1.1 	A bill for an act
1.2 	relating to state government; appropriating money for environment, natural 
1.3 	resources, and energy; authorizing sale of gift cards and certificates; establishing 
1.4 	composting competitive grant program; modifying regulation of storm water 
1.5 	discharges; modifying waste management reporting requirements; requiring 
1.6 	nonresident all-terrain vehicle state trail pass; modifying horse trail and state park 
1.7 	pass requirements; extending certain land sale requirements; prohibiting certain 
1.8 	sales of outdoor recreation system lands; providing for exchange of riparian land; 
1.9 	requiring disclosure of certain chemicals in children's products by manufacturers; 
1.10 	requiring plastic yard waste bags to be compostable and establishing labeling 
1.11 	standards; modifying feedlot permit and grant provisions; authorizing uses of 
1.12 	the Hennepin County solid and hazardous waste fund; modifying greenhouse 
1.13 	gas emissions provisions and requiring a registry; establishing, modifying, 
1.14 	and authorizing fees and surcharges; providing for disposition of certain fees; 
1.15 	modifying and establishing assessments for certain regulatory expenses; 
1.16 	modifying prior appropriations; prohibiting certain reorganizations; providing for 
1.17 	fish consumption advisories in different languages; limiting use of certain funds; 
1.18 	requiring studies and reports; appropriating money to Department of Commerce 
1.19 	and Public Utilities Commission to finance activities related to commerce and 
1.20 	energy; providing for green enterprise assistance; modifying provisions related to 
1.21 	insurance audits, insurers and insurance products, certain financial institutions, 
1.22 	regulated activities related to certain mortgage transactions and professionals, 
1.23 	and debt management and debt settlement services; providing penalties and 
1.24 	remedies;amending Minnesota Statutes 2008, sections 45.011, subdivision 1; 
1.25 	45.027, subdivision 1; 46.04, subdivision 1; 46.05; 46.131, subdivision 2; 47.58, 
1.26 	subdivision 1; 47.60, subdivisions 1, 3, 6; 48.21; 58.05, subdivision 3; 58.06, 
1.27 	subdivision 2; 58.126; 58.13, subdivision 1; 60A.124; 60A.14, subdivision 
1.28 	1; 60B.03, subdivision 15; 60L.02, subdivision 3; 61B.19, subdivision 4; 
1.29 	61B.28, subdivisions 4, 8; 67A.01; 67A.06; 67A.07; 67A.14, subdivisions 
1.30 	1, 7; 67A.18, subdivision 1; 84.0835, subdivision 3; 84.415, subdivision 
1.31 	5, by adding a subdivision; 84.63; 84.631; 84.632; 84.922, subdivision 1a; 
1.32 	84D.15, subdivision 2; 85.015, subdivision 1b; 85.053, subdivision 10; 85.46, 
1.33 	subdivisions 3, 4, 7; 92.685; 93.481, subdivisions 1, 3, 5, 7; 94.342, subdivision 
1.34 	3; 97A.075, subdivision 1; 103G.271, subdivision 6; 103G.301, subdivisions 2, 
1.35 	3; 115.03, subdivision 5c; 115.073; 115.56, subdivision 4; 115.77, subdivision 
1.36 	1; 115A.1314, subdivision 2; 115A.557, subdivision 1; 115A.931; 116.0711; 
1.37 	116.41, subdivision 2; 116C.834, subdivision 1; 216B.62, subdivisions 3, 4, 5, by 
1.38 	adding a subdivision; 216H.10, subdivision 7; 216H.11; 325E.311, subdivision 
1.39 	6; 332A.02, subdivisions 5, 8, 9, 10, 13, by adding subdivisions; 332A.04, 
2.1 	subdivision 6; 332A.08; 332A.10; 332A.11, subdivision 2; 332A.14; 332A.16; 
2.2 	Laws 2005, chapter 156, article 2, section 45, as amended; Laws 2007, chapter 
2.3 	57, article 1, section 4, subdivision 2; Laws 2008, chapter 363, article 5, section 
2.4 	4, subdivision 7; proposing coding for new law in Minnesota Statutes, chapters 
2.5 	60A; 61A; 67A; 84; 86A; 93; 115A; 116; 116J; 216H; 325E; 383B; proposing 
2.6 	coding for new law as Minnesota Statutes, chapter 332B; repealing Minnesota 
2.7 	Statutes 2008, sections 60A.129; 61B.19, subdivision 6; 67A.14, subdivision 5; 
2.8 	67A.17; 67A.19; Laws 2008, chapter 363, article 5, section 30; Minnesota Rules, 
2.9 	parts 2675.2180; 2675.7100; 2675.7110; 2675.7120; 2675.7130; 2675.7140.
2.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.11 	ARTICLE 1
2.12 	ENVIRONMENT AND NATURAL RESOURCES FINANCE

2.13	Section 1. SUMMARY OF APPROPRIATIONS.
 	
2.14 	The amounts shown in this section summarize direct appropriations, by fund, made 
2.15 	in this article.

2.16			2010
		2011
		Total
	
2.17	General
	$
	112,820,000
	$
	111,945,000
	$
	224,765,000
	
2.18
2.19	State Government Special 
Revenue
		48,000
		48,000
		96,000
	
2.20	Environmental
		69,064,000
		69,188,000
		138,252,000
	
2.21	Natural Resources
		82,010,000
		80,910,000
		162,920,000
	
2.22	Game and Fish
		94,312,000
		93,912,000
		188,224,000
	
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
	$
	369,640,000
	$
	367,389,000
	$
	737,029,000

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 article. The appropriations are from the 
2.29 	general fund, or another named fund, and are available for the fiscal years indicated 
2.30 	for each purpose. The figures "2010" and "2011" used in this article mean that the 
2.31 	appropriations listed under them are available for the fiscal year ending June 30, 2010, or 
2.32 	June 30, 2011, respectively. "The first year" is fiscal year 2010. "The second year" is fiscal 
2.33 	year 2011. "The biennium" is fiscal years 2010 and 2011. Appropriations for the fiscal 
2.34 	year ending 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
 	$
	90,969,000
	$
	90,493,000

3.3	Appropriations by Fund
	
3.4		2010
	2011
	
3.5	General
	10,771,000
	10,171,000
	
3.6
3.7	State Government 
Special Revenue
	48,000
	48,000
	
3.8	Environmental
	69,064,000
	69,188,000
	
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 understand more easily 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 	By October 1, 2010 and 2011, the 
3.24 	commissioner shall submit a report to the 
3.25 	chairs of the legislative committees with 
3.26 	primary jurisdiction over the environment 
3.27 	and natural resources policy and finance 
3.28 	that includes the number of environmental 
3.29 	assessment worksheets completed in the 
3.30 	previous fiscal year, the total number of 
3.31 	staff hours spent on those environmental 
3.32 	assessment worksheets, and the average and 
3.33 	median number of hours spent per completed 
3.34 	environmental assessment worksheet.
4.1 	Fee rules adopted by the agency during fiscal 
4.2 	year 2010 are effective retroactively on July 
4.3 	1, 2009.
4.4 	A recipient of a grant funded by an 
4.5 	appropriation under this section shall display 
4.6 	on its Web site detailed information on 
4.7 	the expenditure of the grant funds, and 
4.8 	measurable outcomes as a result of the 
4.9 	expenditure of funds, and submit this 
4.10 	information to the agency by June 30 each 
4.11 	year. A recipient without an active Web site 
4.12 	shall report to the agency by June 30 each 
4.13 	year detailed information on the expenditure 
4.14 	of the grant funds, and measurable outcomes 
4.15 	as a result of the expenditure of funds. The 
4.16 	commissioner shall display the information 
4.17 	received by recipients under this paragraph 
4.18 	on the agency's Web site.

4.19	Subd. 2.Water
 		33,867,000
		33,267,000

4.20	Appropriations by Fund
	
4.21	General
	8,148,000
	7,548,000
	
4.22
4.23	State Government 
Special Revenue
	48,000
	48,000
	
4.24	Environmental
	25,671,000
	25,671,000
	
4.25 	$2,348,000 the first year and $2,348,000 
4.26 	the second year are for the clean water 
4.27 	partnership program. Priority shall be 
4.28 	given to projects preventing impairments 
4.29 	and degradation of lakes, rivers, streams, 
4.30 	and groundwater according to Minnesota 
4.31 	Statutes, section 114D.20, subdivision 2, 
4.32 	clause (4). Funds from this appropriation 
4.33 	may not be used to purchase or use pesticides 
4.34 	suspected by current science of being 
4.35 	endocrine disruptors. To the extent possible, 
4.36 	with money from this appropriation, a 
5.1 	person must plant vegetation or sow seed 
5.2 	only of ecotypes native to Minnesota, and 
5.3 	preferably of the local ecotype, using a high 
5.4 	diversity of species originating from as 
5.5 	close to the restoration site as possible, and 
5.6 	protect existing native prairies from genetic 
5.7 	contamination. Any balance remaining in the 
5.8 	first year does not cancel and is available for 
5.9 	the second year.
5.10 	$2,164,000 the first year and $2,164,000 the 
5.11 	second year must be distributed as grants to 
5.12 	delegated counties to administer the county 
5.13 	feedlot program under new Minnesota 
5.14 	Statutes, section 116.0711, subdivisions 2 
5.15 	and 3. Any money remaining after the first 
5.16 	year is available for the second year.
5.17 	$310,000 the first year and $310,000 the 
5.18 	second year are for community technical 
5.19 	assistance and education, including grants 
5.20 	and technical assistance to communities for 
5.21 	local and basinwide water quality protection.
5.22 	$100,000 the first year is for grants to 
5.23 	local units of government to implement 
5.24 	cost-effective projects to control runoff, 
5.25 	prevent erosion, and provide ditch 
5.26 	stabilization, in order to protect water quality 
5.27 	in lakes, rivers, and streams and to protect 
5.28 	groundwater from degradation. This is a 
5.29 	onetime appropriation.
5.30 	$350,000 the first year and $350,000 the 
5.31 	second year are for challenge grants to 
5.32 	counties for subsurface sewage treatment 
5.33 	system (SSTS) inventories that will 
5.34 	determine the number of systems that are 
5.35 	failing or that pose an imminent health threat 
6.1 	and are located on riparian land or a lake 
6.2 	or near wetlands or other sensitive waters. 
6.3 	Counties must provide a nonstate match of 
6.4 	at least 50 percent that may be in cash or in 
6.5 	kind. The commissioner shall, by county, 
6.6 	report: the number of systems evaluated, the 
6.7 	number of systems determined to be failing 
6.8 	or that pose an imminent health threat located 
6.9 	on riparian land or a lake or near wetlands or 
6.10 	other sensitive waters, the number replaced 
6.11 	or soon to be replaced, and the gallons of 
6.12 	sewage that are prevented from threatening 
6.13 	waters. The commissioner shall develop 
6.14 	recommendations and a plan for directly 
6.15 	or indirectly inspecting and providing an 
6.16 	inventory for all subsurface sewage treatment 
6.17 	systems and submit a report to the chairs of 
6.18 	the legislative committees having primary 
6.19 	jurisdiction over environment and natural 
6.20 	resources policy and finance no later than 
6.21 	September 15, 2010. Direct inspection 
6.22 	methods shall include field verification of 
6.23 	each SSTS on riparian land or a lake or 
6.24 	near wetlands or other sensitive waters to 
6.25 	determine the owner, location, and which 
6.26 	systems are failing or are an imminent 
6.27 	health threat. Indirect inspection methods 
6.28 	may include census-type data collection to 
6.29 	determine the owner and location of each 
6.30 	SSTS in the remaining portion of each 
6.31 	county. An SSTS with a valid certificate of 
6.32 	compliance may be considered inventoried 
6.33 	without further work. This is a onetime 
6.34 	appropriation.
6.35 	$375,000 the first year and $375,000 the 
6.36 	second year are for subsurface sewage 
7.1 	treatment system (SSTS) administration and 
7.2 	grants. Of this amount, $80,000 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 	$1,250,000 the first year and $1,250,000 
7.20 	the second year are for assessment and 
7.21 	monitoring of lakes, rivers, and streams.
7.22 	$100,000 the first year and $100,000 the 
7.23 	second year are for a grant to the Red River 
7.24 	Watershed Management Board to enhance 
7.25 	and expand existing river watch activities in 
7.26 	the Red River of the North and shall enhance 
7.27 	student understanding of the causes of 
7.28 	flooding, flood prevention, and the impacts 
7.29 	of flood waters on land and water resources. 
7.30 	The Red River Watershed Management 
7.31 	Board shall provide a report that includes 
7.32 	formal evaluation results from the river 
7.33 	watch program to the commissioners of 
7.34 	education and the Pollution Control Agency 
7.35 	and to the legislative committees with 
8.1 	jurisdiction over the environment and natural 
8.2 	resources policy and finance and K-12 policy 
8.3 	and finance by February 15, 2011. This is a 
8.4 	onetime appropriation.
8.5 	$7,540,000 the first year and $7,540,000 
8.6 	the second year are from the environmental 
8.7 	fund for completion of 20 percent of the 
8.8 	needed statewide assessments of surface 
8.9 	water quality and trends.
8.10 	$500,000 the first year is to develop minimal 
8.11 	impact design standards for urban storm 
8.12 	water runoff. This is a onetime appropriation 
8.13 	and is available until June 30, 2011. The 
8.14 	commissioner shall report to the chairs and 
8.15 	ranking minority members of the legislative 
8.16 	committees and divisions having primary 
8.17 	jurisdiction over environment and natural 
8.18 	resources policy and finance no later than 
8.19 	January 12, 2011, regarding the expenditure 
8.20 	of this appropriation.
8.21 	By October 1, 2009 and 2010, the 
8.22 	commissioner shall report to the chairs 
8.23 	of the legislative committees having 
8.24 	primary jurisdiction over environment and 
8.25 	natural resources policy and finance on the 
8.26 	effectiveness of enforcement actions in the 
8.27 	previous fiscal year in preventing water 
8.28 	pollution.
8.29 	The commissioner shall continue the 
8.30 	rulemaking process to better align water 
8.31 	permit fee revenue for fiscal years 2010, 
8.32 	2011, 2012, and 2013 with the cost of issuing 
8.33 	permits, including environmental review.
8.34 	Notwithstanding Minnesota Statutes, section 
8.35 	16A.28, the appropriations encumbered on or 
9.1 	before June 30, 2011, as grants or contracts 
9.2 	for clean water partnership, SSTS's, surface 
9.3 	water and groundwater assessments, total 
9.4 	maximum daily loads, stormwater, and local 
9.5 	basinwide water quality protection in this 
9.6 	subdivision are available until June 30, 2013.

9.7	Subd. 3.Air
 		11,871,000
		12,131,000

9.8	Appropriations by Fund
	
9.9	Environmental
	11,871,000
	12,131,000
	
9.10 	Up to $150,000 the first year and $150,000 
9.11 	the second year may be transferred from the 
9.12 	environmental fund to the small business 
9.13 	environmental improvement loan account 
9.14 	established in Minnesota Statutes, section 
9.15 	116.993.
9.16 	$200,000 the first year and $200,000 the 
9.17 	second year are from the environmental fund 
9.18 	for a monitoring program under Minnesota 
9.19 	Statutes, section 116.454.
9.20 	$125,000 the first year and $125,000 the 
9.21 	second year are from the environmental fund 
9.22 	for monitoring ambient air for hazardous 
9.23 	pollutants in the metropolitan area.
9.24 	An agency report on the level of fine 
9.25 	particulate matter in Minnesota's air must 
9.26 	compare measured levels with a 24-hour 
9.27 	PM 2.5 standard of 13 to 14 micrograms 
9.28 	per cubic meter and an annual PM 2.5 
9.29 	standard of 30 to 35 micrograms per cubic 
9.30 	meter, as recommended by the Particulate 
9.31 	Matter Review Panel of the Environmental 
9.32 	Protection Agency's Clean Air Scientific 
9.33 	Advisory Committee in its June 2005 report, 
9.34 	EPA's Review of the National Ambient Air 
9.35 	Quality Standards for Particulate Matter 
10.1 	(Second Draft PM Staff Paper, January 
10.2 	2005).
10.3 	$700,000 the first year and $700,000 the 
10.4 	second year are from the environmental 
10.5 	fund for an air emissions database, including 
10.6 	monitoring greenhouse gas emissions.
10.7 	The commissioner shall continue the 
10.8 	rulemaking process to better align air quality 
10.9 	fee revenue for fiscal years 2010, 2011, 2012, 
10.10 	and 2013 with the cost of issuing permits, 
10.11 	including environmental review.

10.12	Subd. 4.Land
 		18,467,000
		18,467,000

10.13	Appropriations by Fund
	
10.14	General
	465,000
	465,000
	
10.15	Environmental
	6,916,000
	6,916,000
	
10.16	Remediation
	11,086,000
	11,086,000
	
10.17 	All money for environmental response, 
10.18 	compensation, and compliance in the 
10.19 	remediation fund not otherwise appropriated 
10.20 	is appropriated to the commissioners of the 
10.21 	Pollution Control Agency and agriculture 
10.22 	for purposes of Minnesota Statutes, section 
10.23 	115B.20, subdivision 2, clauses (1), (2), 
10.24 	(3), (6), and (7). At the beginning of each 
10.25 	fiscal year, the two commissioners shall 
10.26 	jointly submit an annual spending plan to 
10.27 	the commissioner of finance that maximizes 
10.28 	the utilization of resources and appropriately 
10.29 	allocates the money between the two 
10.30 	departments. This appropriation is available 
10.31 	until June 20, 2011.
10.32 	$3,616,000 the first year and $3,616,000 the 
10.33 	second year are from the petroleum tank fund 
10.34 	to be transferred to the remediation fund for 
11.1 	purposes of the leaking underground storage 
11.2 	tank program to protect the land.
11.3 	$252,000 the first year and $252,000 the 
11.4 	second year are from the remediation fund to 
11.5 	be transferred to the Department of Health for 
11.6 	private water supply monitoring and health 
11.7 	assessment costs in areas contaminated 
11.8 	by unpermitted mixed municipal solid 
11.9 	waste disposal facilities and drinking water 
11.10 	advisories and public information activities 
11.11 	for areas contaminated by hazardous releases.
11.12 	$500,000 each year is for environmental 
11.13 	health tracking and biomonitoring of a 
11.14 	representative sample of the population 
11.15 	including indigenous people and people of 
11.16 	color. Of this amount, $450,000 each year is 
11.17 	for transfer to the Department of Health.

11.18
11.19	Subd. 5.Environmental Assistance and 
Cross-Media
 		25,420,000
		25,284,000

11.20	Appropriations by Fund
	
11.21	General
	814,000
	814,000
	
11.22	Environmental
	24,606,000
	24,470,000
	
11.23 	$14,250,000 each year is from the 
11.24 	environmental fund for SCORE block grants 
11.25 	to counties.
11.26 	$250,000 each year is from the environmental 
11.27 	fund to administer the composting 
11.28 	grant program established under new 
11.29 	Minnesota Statutes, section 115A.559. The 
11.30 	appropriation is added to the agency base 
11.31 	and available until June 30, 2011.
11.32 	By January 15, 2012, the commissioner shall 
11.33 	report to the legislative committees with 
11.34 	jurisdiction over environment and natural 
11.35 	resources policy on:
12.1 	(1) the mixed municipal solid waste diversion 
12.2 	rates accomplished by the grant program 
12.3 	under new Minnesota Statutes, section 
12.4 	115A.559;
12.5 	(2) participants in the grant program and the 
12.6 	programs developed with grant funds; and
12.7 	(3) the potential for new permanent programs 
12.8 	based on results of projects funded with 
12.9 	grants issued under new Minnesota Statutes, 
12.10 	section 115A.559.
12.11 	$225,000 the first year and $89,000 the 
12.12 	second year are from the environmental 
12.13 	fund for duties related to harmful chemicals 
12.14 	in products under new Minnesota Statutes, 
12.15 	sections 116.9401 to 116.9407. Of this 
12.16 	amount, $133,000 the first year and $57,000 
12.17 	the second year are for transfer to the 
12.18 	Department of Health.
12.19 	$119,000 the first year and $119,000 the 
12.20 	second year are from the environmental 
12.21 	fund for environmental assistance grants 
12.22 	or loans under Minnesota Statutes, section 
12.23 	115A.0716. Any unencumbered grant and 
12.24 	loan balances in the first year do not cancel 
12.25 	but are available for grants and loans in the 
12.26 	second year.
12.27 	All money deposited in the environmental 
12.28 	fund for the metropolitan solid waste 
12.29 	landfill fee in accordance with Minnesota 
12.30 	Statutes, section 473.843, and not otherwise 
12.31 	appropriated, is appropriated for the purposes 
12.32 	of Minnesota Statutes, section 473.844.
12.33 	Notwithstanding Minnesota Statutes, section 
12.34 	16A.28, the appropriations encumbered on 
12.35 	or before June 30, 2011, as contracts or 
13.1 	grants for surface water and groundwater 
13.2 	assessments; environmental assistance 
13.3 	awarded under Minnesota Statutes, section 
13.4 	115A.0716; technical and research assistance 
13.5 	under Minnesota Statutes, section 115A.152; 
13.6 	technical assistance under Minnesota 
13.7 	Statutes, section 115A.52; and pollution 
13.8 	prevention assistance under Minnesota 
13.9 	Statutes, section 115D.04, are available until 
13.10 	June 30, 2013.
13.11 	Before the governor makes budget 
13.12 	recommendations to the legislature in 2011, 
13.13 	the commissioner must report on revenues 
13.14 	received and expenditures made under 
13.15 	Minnesota Statutes, section 115A.1314, 
13.16 	subdivision 2, during fiscal years 2010 
13.17 	and 2011 to determine if fees collected 
13.18 	are covering the costs of the program and 
13.19 	request that the governor recommend a direct 
13.20 	appropriation for the purposes of that section.

13.21	Subd. 6.Administrative Support
 		1,344,000
		1,344,000
	
13.22 	The commissioner shall transfer $40,000,000 
13.23 	from the environmental fund to the 
13.24 	remediation fund for the purposes of the 
13.25 	remediation fund under Minnesota Statutes, 
13.26 	section 116.155, subdivision 2.

13.27	Sec. 4. NATURAL RESOURCES

13.28	Subdivision 1.Total Appropriation
 	$
	245,313,000
	$
	243,813,000

13.29	Appropriations by Fund
	
13.30		2010
	2011
	
13.31	General
	74,411,000
	74,411,000
	
13.32	Natural Resources
	76,290,000
	75,190,000
	
13.33	Game and Fish
	94,312,000
	93,912,000
	
13.34	Remediation
	100,000
	100,000
	
13.35	Permanent School
	200,000
	200,000
	
14.1 	The amounts that may be spent for each 
14.2 	purpose are specified in the following 
14.3 	subdivisions.
14.4 	To the extent possible, a person conducting 
14.5 	restoration with money appropriated in this 
14.6 	section must plant vegetation or sow seed 
14.7 	only of ecotypes native to Minnesota, and 
14.8 	preferably of the local ecotype, using a high 
14.9 	diversity of species originating from as 
14.10 	close to the restoration site as possible, and 
14.11 	protect existing native prairies from genetic 
14.12 	contamination.
14.13 	A recipient of a grant funded by an 
14.14 	appropriation under this section shall display 
14.15 	on its Web site detailed information on 
14.16 	the expenditure of the grant funds, and 
14.17 	measurable outcomes as a result of the 
14.18 	expenditure of funds, and submit this 
14.19 	information to the department by June 30 
14.20 	each year. A recipient without an active 
14.21 	Web site shall report to the department by 
14.22 	June 30 each year detailed information on 
14.23 	the expenditure of the grant funds, and 
14.24 	measurable outcomes as a result of the 
14.25 	expenditure of funds. The commissioner 
14.26 	shall display the information received by 
14.27 	recipients under this paragraph on the 
14.28 	department's Web site.
14.29 	The commissioner shall require the chief 
14.30 	financial officer or other financial staff 
14.31 	to display the department's budget on the 
14.32 	department's Web site in a manner that will 
14.33 	allow citizens to easily understand the value 
14.34 	they are getting for their money.

14.35
14.36	Subd. 2.Land and Mineral Resources 
Management
 		10,398,000
		10,398,000

15.1	Appropriations by Fund
	
15.2	General
	3,351,000
	3,351,000
	
15.3	Natural Resources
	5,461,000
	5,461,000
	
15.4	Game and Fish
	1,386,000
	1,386,000
	
15.5	Permanent School
	200,000
	200,000
	
15.6 	$1,202,000 the first year and $1,202,000 
15.7 	the second year are from the mining 
15.8 	administration account in the natural 
15.9 	resources fund to cover the costs associated 
15.10 	with issuing mining permits.
15.11 	$612,000 each year is from the dedicated 
15.12 	receipts account in the natural resources fund 
15.13 	to cover the costs associated with issuing 
15.14 	licenses for land and water crossings and 
15.15 	road easements.
15.16 	$351,000 the first year and $351,000 the 
15.17 	second year are for iron ore cooperative 
15.18 	research. Of this amount, $200,000 each year 
15.19 	is from the minerals management account 
15.20 	in the natural resources fund. $175,500 the 
15.21 	first year and $175,500 the second year are 
15.22 	available only as matched by $1 of nonstate 
15.23 	money for each $1 of state money. The 
15.24 	match may be cash or in-kind.
15.25 	$86,000 the first year and $86,000 the 
15.26 	second year are for minerals cooperative 
15.27 	environmental research, of which $43,000 
15.28 	the first year and $43,000 the second year are 
15.29 	available only as matched by $1 of nonstate 
15.30 	money for each $1 of state money. The 
15.31 	match may be cash or in-kind.
15.32 	$2,696,000 the first year and $2,696,000 
15.33 	the second year are from the minerals 
15.34 	management account in the natural resources 
15.35 	fund for use as provided in Minnesota 
16.1 	Statutes, section 93.2236, paragraph (c), 
16.2 	for mineral resource management, projects 
16.3 	to enhance future mineral income, and 
16.4 	projects to promote new mineral resource 
16.5 	opportunities.
16.6 	$200,000 the first year and $200,000 the 
16.7 	second year are from the state forest suspense 
16.8 	account in the permanent school fund to 
16.9 	accelerate land exchanges, land sales, and 
16.10 	commercial leasing of school trust lands and 
16.11 	to identify, evaluate, and lease construction 
16.12 	aggregate located on school trust lands. This 
16.13 	appropriation is to be used for securing 
16.14 	maximum long-term economic return 
16.15 	from the school trust lands consistent with 
16.16 	fiduciary responsibilities and sound natural 
16.17 	resources conservation and management 
16.18 	principles.

16.19	Subd. 3.Water Resources Management
 		11,732,000
		11,732,000

16.20	Appropriations by Fund
	
16.21	General
	11,452,000
	11,452,000
	
16.22	Natural Resources
	280,000
	280,000
	
16.23 	By January 15, 2010, the commissioner 
16.24 	shall submit a report evaluating and 
16.25 	recommending options to provide for the 
16.26 	long-term protection of the state's surface 
16.27 	water and groundwater resources and 
16.28 	the funding of programs to provide this 
16.29 	protection.
16.30 	$275,000 the first year and $275,000 the 
16.31 	second year are for grants for up to 50 
16.32 	percent of the cost of implementation of 
16.33 	the Red River mediation agreement. The 
16.34 	commissioner shall submit a report to the 
16.35 	chairs of the legislative committees having 
17.1 	primary jurisdiction over environment and 
17.2 	natural resources policy and finance on the 
17.3 	accomplishments achieved with the grants 
17.4 	by January 15, 2012.
17.5 	$60,000 the first year and $60,000 the 
17.6 	second year are for a grant to the Mississippi 
17.7 	Headwaters Board for up to 50 percent of 
17.8 	the cost of implementing the comprehensive 
17.9 	plan for the upper Mississippi within areas 
17.10 	under the board's jurisdiction.
17.11 	$5,000 the first year and $5,000 the second 
17.12 	year are for payment to the Leech Lake Band 
17.13 	of Chippewa Indians to implement the band's 
17.14 	portion of the comprehensive plan for the 
17.15 	upper Mississippi.
17.16 	$125,000 the first year and $125,000 the 
17.17 	second year are for the construction of ring 
17.18 	dikes under Minnesota Statutes, section 
17.19 	103F.161. The ring dikes may be publicly 
17.20 	or privately owned. If the appropriation in 
17.21 	either year is insufficient, the appropriation 
17.22 	in the other year is available for it.
17.23 	By October 1, 2009, the commissioner shall 
17.24 	develop a plan for the development of an 
17.25 	adequate groundwater level monitoring 
17.26 	network of wells in the 11-county 
17.27 	metropolitan area. The commissioner, 
17.28 	working with the Metropolitan Council, 
17.29 	the Department of Homeland Security, and 
17.30 	the commissioner of the Pollution Control 
17.31 	Agency, shall design the network so that 
17.32 	the wells can be used to identify threats to 
17.33 	groundwater quality and institute practices to 
17.34 	protect the groundwater from degradation. 
17.35 	The network must be sufficient to ensure 
18.1 	that water use in the metropolitan area 
18.2 	does not harm ecosystems, degrade water 
18.3 	quality, or compromise the ability of future 
18.4 	generations to meet their own needs. The 
18.5 	plan should include recommendations on 
18.6 	the necessary payment rates for users of the 
18.7 	system expressed in cents per gallon for well 
18.8 	drilling, operation, and maintenance.

18.9	Subd. 4.Forest Management
 		39,609,000
		38,259,000

18.10	Appropriations by Fund
	
18.11	General
	25,952,000
	25,952,000
	
18.12	Natural Resources
	12,193,000
	11,093,000
	
18.13	Game and Fish
	1,464,000
	1,214,000
	
18.14 	$2,000,000 each year is to maintain forest 
18.15 	management operations. This is a onetime 
18.16 	appropriation.
18.17 	$1,200,000 the first year and $950,000 
18.18 	the second year are from the heritage 
18.19 	enhancement account in the game and fish 
18.20 	fund to maintain and expand the ecological 
18.21 	classification system program on state forest 
18.22 	lands and prevent the introduction and spread 
18.23 	of invasive species on state lands. This is a 
18.24 	onetime appropriation.
18.25 	$7,217,000 the first year and $7,217,000 
18.26 	the second year are for prevention, 
18.27 	presuppression, and suppression costs of 
18.28 	emergency firefighting and other costs 
18.29 	incurred under Minnesota Statutes, section 
18.30 	88.12. If the appropriation for either 
18.31 	year is insufficient to cover all costs of 
18.32 	presuppression and suppression, the amount 
18.33 	necessary to pay for these costs during the 
18.34 	biennium is appropriated from the general 
18.35 	fund.
19.1 	By January 15 of each year, the commissioner 
19.2 	of natural resources shall submit a report to 
19.3 	the chairs and ranking minority members 
19.4 	of the house and senate committees 
19.5 	and divisions having jurisdiction over 
19.6 	environment and natural resources finance, 
19.7 	identifying all firefighting costs incurred 
19.8 	and reimbursements received in the prior 
19.9 	fiscal year. These appropriations may 
19.10 	not be transferred. Any reimbursement 
19.11 	of firefighting expenditures made to the 
19.12 	commissioner from any source other than 
19.13 	federal mobilizations shall be deposited into 
19.14 	the general fund.
19.15 	$12,193,000 the first year and $11,093,000 
19.16 	the second year are from the forest 
19.17 	management investment account in the 
19.18 	natural resources fund for only the purposes 
19.19 	specified in Minnesota Statutes, section 
19.20 	89.039, subdivision 2.
19.21 	$780,000 the first year and $780,000 the 
19.22 	second year are for the Forest Resources 
19.23 	Council for implementation of the 
19.24 	Sustainable Forest Resources Act. 

19.25	Subd. 5.Parks and Trails Management
 		67,372,000
		67,372,000

19.26	Appropriations by Fund
	
19.27	General
	21,857,000
	21,857,000
	
19.28	Natural Resources
	43,321,000
	43,321,000
	
19.29	Game and Fish
	2,194,000
	2,194,000
	
19.30 	$1,175,000 the first year and $1,175,000 the 
19.31 	second year are from the water recreation 
19.32 	account in the natural resources fund for 
19.33 	enhancing public water access facilities. 
19.34 	Of this amount, $100,000 is a onetime 
19.35 	appropriation to provide downloadable 
20.1 	GPS coordinates and river gauge data 
20.2 	interpretation. The base appropriation is 
20.3 	$1,075,000.
20.4 	The appropriation in Laws 2003, chapter 
20.5 	128, article 1, section 5, subdivision 6, from 
20.6 	the water recreation account in the natural 
20.7 	resources fund for a cooperative project with 
20.8 	the United States Army Corps of Engineers 
20.9 	to develop the Mississippi Whitewater Park 
20.10 	is available until June 30, 2011. The project 
20.11 	must be designed to prevent the spread of 
20.12 	aquatic invasive species.
20.13 	$4,371,000 the first year and $4,371,000 the 
20.14 	second year are from the natural resources 
20.15 	fund for state park and recreation area 
20.16 	operations. Of this amount, $375,000 each 
20.17 	year is for coordinated activities with Explore 
20.18 	Minnesota Tourism. This appropriation is 
20.19 	from the revenue deposited in the natural 
20.20 	resources fund under Minnesota Statutes, 
20.21 	section 297A.94, paragraph (e), clause (2).
20.22 	$8,424,000 the first year and $8,424,000 
20.23 	the second year are from the snowmobile 
20.24 	trails and enforcement account in the 
20.25 	natural resources fund for the snowmobile 
20.26 	grants-in-aid program. This additional 
20.27 	money may be used for new grant-in-aid 
20.28 	trails. Any unencumbered balance does not 
20.29 	cancel at the end of the first year and is 
20.30 	available for the second year.
20.31 	$400,000 the first year and $400,000 the 
20.32 	second year are from the snowmobile trails 
20.33 	and enforcement account in the natural 
20.34 	resources fund for operation and maintenance 
20.35 	of state trails and increased oversight and 
21.1 	training for the grant-in-aid program. This is 
21.2 	a onetime appropriation.
21.3 	$1,360,000 the first year and $1,360,000 
21.4 	the second year are from the natural 
21.5 	resources fund for the off-highway vehicle 
21.6 	grants-in-aid program. Of this amount, 
21.7 	$1,110,000 each year is from the all-terrain 
21.8 	vehicle account; $150,000 each year is from 
21.9 	the off-highway motorcycle account; and 
21.10 	$100,000 each year is from the off-road 
21.11 	vehicle account. Any unencumbered balance 
21.12 	does not cancel at the end of the first year 
21.13 	and is available for the second year.
21.14 	$760,000 the first year and $760,000 the 
21.15 	second year are from the natural resources 
21.16 	fund for state trail operations. This 
21.17 	appropriation is from the revenue deposited 
21.18 	in the natural resources fund under Minnesota 
21.19 	Statutes, section 297A.94, paragraph (e), 
21.20 	clause (2).

21.21	Subd. 6.Fish and Wildlife Management
 		67,574,000
		67,424,000

21.22	Appropriations by Fund
	
21.23	General
	1,340,000
	1,340,000
	
21.24	Natural Resources
	1,976,000
	1,976,000
	
21.25	Game and Fish
	64,258,000
	64,108,000
	
21.26 	$100,000 the first year and $100,000 the 
21.27 	second year are from the nongame wildlife 
21.28 	account in the natural resources fund for gray 
21.29 	wolf research.
21.30 	$120,000 the first year and $120,000 the 
21.31 	second year from the game and fish fund are 
21.32 	for gray wolf management.
21.33 	$285,000 the first year and $285,000 the 
21.34 	second year are from the walleye stamp 
21.35 	account in the game and fish fund for the 
22.1 	purposes specified under Minnesota Statutes, 
22.2 	section 97A.075, subdivision 6. Of this 
22.3 	amount, $25,000 must be spent in the first 
22.4 	year to provide signage to each independent 
22.5 	licensed dealer for display and promotion of 
22.6 	the walleye stamp.
22.7 	$600,000 the first year and $600,000 the 
22.8 	second year are to accelerate wildlife health 
22.9 	programs. This is a onetime appropriation.
22.10 	$1,860,000 the first year and $1,860,000 the 
22.11 	second year are from the wildlife acquisition 
22.12 	surcharge account for only the purposes 
22.13 	specified in Minnesota Statutes, section 
22.14 	97A.071, subdivision 2a. This appropriation 
22.15 	is available until spent.
22.16 	$8,167,000 the first year and $8,167,000 
22.17 	the second year are from the heritage 
22.18 	enhancement account in the game and 
22.19 	fish fund only for activities specified in 
22.20 	Minnesota Statutes, section 297A.94, 
22.21 	paragraph (e), clause (1). Of this amount, at 
22.22 	least 20 percent must be used to purchase 
22.23 	or restore land, of which over half must 
22.24 	be used for restoration. Notwithstanding 
22.25 	Minnesota Statutes, section 297A.94, five 
22.26 	percent of this appropriation may be used for 
22.27 	expanding hunter and angler recruitment and 
22.28 	retention. This appropriation may be used to 
22.29 	leverage other funds and to provide fish and 
22.30 	wildlife technical assistance for shallow lake 
22.31 	management and restoration and stream and 
22.32 	lake shoreland and habitat improvement and 
22.33 	maintenance on private lands.
22.34 	Notwithstanding Minnesota Statutes, section 
22.35 	84.943, $13,000 the first year and $13,000 
23.1 	the second year from the critical habitat 
23.2 	private sector matching account may be used 
23.3 	to publicize the critical habitat license plate 
23.4 	match program.
23.5 	$830,000 the first year and $830,000 the 
23.6 	second year are from the trout and salmon 
23.7 	management account for only the purposes 
23.8 	specified in Minnesota Statutes, section 
23.9 	97A.075, subdivision 3.
23.10 	$1,553,000 the first year and $1,553,000 the 
23.11 	second year are from the deer management 
23.12 	account for only the purposes specified 
23.13 	in Minnesota Statutes, section 97A.075, 
23.14 	subdivision 1, paragraph (b).
23.15 	$890,000 the first year and $890,000 the 
23.16 	second year are from the deer and bear 
23.17 	management account for only the purposes 
23.18 	specified in Minnesota Statutes, section 
23.19 	97A.075, subdivision 1, paragraph (c).
23.20 	$700,000 the first year and $700,000 the 
23.21 	second year are from the waterfowl habitat 
23.22 	improvement account for only the purposes 
23.23 	specified in Minnesota Statutes, section 
23.24 	97A.075, subdivision 2.
23.25 	$925,000 the first year and $925,000 the 
23.26 	second year are from the pheasant habitat 
23.27 	improvement account for only the purposes 
23.28 	specified in Minnesota Statutes, section 
23.29 	97A.075, subdivision 4.
23.30 	$192,000 the first year and $192,000 the 
23.31 	second year are from the wild turkey 
23.32 	management account for only the purposes 
23.33 	specified in Minnesota Statutes, section 
23.34 	97A.075, subdivision 5. Of this amount, 
23.35 	$8,000 the first year and $8,000 the second 
24.1 	year are transferred from the game and fish 
24.2 	fund to the wild turkey management account.
24.3 	$535,000 the first year and $535,000 the 
24.4 	second year are for preserving, restoring, and 
24.5 	enhancing grassland/wetland complexes on 
24.6 	public or private lands.
24.7 	Notwithstanding Minnesota Statutes, section 
24.8 	16A.28, the appropriations encumbered 
24.9 	under contract on or before June 30, 2011, for 
24.10 	aquatic restoration grants and wildlife habitat 
24.11 	grants are available until June 30, 2012.

24.12	Subd. 7.Ecological Services
 		14,175,000
		14,175,000

24.13	Appropriations by Fund
	
24.14	General
	6,230,000
	6,230,000
	
24.15	Natural Resources
	3,994,000
	3,994,000
	
24.16	Game and Fish
	3,951,000
	3,951,000
	
24.17 	$1,223,000 the first year and $1,223,000 the 
24.18 	second year are from the nongame wildlife 
24.19 	management account in the natural resources 
24.20 	fund for the purpose of nongame wildlife 
24.21 	management. Notwithstanding Minnesota 
24.22 	Statutes, section 290.431, $100,000 the first 
24.23 	year and $100,000 the second year may 
24.24 	be used for nongame wildlife information, 
24.25 	education, and promotion.
24.26 	$1,636,000 the first year and $1,636,000 
24.27 	the second year are from the heritage 
24.28 	enhancement account in the game and 
24.29 	fish fund for only the purposes specified 
24.30 	in Minnesota Statutes, section 297A.94, 
24.31 	paragraph (e), clause (1).
24.32 	$2,142,000 the first year and $2,142,000 the 
24.33 	second year are from the invasive species 
24.34 	account, and $2,090,000 the first year 
24.35 	and $2,090,000 the second year are from 
25.1 	the general fund for management, public 
25.2 	awareness, assessment and monitoring 
25.3 	research, law enforcement, and water access 
25.4 	inspection to prevent the spread of invasive 
25.5 	species; management of invasive plants in 
25.6 	public waters; and management of terrestrial 
25.7 	invasive species on state-administered lands. 
25.8 	Funds from this appropriation may not be 
25.9 	used to purchase or use pesticides suspected 
25.10 	by current science of being endocrine 
25.11 	disruptors.
25.12 	The commissioner shall report on the 
25.13 	projected outcomes and goals for protecting 
25.14 	species in all ecological provinces and the 
25.15 	quantity and quality of groundwater and 
25.16 	surface water of the state, including but not 
25.17 	limited to, protecting rare and endangered 
25.18 	species, native prairies, and wetlands, from 
25.19 	merging ecological services and waters 
25.20 	duties to the senate and house natural 
25.21 	resources policy and finance committees and 
25.22 	divisions. The commissioner shall not merge 
25.23 	ecological services and waters duties prior to 
25.24 	presenting the report to the committees and 
25.25 	divisions. Any merger must include a variant 
25.26 	of the word "ecology" in the title of the new 
25.27 	division.

