1.1CONFERENCE COMMITTEE REPORT ON H. F. No. 21231.2A bill for an act1.3relating to state government; environment, natural resources, and energy 1.4finance; appropriating money for environment and natural resources; authorizing 1.5sale of gift cards and certificates; establishing composting competitive grant 1.6program; modifying regulation of storm water discharges; modifying waste 1.7management reporting requirements and creating a work group; requiring 1.8nonresident all-terrain vehicle state trail pass; modifying horse trail and state 1.9park pass requirements; requiring disclosure of certain chemicals in children's 1.10products by manufacturers; requiring plastic yard waste bags to be compostable 1.11and establishing labeling standards; authorizing uses of the Hennepin County 1.12solid and hazardous waste fund; modifying greenhouse gas emissions provisions 1.13and requiring a registry; establishing and authorizing fees; providing for 1.14disposition of certain fees; modifying and establishing assessments for certain 1.15regulatory expenses; providing for fish consumption advisories in different 1.16languages; limiting use of certain funds; requiring reports; appropriating 1.17money to Department of Commerce and Public Utilities Commission to finance 1.18activities related to commerce and energy; modifying provisions related to 1.19Telecommunications Access Minnesota assessments, insurance audits, insurers 1.20and insurance products, certain financial institutions, regulated activities related 1.21to certain mortgage transactions and professionals, and debt management and 1.22debt settlement services; providing penalties and remedies; appropriating and 1.23allocating federal stimulus money for various energy programs;amending 1.24Minnesota Statutes 2008, sections 45.011, subdivision 1; 45.027, subdivision 1; 1.2546.04, subdivision 1; 46.05; 46.131, subdivision 2; 47.58, subdivision 1; 47.60, 1.26subdivisions 1, 3, 6; 48.21; 58.05, subdivision 3; 58.06, subdivision 2; 58.126; 1.2758.13, subdivision 1; 60A.124; 60A.14, subdivision 1; 60B.03, subdivision 15; 1.2860L.02, subdivision 3; 61B.19, subdivision 4; 61B.28, subdivisions 4, 8; 67A.01; 1.2967A.06; 67A.07; 67A.14, subdivisions 1, 7; 67A.18, subdivision 1; 84.0835, 1.30subdivision 3; 84.415, subdivision 5, by adding a subdivision; 84.63; 84.631; 1.3184.632; 84.788, subdivision 3; 84.922, subdivision 1a; 85.015, subdivision 1b; 1.3285.053, subdivision 10; 85.46, subdivisions 3, 4, 7; 93.481, subdivisions 1, 3, 5, 1.337; 97A.075, subdivision 1; 103G.301, subdivisions 2, 3; 115.03, subdivision 5c; 1.34115.073; 115.56, subdivision 4; 115.77, subdivision 1; 115A.1314, subdivision 2; 1.35115A.557, subdivision 3; 115A.931; 116.07, subdivision 4d; 116.41, subdivision 1.362; 116C.834, subdivision 1; 116D.045; 216B.62, subdivisions 3, 4, 5, by 1.37adding a subdivision; 216H.10, subdivision 7; 216H.11; 325E.311, subdivision 1.386; 332A.02, subdivisions 5, 8, 9, 10, 13, by adding a subdivision; 332A.04, 1.39subdivision 6; 332A.08; 332A.10; 332A.11, subdivision 2; 332A.14; Laws 2002, 1.40chapter 220, article 8, section 15; Laws 2007, chapter 57, article 1, section 1.414, subdivision 2; Laws 2008, chapter 363, article 5, section 4, subdivision 1.427; proposing coding for new law in Minnesota Statutes, chapters 60A; 61A; 2.167A; 84; 93; 115A; 116; 216H; 325E; 383B; proposing coding for new law as 2.2Minnesota Statutes, chapter 332B; repealing Minnesota Statutes 2008, sections 2.360A.129; 61B.19, subdivision 6; 67A.14, subdivision 5; 67A.17; 67A.19; Laws 2.42008, chapter 363, article 5, section 30; Minnesota Rules, parts 2675.2180; 2.52675.7100; 2675.7110; 2675.7120; 2675.7130; 2675.7140.2.6May 4, 20092.7The Honorable Margaret Anderson Kelliher2.8Speaker of the House of Representatives2.9The Honorable James P. Metzen2.10President of the Senate2.11We, the undersigned conferees for H. F. No. 2123 report that we have agreed upon 2.12the items in dispute and recommend as follows:2.13That the Senate recede from its amendment and that H. F. No. 2123 be further 2.14amended as follows:2.15Delete everything after the enacting clause and insert:2.16"ARTICLE 12.17ENVIRONMENT AND NATURAL RESOURCES FINANCE

2.18Section 1. SUMMARY OF APPROPRIATIONS.

2.19    The amounts shown in this section summarize direct appropriations, by fund, made 2.20in this article.

2.2120102011Total2.22General$112,820,000$111,945,000$224,765,0002.232.24State Government Special Revenue48,00048,00096,0002.25Environmental69,064,00069,188,000138,252,0002.26Natural Resources82,010,00080,910,000162,920,0002.27Game and Fish94,312,00093,912,000188,224,0002.28Remediation11,186,00011,186,00022,372,0002.29Permanent School200,000200,000400,0002.30Total$369,640,000$367,389,000$737,029,000

2.31Sec. 2. ENVIRONMENT AND NATURAL RESOURCES APPROPRIATIONS.

2.32    The sums shown in the columns marked "Appropriations" are appropriated to the 2.33agencies and for the purposes specified in this article. The appropriations are from the 2.34general fund, or another named fund, and are available for the fiscal years indicated 3.1for each purpose. The figures "2010" and "2011" used in this article mean that the 3.2appropriations listed under them are available for the fiscal year ending June 30, 2010, or 3.3June 30, 2011, respectively. "The first year" is fiscal year 2010. "The second year" is fiscal 3.4year 2011. "The biennium" is fiscal years 2010 and 2011. Appropriations for the fiscal 3.5year ending June 30, 2009, are effective the day following final enactment.

3.6APPROPRIATIONS3.7Available for the Year3.8Ending June 303.920102011

3.10Sec. 3. POLLUTION CONTROL AGENCY

3.11Subdivision 1.Total Appropriation$90,969,000$90,493,000

3.12Appropriations by Fund3.13201020113.14General10,771,00010,171,0003.153.16State Government Special Revenue48,00048,0003.17Environmental69,064,00069,188,0003.18Remediation11,086,00011,086,000

3.19The amounts that may be spent for each 3.20purpose are specified in the following 3.21subdivisions.3.22The commissioner shall require the chief 3.23financial officer or other financial staff to 3.24display the agency's budget on the agency's 3.25Web site in a manner that will allow citizens 3.26to understand more easily the value they are 3.27getting for their money. The agency must 3.28have an air permit and regulatory account, 3.29water permit and regulatory account, and 3.30solid waste permit and regulatory account to 3.31track revenues and expenses.4.1By October 1, 2010 and 2011, the 4.2commissioner shall submit a report to the 4.3chairs of the legislative committees with 4.4primary jurisdiction over the environment 4.5and natural resources policy and finance 4.6that includes the number of environmental 4.7assessment worksheets completed in the 4.8previous fiscal year, the total number of 4.9staff hours spent on those environmental 4.10assessment worksheets, and the average and 4.11median number of hours spent per completed 4.12environmental assessment worksheet.4.13Fee rules adopted by the agency during fiscal 4.14year 2010 are effective retroactively on July 4.151, 2009.4.16A recipient of a grant funded by an 4.17appropriation under this section shall display 4.18on its Web site detailed information on 4.19the expenditure of the grant funds, and 4.20measurable outcomes as a result of the 4.21expenditure of funds, and submit this 4.22information to the agency by June 30 each 4.23year. A recipient without an active Web site 4.24shall report to the agency by June 30 each 4.25year detailed information on the expenditure 4.26of the grant funds, and measurable outcomes 4.27as a result of the expenditure of funds. The 4.28commissioner shall display the information 4.29received by recipients under this paragraph 4.30on the agency's Web site.

4.31Subd. 2.Water33,867,00033,267,000

4.32Appropriations by Fund4.33General8,148,0007,548,0005.15.2State Government Special Revenue48,00048,0005.3Environmental25,671,00025,671,000

5.4$2,348,000 the first year and $2,348,000 5.5the second year are for the clean water 5.6partnership program. Priority shall be 5.7given to projects preventing impairments 5.8and degradation of lakes, rivers, streams, 5.9and groundwater according to Minnesota 5.10Statutes, section 114D.20, subdivision 2, 5.11clause (4). Funds from this appropriation 5.12may not be used to purchase or use pesticides 5.13suspected by current science of being 5.14endocrine disruptors. To the extent possible, 5.15with money from this appropriation, a 5.16person must plant vegetation or sow seed 5.17only of ecotypes native to Minnesota, and 5.18preferably of the local ecotype, using a high 5.19diversity of species originating from as 5.20close to the restoration site as possible, and 5.21protect existing native prairies from genetic 5.22contamination. Any balance remaining in the 5.23first year does not cancel and is available for 5.24the second year.5.25$2,164,000 the first year and $2,164,000 the 5.26second year must be distributed as grants to 5.27delegated counties to administer the county 5.28feedlot program under new Minnesota 5.29Statutes, section 116.0711, subdivisions 2 5.30and 3. Any money remaining after the first 5.31year is available for the second year.5.32$310,000 the first year and $310,000 the 5.33second year are for community technical 5.34assistance and education, including grants 6.1and technical assistance to communities for 6.2local and basinwide water quality protection.6.3$100,000 the first year is for grants to 6.4local units of government to implement 6.5cost-effective projects to control runoff, 6.6prevent erosion, and provide ditch 6.7stabilization, in order to protect water quality 6.8in lakes, rivers, and streams and to protect 6.9groundwater from degradation. This is a 6.10onetime appropriation.6.11$350,000 the first year and $350,000 the 6.12second year are for challenge grants to 6.13counties for subsurface sewage treatment 6.14system (SSTS) inventories that will 6.15determine the number of systems that are 6.16failing or that pose an imminent health threat 6.17and are located on riparian land or a lake 6.18or near wetlands or other sensitive waters. 6.19Counties must provide a nonstate match of 6.20at least 50 percent that may be in cash or in 6.21kind. The commissioner shall, by county, 6.22report: the number of systems evaluated, the 6.23number of systems determined to be failing 6.24or that pose an imminent health threat located 6.25on riparian land or a lake or near wetlands or 6.26other sensitive waters, the number replaced 6.27or soon to be replaced, and the gallons of 6.28sewage that are prevented from threatening 6.29waters. The commissioner shall develop 6.30recommendations and a plan for directly 6.31or indirectly inspecting and providing an 6.32inventory for all subsurface sewage treatment 6.33systems and submit a report to the chairs of 6.34the legislative committees having primary 6.35jurisdiction over environment and natural 6.36resources policy and finance no later than 7.1September 15, 2010. Direct inspection 7.2methods shall include field verification of 7.3each SSTS on riparian land or a lake or 7.4near wetlands or other sensitive waters to 7.5determine the owner, location, and which 7.6systems are failing or are an imminent 7.7health threat. Indirect inspection methods 7.8may include census-type data collection to 7.9determine the owner and location of each 7.10SSTS in the remaining portion of each 7.11county. An SSTS with a valid certificate of 7.12compliance may be considered inventoried 7.13without further work. This is a onetime 7.14appropriation.7.15$375,000 the first year and $375,000 the 7.16second year are for subsurface sewage 7.17treatment system (SSTS) administration and 7.18grants. Of this amount, $80,000 each year 7.19is for assistance to counties through grants 7.20for SSTS program administration. Any 7.21unexpended balance in the first year does not 7.22cancel but is available in the second year.7.23$740,000 the first year and $740,000 the 7.24second year are from the environmental 7.25fund to address the need for continued 7.26increased activity in the areas of new 7.27technology review, technical assistance 7.28for local governments, and enforcement 7.29under Minnesota Statutes, sections 115.55 7.30to 115.58, and to complete the requirements 7.31of Laws 2003, chapter 128, article 1, section 7.32165. Of this amount, $48,000 each year is for 7.33administration of individual septic tank fees, 7.34as provided in this article.8.1$1,250,000 the first year and $1,250,000 8.2the second year are for assessment and 8.3monitoring of lakes, rivers, and streams.8.4$100,000 the first year and $100,000 the 8.5second year are for a grant to the Red River 8.6Watershed Management Board to enhance 8.7and expand existing river watch activities in 8.8the Red River of the North and shall enhance 8.9student understanding of the causes of 8.10flooding, flood prevention, and the impacts 8.11of flood waters on land and water resources. 8.12The Red River Watershed Management 8.13Board shall provide a report that includes 8.14formal evaluation results from the river 8.15watch program to the commissioners of 8.16education and the Pollution Control Agency 8.17and to the legislative committees with 8.18jurisdiction over the environment and natural 8.19resources policy and finance and K-12 policy 8.20and finance by February 15, 2011. This is a 8.21onetime appropriation.8.22$7,540,000 the first year and $7,540,000 8.23the second year are from the environmental 8.24fund for completion of 20 percent of the 8.25needed statewide assessments of surface 8.26water quality and trends.8.27$500,000 the first year is to develop minimal 8.28impact design standards for urban storm 8.29water runoff. This is a onetime appropriation 8.30and is available until June 30, 2011. The 8.31commissioner shall report to the chairs and 8.32ranking minority members of the legislative 8.33committees and divisions having primary 8.34jurisdiction over environment and natural 8.35resources policy and finance no later than 9.1January 12, 2011, regarding the expenditure 9.2of this appropriation.9.3By October 1, 2009 and 2010, the 9.4commissioner shall report to the chairs 9.5of the legislative committees having 9.6primary jurisdiction over environment and 9.7natural resources policy and finance on the 9.8effectiveness of enforcement actions in the 9.9previous fiscal year in preventing water 9.10pollution.9.11The commissioner shall continue the 9.12rulemaking process to better align water 9.13permit fee revenue for fiscal years 2010, 9.142011, 2012, and 2013 with the cost of issuing 9.15permits, including environmental review.9.16Notwithstanding Minnesota Statutes, section 9.1716A.28, the appropriations encumbered on or 9.18before June 30, 2011, as grants or contracts 9.19for clean water partnership, SSTS's, surface 9.20water and groundwater assessments, total 9.21maximum daily loads, stormwater, and local 9.22basinwide water quality protection in this 9.23subdivision are available until June 30, 2013.

9.24Subd. 3.Air11,871,00012,131,000

9.25Appropriations by Fund9.26Environmental11,871,00012,131,000

9.27Up to $150,000 the first year and $150,000 9.28the second year may be transferred from the 9.29environmental fund to the small business 9.30environmental improvement loan account 9.31established in Minnesota Statutes, section 9.32116.993.10.1$200,000 the first year and $200,000 the 10.2second year are from the environmental fund 10.3for a monitoring program under Minnesota 10.4Statutes, section 116.454.10.5$125,000 the first year and $125,000 the 10.6second year are from the environmental fund 10.7for monitoring ambient air for hazardous 10.8pollutants in the metropolitan area.10.9An agency report on the level of fine 10.10particulate matter in Minnesota's air must 10.11compare measured levels with a 24-hour 10.12PM 2.5 standard of 13 to 14 micrograms 10.13per cubic meter and an annual PM 2.5 10.14standard of 30 to 35 micrograms per cubic 10.15meter, as recommended by the Particulate 10.16Matter Review Panel of the Environmental 10.17Protection Agency's Clean Air Scientific 10.18Advisory Committee in its June 2005 report, 10.19EPA's Review of the National Ambient Air 10.20Quality Standards for Particulate Matter 10.21(Second Draft PM Staff Paper, January 10.222005).10.23$700,000 the first year and $700,000 the 10.24second year are from the environmental 10.25fund for an air emissions database, including 10.26monitoring greenhouse gas emissions.10.27The commissioner shall continue the 10.28rulemaking process to better align air quality 10.29fee revenue for fiscal years 2010, 2011, 2012, 10.30and 2013 with the cost of issuing permits, 10.31including environmental review.