25.28	Subd. 8.Enforcement
 		31,490,000
		31,490,000

25.29	Appropriations by Fund
	
25.30	General
	2,889,000
	2,889,000
	
25.31	Natural Resources
	8,531,000
	8,531,000
	
25.32	Game and Fish
	19,970,000
	19,970,000
	
25.33	Remediation
	100,000
	100,000
	
25.34 	$1,082,000 the first year and $1,082,000 the 
25.35 	second year are from the water recreation 
26.1 	account in the natural resources fund for 
26.2 	grants to counties for boat and water safety.
26.3 	$315,000 the first year and $315,000 the 
26.4 	second year are from the snowmobile 
26.5 	trails and enforcement account in the 
26.6 	natural resources fund for grants to local 
26.7 	law enforcement agencies for snowmobile 
26.8 	enforcement activities.
26.9 	$1,164,000 the first year and $1,164,000 
26.10 	the second year are from the heritage 
26.11 	enhancement account in the game and 
26.12 	fish fund for only the purposes specified 
26.13 	in Minnesota Statutes, section 297A.94, 
26.14 	paragraph (e), clause (1).
26.15 	$510,000 the first year and $510,000 
26.16 	the second year are from the natural 
26.17 	resources fund for grants to county law 
26.18 	enforcement agencies for off-highway 
26.19 	vehicle enforcement and public education 
26.20 	activities based on off-highway vehicle use 
26.21 	in the county. Of this amount, $498,000 each 
26.22 	year is from the all-terrain vehicle account; 
26.23 	$11,000 each year is from the off-highway 
26.24 	motorcycle account; and $1,000 each year 
26.25 	is from the off-road vehicle account. The 
26.26 	county enforcement agencies may use 
26.27 	money received under this appropriation 
26.28 	to make grants to other local enforcement 
26.29 	agencies within the county that have a high 
26.30 	concentration of off-highway vehicle use. Of 
26.31 	this appropriation, $25,000 each year is for 
26.32 	administration of these grants.
26.33 	$250,000 the first year and $250,000 the 
26.34 	second year are from the all-terrain vehicle 
26.35 	account for grants to qualifying organizations 
27.1 	to assist in safety and environmental 
27.2 	education and monitoring trails on public 
27.3 	lands under Minnesota Statutes, section 
27.4 	84.9011. Grants issued under this paragraph: 
27.5 	(1) must be issued through a formal 
27.6 	agreement with the organization; and (2) 
27.7 	must not be used as a substitute for traditional 
27.8 	spending by the organization. By December 
27.9 	15 each year, an organization receiving a 
27.10 	grant under this paragraph shall report to the 
27.11 	commissioner with details on expenditures 
27.12 	and outcomes from the grant. By January 
27.13 	15, 2011, the commissioner shall report 
27.14 	on the expenditures and outcomes of the 
27.15 	grants to the chairs and ranking minority 
27.16 	members of the natural resources policy 
27.17 	and finance committees and divisions. Of 
27.18 	this appropriation, $25,000 each year is for 
27.19 	administration of these grants.
27.20 	The commissioner must publicize 
27.21 	opportunities for conservation officer 
27.22 	employment and recruit, when possible, 
27.23 	conservation officer candidates from the 
27.24 	biological sciences departments at colleges 
27.25 	and universities.

27.26	Subd. 9.Operations Support
 		2,963,000
		2,963,000

27.27	Appropriations by Fund
	
27.28	General
	1,340,000
	1,340,000
	
27.29	Natural Resources
	534,000
	534,000
	
27.30	Game and Fish
	1,089,000
	1,089,000
	
27.31 	The commissioner may redirect the general 
27.32 	fund reduction of $800,000 in fiscal year 
27.33 	2010 and $800,000 in fiscal year 2011, to 
27.34 	other subdivisions of this section. No grants 
27.35 	may be reduced. The commissioner shall 
27.36 	report by October 1, 2011, to the chairs of 
28.1 	the legislative committees having primary 
28.2 	jurisdiction over environment and natural 
28.3 	resources policy and finance regarding any 
28.4 	redirection and what department outcomes 
28.5 	were affected by the redirection.
28.6 	$320,000 the first year and $320,000 the 
28.7 	second year are from the natural resources 
28.8 	fund for grants to be divided equally between 
28.9 	the city of St. Paul for the Como Zoo 
28.10 	and Conservatory and the city of Duluth 
28.11 	for the Duluth Zoo. This appropriation 
28.12 	is from the revenue deposited to the fund 
28.13 	under Minnesota Statutes, section 297A.94, 
28.14 	paragraph (e), clause (5).

28.15
28.16	Sec. 5. BOARD OF WATER AND SOIL 
RESOURCES
 	$
	15,618,000
	$
	15,343,000
	
28.17 	$3,900,000 the first year and $3,900,000 the 
28.18 	second year are for natural resources block 
28.19 	grants to local governments. The board may 
28.20 	reduce the amount of the natural resources 
28.21 	block grant to a county by an amount equal to 
28.22 	any reduction in the county's general services 
28.23 	allocation to a soil and water conservation 
28.24 	district from the county's previous year 
28.25 	allocation when the board determines that 
28.26 	the reduction was disproportionate. Grants 
28.27 	must be matched with a combination of local 
28.28 	cash or in-kind contributions. The base 
28.29 	grant portion related to water planning must 
28.30 	be matched by an amount as specified by 
28.31 	Minnesota Statutes, section 103B.3369.
28.32 	$3,500,000 the first year and $3,500,000 
28.33 	the second year are for grants requested 
28.34 	by soil and water conservation districts for 
28.35 	general purposes, nonpoint engineering, 
29.1 	and implementation of the reinvest in 
29.2 	Minnesota conservation reserve program. 
29.3 	Upon approval of the board, expenditures 
29.4 	may be made from these appropriations for 
29.5 	supplies and services benefiting soil and 
29.6 	water conservation districts. Any district 
29.7 	requesting a grant under this paragraph shall 
29.8 	maintain a Web page that publishes, at a 
29.9 	minimum, its annual plan, annual report, 
29.10 	annual audit, annual budget, including 
29.11 	membership dues, and meeting notices and 
29.12 	minutes.
29.13 	$500,000 the first year and $500,000 the 
29.14 	second year are for feedlot water quality 
29.15 	grants for feedlots under 300 animal units 
29.16 	where there are impaired waters.
29.17 	$2,000,000 the first year and $2,000,000 
29.18 	the second year are for grants to soil and 
29.19 	water conservation districts for cost-sharing 
29.20 	contracts for erosion control, water quality 
29.21 	management, of which at least $900,000 
29.22 	each year is for establishing and maintaining 
29.23 	riparian vegetation buffers of restored native 
29.24 	prairie and restored prairie.
29.25 	$100,000 the first year and $100,000 
29.26 	the second year are available for county 
29.27 	cooperative weed management programs and 
29.28 	to restore native plants in selected invasive 
29.29 	species management sites by providing local 
29.30 	native seeds and plants to landowners for 
29.31 	implementation. 
29.32 	Notwithstanding Minnesota Statutes, section 
29.33 	103C.501, the board may shift cost-share 
29.34 	funds in this section and may adjust the 
29.35 	technical and administrative assistance 
30.1 	portion of the grant funds to leverage 
30.2 	federal or other nonstate funds or to address 
30.3 	high-priority needs identified in local water 
30.4 	management plans.
30.5 	$500,000 the first year and $500,000 the 
30.6 	second year are for implementation and 
30.7 	enforcement of the Wetland Conservation 
30.8 	Act. The board must make available 
30.9 	information about final enforcement actions 
30.10 	on the board's Web site.
30.11 	$60,000 each year is for staff to monitor and 
30.12 	enforce wetland replacement, wetland bank 
30.13 	sites, and the Wetland Conservation Act. The 
30.14 	board must include in its biennial report to 
30.15 	the legislature information on all state and 
30.16 	local units of government, including special 
30.17 	purpose districts and impacts on wetlands 
30.18 	in the state. This information must be made 
30.19 	available on the board's Web site.
30.20 	$100,000 each  year is for transfer to the 
30.21 	commissioner of natural resources for 
30.22 	enforcement of  wetland violations.
30.23 	$100,000 each year is to make grants to local 
30.24 	units  of government within the 11-county 
30.25 	metropolitan area to improve response to 
30.26 	major wetland violations.
30.27 	$100,000 each year is for cost-share grants 
30.28 	to local governments for public drainage 
30.29 	records modernization.
30.30 	$212,000 each year is to provide assistance 
30.31 	to local drainage management officials and 
30.32 	for the costs of the Drainage Work Group.
30.33 	$90,000 the first year and $90,000 the second 
30.34 	year are for a grant to the Red River Basin 
31.1 	Commission for water quality and floodplain 
31.2 	management, including administration of 
31.3 	programs. The commission shall submit 
31.4 	a report to the chairs of the legislative 
31.5 	committees having primary jurisdiction 
31.6 	over environment and natural resources 
31.7 	policy and finance on the accomplishments 
31.8 	achieved with this appropriation by January 
31.9 	15, 2012. If the appropriation in either year 
31.10 	is insufficient, the appropriation in the other 
31.11 	year is available for it.
31.12 	$90,000 each year is to the Minnesota River 
31.13 	Basin Joint Powers Board, also known as 
31.14 	the Minnesota River Board, for operating 
31.15 	expenses to measure and report the results of 
31.16 	projects in the 12 major watersheds within 
31.17 	the Minnesota River basin.
31.18 	$130,000 each year is for grants to Area 
31.19 	II, Minnesota River Basin Projects, 
31.20 	for floodplain management, including 
31.21 	administration of programs.
31.22 	Notwithstanding Minnesota Statutes, section 
31.23 	103C.501, a balance in the board's cost-share 
31.24 	program is available for $150,000 each year 
31.25 	for evaluating and reporting on performance, 
31.26 	financial, and activity information of local 
31.27 	water management entities as provided for in 
31.28 	Minnesota Statutes, section 103B.102.
31.29 	The appropriations for grants in this 
31.30 	section are available until expended. If an 
31.31 	appropriation for grants in either year is 
31.32 	insufficient, the appropriation in the other 
31.33 	year is available for it.
31.34 	To the extent possible, any person conducting 
31.35 	a restoration with money appropriated in 
32.1 	this section must plant vegetation or sow 
32.2 	seed only of ecotypes native to Minnesota, 
32.3 	and preferably of the local ecotype, using a 
32.4 	high diversity of species originating from as 
32.5 	close to the restoration site as possible, and 
32.6 	protect existing native prairies from genetic 
32.7 	contamination.
32.8 	A recipient of a grant funded by an 
32.9 	appropriation under this section shall display 
32.10 	on its Web site detailed information on 
32.11 	the expenditure of the grant funds, and 
32.12 	measurable outcomes as a result of the 
32.13 	expenditure of funds, and submit this 
32.14 	information to the board by June 30 each 
32.15 	year. A recipient without an active Web site 
32.16 	shall report to the board by June 30 each year 
32.17 	detailed information on the expenditure of 
32.18 	the grant funds, and measurable outcomes 
32.19 	as a result of the expenditure of funds. The 
32.20 	board shall display the information received 
32.21 	by recipients under this paragraph on the 
32.22 	board's Web site.
32.23 	The board shall require the chief financial 
32.24 	officer or other financial staff to display the 
32.25 	board's budget on the board's Web site in a 
32.26 	manner that will allow citizens to understand 
32.27 	more easily the value they are getting for 
32.28 	their money.

32.29	Sec. 6. METROPOLITAN COUNCIL
 	$
	8,880,000
	$
	8,880,000

32.30	Appropriations by Fund
	
32.31		2010
	2011
	
32.32	General
	3,810,000
	3,810,000
	
32.33	Natural Resources
	5,070,000
	5,070,000
	
32.34 	$3,810,000 the first year and $3,810,000 
32.35 	the second year are for metropolitan area 
33.1 	regional parks operation and maintenance 
33.2 	according to Minnesota Statutes, section 
33.3 	473.351.
33.4 	$5,070,000 the first year and $5,070,000 the 
33.5 	second year are from the natural resources 
33.6 	fund for metropolitan area regional parks 
33.7 	and trails maintenance and operations. This 
33.8 	appropriation is from the revenue deposited 
33.9 	in the natural resources fund under Minnesota 
33.10 	Statutes, section 297A.94, paragraph (e), 
33.11 	clause (3).

33.12
33.13	Sec. 7. MINNESOTA CONSERVATION 
CORPS
 	$
	945,000
	$
	945,000

33.14	Appropriations by Fund
	
33.15		2010
	2011
	
33.16	General
	455,000
	455,000
	
33.17	Natural Resources
	490,000
	490,000
	
33.18 	The Minnesota Conservation Corps may 
33.19 	receive money appropriated from the 
33.20 	natural resources fund under this section 
33.21 	only as provided in an agreement with the 
33.22 	commissioner of natural resources.

33.23	Sec. 8. ZOOLOGICAL BOARD
 	$
	6,728,000
	$
	6,728,000

33.24	Appropriations by Fund
	
33.25		2010
	2011
	
33.26	General
	6,568,000
	6,568,000
	
33.27	Natural Resources
	160,000
	160,000
	
33.28 	$160,000 the first year and $160,000 the 
33.29 	second year are from the natural resources 
33.30 	fund from the revenue deposited under 
33.31 	Minnesota Statutes, section 297A.94, 
33.32 	paragraph (e), clause (5).

33.33
33.34	Sec. 9. SCIENCE MUSEUM OF 
MINNESOTA
 	$
	1,187,000
	$
	1,187,000

34.1 	Sec. 10. Minnesota Statutes 2008, section 84.0835, subdivision 3, is amended to read:
34.2 		Subd. 3.Citation authority. Employees designated by the commissioner under 
34.3 	subdivision 1 may issue citations, as specifically authorized under this subdivision, for 
34.4 	violations of:
34.5 	(1) sections 85.052, subdivision 3 (payment of camping fees in state parks), 
34.6 	85.45, subdivision 1 (cross-country ski pass), and85.46 (horse trail pass), and 84.9275 
34.7 	(nonresident all-terrain vehicle state trail pass); 
34.8 	(2) rules relating to hours and days of operation, restricted areas, noise, fireworks, 
34.9 	environmental protection, fires and refuse, pets, picnicking, camping and dispersed 
34.10 	camping, nonmotorized uses, construction of unauthorized permanent trails, mooring of 
34.11 	boats, fish cleaning, swimming, storage and abandonment of personal property, structures 
34.12 	and stands, animal trespass, state park individual and group motor vehicle permits, 
34.13 	licensed motor vehicles, designated roads, and snowmobile operation off trails;
34.14 	(3) rules relating to off-highway vehicle registration, display of registration numbers, 
34.15 	required equipment, operation restrictions, off-trail use for hunting and trapping, and 
34.16 	operation in lakes, rivers, and streams;
34.17 	(4) rules relating to off-highway vehicle and snowmobile operation causing damage 
34.18 	or in closed areas within the Richard J. Dorer Memorial Hardwood State Forest;
34.19 	(5) rules relating to parking, snow removal, and damage on state forest roads; and
34.20 	(6) rules relating to controlled hunting zones on major wildlife management units.

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

34.22 	Sec. 11. [84.0854] GIFT CARD AND CERTIFICATE SALES; RECEIPTS; 
34.23 	TRANSFERS; APPROPRIATION.
34.24 		Subdivision 1.Sales authorized; gift cards and certificates. The commissioner 
34.25 	may sell gift cards and certificates that can be used to purchase licenses, permits, products, 
34.26 	or services sold by the commissioner. Gift cards and certificates are valid until they 
34.27 	are redeemed. The commissioner may advertise the availability of this program and 
34.28 	items offered for sale under this section. The commissioner may make the purchase and 
34.29 	redemption of gift cards available electronically.
34.30 		Subd. 2.Receipts; disposition. Proceeds of gift card and certificate sales shall be 
34.31 	deposited in an account in the special revenue fund. When gift cards or certificates are 
34.32 	redeemed, funds shall be transferred to the appropriate account or fund based on the 
34.33 	license, permit, product, or service purchased. Money in the gift card and certificate 
34.34 	account shall accrue interest, which shall be credited to the account. Interest on funds in 
34.35 	the account is appropriated to the commissioner to help cover the cost of administering 
35.1 	the gift card and certificate program. Money from gift cards and certificates sold but 
35.2 	unredeemed after three years shall be transferred to the various accounts and funds 
35.3 	receiving revenue from purchases of licenses, permits, products, or services purchased 
35.4 	with gift card or certificate redemptions in the last two fiscal years. Unredeemed funds 
35.5 	shall be distributed based on the dollar value of cards redeemed for the various licenses, 
35.6 	permits, products, or services on a pro rata basis.
35.7 		Subd. 3.Exemption from rulemaking. This section is not subject to the 
35.8 	rulemaking provisions of chapter 14 and section 14.386 does not apply.

35.9 	Sec. 12. Minnesota Statutes 2008, section 84.415, subdivision 5, is amended to read:
35.10 		Subd. 5.Fee Fees; disposition. (a) In the event the construction of such lines 
35.11 	causes damage to timber or other property of the state on or along the same, the license 
35.12 	or permit shall also provide for payment to the commissioner of finance of the amount 
35.13 	thereof of the damages as may be determined by the commissioner.
35.14 	(b) The application fee specified in Minnesota Rules is credited to the general fund.
35.15 	All money received under such licenses or permits(c) The utility crossing fees 
35.16 	specified in Minnesota Rules shall be credited to the fund to which other income or 
35.17 	proceeds of sale from such the land would be credited, if provision therefor be made as 
35.18 	provided by law, otherwise to the general fund.
35.19 	(d) Money received from licenses and permits issued under this section for use of 
35.20 	the beds of navigable waters shall be credited to the permanent school fund.
35.21 	(e) Money received under subdivision 6 must be credited to the land management 
35.22 	account in the natural resources fund and is appropriated to the commissioner of natural 
35.23 	resources to cover the costs incurred for issuing and monitoring utility licenses.

35.24 	Sec. 13. Minnesota Statutes 2008, section 84.415, is amended by adding a subdivision 
35.25 	to read:
35.26 		Subd. 6.Supplemental application fee and monitoring fee. (a) In addition to the 
35.27 	application fee and utility crossing fees specified in Minnesota Rules, the commissioner of 
35.28 	natural resources shall assess the applicant for a utility license the following fees:
35.29 	(1) a supplemental application fee of $1,500 for a public water crossing license and 
35.30 	a supplemental application fee of $4,500 for a public lands crossing license, to cover 
35.31 	reasonable costs for reviewing the application and preparing the license; and
35.32 	(2) a monitoring fee to cover the projected reasonable costs for monitoring the 
35.33 	construction of the utility line and preparing special terms and conditions of the license 
36.1 	to ensure proper construction. The commissioner must give the applicant an estimate of 
36.2 	the monitoring fee before the applicant submits the fee.
36.3 	(b) The applicant shall pay fees under this subdivision to the commissioner of 
36.4 	natural resources. The commissioner shall not issue the license until the applicant has 
36.5 	paid all fees in full.
36.6 	(c) Upon completion of construction of the improvement for which the license 
36.7 	or permit was issued, the commissioner shall refund the unobligated balance from the 
36.8 	monitoring fee revenue. The commissioner shall not return the application fees, even 
36.9 	if the application is withdrawn or denied.

36.10 	Sec. 14. Minnesota Statutes 2008, section 84.63, is amended to read:
36.11 	84.63 CONVEYANCE OF INTERESTS IN LANDS TO STATE AND 
36.12 	FEDERAL GOVERNMENTS.
36.13 	(a) Notwithstanding any existing law to the contrary, the commissioner of natural 
36.14 	resources is hereby authorized on behalf of the state to convey to the United States 
36.15 	or to the state of Minnesota or any of its subdivisions, upon state-owned lands under 
36.16 	the administration of the commissioner of natural resources, permanent or temporary 
36.17 	easements for specified periods or otherwise for trails, highways, roads including 
36.18 	limitation of right of access from the lands to adjacent highways and roads, flowage for 
36.19 	development of fish and game resources, stream protection, flood control, and necessary 
36.20 	appurtenances thereto, such conveyances to be made upon such terms and conditions 
36.21 	including provision for reversion in the event of non-user as the commissioner of natural 
36.22 	resources may determine.
36.23 	(b) In addition to the fee for the market value of the easement, the commissioner of 
36.24 	natural resources shall assess the applicant the following fees:
36.25 	(1) an application fee of $2,000 to cover reasonable costs for reviewing the 
36.26 	application and preparing the easement; and
36.27 	(2) a monitoring fee to cover the projected reasonable costs for monitoring the 
36.28 	construction of the improvement for which the easement was conveyed and preparing 
36.29 	special terms and conditions for the easement. The commissioner must give the applicant 
36.30 	an estimate of the monitoring fee before the applicant submits the fee.
36.31 	(c) The applicant shall pay these fees to the commissioner of natural resources. 
36.32 	The commissioner shall not issue the easement until the applicant has paid in full the 
36.33 	application fee, the monitoring fee, and the market value payment for the easement.
36.34 	(d) Upon completion of construction of the improvement for which the easement 
36.35 	was conveyed, the commissioner shall refund the unobligated balance from the monitoring 
37.1 	fee revenue. The commissioner shall not return the application fee, even if the application 
37.2 	is withdrawn or denied.
37.3 	(e) Money received under paragraph (b) must be deposited in the land management 
37.4 	account in the natural resources fund and is appropriated to the commissioner of natural 
37.5 	resources to cover the reasonable costs incurred for issuing and monitoring easements.

37.6 	Sec. 15. Minnesota Statutes 2008, section 84.631, is amended to read:
37.7 	84.631 ROAD EASEMENTS ACROSS STATE LANDS.
37.8 	(a) Except as provided in section 85.015, subdivision 1b, the commissioner, on 
37.9 	behalf of the state, may convey a road easement across state land under the commissioner's 
37.10 	jurisdiction other than school trust land, to a private person requesting an easement for 
37.11 	access to property owned by the person only if the following requirements are met: (1) 
37.12 	there are no reasonable alternatives to obtain access to the property; and (2) the exercise 
37.13 	of the easement will not cause significant adverse environmental or natural resource 
37.14 	management impacts.
37.15 	(b) The commissioner shall:
37.16 	(1) require the applicant to pay the market value of the easement;
37.17 	(2) provide that the easement reverts to the state in the event of nonuse; and
37.18 	(3) impose other terms and conditions of use as necessary and appropriate under 
37.19 	the circumstances.
37.20 	(c) An applicant shall submit aan application fee of up to $2,000 with each 
37.21 	application for a road easement across state land. The commissioner must give the 
37.22 	applicant an estimate of the costs of the road easement before the applicant submits the 
37.23 	fee. The application fee is nonrefundable, even if the application is withdrawn or denied.
37.24 	(d) In addition to the payment for the market value of the easement and the 
37.25 	application fee, the commissioner of natural resources shall assess the applicant a 
37.26 	monitoring fee to cover the projected reasonable costs for monitoring the construction of 
37.27 	the road and preparing special terms and conditions for the easement. The commissioner 
37.28 	must give the applicant an estimate of the monitoring fee before the applicant submits 
37.29 	the fee. The applicant shall pay the application and monitoring fees to the commissioner 
37.30 	of natural resources. The commissioner shall not issue the easement until the applicant 
37.31 	has paid in full the application fee, the monitoring fee, and the market value payment for 
37.32 	the easement. 
37.33 	(e) Upon completion of construction of the road, the commissioner shall refund the 
37.34 	unobligated balance from the monitoring fee revenue.
38.1 	(f) Fees collected under paragraphparagraphs (c) and (d) must be deposited in
38.2 	credited to the land management account in the natural resources fund and are appropriated 
38.3 	to the commissioner of natural resources to cover the reasonable costs incurred under 
38.4 	this section.

38.5 	Sec. 16. Minnesota Statutes 2008, section 84.632, is amended to read:
38.6 	84.632 CONVEYANCE OF UNNEEDED STATE EASEMENTS.
38.7 	(a) Notwithstanding section 92.45, the commissioner of natural resources may, 
38.8 	in the name of the state, release all or part of an easement acquired by the state upon 
38.9 	application of a landowner whose property is burdened with the easement if the easement 
38.10 	is not needed for state purposes.  
38.11 	(b) All or part of an easement may be released by payment of consideration of not 
38.12 	less than $500, to be determined by the commissioner the market value of the easement. 
38.13 	The release must be in a form approved by the attorney general.
38.14 	(c) Money received for release of the easement under paragraph (b) must be credited 
38.15 	to the account from which money was expended for purchase of the easement. If there is 
38.16 	no specific account, the money must be credited to the land acquisition account established 
38.17 	in section 94.165.  
38.18 	(d) In addition to payment under paragraph (b), the commissioner of natural 
38.19 	resources shall assess a landowner who applies for a release under this section an 
38.20 	application fee of $2,000 for reviewing the application and preparing the release of 
38.21 	easement. The applicant shall pay the application fee to the commissioner of natural 
38.22 	resources. The commissioner shall not issue the release of easement until the applicant 
38.23 	has paid the application fee in full. The commissioner shall not return the application fee, 
38.24 	even if the application is withdrawn or denied.
38.25 	(e) Money received under paragraph (d) must be credited to the land management 
38.26 	account in the natural resources fund and is appropriated to the commissioner of natural 
38.27 	resources to cover the reasonable costs incurred under this section.

38.28 	Sec. 17. Minnesota Statutes 2008, section 84.922, subdivision 1a, is amended to read:
38.29 		Subd. 1a.Exemptions. All-terrain vehicles exempt from registration are:
38.30 	(1) vehicles owned and used by the United States, the state, another state, or a 
38.31 	political subdivision;
38.32 	(2) vehicles registered in another state or country that have not been in this state for 
38.33 	more than 30 consecutive days; 
38.34 	(3) vehicles that:
39.1 	(i) are owned by a resident of another state or country that does not require 
39.2 	registration of all-terrain vehicles;
39.3 	(ii) have not been in this state for more than 30 consecutive days; and
39.4 	(iii) are operated on state and grant-in-aid trails by a nonresident possessing a 
39.5 	nonresident all-terrain vehicle state trail pass;
39.6 	(3) (4) vehicles used exclusively in organized track racing events; and
39.7 	(4) (5) vehicles that are 25 years old or older and were originally produced as a 
39.8 	separate identifiable make by a manufacturer.

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

39.10 	Sec. 18. [84.9275] NONRESIDENT ALL-TERRAIN VEHICLE STATE TRAIL 
39.11 	PASS.
39.12 		Subdivision 1.Pass required; fee. (a) A nonresident may not operate an all-terrain 
39.13 	vehicle on a state or grant-in-aid all-terrain vehicle trail unless the operator carries a valid 
39.14 	nonresident all-terrain vehicle state trail pass in immediate possession. The pass must 
39.15 	be available for inspection by a peace officer, a conservation officer, or an employee 
39.16 	designated under section 84.0835.
39.17 	(b) The commissioner of natural resources shall issue a pass upon application and 
39.18 	payment of a $20 fee. The pass is valid from January 1 through December 31. Fees 
39.19 	collected under this section, except for the issuing fee for licensing agents, shall be 
39.20 	deposited in the state treasury and credited to the all-terrain vehicle account in the natural 
39.21 	resources fund and, except for the electronic licensing system commission established by 
39.22 	the commissioner under section 84.027, subdivision 15, must be used for grants-in-aid to 
39.23 	counties and municipalities for all-terrain vehicle organizations to construct and maintain 
39.24 	all-terrain vehicle trails and use areas.
39.25 	(c) A nonresident all-terrain vehicle state trail pass is not required for:
39.26 	(1) an all-terrain vehicle that is owned and used by the United States, another state, 
39.27 	or a political subdivision thereof that is exempt from registration under section 84.922, 
39.28 	subdivision 1a; or
39.29 	(2) a person operating an all-terrain vehicle only on the portion of a trail that is 
39.30 	owned by the person or the person's spouse, child, or parent.
39.31 		Subd. 2.License agents. The commissioner may appoint agents to issue and sell 
39.32 	nonresident all-terrain vehicle state trail passes. The commissioner may revoke the 
39.33 	appointment of an agent at any time. The commissioner may adopt additional rules as 
39.34 	provided in section 97A.485, subdivision 11. An agent shall observe all rules adopted 
39.35 	by the commissioner for accounting and handling of passes pursuant to section 97A.485, 
40.1 	subdivision 11. An agent shall promptly deposit and remit all money received from the 
40.2 	sale of the passes, exclusive of the issuing fee, to the commissioner.
40.3 		Subd. 3.Issuance of passes. The commissioner and agents shall issue and sell 
40.4 	nonresident all-terrain vehicle state trail passes. The commissioner shall also make the 
40.5 	passes available through the electronic licensing system established under section 84.027, 
40.6 	subdivision 15.
40.7 		Subd. 4.Agent's fee. In addition to the fee for a pass, an issuing fee of $1 per pass 
40.8 	shall be charged. The issuing fee may be retained by the seller of the pass. Issuing fees for 
40.9 	passes issued by the commissioner shall be deposited in the all-terrain vehicle account in 
40.10 	the natural resources fund and retained for the operation of the electronic licensing system.
40.11 		Subd. 5.Duplicate passes. The commissioner and agents shall issue a duplicate 
40.12 	pass to persons whose pass is lost or destroyed using the process established under section 
40.13 	97A.405, subdivision 3, and rules adopted thereunder. The fee for a duplicate nonresident 
40.14 	all-terrain vehicle state trail pass is $2, with an issuing fee of 50 cents.

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

40.16 	Sec. 19. Minnesota Statutes 2008, section 84D.15, subdivision 2, is amended to read:
40.17 		Subd. 2.Receipts. Money received from surcharges on watercraft licenses under 
40.18 	section 86B.415, subdivision 7, and civil penalties under section 84D.13 shall be deposited 
40.19 	in the invasive species account. Each year, the commissioner of finance shall transfer from 
40.20 	the game and fish fund to the invasive species account, the annual surcharge collected on 
40.21 	nonresident fishing licenses under section 97A.475, subdivision 7, paragraph (b). In fiscal 
40.22 	years 2010 and 2011, the commissioner of finance shall transfer $725,000 from the water 
40.23 	recreation account under section 86B.706 to the invasive species account.

40.24 	Sec. 20. Minnesota Statutes 2008, section 85.015, subdivision 1b, is amended to read:
40.25 		Subd. 1b.Easements for ingress and egress. (a) Notwithstanding section 16A.695, 
40.26 	except as provided in paragraph (b), when a trail is established under this section, a 
40.27 	private property owner who has a preexisting right of ingress and egress over the trail 
40.28 	right-of-way is granted, without charge, a permanent easement for ingress and egress 
40.29 	purposes only. The easement is limited to the preexisting crossing and reverts to the state 
40.30 	upon abandonment. Nothing in this subdivision is intended to diminish or alter any written 
40.31 	or recorded easement that existed before the state acquired the land for the trail. 
40.32 	(b) The commissioner of natural resources shall assess the applicant an application 
40.33 	fee of $2,000 for reviewing the application and preparing the easement. The applicant 
40.34 	shall pay the application fee to the commissioner of natural resources. The commissioner 
41.1 	shall not issue the easement until the applicant has paid the application fee in full. The 
41.2 	commissioner shall not return the application fee, even if the application is withdrawn 
41.3 	or denied.
41.4 	(c) Money received under paragraph (b) must be credited to the land management 
41.5 	account in the natural resources fund and is appropriated to the commissioner of natural 
41.6 	resources to cover the reasonable costs incurred under this section.

41.7 	Sec. 21. Minnesota Statutes 2008, section 85.053, subdivision 10, is amended to read:
41.8 		Subd. 10.Free entrance; totally and permanently disabled veterans. The 
41.9 	commissioner shall issue an annual park permit for no charge for to any veteran with a 
41.10 	total and permanent service-connected disability, as determined by the United States 
41.11 	Department of Veterans Affairs, who presents each year a copy of their determination 
41.12 	letter to a park attendant or commissioner's designee. For the purposes of this section, 
41.13 	"veteran"with a total and permanent service-connected disability" means a resident who 
41.14 	has a total and permanent service-connected disability as adjudicated by the United States 
41.15 	Veterans Administration or by the retirement board of one of the several branches of the 
41.16 	armed forces has the meaning given in section 197.447.

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

41.19 	Sec. 22. Minnesota Statutes 2008, section 85.46, subdivision 3, is amended to read:
41.20 		Subd. 3.Issuance. The commissioner of natural resources and agents shall issue 
41.21 	and sell horse trail passes. The pass shall include the applicant's signature and other 
41.22 	information deemed necessary by the commissioner. To be valid, a daily or annual pass 
41.23 	must be signed by the person riding, leading, or driving the horse, and a commercial 
41.24 	annual pass must be signed by the owner of the commercial trail riding facility.

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

41.26 	Sec. 23. Minnesota Statutes 2008, section 85.46, subdivision 4, is amended to read:
41.27 		Subd. 4.Pass fees. (a) The fee for an annual horse trail pass is $20 for an individual 
41.28 	16 years of age and over. The fee shall be collected at the time the pass is purchased. 
41.29 	Annual passes are valid for one year beginning January 1 and ending December 31.
41.30 	(b) The fee for a daily horse trail pass is $4 for an individual 16 years of age and 
41.31 	over. The fee shall be collected at the time the pass is purchased. The daily pass is valid 
41.32 	only for the date designated on the pass form.
42.1 	(c) The fee for a commercial annual horse trail pass is $200 and includes issuance 
42.2 	of 15 passes. Additional or individual commercial annual horse trail passes may be 
42.3 	purchased by the commercial trail riding facility owner at a fee of $20 each. Commercial 
42.4 	annual horse trail passes are valid for one year beginning January 1 and ending December 
42.5 	31 and may be affixed to the horse tack, saddle, or person. Commercial annual horse trail 
42.6 	passes are not transferable to another commercial trail riding facility. For the purposes of 
42.7 	this section, a "commercial trail riding facility" is an operation where horses are used for 
42.8 	riding instruction or other equestrian activities for hire or use by others.

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

42.10 	Sec. 24. Minnesota Statutes 2008, section 85.46, subdivision 7, is amended to read:
42.11 		Subd. 7.Duplicate horse trail passes. The commissioner of natural resources and 
42.12 	agents shall issue a duplicate pass to a person or commercial trail riding facility owner 
42.13 	whose pass is lost or destroyed using the process established under section 97A.405, 
42.14 	subdivision 3, and rules adopted thereunder. The fee for a duplicate horse trail pass is $2, 
42.15 	with an issuing fee of 50 cents.

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

42.17 	Sec. 25. [86A.055] PROHIBITION ON SALES OF OUTDOOR RECREATION 
42.18 	SYSTEM LANDS FOR CERTAIN PURPOSES.
42.19 	Notwithstanding Laws 2005, chapter 156, article 2, section 45, as amended by Laws 
42.20 	2007, chapter 148, article 2, section 73, or other law to the contrary, a state agency shall 
42.21 	not sell land that, on or after the effective date of this section, is classified as a unit of the 
42.22 	outdoor recreation system under section 86A.05, for the purpose of anticipated savings 
42.23 	to the general fund.

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

42.25 	Sec. 26. Minnesota Statutes 2008, section 92.685, is amended to read:
42.26 	92.685 LAND MANAGEMENT ACCOUNT.
42.27 	The land management account is created in the natural resources fund. Money 
42.28 	credited to the account is appropriated annually to the commissioner of natural resources 
42.29 	for the Lands and Minerals Division to administer the utility easement program under 
42.30 	section 84.415, the easement program under section 84.63, the road easement program 
43.1 	under section 84.631, the easement release program under section 84.632, and the trail 
43.2 	easement program under section 85.015, subdivision 1b.

43.3 	Sec. 27. Minnesota Statutes 2008, section 93.481, subdivision 1, is amended to read:
43.4 		Subdivision 1.Prohibition against mining without permit; application for 
43.5 	permit. Except as provided in this subdivision, after June 30, 1975, no person shall 
43.6 	engage in or carry out a mining operation for metallic minerals within the state unless the 
43.7 	person has first obtained a permit to mine from the commissioner. Any person engaging 
43.8 	in or carrying out a mining operation as of the effective date of the rules promulgated
43.9 	adopted under section 93.47 shall apply for a permit to mine within 180 days after the 
43.10 	effective date of such rules. Any such existing mining operation may continue during the 
43.11 	pendency of the application for the permit to mine. The person applying for a permit shall 
43.12 	apply on forms prescribed by the commissioner and shall submit such information as the 
43.13 	commissioner may require, including but not limited to the following: 
43.14 	(a) (1) a proposed plan for the reclamation or restoration, or both, of any mining 
43.15 	area affected by mining operations to be conducted on and after the date on which permits 
43.16 	are required for mining under this section;
43.17 	(b) (2) a certificate issued by an insurance company authorized to do business in 
43.18 	the United States that the applicant has a public liability insurance policy in force for 
43.19 	the mining operation for which the permit is sought, or evidence that the applicant has 
43.20 	satisfied other state or federal self-insurance requirements, to provide personal injury 
43.21 	and property damage protection in an amount adequate to compensate any persons who 
43.22 	might be damaged as a result of the mining operation or any reclamation or restoration 
43.23 	operations connected with the mining operation;
43.24 	(3) an application fee of:
43.25 	(i) $25,000 for a permit to mine for a taconite mining operation;
43.26 	(ii) $50,000 for a permit to mine for a nonferrous metallic minerals operation;
43.27 	(iii) $10,000 for a permit to mine for a scram mining operation; or
43.28 	(iv) $5,000 for a permit to mine for a peat operation;
43.29 	(c) (4) a bond which may be required pursuant to section 93.49; and 
43.30 	(d) (5) a copy of the applicant's advertisement of the ownership, location, and 
43.31 	boundaries of the proposed mining area and reclamation or restoration operations, which 
43.32 	advertisement shall be published in a legal newspaper in the locality of the proposed site 
43.33 	at least once a week for four successive weeks before the application is filed, except that if 
43.34 	the application is for a permit to conduct lean ore stockpile removal the advertisement 
43.35 	need be published only once.

44.1 	Sec. 28. Minnesota Statutes 2008, section 93.481, subdivision 3, is amended to read:
44.2 		Subd. 3.Term of permit; amendment. A permit issued by the commissioner 
44.3 	pursuant to this section shall be granted for the term determined necessary by the 
44.4 	commissioner for the completion of the proposed mining operation, including reclamation 
44.5 	or restoration. A permit may be amended upon written application to the commissioner. 
44.6 	A permit amendment application fee must be submitted with the written application. The 
44.7 	permit amendment application fee is ten percent of the amount provided for in subdivision 
44.8 	1, clause (3), for an application for the applicable permit to mine. If the commissioner 
44.9 	determines that the proposed amendment constitutes a substantial change to the permit, 
44.10 	the person applying for the amendment shall publish notice in the same manner as for a 
44.11 	new permit, and a hearing shall be held if written objections are received in the same 
44.12 	manner as for a new permit. An amendment may be granted by the commissioner if the 
44.13 	commissioner determines that lawful requirements have been met.

44.14 	Sec. 29. Minnesota Statutes 2008, section 93.481, subdivision 5, is amended to read:
44.15 		Subd. 5.Assignment. A permit may not be assigned or otherwise transferred 
44.16 	without the written approval of the commissioner. A permit assignment application fee 
44.17 	must be submitted with the written application. The permit assignment application fee 
44.18 	is ten percent of the amount provided for in subdivision 1, clause (3), for an application 
44.19 	for the applicable permit to mine.

44.20 	Sec. 30. Minnesota Statutes 2008, section 93.481, subdivision 7, is amended to read:
44.21 		Subd. 7.Mining administration account. The mining administration account is 
44.22 	established as an account in the natural resources fund. Ferrous mining administrative
44.23 	Fees charged to owners, operators, or managers of mines under this section and section 
44.24 	93.482 shall be credited to the account and may be appropriated to the commissioner 
44.25 	to cover the costs of providing and monitoring permits to mine ferrous metals under 
44.26 	this section. Earnings accruing from investment of the account remain with the account 
44.27 	until appropriated.