10.32Subd. 4.Land18,467,00018,467,000

11.1Appropriations by Fund11.2General465,000465,00011.3Environmental6,916,0006,916,00011.4Remediation11,086,00011,086,000

11.5All money for environmental response, 11.6compensation, and compliance in the 11.7remediation fund not otherwise appropriated 11.8is appropriated to the commissioners of the 11.9Pollution Control Agency and agriculture 11.10for purposes of Minnesota Statutes, section 11.11115B.20, subdivision 2, clauses (1), (2), 11.12(3), (6), and (7). At the beginning of each 11.13fiscal year, the two commissioners shall 11.14jointly submit an annual spending plan to 11.15the commissioner of finance that maximizes 11.16the utilization of resources and appropriately 11.17allocates the money between the two 11.18departments. This appropriation is available 11.19until June 20, 2011.11.20$3,616,000 the first year and $3,616,000 the 11.21second year are from the petroleum tank fund 11.22to be transferred to the remediation fund for 11.23purposes of the leaking underground storage 11.24tank program to protect the land.11.25$252,000 the first year and $252,000 the 11.26second year are from the remediation fund to 11.27be transferred to the Department of Health for 11.28private water supply monitoring and health 11.29assessment costs in areas contaminated 11.30by unpermitted mixed municipal solid 11.31waste disposal facilities and drinking water 11.32advisories and public information activities 11.33for areas contaminated by hazardous releases.12.1$500,000 each year is for environmental 12.2health tracking and biomonitoring of a 12.3representative sample of the population 12.4including indigenous people and people of 12.5color. Of this amount, $450,000 each year is 12.6for transfer to the Department of Health.

12.712.8Subd. 5.Environmental Assistance and Cross-Media25,420,00025,284,000

12.9Appropriations by Fund12.10General814,000814,00012.11Environmental24,606,00024,470,000

12.12$14,250,000 each year is from the 12.13environmental fund for SCORE block grants 12.14to counties.12.15$250,000 each year is from the environmental 12.16fund to administer the composting 12.17grant program established under new 12.18Minnesota Statutes, section 115A.559. The 12.19appropriation is added to the agency base 12.20and available until June 30, 2011.12.21By January 15, 2012, the commissioner shall 12.22report to the legislative committees with 12.23jurisdiction over environment and natural 12.24resources policy on:12.25(1) the mixed municipal solid waste diversion 12.26rates accomplished by the grant program 12.27under new Minnesota Statutes, section 12.28115A.559;12.29(2) participants in the grant program and the 12.30programs developed with grant funds; and12.31(3) the potential for new permanent programs 12.32based on results of projects funded with 13.1grants issued under new Minnesota Statutes, 13.2section 115A.559.13.3$225,000 the first year and $89,000 the 13.4second year are from the environmental 13.5fund for duties related to harmful chemicals 13.6in products under new Minnesota Statutes, 13.7sections 116.9401 to 116.9407. Of this 13.8amount, $133,000 the first year and $57,000 13.9the second year are for transfer to the 13.10Department of Health.13.11$119,000 the first year and $119,000 the 13.12second year are from the environmental 13.13fund for environmental assistance grants 13.14or loans under Minnesota Statutes, section 13.15115A.0716. Any unencumbered grant and 13.16loan balances in the first year do not cancel 13.17but are available for grants and loans in the 13.18second year.13.19All money deposited in the environmental 13.20fund for the metropolitan solid waste 13.21landfill fee in accordance with Minnesota 13.22Statutes, section 473.843, and not otherwise 13.23appropriated, is appropriated for the purposes 13.24of Minnesota Statutes, section 473.844.13.25Notwithstanding Minnesota Statutes, section 13.2616A.28, the appropriations encumbered on 13.27or before June 30, 2011, as contracts or 13.28grants for surface water and groundwater 13.29assessments; environmental assistance 13.30awarded under Minnesota Statutes, section 13.31115A.0716; technical and research assistance 13.32under Minnesota Statutes, section 115A.152; 13.33technical assistance under Minnesota 13.34Statutes, section 115A.52; and pollution 13.35prevention assistance under Minnesota 14.1Statutes, section 115D.04, are available until 14.2June 30, 2013.14.3Before the governor makes budget 14.4recommendations to the legislature in 2011, 14.5the commissioner must report on revenues 14.6received and expenditures made under 14.7Minnesota Statutes, section 115A.1314, 14.8subdivision 2, during fiscal years 2010 14.9and 2011 to determine if fees collected 14.10are covering the costs of the program and 14.11request that the governor recommend a direct 14.12appropriation for the purposes of that section.

14.13Subd. 6.Administrative Support1,344,0001,344,000

14.14The commissioner shall transfer $40,000,000 14.15from the environmental fund to the 14.16remediation fund for the purposes of the 14.17remediation fund under Minnesota Statutes, 14.18section 116.155, subdivision 2.

14.19Sec. 4. NATURAL RESOURCES

14.20Subdivision 1.Total Appropriation$245,313,000$243,813,000

14.21Appropriations by Fund14.222010201114.23General74,411,00074,411,00014.24Natural Resources76,290,00075,190,00014.25Game and Fish94,312,00093,912,00014.26Remediation100,000100,00014.27Permanent School200,000200,000

14.28The amounts that may be spent for each 14.29purpose are specified in the following 14.30subdivisions.15.1To the extent possible, a person conducting 15.2restoration with money appropriated in this 15.3section must plant vegetation or sow seed 15.4only of ecotypes native to Minnesota, and 15.5preferably of the local ecotype, using a high 15.6diversity of species originating from as 15.7close to the restoration site as possible, and 15.8protect existing native prairies from genetic 15.9contamination.15.10A recipient of a grant funded by an 15.11appropriation under this section shall display 15.12on its Web site detailed information on 15.13the expenditure of the grant funds, and 15.14measurable outcomes as a result of the 15.15expenditure of funds, and submit this 15.16information to the department by June 30 15.17each year. A recipient without an active 15.18Web site shall report to the department by 15.19June 30 each year detailed information on 15.20the expenditure of the grant funds, and 15.21measurable outcomes as a result of the 15.22expenditure of funds. The commissioner 15.23shall display the information received by 15.24recipients under this paragraph on the 15.25department's Web site.15.26The commissioner shall require the chief 15.27financial officer or other financial staff 15.28to display the department's budget on the 15.29department's Web site in a manner that will 15.30allow citizens to easily understand the value 15.31they are getting for their money.

15.3215.33Subd. 2.Land and Mineral Resources Management10,398,00010,398,000

16.1Appropriations by Fund16.2General3,351,0003,351,00016.3Natural Resources5,461,0005,461,00016.4Game and Fish1,386,0001,386,00016.5Permanent School200,000200,000

16.6$1,202,000 the first year and $1,202,000 16.7the second year are from the mining 16.8administration account in the natural 16.9resources fund to cover the costs associated 16.10with issuing mining permits.16.11$612,000 each year is from the dedicated 16.12receipts account in the natural resources fund 16.13to cover the costs associated with issuing 16.14licenses for land and water crossings and 16.15road easements.16.16$351,000 the first year and $351,000 the 16.17second year are for iron ore cooperative 16.18research. Of this amount, $200,000 each year 16.19is from the minerals management account 16.20in the natural resources fund. $175,500 the 16.21first year and $175,500 the second year are 16.22available only as matched by $1 of nonstate 16.23money for each $1 of state money. The 16.24match may be cash or in-kind.16.25$86,000 the first year and $86,000 the 16.26second year are for minerals cooperative 16.27environmental research, of which $43,000 16.28the first year and $43,000 the second year are 16.29available only as matched by $1 of nonstate 16.30money for each $1 of state money. The 16.31match may be cash or in-kind.16.32$2,696,000 the first year and $2,696,000 16.33the second year are from the minerals 17.1management account in the natural resources 17.2fund for use as provided in Minnesota 17.3Statutes, section 93.2236, paragraph (c), 17.4for mineral resource management, projects 17.5to enhance future mineral income, and 17.6projects to promote new mineral resource 17.7opportunities.17.8$200,000 the first year and $200,000 the 17.9second year are from the state forest suspense 17.10account in the permanent school fund to 17.11accelerate land exchanges, land sales, and 17.12commercial leasing of school trust lands and 17.13to identify, evaluate, and lease construction 17.14aggregate located on school trust lands. This 17.15appropriation is to be used for securing 17.16maximum long-term economic return 17.17from the school trust lands consistent with 17.18fiduciary responsibilities and sound natural 17.19resources conservation and management 17.20principles.