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

44.29 	Sec. 31. [93.482] RECLAMATION FEES.
44.30 		Subdivision 1.Annual permit to mine fee. (a) The commissioner shall charge 
44.31 	every person holding a permit to mine an annual permit fee. The fee is payable to the 
44.32 	commissioner by June 30 of each year, beginning in 2009.
45.1 	(b) The annual permit to mine fee for a taconite mining operation is $60,000 if the 
45.2 	operation had production within the calendar year immediately preceding the year in 
45.3 	which payment is due and $30,000 if there was no production within the immediately 
45.4 	preceding calendar year.
45.5 	(c) The annual permit to mine fee for a nonferrous metallic minerals mining 
45.6 	operation is $75,000 if the operation had production within the calendar year immediately 
45.7 	preceding the year in which payment is due and $37,500 if there was no production within 
45.8 	the immediately preceding calendar year.
45.9 	(d) The annual permit to mine fee for a scram mining operation is $5,000 if the 
45.10 	operation had production within the calendar year immediately preceding the year in 
45.11 	which payment is due and $2,500 if there was no production within the immediately 
45.12 	preceding calendar year.
45.13 	(e) The annual permit to mine fee for a peat mining operation is $1,000 if the 
45.14 	operation had production within the calendar year immediately preceding the year in 
45.15 	which payment is due and $500 if there was no production within the immediately 
45.16 	preceding calendar year.
45.17 		Subd. 2.Supplemental application fee for taconite and nonferrous metallic 
45.18 	minerals mining operation. (a) In addition to the application fee specified in section 
45.19 	93.481, the commissioner shall assess a person submitting an application for a permit to 
45.20 	mine for a taconite or a nonferrous metallic minerals mining operation the reasonable 
45.21 	costs for reviewing the application and preparing the permit to mine. For nonferrous 
45.22 	metallic minerals mining, the commissioner shall assess reasonable costs for monitoring 
45.23 	construction of the mining facilities.
45.24 	(b) The commissioner must give the applicant an estimate of the supplemental 
45.25 	application fee under this subdivision. The estimate must include a brief description 
45.26 	of the tasks to be performed and the estimated cost of each task. The application fee 
45.27 	under section 93.481 must be subtracted from the estimate of costs to determine the 
45.28 	supplemental application fee.
45.29 	(c) The applicant and the commissioner shall enter into a written agreement to cover 
45.30 	the estimated costs to be incurred by the commissioner.
45.31 	(d) The commissioner shall not issue the permit to mine until the applicant has paid 
45.32 	all fees in full. Upon completion of construction of a nonferrous metallic minerals facility, 
45.33 	the commissioner shall refund the unobligated balance of the monitoring fee revenue.
45.34 		Subd. 3.Reclamation fee on taconite iron ore produced. (a) For the purposes 
45.35 	of this subdivision:
46.1 	(1) "fee owner" means a person having any right, title, or interest in any minerals 
46.2 	or mineral rights in this state from which taconite iron ore is mined. Fee owner does not 
46.3 	include the United States, the state, or the University of Minnesota; 
46.4 	(2) "taconite iron ore" means a ferruginous chert or ferruginous slate in the form of 
46.5 	compact siliceous rock, in which the iron oxide is so finely disseminated that substantially 
46.6 	all of the iron bearing particles of merchantable grade are smaller than 20 mesh; and
46.7 	(3) "ton" means a gross ton of 2,240 pounds.
46.8 	(b) A fee owner is subject to a reclamation fee of $.0075 per ton of taconite iron ore 
46.9 	mined from the minerals or mineral rights owned by the fee owner.
46.10 	(c) The fee owner shall make payment to the commissioner no later than January 
46.11 	20 of each calendar year for ore removed during the previous calendar year. The fee 
46.12 	owner is liable for the payment of the reclamation fee. The fee owner may enter into an 
46.13 	agreement with the mining operator to make the payment on their behalf from royalties 
46.14 	due and owing or other financial terms.

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

46.16 	Sec. 32. Minnesota Statutes 2008, section 94.342, subdivision 3, is amended to read:
46.17 		Subd. 3.Additional restrictions on riparian land. (a) Land bordering on or 
46.18 	adjacent to any meandered or other public waters and withdrawn from sale by law is 
46.19 	riparian land. Riparian land may not be given in exchange unless:
46.20 	(1) expressly authorized by the legislature or unless;
46.21 	(2) through the same exchange the state acquires land on the same or other public 
46.22 	waters in the same general vicinity affording at least equal opportunity for access to the 
46.23 	waters and other riparian use by the public;
46.24 	(3) Class A land is being exchanged for Class A land; or
46.25 	 provided, that any (4) the exchange with is an agency of  the United States or any 
46.26 	agency thereof may be made free from this limitation upon condition that and the state 
46.27 	land given in exchange bordering on public waters shall be subject to reservations by 
46.28 	the state for public travel along the shores as provided by section 92.45, unless waived 
46.29 	as provided in this subdivision paragraph (b), and that there shall be reserved by the 
46.30 	state such additional rights of public use upon suitable portions of such state land as 
46.31 	the commissioner of natural resources, with the approval of the Land Exchange Board, 
46.32 	may deem necessary or desirable for camping, hunting, fishing, access to the water, and 
46.33 	other public uses.
46.34 	In regard to (b) For Class B or riparian land that is contained within that portion 
46.35 	of the Superior National Forest that is designated as the Boundary Waters Canoe Area 
47.1 	Wilderness, the condition that state land given in exchange bordering on public waters 
47.2 	must be subject to the public travel reservations provided in section 92.45, may be waived 
47.3 	by the Land Exchange Board upon the recommendation of the commissioner of natural 
47.4 	resources and, if the land is Class B land, the additional recommendation of the county 
47.5 	board in which the land is located.

47.6 	Sec. 33. Minnesota Statutes 2008, section 97A.075, subdivision 1, is amended to read:
47.7 		Subdivision 1.Deer, bear, and lifetime licenses. (a) For purposes of this 
47.8 	subdivision, "deer license" means a license issued under section 97A.475, subdivisions 2, 
47.9 	clauses (5), (6), (7), (11), (13), (15), (16), and (17), and 3, clauses (2), (3), (4), (9), (11), 
47.10 	(12), and (13), and licenses issued under section 97B.301, subdivision 4. 
47.11 	(b) $2 from each annual deer license and $2 annually from the lifetime fish and 
47.12 	wildlife trust fund, established in section 97A.4742, for each license issued under section 
47.13 	97A.473, subdivision 4, shall be credited to the deer management account and shall be 
47.14 	used for deer habitat improvement or deer management programs. 
47.15 	(c) $1 from each annual deer license and each bear license and $1 annually from 
47.16 	the lifetime fish and wildlife trust fund, established in section 97A.4742, for each license 
47.17 	issued under section 97A.473, subdivision 4, shall be credited to the deer and bear 
47.18 	management account and shall be used for deer and bear management programs, including 
47.19 	a computerized licensing system. 
47.20 	(d) Fifty cents from each deer license is credited to the emergency deer feeding 
47.21 	and wild cervidae health management account and is appropriated for emergency deer 
47.22 	feeding and wild cervidae health management. Money appropriated for emergency 
47.23 	deer feeding and wild cervidae health management is available until expended. When 
47.24 	the unencumbered balance in the appropriation for emergency deer feeding and wild 
47.25 	cervidae health management at the end of a fiscal year exceeds $2,500,000 for the first 
47.26 	time, $750,000 is canceled to the unappropriated balance of the game and fish fund.
47.27 	The commissioner must inform the legislative chairs of the natural resources finance 
47.28 	committees every two years on how the money for emergency deer feeding and wild 
47.29 	cervidae health management has been spent. 
47.30 	Thereafter, When the unencumbered balance in the appropriation for emergency 
47.31 	deer feeding and wild cervidae health management exceeds $2,500,000 at the end of a 
47.32 	fiscal year, the unencumbered balance in excess of $2,500,000 is canceled and available 
47.33 	for deer and bear management programs and computerized licensing.

47.34 	Sec. 34. Minnesota Statutes 2008, section 103G.271, subdivision 6, is amended to read:
48.1 		Subd. 6.Water use permit processing fee. (a) Except as described in paragraphs 
48.2 	(b) to (f), a water use permit processing fee must be prescribed by the commissioner in 
48.3 	accordance with the schedule of fees in this subdivision for each water use permit in force 
48.4 	at any time during the year. The schedule is as follows, with the stated fee in each clause 
48.5 	applied to the total amount appropriated:
48.6 	(1) $140 for amounts not exceeding 50,000,000 gallons per year;
48.7 	(2) $3.50 per 1,000,000 gallons for amounts greater than 50,000,000 gallons but less 
48.8 	than 100,000,000 gallons per year;
48.9 	(3) $4 per 1,000,000 gallons for amounts greater than 100,000,000 gallons but less 
48.10 	than 150,000,000 gallons per year;
48.11 	(4) $4.50 per 1,000,000 gallons for amounts greater than 150,000,000 gallons but 
48.12 	less than 200,000,000 gallons per year;
48.13 	(5) $5 per 1,000,000 gallons for amounts greater than 200,000,000 gallons but less 
48.14 	than 250,000,000 gallons per year;
48.15 	(6) $5.50 per 1,000,000 gallons for amounts greater than 250,000,000 gallons but 
48.16 	less than 300,000,000 gallons per year;
48.17 	(7) $6 per 1,000,000 gallons for amounts greater than 300,000,000 gallons but less 
48.18 	than 350,000,000 gallons per year;
48.19 	(8) $6.50 per 1,000,000 gallons for amounts greater than 350,000,000 gallons but 
48.20 	less than 400,000,000 gallons per year;
48.21 	(9) $7 per 1,000,000 gallons for amounts greater than 400,000,000 gallons but less 
48.22 	than 450,000,000 gallons per year;
48.23 	(10) $7.50 per 1,000,000 gallons for amounts greater than 450,000,000 gallons but 
48.24 	less than 500,000,000 gallons per year; and
48.25 	(11) $8 per 1,000,000 gallons for amounts greater than 500,000,000 gallons per year.
48.26 	(b) For once-through cooling systems, a water use processing fee must be prescribed 
48.27 	by the commissioner in accordance with the following schedule of fees for each water use 
48.28 	permit in force at any time during the year:
48.29 	(1) for nonprofit corporations and school districts, $200 per 1,000,000 gallons; and
48.30 	(2) for all other users, $420 per 1,000,000 gallons.
48.31 	(c) The fee is payable based on the amount of water appropriated during the year 
48.32 	and, except as provided in paragraph (f), the minimum fee is $100.
48.33 	(d) For water use processing fees other than once-through cooling systems:
48.34 	(1) the fee for a city of the first class may not exceed $250,000 per year;
48.35 	(2) the fee for other entities for any permitted use may not exceed:
48.36 	(i) $50,000 $60,000 per year for an entity holding three or fewer permits;
49.1 	(ii) $75,000 $90,000 per year for an entity holding four or five permits;
49.2 	(iii) $250,000 $300,000 per year for an entity holding more than five permits;
49.3 	(3) the fee for agricultural irrigation may not exceed $750 per year;
49.4 	(4) the fee for a municipality that furnishes electric service and cogenerates steam 
49.5 	for home heating may not exceed $10,000 for its permit for water use related to the 
49.6 	cogeneration of electricity and steam; and
49.7 	(5) no fee is required for a project involving the appropriation of surface water to 
49.8 	prevent flood damage or to remove flood waters during a period of flooding, as determined 
49.9 	by the commissioner.
49.10 	(e) Failure to pay the fee is sufficient cause for revoking a permit. A penalty of two 
49.11 	percent per month calculated from the original due date must be imposed on the unpaid 
49.12 	balance of fees remaining 30 days after the sending of a second notice of fees due. A fee 
49.13 	may not be imposed on an agency, as defined in section 16B.01, subdivision 2, or federal 
49.14 	governmental agency holding a water appropriation permit.
49.15 	(f) The minimum water use processing fee for a permit issued for irrigation of 
49.16 	agricultural land is $20 for years in which:
49.17 	(1) there is no appropriation of water under the permit; or
49.18 	(2) the permit is suspended for more than seven consecutive days between May 1 
49.19 	and October 1.
49.20 	(g) A surcharge of $20 $30 per million gallons in addition to the fee prescribed in 
49.21 	paragraph (a) shall be applied to the volume of water used in each of the months of June, 
49.22 	July, and August that exceeds the volume of water used in January for municipal water 
49.23 	use, irrigation of golf courses, and landscape irrigation. The surcharge for municipalities 
49.24 	with more than one permit shall be determined based on the total appropriations from all 
49.25 	permits that supply a common distribution system.

49.26 	Sec. 35. Minnesota Statutes 2008, section 103G.301, subdivision 2, is amended to read:
49.27 		Subd. 2.Permit application fees. (a) A permit application fee to defray the costs of 
49.28 	receiving, recording, and processing the application must be paid for a permit authorized 
49.29 	under this chapter and for each request to amend or transfer an existing permit. Fees 
49.30 	established under this subdivision, unless specified in paragraph (c), shall be compliant 
49.31 	with section 16A.1285.
49.32 	(b) The fee for a project appropriatingProposed projects that require water in excess 
49.33 	of 100 million gallons per year must be assessed fees to recover the reasonable costs 
49.34 	of preparing and processing the permit, including costsincurred to evaluate the project 
49.35 	and the costs incurred for environmental review. Fees collected under this paragraph 
50.1 	must be credited to an account in the natural resources fund and are appropriated to the 
50.2 	commissioner for fiscal years 2008 and 2009.
50.3 	(c) The fee to apply for a permit to appropriate water, other than a permit subject 
50.4 	to thein addition to any fee under paragraph (b); a permit to construct or repair a dam 
50.5 	that is subject to dam safety inspection; or a state general permit or to apply for the state 
50.6 	water bank program is $150. The application fee for a permit to work in public waters or 
50.7 	to divert waters for mining must be at least $150, but not more than $1,000, according to a 
50.8 	schedule of fees adopted under section 16A.1285.

50.9 	Sec. 36. Minnesota Statutes 2008, section 103G.301, subdivision 3, is amended to read:
50.10 		Subd. 3.Field inspection fees. (a) In addition to the application fee, the 
50.11 	commissioner may charge a field inspection fee for:
50.12 	(1) projects requiring a mandatory environmental assessment under chapter 116D;
50.13 	(2) projects undertaken without a required permit or application; and
50.14 	(3) projects undertaken in excess of limitations established in an issued permit.
50.15 	(b) The fee must be at least $100 but not more than actual inspection costs.
50.16 	(c) The fee is to cover actual costs related to a permit applied for under this chapter 
50.17 	or for a project undertaken without proper authorization.
50.18 	(d) The commissioner shall establish a schedule of field inspection fees under section 
50.19 	16A.1285. The schedule must include actual costs related to field inspection, including 
50.20 	investigations of the area affected by the proposed activity, analysis of the proposed 
50.21 	activity, consultant services, and subsequent monitoring, if any, of the activity authorized 
50.22 	by the permit. Fees collected under this subdivision must be credited to an account in the 
50.23 	natural resources fund and are appropriated to the commissioner.

50.24 	Sec. 37. Minnesota Statutes 2008, section 115.03, subdivision 5c, is amended to read:
50.25 		Subd. 5c.Regulation of storm water discharges. (a) The agency may issue a 
50.26 	general permit to any category or subcategory of point source storm water discharges 
50.27 	that it deems administratively reasonable and efficient without making any findings 
50.28 	under agency rules. Nothing in this subdivision precludes the agency from requiring an 
50.29 	individual permit for a point source storm water discharge if the agency finds that it is 
50.30 	appropriate under applicable legal or regulatory standards.
50.31 	(b) Pursuant to this paragraph, the legislature authorizes the agency to adopt and 
50.32 	enforce rules regulating point source storm water discharges. No further legislative 
50.33 	approval is required under any other legal or statutory provision whether enacted before or 
50.34 	after May 29, 2003.
51.1 	(c) The agency shall develop performance standards, design standards, or other 
51.2 	tools to enable and promote the implementation of low-impact development and other 
51.3 	storm water management techniques. For the purposes of this section, "low-impact 
51.4 	development" means an approach to storm water management that mimics a site's natural 
51.5 	hydrology as the landscape is developed. Using the low-impact development approach, 
51.6 	storm water is managed on-site and the rate and volume of predevelopment storm water 
51.7 	reaching receiving waters is unchanged. The calculation of predevelopment hydrology is 
51.8 	based on native soil and vegetation.

51.9 	Sec. 38. Minnesota Statutes 2008, section 115.073, is amended to read:
51.10 	115.073 ENFORCEMENT FUNDING.
51.11 	Except as provided in section 115C.05, all money recovered by the state under this 
51.12 	chapter and chapters 115A and 116, including civil penalties and money paid under an 
51.13 	agreement, stipulation, or settlement, excluding money paid for past due fees or taxes, 
51.14 	up to the amount appropriated for implementation of Laws 1991, chapter 347, must be 
51.15 	deposited in the state treasury and credited to the environmental fund.  

51.16 	Sec. 39. Minnesota Statutes 2008, section 115.56, subdivision 4, is amended to read:
51.17 		Subd. 4.License fee. (a) Until the agency adopts a final rule establishing fees for 
51.18 	licenses under subdivision 2, the fee for a license required under subdivision 2 is $100
51.19 	$200 per year and the annual license fee for a business with multiple licenses shall not 
51.20 	exceed $400.
51.21 	(b) Revenue from the any fees charged by the agency for licenses under subdivision 
51.22 	2 must be credited to the environmental fund and is exempt from section 16A.1285.  

51.23 	Sec. 40. Minnesota Statutes 2008, section 115.77, subdivision 1, is amended to read:
51.24 		Subdivision 1.Fees established. The following fees are established for the 
51.25 	purposes indicated: agency shall collect fees in amounts necessary, but no greater than the 
51.26 	amounts necessary, to cover the reasonable costs of reviewing applications and issuing 
51.27 	certifications.
51.28 	(1) application for examination, $32;
51.29 	(2) issuance of certificate, $23;
51.30 	(3) reexamination resulting from failure to pass an examination, $32;
51.31 	(4) renewal of certificate, $23;
51.32 	(5) replacement certificate, $10; and
51.33 	(6) reinstatement or reciprocity certificate, $40.

52.1 	Sec. 41. Minnesota Statutes 2008, section 115A.1314, subdivision 2, is amended to 
52.2 	read:
52.3 		Subd. 2.Creation of account; appropriations. (a) The electronic waste account 
52.4 	is established in the environmental fund. The commissioner of revenue must deposit 
52.5 	receipts from the fee established in subdivision 1 in the account. Any interest earned on 
52.6 	the account must be credited to the account. Money from other sources may be credited to 
52.7 	the account. Beginning in the second program year and continuing each program year 
52.8 	thereafter, as of the last day of each program year, the commissioner of revenue shall 
52.9 	determine the total amount of the variable fees that were collected. By July 15, 2009, and 
52.10 	each July 15 thereafter, the commissioner of the Pollution Control Agency shall inform 
52.11 	the commissioner of revenue of the amount necessary to operate the program in the new 
52.12 	program year. To the extent that the total fees collected by the commissioner of revenue
52.13 	in connection with this section exceed the amount the commissioner of the Pollution 
52.14 	Control Agency determines necessary to operate the program for the new program 
52.15 	year, the commissioner of revenue shall refund on a pro rata basis, to all manufacturers 
52.16 	who paid any fees for the previous program year, the amount of fees collected by the 
52.17 	commissioner of revenue in excess of the amount necessary to operate the program for the 
52.18 	new program year. No individual refund is required of amounts of $100 or less for a fiscal 
52.19 	year. Manufacturers who report collections less than 50 percent of their obligation for the 
52.20 	previous program year are not eligible for a refund. Amounts not refunded pursuant to this 
52.21 	paragraph shall remain in the account. The commissioner of revenue shall issue refunds 
52.22 	by August 10. In lieu of issuing a refund, the commissioner of revenue may grant credit 
52.23 	against a manufacturer's variable fee due by September 1.
52.24 	(b) Until June 30, 2009 2011, money in the account is annually appropriated to the 
52.25 	Pollution Control Agency:
52.26 	(1) for the purpose of implementing sections 115A.1312 to 115A.1330, including 
52.27 	transfer to the commissioner of revenue to carry out the department's duties under 
52.28 	section 115A.1320, subdivision 2, and transfer to the commissioner of administration for 
52.29 	responsibilities under section 115A.1324; and 
52.30 	(2) to the commissioner of the Pollution Control Agency to be distributed on a 
52.31 	competitive basis through contracts with counties outside the 11-county metropolitan 
52.32 	area, as defined in paragraph (c), and with private entities that collect for recycling 
52.33 	covered electronic devices in counties outside the 11-county metropolitan area, where the 
52.34 	collection and recycling is consistent with the respective county's solid waste plan, for 
52.35 	the purpose of carrying out the activities under sections 115A.1312 to 115A.1330. In 
52.36 	awarding competitive grants under this clause, the commissioner must give preference to 
53.1 	counties and private entities that are working cooperatively with manufacturers to help 
53.2 	them meet their recycling obligations under section 115A.1318, subdivision 1.
53.3 	(c) The 11-county metropolitan area consists of the counties of Anoka, Carver, 
53.4 	Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright.

53.5 	Sec. 42. Minnesota Statutes 2008, section 115A.557, subdivision 1, is amended to read:
53.6 		Subdivision 1.Distribution; formula. Any funds appropriated to the commissioner 
53.7 	for the purpose of distribution to counties under this section must be distributed each fiscal 
53.8 	year by the commissioner based on population, except a county may not receive less than 
53.9 	$55,000 in a fiscal year. If the amount available for distribution under this section is less 
53.10 	or more than the amount available in fiscal year 2001, the minimum county payment under 
53.11 	this section is reduced or increased proportionately. For purposes of this subdivision, 
53.12 	"population" has the definition given in section 477A.011, subdivision 3. A county that 
53.13 	participates in a multicounty district that manages solid waste and that has responsibility 
53.14 	for recycling programs as authorized in section 115A.552, must pass through to the 
53.15 	districts funds received by the county in excess of the minimum county payment under 
53.16 	this section in proportion to the population of the county served by that district. 

53.17 	Sec. 43. [115A.559] COMPOSTING COMPETITIVE GRANT PROGRAM.
53.18 		Subdivision 1.Grant program established. The commissioner shall make 
53.19 	competitive grants to political subdivisions to increase composting, reduce the amount of 
53.20 	organic wastes entering disposal facilities, and reduce the costs associated with hauling 
53.21 	waste by locating the composting site as close as possible to the site where the waste is 
53.22 	generated. To achieve the purpose of the grant program, the commissioner shall actively 
53.23 	recruit potential applicants beyond traditional solid waste professionals and organizations, 
53.24 	such as soil and water conservation districts and schools. Each grant must include an 
53.25 	educational component on the methods and benefits of composting.
53.26 		Subd. 2.Application. (a) The commissioner must develop forms and procedures 
53.27 	for soliciting and reviewing applications for grants under this section.
53.28 	(b) The determination of whether to make a grant under this section is within the 
53.29 	discretion of the commissioner, subject to subdivision 4. The commissioner's decisions 
53.30 	are not subject to judicial review, except for abuse of discretion.
53.31 		Subd. 3.Priorities; eligible projects. (a) If applications for grants exceed the 
53.32 	available appropriations, grants must be made for projects that, in the commissioner's 
53.33 	judgment, provide the highest return in public benefits.
53.34 	(b) To be eligible to receive a grant, a project must:
54.1 	(1) be locally administered;
54.2 	(2) have measurable outcomes; and
54.3 	(3) include at least one of the following elements:
54.4 	(i) the development of erosion control methods that use compost; 
54.5 	(ii) activities to encourage on-site composting by homeowners; or
54.6 	(iii) activities to encourage composting by schools or public institutions.
54.7 		Subd. 4.Cancellation of grant. If a grant is awarded under this section and 
54.8 	funds are not encumbered for the grant within four years after the award date, the grant 
54.9 	must be canceled.

54.10 	Sec. 44. Minnesota Statutes 2008, section 115A.931, is amended to read:
54.11 	115A.931 YARD WASTE PROHIBITION.
54.12 	(a) Except as authorized by the agency, in the metropolitan area after January 1, 
54.13 	1990, and outside the metropolitan area after January 1, 1992, a person may not place 
54.14 	yard waste:
54.15 	(1) in mixed municipal solid waste;
54.16 	(2) in a disposal facility; or
54.17 	(3) in a resource recovery facility except for the purposes of reuse, composting, or 
54.18 	cocomposting.
54.19 	(b) [Renumbered 115A.03, subd 38] 
54.20 	(c) On or after January 1, 2010, a person may not place yard waste or 
54.21 	source-separated compostable materials generated in a metropolitan county in a plastic bag 
54.22 	delivered to a transfer station or compost facility unless the bag meets all the specifications 
54.23 	in ASTM Standard Specification for Compostable Plastics (D6400). For purposes of this 
54.24 	paragraph, "metropolitan county" has the meaning given in section 473.121, subdivision 
54.25 	4, and "ASTM" has the meaning given in section 296A.01, subdivision 6.
54.26 	(d) A person who immediately empties a plastic bag containing yard waste or 
54.27 	source-separated compostable materials delivered to a transfer station or compost facility 
54.28 	and removes the plastic bag from the transfer station or compost facility is exempt from 
54.29 	paragraph (c).
54.30 	(e) Residents of a city of the first class that currently contracts for the collection of 
54.31 	yard waste are exempt from paragraph (c) until January 1, 2013, if, by that date, the 
54.32 	city implements a citywide source-separated compostable materials collection program 
54.33 	using durable carts.

55.1 	Sec. 45. Minnesota Statutes 2008, section 116.0711, is amended to read:
55.2 	116.0711 FEEDLOT PERMIT CONDITIONS PERMITS; CONDITIONS; 
55.3 	COUNTY GRANTS.
55.4 		Subdivision 1.Conditions. (a) The agency shall not require feedlot permittees to 
55.5 	maintain records as to rainfall or snowfall as a condition of a general feedlot permit if the 
55.6 	owner directs the commissioner or agent of the commissioner to appropriate data on 
55.7 	precipitation maintained by a government agency or educational institution.
55.8 	(b) A feedlot permittee shall give notice to the agency when the permittee proposes 
55.9 	to transfer ownership or control of the feedlot to a new party. The commissioner shall 
55.10 	not unreasonably withhold or unreasonably delay approval of any transfer request. This 
55.11 	request shall be handled in accordance with sections 116.07 and 15.992. 
55.12 	(c) The Environmental Quality Board shall review and recommend modifications 
55.13 	to environmental review rules related to phased actions and animal agriculture facilities. 
55.14 	The Environmental Quality Board shall report recommendations to the chairs of the 
55.15 	committees of the senate and house of representatives with jurisdiction over agriculture 
55.16 	and the environment by January 15, 2002.
55.17 	(d) If the owner of an animal feedlot requests an extension for an application for a 
55.18 	national pollutant discharge elimination permit or state disposal system permit by June 1, 
55.19 	2001, then the agency shall grant an extension for the application to September 1, 2001.
55.20 	(e) (c) An animal feedlot in shoreland that has been unused may resume operation 
55.21 	after obtaining a permit from the agency or county, regardless of the number of years that 
55.22 	the feedlot was unused.
55.23 		Subd. 2.County feedlot program grants; three-part formula. (a) Money 
55.24 	appropriated to the commissioner to make grants to delegated counties to administer 
55.25 	the county feedlot program must be distributed according to the three-part formula in 
55.26 	paragraphs (b) to (d).
55.27 	(b) Number of feedlots in the county: 60 percent of the total appropriation must be 
55.28 	distributed according to the number of feedlots that are required to be registered in the 
55.29 	county. Grants awarded under this paragraph must be matched with a combination of local 
55.30 	cash and in-kind contributions.
55.31 	(c) Minimum program requirements: 25 percent of the total appropriation must be 
55.32 	distributed based on the county (1) conducting an annual number of inspections at feedlots 
55.33 	that is equal to or greater than seven percent of the total number of registered feedlots that 
55.34 	are required to be registered in the county; and (2) meeting noninspection minimum 
55.35 	program requirements as identified in the county feedlot workplan form. Counties that do 
55.36 	not meet the inspection requirement must not receive 50 percent of the eligible funding 
56.1 	under this paragraph. Counties must receive funding for noninspection requirements under 
56.2 	this paragraph according to a scoring system checklist administered by the commissioner. 
56.3 	The commissioner, in consultation with the Minnesota Association of County Feedlot 
56.4 	Officers executive team, shall make a final decision regarding any appeal by a county 
56.5 	regarding the terms and conditions of this paragraph.
56.6 	(d) Performance credits: 15 percent of the total appropriation must be distributed 
56.7 	according to work that has been done by the counties during the fiscal year. The amount 
56.8 	must be determined by the number of performance credits a county accumulates during 
56.9 	the year based on a performance credit matrix jointly agreed upon by the commissioner 
56.10 	in consultation with the Minnesota Association of County Feedlot Officers executive 
56.11 	team. To receive an award under this paragraph, the county must meet the requirements 
56.12 	of paragraph (c), clause (1), and achieve 90 percent of the requirements according to 
56.13 	paragraph (c), clause (2), of the formula. The rate of reimbursement per performance 
56.14 	credit item must not exceed $200.
56.15 		Subd. 3.Minimum grant; prorated grant; transfers. Delegated counties are 
56.16 	eligible for a minimum grant of $7,500. To receive the full $7,500 amount, a county must 
56.17 	meet the requirements under subdivision 2, paragraph (c). Nondelegated counties that 
56.18 	apply for delegation shall receive a grant prorated according to the number of full quarters 
56.19 	remaining in the program year from the date of commissioner approval of the delegation. 
56.20 	Awards to any newly delegated counties must be made out of the appropriation reserved 
56.21 	under subdivision 2, paragraph (d). The commissioner, in consultation with the Minnesota 
56.22 	Association of County Feedlot Officers executive team, may decide to use money reserved 
56.23 	under subdivision 2, paragraph (d), in an amount not to exceed five percent of the total 
56.24 	annual appropriation for initiatives to enhance existing delegated county feedlot programs, 
56.25 	information and education, or technical assistance efforts to reduce feedlot-related 
56.26 	pollution hazards. Any amount remaining after distribution under subdivision 2, 
56.27 	paragraphs (b) and (c), must be transferred for purposes of subdivision 2, paragraph (d).

56.28 	Sec. 46. Minnesota Statutes 2008, section 116.41, subdivision 2, is amended to read:
56.29 		Subd. 2.Training and certification programs. The agency shall develop standards 
56.30 	of competence for persons operating and inspecting various classes of disposal facilities. 
56.31 	The agency shall conduct training programs for persons operating facilities for the 
56.32 	disposal of waste and for inspectors of such facilities, and may shall charge such fees as 
56.33 	are necessary to cover the actual costs of the training programs. All fees received shall be 
56.34 	paid into the state treasury and credited to the Pollution Control Agency training account 
57.1 	and are appropriated to the agency to pay expenses relating to the training of disposal 
57.2 	facility personnel.
57.3 	The agency shall require operators and inspectors of such facilities to obtain from 
57.4 	the agency a certificate of competence. The agency shall conduct examinations to test the 
57.5 	competence of applicants for certification, and shall require that certificates be renewed at 
57.6 	reasonable intervals. The agency may charge such fees as are necessary to cover the actual 
57.7 	costs of receiving and processing applications, conducting examinations, and issuing 
57.8 	and renewing certificates. Certificates shall not be required for a private individual for 
57.9 	land-spreading and associated interim and temporary storage of sewage sludge on property 
57.10 	owned or farmed by that individual.

57.11 	Sec. 47. [116.9401] DEFINITIONS.
57.12 	(a) For the purposes of sections 116.9401 to 116.9407, the following terms have 
57.13 	the meanings given them.
57.14 	(b) "Agency" means the Pollution Control Agency.
57.15 	(c) "Alternative" means a substitute process, product, material, chemical, strategy, 
57.16 	or combination of these that is technically feasible and serves a functionally equivalent 
57.17 	purpose to a chemical in a children's product.
57.18 	(d) "Chemical" means a substance with a distinct molecular composition or a group 
57.19 	of structurally related substances and includes the breakdown products of the substance or 
57.20 	substances that form through decomposition, degradation, or metabolism.
57.21 	(e) "Chemical of high concern" means a chemical identified on the basis of credible 
57.22 	scientific evidence by a state, federal, or international agency as being known or suspected 
57.23 	with a high degree of probability to:
57.24 	(1) harm the normal development of a fetus or child or cause other developmental 
57.25 	toxicity;
57.26 	(2) cause cancer, genetic damage, or reproductive harm;
57.27 	(3) disrupt the endocrine or hormone system;
57.28 	(4) damage the nervous system, immune system, or organs, or cause other systemic 
57.29 	toxicity;
57.30 	(5) be persistent, bioaccumulative, and toxic; or
57.31 	(6) be very persistent and very bioaccumulative.
57.32 	(f) "Child" means a person under 12 years of age.
57.33 	(g) "Children's product" means a consumer product intended for use by children, 
57.34 	such as baby products, toys, car seats, personal care products, and clothing.
57.35 	(h) "Commissioner" means the commissioner of the Pollution Control Agency. 
58.1 	(i) "Department" means the Department of Health.
58.2 	(j) "Distributor" means a person who sells consumer products to retail establishments 
58.3 	on a wholesale basis.
58.4 	(k) "Green chemistry" means an approach to designing and manufacturing products 
58.5 	that minimizes the use and generation of toxic substances.
58.6 	(l) "Manufacturer" means any person who manufactures a final consumer product 
58.7 	sold at retail or whose brand name is affixed to the consumer product. In the case of a 
58.8 	consumer product imported into the United States, manufacturer includes the importer 
58.9 	or domestic distributor of the consumer product if the person who manufactured or 
58.10 	assembled the consumer product or whose brand name is affixed to the consumer product 
58.11 	does not have a presence in the United States.
58.12 	(m) "Priority chemical" means a chemical identified by the Department of Health as 
58.13 	a chemical of high concern that meets the criteria in section 116.9403.
58.14 	(n) "Safer alternative" means an alternative whose potential to harm human health is 
58.15 	less than that of the use of a priority chemical that it could replace.

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

58.17 	Sec. 48. [116.9402] IDENTIFICATION OF CHEMICALS OF HIGH CONCERN.
58.18 	(a) By July 1, 2010, the department shall, after consultation with the agency, 
58.19 	generate a list of chemicals of high concern.
58.20 	(b) The department must periodically review and revise the list of chemicals of high 
58.21 	concern at least every three years. The department may add chemicals to the list if the 
58.22 	chemical meets one or more of the criteria in section 116.9401, paragraph (e).
58.23 	(c) The department shall consider chemicals listed as a suspected carcinogen, 
58.24 	reproductive or developmental toxicant, or as being persistent, bioaccumulative, and 
58.25 	toxic, or very persistent and very bioaccumulative by a state, federal, or international 
58.26 	agency. These agencies may include, but are not limited to, the California Environmental 
58.27 	Protection Agency, the Washington Department of Ecology, the United States Department 
58.28 	of Health, the United States Environmental Protection Agency, the United Nation's World 
58.29 	Health Organization, and European Parliament Annex X1V concerning the Registration, 
58.30 	Evaluation, Authorisation, and Restriction of Chemicals.
58.31 	(d) The department may consider chemicals listed by another state as harmful to 
58.32 	human health or the environment for possible inclusion in the list of chemicals of high 
58.33 	concern.

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

59.1 	Sec. 49. [116.9403] IDENTIFICATION OF PRIORITY CHEMICALS.
59.2 	(a) The department, after consultation with the agency, may designate a chemical of 
59.3 	high concern as a priority chemical if the department finds that the chemical:
59.4 	(1) has been identified as a high-production volume chemical by the United States 
59.5 	Environmental Protection Agency; and
59.6 	(2) meets any of the following criteria:
59.7 	(i) the chemical has been found through biomonitoring to be present in human blood, 
59.8 	including umbilical cord blood, breast milk, urine, or other bodily tissues or fluids;
59.9 	(ii) the chemical has been found through sampling and analysis to be present in 
59.10 	household dust, indoor air, drinking water, or elsewhere in the home environment; or
59.11 	(iii) the chemical has been found through monitoring to be present in fish, wildlife, 
59.12 	or the natural environment.
59.13 	(b) By February 1, 2011, the department shall publish a list of priority chemicals in 
59.14 	the State Register and on the department's Internet Web site and shall update the published 
59.15 	list whenever a new priority chemical is designated.

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

59.17 	Sec. 50. [116.9405] APPLICABILITY.
59.18 	The requirements of sections 116.9401 to 116.9407 do not apply to:
59.19 	(1) chemicals in used children's products;
59.20 	(2) priority chemicals used in the manufacturing process, but that are not present 
59.21 	in the final product;
59.22 	(3) priority chemicals used in agricultural production;
59.23 	(4) motor vehicles as defined in chapter 168 or watercraft as defined in chapter 
59.24 	86B or their component parts, except that the use of priority chemicals in detachable 
59.25 	car seats is not exempt;
59.26 	(5) priority chemicals generated solely as combustion by-products or that are present 
59.27 	in combustible fuels;
59.28 	(6) retailers;
59.29 	(7) pharmaceutical products or biologics;
59.30 	(8) a medical device as defined in the federal Food, Drug, and Cosmetic Act, United 
59.31 	States Code, title 21, section 321(h); 
59.32 	(9) food and food or beverage packaging, except a container containing baby food 
59.33 	or infant formula; 
59.34 	(10) consumer electronics products and electronic components, including but not 
59.35 	limited to personal computers; audio and video equipment; calculators; digital displays; 
60.1 	wireless phones; cameras; game consoles; printers; and handheld electronic and electrical 
60.2 	devices used to access interactive software or their associated peripherals; or products that 
60.3 	comply with the provisions of directive 2002/95/EC of the European Union, adopted by 
60.4 	the European Parliament and Council of the European Union now or hereafter in effect; or
60.5 	(11) outdoor sport equipment, including snowmobiles as defined in section 84.81, 
60.6 	subdivision 3; all-terrain vehicles as defined in section 84.92, subdivision 8; personal 
60.7 	watercraft as defined in section 86B.005, subdivision 14a; watercraft as defined in section 
60.8 	86B.005, subdivision 18; and off-highway motorcycles, as defined in section 84.787, 
60.9 	subdivision 7, and all attachments and repair parts for all of this equipment.

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

60.11 	Sec. 51. [116.9406] DONATIONS TO THE STATE.
60.12 	The commissioner may accept donations, grants, and other funds to carry out the 
60.13 	purposes of sections 116.9401 to 116.9407. All donations, grants, and other funds must 
60.14 	be accepted without preconditions regarding the outcomes of the regulatory oversight 
60.15 	processes set forth in sections 116.9401 to 116.9407.

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

60.17 	Sec. 52. [116.9407] PARTICIPATION IN INTERSTATE CHEMICALS 
60.18 	CLEARINGHOUSE.
60.19 	The state may cooperate with other states in an interstate chemicals clearinghouse 
60.20 	regarding chemicals in consumer products, including the classification of priority 
60.21 	chemicals in commerce; organizing and managing available data on chemicals, including 
60.22 	information on uses, hazards, risks, and environmental and health concerns; and producing 
60.23 	and evaluating  information on safer alternatives to specific uses of priority chemicals.

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

60.25 	Sec. 53. Minnesota Statutes 2008, section 116C.834, subdivision 1, is amended to read:
60.26 		Subdivision 1.Costs. All costs incurred by the state to carry out its responsibilities 
60.27 	under the compact and under sections 116C.833 to 116C.843 shall be paid by generators 
60.28 	of low-level radioactive waste in this state through fees assessed by the Pollution Control 
60.29 	Agency. Fees may be reasonably assessed on the basis of volume or degree of hazard of 
60.30 	the waste produced by a generator. Costs for which fees may be assessed include, but 
60.31 	are not limited to:  
60.32 	(1) the state contribution required to join the compact;
61.1 	(2) the expenses of the commission member and state agency costs incurred to 
61.2 	support the work of the Interstate Commission; and
61.3 	(3) regulatory costs.
61.4 	The fees are exempt from section 16A.1285.