17.21Subd. 3.Water Resources Management11,732,00011,732,000

17.22Appropriations by Fund17.23General11,452,00011,452,00017.24Natural Resources280,000280,000

17.25By January 15, 2010, the commissioner 17.26shall submit a report evaluating and 17.27recommending options to provide for the 17.28long-term protection of the state's surface 17.29water and groundwater resources and 17.30the funding of programs to provide this 17.31protection.17.32$275,000 the first year and $275,000 the 17.33second year are for grants for up to 50 17.34percent of the cost of implementation of 18.1the Red River mediation agreement. The 18.2commissioner shall submit a report to the 18.3chairs of the legislative committees having 18.4primary jurisdiction over environment and 18.5natural resources policy and finance on the 18.6accomplishments achieved with the grants 18.7by January 15, 2012.18.8$60,000 the first year and $60,000 the 18.9second year are for a grant to the Mississippi 18.10Headwaters Board for up to 50 percent of 18.11the cost of implementing the comprehensive 18.12plan for the upper Mississippi within areas 18.13under the board's jurisdiction.18.14$5,000 the first year and $5,000 the second 18.15year are for payment to the Leech Lake Band 18.16of Chippewa Indians to implement the band's 18.17portion of the comprehensive plan for the 18.18upper Mississippi.18.19$125,000 the first year and $125,000 the 18.20second year are for the construction of ring 18.21dikes under Minnesota Statutes, section 18.22103F.161. The ring dikes may be publicly 18.23or privately owned. If the appropriation in 18.24either year is insufficient, the appropriation 18.25in the other year is available for it.18.26By October 1, 2009, the commissioner shall 18.27develop a plan for the development of an 18.28adequate groundwater level monitoring 18.29network of wells in the 11-county 18.30metropolitan area. The commissioner, 18.31working with the Metropolitan Council, 18.32the Department of Homeland Security, and 18.33the commissioner of the Pollution Control 18.34Agency, shall design the network so that 18.35the wells can be used to identify threats to 19.1groundwater quality and institute practices to 19.2protect the groundwater from degradation. 19.3The network must be sufficient to ensure 19.4that water use in the metropolitan area 19.5does not harm ecosystems, degrade water 19.6quality, or compromise the ability of future 19.7generations to meet their own needs. The 19.8plan should include recommendations on 19.9the necessary payment rates for users of the 19.10system expressed in cents per gallon for well 19.11drilling, operation, and maintenance.

19.12Subd. 4.Forest Management39,609,00038,259,000

19.13Appropriations by Fund19.14General25,952,00025,952,00019.15Natural Resources12,193,00011,093,00019.16Game and Fish1,464,0001,214,000

19.17$2,000,000 each year is to maintain forest 19.18management operations. This is a onetime 19.19appropriation.19.20$1,200,000 the first year and $950,000 19.21the second year are from the heritage 19.22enhancement account in the game and fish 19.23fund to maintain and expand the ecological 19.24classification system program on state forest 19.25lands and prevent the introduction and spread 19.26of invasive species on state lands. This is a 19.27onetime appropriation.19.28$7,217,000 the first year and $7,217,000 19.29the second year are for prevention, 19.30presuppression, and suppression costs of 19.31emergency firefighting and other costs 19.32incurred under Minnesota Statutes, section 19.3388.12. If the appropriation for either 20.1year is insufficient to cover all costs of 20.2presuppression and suppression, the amount 20.3necessary to pay for these costs during the 20.4biennium is appropriated from the general 20.5fund.20.6By January 15 of each year, the commissioner 20.7of natural resources shall submit a report to 20.8the chairs and ranking minority members 20.9of the house and senate committees 20.10and divisions having jurisdiction over 20.11environment and natural resources finance, 20.12identifying all firefighting costs incurred 20.13and reimbursements received in the prior 20.14fiscal year. These appropriations may 20.15not be transferred. Any reimbursement 20.16of firefighting expenditures made to the 20.17commissioner from any source other than 20.18federal mobilizations shall be deposited into 20.19the general fund.20.20$12,193,000 the first year and $11,093,000 20.21the second year are from the forest 20.22management investment account in the 20.23natural resources fund for only the purposes 20.24specified in Minnesota Statutes, section 20.2589.039, subdivision 2.20.26$780,000 the first year and $780,000 the 20.27second year are for the Forest Resources 20.28Council for implementation of the 20.29Sustainable Forest Resources Act. 

20.30Subd. 5.Parks and Trails Management67,372,00067,372,000

20.31Appropriations by Fund20.32General21,857,00021,857,00021.1Natural Resources43,321,00043,321,00021.2Game and Fish2,194,0002,194,000

21.3$1,175,000 the first year and $1,175,000 the 21.4second year are from the water recreation 21.5account in the natural resources fund for 21.6enhancing public water access facilities. 21.7Of this amount, $100,000 is a onetime 21.8appropriation to provide downloadable 21.9GPS coordinates and river gauge data 21.10interpretation. The base appropriation is 21.11$1,075,000.21.12The appropriation in Laws 2003, chapter 21.13128, article 1, section 5, subdivision 6, from 21.14the water recreation account in the natural 21.15resources fund for a cooperative project with 21.16the United States Army Corps of Engineers 21.17to develop the Mississippi Whitewater Park 21.18is available until June 30, 2011. The project 21.19must be designed to prevent the spread of 21.20aquatic invasive species.21.21$4,371,000 the first year and $4,371,000 the 21.22second year are from the natural resources 21.23fund for state park and recreation area 21.24operations. Of this amount, $375,000 each 21.25year is for coordinated activities with Explore 21.26Minnesota Tourism. This appropriation is 21.27from the revenue deposited in the natural 21.28resources fund under Minnesota Statutes, 21.29section 297A.94, paragraph (e), clause (2).21.30$8,424,000 the first year and $8,424,000 21.31the second year are from the snowmobile 21.32trails and enforcement account in the 21.33natural resources fund for the snowmobile 21.34grants-in-aid program. This additional 22.1money may be used for new grant-in-aid 22.2trails. Any unencumbered balance does not 22.3cancel at the end of the first year and is 22.4available for the second year.22.5$400,000 the first year and $400,000 the 22.6second year are from the snowmobile trails 22.7and enforcement account in the natural 22.8resources fund for operation and maintenance 22.9of state trails and increased oversight and 22.10training for the grant-in-aid program. This is 22.11a onetime appropriation.22.12$1,360,000 the first year and $1,360,000 22.13the second year are from the natural 22.14resources fund for the off-highway vehicle 22.15grants-in-aid program. Of this amount, 22.16$1,110,000 each year is from the all-terrain 22.17vehicle account; $150,000 each year is from 22.18the off-highway motorcycle account; and 22.19$100,000 each year is from the off-road 22.20vehicle account. Any unencumbered balance 22.21does not cancel at the end of the first year 22.22and is available for the second year.22.23$760,000 the first year and $760,000 the 22.24second year are from the natural resources 22.25fund for state trail operations. This 22.26appropriation is from the revenue deposited 22.27in the natural resources fund under Minnesota 22.28Statutes, section 297A.94, paragraph (e), 22.29clause (2).