61.5 	Sec. 54. [216H.021] GREENHOUSE GAS EMISSIONS REPORTING.
61.6 		Subdivision 1.Commissioner to establish reporting system and maintain 
61.7 	inventory. In order to measure the progress in meeting the goals of section 216H.02, 
61.8 	subdivision 1, and to provide information to develop strategies to achieve those goals, the 
61.9 	commissioner of the Pollution Control Agency shall establish a system for reporting and 
61.10 	maintaining an inventory of greenhouse gas emissions. The commissioner must consult 
61.11 	with the chief information officer of the Office of Enterprise Technology about system 
61.12 	design and operation. Greenhouse gas emissions include those emissions described in 
61.13 	section 216H.01, subdivision 2.
61.14 		Subd. 2.Reporting system design. (a) The commissioner shall, to the extent 
61.15 	practicable, design the system to coordinate with other regional or federal greenhouse gas 
61.16 	emissions-reporting and inventory systems. The coordination may, without limitation, 
61.17 	include the use of similar forms and reports, the sharing of information, and the use of 
61.18 	common facilities, systems, and databases.
61.19 	(b) The reporting system need not include all sources of emissions nor all amounts 
61.20 	of emissions but, at its outset, must include:
61.21 	(1) all stationary sources and other facilities required to obtain a permit under Title 
61.22 	V of the federal Clean Air Act, United States Code, title 42, section 7401 et. seq.; and
61.23 	(2) facilities whose annual carbon dioxide equivalent emissions, as defined in 
61.24 	section 216H.10, subdivision 3, exceed a threshold set by the commissioner at between 
61.25 	10,000 tons and 25,000 tons. The reporting threshold set by the commissioner must 
61.26 	be consistent with the goal of accurately tracking progress in attaining greenhouse 
61.27 	gas emissions-reduction goals and the need for emissions data to assist in developing 
61.28 	greenhouse gas emissions-reduction strategies.
61.29 	(c) In designing the greenhouse gas emissions reporting system, the commissioner 
61.30 	shall consider requiring the reporting of greenhouse gas emissions from transportation 
61.31 	fuels and greenhouse gas emissions from natural gas combustion that are not included 
61.32 	in reporting from stationary sources. In determining whether to include reporting of 
61.33 	these emissions, the commissioner must consider both the goal of accurately tracking 
61.34 	progress in attaining greenhouse gas emissions-reduction goals and the need for emissions 
61.35 	data to assist in developing greenhouse gas emissions-reduction strategies recommended 
62.1 	by the Minnesota Climate Change Advisory Group. If the commissioner decides that 
62.2 	transportation fuels and portions of natural gas combustion should not be included in 
62.3 	the initial emissions reporting system, the commissioner must report to the chairs and 
62.4 	ranking minority members of the senate and house of representatives committees with 
62.5 	primary jurisdiction over energy and environmental policy the reasons for that decision 
62.6 	and suggestions for steps that should be taken to allow their inclusion in the emissions 
62.7 	reporting system in the future.
62.8 	(d) A facility reporting greenhouse gas emissions under this section must maintain 
62.9 	the data used to create the reports for a minimum of five years.
62.10 		Subd. 3.Rules. The commissioner of the Pollution Control Agency may adopt rules 
62.11 	for the purposes of this section.

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

62.13 	Sec. 55. Minnesota Statutes 2008, section 216H.10, subdivision 7, is amended to read:
62.14 		Subd. 7. High-GWP greenhouse gas. "High-GWP greenhouse gas" means 
62.15 	hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride, nitrous trifluoride, and any 
62.16 	other gas the agency determines by rule to have a high global warming potential. 

62.17 	Sec. 56. Minnesota Statutes 2008, section 216H.11, is amended to read:
62.18 	216H.11 HIGH-GWP GREENHOUSE GAS REPORTING. 
62.19 		Subdivision 1. Gas manufacturers. Beginning By October 1, 2008, and each year 
62.20 	thereafter, a manufacturer of a high-GWP greenhouse gas must report to the agency the 
62.21 	total amount of each high-GWP greenhouse gas sold to a purchaser in this state during 
62.22 	the previous year. 
62.23 		Subd. 2. Purchases. Beginning By October 1, 2008, and each year thereafter, 
62.24 	a person in this state who purchases 500 10,000 metric tons or more carbon dioxide 
62.25 	equivalent of a high-GWP greenhouse gas for use or retail sale in this state must report 
62.26 	to the agency, on a form prescribed by the commissioner, the total amount of each 
62.27 	high-GWP greenhouse gas purchased for use or retail sale in this state during the previous 
62.28 	year and the purpose for which the gas was used. The commissioner may adopt rules 
62.29 	under chapter 14 to establish a different reporting threshold or to adopt specific reporting 
62.30 	requirements for commercial or industrial facilities that purchase high-GWP gases for use 
62.31 	or retail sale in this state.
62.32 		Subd. 3. Acceptance of federal filing. With the approval of the commissioner, this 
62.33 	section may be satisfied by filing with the commissioner a copy of a greenhouse gas 
63.1 	emissions report filed with a federal agency or a regional or national greenhouse gas 
63.2 	registry, provided that the entity with which the report is filed requires the emissions 
63.3 	data to be verified.

63.4 	Sec. 57. [325E.046] STANDARDS FOR LABELING PLASTIC BAGS.
63.5 		Subdivision 1."Biodegradable" label. A manufacturer, distributor, or wholesaler 
63.6 	may not offer for sale in this state a plastic bag labeled "biodegradable," "degradable," 
63.7 	or any form of those terms, or in any way imply that the bag will chemically decompose 
63.8 	into innocuous elements in a reasonably short period of time in a landfill, composting, or 
63.9 	other terrestrial environment unless a scientifically based standard for biodegradability is 
63.10 	developed and the bags are certified as meeting the standard.
63.11 		Subd. 2."Compostable" label. A manufacturer, distributor, or wholesaler may not 
63.12 	offer for sale in this state a plastic bag labeled "compostable" unless, at the time of sale, 
63.13 	the bag meets the ASTM Standard Specification for Compostable Plastics (D6400). Each 
63.14 	bag must be labeled to reflect that it meets the standard. For purposes of this subdivision, 
63.15 	"ASTM" has the meaning given in section 296A.01, subdivision 6.
63.16 		Subd. 3.Enforcement; civil penalty; injunctive relief. (a) A manufacturer, 
63.17 	distributor, or wholesaler who violates subdivision 1 or 2 is subject to a civil penalty of 
63.18 	$100 for each prepackaged saleable unit offered for sale up to a maximum of $5,000 
63.19 	and may be enjoined from those violations.
63.20 	(b) The attorney general may bring an action in the name of the state in a court of 
63.21 	competent jurisdiction for recovery of civil penalties or for injunctive relief as provided in 
63.22 	this subdivision. The attorney general may accept an assurance of discontinuance of acts 
63.23 	in violation of subdivision 1 or 2 in the manner provided in section 8.31, subdivision 2b.

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

63.25 	Sec. 58. [383B.236] WASTE MANAGEMENT BY HENNEPIN COUNTY.
63.26 	The Hennepin County Board of Commissioners may utilize money received from 
63.27 	the sale of energy and recovered materials and placed in the county solid and hazardous 
63.28 	waste fund under section 473.811, subdivision 9, for program expenses of the Department 
63.29 	of Environmental Services, or the department or office succeeding to the functions of the 
63.30 	Department of Environmental Services. This authority shall be in addition to the authority 
63.31 	given in section 473.811, subdivision 9.

63.32 	Sec. 59. Laws 2005, chapter 156, article 2, section 45, as amended by Laws 2007, 
63.33 	chapter 148, article 2, section 73, is amended to read:
64.1 	Sec. 45. SALE OF STATE LAND.
 64.2 		Subdivision 1.State land sales. The commissioner of administration shall 
64.3 	coordinate with the head of each department or agency having control of state-owned land 
64.4 	to identify and sell at least $6,440,000 of state-owned land. Sales should be completed 
64.5 	according to law and as provided in this section as soon as practicable but no later than 
64.6 	June 30, 2009 2011. Notwithstanding Minnesota Statutes, sections 16B.281 and 16B.282, 
64.7 	94.09 and 94.10, or any other law to the contrary, the commissioner may offer land 
64.8 	for public sale by only providing notice of lands or an offer of sale of lands to state 
64.9 	departments or agencies, the University of Minnesota, cities, counties, towns, school 
64.10 	districts, or other public entities.
64.11 		Subd. 2.Anticipated savings. Notwithstanding Minnesota Statutes, section 
64.12 	94.16, subdivision 3, or other law to the contrary, the amount of the proceeds from the 
64.13 	sale of land under this section that exceeds the actual expenses of selling the land must 
64.14 	be deposited in the general fund, except as otherwise provided by the commissioner of 
64.15 	finance. Notwithstanding Minnesota Statutes, section 94.11 or 16B.283, the commissioner 
64.16 	of finance may establish the timing of payments for land purchased under this section. If 
64.17 	the total of all money deposited into the general fund from the proceeds of the sale of land 
64.18 	under this section is anticipated to be less than $6,440,000, the governor must allocate the 
64.19 	amount of the difference as reductions to general fund operating expenditures for other 
64.20 	executive agencies for the biennium ending June 30, 2009 2011.
64.21 		Subd. 3.Sale of state lands revolving loan fund. $290,000 is appropriated from 
64.22 	the general fund in fiscal year 2006 to the commissioner of administration for purposes 
64.23 	of paying the actual expenses of selling state-owned lands to achieve the anticipated 
64.24 	savings required in this section. From the gross proceeds of land sales under this section, 
64.25 	the commissioner of administration must cancel the amount of the appropriation in this 
64.26 	subdivision to the general fund by June 30, 2009 2011.

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

64.28 	Sec. 60. Laws 2007, chapter 57, article 1, section 4, subdivision 2, is amended to read:

64.29
64.30	Subd. 2.Land and Mineral Resources 
Management
 		11,747,000
		11,272,000

64.31	Appropriations by Fund
	
64.32	General
	6,633,000
	6,230,000
	
64.33	Natural Resources
	3,551,000
	3,447,000
	
64.34	Game and Fish
	1,363,000
	1,395,000
	
64.35	Permanent School
	200,000
	200,000
	
65.1 	$475,000 the first year and $475,000 the 
65.2 	second year are for iron ore cooperative 
65.3 	research. Of this amount, $200,000 each year 
65.4 	is from the minerals management account in 
65.5 	the natural resources fund and $275,000 each 
65.6 	year is from the general fund. $237,500 the 
65.7 	first year and $237,500 the second year are 
65.8 	available only as matched by $1 of nonstate 
65.9 	money for each $1 of state money. The 
65.10 	match may be cash or in-kind.
65.11 	$86,000 the first year and $86,000 the 
65.12 	second year are for minerals cooperative 
65.13 	environmental research, of which $43,000 
65.14 	the first year and $43,000 the second year are 
65.15 	available only as matched by $1 of nonstate 
65.16 	money for each $1 of state money. The 
65.17 	match may be cash or in-kind.
65.18 	$2,800,000 the first year and $2,696,000 
65.19 	the second year are from the minerals 
65.20 	management account in the natural resources 
65.21 	fund for use as provided in Minnesota 
65.22 	Statutes, section 93.2236, paragraph (c).
65.23 	$200,000 the first year and $200,000 the 
65.24 	second year are from the state forest suspense 
65.25 	account in the permanent school fund to 
65.26 	accelerate land exchanges, land sales, and 
65.27 	commercial leasing of school trust lands and 
65.28 	to identify, evaluate, and lease construction 
65.29 	aggregate located on school trust lands. This 
65.30 	appropriation is to be used for securing 
65.31 	maximum long-term economic return 
65.32 	from the school trust lands consistent with 
65.33 	fiduciary responsibilities and sound natural 
65.34 	resources conservation and management 
65.35 	principles.
66.1 	$15,000 the first year is for a report 
66.2 	by February 1, 2008, to the house and 
66.3 	senate committees with jurisdiction over 
66.4 	environment and natural resources on 
66.5 	proposed minimum legal and conservation 
66.6 	standards that could be applied to 
66.7 	conservation easements acquired with public 
66.8 	money.
66.9 	$1,201,000 the first year and $701,000 the 
66.10 	second year are to support the land records 
66.11 	management system. Of this amount, 
66.12 	$326,000 the first year and $326,000 the 
66.13 	second year are from the game and fish fund 
66.14 	and $375,000 the first year and $375,000 the 
66.15 	second year are from the natural resources 
66.16 	fund. The unexpended balances are available 
66.17 	until June 30, 2011. The commissioner 
66.18 	must report to the legislative chairs on 
66.19 	environmental finance on the outcomes of 
66.20 	the land records management support.
66.21 	$500,000 the first year and $500,000 the 
66.22 	second year are for land asset management. 
66.23 	This is a onetime appropriation.

66.24 	Sec. 61. Laws 2008, chapter 363, article 5, section 4, subdivision 7, is amended to read:

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

66.26	Appropriations by Fund
	
66.27	General
	-0-
	(427,000)
	
66.28	Game and Fish
	123,000
	546,000
	
66.29 	$329,000 in 2009 is a reduction for fish and 
66.30 	wildlife management.
66.31 	$46,000 in 2009 is a reduction in the 
66.32 	appropriation for the Minnesota Shooting 
66.33 	Sports Education Center.
66.34 	$52,000 in 2009 is a reduction for licensing.
67.1 	$123,000 in 2008 and $246,000 in 2009 are 
67.2 	from the game and fish fund to implement 
67.3 	fish virus surveillance, prepare infrastructure 
67.4 	to handle possible outbreaks, and implement 
67.5 	control procedures for highest risk waters 
67.6 	and fish production operations. This is a 
67.7 	onetime appropriation.
67.8 	Notwithstanding Minnesota Statutes, section 
67.9 	297A.94, paragraph (e), $300,000 in 2009 
67.10 	is from the second year appropriation in 
67.11 	Laws 2007, chapter 57, article 1, section 4, 
67.12 	subdivision 7, from the heritage enhancement 
67.13 	account in the game and fish fund to study, 
67.14 	predesign, and design a shooting sports 
67.15 	facilities at the Vermillion Highlands Wildlife 
67.16 	Management Area authorized by Laws 2007, 
67.17 	chapter 57, article 1, section 168 facility in 
67.18 	the seven-county metropolitan area. This is 
67.19 	available onetime only and is available until 
67.20 	expended.
67.21 	$300,000 in 2009 is appropriated from the 
67.22 	game and fish fund for only activities that 
67.23 	improve, enhance, or protect fish and wildlife 
67.24 	resources. This is a onetime appropriation.

67.25 	Sec. 62. SCORE REPORTING.
 67.26 		Subdivision 1.2010 requirement. The requirements for the report specified in 
67.27 	Minnesota Statutes, section 115A.557, subdivision 3, paragraph (b), clause (2), that is due 
67.28 	April 1, 2010, shall be abbreviated in scope. The information collected shall be sufficient 
67.29 	for the commissioner of the Pollution Control Agency to determine that counties have 
67.30 	complied with the requirements of this subdivision.
67.31 		Subd. 2.Recommendations; report. The commissioner of the Pollution Control 
67.32 	Agency, in consultation with the Association of Minnesota Counties, the Solid Waste 
67.33 	Administrators Association, the Solid Waste Management Coordinating Board, and other 
67.34 	interested parties shall make recommendations to amend the reporting requirements under 
67.35 	Minnesota Statutes, section 115A.557, subdivision 3, in ways that reduce the resources 
68.1 	counties employ to collect the data reported, while ensuring that estimation methods used 
68.2 	to report data are consistent across counties and that the data reported are accurate and 
68.3 	useful as a guide to solid waste management policy makers. The commissioner shall also 
68.4 	make recommendations regarding the feasibility and desirability of multicounty reporting 
68.5 	of the data. The commissioner's recommendations must be presented in a report submitted 
68.6 	to the chairs and ranking minority members of the senate and house of representatives 
68.7 	committees and divisions with primary jurisdiction over solid waste policy and finance 
68.8 	no later than January 15, 2010.

68.9 	Sec. 63. PRIORITY CHEMICAL REPORTS.
 68.10 	(a) By January 15, 2010, the commissioner of health, in consultation with the 
68.11 	Pollution Control Agency, shall report to the chairs and ranking minority members 
68.12 	of the senate and house of representatives committees with primary jurisdiction over 
68.13 	environment and natural resources policy, commerce, and public health regarding the 
68.14 	progress on implementing new Minnesota Statutes, sections 116.9401 to 116.9407, and 
68.15 	information on the progress of federal, international, and other states in identifying, 
68.16 	prioritizing, evaluating, regulating, and reducing the use of chemicals of high concern 
68.17 	and priority chemicals in children's products and in determining the availability of safer 
68.18 	alternatives for specific applications and promoting the use of those safer alternatives.
68.19 	(b) By December 15, 2010, the commissioner of the Pollution Control Agency 
68.20 	shall report to the chairs and ranking minority members of the senate and house of 
68.21 	representatives committees with primary jurisdiction over environment and natural 
68.22 	resources policy, commerce, and public health assessing mechanisms used by other states, 
68.23 	the federal government, and other countries to reduce and phase out the use of priority 
68.24 	chemicals in children's products and promote the use of safer alternatives. The report shall 
68.25 	include potential funding mechanisms to implement this process. The report must include 
68.26 	recommendations to promote and provide incentives for product design that use principles 
68.27 	of green chemistry and life-cycle analysis. In developing the report, the agency may 
68.28 	consult with stakeholders, including representatives of state agencies, manufacturers of 
68.29 	children's products, chemical manufacturers, public health experts, independent scientists, 
68.30 	and public interest groups. The report must include information on any stakeholder 
68.31 	process consulted with or used in developing the report.
68.32 	(c) By January 15, 2010, the agency shall provide an interim report about the 
68.33 	progress in developing the report required under paragraph (b), including information 
68.34 	on the status of any stakeholder process.

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

69.1 	Sec. 64. REORGANIZATION PROHIBITION; ENVIRONMENTAL QUALITY 
69.2 	BOARD.
 69.3 	Notwithstanding Minnesota Statutes, section 16B.37, unless expressly provided by 
69.4 	law, the commissioner of administration shall not reorganize the Environmental Quality 
69.5 	Board within another agency, prior to July 1, 2011.

69.6 	Sec. 65. ENVIRONMENTAL REVIEW STREAMLINING REPORT.
 69.7 	By February 15, 2010, the commissioner of the Pollution Control Agency, in 
69.8 	consultation with staff from the Environmental Quality Board, shall submit a report 
69.9 	to the environment and natural resources policy and finance committees of the house 
69.10 	and senate on options to streamline the environmental review process under Minnesota 
69.11 	Statutes, chapter 116D. In preparing the report, the commissioner shall consult with state 
69.12 	agencies, local government units, and business, agriculture, and environmental advocacy 
69.13 	organizations with an interest in the environmental review process. The report shall 
69.14 	include options that will reduce the time required to complete environmental review and 
69.15 	the cost of the process to responsible governmental units and project proposers while 
69.16 	maintaining or improving air, land, and water quality standards.

69.17 	Sec. 66. COMPENSATION OF GOVERNOR'S STAFF.
 69.18 	For fiscal years 2010 and 2011, the Department of Natural Resources, the Pollution 
69.19 	Control Agency, and the Board of Water and Soil Resources may not use funds 
69.20 	appropriated in this article or funds from any statutory or open appropriation to pay 
69.21 	directly or indirectly for the compensation costs of staff in the office of the governor.

69.22 	Sec. 67. FISH CONSUMPTION ADVISORIES.
 69.23 	The commissioner of natural resources, in cooperation with the commissioner of 
69.24 	health, shall ensure that fish consumption advisories are displayed in at least four different 
69.25 	languages, one of which must be English, to fairly represent the population of the state.

69.26 	Sec. 68. CARBON SEQUESTRATION FORESTRY REPORT.
 69.27 	The Minnesota Forest Resources Council shall review the Minnesota Climate 
69.28 	Change Advisory Group's recommendation to increase carbon sequestration in forests by 
69.29 	planting 1,000,000 acres of trees and shall submit a report to the chairs of the house of 
69.30 	representatives and senate committees with jurisdiction over energy and energy finance, 
69.31 	environment and natural resources, and environment and natural resources finance; the 
69.32 	governor; and the commissioner of natural resources by January 15, 2010. The report 
70.1 	shall, at a minimum, include recommendations on implementation and analysis of the 
70.2 	number and ownership of acres available for tree planting, the types of native species best 
70.3 	suited for planting, the availability of planting stock, and potential costs.

70.4 	Sec. 69. REPEALER.
 70.5 	Laws 2008, chapter 363, article 5, section 30, is repealed.

70.6 	ARTICLE 2
70.7 	ENERGY FINANCE

70.8	Section 1. SUMMARY OF APPROPRIATIONS.
 	
70.9 	The amounts shown in this section summarize direct appropriations, by fund, made 
70.10 	in this article.

70.11			2010
		2011
		Total
	
70.12	General
	$
	27,291,000
	$
	27,041,000
	$
	54,332,000
	
70.13	Petroleum Tank Cleanup
		1,084,000
		1,084,000
		2,168,000
	
70.14	Workers' Compensation
		751,000
		751,000
		1,502,000
	
70.15
70.16	Telecommunications Access 
Minnesota
		600,000
		600,000
		1,200,000
	
70.17	Special Revenue
		1,350,000
		625,000
		1,975,000
	
70.18	Total
	$
	31,076,000
	$
	30,101,000
	$
	61,177,000

70.19	Sec. 2. ENERGY FINANCE APPROPRIATIONS.
 	
70.20 	The sums shown in the columns marked "Appropriations" are appropriated to the 
70.21 	agencies and for the purposes specified in this article. The appropriations are from the 
70.22 	general fund, or another named fund, and are available for the fiscal years indicated 
70.23 	for each purpose. The figures "2010" and "2011" used in this article mean that the 
70.24 	appropriations listed under them are available for the fiscal year ending June 30, 2010, or 
70.25 	June 30, 2011, respectively. "The first year" is fiscal year 2010. "The second year" is fiscal 
70.26 	year 2011. "The biennium" is fiscal years 2010 and 2011. Appropriations for the fiscal 
70.27 	year ending June 30, 2009, are effective the day following final enactment.

70.28				APPROPRIATIONS
	
70.29				Available for the Year
	
70.30				Ending June 30
	
70.31					2010
		2011

70.32	Sec. 3. DEPARTMENT OF COMMERCE

70.33	Subdivision 1.Total Appropriation
 	$
	25,643,000
	$
	24,668,000

71.1	Appropriations by Fund
	
71.2		2010
	2011
	
71.3	General
	21,858,000
	21,608,000
	
71.4	Petroleum Cleanup
	1,084,000
	1,084,000
	
71.5
71.6	Workers' 
Compensation
	751,000
	751,000
	
71.7	Special Revenue
	1,350,000
	625,000
	
71.8
71.9	Telecommunications 
Access Minnesota
	600,000
	600,000
	
71.10 	The amounts that may be spent for each 
71.11 	purpose are specified in the following 
71.12 	subdivisions.

71.13	Subd. 2.Financial Institutions
 		6,638,000
		6,638,000
	
71.14 	$1,000 each year is for consumer small loan 
71.15 	regulation modifications in article 7. This 
71.16 	appropriation is added to the department's 
71.17 	base.

71.18
71.19	Subd. 3.Petroleum Tank Release Cleanup 
Board
 		1,084,000
		1,084,000
	
71.20 	This appropriation is from the petroleum 
71.21 	tank release cleanup fund. The base funding 
71.22 	for this program ends June 30, 2012.

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

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

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

71.26	Appropriations by Fund
	
71.27	General
	6,670,000
	6,670,000
	
71.28
71.29	Workers' 
Compensation
	751,000
	751,000

71.30	Subd. 7.Office of Energy Security
 		4,590,000
		3,615,000

71.31	Appropriations by Fund
	
71.32	General
	3,240,000
	2,990,000
	
71.33	Special Revenue
	1,350,000
	625,000

71.34 	$250,000 the first year is for E-85 grants 
71.35 	under Laws 2007, chapter 57, article 2, 
72.1 	section 3, subdivision 6. Grants for on-site 
72.2 	blending pumps must include up to 75 
72.3 	percent of the total cost of the project, up to 
72.4 	a maximum of $15,000 per pump. This is a 
72.5 	onetime appropriation.
72.6 	The utility subject to Minnesota Statutes, 
72.7 	section 116C.779, shall transfer $1,350,000 
72.8 	in fiscal year 2010 and $625,000 in fiscal 
72.9 	year 2011 only to the Department of 
72.10 	Commerce on a schedule determined by the 
72.11 	commissioner of commerce. These funds 
72.12 	must be deposited in the special revenue fund 
72.13 	and are appropriated to the commissioner 
72.14 	for grants to promote renewable energy 
72.15 	projects and community energy outreach and 
72.16 	assistance. Of the amounts identified:
72.17 	(1) $300,000 the first year is for a grant 
72.18 	to the Board of Regents of the University 
72.19 	of Minnesota for the Natural Resources 
72.20 	and Research Institute at the University of 
72.21 	Minnesota, Duluth, to develop statewide 
72.22 	heat flow maps in order to determine 
72.23 	the geothermal potential of the state of 
72.24 	Minnesota;
72.25 	(2) $625,000 each year is for continued 
72.26 	funding of community energy technical 
72.27 	assistance and outreach on renewable 
72.28 	energy and energy efficiency, as described 
72.29 	in Minnesota Statutes, section 216C.385. 
72.30 	Of this amount, $125,000 each year is for 
72.31 	technical assistance in the metropolitan area;
72.32 	(3) $25,000 the first year is for a grant to 
72.33 	a nonprofit organization with experience 
72.34 	in creating innovative partnerships through 
72.35 	collaborative action with diverse interests, 
73.1 	including businesses, government agencies, 
73.2 	environmental organizations, and others, 
73.3 	to manage a stakeholder process on green 
73.4 	jobs that would integrate the work of the 
73.5 	state Green Jobs Task Force and the mayors' 
73.6 	initiative on green manufacturing; and
73.7 	(4) $400,000 the first year is to provide 
73.8 	financial rebates for new solar electricity 
73.9 	projects.

73.10
73.11	Subd. 8.Telecommunications Access 
Minnesota
 		600,000
		600,000
	
73.12 	$300,000 the first year and $300,000 
73.13 	the second year are for transfer to the 
73.14 	commissioner of human services to 
73.15 	supplement the ongoing operational expenses 
73.16 	of the Minnesota Commission Serving 
73.17 	Deaf and Hard-of-Hearing People. This 
73.18 	appropriation is from the telecommunication 
73.19 	access Minnesota fund, and is added to 
73.20 	the commission's base. This appropriation 
73.21 	consolidates, and is not in addition to, 
73.22 	appropriation language from Laws 2006, 
73.23 	chapter 282, article 11, section 4, and 
73.24 	Laws 2007, chapter 57, article 2, section 3, 
73.25 	subdivision 7.
73.26 	$300,000 each year is from the 
73.27 	telecommunications access fund to the 
73.28 	commissioner of commerce for a grant to 
73.29 	the Legislative Coordinating Commission 
73.30 	for a pilot program to provide captioning 
73.31 	of live streaming of legislative sessions 
73.32 	on the commission's Web site and a grant 
73.33 	to the Commission of Deaf, DeafBlind, 
73.34 	and Hard-of-Hearing Minnesotans to 
73.35 	provide information on their Web site in 
73.36 	American Sign Language and to provide 
74.1 	technical assistance to state agencies. The 
74.2 	commissioner of commerce may allocate 
74.3 	a portion of this money to the Office 
74.4 	of Technology to coordinate technology 
74.5 	accessibility and usability.

74.6	Subd. 9.Transfers
 					
74.7 	By July 31, 2009, the commissioner of 
74.8 	finance shall transfer $500,000 from the 
74.9 	unexpended balance in the auto theft 
74.10 	prevention account to the general fund.

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

74.12 	Sec. 5. Minnesota Statutes 2008, section 45.027, subdivision 1, is amended to read:
74.13 		Subdivision 1.General powers. In connection with the duties and responsibilities 
74.14 	entrusted to the commissioner, and Laws 1993, chapter 361, section 2, the commissioner 
74.15 	of commerce may:
74.16 	(1) make public or private investigations within or without this state as the 
74.17 	commissioner considers necessary to determine whether any person has violated or is 
74.18 	about to violate any law, rule, or order related to the duties and responsibilities entrusted 
74.19 	to the commissioner;
74.20 	(2) require or permit any person to file a statement in writing, under oath or otherwise 
74.21 	as the commissioner determines, as to all the facts and circumstances concerning the 
74.22 	matter being investigated;
74.23 	(3) hold hearings, upon reasonable notice, in respect to any matter arising out of the 
74.24 	duties and responsibilities entrusted to the commissioner;
74.25 	(4) conduct investigations and hold hearings for the purpose of compiling 
74.26 	information related to the duties and responsibilities entrusted to the commissioner;
74.27 	(5) examine the books, accounts, records, and files of every licensee, and of every 
74.28 	person who is engaged in any activity regulated; the commissioner or a designated 
74.29 	representative shall have free access during normal business hours to the offices and 
74.30 	places of business of the person, and to all books, accounts, papers, records, files, safes, 
74.31 	and vaults maintained in the place of business;
74.32 	(6) publish information which is contained in any order issued by the commissioner; 
74.33 	and
75.1 	(7) require any person subject to duties and responsibilities entrusted to the 
75.2 	commissioner, to report all sales or transactions that are regulated. The reports must 
75.3 	be made within ten days after the commissioner has ordered the report. The report is 
75.4 	accessible only to the respondent and other governmental agencies unless otherwise 
75.5 	ordered by a court of competent jurisdiction.; and
75.6 	(8) assess a licensee the necessary expenses of the investigation performed by the 
75.7 	department when an investigation is made by order of the commissioner. The cost of the 
75.8 	investigation shall be determined by the commissioner and is based on the salary cost 
75.9 	of investigators or assistants and at an average rate per day or fraction thereof so as to 
75.10 	provide for the total cost of the investigations. All money collected must be deposited into 
75.11 	the general fund. A natural person licensed under chapter 60K or 82 shall not be charged 
75.12 	costs of an investigation if the investigation results in no finding of a violation.

75.13 	Sec. 6. Minnesota Statutes 2008, section 60A.14, subdivision 1, is amended to read:
75.14 		Subdivision 1.Fees other than examination fees. In addition to the fees and 
75.15 	charges provided for examinations, the following fees must be paid to the commissioner 
75.16 	for deposit in the general fund:
75.17 	(a) by township mutual fire insurance companies;
75.18 	(1) for filing certificate of incorporation $25 and amendments thereto, $10;
75.19 	(2) for filing annual statements, $15;
75.20 	(3) for each annual certificate of authority, $15;
75.21 	(4) for filing bylaws $25 and amendments thereto, $10;
75.22 	(b) by other domestic and foreign companies including fraternals and reciprocal 
75.23 	exchanges;
75.24 	(1) for filing an application for an initial certification of authority to be admitted 
75.25 	to transact business in this state, $1,500;
75.26 	(2) for filing certified copy of certificate of articles of incorporation, $100;
75.27 	(3) for filing annual statement, $225;
75.28 	(4) for filing certified copy of amendment to certificate or articles of incorporation, 
75.29 	$100;
75.30 	(5) for filing bylaws, $75 or amendments thereto, $75;
75.31 	(6) for each company's certificate of authority, $575, annually;
75.32 	(c) the following general fees apply:
75.33 	(1) for each certificate, including certified copy of certificate of authority, renewal, 
75.34 	valuation of life policies, corporate condition or qualification, $25;
76.1 	(2) for each copy of paper on file in the commissioner's office 50 cents per page, 
76.2 	and $2.50 for certifying the same;
76.3 	(3) for license to procure insurance in unadmitted foreign companies, $575;
76.4 	(4) for valuing the policies of life insurance companies, one cent per $1,000 of 
76.5 	insurance so valued, provided that the fee shall not exceed $13,000 per year for any 
76.6 	company. The commissioner may, in lieu of a valuation of the policies of any foreign life 
76.7 	insurance company admitted, or applying for admission, to do business in this state, accept 
76.8 	a certificate of valuation from the company's own actuary or from the commissioner of 
76.9 	insurance of the state or territory in which the company is domiciled;
76.10 	(5) for receiving and filing certificates of policies by the company's actuary, or by 
76.11 	the commissioner of insurance of any other state or territory, $50;
76.12 	(6) for each appointment of an agent filed with the commissioner, $10;
76.13 	(7) for filing forms, rates, and compliance certifications under section 60A.315, $90
76.14 	$140 per filing, or $75$125 per filing when submitted via electronic filing system. Filing 
76.15 	fees may be paid on a quarterly basis in response to an invoice. Billing and payment may 
76.16 	be made electronically;
76.17 	(8) for annual renewal of surplus lines insurer license, $300.
76.18 	The commissioner shall adopt rules to define filings that are subject to a fee.

76.19 	Sec. 7. [116J.438] MINNESOTA GREEN ENTERPRISE ASSISTANCE.
76.20 	(a) The commissioner of employment and economic development, in consultation 
76.21 	with the commissioner of commerce, shall lead a multiagency project to advise, 
76.22 	promote, market, and coordinate state agency collaboration on green enterprise and 
76.23 	green economy projects, as defined in section 116J.437. The multiagency project must 
76.24 	include the commissioners of employment and economic development, natural resources, 
76.25 	agriculture, transportation, and commerce, and the Pollution Control Agency. The 
76.26 	project must involve collaboration with the chairs and ranking minority members of 
76.27 	legislative committees overseeing energy policy and energy finance, state agencies, 
76.28 	local governments, representatives from business and agriculture, and other interested 
76.29 	stakeholders. The objective of the project is to utilize existing state resources to expedite 
76.30 	the delivery of grants, licenses, permits, and other state authorizations and approvals for 
76.31 	green economy projects. The commissioner shall appoint a lead person to coordinate 
76.32 	green enterprise assistance activities.
76.33 	(b) The commissioner of employment and economic development shall seek out and 
76.34 	may select persons from the business community to assist the commissioner in project 
76.35 	activities.
77.1 	(c) The commissioner may accept gifts, contributions, and in-kind services for the 
77.2 	purposes of this section, under the authority provided in section 116J.035, subdivision 
77.3 	1. Any funds received must be placed in a special revenue account for the purposes of 
77.4 	this section.

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

77.6 	Sec. 8. Minnesota Statutes 2008, section 216B.62, subdivision 3, is amended to read:
77.7 		Subd. 3.Assessing all public utilities. The department and commission shall 
77.8 	quarterly, at least 30 days before the start of each quarter, estimate the total of their 
77.9 	expenditures in the performance of their duties relating to (1) public utilities under section 
77.10 	216A.085, sections 216A.085 and 216B.01 to 216B.67, other than amounts chargeable 
77.11 	to public utilities under subdivision 2 or, 6, and (2) alternative energy engineering 
77.12 	activity under section 216C.261 or 7. The remainder, except the amount assessed 
77.13 	against cooperatives and municipalities for alternative energy engineering activity under 
77.14 	subdivision 5, shall be assessed by the commission and department to the several public 
77.15 	utilities in proportion to their respective gross operating revenues from retail sales of gas 
77.16 	or electric service within the state during the last calendar year. The assessment shall be 
77.17 	paid into the state treasury within 30 days after the bill has been transmitted via mail, 
77.18 	personal delivery, or electronic service to the several public utilities, which shall constitute 
77.19 	notice of the assessment and demand of payment thereof. The total amount which may 
77.20 	be assessed to the public utilities, under authority of this subdivision, shall not exceed 
77.21 	one-sixth of one percent of the total gross operating revenues of the public utilities 
77.22 	during the calendar year from retail sales of gas or electric service within the state. The 
77.23 	assessment for the third quarter of each fiscal year shall be adjusted to compensate for the 
77.24 	amount by which actual expenditures by the commission and department for the preceding 
77.25 	fiscal year were more or less than the estimated expenditures previously assessed. 

77.26 	Sec. 9. Minnesota Statutes 2008, section 216B.62, subdivision 4, is amended to read:
77.27 		Subd. 4.Objections. Within 30 days after the date of the transmittal of any bill as 
77.28 	provided by subdivisions subdivision 2 and, 3, or 7, the public utility against which the bill 
77.29 	has been rendered may file with the commission objections setting out the grounds upon 
77.30 	which it is claimed the bill is excessive, erroneous, unlawful or invalid. The commission 
77.31 	shall within 60 days hold a hearing and issue an order in accordance with its findings. The 
77.32 	order shall be appealable in the same manner as other final orders of the commission.

77.33 	Sec. 10. Minnesota Statutes 2008, section 216B.62, subdivision 5, is amended to read:
78.1 		Subd. 5.Assessing cooperatives and municipals. The commission and department 
78.2 	may charge cooperative electric associations, generation and transmission cooperative 
78.3 	electric associations, municipal power agencies, and municipal electric utilities their 
78.4 	proportionate share of the expenses incurred in the review and disposition of resource 
78.5 	plans, adjudication of service area disputes, proceedings under section 216B.1691, 
78.6 	216B.2425, or 216B.243, and the costs incurred in the adjudication of complaints over 
78.7 	service standards, practices, and rates. Cooperative electric associations electing to 
78.8 	become subject to rate regulation by the commission pursuant to section 216B.026, 
78.9 	subdivision 4, are also subject to this section. Neither a cooperative electric association 
78.10 	nor a municipal electric utility is liable for costs and expenses in a calendar year in excess 
78.11 	of the limitation on costs that may be assessed against public utilities under subdivision 
78.12 	2. A cooperative electric association, generation and transmission cooperative electric 
78.13 	association, municipal power agency, or municipal electric utility may object to and appeal 
78.14 	bills of the commission and department as provided in subdivision 4.
78.15 	The department shall assess cooperatives and municipalities for the costs of 
78.16 	alternative energy engineering activities under section 216C.261. Each cooperative and 
78.17 	municipality shall be assessed in proportion that its gross operating revenues for the sale 
78.18 	of gas and electric service within the state for the last calendar year bears to the total of 
78.19 	those revenues for all public utilities, cooperatives, and municipalities.

78.20 	Sec. 11. Minnesota Statutes 2008, section 216B.62, is amended by adding a subdivision 
78.21 	to read:
78.22 		Subd. 7.Assessing all utilities. The department shall assess public utilities, 
78.23 	cooperative electric associations, and municipal utilities for the costs of activities under 
78.24 	chapter 216C. The department shall not assess for costs of grants, loans, or other aids or 
78.25 	for costs that can be recovered through other assessment authority. Each public utility, 
78.26 	cooperative, and municipal utility shall be assessed in the proportion that its gross 
78.27 	operating revenue for the sale of gas and electric service within the state for the last 
78.28 	calendar year bears to the total of those revenues for all public utilities, cooperatives, 
78.29 	and municipalities.

78.30 	Sec. 12. BULK INSTALLATION OF SOLAR PHOTOVOLTAIC PANELS ON 
78.31 	SCHOOL BUILDINGS; FEASIBILITY STUDY AND REPORT.
 78.32 	The director of the Office of Energy Security, in consultation with the commissioner 
78.33 	of education, schools, school districts, and solar industry experts, must study the economic 
78.34 	and technical feasibility of bulk installation of solar photovoltaic panels on school 
79.1 	buildings in this state. The study must use a power-purchase agreement model in which 
79.2 	a private company would pay for, install, and own the solar photovoltaic panels. No 
79.3 	later than January 15, 2010, the director of the Office of Energy Security must report 
79.4 	the results of the feasibility study, including whether the proposed model would reduce 
79.5 	carbon emissions and result in savings to school districts, to the chairs and ranking 
79.6 	minority members of the house of representatives and senate committees with jurisdiction 
79.7 	over energy policy and finance.

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

79.9 	Sec. 13. APPROPRIATIONS; CANCELLATIONS.
 79.10 	(a) The remaining balance of the fiscal year 2009 special revenue fund appropriation 
79.11 	for the Green Jobs Task Force under Laws 2008, chapter 363, article 6, section 3, 
79.12 	subdivision 4, is transferred and appropriated to the commissioner of employment and 
79.13 	economic development for the purposes of green enterprise assistance under Minnesota 
79.14 	Statutes, section 116J.438. This appropriation is available until spent.
79.15 	(b) The unencumbered balance of the fiscal year 2008 appropriation to the 
79.16 	commissioner of commerce for the rural and energy development revolving loan 
79.17 	fund under Laws 2007, chapter 57, article 2, section 3, subdivision 6, is canceled and 
79.18 	reappropriated as follows:
79.19 	(1) $1,500,000 is for a grant to the Board of Trustees of the Minnesota State Colleges 
79.20 	and Universities for the International Renewable Energy Technology Institute (IRETI) to 
79.21 	be located at Minnesota State University, Mankato, as a public and private partnership to 
79.22 	support applied research in renewable energy and energy efficiency to aid in the transfer of 
79.23 	technology from Sweden to Minnesota and to support technology commercialization from 
79.24 	companies located in Minnesota and throughout the world; and
79.25 	(2) the remaining balance is for a grant to the Board of Regents of the University of 
79.26 	Minnesota for the initiative for renewable energy and the environment to fund start up 
79.27 	costs related to a national solar testing and certification laboratory to test, rate, and certify 
79.28 	the performance of equipment and devices that utilize solar energy for heating and cooling 
79.29 	air and water and for generating electricity.
79.30 	This appropriation is available until expended.