22.30Subd. 6.Fish and Wildlife Management67,574,00067,424,000

22.31Appropriations by Fund22.32General1,340,0001,340,00023.1Natural Resources1,976,0001,976,00023.2Game and Fish64,258,00064,108,000

23.3$100,000 the first year and $100,000 the 23.4second year are from the nongame wildlife 23.5account in the natural resources fund for gray 23.6wolf research.23.7$120,000 the first year and $120,000 the 23.8second year from the game and fish fund are 23.9for gray wolf management.23.10$285,000 the first year and $285,000 the 23.11second year are from the walleye stamp 23.12account in the game and fish fund for the 23.13purposes specified under Minnesota Statutes, 23.14section 97A.075, subdivision 6. Of this 23.15amount, $25,000 must be spent in the first 23.16year to provide signage to each independent 23.17licensed dealer for display and promotion of 23.18the walleye stamp.23.19$600,000 the first year and $600,000 the 23.20second year are to accelerate wildlife health 23.21programs. This is a onetime appropriation.23.22$1,860,000 the first year and $1,860,000 the 23.23second year are from the wildlife acquisition 23.24surcharge account for only the purposes 23.25specified in Minnesota Statutes, section 23.2697A.071, subdivision 2a. This appropriation 23.27is available until spent.23.28$8,167,000 the first year and $8,167,000 23.29the second year are from the heritage 23.30enhancement account in the game and 23.31fish fund only for activities specified in 23.32Minnesota Statutes, section 297A.94, 23.33paragraph (e), clause (1). Of this amount, at 24.1least 20 percent must be used to purchase 24.2or restore land, of which over half must 24.3be used for restoration. Notwithstanding 24.4Minnesota Statutes, section 297A.94, five 24.5percent of this appropriation may be used for 24.6expanding hunter and angler recruitment and 24.7retention. This appropriation may be used to 24.8leverage other funds and to provide fish and 24.9wildlife technical assistance for shallow lake 24.10management and restoration and stream and 24.11lake shoreland and habitat improvement and 24.12maintenance on private lands.24.13Notwithstanding Minnesota Statutes, section 24.1484.943, $13,000 the first year and $13,000 24.15the second year from the critical habitat 24.16private sector matching account may be used 24.17to publicize the critical habitat license plate 24.18match program.24.19$830,000 the first year and $830,000 the 24.20second year are from the trout and salmon 24.21management account for only the purposes 24.22specified in Minnesota Statutes, section 24.2397A.075, subdivision 3.24.24$1,553,000 the first year and $1,553,000 the 24.25second year are from the deer management 24.26account for only the purposes specified 24.27in Minnesota Statutes, section 97A.075, 24.28subdivision 1, paragraph (b).24.29$890,000 the first year and $890,000 the 24.30second year are from the deer and bear 24.31management account for only the purposes 24.32specified in Minnesota Statutes, section 24.3397A.075, subdivision 1, paragraph (c).24.34$700,000 the first year and $700,000 the 24.35second year are from the waterfowl habitat 25.1improvement account for only the purposes 25.2specified in Minnesota Statutes, section 25.397A.075, subdivision 2.25.4$925,000 the first year and $925,000 the 25.5second year are from the pheasant habitat 25.6improvement account for only the purposes 25.7specified in Minnesota Statutes, section 25.897A.075, subdivision 4.25.9$192,000 the first year and $192,000 the 25.10second year are from the wild turkey 25.11management account for only the purposes 25.12specified in Minnesota Statutes, section 25.1397A.075, subdivision 5. Of this amount, 25.14$8,000 the first year and $8,000 the second 25.15year are transferred from the game and fish 25.16fund to the wild turkey management account.25.17$535,000 the first year and $535,000 the 25.18second year are for preserving, restoring, and 25.19enhancing grassland/wetland complexes on 25.20public or private lands.25.21Notwithstanding Minnesota Statutes, section 25.2216A.28, the appropriations encumbered 25.23under contract on or before June 30, 2011, for 25.24aquatic restoration grants and wildlife habitat 25.25grants are available until June 30, 2012.

25.26Subd. 7.Ecological Services14,175,00014,175,000

25.27Appropriations by Fund25.28General6,230,0006,230,00025.29Natural Resources3,994,0003,994,00025.30Game and Fish3,951,0003,951,000

25.31$1,223,000 the first year and $1,223,000 the 25.32second year are from the nongame wildlife 25.33management account in the natural resources 26.1fund for the purpose of nongame wildlife 26.2management. Notwithstanding Minnesota 26.3Statutes, section 290.431, $100,000 the first 26.4year and $100,000 the second year may 26.5be used for nongame wildlife information, 26.6education, and promotion.26.7$1,636,000 the first year and $1,636,000 26.8the second year are from the heritage 26.9enhancement account in the game and 26.10fish fund for only the purposes specified 26.11in Minnesota Statutes, section 297A.94, 26.12paragraph (e), clause (1).26.13$2,142,000 the first year and $2,142,000 the 26.14second year are from the invasive species 26.15account, and $2,090,000 the first year 26.16and $2,090,000 the second year are from 26.17the general fund for management, public 26.18awareness, assessment and monitoring 26.19research, law enforcement, and water access 26.20inspection to prevent the spread of invasive 26.21species; management of invasive plants in 26.22public waters; and management of terrestrial 26.23invasive species on state-administered lands. 26.24Funds from this appropriation may not be 26.25used to purchase or use pesticides suspected 26.26by current science of being endocrine 26.27disruptors.26.28The commissioner shall report on the 26.29projected outcomes and goals for protecting 26.30species in all ecological provinces and the 26.31quantity and quality of groundwater and 26.32surface water of the state, including but not 26.33limited to, protecting rare and endangered 26.34species, native prairies, and wetlands, from 26.35merging ecological services and waters 27.1duties to the senate and house natural 27.2resources policy and finance committees and 27.3divisions. The commissioner shall not merge 27.4ecological services and waters duties prior to 27.5presenting the report to the committees and 27.6divisions. Any merger must include a variant 27.7of the word "ecology" in the title of the new 27.8division.

27.9Subd. 8.Enforcement31,490,00031,490,000

27.10Appropriations by Fund27.11General2,889,0002,889,00027.12Natural Resources8,531,0008,531,00027.13Game and Fish19,970,00019,970,00027.14Remediation100,000100,000

27.15$1,082,000 the first year and $1,082,000 the 27.16second year are from the water recreation 27.17account in the natural resources fund for 27.18grants to counties for boat and water safety.27.19$315,000 the first year and $315,000 the 27.20second year are from the snowmobile 27.21trails and enforcement account in the 27.22natural resources fund for grants to local 27.23law enforcement agencies for snowmobile 27.24enforcement activities.27.25$1,164,000 the first year and $1,164,000 27.26the second year are from the heritage 27.27enhancement account in the game and 27.28fish fund for only the purposes specified 27.29in Minnesota Statutes, section 297A.94, 27.30paragraph (e), clause (1).27.31$510,000 the first year and $510,000 27.32the second year are from the natural 27.33resources fund for grants to county law 28.1enforcement agencies for off-highway 28.2vehicle enforcement and public education 28.3activities based on off-highway vehicle use 28.4in the county. Of this amount, $498,000 each 28.5year is from the all-terrain vehicle account; 28.6$11,000 each year is from the off-highway 28.7motorcycle account; and $1,000 each year 28.8is from the off-road vehicle account. The 28.9county enforcement agencies may use 28.10money received under this appropriation 28.11to make grants to other local enforcement 28.12agencies within the county that have a high 28.13concentration of off-highway vehicle use. Of 28.14this appropriation, $25,000 each year is for 28.15administration of these grants.28.16$250,000 the first year and $250,000 the 28.17second year are from the all-terrain vehicle 28.18account for grants to qualifying organizations 28.19to assist in safety and environmental 28.20education and monitoring trails on public 28.21lands under Minnesota Statutes, section 28.2284.9011. Grants issued under this paragraph: 28.23(1) must be issued through a formal 28.24agreement with the organization; and (2) 28.25must not be used as a substitute for traditional 28.26spending by the organization. By December 28.2715 each year, an organization receiving a 28.28grant under this paragraph shall report to the 28.29commissioner with details on expenditures 28.30and outcomes from the grant. By January 28.3115, 2011, the commissioner shall report 28.32on the expenditures and outcomes of the 28.33grants to the chairs and ranking minority 28.34members of the natural resources policy 28.35and finance committees and divisions. Of 29.1this appropriation, $25,000 each year is for 29.2administration of these grants.29.3The commissioner must publicize 29.4opportunities for conservation officer 29.5employment and recruit, when possible, 29.6conservation officer candidates from the 29.7biological sciences departments at colleges 29.8and universities.

29.9Subd. 9.Operations Support2,963,0002,963,000

29.10Appropriations by Fund29.11General1,340,0001,340,00029.12Natural Resources534,000534,00029.13Game and Fish1,089,0001,089,000

29.14The commissioner may redirect the general 29.15fund reduction of $800,000 in fiscal year 29.162010 and $800,000 in fiscal year 2011, to 29.17other subdivisions of this section. No grants 29.18may be reduced. The commissioner shall 29.19report by October 1, 2011, to the chairs of 29.20the legislative committees having primary 29.21jurisdiction over environment and natural 29.22resources policy and finance regarding any 29.23redirection and what department outcomes 29.24were affected by the redirection.29.25$320,000 the first year and $320,000 the 29.26second year are from the natural resources 29.27fund for grants to be divided equally between 29.28the city of St. Paul for the Como Zoo 29.29and Conservatory and the city of Duluth 29.30for the Duluth Zoo. This appropriation 29.31is from the revenue deposited to the fund 29.32under Minnesota Statutes, section 297A.94, 29.33paragraph (e), clause (5).

30.130.2Sec. 5. BOARD OF WATER AND SOIL RESOURCES$15,618,000$15,343,000

30.3$3,900,000 the first year and $3,900,000 the 30.4second year are for natural resources block 30.5grants to local governments. The board may 30.6reduce the amount of the natural resources 30.7block grant to a county by an amount equal to 30.8any reduction in the county's general services 30.9allocation to a soil and water conservation 30.10district from the county's previous year 30.11allocation when the board determines that 30.12the reduction was disproportionate. Grants 30.13must be matched with a combination of local 30.14cash or in-kind contributions. The base 30.15grant portion related to water planning must 30.16be matched by an amount as specified by 30.17Minnesota Statutes, section 103B.3369.30.18$3,500,000 the first year and $3,500,000 30.19the second year are for grants requested 30.20by soil and water conservation districts for 30.21general purposes, nonpoint engineering, 30.22and implementation of the reinvest in 30.23Minnesota conservation reserve program. 30.24Upon approval of the board, expenditures 30.25may be made from these appropriations for 30.26supplies and services benefiting soil and 30.27water conservation districts. Any district 30.28requesting a grant under this paragraph shall 30.29maintain a Web page that publishes, at a 30.30minimum, its annual plan, annual report, 30.31annual audit, annual budget, including 30.32membership dues, and meeting notices and 30.33minutes.31.1$500,000 the first year and $500,000 the 31.2second year are for feedlot water quality 31.3grants for feedlots under 300 animal units 31.4where there are impaired waters.31.5$2,000,000 the first year and $2,000,000 31.6the second year are for grants to soil and 31.7water conservation districts for cost-sharing 31.8contracts for erosion control, water quality 31.9management, of which at least $900,000 31.10each year is for establishing and maintaining 31.11riparian vegetation buffers of restored native 31.12prairie and restored prairie.31.13$100,000 the first year and $100,000 31.14the second year are available for county 31.15cooperative weed management programs and 31.16to restore native plants in selected invasive 31.17species management sites by providing local 31.18native seeds and plants to landowners for 31.19implementation. 31.20Notwithstanding Minnesota Statutes, section 31.21103C.501, the board may shift cost-share 31.22funds in this section and may adjust the 31.23technical and administrative assistance 31.24portion of the grant funds to leverage 31.25federal or other nonstate funds or to address 31.26high-priority needs identified in local water 31.27management plans.31.28$500,000 the first year and $500,000 the 31.29second year are for implementation and 31.30enforcement of the Wetland Conservation 31.31Act. The board must make available 31.32information about final enforcement actions 31.33on the board's Web site.31.34$60,000 each year is for staff to monitor and 31.35enforce wetland replacement, wetland bank 32.1sites, and the Wetland Conservation Act. The 32.2board must include in its biennial report to 32.3the legislature information on all state and 32.4local units of government, including special 32.5purpose districts and impacts on wetlands 32.6in the state. This information must be made 32.7available on the board's Web site.32.8$100,000 each  year is for transfer to the 32.9commissioner of natural resources for 32.10enforcement of  wetland violations.32.11$100,000 each year is to make grants to local 32.12units  of government within the 11-county 32.13metropolitan area to improve response to 32.14major wetland violations.32.15$100,000 each year is for cost-share grants 32.16to local governments for public drainage 32.17records modernization.32.18$212,000 each year is to provide assistance 32.19to local drainage management officials and 32.20for the costs of the Drainage Work Group.32.21$90,000 the first year and $90,000 the second 32.22year are for a grant to the Red River Basin 32.23Commission for water quality and floodplain 32.24management, including administration of 32.25programs. The commission shall submit 32.26a report to the chairs of the legislative 32.27committees having primary jurisdiction 32.28over environment and natural resources 32.29policy and finance on the accomplishments 32.30achieved with this appropriation by January 32.3115, 2012. If the appropriation in either year 32.32is insufficient, the appropriation in the other 32.33year is available for it.33.1$90,000 each year is to the Minnesota River 33.2Basin Joint Powers Board, also known as 33.3the Minnesota River Board, for operating 33.4expenses to measure and report the results of 33.5projects in the 12 major watersheds within 33.6the Minnesota River basin.33.7$130,000 each year is for grants to Area 33.8II, Minnesota River Basin Projects, 33.9for floodplain management, including 33.10administration of programs.33.11Notwithstanding Minnesota Statutes, section 33.12103C.501, a balance in the board's cost-share 33.13program is available for $150,000 each year 33.14for evaluating and reporting on performance, 33.15financial, and activity information of local 33.16water management entities as provided for in 33.17Minnesota Statutes, section 103B.102.33.18The appropriations for grants in this 33.19section are available until expended. If an 33.20appropriation for grants in either year is 33.21insufficient, the appropriation in the other 33.22year is available for it.33.23To the extent possible, any person conducting 33.24a restoration with money appropriated in 33.25this section must plant vegetation or sow 33.26seed only of ecotypes native to Minnesota, 33.27and preferably of the local ecotype, using a 33.28high diversity of species originating from as 33.29close to the restoration site as possible, and 33.30protect existing native prairies from genetic 33.31contamination.33.32A recipient of a grant funded by an 33.33appropriation under this section shall display 33.34on its Web site detailed information on 33.35the expenditure of the grant funds, and 34.1measurable outcomes as a result of the 34.2expenditure of funds, and submit this 34.3information to the board by June 30 each 34.4year. A recipient without an active Web site 34.5shall report to the board by June 30 each year 34.6detailed information on the expenditure of 34.7the grant funds, and measurable outcomes 34.8as a result of the expenditure of funds. The 34.9board shall display the information received 34.10by recipients under this paragraph on the 34.11board's Web site.34.12The board shall require the chief financial 34.13officer or other financial staff to display the 34.14board's budget on the board's Web site in a 34.15manner that will allow citizens to understand 34.16more easily the value they are getting for 34.17their money.

34.18Sec. 6. METROPOLITAN COUNCIL$8,880,000$8,880,000

34.19Appropriations by Fund34.202010201134.21General3,810,0003,810,00034.22Natural Resources5,070,0005,070,000

34.23$3,810,000 the first year and $3,810,000 34.24the second year are for metropolitan area 34.25regional parks operation and maintenance 34.26according to Minnesota Statutes, section 34.27473.351.34.28$5,070,000 the first year and $5,070,000 the 34.29second year are from the natural resources 34.30fund for metropolitan area regional parks 34.31and trails maintenance and operations. This 34.32appropriation is from the revenue deposited 34.33in the natural resources fund under Minnesota 35.1Statutes, section 297A.94, paragraph (e), 35.2clause (3).

35.335.4Sec. 7. MINNESOTA CONSERVATION CORPS$945,000$945,000

35.5Appropriations by Fund35.62010201135.7General455,000455,00035.8Natural Resources490,000490,000

35.9The Minnesota Conservation Corps may 35.10receive money appropriated from the 35.11natural resources fund under this section 35.12only as provided in an agreement with the 35.13commissioner of natural resources.

35.14Sec. 8. ZOOLOGICAL BOARD$6,728,000$6,728,000

35.15Appropriations by Fund35.162010201135.17General6,568,0006,568,00035.18Natural Resources160,000160,000

35.19$160,000 the first year and $160,000 the 35.20second year are from the natural resources 35.21fund from the revenue deposited under 35.22Minnesota Statutes, section 297A.94, 35.23paragraph (e), clause (5).