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

80.1 	ARTICLE 3
80.2 	DEPARTMENT OF COMMERCE; OTHER REGULATORY PROVISIONS

80.3 	Section 1. Minnesota Statutes 2008, section 47.58, subdivision 1, is amended to read:
80.4 		Subdivision 1.Definitions. For the purposes of this section, the terms defined in this 
80.5 	subdivision have the meanings given them.
80.6 	(a) "Reverse mortgage loan" means a loan:
80.7 	(1) Made to a borrower wherein the committed principal amount is paid to the 
80.8 	borrower in equal or unequal installments over a period of months or years, interest is 
80.9 	assessed, and authorized closing costs are incurred as specified in the loan agreement;
80.10 	(2) Which is secured by a mortgage on residential property owned solely by the 
80.11 	borrower; and
80.12 	(3) Which is due when the committed principal amount has been fully paid to the 
80.13 	borrower, or upon sale of the property securing the loan, or upon the death of the last 
80.14 	surviving borrower, or upon the borrower terminating use of the property as principal 
80.15 	residence so as to disqualify the property from the homestead credit given in chapter 290A.
80.16 	(b) "Lender" means any bank subject to chapter 48, credit union subject to chapter 
80.17 	52, savings bank organized and operated pursuant to chapter 50, savings association 
80.18 	subject to chapter 51A, any residential mortgage originator subject to chapter 58, or any 
80.19 	insurance company as defined in section 60A.02, subdivision 4. "Lender" also includes 
80.20 	any federally chartered bank supervised by the comptroller of the currency or federally 
80.21 	chartered savings association supervised by the Federal Home Loan Bank Board or 
80.22 	federally chartered credit union supervised by the National Credit Union Administration, 
80.23 	to the extent permitted by federal law.  
80.24 	(c) "Borrower" includes any natural person holding an interest in severalty or as joint 
80.25 	tenant or tenant-in-common in the property securing a reverse mortgage loan.
80.26 	(d) "Outstanding loan balance" means the current net amount of money owed by the 
80.27 	borrower to the lender whether or not that sum is suspended pursuant to the terms of the 
80.28 	reverse mortgage loan agreement or is immediately due and payable. The outstanding 
80.29 	loan balance is calculated by adding the current totals of the items described in clauses (1) 
80.30 	to (5) and subtracting the current totals of the item described in clause (6):
80.31 	(1) The sum of all payments made by the lender which are necessary to clear the 
80.32 	property securing the loan of any outstanding mortgage encumbrance or mechanics or 
80.33 	material supplier's lien.
80.34 	(2) The total disbursements made by the lender to date pursuant to the loan 
80.35 	agreement as formulated in accordance with subdivision 3.
81.1 	(3) All taxes, assessments, insurance premiums and other similar charges paid to 
81.2 	date by the lender pursuant to subdivision 6, which charges were not reimbursed by the 
81.3 	borrower within 60 days.
81.4 	(4) All actual closing costs which the borrower has deferred, if a deferral provision 
81.5 	is contained in the loan agreement as authorized by subdivision 7.
81.6 	(5) The total accrued interest to date, as authorized by subdivision 5.
81.7 	(6) All payments made by the borrower pursuant to subdivision 4.
81.8 	(e) "Actual closing costs" mean reasonable charges or sums ordinarily paid at the 
81.9 	time of closing for the following, whether or not retained by the lender:
81.10 	(1) Any insurance premiums on policies covering the mortgaged property including 
81.11 	but not limited to premiums for title insurance, fire and extended coverage insurance, flood 
81.12 	insurance, and private mortgage insurance.
81.13 	(2) Abstracting, title examination and search, and examination of public records 
81.14 	related to the mortgaged property.
81.15 	(3) The preparation and recording of any or all documents required by law or custom 
81.16 	for closing a reverse mortgage loan agreement.
81.17 	(4) Appraisal and survey of real property securing a reverse mortgage loan.
81.18 	(5) A single service charge, which service charge shall include any consideration, 
81.19 	not otherwise specified in this section as an "actual closing cost," paid by the borrower to 
81.20 	the lender for or in relation to the acquisition, making, refinancing or modification of a 
81.21 	reverse mortgage loan, and shall also include any consideration received by the lender 
81.22 	for making a commitment for a reverse mortgage loan, whether or not an actual loan 
81.23 	follows the commitment. The service charge shall not exceed one percent of the bona fide 
81.24 	committed principal amount of the reverse mortgage loan.
81.25 	(6) Charges and fees necessary for or related to the transfer of real property securing 
81.26 	a reverse mortgage loan or the closing of a reverse mortgage loan agreement paid by the 
81.27 	borrower and received by any party other than the lender.

81.28 	Sec. 2. Minnesota Statutes 2008, section 47.60, subdivision 1, is amended to read:
81.29 		Subdivision 1.Definitions. For purposes of this section, the terms defined have 
81.30 	the meanings given them:
81.31 	(a) "Consumer small loan" is a loan transaction in which cash is advanced to a 
81.32 	borrower for the borrower's own personal, family, or household purpose. A consumer 
81.33 	small loan is a short-term, unsecured loan to be repaid in a single installment. The cash 
81.34 	advance of a consumer small loan is equal to or less than $350. A consumer small loan 
82.1 	includes an indebtedness evidenced by but not limited to a promissory note or agreement 
82.2 	to defer the presentation of a personal check for a fee.
82.3 	(b) "Consumer small loan lender" is a financial institution as defined in section 
82.4 	47.59 or a person business entity registered with the commissioner and engaged in the 
82.5 	business of making consumer small loans. 

82.6 	Sec. 3. Minnesota Statutes 2008, section 47.60, subdivision 3, is amended to read:
82.7 		Subd. 3.Filing. Before a person business entity other than a financial institution 
82.8 	as defined by section 47.59 engages in the business of making consumer small loans to 
82.9 	Minnesota residents, the person business entity shall file with the commissioner as a 
82.10 	consumer small loan lender. The filing must be on a form prescribed by the commissioner 
82.11 	together with a fee of $250 for each place of business and contain the following 
82.12 	information in addition to the information required by the commissioner: 
82.13 	(1) evidence that the filer has available for the operation of the business at the 
82.14 	location specified, liquid assets of at least $50,000; and
82.15 	(2) a biographical statement on the principal person responsible for the operation 
82.16 	and management of the business to be certified.
82.17 	Revocation of the filing and the right to engage in the business of a consumer small 
82.18 	loan lender is the same as in the case of a regulated lender license in section 56.09. 
82.19 	For purposes of this subdivision, "business entity" includes one that does not have a 
82.20 	physical location in Minnesota that makes a consumer small loan electronically via the 
82.21 	Internet. 

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

82.27 	Sec. 5. Minnesota Statutes 2008, section 48.21, is amended to read:
82.28 	48.21 REAL ESTATE; RESTRICTIONS ON HOLDING.
82.29 		Subdivision 1.Specific restrictions. (a) A bank may purchase, carry as an asset, 
82.30 	and convey real estate only:
82.31 	(1) as provided for in section 47.10;  
82.32 	(2) if acquired through foreclosure of a mortgage given to it in good faith as security 
82.33 	for loans made by or money due to it;
83.1 	(3) if conveyed to it in satisfaction of debts previously contracted in good faith in 
83.2 	the course of its dealings;
83.3 	(4) if acquired by sale on execution or judgment of a court in its favor; or
83.4 	(5) if reasonably necessary to mitigate or avoid loss on a loan or investment 
83.5 	theretofore made.
83.6 	(b) Real estate acquired under paragraph (a), clauses (2) to (5), shall be carried as an 
83.7 	asset only in accordance with rules the commissioner prescribes. The maximum period for 
83.8 	holding other real estate as an asset shall be five years, provided that upon application to 
83.9 	the commissioner, the commissioner may approve the possession of such real estate by a 
83.10 	bank for a period longer than five years, but not to exceed an additional five years, if:
83.11 	(1) the bank has made a good faith attempt to dispose of the real estate within the 
83.12 	initial five-year period; or
83.13 	(2) disposal within the initial five-year period would be detrimental to the bank.
83.14 		Subd. 2.Real estate holdings not bank liabilities. Real estate owned by a bank as 
83.15 	a result of actions authorized in clauses (2) to (5) of subdivision 1, paragraph (a), clauses 
83.16 	(2) to (5), and subsequently sold to any buyer on a contract for deed may not be considered 
83.17 	creating a liability to a bank for purposes of section 48.24.  
83.18 		Subd. 3.Real estate holdings not sold; authority to write off. Notwithstanding 
83.19 	any rules of the commissioner to the contrary, if real estate owned by a bank pursuant to 
83.20 	clauses (2) to (5) of subdivision 1, paragraph (a), clauses (2) to (5), is not sold or otherwise 
83.21 	disposed of within the maximum period established by rule by the commissioner, the 
83.22 	bank may write off any remaining balance at a rate not less than one-fifth of that balance 
83.23 	each subsequent calendar year.

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

83.30 	Sec. 7. Minnesota Statutes 2008, section 58.06, subdivision 2, is amended to read:
83.31 		Subd. 2.Application contents. (a) The application must contain the name and 
83.32 	complete business address or addresses of the license applicant. The license applicant 
83.33 	must be a partnership, limited liability partnership, association, limited liability company, 
83.34 	corporation, or other form of business organization, and the application must contain the 
84.1 	names and complete business addresses of each partner, member, director, and principal 
84.2 	officer. The application must also include a description of the activities of the license 
84.3 	applicant, in the detail and for the periods the commissioner may require.
84.4 	(b) An A residential mortgage originator applicant must submit one of the following:
84.5 	(1) evidence which shows, to the commissioner's satisfaction, that either the federal 
84.6 	Department of Housing and Urban Development or the Federal National Mortgage 
84.7 	Association has approved the residential mortgage originator applicant as a mortgagee;
84.8 	(2) a surety bond or irrevocable letter of credit in the amount of not less than 
84.9 	$50,000 in a form approved by the commissioner, issued by an insurance company or bank 
84.10 	authorized to do so in this state. The bond or irrevocable letter of credit must be available 
84.11 	for the recovery of expenses, fines, and fees levied by the commissioner under this chapter 
84.12 	and for losses incurred by borrowers. The bond or letter of credit must be submitted with 
84.13 	the license application, and evidence of continued coverage must be submitted with each 
84.14 	renewal. Any change in the bond or letter of credit must be submitted for approval by the 
84.15 	commissioner within ten days of its execution; or
84.16 	(3) a copy of the residential mortgage originator applicant's most recent audited 
84.17 	financial statement, including balance sheet, statement of income or loss, statements of 
84.18 	changes in shareholder equity, and statement of changes in financial position. Financial 
84.19 	statements must be as of a date within 12 months of the date of application.
84.20 	(c) The application must also include all of the following:
84.21 	(1) an affirmation under oath that the applicant:
84.22 	(i) is in compliance with the requirements of section 58.125;
84.23 	(ii) will maintain a perpetual roster of individuals employed as residential mortgage 
84.24 	originators, including employees and independent contractors, which includes the date
84.25 	dates that mandatory testing, initial education was, and continuing education were
84.26 	completed. In addition, the roster must be made available to the commissioner on demand, 
84.27 	within three business days of the commissioner's request;
84.28 	(iii) will advise the commissioner of any material changes to the information 
84.29 	submitted in the most recent application within ten days of the change;
84.30 	(iv) will advise the commissioner in writing immediately of any bankruptcy petitions 
84.31 	filed against or by the applicant or licensee;
84.32 	(v) will maintain at all times either a net worth, net of intangibles, of at least 
84.33 	$250,000 or a surety bond or irrevocable letter of credit in the amount of at least $50,000;
84.34 	(vi) complies with federal and state tax laws; and
84.35 	(vii) complies with sections 345.31 to 345.60, the Minnesota unclaimed property 
84.36 	law;  
85.1 	(2) information as to the mortgage lending, servicing, or brokering experience of the 
85.2 	applicant and persons in control of the applicant;
85.3 	(3) information as to criminal convictions, excluding traffic violations, of persons in 
85.4 	control of the license applicant;
85.5 	(4) whether a court of competent jurisdiction has found that the applicant or persons 
85.6 	in control of the applicant have engaged in conduct evidencing gross negligence, fraud, 
85.7 	misrepresentation, or deceit in performing an act for which a license is required under 
85.8 	this chapter;
85.9 	(5) whether the applicant or persons in control of the applicant have been the subject 
85.10 	of: an order of suspension or revocation, cease and desist order, or injunctive order, or 
85.11 	order barring involvement in an industry or profession issued by this or another state or 
85.12 	federal regulatory agency or by the Secretary of Housing and Urban Development within 
85.13 	the ten-year period immediately preceding submission of the application; and
85.14 	(6) other information required by the commissioner.

85.15 	Sec. 8. Minnesota Statutes 2008, section 58.126, is amended to read:
85.16 	58.126 EDUCATION AND TESTING REQUIREMENT.
85.17 	(a) No individual shall engage in residential mortgage origination or make residential 
85.18 	mortgage loans, whether as an employee or independent contractor, before the completion 
85.19 	of 15 20 hours of educational training which has been approved by the commissioner, and 
85.20 	covering state and federal laws concerning residential mortgage lending.
85.21 	(b) In addition to the initial education requirements in paragraph (a), each individual 
85.22 	must also complete eight hours of continuing education annually. The education must 
85.23 	include:
85.24 	(1) three hours of federal law and regulations;
85.25 	(2) two hours of ethics, which must include fraud, consumer protection, and fair 
85.26 	lending; and 
85.27 	(3) two hours of standards governing nontraditional mortgage lending.
85.28 	(c) The commissioner may by rule establish testing requirements for individuals 
85.29 	subject to the requirements of paragraphs (a) and (b). An individual must satisfy the 
85.30 	testing requirements established by the commissioner before engaging in residential 
85.31 	mortgage loan origination or making residential mortgage loans.

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

86.1 	Sec. 9. Minnesota Statutes 2008, section 58.13, subdivision 1, is amended to read:
86.2 		Subdivision 1. Generally. (a) No person acting as a residential mortgage originator 
86.3 	or servicer, including a person required to be licensed under this chapter, and no person 
86.4 	exempt from the licensing requirements of this chapter under section 58.04, except as 
86.5 	otherwise provided in paragraph (b), shall: 
86.6 	(1) fail to maintain a trust account to hold trust funds received in connection with a 
86.7 	residential mortgage loan; 
86.8 	(2) fail to deposit all trust funds into a trust account within three business days of 
86.9 	receipt; commingle trust funds with funds belonging to the licensee or exempt person; or 
86.10 	use trust account funds for any purpose other than that for which they are received; 
86.11 	(3) unreasonably delay the processing of a residential mortgage loan application, 
86.12 	or the closing of a residential mortgage loan. For purposes of this clause, evidence of 
86.13 	unreasonable delay includes but is not limited to those factors identified in section 47.206, 
86.14 	subdivision 7, clause (d); 
86.15 	(4) fail to disburse funds according to its contractual or statutory obligations; 
86.16 	(5) fail to perform in conformance with its written agreements with borrowers, 
86.17 	investors, other licensees, or exempt persons; 
86.18 	(6) charge a fee for a product or service where the product or service is not actually 
86.19 	provided, or misrepresent the amount charged by or paid to a third party for a product 
86.20 	or service; 
86.21 	(7) fail to comply with sections 345.31 to 345.60, the Minnesota unclaimed property 
86.22 	law; 
86.23 	(8) violate any provision of any other applicable state or federal law regulating 
86.24 	residential mortgage loans including, without limitation, sections 47.20 to 47.208, and 
86.25 	47.58; 
86.26 	(9) make or cause to be made, directly or indirectly, any false, deceptive, or 
86.27 	misleading statement or representation in connection with a residential loan transaction 
86.28 	including, without limitation, a false, deceptive, or misleading statement or representation 
86.29 	regarding the borrower's ability to qualify for any mortgage product; 
86.30 	(10) conduct residential mortgage loan business under any name other than that 
86.31 	under which the license or certificate of exemption was issued; 
86.32 	(11) compensate, whether directly or indirectly, coerce or intimidate an appraiser for 
86.33 	the purpose of influencing the independent judgment of the appraiser with respect to the 
86.34 	value of real estate that is to be covered by a residential mortgage or is being offered as 
86.35 	security according to an application for a residential mortgage loan; 
87.1 	(12) issue any document indicating conditional qualification or conditional approval 
87.2 	for a residential mortgage loan, unless the document also clearly indicates that final 
87.3 	qualification or approval is not guaranteed, and may be subject to additional review; 
87.4 	(13) make or assist in making any residential mortgage loan with the intent that the 
87.5 	loan will not be repaid and that the residential mortgage originator will obtain title to 
87.6 	the property through foreclosure; 
87.7 	(14) provide or offer to provide for a borrower, any brokering or lending services 
87.8 	under an arrangement with a person other than a licensee or exempt person, provided that 
87.9 	a person may rely upon a written representation by the residential mortgage originator that 
87.10 	it is in compliance with the licensing requirements of this chapter; 
87.11 	(15) claim to represent a licensee or exempt person, unless the person is an employee 
87.12 	of the licensee or exempt person or unless the person has entered into a written agency 
87.13 	agreement with the licensee or exempt person; 
87.14 	(16) fail to comply with the record keeping and notification requirements identified 
87.15 	in section 58.14 or fail to abide by the affirmations made on the application for licensure; 
87.16 	(17) represent that the licensee or exempt person is acting as the borrower's agent 
87.17 	after providing the nonagency disclosure required by section 58.15, unless the disclosure 
87.18 	is retracted and the licensee or exempt person complies with all of the requirements of 
87.19 	section 58.16; 
87.20 	(18) make, provide, or arrange for a residential mortgage loan that is of a lower 
87.21 	investment grade if the borrower's credit score or, if the originator does not utilize credit 
87.22 	scoring or if a credit score is unavailable, then comparable underwriting data, indicates 
87.23 	that the borrower may qualify for a residential mortgage loan, available from or through 
87.24 	the originator, that is of a higher investment grade, unless the borrower is informed that 
87.25 	the borrower may qualify for a higher investment grade loan with a lower interest rate 
87.26 	and/or lower discount points, and consents in writing to receipt of the lower investment 
87.27 	grade loan; 
87.28 	For purposes of this section, "investment grade" refers to a system of categorizing 
87.29 	residential mortgage loans in which the loans are: (i) commonly referred to as "prime" or 
87.30 	"subprime"; (ii) commonly designated by an alphabetical character with "A" being the 
87.31 	highest investment grade; and (iii) are distinguished by interest rate or discount points 
87.32 	or both charged to the borrower, which vary according to the degree of perceived risk 
87.33 	of default based on factors such as the borrower's credit, including credit score and 
87.34 	credit patterns, income and employment history, debt ratio, loan-to-value ratio, and prior 
87.35 	bankruptcy or foreclosure; 
88.1 	(19) make, publish, disseminate, circulate, place before the public, or cause to be 
88.2 	made, directly or indirectly, any advertisement or marketing materials of any type, or any 
88.3 	statement or representation relating to the business of residential mortgage loans that is 
88.4 	false, deceptive, or misleading; 
88.5 	(20) advertise loan types or terms that are not available from or through the licensee 
88.6 	or exempt person on the date advertised, or on the date specified in the advertisement. 
88.7 	For purposes of this clause, advertisement includes, but is not limited to, a list of sample 
88.8 	mortgage terms, including interest rates, discount points, and closing costs provided by 
88.9 	licensees or exempt persons to a print or electronic medium that presents the information 
88.10 	to the public; 
88.11 	(21) use or employ phrases, pictures, return addresses, geographic designations, or 
88.12 	other means that create the impression, directly or indirectly, that a licensee or other 
88.13 	person is a governmental agency, or is associated with, sponsored by, or in any manner 
88.14 	connected to, related to, or endorsed by a governmental agency, if that is not the case; 
88.15 	(22) violate section 82.49, relating to table funding; 
88.16 	(23) make, provide, or arrange for a residential mortgage loan all or a portion 
88.17 	of the proceeds of which are used to fully or partially pay off a "special mortgage" 
88.18 	unless the borrower has obtained a written certification from an authorized independent 
88.19 	loan counselor that the borrower has received counseling on the advisability of the 
88.20 	loan transaction. For purposes of this section, "special mortgage" means a residential 
88.21 	mortgage loan originated, subsidized, or guaranteed by or through a state, tribal, or 
88.22 	local government, or nonprofit organization, that bears one or more of the following 
88.23 	nonstandard payment terms which substantially benefit the borrower: (i) payments vary 
88.24 	with income; (ii) payments of principal or interest are not required or can be deferred under 
88.25 	specified conditions; (iii) principal or interest is forgivable under specified conditions; 
88.26 	or (iv) where no interest or an annual interest rate of two percent or less is charged in 
88.27 	connection with the loan. For purposes of this section, "authorized independent loan 
88.28 	counselor" means a nonprofit, third-party individual or organization providing homebuyer 
88.29 	education programs, foreclosure prevention services, mortgage loan counseling, or credit 
88.30 	counseling certified by the United States Department of Housing and Urban Development, 
88.31 	the Minnesota Home Ownership Center, the Minnesota Mortgage Foreclosure Prevention 
88.32 	Association, AARP, or NeighborWorks America; 
88.33 	(24) make, provide, or arrange for a residential mortgage loan without verifying 
88.34 	the borrower's reasonable ability to pay the scheduled payments of the following, as 
88.35 	applicable: principal; interest; real estate taxes; homeowner's insurance, assessments, 
88.36 	and mortgage insurance premiums. For loans in which the interest rate may vary, the 
89.1 	reasonable ability to pay shall be determined based on a fully indexed rate and a repayment 
89.2 	schedule which achieves full amortization over the life of the loan. For all residential 
89.3 	mortgage loans, the borrower's income and financial resources must be verified by tax 
89.4 	returns, payroll receipts, bank records, or other similarly reliable documents. 
89.5 	Nothing in this section shall be construed to limit a mortgage originator's or exempt 
89.6 	person's ability to rely on criteria other than the borrower's income and financial resources 
89.7 	to establish the borrower's reasonable ability to repay the residential mortgage loan, 
89.8 	including criteria established by the United States Department of Veterans Affairs or the 
89.9 	United States Department of Housing and Urban Development for interest rate reduction 
89.10 	refinancing loans or streamline loans, or criteria authorized or promulgated by the 
89.11 	Federal National Mortgage Association or Federal Home Loan Mortgage Corporation; 
89.12 	however, such other criteria must be verified through reasonably reliable methods and 
89.13 	documentation. The mortgage originator's analysis of the borrower's reasonable ability 
89.14 	to repay may include, but is not limited to, consideration of the following items, if 
89.15 	verified: (1) the borrower's current and expected income; (2) current and expected cash 
89.16 	flow; (3) net worth and other financial resources other than the consumer's equity in the 
89.17 	dwelling that secures the loan; (4) current financial obligations; (5) property taxes and 
89.18 	insurance; (6) assessments on the property; (7) employment status; (8) credit history; (9) 
89.19 	debt-to-income ratio; (10) credit scores; (11) tax returns; (12) pension statements; and 
89.20 	(13) employment payment records, provided that no mortgage originator shall disregard 
89.21 	facts and circumstances that indicate that the financial or other information submitted by 
89.22 	the consumer is inaccurate or incomplete. A statement by the borrower to the residential 
89.23 	mortgage originator or exempt person of the borrower's income and resources or sole 
89.24 	reliance on any single item listed above is not sufficient to establish the existence of the 
89.25 	income or resources when verifying the reasonable ability to pay. 
89.26 	(25) engage in "churning." As used in this section, "churning" means knowingly or 
89.27 	intentionally making, providing, or arranging for a residential mortgage loan when the 
89.28 	new residential mortgage loan does not provide a reasonable, tangible net benefit to the 
89.29 	borrower considering all of the circumstances including the terms of both the new and 
89.30 	refinanced loans, the cost of the new loan, and the borrower's circumstances; 
89.31 	(26) the first time a residential mortgage originator orally informs a borrower of the 
89.32 	anticipated or actual periodic payment amount for a first-lien residential mortgage loan 
89.33 	which does not include an amount for payment of property taxes and hazard insurance, 
89.34 	the residential mortgage originator must inform the borrower that an additional amount 
89.35 	will be due for taxes and insurance and, if known, disclose to the borrower the amount of 
89.36 	the anticipated or actual periodic payments for property taxes and hazard insurance. This 
90.1 	same oral disclosure must be made each time the residential mortgage originator orally 
90.2 	informs the borrower of a different anticipated or actual periodic payment amount change 
90.3 	from the amount previously disclosed. A residential mortgage originator need not make 
90.4 	this disclosure concerning a refinancing loan if the residential mortgage originator knows 
90.5 	that the borrower's existing loan that is anticipated to be refinanced does not have an 
90.6 	escrow account; or 
90.7 	(27) make, provide, or arrange for a residential mortgage loan, other than a reverse 
90.8 	mortgage pursuant to United States Code, title 15, chapter 41, if the borrower's compliance 
90.9 	with any repayment option offered pursuant to the terms of the loan will result in negative 
90.10 	amortization during any six-month period. 
90.11 	(b) Paragraph (a), clauses (24) through (27), do not apply to a state or federally 
90.12 	chartered bank, savings bank, or credit union, an institution chartered by Congress under 
90.13 	the Farm Credit Act, or to a person making, providing, or arranging a residential mortgage 
90.14 	loan originated or purchased by a state agency or a tribal or local unit of government. This 
90.15 	paragraph supersedes any inconsistent provision of this chapter. 

90.16 	Sec. 10. Minnesota Statutes 2008, section 60A.124, is amended to read:
90.17 	60A.124 INDEPENDENT AUDIT.
90.18 	The audit report of the independent certified public accountant that performs the 
90.19 	audit of an insurer's annual statement as required under section 60A.129 60A.1291, 
90.20 	subdivision 3 2, paragraph (a), should contain a statement as to whether anything, in 
90.21 	connection with their audit, came to their attention that caused them to believe that the 
90.22 	insurer failed to adopt and consistently apply the valuation procedure as required by 
90.23 	sections 60A.122 and 60A.123.  