35.2435.25Sec. 9. SCIENCE MUSEUM OF MINNESOTA$1,187,000$1,187,000

35.26    Sec. 10. Minnesota Statutes 2008, section 84.0835, subdivision 3, is amended to read:35.27    Subd. 3. Citation authority. Employees designated by the commissioner under 35.28subdivision 1 may issue citations, as specifically authorized under this subdivision, for 35.29violations of:36.1(1) sections 
         85.052, subdivision 3 (payment of camping fees in state parks), 36.285.45, subdivision 1
          (cross-country ski pass), and85.46 (horse trail pass), and 84.9275 36.3(nonresident all-terrain vehicle state trail pass); 36.4(2) rules relating to hours and days of operation, restricted areas, noise, fireworks, 36.5environmental protection, fires and refuse, pets, picnicking, camping and dispersed 36.6camping, nonmotorized uses, construction of unauthorized permanent trails, mooring of 36.7boats, fish cleaning, swimming, storage and abandonment of personal property, structures 36.8and stands, animal trespass, state park individual and group motor vehicle permits, 36.9licensed motor vehicles, designated roads, and snowmobile operation off trails;36.10(3) rules relating to off-highway vehicle registration, display of registration numbers, 36.11required equipment, operation restrictions, off-trail use for hunting and trapping, and 36.12operation in lakes, rivers, and streams;36.13(4) rules relating to off-highway vehicle and snowmobile operation causing damage 36.14or in closed areas within the Richard J. Dorer Memorial Hardwood State Forest;36.15(5) rules relating to parking, snow removal, and damage on state forest roads; and36.16(6) rules relating to controlled hunting zones on major wildlife management units.36.17EFFECTIVE DATE.This section is effective January 1, 2010.36.18    Sec. 11. [84.0854] GIFT CARD AND CERTIFICATE SALES; RECEIPTS; 36.19TRANSFERS; APPROPRIATION.36.20    Subdivision 1.Sales authorized; gift cards and certificates.The commissioner 36.21may sell gift cards and certificates that can be used to purchase licenses, permits, products, 36.22or services sold by the commissioner. Gift cards and certificates are valid until they 36.23are redeemed. The commissioner may advertise the availability of this program and 36.24items offered for sale under this section. The commissioner may make the purchase and 36.25redemption of gift cards available electronically.36.26    Subd. 2.Receipts; disposition.Proceeds of gift card and certificate sales shall be 36.27deposited in an account in the special revenue fund. When gift cards or certificates are 36.28redeemed, funds shall be transferred to the appropriate account or fund based on the 36.29license, permit, product, or service purchased. Money in the gift card and certificate 36.30account shall accrue interest, which shall be credited to the account. Interest on funds in 36.31the account is appropriated to the commissioner to help cover the cost of administering 36.32the gift card and certificate program. Money from gift cards and certificates sold but 36.33unredeemed after three years shall be transferred to the various accounts and funds 36.34receiving revenue from purchases of licenses, permits, products, or services purchased 36.35with gift card or certificate redemptions in the last two fiscal years. Unredeemed funds 37.1shall be distributed based on the dollar value of cards redeemed for the various licenses, 37.2permits, products, or services on a pro rata basis.37.3    Subd. 3.Exemption from rulemaking.This section is not subject to the 37.4rulemaking provisions of chapter 14 and section 14.386 does not apply.37.5    Sec. 12. Minnesota Statutes 2008, section 84.415, subdivision 5, is amended to read:37.6    Subd. 5. Fee Fees; disposition.(a) In the event the construction of such lines 37.7causes damage to timber or other property of the state on or along the same, the license 37.8or permit shall also provide for payment to the commissioner of finance of the amount 37.9thereof of the damages as may be determined by the commissioner.37.10(b) The application fee specified in Minnesota Rules is credited to the general fund.37.11All money received under such licenses or permits(c) The utility crossing fees 37.12specified in Minnesota Rules shall be credited to the fund to which other income or 37.13proceeds of sale from such the land would be credited, if provision therefor be made as 37.14provided by law, otherwise to the general fund.37.15(d) Money received from licenses and permits issued under this section for use of 37.16the beds of navigable waters shall be credited to the permanent school fund.37.17(e) Money received under subdivision 6 must be credited to the land management 37.18account in the natural resources fund and is appropriated to the commissioner of natural 37.19resources to cover the costs incurred for issuing and monitoring utility licenses.37.20    Sec. 13. Minnesota Statutes 2008, section 84.415, is amended by adding a subdivision 37.21to read:37.22    Subd. 6.Supplemental application fee and monitoring fee.(a) In addition to the 37.23application fee and utility crossing fees specified in Minnesota Rules, the commissioner of 37.24natural resources shall assess the applicant for a utility license the following fees:37.25(1) a supplemental application fee of $1,500 for a public water crossing license and 37.26a supplemental application fee of $4,500 for a public lands crossing license, to cover 37.27reasonable costs for reviewing the application and preparing the license; and37.28(2) a monitoring fee to cover the projected reasonable costs for monitoring the 37.29construction of the utility line and preparing special terms and conditions of the license 37.30to ensure proper construction. The commissioner must give the applicant an estimate of 37.31the monitoring fee before the applicant submits the fee.37.32(b) The applicant shall pay fees under this subdivision to the commissioner of 37.33natural resources. The commissioner shall not issue the license until the applicant has 37.34paid all fees in full.38.1(c) Upon completion of construction of the improvement for which the license 38.2or permit was issued, the commissioner shall refund the unobligated balance from the 38.3monitoring fee revenue. The commissioner shall not return the application fees, even 38.4if the application is withdrawn or denied.38.5    Sec. 14. Minnesota Statutes 2008, section 84.63, is amended to read:38.684.63 CONVEYANCE OF INTERESTS IN LANDS TO STATE AND 38.7FEDERAL GOVERNMENTS.38.8(a) Notwithstanding any existing law to the contrary, the commissioner of natural 38.9resources is hereby authorized on behalf of the state to convey to the United States 38.10or to the state of Minnesota or any of its subdivisions, upon state-owned lands under 38.11the administration of the commissioner of natural resources, permanent or temporary 38.12easements for specified periods or otherwise for trails, highways, roads including 38.13limitation of right of access from the lands to adjacent highways and roads, flowage for 38.14development of fish and game resources, stream protection, flood control, and necessary 38.15appurtenances thereto, such conveyances to be made upon such terms and conditions 38.16including provision for reversion in the event of non-user as the commissioner of natural 38.17resources may determine.38.18(b) In addition to the fee for the market value of the easement, the commissioner of 38.19natural resources shall assess the applicant the following fees:38.20(1) an application fee of $2,000 to cover reasonable costs for reviewing the 38.21application and preparing the easement; and38.22(2) a monitoring fee to cover the projected reasonable costs for monitoring the 38.23construction of the improvement for which the easement was conveyed and preparing 38.24special terms and conditions for the easement. The commissioner must give the applicant 38.25an estimate of the monitoring fee before the applicant submits the fee.38.26(c) The applicant shall pay these fees to the commissioner of natural resources. 38.27The commissioner shall not issue the easement until the applicant has paid in full the 38.28application fee, the monitoring fee, and the market value payment for the easement.38.29(d) Upon completion of construction of the improvement for which the easement 38.30was conveyed, the commissioner shall refund the unobligated balance from the monitoring 38.31fee revenue. The commissioner shall not return the application fee, even if the application 38.32is withdrawn or denied.38.33(e) Money received under paragraph (b) must be deposited in the land management 38.34account in the natural resources fund and is appropriated to the commissioner of natural 38.35resources to cover the reasonable costs incurred for issuing and monitoring easements.39.1    Sec. 15. Minnesota Statutes 2008, section 84.631, is amended to read:39.284.631 ROAD EASEMENTS ACROSS STATE LANDS.39.3(a) Except as provided in section 