90.24 	Sec. 11. [60A.1291] ANNUAL AUDIT.
90.25 		Subdivision 1.Definitions. The definitions in this subdivision apply to this section.
90.26 	(a) "Accountant" and "independent public accountant" mean an independent certified 
90.27 	public accountant or accounting firm in good standing with the American Institute of 
90.28 	Certified Public Accountants and in all states in which the accountant or firm is licensed 
90.29 	or is required to be licensed to practice. For Canadian and British companies, the term 
90.30 	means a Canadian-chartered or British-chartered accountant.
90.31 	(b) "Audit committee" means a committee or equivalent body established by the 
90.32 	board of directors of an entity for the purpose of overseeing the accounting and financial 
90.33 	reporting processes of an insurer or group of insurers, and audits of financial statements of 
90.34 	the insurer or group of insurers. The audit committee of any entity that controls a group of 
91.1 	insurers may be deemed to be the audit committee for one or more of these controlled 
91.2 	insurers solely for the purposes of this section at the election of the controlling person 
91.3 	under subdivision 15, paragraph (e). If an audit committee is not designated by the insurer, 
91.4 	the insurer's entire board of directors constitutes the audit committee.
91.5 	(c) "Indemnification" means an agreement of indemnity or a release from liability 
91.6 	where the intent or effect is to shift or limit in any manner the potential liability of the 
91.7 	person or firm for failure to adhere to applicable auditing or professional standards, 
91.8 	whether or not resulting in part from knowing of other misrepresentations made by the 
91.9 	insurer or its representatives.
91.10 	(d) "Independent board member" has the same meaning as described in subdivision 
91.11 	15, paragraph (c).
91.12 	(e) "Internal control over financial reporting" means a process effected by an entity's 
91.13 	board of directors, management, and other personnel designed to provide reasonable 
91.14 	assurance regarding the reliability of the financial statements, for example, those items 
91.15 	specified in subdivision 4, paragraphs (a), clauses (2) to (6), (b), and (c), and includes 
91.16 	those policies and procedures that:
91.17 	(1) pertain to the maintenance of records that, in reasonable detail, accurately and 
91.18 	fairly reflect the transactions and dispositions of assets;
91.19 	(2) provide reasonable assurance that transactions are recorded as necessary to permit 
91.20 	preparation of the financial statements, for example, those items specified in subdivision 4, 
91.21 	paragraphs (a), clauses (2) to (6), (b), and (c), and that receipts and expenditures are being 
91.22 	made only in accordance with authorizations of management and directors; and
91.23 	(3) provide reasonable assurance regarding prevention or timely detection of 
91.24 	unauthorized acquisition, use, or disposition of assets that could have a material effect on 
91.25 	the financial statements, for example, those items specified in subdivision 4, paragraphs 
91.26 	(a), clauses (2) to (6), (b), and (c).
91.27 	(f) "SEC" means the United States Securities and Exchange Commission.
91.28 	(g) "Section 404" means Section 404 of the Sarbanes-Oxley Act of 2002 and the 
91.29 	SEC's rules and regulations promulgated under it.
91.30 	(h) "Section 404 report" means management's report on "internal control over 
91.31 	financial reporting" as defined by the SEC and the related attestation report of the 
91.32 	independent certified public accountant as described in paragraph (a).
91.33 	(i) "SOX compliant entity" means an entity that either is required to be 
91.34 	compliant with, or voluntarily is compliant with, all of the following provisions of the 
91.35 	Sarbanes-Oxley Act of 2002: (i) the preapproval requirements of Section 201 (section 
91.36 	10A(i) of the Securities Exchange Act of 1934); (ii) the audit committee independence 
92.1 	requirements of Section 301 (section 10A(m)(3) of the Securities Exchange Act of 1934); 
92.2 	and (iii) the internal control over financial reporting requirements of Section 404 (Item 
92.3 	308 of SEC Regulation S-K).
92.4 		Subd. 2.Filing requirements. Every insurance company doing business in this 
92.5 	state, including fraternal benefit societies, reciprocal exchanges, service plan corporations 
92.6 	licensed pursuant to chapter 62C, and legal service plans licensed pursuant to chapter 
92.7 	62G, unless exempted by the commissioner pursuant to subdivision 9, paragraph (a), or by 
92.8 	subdivision 18, shall have an annual audit of the financial activities of the most recently 
92.9 	completed calendar year performed by an independent certified public accountant, and 
92.10 	shall file the report of this audit with the commissioner on or before June 1 for the 
92.11 	immediately preceding year ending December 31. The commissioner may require an 
92.12 	insurer to file an audited financial report earlier than June 1 with 90 days' advance notice 
92.13 	to the insurer.
92.14 	Extensions of the June 1 filing date may be granted by the commissioner for 30-day 
92.15 	periods upon a showing by the insurer and its independent certified public accountant of 
92.16 	the reasons for requesting the extension and a determination by the commissioner of good 
92.17 	cause for the extension.
92.18 	The request for extension must be submitted in writing not less than ten days before 
92.19 	the due date in sufficient detail to permit the commissioner to make an informed decision 
92.20 	with respect to the requested extension.
92.21 	If an extension is granted in accordance with this subdivision, a similar extension of 
92.22 	30 days is granted to the filing of management's report of internal control over financial 
92.23 	reporting.
92.24 	Every insurer required to file an annual audited financial report pursuant to this 
92.25 	subdivision shall designate a group of individuals as constituting its audit committee. The 
92.26 	audit committee of an entity that controls an insurer may be deemed to be the insurer's 
92.27 	audit committee for purposes of this subdivision at the election of the controlling person.
92.28 		Subd. 3.Exemptions. Foreign and alien insurers filing audited financial reports 
92.29 	in another state under the other state's requirements of audited financial reports which 
92.30 	have been found by the commissioner to be substantially similar to these requirements 
92.31 	are exempt from this section if a copy of the audited financial report, communication of 
92.32 	internal control related matters noted in an audit, accountant's letter of qualifications, and 
92.33 	report on significant deficiencies in internal controls, which are filed with the other state, 
92.34 	are filed with the commissioner in accordance with the filing dates specified in subdivision 
92.35 	2 (Canadian insurers may submit accountants' reports as filed with the Canadian Dominion 
92.36 	Department of Insurance); and a copy of any notification of adverse financial condition 
93.1 	report filed with the other state is filed with the commissioner within the time specified 
93.2 	in subdivision 11. Foreign or alien insurers required to file management's report of 
93.3 	internal control over financial reporting in another state are exempt from filing the report 
93.4 	in this state provided the other state has substantially similar reporting requirements and 
93.5 	the report is filed with the commissioner of the other state within the time specified. 
93.6 	This subdivision does not prohibit or in any way limit the commissioner from ordering, 
93.7 	conducting, and performing examinations of insurers under the authority of this chapter.
93.8 		Subd. 4.Contents of annual audit; financial report. (a) The annual audited 
93.9 	financial report must report, in conformity with statutory accounting practices required 
93.10 	or permitted by the commissioner of insurance of the state of domicile, the financial 
93.11 	position of the insurer as of the end of the most recent calendar year and the results of 
93.12 	its operations, cash flows, and changes in capital and surplus for the year ended. The 
93.13 	annual audited financial report must include:
93.14 	(1) a report of an independent certified public accountant;
93.15 	(2) a balance sheet reporting admitted assets, liabilities, capital, and surplus;
93.16 	(3) a statement of operations;
93.17 	(4) a statement of cash flows;
93.18 	(5) a statement of changes in capital and surplus; and
93.19 	(6) notes to the financial statements.
93.20 	(b) The notes required under paragraph (a) are those required by the appropriate 
93.21 	National Association of Insurance Commissioners (NAIC) annual statement instructions 
93.22 	and National Association of Insurance Commissioners Accounting Practices and 
93.23 	Procedures Manual and include reconciliation of differences, if any, between the audited 
93.24 	statutory financial statements and the annual statement filed under section 60A.13, 
93.25 	subdivision 1, with a written description of the nature of these differences.
93.26 	(c) The financial statements included in the audited financial report must be prepared 
93.27 	in a form and using language and groupings substantially the same as the relevant sections 
93.28 	of the annual statement of the insurer filed with the commissioner. The financial statement 
93.29 	must be comparative, presenting the amounts as of December 31 of the current year and 
93.30 	the amounts as of the immediately preceding December 31. In the first year in which 
93.31 	an insurer is required to file an audited financial report, the comparative data may be 
93.32 	omitted. The amounts may be rounded to the nearest $1,000, and all immaterial amounts 
93.33 	may be combined.
93.34 		Subd. 5.Designation of independent certified public accountant. Each insurer 
93.35 	required by this section to file an annual audited financial report must notify the 
93.36 	commissioner in writing of the name and address of the independent certified public 
94.1 	accountant or accounting firm retained to conduct the annual audit within 60 days after 
94.2 	becoming subject to the annual audit requirement. The insurer shall obtain from the 
94.3 	accountant a letter which states that the accountant is aware of the provisions that relate 
94.4 	to accounting and financial matters in the insurance laws and the rules of the insurance 
94.5 	regulatory authority of the state of domicile. The letter shall affirm that the accountant will 
94.6 	express an opinion on the financial statements in terms of their conformity to the statutory 
94.7 	accounting practices prescribed or otherwise permitted by that insurance regulatory 
94.8 	authority, specifying the exceptions believed to be appropriate. A copy of the accountant's 
94.9 	letter shall be filed with the commissioner.
94.10 		Subd. 6.Report of disagreements. If an accountant who was the accountant for 
94.11 	the immediately preceding filed audited financial report is dismissed or resigns, the 
94.12 	insurer shall notify the commissioner of this event within five business days. Within 
94.13 	ten business days of this notification, the insurer shall also furnish the commissioner 
94.14 	with a separate letter stating whether in the 24 months preceding this event there were 
94.15 	any disagreements with the former accountant on any matter of accounting principles or 
94.16 	practices, financial statement disclosure, or auditing scope or procedure, which, if not 
94.17 	resolved to the satisfaction of the former accountant, would have caused that person to 
94.18 	make reference to the subject matter of the disagreement in connection with the opinion 
94.19 	on the financial statements. The disagreements required to be reported in response to this 
94.20 	subdivision include both those resolved to the former accountant's satisfaction and those 
94.21 	not resolved to the former accountant's satisfaction. Disagreements contemplated by this 
94.22 	subdivision are those disagreements between personnel of the insurer responsible for 
94.23 	presentation of its financial statements and personnel of the accounting firm responsible 
94.24 	for rendering its report. The insurer shall also in writing request the former accountant 
94.25 	to furnish a letter addressed to the insurer stating whether the accountant agrees with 
94.26 	the statements contained in the insurer's letter and, if not, stating the reasons for any 
94.27 	disagreement. The insurer shall furnish this responsive letter from the former accountant 
94.28 	to the commissioner together with its own.
94.29 		Subd. 7.Qualifications of independent certified public accountant. (a) The 
94.30 	commissioner shall not recognize any person or firm as a qualified independent certified 
94.31 	public accountant that is not in good standing with the American Institute of Certified 
94.32 	Public Accountants and in all states in which the accountant is licensed or is required 
94.33 	to be licensed to practice, or for a Canadian or British company, that is not a chartered 
94.34 	accountant, or that has either directly or indirectly entered into an agreement of indemnity 
94.35 	or release from liability (collectively referred to as an indemnification agreement) with 
94.36 	respect to the audit of the insurer. Except as otherwise provided, an independent certified 
95.1 	public accountant must be recognized as qualified as long as the person conforms to the 
95.2 	standards of the person's profession, as contained in the Code of Professional Conduct 
95.3 	of the American Institute of Certified Public Accountants and the Code of Professional 
95.4 	Conduct of the Minnesota Board of Public Accountancy or similar code and the person is 
95.5 	properly licensed in good standing with all required state boards of accountancy.
95.6 	(b) The lead or coordinating audit partner, having primary responsibility for the 
95.7 	audit, may not act in that capacity for more than five consecutive years. The person shall 
95.8 	be disqualified from acting in that or a similar capacity for the same company or its 
95.9 	insurance subsidiaries or affiliates for a period of five consecutive years. An insurer may 
95.10 	make application to the commissioner for relief from this rotation requirement on the 
95.11 	basis of unusual circumstances. This application must be made at least 30 days before 
95.12 	the end of the calendar year. The commissioner may consider the following factors in 
95.13 	determining if the relief should be granted:
95.14 	(1) number of partners, expertise of the partners, or the number of insurance clients 
95.15 	in the currently registered firm;
95.16 	(2) premium volume of the insurer; or
95.17 	(3) number of jurisdictions in which the insurer transacts business.
95.18 	The insurer shall file, with its annual statement filing, the approval for relief from this 
95.19 	paragraph with the states that it is licensed in or doing business in and with the NAIC. If 
95.20 	the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the 
95.21 	approval in an electronic format acceptable to the NAIC.
95.22 	(c) The commissioner shall not recognize as a qualified independent certified public 
95.23 	accountant, nor accept an annual audited financial report, prepared in whole or in part by 
95.24 	an accountant who provides to an insurer, contemporaneously with the audit, the following 
95.25 	nonaudit services:
95.26 	(1) bookkeeping or other services related to the accounting records or financial 
95.27 	statements of the insurer;
95.28 	(2) financial information systems design and implementation;
95.29 	(3) appraisal or valuation services, fairness opinions, or contribution in-kind reports;
95.30 	(4) actuarially oriented advisory services involving the determination of amounts 
95.31 	recorded in the financial statements. The accountant may assist an insurer in understanding 
95.32 	the methods, assumptions, and inputs used in the determination of amounts recorded in the 
95.33 	financial statement only if it is reasonable to conclude that the services provided will not 
95.34 	be subject to audit procedures during an audit of the insurer's financial statements. An 
95.35 	accountant's actuary may also issue an actuarial opinion or certification on an insurer's 
95.36 	reserves if the following conditions have been met:
96.1 	(i) neither the accountant nor the accountant's actuary has performed any 
96.2 	management functions or made any management decisions;
96.3 	(ii) the insurer has competent personnel, or engages a third-party actuary, to estimate 
96.4 	the loss reserves for which management takes responsibility; and
96.5 	(iii) the accountant's actuary tests the reasonableness of the reserves after the 
96.6 	insurer's management has determined the amount of the loss reserves;
96.7 	(5) internal audit outsourcing services;
96.8 	(6) management functions or human resources;
96.9 	(7) broker or dealer, investment adviser, or investment banking services;
96.10 	(8) legal services or expert services unrelated to the audit; and
96.11 	(9) any other services that the commissioner determines, by rule, are impermissible.
96.12 	(d) The commissioner shall not recognize as a qualified independent certified public 
96.13 	accountant, nor accept any audited financial report, prepared in whole or in part by any 
96.14 	natural person who has been convicted of fraud, bribery, a violation of the Racketeer 
96.15 	Influenced and Corrupt Organizations Act, United States Code, title 18, sections 1961 to 
96.16 	1968, or any dishonest conduct or practices under federal or state law, has been found to 
96.17 	have violated the insurance laws of this state with respect to any previous reports submitted 
96.18 	under this section, or has demonstrated a pattern or practice of failing to detect or disclose 
96.19 	material information in previous reports filed under the provisions of this section.
96.20 	(e) The commissioner, after notice and hearing under chapter 14, may find that 
96.21 	the accountant is not qualified for purposes of expressing an opinion on the financial 
96.22 	statements in the annual audited financial report. The commissioner may require the 
96.23 	insurer to replace the accountant with another whose relationship with the insurer is 
96.24 	qualified within the meaning of this section.
96.25 		Subd. 8.Exemptions to qualifications of certified public accountant. (a) Insurers 
96.26 	having direct written and assumed premiums of less than $100,000,000 in any calendar 
96.27 	year may request an exemption from subdivision 7, paragraph (c). The insurer shall 
96.28 	file with the commissioner a written statement discussing the reasons why the insurer 
96.29 	should be exempt from these provisions. If the commissioner finds, upon review of this 
96.30 	statement, that compliance with this section would constitute a financial or organizational 
96.31 	hardship upon the insurer, an exemption may be granted.
96.32 	(b) A qualified independent certified public accountant who performs the audit 
96.33 	may engage in other nonaudit services, including tax services, that are not described in 
96.34 	subdivision 7, paragraph (c), only if the activity is approved in advance by the audit 
96.35 	committee, in accordance with paragraph (c).
97.1 	(c) All auditing services and nonaudit services provided to an insurer by the qualified 
97.2 	independent certified public accountant of the insurer must be preapproved by the audit 
97.3 	committee. The preapproval requirement is waived with respect to nonaudit services if 
97.4 	the insurer is a SOX compliant entity or a direct or indirect wholly owned subsidiary of a 
97.5 	SOX compliant entity or:
97.6 	(1) the aggregate amount of all such nonaudit services provided to the insurer 
97.7 	constitutes not more than five percent of the total amount of fees paid by the insurer to 
97.8 	its qualified independent certified public accountant during the fiscal year in which the 
97.9 	nonaudit services are provided;
97.10 	(2) the services were not recognized by the insurer at the time of the engagement to 
97.11 	be nonaudit services; and
97.12 	(3) the services are promptly brought to the attention of the audit committee and 
97.13 	approved before the completion of the audit by the audit committee or by one or more 
97.14 	members of the audit committee who are the members of the board of directors to whom 
97.15 	authority to grant such approvals has been delegated by the audit committee.
97.16 	(d) The audit committee may delegate to one or more designated members of the 
97.17 	audit committee the authority to grant the preapprovals required by paragraph (c). The 
97.18 	decisions of any member to whom this authority is delegated must be presented to the full 
97.19 	audit committee at each of its scheduled meetings.
97.20 	(e) The commissioner shall not recognize an independent certified public accountant 
97.21 	as qualified for a particular insurer if a member of the board, president, chief executive 
97.22 	officer, controller, chief financial officer, chief accounting officer, or any person serving in 
97.23 	an equivalent position for that insurer, was employed by the independent certified public 
97.24 	accountant and participated in the audit of that insurer during the one-year period preceding 
97.25 	the date that the most current statutory opinion is due. This paragraph applies only to 
97.26 	partners and senior managers involved in the audit. An insurer may make application to 
97.27 	the commissioner for relief from this paragraph on the basis of unusual circumstances.
97.28 	(f) The insurer shall file, with its annual statement filing, the approval for relief with 
97.29 	the states that it is licensed in or doing business in and the NAIC. If the nondomestic state 
97.30 	accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic 
97.31 	format acceptable to the NAIC.
97.32 		Subd. 9.Consolidated or combined audits. (a) The commissioner may allow 
97.33 	an insurer to file consolidated or combined audited financial statements required by 
97.34 	subdivision 2, in lieu of separate annual audited financial statements, where it can be 
97.35 	demonstrated that an insurer is part of a group of insurance companies that has a pooling 
97.36 	or 100 percent reinsurance agreement which substantially affects the solvency and 
98.1 	integrity of the reserves of the insurer and the insurer cedes all of its direct and assumed 
98.2 	business to the pool. An affiliated insurance company not meeting these requirements may 
98.3 	be included in the consolidated or combined audited financial statements, if the company's 
98.4 	total admitted assets are less than five percent of the consolidated group's total admitted 
98.5 	assets. If these circumstances exist, then the company may file a written application to 
98.6 	file consolidated or combined audited financial statements. This application must be for 
98.7 	a specified period.
98.8 	(b) Upon written application by a domestic insurer, the commissioner may 
98.9 	authorize the domestic insurer to include additional affiliated insurance companies in the 
98.10 	consolidated or combined audited financial statements. A foreign insurer must obtain the 
98.11 	prior written authorization of the commissioner of its state of domicile in order to submit 
98.12 	an application for authority to file consolidated or combined audited financial statements. 
98.13 	This application must be for a specified period.
98.14 	(c) A consolidated annual audit filing must include a columnar consolidated or 
98.15 	combining worksheet. Amounts shown on the audited consolidated or combined financial 
98.16 	statement must be shown on the worksheet. Amounts for each insurer must be stated 
98.17 	separately. Noninsurance operations may be shown on the worksheet on a combined or 
98.18 	individual basis. Explanations of consolidating or eliminating entries must be shown on 
98.19 	the worksheet. A reconciliation of any differences between the amounts shown in the 
98.20 	individual insurer columns of the worksheet and comparable amounts shown on the annual 
98.21 	statement of the insurers must be included on the worksheet.
98.22 		Subd. 10.Scope of audit and report of independent certified public accountant.
 98.23 	Financial statements furnished pursuant to subdivision 4 must be examined by an 
98.24 	independent certified public accountant. The audit of the insurer's financial statements 
98.25 	must be conducted in accordance with generally accepted auditing standards. In 
98.26 	accordance with AICPA Statement on Auditing Standards (SAS) No. 109, Understanding 
98.27 	the Entity and its Environment and Assessing the Risks of Material Misstatement, or its 
98.28 	replacement, the independent certified public accountant should obtain an understanding 
98.29 	of internal control sufficient to plan the audit. To the extent required by SAS No. 109, 
98.30 	for those insurers required to file a management's report of internal control over financial 
98.31 	reporting pursuant to subdivision 17, the independent certified public accountant should 
98.32 	consider (as that term is defined in SAS No. 102, Defining Professional Requirements in 
98.33 	Statements on Auditing Standards or its replacement) the most recently available report in 
98.34 	planning and performing the audit of the statutory financial statements. Consideration 
98.35 	should be given to other procedures illustrated in the Financial Condition Examiners 
99.1 	Handbook promulgated by the National Association of Insurance Commissioners as the 
99.2 	independent certified public accountant deems necessary.
99.3 		Subd. 11.Notification of adverse financial condition. The insurer required to 
99.4 	furnish the annual audited financial report shall require the independent certified public 
99.5 	accountant to provide written notice within five business days to the board of directors of 
99.6 	the insurer or its audit committee of any determination by that independent certified public 
99.7 	accountant that the insurer has materially misstated its financial condition as reported to 
99.8 	the commissioner as of the balance sheet date currently under audit or that the insurer does 
99.9 	not meet the minimum capital and surplus requirement of sections 60A.07, 66A.32, and 
99.10 	66A.33 as of that date. An insurer required to file an annual audited financial report who 
99.11 	received a notification of adverse financial condition from the accountant shall file a 
99.12 	copy of the notification with the commissioner within five business days of the receipt 
99.13 	of the notification. The insurer shall provide the independent certified public accountant 
99.14 	making the notification with evidence of the report being furnished to the commissioner. 
99.15 	If the independent certified public accountant fails to receive the evidence within the 
99.16 	required five-day period, the independent certified public accountant shall furnish to the 
99.17 	commissioner a copy of the notification to the board of directors or its audit committee 
99.18 	within the next five business days. No independent certified public accountant is liable in 
99.19 	any manner to any person for any statement made in connection with this subdivision if 
99.20 	the statement is made in good faith in compliance with this subdivision. If the accountant 
99.21 	becomes aware of facts which might have affected the audited financial report after 
99.22 	the date it was filed, the accountant shall take the action prescribed by AU section 
99.23 	561, Subsequent Discovery of Facts Existing at the Date of the Auditor's Report of the 
99.24 	Professional Standards issued by the American Institute of Certified Public Accountants, 
99.25 	or its replacement.
99.26 		Subd. 12.Communication of internal control related matters noted in an 
99.27 	audit. In addition to the annual audited financial report, each insurer shall furnish the 
99.28 	commissioner with a written communication as to any unremediated material weaknesses 
99.29 	in its internal control over financial reporting noted during the audit. The communication 
99.30 	must be prepared by the accountant within 60 days after the filing of the annual audited 
99.31 	financial report, and must contain a description of any unremediated material weakness, as 
99.32 	the term material weakness is defined by SAS No. 115, Communicating Internal Control 
99.33 	Related Matters Identified in an Audit, or its replacement, as of December 31 immediately 
99.34 	preceding so as to coincide with the audited financial report discussed in subdivision 2 in 
99.35 	the insurer's internal control over financial reporting noted by the accountant during the 
100.1 	course of their audit of the financial statements. If no unremediated material weaknesses 
100.2 	were noted, the communication should so state.
100.3 	The insurer is required to provide a description of remedial actions taken or 
100.4 	proposed to correct unremediated material weaknesses, if the actions are not described in 
100.5 	the accountant's communication.
100.6 		Subd. 13.Accountant's letter of qualification. The accountant shall furnish the 
100.7 	insurer in connection with, and for inclusion in, the filing of the annual audited financial 
100.8 	report, a letter stating that the accountant is independent with respect to the insurer and 
100.9 	conforms to the standards of the accountant's profession as contained in the Code of 
100.10 	Professional Conduct of the American Institute of Certified Public Accountants and the 
100.11 	Code of Professional Conduct of the Minnesota Board of Accountancy or similar code; 
100.12 	the background and experience in general, and the experience in audits of insurers of the 
100.13 	staff assigned to the engagement and whether each is an independent certified public 
100.14 	accountant; that the accountant understands that the annual audited financial report and the 
100.15 	opinion on it will be filed in compliance with this statute and that the commissioner will 
100.16 	be relying on this information in the monitoring and regulation of the financial position of 
100.17 	insurers; that the accountant consents to the requirements of subdivision 14 and that the 
100.18 	accountant consents and agrees to make available for review by the commissioner, or the 
100.19 	commissioner's designee or appointed agent, the work papers, as defined in subdivision 
100.20 	14; a representation that the accountant is properly licensed in good standing by the 
100.21 	appropriate state licensing authorities and is a member in good standing in the American 
100.22 	Institute of Certified Public Accountants; and a representation that the accountant complies 
100.23 	with subdivision 7. Nothing in this section prohibits the accountant from utilizing staff 
100.24 	the accountant deems appropriate where use is consistent with the standards prescribed 
100.25 	by generally accepted auditing standards.
100.26 		Subd. 14.Availability and maintenance of independent certified public 
100.27 	accountants' work papers. Work papers are the records kept by the independent certified 
100.28 	public accountant of the procedures followed, tests performed, information obtained, and 
100.29 	conclusions reached pertinent to the independent certified public accountant's audit of the 
100.30 	financial statements of an insurer. Work papers may include audit planning documents, 
100.31 	work programs, analyses, memoranda, letters of confirmation and representation, 
100.32 	management letters, abstracts of company documents, and schedules or commentaries 
100.33 	prepared or obtained by the independent certified public accountant in the course of the 
100.34 	audit of the financial statements of an insurer and that support the accountant's opinion. 
100.35 	Every insurer required to file an audited financial report shall require the accountant, 
100.36 	through the insurer, to make available for review by the examiners the work papers 
101.1 	prepared in the conduct of the audit and any communications related to the audit between 
101.2 	the accountant and the insurer. The work papers must be made available at the offices of 
101.3 	the insurer, at the offices of the commissioner, or at any other reasonable place designated 
101.4 	by the commissioner. The insurer shall require that the accountant retain the audit work 
101.5 	papers and communications until the commissioner has filed a report on examination 
101.6 	covering the period of the audit but no longer than seven years after the period reported 
101.7 	upon, provided retention of the working papers beyond the seven years is not required by 
101.8 	other professional or regulatory requirements. In the conduct of the periodic review by 
101.9 	the examiners, it must be agreed that photocopies of pertinent audit work papers may be 
101.10 	made and retained by the commissioner. These copies shall be part of the commissioner's 
101.11 	work papers and must be given the same confidentiality as other examination work papers 
101.12 	generated by the commissioner.
101.13 		Subd. 15.Requirements for audit committee. (a) The audit committee must 
101.14 	be directly responsible for the appointment, compensation, and oversight of the work 
101.15 	of any accountant including resolution of disagreements between management and the 
101.16 	accountant regarding financial reporting for the purpose of preparing or issuing the audited 
101.17 	financial report or related work pursuant to this section. Each accountant shall report 
101.18 	directly to the audit committee.
101.19 	(b) Each member of the audit committee must be a member of the board of directors 
101.20 	of the insurer or a member of the board of directors of an entity elected pursuant to 
101.21 	paragraph (e) and subdivision 1, paragraph (b).
101.22 	(c) In order to be considered independent for purposes of this section, a member of 
101.23 	the audit committee may not, other than in his or her capacity as a member of the audit 
101.24 	committee, the board of directors, or any other board committee, accept any consulting, 
101.25 	advisory, or other compensatory fee from the entity or be an affiliated person of the entity 
101.26 	or any subsidiary of the entity. However, if law requires board participation by otherwise 
101.27 	nonindependent members, that law shall prevail and such members may participate in the 
101.28 	audit committee and be designated as independent for audit committee purposes, unless 
101.29 	they are an officer or employee of the insurer or one of its affiliates.
101.30 	(d) If a member of the audit committee ceases to be independent for reasons outside 
101.31 	the member's reasonable control, that person, with notice by the responsible entity to the 
101.32 	state, may remain an audit committee member of the responsible entity until the earlier of 
101.33 	the next annual meeting of the responsible entity or one year from the occurrence of the 
101.34 	event that caused the member to be no longer independent.
101.35 	(e) To exercise the election of the controlling person to designate the audit committee 
101.36 	for purposes of this section, the ultimate controlling person shall provide written notice to 
102.1 	the commissioners of the affected insurers. Notification must be made timely before the 
102.2 	issuance of the statutory audit report and include a description of the basis for the election. 
102.3 	The election can be changed through notice to the commissioner by the insurer, which 
102.4 	shall include a description of the basis for the change. The election remains in effect for 
102.5 	perpetuity, until rescinded.
102.6 	(f) The audit committee shall require the accountant that performs for an insurer any 
102.7 	audit required by this section to timely report to the audit committee in accordance with 
102.8 	the requirements of SAS No. 114, The Auditor's Communication with Those Charged 
102.9 	with Governance, or its replacement, including:
102.10 	(1) all significant accounting policies and material permitted practices;
102.11 	(2) all material alternative treatments of financial information within statutory 
102.12 	accounting principles that have been discussed with management officials of the insurer, 
102.13 	ramifications of the use of the alternative disclosures and treatments, and the treatment 
102.14 	preferred by the accountant; and 
102.15 	(3) other material written communications between the accountant and the 
102.16 	management of the insurer, such as any management letter or schedule of unadjusted 
102.17 	differences.
102.18 	(g) If an insurer is a member of an insurance holding company system, the reports 
102.19 	required by paragraph (f) may be provided to the audit committee on an aggregate basis 
102.20 	for insurers in the holding company system, provided that any substantial differences 
102.21 	among insurers in the system are identified to the audit committee.
102.22 	(h) The proportion of independent audit committee members shall meet or exceed 
102.23 	the following criteria:
102.24 	(1) for companies with prior calendar year direct written and assumed premiums $0 
102.25 	to $300,000,000, no minimum requirements;
102.26 	(2) for companies with prior calendar year direct written and assumed premiums 
102.27 	over $300,000,000 to $500,000,000, majority of members must be independent; and
102.28 	(3) for companies with prior calendar year direct written and assumed premiums 
102.29 	over $500,000,000, 75 percent or more must be independent.
102.30 	(i) An insurer with direct written and assumed premium, excluding premiums 
102.31 	reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less 
102.32 	than $500,000,000 may make application to the commissioner for a waiver from the 
102.33 	requirements of this subdivision based upon hardship. The insurer shall file, with its 
102.34 	annual statement filing, the approval for relief from this subdivision with the states that 
102.35 	it is licensed in or doing business in and the NAIC. If the nondomestic state accepts 
103.1 	electronic filing with the NAIC, the insurer shall file the approval in an electronic format 
103.2 	acceptable to the NAIC.
103.3 	This subdivision does not apply to foreign or alien insurers licensed in this state or 
103.4 	an insurer that is a SOX compliant entity or a direct or indirect wholly-owned subsidiary 
103.5 	of a SOX compliant entity.
103.6 		Subd. 16.Conduct of insurer in connection with the preparation of required 
103.7 	reports and documents. (a) No director or officer of an insurer shall, directly or indirectly:
103.8 	(1) make or cause to be made a materially false or misleading statement to an 
103.9 	accountant in connection with any audit, review, or communication required under this 
103.10 	section; or
103.11 	(2) omit to state, or cause another person to omit to state, any material fact necessary 
103.12 	in order to make statements made, in light of the circumstances under which the statements 
103.13 	were made, not misleading to an accountant in connection with any audit, review, or 
103.14 	communication required under this section.
103.15 	(b) No officer or director of an insurer, or any other person acting under the direction 
103.16 	thereof, shall directly or indirectly take any action to coerce, manipulate, mislead, or 
103.17 	fraudulently influence any accountant engaged in the performance of an audit pursuant to 
103.18 	this section if that person knew or should have known that the action, if successful, could 
103.19 	result in rendering the insurer's financial statements materially misleading.
103.20 	(c) For purposes of paragraph (b), actions that, "if successful, could result in 
103.21 	rendering the insurer's financial statements materially misleading" include, but are not 
103.22 	limited to, actions taken at any time with respect to the professional engagement period to 
103.23 	coerce, manipulate, mislead, or fraudulently influence an accountant:
103.24 	(1) to issue or reissue a report on an insurer's financial statements that is not 
103.25 	warranted in the circumstances due to material violations of statutory accounting 
103.26 	principles prescribed by the commissioner, generally accepted auditing standards, or 
103.27 	other professional or regulatory standards;
103.28 	(2) not to perform audit, review, or other procedures required by generally accepted 
103.29 	auditing standards or other professional standards;
103.30 	(3) not to withdraw an issued report; or
103.31 	(4) not to communicate matters to an insurer's audit committee.
103.32 		Subd. 17.Management's report of internal control over financial reporting.
 103.33 	(a) Every insurer required to file an audited financial report pursuant to this section that 
103.34 	has annual direct written and assumed premiums, excluding premiums reinsured with the 
103.35 	Federal Crop Insurance Corporation and Federal Flood Program, of $500,000,000 or 
103.36 	more, shall prepare a report of the insurer's or group of insurers' internal control over 
104.1 	financial reporting, as these terms are defined in subdivision 1. The report must be filed 
104.2 	with the commissioner along with the communication of internal control related matters 
104.3 	noted in an audit described under subdivision 12. Management's report of internal control 
104.4 	over financial reporting shall be as of December 31 immediately preceding.
104.5 	(b) Notwithstanding the premium threshold in paragraph (a), the commissioner may 
104.6 	require an insurer to file management's report of internal control over financial reporting 
104.7 	if the insurer is in any RBC level event, or meets any one or more of the standards of 
104.8 	an insurer deemed to be in hazardous financial condition pursuant to sections 60G.20 
104.9 	to 60G.22.
104.10 	(c) An insurer or a group of insurers that is:
104.11 	(1) directly subject to Section 404;
104.12 	(2) part of a holding company system whose parent is directly subject to Section 404;
104.13 	(3) not directly subject to Section 404 but is a SOX compliant entity; or
104.14 	(4) a member of a holding company system whose parent is not directly subject to 
104.15 	Section 404 but is a SOX compliant entity;
104.16 	may file its or its parent's Section 404 report and an addendum in satisfaction of this 
104.17 	requirement provided that those internal controls of the insurer or group of insurers 
104.18 	having a material impact on the preparation of the insurer's or group of insurers' audited 
104.19 	statutory financial statements, consisting of those items included in subdivision 4, 
104.20 	paragraphs (a), clauses (2) to (6), (b), and (c), were included in the scope of the Section 
104.21 	404 report. The addendum shall be a positive statement by management that there are 
104.22 	no material processes with respect to the preparation of the insurer's or group of insurers' 
104.23 	audited statutory financial statements, consisting of those items included in subdivision 4, 
104.24 	paragraphs (a), clauses (2) to (6), (b), and (c), excluded from the Section 404 report. If 
104.25 	there are internal controls of the insurer or group of insurers that have a material impact on 
104.26 	the preparation of the insurer's or group of insurers' audited statutory financial statements 
104.27 	and those internal controls were not included in the scope of the Section 404 report, the 
104.28 	insurer or group of insurers may either file (i) a report under this subdivision, or (ii) the 
104.29 	Section 404 report and a report under this subdivision for those internal controls that have 
104.30 	a material impact on the preparation of the insurer's or group of insurers' audited statutory 
104.31 	financial statements not covered by the Section 404 report.
104.32 	(d) Management's report of internal control over financial reporting shall include:
104.33 	(1) a statement that management is responsible for establishing and maintaining 
104.34 	adequate internal control over financial reporting;
104.35 	(2) a statement that management has established internal control over financial 
104.36 	reporting and an assertion, to the best of management's knowledge and belief, after diligent 
105.1 	inquiry, as to whether its internal control over financial reporting is effective to provide 
105.2 	reasonable assurance regarding the reliability of financial statements in accordance with 
105.3 	statutory accounting principles;
105.4 	(3) a statement that briefly describes the approach or processes by which 
105.5 	management evaluated the effectiveness of its internal control over financial reporting;
105.6 	(4) a statement that briefly describes the scope of work that is included and whether 
105.7 	any internal controls were excluded;
105.8 	(5) disclosure of any unremediated material weaknesses in the internal control over 
105.9 	financial reporting identified by management as of December 31 immediately preceding. 
105.10 	Management is not permitted to conclude that the internal control over financial reporting 
105.11 	is effective to provide reasonable assurance regarding the reliability of financial statements 
105.12 	in accordance with statutory accounting principles if there is one or more unremediated 
105.13 	material weaknesses in its internal control over financial reporting;
105.14 	(6) a statement regarding the inherent limitations of internal control systems; and
105.15 	(7) signatures of the chief executive officer and the chief financial officer or 
105.16 	equivalent position or title.
105.17 	(e) Management shall document and make available upon financial condition 
105.18 	examination the basis upon which its assertions, required in paragraph (d), are made. 
105.19 	Management may base its assertions, in part, upon its review, monitoring, and testing of 
105.20 	internal controls undertaken in the normal course of its activities.
105.21 	(1) Management has discretion as to the nature of the internal control framework 
105.22 	used, and the nature and extent of documentation, in order to make its assertion in a 
105.23 	cost-effective manner and, as such, may include assembly of or reference to existing 
105.24 	documentation.
105.25 	(2) Management's report on internal control over financial reporting, required by 
105.26 	paragraph (a), and any documentation provided in support of the report during the course 
105.27 	of a financial condition examination, must be kept confidential by the Department of 
105.28 	Commerce.
105.29 		Subd. 18.Exemptions. (a) Upon written application of any insurer, the 
105.30 	commissioner may grant an exemption from compliance with the provisions of this 
105.31 	section. In order to receive an exemption, an insurer must demonstrate to the satisfaction 
105.32 	of the commissioner that compliance would constitute a financial or organizational 
105.33 	hardship upon the insurer. An exemption may be granted at any time and from time 
105.34 	to time for specified periods. Within ten days from the denial of an insurer's written 
105.35 	request for an exemption, the insurer may request in writing a hearing on its application 
105.36 	for an exemption. This hearing must be held in accordance with chapter 14. Upon written 
106.1 	application of any insurer, the commissioner may permit an insurer to file annual audited 
106.2 	financial reports on some basis other than a calendar year basis for a specified period. An 
106.3 	exemption may not be granted until the insurer presents an alternative method satisfying 
106.4 	the purposes of this section. Within ten days from a denial of a written request for an 
106.5 	exemption, the insurer may request in writing a hearing on its application. The hearing 
106.6 	must be held in accordance with chapter 14.
106.7 	(b) This section applies to all insurers, unless otherwise indicated, required to file 
106.8 	an annual audit by subdivision 2, except insurers having less than $1,000,000 of direct 
106.9 	written premiums in this state in any calendar year and fewer than 1,000 policyholders 
106.10 	or certificate holders of directly written policies nationwide at the end of the calendar 
106.11 	year, are exempt from this section for that year, unless the commissioner makes a 
106.12 	specific finding that compliance is necessary for the commissioner to carry out statutory 
106.13 	responsibilities, except that insurers having assumed premiums from reinsurance contracts 
106.14 	or treaties of $1,000,000 or more are not exempt.
106.15 		Subd. 19.Canadian and British companies. (a) In the case of Canadian and 
106.16 	British insurers, the annual audited financial report means the annual statement of total 
106.17 	business on the form filed by these companies with their domiciliary supervision authority 
106.18 	and duly audited by an independent chartered accountant.
106.19 	(b) For these insurers the letter required in subdivision 5 shall state that the 
106.20 	accountant is aware of the requirements relating to the annual audited statement filed 
106.21 	with the commissioner under subdivision 2, and shall affirm that the opinion expressed 
106.22 	is in conformity with those requirements.
106.23 		Subd. 20.Commercial mortgage loan valuation procedures. A report of the 
106.24 	independent certified public accountant that performs the audit of an insurer's annual 
106.25 	statement as required under subdivision 2, shall be filed and contain a statement as to 
106.26 	whether anything in connection with the audit came to the accountant's attention that 
106.27 	caused the accountant to believe that the insurer failed to adopt and consistently apply the 
106.28 	valuation procedures as required by sections 60A.122 and 60A.123. 
106.29 		Subd. 21.Examinations. (a) The commissioner or a designated representative shall 
106.30 	determine the nature, scope, and frequency of examinations under this section conducted 
106.31 	by examiners under section 60A.031. These examinations may cover all aspects of the 
106.32 	insurer's assets, condition, affairs, and operations and may include and be supplemented 
106.33 	by audit procedures performed by independent certified public accountants. Scheduling 
106.34 	of examinations will take into account all relevant matters with respect to the insurer's 
106.35 	condition, including results of the National Association of Insurance Commissioners, 
106.36 	Insurance Regulatory Information Systems, changes in management, results of market 
107.1 	conduct examinations, and audited financial reports. The type of examinations performed 
107.2 	by examiners under this section must be compliance examinations, targeted examinations, 
107.3 	and comprehensive examinations. 
107.4 	(b) Compliance examinations will consist of a review of the accountant's workpapers 
107.5 	defined under this section and a general review of the insurer's corporate affairs and 
107.6 	insurance operations to determine compliance with the Minnesota insurance laws and 
107.7 	the rules of the Department of Commerce. The examiners may perform alternative or 
107.8 	additional examination procedures to supplement those performed by the accountant 
107.9 	when the examiners determine that the procedures are necessary to verify the financial 
107.10 	condition of the insurer.
107.11 	(c) Targeted examinations may cover limited areas of the insurer's operations as 
107.12 	the commissioner may deem appropriate.
107.13 	(d) Comprehensive examinations will be performed when the report of the 
107.14 	accountant as provided for in subdivision 7, paragraph (b), the notification required by 
107.15 	subdivision 7, paragraph (c), the results of compliance or targeted examinations, or other 
107.16 	circumstances indicate in the judgment of the commissioner or a designated representative 
107.17 	that a complete examination of the condition and affairs of the insurer is necessary.
107.18 	(e) Upon completion of each targeted, compliance, or comprehensive examination, 
107.19 	the examiner appointed by the commissioner shall make a full and true report on the 
107.20 	results of the examination. Each report shall include a general description of the audit 
107.21 	procedures performed by the examiners and the procedures of the accountant that 
107.22 	the examiners may have utilized to supplement their examination procedures and the 
107.23 	procedures that were performed by the registered independent certified public accountant 
107.24 	if included as a supplement to the examination.
107.25 		Subd. 22.Penalties. An annual statement, report, or document related to the 
107.26 	business of insurance must not be filed with the commissioner or issued to the public if it 
107.27 	is signed by anyone who is represented in the instrument as an "accountant," unless the 
107.28 	person is qualified as defined by this section. A violation of this subdivision is a violation 
107.29 	of section 72A.19 and punishable in accordance with section 72A.25.

107.30 	EFFECTIVE DATE. (a) Domestic insurers retaining a certified public accountant 
107.31 	on the effective date of this section who qualify as independent shall comply with this 
107.32 	section for the year ending December 31, 2010, and each year thereafter unless the 
107.33 	commissioner permits otherwise.
107.34 	(b) Domestic insurers not retaining a certified public accountant on the effective 
107.35 	date of this section who qualifies as independent shall meet the following schedule for 
107.36 	compliance unless the commissioner permits otherwise.
108.1 	(1) As of December 31, 2010, file with the commissioner an audited financial report.
108.2 	(2) For the year ending December 31, 2010, and each year thereafter, such insurers 
108.3 	shall file with the commissioner all reports and communication required by this section.
108.4 	(c) Foreign insurers shall comply with this section for the year ending December 31, 
108.5 	2010, and each year thereafter, unless the commissioner permits otherwise.
108.6 	(d) The requirements of subdivision 7, paragraph (b), are in effect for audits of the 
108.7 	year beginning January 1, 2010, and thereafter.
108.8 	(e) The requirements of subdivision 15 are in effect January 1, 2010. An insurer or 
108.9 	group of insurers that is not required to have independent audit committee members or 
108.10 	only a majority of independent audit committee members, as opposed to a supermajority, 
108.11 	because the total written and assumed premium is below the threshold and subsequently 
108.12 	becomes subject to one of the independence requirements due to changes in premium has 
108.13 	one year following the year the threshold is exceeded, but not earlier than January 1, 
108.14 	2010, to comply with the independence requirements. Likewise, an insurer that becomes 
108.15 	subject to one of the independence requirements as a result of a business combination 
108.16 	has one calendar year following the date of acquisition or combination to comply with 
108.17 	the independence requirements.
108.18 	(f) An insurer or group of insurers that is not required to file a report because the total 
108.19 	written premium is below the threshold and subsequently becomes subject to the reporting 
108.20 	requirements has two years following the year the threshold is exceeded, but not earlier 
108.21 	than December 31, 2010, to file a report. Likewise, an insurer acquired in a business 
108.22 	combination has two calendar years following the date of acquisition or combination to 
108.23 	comply with the reporting requirements.
108.24 	(g) The requirements and provisions contained in this section are effective January 
108.25 	1, 2010, and thereafter.

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

109.5 	Sec. 13. Minnesota Statutes 2008, section 60L.02, subdivision 3, is amended to read:
109.6 		Subd. 3.Additional requirements. (a) In order to be eligible to be governed by 
109.7 	sections 60L.01 to 60L.15, the insurer must meet the requirements specified under this 
109.8 	subdivision.  
109.9 	(b) The insurer shall:
109.10 	(1) have been in continuous operation for a minimum of five years; and
109.11 	(2) maintain a minimum claims-paying, financial strength, or equivalent rating from 
109.12 	at least one nationally recognized statistical rating organization in one of the organization's 
109.13 	three highest rating categories for the time period during which sections 60L.01 to 60L.15
109.14 	apply to the insurer. For purposes of this subdivision, the rating must be based on a 
109.15 	review of the insurer by the nationally recognized statistical rating organization with the 
109.16 	cooperation of the insurer; must not depend on a guarantee or other credit enhancement 
109.17 	from another entity; and must not be modified or otherwise qualified to show dependence 
109.18 	of the rating on the performance or a contractual obligation of, or the insurer's affiliation 
109.19 	with, another insurer.  
109.20 	(c) The insurer or an affiliate, as defined in section 60D.15, subdivision 2, of the 
109.21 	insurer shall employ at least one individual as a professional investment manager for 
109.22 	the insurer's investments whom the board of directors or trustees of the insurer finds 
109.23 	is qualified on the basis of experience, education or training, competence, personal 
109.24 	integrity, and who conducts professional investment management activities in accordance 
109.25 	with the Code of Ethics and Standards of Professional Conduct of the Association for 
109.26 	Investment Management and Research. For purposes of complying with this paragraph, 
109.27 	an employee of an affiliate may only be used if they are responsible for managing the 
109.28 	insurer's investments.  
109.29 	(d) The board of directors of the insurer must annually adopt a resolution finding 
109.30 	that the insurer or an affiliate, as defined in section 60D.15, subdivision 2, of the insurer 
109.31 	has employed a professional investment manager for the insurer's investments with 
109.32 	sufficient expertise and has sufficient other resources to implement and monitor the 
109.33 	insurer's investment policies and strategies.  
109.34 	(e) In the report required under section 60A.129 60A.1291, subdivision 3 12, 
109.35 	paragraph (l), the insurer's independent auditor shall not have identified any significant 
110.1 	deficiencies in the insurer's internal control structure related to investments during any of 
110.2 	the five years immediately preceding the date on which sections 60L.01 to 60L.15 begin to 
110.3 	apply to the insurer, and as long as sections 60L.01 to 60L.15 apply to the insurer.  

110.4 	Sec. 14. [61A.258] PRENEED INSURANCE PRODUCTS; MINIMUM 
110.5 	MORTALITY STANDARDS FOR RESERVES AND NONFORFEITURE VALUES.
110.6 		Subdivision 1.Definitions. For the purposes of this section, the following terms 
110.7 	have the meanings given them:
110.8 	(1) "2001 CSO Mortality Table (2001 CSO)" means that mortality table, consisting 
110.9 	of separate rates of mortality for male and female lives, developed by the American 
110.10 	Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table 
110.11 	developed by the Society of Actuaries Individual Life Insurance Valuation Mortality 
110.12 	Task Force, and adopted by the National Association of Insurance Commissioners 
110.13 	(NAIC) in December 2002. The 2001 CSO Mortality Table (2001 CSO) is included in 
110.14 	the Proceedings of the NAIC (2nd Quarter 2002). Unless the context indicates otherwise, 
110.15 	the "2001 CSO Mortality Table (2001 CSO)" includes both the ultimate form of that 
110.16 	table and the select and ultimate form of that table and includes both the smoker and 
110.17 	nonsmoker mortality tables and the composite mortality tables. It also includes both the 
110.18 	age-nearest-birthday and age-last-birthday bases of the mortality tables;
110.19 	(2) "Ultimate 1980 CSO" means the Commissioners' 1980 Standard Ordinary Life 
110.20 	Valuation Mortality Tables (1980 CSO) without ten-year selection factors, incorporated 
110.21 	into the 1980 amendments to the NAIC Standard Valuation Law approved in December 
110.22 	1983; and
110.23 	(3) "preneed insurance" is any life insurance policy or certificate that is issued 
110.24 	in combination with, in support of, with an assignment to, or as a guarantee for a 
110.25 	prearrangement agreement for goods and services to be provided at the time of and 
110.26 	immediately following the death of the insured. Goods and services may include, but 
110.27 	are not limited to embalming, cremation, body preparation, viewing or visitation, coffin 
110.28 	or urn, memorial stone, and transportation of the deceased. The status of the policy or 
110.29 	contract as preneed insurance is determined at the time of issue in accordance with the 
110.30 	policy form filing.
110.31 		Subd. 2.Minimum valuation mortality standards. For preneed insurance 
110.32 	contracts, the minimum mortality standard for determining reserve liabilities and 
110.33 	nonforfeiture values for both male and female insureds shall be the Ultimate 1980 CSO.
111.1 		Subd. 3.Minimum valuation interest rate standards. (a) The interest rates used 
111.2 	in determining the minimum standard for valuation of preneed insurance shall be the 
111.3 	calendar year statutory valuation interest rates as defined in section 61A.25.
111.4 	(b) The interest rates used in determining the minimum standard for nonforfeiture 
111.5 	values for preneed insurance shall be the calendar year statutory nonforfeiture interest 
111.6 	rates as defined in section 61A.24.
111.7 		Subd. 4.Minimum valuation method standards. (a) The method used in 
111.8 	determining the standard for the minimum valuation of reserves of preneed insurance shall 
111.9 	be the method defined in section 61A.25.
111.10 	(b) The method used in determining the standard for the minimum nonforfeiture 
111.11 	values for preneed insurance shall be the method defined in section 61A.24.

111.12 	EFFECTIVE DATE; TRANSITION RULES. (a) This section is effective January 
111.13 	1, 2009, and applies to preneed insurance policies and certificates issued on or after that 
111.14 	date.
111.15 	(b) For preneed insurance policies issued on or after the effective date of this 
111.16 	section and before January 1, 2012, the 2001 CSO may be used as the minimum standard 
111.17 	for reserves and minimum standard for nonforfeiture benefits for both male and female 
111.18 	insureds.
111.19 	(c) If an insurer elects to use the 2001 CSO as a minimum standard for any policy 
111.20 	issued on or after the effective date of this section and before January 1, 2012, the insurer 
111.21 	shall provide, as a part of the actuarial opinion memorandum submitted in support of 
111.22 	the company's asset adequacy testing, an annual written notification to the domiciliary 
111.23 	commissioner. The notification shall include:
111.24 	(1) a complete list of all preneed policy forms that use the 2001 CSO as a minimum 
111.25 	standard;
111.26 	(2) a certification signed by the appointed actuary stating that the reserve 
111.27 	methodology employed by the company in determining reserves for the preneed policies 
111.28 	issued after the effective date and using the 2001 CSO as a minimum standard, develops 
111.29 	adequate reserves (For the purposes of this certification, the preneed insurance policies 
111.30 	using the 2001 CSO as a minimum standard cannot be aggregated with any other 
111.31 	policies.); and
111.32 	(3) supporting information regarding the adequacy of reserves for preneed insurance 
111.33 	policies issued after the effective date of this section and using the 2001 CSO as a 
111.34 	minimum standard for reserves.
112.1 	(d) Preneed insurance policies issued on or after January 1, 2012, must use the 
112.2 	Ultimate 1980 CSO in the calculation of minimum nonforfeiture values and minimum 
112.3 	reserves.

112.4 	Sec. 15. Minnesota Statutes 2008, section 61B.19, subdivision 4, is amended to read:
112.5 		Subd. 4.Limitation of benefits. The benefits for which the association may become 
112.6 	liable shall in no event exceed the lesser of:
112.7 	(1) the contractual obligations for which the insurer is liable or would have been 
112.8 	liable if it were not an impaired or insolvent insurer; or
112.9 	(2) subject to the limitation in clause (5), with respect to any one life, regardless of 
112.10 	the number of policies or contracts:
112.11 	(i) $300,000 $500,000 in life insurance death benefits, but not more than $100,000
112.12 	$130,000 in net cash surrender and net cash withdrawal values for life insurance;
112.13 	(ii) $300,000 $500,000 in health insurance benefits, including any net cash surrender 
112.14 	and net cash withdrawal values;
112.15 	(iii) $100,000 $250,000 in annuity net cash surrender and net cash withdrawal values;
112.16 	(iv) $300,000 $410,000 in present value of annuity benefits for structured settlement 
112.17 	annuities or for annuities in regard to which periodic annuity benefits, for a period of not 
112.18 	less than the annuitant's lifetime or for a period certain of not less than ten years, have 
112.19 	begun to be paid, on or before the date of impairment or insolvency; or
112.20 	(3) subject to the limitations in clauses (5) and (6), with respect to each individual 
112.21 	resident participating in a retirement plan, except a defined benefit plan, established under 
112.22 	section 401, 403(b), or 457 of the Internal Revenue Code of 1986, as amended through 
112.23 	December 31, 1992, covered by an unallocated annuity contract, or the beneficiaries 
112.24 	of each such individual if deceased, in the aggregate, $100,000 $250,000 in net cash 
112.25 	surrender and net cash withdrawal values;
112.26 	(4) where no coverage limit has been specified for a covered policy or benefit, the 
112.27 	coverage limit shall be $300,000 $500,000 in present value;
112.28 	(5) in no event shall the association be liable to expend more than $300,000
112.29 	$500,000 in the aggregate with respect to any one life under clause (2), items (i), (ii), (iii), 
112.30 	(iv), and clause (4), and any one individual under clause (3);
112.31 	(6) in no event shall the association be liable to expend more than $7,500,000
112.32 	$10,000,000 with respect to all unallocated annuities of a retirement plan, except a defined 
112.33 	benefit plan, established under section 401, 403(b), or 457 of the Internal Revenue Code 
112.34 	of 1986, as amended through December 31, 1992. If total claims from a plan exceed 
113.1 	$7,500,000 $10,000,000, the $7,500,000 $10,000,000 shall be prorated among the 
113.2 	claimants;
113.3 	(7) for purposes of applying clause (2)(ii) and clause (5), with respect only to 
113.4 	health insurance benefits, the term "any one life" applies to each individual covered by a 
113.5 	health insurance policy;
113.6 	(8) where covered contractual obligations are equal to or less than the limits stated in 
113.7 	this subdivision, the association will pay the difference between the covered contractual 
113.8 	obligations and the amount credited by the estate of the insolvent or impaired insurer, if 
113.9 	that amount has been determined or, if it has not, the covered contractual limit, subject 
113.10 	to the association's right of subrogation;
113.11 	(9) where covered contractual obligations exceed the limits stated in this subdivision, 
113.12 	the amount payable by the association will be determined as though the covered 
113.13 	contractual obligations were equal to those limits. In making the determination, the estate 
113.14 	shall be deemed to have credited the covered person the same amount as the estate would 
113.15 	credit a covered person with contractual obligations equal to those limits; or
113.16 	(10) the following illustrates how the principles stated in clauses (8) and (9) apply. 
113.17 	The example illustrated concerns hypothetical claims subject to the limit stated in clause 
113.18 	(2)(iii). The principles stated in clauses (8) and (9), and illustrated in this clause, apply 
113.19 	to claims subject to any limits stated in this subdivision.
113.20 	CONTRACTUAL OBLIGATIONS OF:

113.21					$50,000
			
113.22
113.23				Estate
		Guaranty 
Association
	
113.24
113.25	0% recovery 
from estate
			$ 0
			$ 50,000
	
113.26
113.27	25% recovery 
from estate
			$ 12,500
			$ 37,500
	
113.28
113.29	50% recovery 
from estate
			$ 25,000
			$ 25,000
	
113.30
113.31	75% recovery 
from estate
			$ 37,500
			$ 12,500
	
113.32					$100,000
			
113.33
113.34				Estate
		Guaranty 
Association
	
113.35
113.36	0% recovery 
from estate
			$ 0
			$ 100,000
	
113.37
113.38	25% recovery 
from estate
			$ 25,000
			$ 75,000
	
113.39
113.40	50% recovery 
from estate
			$ 50,000
			$ 50,000
	
113.41
113.42	75% recovery 
from estate
			$ 75,000
			$ 25,000
	
114.1					$200,000
			
114.2
114.3				Estate
		Guaranty 
Association
	
114.4
114.5	0% recovery 
from estate
			$ 0
			$ 100,000
	
114.6
114.7	25% recovery 
from estate
			$ 50,000
			$ 75,000
	
114.8
114.9	50% recovery 
from estate
			$ 100,000
			$ 50,000
	
114.10
114.11	75% recovery 
from estate
			$ 150,000
			$ 25,000
	
114.12 	For purposes of this subdivision, the commissioner shall determine the discount rate 
114.13 	to be used in determining the present value of annuity benefits.

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

114.19 	Sec. 16. Minnesota Statutes 2008, section 61B.28, subdivision 4, is amended to read:
114.20 		Subd. 4.Prohibited sales practice. No person, including an insurer, agent, or 
114.21 	affiliate of an insurer, shall make, publish, disseminate, circulate, or place before the 
114.22 	public, or cause directly or indirectly, to be made, published, disseminated, circulated, 
114.23 	or placed before the public, in any newspaper, magazine, or other publication, or in the 
114.24 	form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television 
114.25 	station, or in any other way, an advertisement, announcement, or statement, written or 
114.26 	oral, which uses the existence of the Minnesota Life and Health Insurance Guaranty 
114.27 	Association for the purpose of sales, solicitation, or inducement to purchase any form of 
114.28 	insurance covered by sections 61B.18 to 61B.32. The notice required by subdivision 8 
114.29 	is not a violation of this subdivision nor is it a violation of this subdivision to explain 
114.30 	verbally to an applicant or potential applicant the coverage provided by the Minnesota 
114.31 	Life and Health Insurance Guaranty Association at any time during the application process 
114.32 	or thereafter. This subdivision does not apply to the Minnesota Life and Health Insurance 
114.33 	Guaranty Association or an entity that does not sell or solicit insurance. A person violating 
114.34 	this section is guilty of a misdemeanor.

114.35 	Sec. 17. Minnesota Statutes 2008, section 61B.28, subdivision 8, is amended to read:
115.1 		Subd. 8.Form. The form of notice referred to in subdivision 7, paragraph (a), 
115.2 	is as follows:
115.3 	"....................
115.4 	....................
115.5 	....................
115.6 	(insert name, current address, and
115.7 	telephone number of insurer)
115.8 	NOTICE CONCERNING POLICYHOLDER RIGHTS IN AN
115.9 	INSOLVENCY UNDER THE MINNESOTA LIFE AND HEALTH
115.10 	INSURANCE GUARANTY ASSOCIATION LAW
115.11 	If the insurer that issued your life, annuity, or health insurance policy becomes 
115.12 	impaired or insolvent, you are entitled to compensation for your policy from the assets of 
115.13 	that insurer. The amount you recover will depend on the financial condition of the insurer.
115.14 	In addition, residents of Minnesota who purchase life insurance, annuities, or health 
115.15 	insurance from insurance companies authorized to do business in Minnesota are protected, 
115.16 	SUBJECT TO LIMITS AND EXCLUSIONS, in the event the insurer becomes financially 
115.17 	impaired or insolvent. This protection is provided by the Minnesota Life and Health 
115.18 	Insurance Guaranty Association.
115.19 	Minnesota Life and Health Insurance Guaranty Association
115.20 	(insert current
115.21 	address and telephone number)
115.22 	The maximum amount the guaranty association will pay for all policies issued on 
115.23 	one life by the same insurer is limited to $300,000 $500,000. Subject to this $300,000
115.24 	$500,000 limit, the guaranty association will pay up to $300,000 $500,000 in life 
115.25 	insurance death benefits, $100,000 $130,000 in net cash surrender and net cash withdrawal 
115.26 	values for life insurance, $300,000 $500,000 in health insurance benefits, including any 
115.27 	net cash surrender and net cash withdrawal values, $100,000 $250,000 in annuity net 
115.28 	cash surrender and net cash withdrawal values, $300,000 $410,000 in present value of 
115.29 	annuity benefits for annuities which are part of a structured settlement or for annuities 
115.30 	in regard to which periodic annuity benefits, for a period of not less than the annuitant's 
115.31 	lifetime or for a period certain of not less than ten years, have begun to be paid on or 
115.32 	before the date of impairment or insolvency, or if no coverage limit has been specified 
115.33 	for a covered policy or benefit, the coverage limit shall be $300,000 $500,000 in present 
115.34 	value. Unallocated annuity contracts issued to retirement plans, other than defined benefit 
115.35 	plans, established under section 401, 403(b), or 457 of the Internal Revenue Code of 
115.36 	1986, as amended through December 31, 1992, are covered up to $100,000 $250,000 in 
115.37 	net cash surrender and net cash withdrawal values, for Minnesota residents covered by 
115.38 	the plan provided, however, that the association shall not be responsible for more than 
116.1 	$7,500,000 $10,000,000 in claims from all Minnesota residents covered by the plan. If 
116.2 	total claims exceed $7,500,000 $10,000,000, the $7,500,000 $10,000,000 shall be prorated 
116.3 	among all claimants. These are the maximum claim amounts. Coverage by the guaranty 
116.4 	association is also subject to other substantial limitations and exclusions and requires 
116.5 	continued residency in Minnesota. If your claim exceeds the guaranty association's limits, 
116.6 	you may still recover a part or all of that amount from the proceeds of the liquidation of 
116.7 	the insolvent insurer, if any exist. Funds to pay claims may not be immediately available. 
116.8 	The guaranty association assesses insurers licensed to sell life and health insurance in 
116.9 	Minnesota after the insolvency occurs. Claims are paid from this assessment.
116.10 	THE COVERAGE PROVIDED BY THE GUARANTY ASSOCIATION IS NOT 
116.11 	A SUBSTITUTE FOR USING CARE IN SELECTING INSURANCE COMPANIES 
116.12 	THAT ARE WELL MANAGED AND FINANCIALLY STABLE. IN SELECTING AN 
116.13 	INSURANCE COMPANY OR POLICY, YOU SHOULD NOT RELY ON COVERAGE 
116.14 	BY THE GUARANTY ASSOCIATION.
116.15 	THIS NOTICE IS REQUIRED BY MINNESOTA STATE LAW TO ADVISE 
116.16 	POLICYHOLDERS OF LIFE, ANNUITY, OR HEALTH INSURANCE POLICIES 
116.17 	OF THEIR RIGHTS IN THE EVENT THEIR INSURANCE CARRIER BECOMES 
116.18 	FINANCIALLY INSOLVENT. THIS NOTICE IN NO WAY IMPLIES THAT THE 
116.19 	COMPANY CURRENTLY HAS ANY TYPE OF FINANCIAL PROBLEMS. ALL LIFE, 
116.20 	ANNUITY, AND HEALTH INSURANCE POLICIES ARE REQUIRED TO PROVIDE 
116.21 	THIS NOTICE."
116.22 	Additional language may be added to the notice if approved by the commissioner 
116.23 	prior to its use in the form. This section does not apply to fraternal benefit societies 
116.24 	regulated under chapter 64B.

116.25 	Sec. 18. Minnesota Statutes 2008, section 67A.01, is amended to read:
116.26 	67A.01 NUMBER OF MEMBERS REQUIRED, PROPERTY AND 
116.27 	TERRITORY.
116.28 		Subdivision 1.Number of members. (a) It shall be lawful for any number of 
116.29 	persons, not less than 25, residing in adjoining townships counties in this state, who shall 
116.30 	collectively own property worth at least $50,000, to form themselves into a corporation 
116.31 	for mutual insurance against loss or damage by the perils listed in section 67A.13.  
116.32 	(b) Except as otherwise provided in this section, the company shall operate in no 
116.33 	more than 150 adjoining townships in the aggregate at the same time. The company may, 
116.34 	if approval has been granted by the commissioner, operate in more than 150 adjoining 
116.35 	townships in the aggregate at the same time, subject to a maximum of 300 townships. 
117.1 	If the company confines its operations to one county it may transact business in that 
117.2 	county by so providing in its certificate of incorporation. In case of merger of two or 
117.3 	more companies having contiguous territories, the surviving company in the merger may 
117.4 	transact business in the entire territory of the merged companies, but the territory of the 
117.5 	surviving company in the merger must not be larger than 300 townships.
117.6 		Subd. 2.Authorized territory. (a) A township mutual fire insurance company may 
117.7 	be authorized to write business in up to nine adjoining counties in the aggregate at the 
117.8 	same time. If policyholder surplus is at least $500,000 as reported in the company's last 
117.9 	annual financial statement filed with the commissioner, the company may, if approval has 
117.10 	been granted by the commissioner, be authorized to write business in ten or more counties 
117.11 	in the aggregate at the same time, subject to a maximum of 20 adjoining counties, in 
117.12 	accordance with the following schedule:

117.13
117.14		Number of 
Counties
		Surplus 
Requirement
		
117.15		10
		$500,000
		
117.16		11
		600,000
		
117.17		12
		700,000
		
117.18		13
		800,000
		
117.19		14
		900,000
		
117.20		15
		1,000,000
		
117.21		16
		1,100,000
		
117.22		17
		1,200,000
		
117.23		18
		1,300,000
		
117.24		19
		1,400,000
		
117.25		20
		1,500,000
		
117.26 	(b) In the case of a merger of two or more companies having contiguous territories, 
117.27 	the surviving company in the merger may transact business in the entire territory of the 
117.28 	merged companies; however, the territory of the surviving company in the merger may not 
117.29 	be larger than 20 counties.
117.30 	(c) A township mutual fire insurance company may write new and renewal insurance 
117.31 	on property in cities within the company's authorized territory having a population less 
117.32 	than 25,000. A township mutual may continue to write new and renewal insurance once 
117.33 	the population increases to 25,000 or greater provided that amended and restated articles 
117.34 	are filed with the commissioner along with a certification that such city's population has 
117.35 	increased to 25,000 or greater.
117.36 	(d) A township mutual fire insurance company may write new and renewal insurance 
117.37 	on property in cities within the company's authorized territory with a population of 25,000 
117.38 	or greater, but less than 150,000, if approval has been granted by the commissioner. 
118.1 	No township mutual fire insurance company shall insure any property in cities with a 
118.2 	population of 150,000 or greater.
118.3 	(e) If a township mutual fire insurance company provides evidence to the 
118.4 	commissioner that the company had insurance in force on December 31, 2007, in a city 
118.5 	within the company's authorized territory with a population of 25,000 or greater, but less 
118.6 	than 150,000, the company may write new and renewal insurance on property in that city 
118.7 	provided that the company files amended and restated articles by July 31, 2010, naming 
118.8 	that city.

118.9 	Sec. 19. Minnesota Statutes 2008, section 67A.06, is amended to read:
118.10 	67A.06 POWERS OF CORPORATION.
118.11 	Every corporation formed under the provisions of sections 67A.01 to 67A.26, 
118.12 	shall have power:
118.13 	(1) to have succession by its corporate name for the time stated in its certificate of 
118.14 	incorporation;
118.15 	(2) to sue and be sued in any court;
118.16 	(3) to have and use a common seal and alter the same at pleasure;
118.17 	(4) to acquire, by purchase or otherwise, and to hold, enjoy, improve, lease, 
118.18 	encumber, and convey all real and personal property necessary for the purpose of its 
118.19 	organization, subject to such limitations as may be imposed by law or by its articles of 
118.20 	incorporation;
118.21 	(5) to elect or appoint in such manner as it may determine all necessary or proper 
118.22 	officers, agents, boards, and committees, fix their compensation, and define their powers 
118.23 	and duties;
118.24 	(6) to make and amend consistently with law bylaws providing for the management 
118.25 	of its property and the regulation and government of its affairs;
118.26 	(7) to wind up and liquidate its business in the manner provided by chapter 60B; and
118.27 	(8) to indemnify certain persons against expenses and liabilities as provided in 
118.28 	section 302A.521. In applying section 302A.521 for this purpose, the term "members" 
118.29 	shall be substituted for the terms "shareholders" and "stockholders."; and
118.30 	(9) to eliminate or limit a director's personal liability to the company or its members 
118.31 	for monetary damages for breach of fiduciary duty as a director. A company shall not 
118.32 	eliminate or limit the liability of a director:
118.33 	(i) for breach of loyalty to the company or its members;
118.34 	(ii) for acts or omissions made in bad faith or with intentional misconduct or 
118.35 	knowing violation of law;
119.1 	(iii) for transactions from which the director derived an improper personal benefit; or
119.2 	(iv) for acts or omissions occurring before the date that the provisions in the articles 
119.3 	eliminating or limiting liability become effective.

119.4 	Sec. 20. Minnesota Statutes 2008, section 67A.07, is amended to read:
119.5 	67A.07 PRINCIPAL OFFICE.
119.6 	The principal office of a township mutual fire insurance company shall be located in 
119.7 	a township or in a city in a township county in which the company is authorized to do 
119.8 	business.

119.9 	Sec. 21. Minnesota Statutes 2008, section 67A.14, subdivision 1, is amended to read:
119.10 		Subdivision 1.Kinds of property; property outside authorized territory. (a) 
119.11 	Township mutual fire insurance companies may insure qualified property. Qualified 
119.12 	property means dwellings, household goods, appurtenant structures, farm buildings, farm 
119.13 	personal property, churches, church personal property, county fair buildings, community 
119.14 	and township meeting halls and their usual contents.
119.15 	(b) Township mutual fire insurance companies may extend coverage to include 
119.16 	an insured's secondary property if the township mutual fire insurance company covers 
119.17 	qualified property belonging to the insured. Secondary property means any real or 
119.18 	personal property that is not considered qualified property for a township mutual fire 
119.19 	insurance company to cover under this chapter. The maximum amount of coverage that a 
119.20 	township mutual fire insurance company may write for secondary property is 25 percent of 
119.21 	the total limit of liability of the policy issued to an insured covering the qualified property.
119.22 	(c) A township mutual fire insurance company may insure any real or personal 
119.23 	property, including qualified or secondary property, subject to the limitations in 
119.24 	subdivision 1, paragraph (b), located outside the limits of the territory in which the 
119.25 	company is authorized by its certificate or articles of incorporation to transact business, if 
119.26 	the company is already covering qualified property belonging to the insured, inside the 
119.27 	limits of the company's territory.
119.28 	(d) A township mutual fire insurance company may insure property temporarily 
119.29 	outside of the authorized territory of the township mutual fire insurance company.

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

120.4 	Sec. 23. [67A.175] SURPLUS REQUIREMENTS.
120.5 		Subdivision 1.Minimum. Township mutual fire insurance companies shall maintain 
120.6 	a minimum policyholders' surplus of $300,000 at all times.
120.7 		Subd. 2.Corrective action plan; filing. A township mutual fire insurance company 
120.8 	that falls below the $300,000 minimum surplus requirement must file a corrective action 
120.9 	plan with the commissioner. The plan shall state how the company will correct its surplus 
120.10 	deficiency. The plan must be submitted within 45 days of the company falling below the 
120.11 	minimum surplus level.
120.12 		Subd. 3.Corrective action plan; commissioner's notification. Within 30 days 
120.13 	after the submission by a township mutual fire insurance company of a corrective action 
120.14 	plan, the commissioner shall notify the insurer whether the plan may be implemented or 
120.15 	is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines 
120.16 	the plan is unsatisfactory, the notification to the company must set forth the reasons for the 
120.17 	determination, and may set forth proposed revisions that will render the plan satisfactory 
120.18 	in the judgment of the commissioner. Upon notification from the commissioner, the 
120.19 	insurer shall prepare a revised corrective action plan that may incorporate by reference 
120.20 	any revisions proposed by the commissioner, and shall submit the revised plan to the 
120.21 	commissioner within 45 days.

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

120.26 	Sec. 25. REPEALER.
 120.27 		Subdivision 1.Annual audits. Minnesota Statutes 2008, section 60A.129, is 
120.28 	repealed.
120.29 		Subd. 2.Township mutual insured properties, joint or partial risks, and 
120.30 	assessments. Minnesota Statutes 2008, sections 67A.14, subdivision 5; 67A.17; and 
120.31 	67A.19, are repealed.
120.32 		Subd. 3.Banking procedures; real estate tax records. Minnesota Rules, part 
120.33 	2675.2180, is repealed.
121.1 		Subd. 4.Debt prorating companies. Minnesota Rules, parts 2675.7100; 
121.2 	2675.7110; 2675.7120; 2675.7130; and 2675.7140, are repealed.
121.3 		Subd. 5.Guaranty association; inflation indexing. Minnesota Statutes 2008, 
121.4 	section 61B.19, subdivision 6, is repealed.

121.5 	ARTICLE 4
121.6 	DEBT MANAGEMENT SERVICES

121.7 	Section 1. Minnesota Statutes 2008, section 45.011, subdivision 1, is amended to read:
121.8 		Subdivision 1.Scope. As used in chapters 45 to 83, 155A,  332, 332A, 332B, 
121.9 	345, and 359, and sections 325D.30 to 325D.42, 326B.802 to 326B.885, and 386.61 to 
121.10 	386.78, unless the context indicates otherwise, the terms defined in this section have 
121.11 	the meanings given them. 

121.12 	Sec. 2. Minnesota Statutes 2008, section 46.04, subdivision 1, is amended to read:
121.13 		Subdivision 1.General. The commissioner of commerce, referred to in chapters 46 
121.14 	to 59A, and chapter 332A, and 332B as the commissioner, is vested with all the powers, 
121.15 	authority, and privileges which, prior to the enactment of Laws 1909, chapter 201, were 
121.16 	conferred by law upon the public examiner, and shall take over all duties in relation to 
121.17 	state banks, savings banks, trust companies, savings associations, and other financial 
121.18 	institutions within the state which, prior to the enactment of chapter 201, were imposed 
121.19 	upon the public examiner. The commissioner of commerce shall exercise a constant 
121.20 	supervision, either personally or through the examiners herein provided for, over the 
121.21 	books and affairs of all state banks, savings banks, trust companies, savings associations, 
121.22 	credit unions, industrial loan and thrift companies, and other financial institutions doing 
121.23 	business within this state; and shall, through examiners, examine each financial institution 
121.24 	at least once every 24 calendar months. In satisfying this examination requirement, the 
121.25 	commissioner may accept reports of examination prepared by a federal agency having 
121.26 	comparable supervisory powers and examination procedures. With the exception of 
121.27 	industrial loan and thrift companies which do not have deposit liabilities and licensed 
121.28 	regulated lenders, it shall be the principal purpose of these examinations to inspect and 
121.29 	verify the assets and liabilities of each and so far investigate the character and value of 
121.30 	the assets of each institution as to determine with reasonable certainty that the values are 
121.31 	correctly carried on its books. Assets and liabilities shall be verified in accordance with 
121.32 	methods of procedure which the commissioner may determine to be adequate to carry out 
121.33 	the intentions of this section. It shall be the further purpose of these examinations to 
121.34 	assess the adequacy of capital protection and the capacity of the institution to meet usual 
122.1 	and reasonably anticipated deposit withdrawals and other cash commitments without 
122.2 	resorting to excessive borrowing or sale of assets at a significant loss, and to investigate 
122.3 	each institution's compliance with applicable laws and rules. Based on the examination 
122.4 	findings, the commissioner shall make a determination as to whether the institution 
122.5 	is being operated in a safe and sound manner. None of the above provisions limits the 
122.6 	commissioner in making additional examinations as deemed necessary or advisable. The 
122.7 	commissioner shall investigate the methods of operation and conduct of these institutions 
122.8 	and their systems of accounting, to ascertain whether these methods and systems are 
122.9 	in accordance with law and sound banking principles. The commissioner may make 
122.10 	requirements as to records as deemed necessary to facilitate the carrying out of the 
122.11 	commissioner's duties and to properly protect the public interest. The commissioner may 
122.12 	examine, or cause to be examined by these examiners, on oath, any officer, director, 
122.13 	trustee, owner, agent, clerk, customer, or depositor of any financial institution touching 
122.14 	the affairs and business thereof, and may issue, or cause to be issued by the examiners, 
122.15 	subpoenas, and administer, or cause to be administered by the examiners, oaths. In 
122.16 	case of any refusal to obey any subpoena issued under the commissioner's direction, 
122.17 	the refusal may at once be reported to the district court of the district in which the bank 
122.18 	or other financial institution is located, and this court shall enforce obedience to these 
122.19 	subpoenas in the manner provided by law for enforcing obedience to subpoenas of the 
122.20 	court. In all matters relating to official duties, the commissioner of commerce has the 
122.21 	power possessed by courts of law to issue subpoenas and cause them to be served and 
122.22 	enforced, and all officers, directors, trustees, and employees of state banks, savings banks, 
122.23 	trust companies, savings associations, and other financial institutions within the state, 
122.24 	and all persons having dealings with or knowledge of the affairs or methods of these 
122.25 	institutions, shall afford reasonable facilities for these examinations, make returns and 
122.26 	reports to the commissioner of commerce as the commissioner may require; attend and 
122.27 	answer, under oath, the commissioner's lawful inquiries; produce and exhibit any books, 
122.28 	accounts, documents, and property as the commissioner may desire to inspect, and in all 
122.29 	things aid the commissioner in the performance of duties. 

122.30 	Sec. 3. Minnesota Statutes 2008, section 46.05, is amended to read:
122.31 	46.05 SUPERVISION OVER FINANCIAL INSTITUTIONS.
122.32 	Every state bank, savings bank, trust company, savings association, debt management 
122.33 	services provider, debt settlement services provider, and other financial institutions shall 
122.34 	be at all times under the supervision and subject to the control of the commissioner 
122.35 	of commerce. If, and whenever in the performance of duties, the commissioner finds 
123.1 	it necessary to make a special investigation of any financial institution under the 
123.2 	commissioner's supervision, and other than a complete examination, the commissioner 
123.3 	shall make a charge therefor to include only the necessary costs thereof. Such a fee shall 
123.4 	be payable to the commissioner on the commissioner's making a request for payment.

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

123.13 	Sec. 5. Minnesota Statutes 2008, section 325E.311, subdivision 6, is amended to read:
123.14 		Subd. 6.Telephone solicitation. "Telephone solicitation" means any voice 
123.15 	communication over a telephone line for the purpose of encouraging the purchase or 
123.16 	rental of, or investment in, property, goods, or services, whether the communication is 
123.17 	made by a live operator, through the use of an automatic dialing-announcing device as 
123.18 	defined in section 325E.26, subdivision 2, or by other means. Telephone solicitation 
123.19 	does not include communications:
123.20 	(1) to any residential subscriber with that subscriber's prior express invitation or 
123.21 	permission; or
123.22 	(2) by or on behalf of any person or entity with whom a residential subscriber has a 
123.23 	prior or current business or personal relationship.
123.24 	Telephone solicitation also does not include communications if the caller is identified by a 
123.25 	caller identification service and the call is:
123.26 	(i) by or on behalf of an organization that is identified as a nonprofit organization 
123.27 	under state or federal law, unless the organization is a debt management services provider 
123.28 	defined in section 332A.02 or a debt settlement services provider defined in section 
123.29 	332B.02;
123.30 	(ii) by a person soliciting without the intent to complete, and who does not in 
123.31 	fact complete, the sales presentation during the call, but who will complete the sales 
123.32 	presentation at a later face-to-face meeting between the solicitor who makes the call 
123.33 	and the prospective purchaser; or
123.34 	(iii) by a political party as defined under section 200.02, subdivision 6.

124.1 	Sec. 6. Minnesota Statutes 2008, section 332A.02, is amended by adding a subdivision 
124.2 	to read:
124.3 		Subd. 2a.Advertise. "Advertise" means to solicit business through any means or 
124.4 	medium.

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

124.11 	Sec. 8. Minnesota Statutes 2008, section 332A.02, is amended by adding a subdivision 
124.12 	to read:
124.13 		Subd. 5a.Creditor. "Creditor" means any party:
124.14 	(1) named by the debtor as a creditor in the debt management services plan or debt 
124.15 	management services agreement;
124.16 	(2) that acquires or holds the debt; or
124.17 	(3) to whom interactions with the debt management services is assigned in relation 
124.18 	to the debt listed in the debt management services plan or debt management services 
124.19 	agreement.

124.20 	Sec. 9. Minnesota Statutes 2008, section 332A.02, subdivision 8, is amended to read:
124.21 		Subd. 8.Debt management services provider. "Debt management services 
124.22 	provider" means any person offering or providing debt management services to a debtor 
124.23 	domiciled in this state, regardless of whether or not a fee is charged for the services and 
124.24 	regardless of whether the person maintains a physical presence in the state. This term 
124.25 	includes any person to whom debt management services are delegated, and does not 
124.26 	include services performed by the following when engaged in the regular course of their 
124.27 	respective businesses and professions:
124.28 	(1) attorneys at law, escrow agents, accountants, broker-dealers in securities;
124.29 	(2) state or national banks, credit unions, trust companies, savings associations, 
124.30 	title insurance companies, insurance companies, and all other lending institutions duly 
124.31 	authorized to transact business in Minnesota, provided no fee is charged for the service;
124.32 	(3) persons who, as employees on a regular salary or wage of an employer not 
124.33 	engaged in the business of debt management, perform credit services for their employer;
125.1 	(4) public officers acting in their official capacities and persons acting as a debt 
125.2 	management services provider pursuant to court order;
125.3 	(5) any person while performing services incidental to the dissolution, winding up, 
125.4 	or liquidation of a partnership, corporation, or other business enterprise;
125.5 	(6) the state, its political subdivisions, public agencies, and their employees;
125.6 	(7) credit unions and collection agencies, provided no fee is charged for the service
125.7 	that the services are provided to a creditor;
125.8 	(8) "qualified organizations" designated as representative payees for purposes of the 
125.9 	Social Security and Supplemental Security Income Representative Payee System and the 
125.10 	federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508;
125.11 	(9) accelerated mortgage payment providers. "Accelerated mortgage payment 
125.12 	providers" are persons who, after satisfying the requirements of sections 332.30 to 
125.13 	332.303, receive funds to make mortgage payments to a lender or lenders, on behalf 
125.14 	of mortgagors, in order to exceed regularly scheduled minimum payment obligations 
125.15 	under the terms of the indebtedness. The term does not include: (i) persons or entities 
125.16 	described in clauses (1) to (8); (ii) mortgage lenders or servicers, industrial loan and 
125.17 	thrift companies, or regulated lenders under chapter 56; or (iii) persons authorized to 
125.18 	make loans under section 47.20, subdivision 1. For purposes of this clause and sections 
125.19 	332.30 to 332.303, "lender" means the original lender or that lender's assignee, whichever 
125.20 	is the current mortgage holder;
125.21 	(10) trustees, guardians, and conservators; and
125.22 	(11) debt settlement services providers. 

125.23 	Sec. 10. Minnesota Statutes 2008, section 332A.02, subdivision 9, is amended to read:
125.24 		Subd. 9.Debt management services. "Debt management services" means the 
125.25 	provision of any one or more of the following services in connection with debt incurred 
125.26 	primarily for personal, family, or household services:
125.27 	(1) managing the financial affairs of an individual by distributing income or money 
125.28 	to the individual's creditors; 
125.29 	(2) receiving funds for the purpose of distributing the funds among creditors in 
125.30 	payment or partial payment of obligations of a debtor; or
125.31 	(3) adjusting, prorating, pooling, or liquidating the indebtedness of a debtor  whereby 
125.32 	a debt management services provider assists in managing the financial affairs of a debtor 
125.33 	by distributing periodic payments to the debtor's creditors from funds that the debt 
125.34 	management services provider receives from the debtor and where the primary purpose of 
126.1 	the services is to effect full repayment of debt incurred primarily for personal, family, or 
126.2 	household services. 
126.3 	Any person so engaged or holding out as so engaged is deemed to be engaged in the 
126.4 	provision of debt management services regardless of whether or not a fee is charged for 
126.5 	such services.

126.6 	Sec. 11. Minnesota Statutes 2008, section 332A.02, subdivision 10, is amended to read:
126.7 		Subd. 10.Debtor. "Debtor" means the person for whom the debt prorating service 
126.8 	is management services are performed.

126.9 	Sec. 12. Minnesota Statutes 2008, section 332A.02, subdivision 13, is amended to read:
126.10 		Subd. 13.Debt settlement services provider. "Debt settlement services provider" 
126.11 	means any person engaging in or holding out as engaging in the business of negotiating, 
126.12 	adjusting, or settling debt incurred primarily for personal, family, or household purposes 
126.13 	without holding or receiving the debtor's funds or personal property and without paying 
126.14 	the debtor's funds to, or distributing the debtor's property among, creditors has the 
126.15 	meaning given in section 332B.02, subdivision 11. The term shall not include persons 
126.16 	listed in subdivision 8, clauses (1) to (10).

126.17 	Sec. 13. Minnesota Statutes 2008, section 332A.04, subdivision 6, is amended to read:
126.18 		Subd. 6.Right of action on bond. If the registrant has failed to account to a debtor 
126.19 	or distribute to the debtor's creditors the amounts required by this chapter and, or has 
126.20 	failed to perform any of the services promised in  the debt management services agreement 
126.21 	between the debtor and registrant, the registrant is in default. The debtor or the debtor's 
126.22 	legal representative or receiver, the commissioner, or the attorney general, shall have, in 
126.23 	addition to all other legal remedies, a right of action in the name of the debtor on the bond 
126.24 	or the security given under this section, for loss suffered by the debtor, not exceeding the 
126.25 	face amount of the bond or security, and without the necessity of joining the registrant 
126.26 	in the suit or action based on the default.

126.27 	Sec. 14. Minnesota Statutes 2008, section 332A.08, is amended to read:
126.28 	332A.08 DENIAL OF REGISTRATION.
126.29 	The commissioner, with notice to the applicant by certified mail sent to the address 
126.30 	listed on the application, may deny an application for a registration upon finding that 
126.31 	the applicant:
127.1 	(1) has submitted an application required under section 332A.04 that contains 
127.2 	incorrect, misleading, incomplete, or materially untrue information. An application is 
127.3 	incomplete if it does not include all the information required in section 332A.04;
127.4 	(2) has failed to pay any fee or pay or maintain any bond required by this chapter, 
127.5 	or failed to comply with any order, decision, or finding of the commissioner made under 
127.6 	and within the authority of this chapter;
127.7 	(3) has violated any provision of this chapter or any rule or direction lawfully made 
127.8 	by the commissioner under and within the authority of this chapter;
127.9 	(4) or any controlling or affiliated party has ever been convicted of a crime or found 
127.10 	civilly liable for an offense involving moral turpitude, including forgery, embezzlement, 
127.11 	obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any 
127.12 	other similar offense or violation, or any violation of a federal or state law or regulation 
127.13 	in connection with activities relating to the rendition of debt management services or 
127.14 	any consumer fraud, false advertising, deceptive trade practices, or similar consumer 
127.15 	protection law;
127.16 	(5) has had a registration or license previously revoked or suspended in this state or 
127.17 	any other state or the applicant or licensee has been permanently or temporarily enjoined 
127.18 	by any court of competent jurisdiction from engaging in or continuing any conduct or 
127.19 	practice involving any aspect of the debt management services provider business; or 
127.20 	any controlling or affiliated party has been an officer, director, manager, or shareholder 
127.21 	owning more than a ten percent interest in a debt management services provider whose 
127.22 	registration has previously been revoked or suspended in this state or any other state, or 
127.23 	who has been permanently or temporarily enjoined by any court of competent jurisdiction 
127.24 	from engaging in or continuing any conduct or practice involving any aspect of the debt 
127.25 	management services provider business;
127.26 	(6) has made any false statement or representation to the commissioner;
127.27 	(7) is insolvent;
127.28 	(8) refuses to fully comply with an investigation or examination of the debt 
127.29 	management services provider by the commissioner;
127.30 	(9) has improperly withheld, misappropriated, or converted any money or properties 
127.31 	received in the course of doing business;
127.32 	(10) has failed to have a trust account with an actual cash balance equal to or greater 
127.33 	than the sum of the escrow balances of each debtor's account;
127.34 	(11) has defaulted in making payments to creditors on behalf of debtors as required 
127.35 	by agreements between the provider and debtor; or
128.1 	(12) has used fraudulent, coercive, or dishonest practices, or demonstrated 
128.2 	incompetence, untrustworthiness, or financial irresponsibility in this state or elsewhere; or
128.3 	(13) has been shown to have engaged in a pattern of failing to perform the services 
128.4 	promised.

128.5 	Sec. 15. Minnesota Statutes 2008, section 332A.10, is amended to read:
128.6 	332A.10 WRITTEN DEBT MANAGEMENT SERVICES AGREEMENT.
128.7 		Subdivision 1.Written agreement required. (a) A debt management services 
128.8 	provider may not perform any debt management services or receive any money related 
128.9 	to a debt management services plan until the provider has obtained a debt management 
128.10 	services agreement that contains all  terms of the agreement between the debt management 
128.11 	services provider and the debtor.
128.12 	(b) A debt management services agreement must:
128.13 	(1) be in writing, dated, and signed by the debt management services provider and 
128.14 	the debtor;
128.15 	(2) conspicuously indicate whether or not the debt management services provider 
128.16 	is registered with the Minnesota Department of Commerce and include any registration 
128.17 	number; and
128.18 	(3) be written in the debtor's primary language if the debt management services 
128.19 	provider advertised in that language. 
128.20 	(c) The registrant must furnish the debtor with a copy of the signed contract upon 
128.21 	execution.
128.22 		Subd. 2.Actions prior to written agreement. No person may provide debt 
128.23 	management services for a debtor or execute a debt management services agreement 
128.24 	unless the person first has:
128.25 	(1) provided the debtor individualized counseling and educational information 
128.26 	that, at a minimum, addresses managing household finances, managing credit and debt, 
128.27 	budgeting, and personal savings strategies;
128.28 	(2) prepared in writing and provided to the debtor, in a form that the debtor may 
128.29 	keep, an individualized financial analysis and a proposed debt management services 
128.30 	plan listing the debtor's known debts with specific recommendations regarding actions 
128.31 	the debtor should take to reduce or eliminate the amount of the debts, including written 
128.32 	disclosure that debt management services are not suitable for all debtors and that there are 
128.33 	other ways, including bankruptcy, to deal with indebtedness;
128.34 	(3) made a determination supported by an individualized financial analysis that the 
128.35 	debtor can reasonably meet the requirements of the proposed debt management services 
129.1 	plan and that there is a net tangible benefit to the debtor of entering into the proposed debt 
129.2 	management services plan; and
129.3 	(4) prepared, in a form the debtor may keep, a written list identifying all known 
129.4 	creditors of the debtor that the provider reasonably expects to participate in the plan 
129.5 	and the creditors, including secured creditors, that the provider reasonably expects not 
129.6 	to participate; and
129.7 	(5) disclosed, in addition to the written disclosure on the agreement required under 
129.8 	subdivision 1, whether or not the debt management services provider is registered with the 
129.9 	Minnesota Department of Commerce and any registration number.
129.10 		Subd. 3.Required terms. (a) Each debt management services agreement must 
129.11 	contain the following terms, which must be disclosed prominently and clearly in bold print 
129.12 	on the front page of the agreement, segregated by bold lines from all other information on 
129.13 	the page:
129.14 	(1) the origination fee amount to be paid by the debtor and whether all or a portion 
129.15 	of the initial origination fee amount is refundable or nonrefundable;
129.16 	(2) the monthly fee amount or percentage to be paid by the debtor; and
129.17 	(3) the total amount of fees reasonably anticipated to be paid by the debtor over 
129.18 	the term of the agreement.
129.19 	(b) Each debt management services agreement must also contain the following:
129.20 	(1) a disclosure that if the amount of debt owed is increased by interest, late fees, 
129.21 	over the limit fees, and other amounts imposed by the creditors, the length of the debt 
129.22 	management services agreement will be extended and remain in force and that the total 
129.23 	dollar charges agreed upon may increase at the rate agreed upon in the original contract 
129.24 	agreement;
129.25 	(2) a prominent statement describing the terms upon which the debtor may cancel 
129.26 	the contract as set forth in section 332A.11;
129.27 	(3) a detailed description of all services to be performed by the debt management 
129.28 	services provider for the debtor;
129.29 	(4) the debt management services provider's refund policy; and
129.30 	(5) the debt management services provider's principal business address and the name 
129.31 	and address of its agent in this state authorized to receive service of process.
129.32 		Subd. 4.Prohibited terms. The following terms shall not be included in the debt 
129.33 	management services agreement:
129.34 	(1) a hold harmless clause;
129.35 	(2) a confession of judgment, or a power of attorney to confess judgment against the 
129.36 	debtor or appear as the debtor in any judicial proceeding;
130.1 	(3) a waiver of the right to a jury trial, if applicable, in any action brought by 
130.2 	or against a debtor;
130.3 	(4) an assignment of or an order for payment of wages or other compensation for 
130.4 	services;
130.5 	(5) a provision in which the debtor agrees not to assert any claim or defense arising 
130.6 	out of the debt management services agreement;
130.7 	(6) a waiver of any provision of this chapter or a release of any obligation required 
130.8 	to be performed on the part of the debt management services provider; or
130.9 	(7) a mandatory arbitration clause or a clause selecting a law other than the laws of 
130.10 	Minnesota under which the debt management services agreement or any other dispute 
130.11 	involving the provision of debt management services is governed or enforced.
130.12 		Subd. 5. New debt management services agreements; modification of existing 
130.13 	agreements. (a) Separate and additional debt management services agreements that 
130.14 	comply with this chapter may be entered into by the debt management services provider 
130.15 	and the debtor provided that no additional initial origination fee may be charged by the 
130.16 	debt management services provider. 
130.17 	(b) Any modification of an existing debt management services agreement, including 
130.18 	any increase in the number or amount of debts included in the debt management service
130.19 	services agreement, must be in writing and signed by both parties, except that the signature 
130.20 	of the debtor is not required if: 
130.21 	(1) a creditor is added to or deleted from a debt management services agreement 
130.22 	at the request of the debtor or a debtor voluntarily increases the amount of a payment, 
130.23 	provided the debt management services provider must provide an updated payment 
130.24 	schedule to the debtor within seven days; or 
130.25 	(2) the payment amount to a creditor in the agreement increases by $10 or less 
130.26 	and the total payment amount to all creditors increases a total of $20 or less as a result 
130.27 	of incorrect or incomplete information provided by the debtor regarding the amount of 
130.28 	debt owed a creditor, provided the debt management services provider must notify the 
130.29 	debtor of the increase within seven days. 
130.30 	No fees, charges, or other consideration may be demanded from the debtor for 
130.31 	the modification, other than an increase in the amount of the monthly maintenance fee 
130.32 	established in the original debt management services agreement. 

130.33 	Sec. 16. Minnesota Statutes 2008, section 332A.11, subdivision 2, is amended to read:
130.34 		Subd. 2.Notice of debtor's right to cancel. A debt management services 
130.35 	agreement must contain, on its face, in an easily readable typeface type immediately 
131.1 	adjacent to the space for signature by the debtor, the following notice: "Right To Cancel: 
131.2 	You have the right to cancel this contract at any time on ten days' written notice." 

131.3 	Sec. 17. Minnesota Statutes 2008, section 332A.14, is amended to read:
131.4 	332A.14 PROHIBITIONS.
131.5 	A registrant No debt management services provider shall not:
131.6 	(1) purchase from a creditor any obligation of a debtor;
131.7 	(2) use, threaten to use, seek to have used, or seek to have threatened the use of any 
131.8 	legal process, including but not limited to garnishment and repossession of personal 
131.9 	property, against any debtor while the debt management services agreement between the 
131.10 	registrant and the debtor remains executory;
131.11 	(3) advise, counsel, or encourage a debtor to stop paying a creditor until a debt 
131.12 	management services plan is in place, or imply, infer, encourage, or in any other way 
131.13 	indicate, that it is advisable to stop paying a creditor;
131.14 	(4) sanction or condone the act by a debtor of ceasing payments or imply, infer, 
131.15 	or in any manner indicate that the act of ceasing payments is advisable or beneficial to 
131.16 	the debtor;
131.17 	(4) (5) require as a condition of performing debt management services the purchase 
131.18 	of any services, stock, insurance, commodity, or other property or any interest therein 
131.19 	either by the debtor or the registrant;
131.20 	(5) (6) compromise any debts unless the prior written or contractual approval of the 
131.21 	debtor has been obtained to such compromise and unless such compromise inures solely 
131.22 	to the benefit of the debtor;
131.23 	(6) (7) receive from any debtor as security or in payment of any fee a promissory 
131.24 	note or other promise to pay or any mortgage or other security, whether as to real or 
131.25 	personal property;
131.26 	(7) (8) lend money or provide credit to any debtor if any interest or fee is charged, 
131.27 	or directly or indirectly collect any fee for referring, advising, procuring, arranging, or 
131.28 	assisting a consumer in obtaining any extension of credit or other debtor service from a 
131.29 	lender or debt management services provider;
131.30 	(8) (9) structure a debt management services agreement that would result in negative 
131.31 	amortization of any debt in the plan;
131.32 	(9) (10) engage in any unfair, deceptive, or unconscionable act or practice in 
131.33 	connection with any service provided to any debtor;
131.34 	(10) (11) offer, pay, or give any material cash fee, gift, bonus, premium, reward, or 
131.35 	other compensation to any person for referring any prospective customer to the registrant 
132.1 	or for enrolling a debtor in a debt management services plan, or provide any other 
132.2 	incentives for employees or agents of the debt management services provider to induce 
132.3 	debtors to enter into a debt management services plan;
132.4 	(11) (12) receive any cash, fee, gift, bonus, premium, reward, or other compensation 
132.5 	from any person other than the debtor or a person on the debtor's behalf in connection 
132.6 	with activities as a registrant, provided that this paragraph does not apply to a registrant 
132.7 	which is a bona fide nonprofit corporation duly organized under chapter 317A or under 
132.8 	the similar laws of another state;
132.9 	(12) (13) enter into a contract with a debtor unless a thorough written budget analysis 
132.10 	indicates that the debtor can reasonably meet the requirements of the financial adjustment 
132.11 	plan and will be benefited by the plan;
132.12 	(13) (14) in any way charge or purport to charge or provide any debtor credit 
132.13 	insurance in conjunction with any contract or agreement involved in the debt management 
132.14 	services plan;
132.15 	(14) (15) operate or employ a person who is an employee or owner of a collection 
132.16 	agency or process-serving business; or
132.17 	(15) (16) solicit, demand, collect, require, or attempt to require payment of a sum 
132.18 	that the registrant states, discloses, or advertises to be a voluntary contribution to a debt 
132.19 	management services provider or designee from the debtor.

132.20 	Sec. 18. Minnesota Statutes 2008, section 332A.16, is amended to read:
132.21 	332A.16 ADVERTISEMENT OF DEBT MANAGEMENT SERVICES PLANS.
132.22 	No debt management services provider may make false, deceptive, or misleading 
132.23 	statements or omissions about the rates, terms, or conditions of an actual or proposed 
132.24 	debt management services plan or its debt management services, or create the likelihood 
132.25 	of consumer confusion or misunderstanding regarding its services, including but not 
132.26 	limited to the following:
132.27 	(1) represent that the debt management services provider is a nonprofit, 
132.28 	not-for-profit, or has similar status or characteristics if some or all of the debt management 
132.29 	services will be provided by a for-profit company that is a controlling or affiliated party to 
132.30 	the debt management services provider; or
132.31 	(2) make any communication that gives the impression that the debt management 
132.32 	services provider is acting on behalf of a government agency.

132.33 	Sec. 19. [332B.02] DEFINITIONS.
133.1 		Subdivision 1.Scope. Unless a different meaning is clearly indicated by the context, 
133.2 	for the purposes of this chapter, the terms defined in this section have the meanings given 
133.3 	them.
133.4 		Subd. 2.Accreditation. "Accreditation" means certification as an accredited credit 
133.5 	counseling provider by the Council on Accreditation, the Bureau Veritas Certification 
133.6 	North America, Inc., or BSI Management Systems America, Inc.
133.7 		Subd. 3.Advertise. "Advertise" means to solicit business through any means or 
133.8 	medium.
133.9 		Subd. 4.Aggregate debt. "Aggregate debt" means the total of principal and interest 
133.10 	that is owed by the debtor to the creditors at the time of execution of the debt settlement 
133.11 	agreement.
133.12 		Subd. 5.Attorney general. "Attorney general" means the attorney general of the 
133.13 	state of Minnesota.
133.14 		Subd. 6.Commissioner. "Commissioner" means the commissioner of commerce.
133.15 		Subd. 7.Controlling or affiliated party. "Controlling or affiliated party" means 
133.16 	any person or entity that controls or is controlled, directly or indirectly, or is under 
133.17 	common control with another person. Controlling or affiliated party includes, but is not 
133.18 	limited to, employees, officers, independent contractors, corporations, partnerships, and 
133.19 	limited liability corporations.
133.20 		Subd. 8.Credit counseling. "Credit counseling" means the provision of counseling 
133.21 	and advice on managing household finances, including but not limited to, managing credit 
133.22 	and debt, budgeting, and personal savings.
133.23 		Subd. 9.Creditor. "Creditor" means any party:
133.24 	(1) named by the debtor as a creditor in the debt settlement services plan or debt 
133.25 	settlement services agreement;
133.26 	(2) that acquires or holds the debt; or
133.27 	(3) to whom interactions with the debt settlement services is assigned in relation to 
133.28 	the debt listed in the debt settlement services plan or debt settlement services agreement.
133.29 		Subd. 10.Debt settlement services. "Debt settlement services" means any one or 
133.30 	more of the following activities:
133.31 	(1) offering to provide advice, or offering to act or acting as an intermediary between 
133.32 	a debtor and one or more of the debtor's creditors, where the primary purpose of the 
133.33 	advice or action is to obtain a settlement for less than the full amount of debt, whether 
133.34 	in principal, interest, fees, or other charges, incurred primarily for personal, family, or 
133.35 	household purposes including, but not limited to, offering debt negotiation, debt reduction, 
133.36 	or debt relief services; or
134.1 	(2) advising, encouraging, assisting, or counseling a debtor to accumulate funds in 
134.2 	an account for future payment of a reduced amount of debt to one or more of the debtor's 
134.3 	creditors.
134.4 	Any person so engaged or holding out as so engaged is deemed to be engaged in 
134.5 	the provision of debt settlement services, regardless of whether or not a fee is charged for 
134.6 	such services.
134.7 		Subd. 11.Debt settlement services agreement. "Debt settlement services 
134.8 	agreement" means the written contract between the debt settlement services provider 
134.9 	and the debtor.
134.10 		Subd. 12.Debt settlement services plan. "Debt settlement services plan" means 
134.11 	the debtor's individualized package of debt settlement services set forth in the debt 
134.12 	settlement services agreement.
134.13 		Subd. 13.Debt settlement services provider. "Debt settlement services provider" 
134.14 	means any person offering or providing debt settlement services to a debtor domiciled 
134.15 	in this state, regardless of whether or not a fee is charged for the services and regardless 
134.16 	of whether the person maintains a physical presence in the state. The term includes 
134.17 	any person to whom debt settlement duties are delegated. The term shall not include 
134.18 	persons listed in section 332A.02, subdivision 8, clauses (1) to (10), or a debt management 
134.19 	services provider.
134.20 		Subd. 14.Lead generator. "Lead generator" means a person that, without providing 
134.21 	debt settlement services: (1) solicits debtors to engage in debt settlement through mail, 
134.22 	in person, or electronic Web site-based solicitation or any other means, (2) acts as an 
134.23 	intermediary or referral agent between a debtor and an entity actually providing debt 
134.24 	settlement services, or (3) obtains a debtor's personally identifiable information and 
134.25 	transmits that information to a debt settlement services provider.
134.26 		Subd. 15.Person. "Person" means an individual, firm, partnership, association, 
134.27 	or corporation.
134.28 		Subd. 16.Registrant. "Registrant" means any person registered by the 
134.29 	commissioner pursuant to this chapter and, where used in conjunction with an act or 
134.30 	omission required or prohibited by this chapter, shall mean any person performing debt 
134.31 	settlement services.

134.32 	Sec. 20. [332B.03] REQUIREMENT OF REGISTRATION.
134.33 	On or after August 1, 2009, it is unlawful for any person, whether or not located 
134.34 	in this state, to operate as a debt settlement services provider or provide debt settlement 
134.35 	services including, but not limited to, offering, advertising, or executing or causing to be 
135.1 	executed any debt settlement services or debt settlement services agreement, except as 
135.2 	authorized by law, without first becoming registered as provided in this chapter. Debt 
135.3 	settlement services providers may continue to provide debt settlement services without 
135.4 	complying with this chapter to those debtors who entered into a contract to participate 
135.5 	in a debt settlement services plan prior to August 1, 2009, but may not enter into a debt 
135.6 	settlement services agreement with a debt on or after August 1, 2009, without complying 
135.7 	with this chapter.

135.8 	Sec. 21. [332B.04] REGISTRATION.
135.9 		Subdivision 1.Form. Application for registration to operate as a debt settlement 
135.10 	services provider in this state must be made in writing to the commissioner, under oath, in 
135.11 	the form prescribed by the commissioner, and must contain:
135.12 	(1) the full name of each principal of the entity applying;
135.13 	(2) the address, which must not be a post office box, and the telephone number and, 
135.14 	if applicable, the e-mail address, of the applicant;
135.15 	(3) consent to the jurisdiction of the courts of this state;
135.16 	(4) the name and address of the registered agent authorized to accept service of 
135.17 	process on behalf of the applicant or appointment of the commissioner as the applicant's 
135.18 	agent for purposes of accepting service of process;
135.19 	(5) disclosure of:
135.20 	(i) whether any controlling or affiliated party has ever been convicted of a crime 
135.21 	or found civilly liable for an offense involving moral turpitude, including forgery, 
135.22 	embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to 
135.23 	defraud, or any other similar offense or violation, or any violation of a federal or state 
135.24 	law or regulation in connection with activities relating to the rendition of debt settlement 
135.25 	services or involving any consumer fraud, false advertising, deceptive trade practices, or 
135.26 	similar consumer protection law;
135.27 	(ii) any judgments, private or public litigation, tax liens, written complaints, 
135.28 	administrative actions, or investigations by any government agency against the applicant 
135.29 	or any officer, director, manager, or shareholder owning more than five percent interest 
135.30 	in the applicant, unresolved or otherwise, filed or otherwise commenced within the 
135.31 	preceding ten years;
135.32 	(iii) whether the applicant or any person employed by the applicant has had a record 
135.33 	of having defaulted in the payment of money collected for others, including the discharge 
135.34 	of debts through bankruptcy proceedings; and
136.1 	(iv) whether the applicant's license or registration to provide debt settlement services 
136.2 	in any other state has ever been revoked or suspended;
136.3 	(6) a copy of the applicant's standard debt settlement services agreement that the 
136.4 	applicant intends to execute with debtors;
136.5 	(7) proof of accreditation, unless the applicant submits an affidavit attesting that the 
136.6 	applicant does not provide credit counseling services; and
136.7 	(8) any other information and material as the commissioner may require.
136.8 	The commissioner may, for good cause shown, temporarily waive any requirement 
136.9 	of this subdivision.
136.10 		Subd. 2.Term and scope of registration. A registration is effective until 11:59 
136.11 	p.m. on December 31 of the year for which the application for registration is filed or until 
136.12 	it is surrendered by the registrant or revoked or suspended by the commissioner. The 
136.13 	registration is limited solely to the business of providing debt settlement services.
136.14 		Subd. 3.Fees; bond. An applicant for registration as a debt settlement services 
136.15 	provider must comply with the requirements of section 332A.04, subdivisions 3, 4, and 5.
136.16 		Subd. 4.Right of action on bond. If the registrant has failed to account to a debtor, 
136.17 	or has failed to perform any of the services promised, the registrant is in default. The 
136.18 	debtor or the debtor's legal representative or receiver, the commissioner, or the attorney 
136.19 	general, shall have, in addition to all other legal remedies, a right of action in the name of 
136.20 	the debtor on the bond or the security given under this section, for loss suffered by the 
136.21 	debtor, not exceeding the face amount of the bond or security, and without the necessity of 
136.22 	joining the registrant in the suit or action based on the default.
136.23 		Subd. 5.Registrant list. The commissioner must maintain a list of registered debt 
136.24 	settlement services providers. The list must be made available to the public in written 
136.25 	form upon request and on the Department of Commerce Web site.
136.26 		Subd. 6.Renewal of registration. Each year, each registrant under the provisions 
136.27 	of this chapter must, not more than 60 nor less than 30 days before its registration is to 
136.28 	expire, apply to the commissioner for renewal of its registration on a form prescribed by 
136.29 	the commissioner. The application must be signed by the registrant under penalty of 
136.30 	perjury, contain current information on all matters required in the original application, and 
136.31 	be accompanied by a payment of $250. The registrant must maintain a continuous surety 
136.32 	bond that satisfies the requirements of section 332A.04, subdivision 4. The renewal is 
136.33 	effective for one year. The commissioner may, for good cause shown, temporarily waive 
136.34 	any requirement of this section.

137.1 	Sec. 22. [332B.05] DENIAL, SUSPENSION, REVOCATION, OR 
137.2 	NONRENEWAL OF REGISTRATION.
137.3 		Subdivision 1.Denial. The commissioner, with notice to the applicant by certified 
137.4 	mail sent to the address listed on the application, may deny an application for a registration 
137.5 	for any of the reasons specified under section 332A.08.
137.6 		Subd. 2.Suspension, revocation, or nonrenewal. The commissioner may suspend, 
137.7 	revoke, or refuse to renew any registration issued under this chapter, or may levy a civil 
137.8 	penalty under section 45.027, or any combination of actions, if the debt settlement services 
137.9 	provider or any controlling or affiliated person has committed any act or omission for 
137.10 	which the commissioner could have refused to issue an initial registration.
137.11 		Subd. 3.Procedure. Suspension, revocation, or nonrenewal must be upon notice 
137.12 	and under the conditions prescribed in section 332A.09, subdivision 1. Upon issuance of 
137.13 	an order suspending, revoking, or refusing to renew a registration, the commissioner:
137.14 	(1) shall follow the procedure established in section 332A.09, subdivision 2; and
137.15 	(2) may follow the procedure specified in section 332A.09, subdivision 3, concerning 
137.16 	the appointment of a receiver for funds of sanctioned registrants.

137.17 	Sec. 23. [332B.06] WRITTEN DEBT SETTLEMENT SERVICES AGREEMENT; 
137.18 	DISCLOSURES; TRUST ACCOUNT.
137.19 		Subdivision 1.Written agreement required. (a) A debt settlement services 
137.20 	provider may not perform, or impose any charges or receive any payment for, any debt 
137.21 	settlement services until the provider and the debtor have executed a debt settlement 
137.22 	services agreement that contains all terms of the agreement between the debt settlement 
137.23 	services provider and the debtor and complies with all the applicable requirements of 
137.24 	this chapter.
137.25 	(b) A debt settlement services agreement must:
137.26 	(1) be in writing, dated, and signed by the debt settlement services provider and 
137.27 	the debtor;
137.28 	(2) conspicuously indicate whether or not the debt settlement services provider is 
137.29 	registered with the Minnesota Department of Commerce and include any registration 
137.30 	number; and
137.31 	(3) be written in the debtor's primary language if the debt settlement services 
137.32 	provider advertises in that language.
137.33 	(c) The registrant must furnish the debtor with a copy of the signed contract upon 
137.34 	execution.
138.1 		Subd. 2.Actions prior to executing a written agreement. No person may provide 
138.2 	debt settlement services for a debtor or execute a debt settlement services agreement 
138.3 	unless the person first has: 
138.4 	(1) informed the debtor, in writing, that debt settlement is not appropriate for all 
138.5 	debtors and that there are other ways to deal with debt, including using credit counseling 
138.6 	or debt management services, or filing bankruptcy;
138.7 	(2) prepared in writing and provided to the debtor, in a form the debtor may keep, 
138.8 	an individualized financial analysis of the debtor's financial circumstances, including 
138.9 	income and liabilities, and made a determination supported by the individualized financial 
138.10 	analysis that:
138.11 	(i) the debt settlement plan proposed for addressing the debt is suitable for the 
138.12 	individual debtor;
138.13 	(ii) the debtor can reasonably meet the requirements of the proposed debt settlement 
138.14 	services plan; and
138.15 	(iii) based on the totality of the circumstances, there is a net tangible benefit to the 
138.16 	debtor of entering into the proposed debt settlement services plan; and
138.17 	(3) provided, on a document separate from any other document, the total amount and 
138.18 	an itemization of fees, including any origination fees, monthly fees, and settlement fees 
138.19 	reasonably anticipated to be paid by the debtor over the term of the agreement.
138.20 		Subd. 3.Determination concerning creditor participation. (a) Before executing a 
138.21 	debt settlement services agreement or providing any services, a debt settlement services 
138.22 	provider must make a determination, supported by sufficient bases, which creditors listed 
138.23 	by the debtor are reasonably likely, and which are not reasonably likely, to participate in 
138.24 	the debt settlement services plan set forth in the debt settlement services agreement.
138.25 	(b) A debt settlement services provider has a defense against a claim that no 
138.26 	sufficient basis existed to make a determination that a creditor was likely to participate if 
138.27 	the debt settlement services provider can produce:
138.28 	(1) written confirmation from the creditor that, at the time the determination was 
138.29 	made, the creditor and the debt settlement services provider were engaged in negotiations 
138.30 	to settle a debt for another debtor; or
138.31 	(2) evidence that the provider and the creditor had entered into a settlement of a debt 
138.32 	within the six months prior to the date of the determination.
138.33 	(c) The debt settlement services provider must notify the debtor as soon as 
138.34 	practicable after the provider has made a determination of the likelihood of participation 
138.35 	or nonparticipation of all the creditors listed for inclusion in the debt settlement services 
138.36 	agreement or debt settlement services plan. If not all creditors listed in the debt settlement 
139.1 	services agreement are reasonably likely to participate in the debt settlement services plan, 
139.2 	the debt settlement services provider must obtain the written authorization from the debtor 
139.3 	to proceed with the debt settlement services agreement without the likely participation of 
139.4 	all listed creditors.
139.5 		Subd. 4.Disclosures. (a) A person offering to provide or providing debt settlement 
139.6 	services must disclose both orally and in writing whether or not the person is registered 
139.7 	with the Minnesota Department of Commerce and any registration number.
139.8 	(b) No person may provide debt settlement services unless the person first has 
139.9 	provided, both orally and in writing, on a single sheet of paper, separate from any other 
139.10 	document or writing, the following verbatim notice:
139.11 	CAUTION
139.12 	We CANNOT GUARANTEE that you will successfully reduce or eliminate your 
139.13 	debt.
139.14 	If you stop paying your creditors, there is a strong likelihood some or all of the 
139.15 	following may happen:
139.16 	• YOUR WAGES OR BANK ACCOUNT MAY STILL BE GARNISHED.
139.17 	• YOU MAY STILL BE CONTACTED BY CREDITORS.
139.18 	• YOU MAY STILL BE SUED BY CREDITORS for the money you owe.
139.19 	• FEES, INTEREST, AND OTHER CHARGES WILL CONTINUE TO MOUNT 
139.20 	UP DURING THE (INSERT NUMBER) MONTHS THIS PLAN IS IN EFFECT.
139.21 	Even if we do settle your debt, YOU MAY STILL HAVE TO PAY TAXES on 
139.22 	the amount forgiven.
139.23 	Your credit rating may be adversely affected.
139.24 	(c) The heading, "CAUTION," must be in bold, underlined, 28-point type, and the 
139.25 	remaining text must be in 14-point type, with a double space between each statement.
139.26 	(d) The disclosures and notices required under this subdivision must be provided 
139.27 	in the debtor's primary language if the debt settlement services provider advertises in 
139.28 	that language.
139.29 		Subd. 5.Required terms. (a) Each debt settlement services agreement must contain 
139.30 	on the front page of the agreement, segregated by bold lines from all other information 
139.31 	on the page and disclosed prominently and clearly in bold print, the total amount and an 
139.32 	itemization of fees, including any origination fees, monthly fees, and settlement fees 
139.33 	reasonably anticipated to be paid by the debtor over the term of the agreement.
139.34 	(b) Each debt settlement services agreement must also contain the following:
139.35 	(1) a prominent statement describing the terms upon which the debtor may cancel 
139.36 	the contract as set forth in section 332B.07;
140.1 	(2) a detailed description of all services to be performed by the debt settlement 
140.2 	services provider for the debtor;
140.3 	(3) the debt settlement services provider's refund policy;
140.4 	(4) the debt settlement services provider's principal business address, which must 
140.5 	not be a post office box, and the name and address of its agent in this state authorized to 
140.6 	receive service of process; and
140.7 	(5) the name of each creditor the debtor has listed and the aggregate debt owed to 
140.8 	each creditor that will be the subject of settlement.
140.9 		Subd. 6.Prohibited terms. A debt settlement services agreement may not contain 
140.10 	any of the terms prohibited under section 332A.10, subdivision 4.
140.11 		Subd. 7.New debt settlement services agreements; modifications of existing 
140.12 	agreements. (a) Separate and additional debt settlement services agreements that comply 
140.13 	with this chapter may be entered into by the debt settlement services provider and the 
140.14 	debtor, provided that no additional origination fee may be charged by the debt settlement 
140.15 	services provider.
140.16 	(b) Any modification of an existing debt settlement services agreement, including 
140.17 	any increase in the number or amount of debts included in the debt settlement services 
140.18 	agreement, must be in writing and signed by both parties. No fee may be charged to 
140.19 	modify an existing agreement.
140.20 		Subd. 8. Funds held in trust. Debtor funds may be held in trust for the purpose 
140.21 	of writing exchange checks for no longer than 42 days. If the registrant holds debtor 
140.22 	funds, the registrant must maintain a separate trust account, except that the registrant may 
140.23 	commingle debtor funds with the registrant's own funds, in the form of an imprest fund, 
140.24 	to the extent necessary to ensure maintenance of a minimum balance, if the financial 
140.25 	institution at which the trust account is held requires a minimum balance to avoid the 
140.26 	assessment of fees or penalties for failure to maintain a minimum balance.

140.27 	Sec. 24. [332B.07] RIGHT TO CANCEL.
140.28 		Subdivision 1.Debtor's right to cancel. (a) A debtor has the right to cancel a debt 
140.29 	settlement services agreement without cause at any time upon ten days' written notice 
140.30 	to the debt settlement services provider.
140.31 	(b) In the event of cancellation, the debt settlement services provider must, within 
140.32 	ten days of the cancellation, notify the debtor's creditors with whom the debt settlement 
140.33 	services provider is or has been, under the terms of the debt settlement agreement, in 
140.34 	communication, of the cancellation and immediately refund all fees paid by the debtor to 
140.35 	the debt settlement services provider that exceed the fees allowed under section 332B.09.
141.1 	(c) Upon cancellation, the debt settlement services provider must cease collection of 
141.2 	any monthly fees beginning in the month following cancellation.
141.3 		Subd. 2.Notice of debtor's right to cancel. A debt settlement services agreement 
141.4 	must contain, on its face, in an easily readable type immediately adjacent to the space for 
141.5 	signature by the debtor, the following notice: "Right to Cancel: You have the right to 
141.6 	cancel this contract at any time on ten days' written notice."
141.7 		Subd. 3.Automatic termination. Upon the payment of all listed or settled debts 
141.8 	and fees, the debt settlement services agreement must automatically terminate, and all 
141.9 	funds held by the debt settlement services provider that exceed the fees allowed under 
141.10 	section 332B.09 must be immediately returned to the debtor.
141.11 		Subd. 4.Debt settlement services provider's right to cancel. (a) A debt settlement 
141.12 	services provider may cancel a debt settlement services agreement with good cause upon 
141.13 	30 days' written notice to the debtor.
141.14 	(b) Within ten days after the cancellation, the debt settlement services provider 
141.15 	must notify the debtor's creditors with whom the debt settlement services provider is or 
141.16 	has been, under the terms of the debt settlement services agreement, in communication, 
141.17 	of the cancellation.
141.18 	(c) Upon cancellation, the debt settlement services provider must cease collection of 
141.19 	any monthly fees beginning in the month following cancellation.
141.20 	(d) A debt settlement services provider is entitled to the full amount of the fees 
141.21 	provided for in the debt settlement services agreement if the provider can show that:
141.22 	(1) the provider obtained a settlement offer from the creditor or creditors in 
141.23 	accordance with the debt settlement services agreement;
141.24 	(2) the debtor rejected the settlement offer; or
141.25 	(3) within the period contemplated in the debt settlement services agreement, the 
141.26 	debtor entered into a settlement agreement with the same creditor or creditors for an 
141.27 	amount equal to or lower than the settlement offer obtained by the provider.

141.28 	Sec. 25. [332B.08] BOOKS, RECORDS, AND INFORMATION.
141.29 		Subdivision 1.Records retention; annual report. Every registrant must keep, and 
141.30 	use in the registrant's business, such books, accounts, and records, including electronic 
141.31 	records, as will enable the commissioner to determine whether the registrant is complying 
141.32 	with this chapter and the rules, orders, and directives adopted by the commissioner under 
141.33 	this chapter. Every registrant must preserve such books, accounts, and records for at least 
141.34 	six years after making the final entry on any transaction recorded therein. Examinations 
141.35 	of the books, records, and method of operations conducted under the supervision of the 
142.1 	commissioner shall be done at the cost of the registrant. The cost must be assessed as 
142.2 	determined under section 46.131.
142.3 		Subd. 2.Annual report. On or before March 15 of each calendar year, 
142.4 	each registrant must file a report with the commissioner containing information the 
142.5 	commissioner may require about the preceding calendar year. The report must be in a 
142.6 	form the commissioner prescribes.
142.7 		Subd. 3.Statements to debtors. (a) Each registrant must:
142.8 	(1) maintain and make available records and accounts that will enable each debtor to 
142.9 	ascertain the amounts paid to the creditors, if any. A statement showing amounts received 
142.10 	from the debtor, disbursements, if any, to each creditor, amounts that any creditor has 
142.11 	agreed to as payment in full for any debt owed the creditor by the debtor, fees deducted by 
142.12 	the registrant, and other information the commissioner may prescribe, must be furnished 
142.13 	by the registrant to the debtor at least monthly and, in addition, upon any cancellation or 
142.14 	termination of the contract;
142.15 	(2) include in the statement furnished to debtors a list of all activities conducted 
142.16 	pursuant to the contract, including the nature of communications and progress of 
142.17 	negotiations with each creditor during the reporting period; and
142.18 	(3) prepare and retain in the file of each debtor a written analysis of the debtor's 
142.19 	income and expenses to substantiate that the plan of payment is feasible and practicable.
142.20 	(b) Each debtor must have reasonable access, without cost, by electronic or other 
142.21 	means, to information in the registrant's files applicable to the debtor. These statements, 
142.22 	records, and accounts must otherwise remain confidential, except for duly authorized 
142.23 	state and government officials, the commissioner, the attorney general, the debtor, and 
142.24 	the debtor's representative and designees.

142.25 	Sec. 26. [332B.09] FEES; WITHDRAWAL OF CREDITORS; NOTIFICATION 
142.26 	TO DEBTOR OF SETTLEMENT OFFER.
142.27 		Subdivision 1.Choice of fee structure. A debt settlement services provider may 
142.28 	calculate fees on a percentage of debt basis or on a percentage of savings basis. The fee 
142.29 	structure shall be clearly disclosed and explained in the debt settlement services agreement.
142.30 		Subd. 2.Fees as a percentage of debt. (a) The total amount of the fees claimed, 
142.31 	demanded, charged, collected, or received under this subdivision shall be calculated as 
142.32 	15 percent of the aggregate debt. A debt settlement services provider that calculates 
142.33 	fees as a percentage of debt may:
142.34 	(1) charge an origination fee, which may be designated by the debt settlement 
142.35 	services provider as nonrefundable, of:
143.1 	(i) $200 on aggregate debt of less than $20,000; or
143.2 	(ii) $400 on aggregate debt of $20,000 or more;
143.3 	(2) charge a monthly fee of:
143.4 	(i) no greater than $50 per month on aggregate debt of less than $40,000; and 
143.5 	(ii) no greater than $60 per month on aggregate debt of $40,000 or more; and
143.6 	(3) charge a settlement fee for the remainder of the allowable fees, which may be 
143.7 	demanded and collected no earlier than upon delivery to the debt settlement services 
143.8 	provider by a creditor of a bona fide written settlement offer consistent with the terms of 
143.9 	the debt settlement services agreement. A settlement fee may be assessed for each debt 
143.10 	settled, but the sum total of the origination fee, the monthly fee, and the settlement fee 
143.11 	may not exceed 15 percent of the aggregate debt.
143.12 	(b) When a settlement offer is obtained by a debt settlement services provider from a 
143.13 	creditor, the collection of any monthly fees shall cease beginning the month following the 
143.14 	month in which the settlement offer was obtained by the debt settlement services provider.
143.15 	(c) In no event may more than 40 percent of the total amount of fees allowable be 
143.16 	claimed, demanded, charged, collected, or received by a debt settlement services provider 
143.17 	any earlier than upon delivery to the debt settlement services provider by a creditor of 
143.18 	a bona fide written settlement offer consistent with the terms of the debt settlement 
143.19 	services agreement.
143.20 		Subd. 3.Fees as a percentage of savings. (a) The total amount of the fees claimed, 
143.21 	demanded, charged, collected, or received under this subdivision shall be calculated as 30 
143.22 	percent of the savings actually negotiated by the debt settlement services provider. The 
143.23 	savings shall be calculated as the difference between the aggregate debt that is stated 
143.24 	in the debt settlement services agreement at the time of its execution and total amount 
143.25 	that the debtor actually pays to settle all the debts stated in the debt settlement services 
143.26 	agreement, provided that only savings resulting from concessions actually negotiated by 
143.27 	the debt settlement services provider may be counted. A debt settlement services provider 
143.28 	that calculates fees as a percentage of debt may:
143.29 	(1) charge an origination fee, which may be designated by the debt settlement 
143.30 	services provider as nonrefundable, of:
143.31 	(i) $300 on aggregate debt of less than $20,000; or
143.32 	(ii) $500 on aggregate debt of $20,000 or more;
143.33 	(2) charge a monthly fee of:
143.34 	(i) no greater than $65 on aggregate debt of less than $40,000; and
143.35 	(ii) no greater than $75 on aggregate debt of $40,000 or more; and
144.1 	(3) charge a settlement fee for the remainder of the allowable fees, which may be 
144.2 	demanded and collected no earlier than upon delivery to the debt settlement services 
144.3 	provider by a creditor of a bona fide, final written settlement offer consistent with the 
144.4 	terms of the debt settlement services agreement. A settlement fee may be assessed for each 
144.5 	debt settled, but the sum total of the origination fee, the monthly fee, and the settlement 
144.6 	fee may not exceed 30 percent of the savings, as calculated under paragraph (a).
144.7 	(b) The collection of monthly fees shall cease under this subdivision when the 
144.8 	total of monthly fees and the origination fee equals 50 percent of the total fees allowable 
144.9 	under this subdivision. For the purposes of this subdivision, 50 percent of the total fees 
144.10 	allowable shall assume a settlement of 50 cents on the dollar.
144.11 	(c) In no event may more than 50 percent of the total amount of fees allowable be 
144.12 	claimed, demanded, charged, collected, or received by a debt settlement services provider 
144.13 	any earlier than upon delivery to the debt settlement services provider by a creditor of a 
144.14 	bona fide, final written settlement offer consistent with the terms of the debt settlement 
144.15 	services agreement.
144.16 		Subd. 4.Fees exclusive. No fees, charges, assessments, or any other compensation 
144.17 	may be claimed, demanded, charged, collected, or received other than the fees allowed 
144.18 	under this section. Any fees collected in excess of those allowed under this section must 
144.19 	be immediately returned to the debtor.
144.20 		Subd. 5.Withdrawal of creditor. Whenever a creditor withdraws from a debt 
144.21 	settlement services plan, the debt settlement services provider must promptly notify the 
144.22 	debtor of the withdrawal, identify the creditor, and inform the debtor of the right to modify 
144.23 	the debt settlement services agreement, unless at least 50 percent of the listed creditors 
144.24 	withdraw, in which case the debt settlement services provider must notify the debtor of the 
144.25 	debtor's right to cancel. In no case may this notice be provided more than 15 days after the 
144.26 	debt settlement services provider learns of the creditor's decision to withdraw from a plan.
144.27 		Subd. 6.Timely notification of settlement offer. A debt settlement services 
144.28 	provider must make all reasonable efforts to notify the debtor within 24 hours of a 
144.29 	settlement offer made by a creditor.

144.30 	Sec. 27. [332B.10] PROHIBITIONS.
144.31 	No debt settlement services provider shall:
144.32 	(1) engage in any activity, act, or omission prohibited under section 332A.14;
144.33 	(2) promise, guarantee, or directly or indirectly imply, infer, or in any manner 
144.34 	represent that any debt will be settled prior to the presentation to the debtor of an offer by 
144.35 	the creditors participating in the debt settlement plan to settle;
145.1 	(3) misrepresent the timing of negotiations with creditors;
145.2 	(4) imply, infer, or in any manner represent that:
145.3 	(i) fees, interest, and other charges will not continue to accrue prior to the time 
145.4 	debts are settled;
145.5 	(ii) wages or bank accounts are not subject to garnishment;
145.6 	(iii) creditors will not continue to contact the debtor;
145.7 	(iv) the debtor is not subject to legal action; and
145.8 	(v) the debtor will not be subject to tax consequences for the portion of any debts 
145.9 	forgiven;
145.10 	(5) execute a power of attorney or any other agreement, oral or written, express 
145.11 	or implied, that extinguishes or limits the debtor's right at any time to contract or 
145.12 	communicate with any creditor or the creditor's right at any time to communicate with 
145.13 	the debtor;
145.14 	(6) exercise or attempt to exercise a power of attorney after an individual has 
145.15 	terminated an agreement;
145.16 	(7) state, imply, infer, or, in any other manner, indicate that entering into a debt 
145.17 	settlement services agreement or settling debts will either have no effect on, or improve, 
145.18 	the debtor's credit, credit rating, and credit score;
145.19 	(8) challenge a debt without the written consent of the debtor;
145.20 	(9) make any false or misleading claim regarding a creditor's right to collect a debt;
145.21 	(10) falsely represent that the debt settlement services provider can negotiate better 
145.22 	settlement terms with a creditor than the debtor alone can negotiate;
145.23 	(11) provide or offer to provide legal advice or legal services unless the person 
145.24 	providing or offering to provide legal advice is licensed to practice law in the state;
145.25 	(12) misrepresent that it is authorized or competent to furnish legal advice or 
145.26 	perform legal services; and
145.27 	(13) settle a debt or lead an individual to believe that a payment to a creditor is in 
145.28 	settlement of a debt to the creditor unless, at the time of settlement, the individual receives 
145.29 	a certification from the creditor that the payment is in full settlement of the debt.

145.30 	Sec. 28. [332B.11] ADVERTISEMENT AND SOLICITATION OF DEBT 
145.31 	SETTLEMENT SERVICES.
145.32 		Subdivision 1.Advertisement. No debt settlement services provider or lead 
145.33 	generator may:
146.1 	(1) make any false, deceptive, or misleading statements or omissions about the rates, 
146.2 	terms, or conditions of an actual or proposed debt settlement services plan, or create the 
146.3 	likelihood of consumer confusion or misunderstanding regarding its services;
146.4 	(2) represent that the debt settlement services provider is a nonprofit, not-for-profit, 
146.5 	or has similar status or characteristics if some or all of the debt settlement services will 
146.6 	be provided by a for-profit company that is a controlling or affiliated party to the debt 
146.7 	settlement services provider;
146.8 	(3) make any communication that gives the impression that the debt settlement 
146.9 	services provider is acting on behalf of a government agency; or
146.10 	(4) represent, claim, imply, or infer that secured debts may be settled.
146.11 		Subd. 2.Solicitation by lead generators. (a) In all print, electronic, and nonprint 
146.12 	solicitations, including Web sites and radio or television advertising, a lead generator must 
146.13 	prominently make the following verbatim disclosure: "This company does not actually 
146.14 	provide any debt settlement, debt consolidation, or other credit counseling services. We 
146.15 	ONLY refer you to companies that want to provide some or all of those services."
146.16 	(b) A lead generator may not, in any advertising or solicitation to debtors:
146.17 	(1) represent that any service is guaranteed; or
146.18 	(2) misrepresent the benefits of its services or debt settlement or consolidation in 
146.19 	comparison to credit counseling, debt management, or bankruptcy.

146.20 	Sec. 29. [332B.12] DEBT SETTLEMENT SERVICES AGREEMENT 
146.21 	RESCISSION.
146.22 	Any debtor has the right to rescind any debt settlement services agreement with a 
146.23 	debt settlement services provider that commits a material violation of this chapter. On 
146.24 	rescission, all fees paid to the debt settlement services provider or any other person other 
146.25 	than creditors of the debtor must be returned to the debtor entering into the debt settlement 
146.26 	services agreement within ten days of rescission of the debt settlement services agreement.

146.27 	Sec. 30. [332B.13] ENFORCEMENT; REMEDIES.
146.28 		Subdivision 1.Violation as deceptive practice. A violation of any of the provisions 
146.29 	of this chapter is considered an unfair or deceptive trade practice under section 8.31, 
146.30 	subdivision 1. A private right of action under section 8.31 by an aggrieved debtor is in 
146.31 	the public interest.
146.32 		Subd. 2.Private right of action. (a) A debt settlement provider who fails to 
146.33 	comply with any of the provisions of this chapter, or a lead generator who violates section 
146.34 	332B.11, is liable under this section in an individual action for the sum of:
147.1 	(1) actual, incidental, and consequential damages sustained by the debtor as a result 
147.2 	of the failure; and
147.3 	(2) statutory damages of up to $5,000.
147.4 	(b) A debt settlement provider who fails to comply with any of the provisions of 
147.5 	this chapter, or a lead generator who violates section 332B.11, is liable to the named 
147.6 	plaintiffs under this section in a class action for the amount that each named plaintiff 
147.7 	could recover under paragraph (a), clause (1), and to the other class members for such 
147.8 	amount as the court may allow.
147.9 	(c) In determining the amount of statutory damages, the court shall consider, among 
147.10 	other relevant factors:
147.11 	(1) the frequency, nature, and persistence of noncompliance;
147.12 	(2) the extent to which the noncompliance was intentional; and
147.13 	(3) in the case of a class action, the number of debtors adversely affected.
147.14 	(d) A plaintiff or class successful in a legal or equitable action under this section is 
147.15 	entitled to the costs of the action, plus reasonable attorney fees.
147.16 		Subd. 3.Injunctive relief. (a) A debtor may sue a debt settlement services provider 
147.17 	for temporary or permanent injunctive or other appropriate equitable relief to prevent 
147.18 	violations of any provision of this chapter. A court must grant injunctive relief on a 
147.19 	showing that the debt settlement services provider has violated any provision of this 
147.20 	chapter, or in the case of a temporary injunction, on a showing that the debtor is likely to 
147.21 	prevail on allegations that the debt settlement services provider violated any provision 
147.22 	of this chapter.
147.23 	(b) A debtor may sue a lead generator for temporary or permanent injunctive or other 
147.24 	appropriate equitable relief to prevent violations of section 332B.11. A court must grant 
147.25 	injunctive relief on a showing that the lead generator has violated section 332B.11, or in 
147.26 	the case of a temporary injunction, on a showing that the debtor is likely to prevail on 
147.27 	allegations that the lead generator violated section 332B.11.
147.28 		Subd. 4.Remedies cumulative. The remedies provided in this section are 
147.29 	cumulative and do not restrict any remedy that is otherwise available. The provisions 
147.30 	of this chapter are not exclusive and are in addition to any other requirements, rights, 
147.31 	remedies, and penalties provided by law.
147.32 		Subd. 5.Public enforcement. The attorney general shall enforce this chapter 
147.33 	under section 8.31.

147.34 	Sec. 31. [332B.14] INVESTIGATIONS.
148.1 	At any reasonable time, the commissioner may examine the books and records of 
148.2 	every registrant and of any person engaged in the business of providing debt settlement 
148.3 	services. The commissioner, once during any calendar year, may require the submission 
148.4 	of an audit prepared by a certified public accountant of the books and records of each 
148.5 	registrant. If the registrant has, within one year previous to the commissioner's demand, 
148.6 	had an audit prepared for some other purpose, this audit may be submitted to satisfy the 
148.7 	requirement of this section. The commissioner may investigate any complaint concerning 
148.8 	violations of this chapter and may require the attendance and sworn testimony of witnesses 
148.9 	and the production of documents.