         85.015, subdivision 1b, the commissioner, on 39.4behalf of the state, may convey a road easement across state land under the commissioner's 39.5jurisdiction other than school trust land, to a private person requesting an easement for 39.6access to property owned by the person only if the following requirements are met: (1) 39.7there are no reasonable alternatives to obtain access to the property; and (2) the exercise 39.8of the easement will not cause significant adverse environmental or natural resource 39.9management impacts.39.10(b) The commissioner shall:39.11(1) require the applicant to pay the market value of the easement;39.12(2) provide that the easement reverts to the state in the event of nonuse; and39.13(3) impose other terms and conditions of use as necessary and appropriate under 39.14the circumstances.39.15(c) An applicant shall submit aan application fee of up to $2,000 with each 39.16application for a road easement across state land. The commissioner must give the 39.17applicant an estimate of the costs of the road easement before the applicant submits the 39.18fee. The application fee is nonrefundable, even if the application is withdrawn or denied.39.19(d) In addition to the payment for the market value of the easement and the 39.20application fee, the commissioner of natural resources shall assess the applicant a 39.21monitoring fee to cover the projected reasonable costs for monitoring the construction of 39.22the road and preparing special terms and conditions for the easement. The commissioner 39.23must give the applicant an estimate of the monitoring fee before the applicant submits 39.24the fee. The applicant shall pay the application and monitoring fees to the commissioner 39.25of natural resources. The commissioner shall not issue the easement until the applicant 39.26has paid in full the application fee, the monitoring fee, and the market value payment for 39.27the easement. 39.28(e) Upon completion of construction of the road, the commissioner shall refund the 39.29unobligated balance from the monitoring fee revenue.39.30(f) Fees collected under paragraphparagraphs (c) and (d) must be deposited in39.31credited to the land management account in the natural resources fund and are appropriated 39.32to the commissioner of natural resources to cover the reasonable costs incurred under 39.33this section.39.34    Sec. 16. Minnesota Statutes 2008, section 84.632, is amended to read:39.3584.632 CONVEYANCE OF UNNEEDED STATE EASEMENTS.40.1(a) Notwithstanding section 
         92.45, the commissioner of natural resources may, 40.2in the name of the state, release all or part of an easement acquired by the state upon 40.3application of a landowner whose property is burdened with the easement if the easement 40.4is not needed for state purposes.  40.5(b) All or part of an easement may be released by payment of consideration of not 40.6less than $500, to be determined by the commissioner the market value of the easement. 40.7The release must be in a form approved by the attorney general.40.8(c) Money received for release of the easement under paragraph (b) must be credited 40.9to the account from which money was expended for purchase of the easement. If there is 40.10no specific account, the money must be credited to the land acquisition account established 40.11in section 
         94.165.  40.12(d) In addition to payment under paragraph (b), the commissioner of natural 40.13resources shall assess a landowner who applies for a release under this section an 40.14application fee of $2,000 for reviewing the application and preparing the release of 40.15easement. The applicant shall pay the application fee to the commissioner of natural 40.16resources. The commissioner shall not issue the release of easement until the applicant 40.17has paid the application fee in full. The commissioner shall not return the application fee, 40.18even if the application is withdrawn or denied.40.19(e) Money received under paragraph (d) must be credited to the land management 40.20account in the natural resources fund and is appropriated to the commissioner of natural 40.21resources to cover the reasonable costs incurred under this section.40.22    Sec. 17. Minnesota Statutes 2008, section 84.922, subdivision 1a, is amended to read:40.23    Subd. 1a. Exemptions. All-terrain vehicles exempt from registration are:40.24    (1) vehicles owned and used by the United States, the state, another state, or a 40.25political subdivision;40.26    (2) vehicles registered in another state or country that have not been in this state for 40.27more than 30 consecutive days; 40.28(3) vehicles that:40.29(i) are owned by a resident of another state or country that does not require 40.30registration of all-terrain vehicles;40.31(ii) have not been in this state for more than 30 consecutive days; and40.32(iii) are operated on state and grant-in-aid trails by a nonresident possessing a 40.33nonresident all-terrain vehicle state trail pass;40.34    (3) (4) vehicles used exclusively in organized track racing events; and41.1    (4) (5) vehicles that are 25 years old or older and were originally produced as a 41.2separate identifiable make by a manufacturer.41.3EFFECTIVE DATE.This section is effective January 1, 2010.41.4    Sec. 18. [84.9275] NONRESIDENT ALL-TERRAIN VEHICLE STATE TRAIL 41.5PASS.41.6    Subdivision 1.Pass required; fee.(a) A nonresident may not operate an all-terrain 41.7vehicle on a state or grant-in-aid all-terrain vehicle trail unless the operator carries a valid 41.8nonresident all-terrain vehicle state trail pass in immediate possession. The pass must 41.9be available for inspection by a peace officer, a conservation officer, or an employee 41.10designated under section 84.0835.41.11(b) The commissioner of natural resources shall issue a pass upon application and 41.12payment of a $20 fee. The pass is valid from January 1 through December 31. Fees 41.13collected under this section, except for the issuing fee for licensing agents, shall be 41.14deposited in the state treasury and credited to the all-terrain vehicle account in the natural 41.15resources fund and, except for the electronic licensing system commission established by 41.16the commissioner under section 84.027, subdivision 15, must be used for grants-in-aid to 41.17counties and municipalities for all-terrain vehicle organizations to construct and maintain 41.18all-terrain vehicle trails and use areas.41.19    (c) A nonresident all-terrain vehicle state trail pass is not required for:41.20    (1) an all-terrain vehicle that is owned and used by the United States, another state, 41.21or a political subdivision thereof that is exempt from registration under section 84.922, 41.22subdivision 1a; or41.23    (2) a person operating an all-terrain vehicle only on the portion of a trail that is 41.24owned by the person or the person's spouse, child, or parent.41.25    Subd. 2.License agents.The commissioner may appoint agents to issue and sell 41.26nonresident all-terrain vehicle state trail passes. The commissioner may revoke the 41.27appointment of an agent at any time. The commissioner may adopt additional rules as 41.28provided in section 97A.485, subdivision 11. An agent shall observe all rules adopted 41.29by the commissioner for accounting and handling of passes pursuant to section 97A.485, 41.30subdivision 11. An agent shall promptly deposit and remit all money received from the 41.31sale of the passes, exclusive of the issuing fee, to the commissioner.41.32    Subd. 3.Issuance of passes.The commissioner and agents shall issue and sell 41.33nonresident all-terrain vehicle state trail passes. The commissioner shall also make the 42.1passes available through the electronic licensing system established under section 84.027, 42.2subdivision 15.42.3    Subd. 4.Agent's fee.In addition to the fee for a pass, an issuing fee of $1 per pass 42.4shall be charged. The issuing fee may be retained by the seller of the pass. Issuing fees for 42.5passes issued by the commissioner shall be deposited in the all-terrain vehicle account in 42.6the natural resources fund and retained for the operation of the electronic licensing system.42.7    Subd. 5.Duplicate passes.The commissioner and agents shall issue a duplicate 42.8pass to persons whose pass is lost or destroyed using the process established under section 42.997A.405, subdivision 3, and rules adopted thereunder. The fee for a duplicate nonresident 42.10all-terrain vehicle state trail pass is $2, with an issuing fee of 50 cents.42.11EFFECTIVE DATE.This section is effective January 1, 2010.42.12    Sec. 19. Minnesota Statutes 2008, section 84D.15, subdivision 2, is amended to read:42.13    Subd. 2. Receipts. Money received from surcharges on watercraft licenses under 42.14section 
         86B.415, subdivision 7, and civil penalties under section 
         84D.13 shall be deposited 42.15in the invasive species account. Each year, the commissioner of finance shall transfer from 42.16the game and fish fund to the invasive species account, the annual surcharge collected on 42.17nonresident fishing licenses under section 
         97A.475, subdivision 7, paragraph (b). In fiscal 42.18years 2010 and 2011, the commissioner of finance shall transfer $725,000 from the water 42.19recreation account under section 86B.706 to the invasive species account.42.20    Sec. 20. Minnesota Statutes 2008, section 85.015, subdivision 1b, is amended to read:42.21    Subd. 1b. Easements for ingress and egress.(a) Notwithstanding section 
         16A.695, 42.22except as provided in paragraph (b), when a trail is established under this section, a 42.23private property owner who has a preexisting right of ingress and egress over the trail 42.24right-of-way is granted, without charge, a permanent easement for ingress and egress 42.25purposes only. The easement is limited to the preexisting crossing and reverts to the state 42.26upon abandonment. Nothing in this subdivision is intended to diminish or alter any written 42.27or recorded easement that existed before the state acquired the land for the trail. 42.28(b) The commissioner of natural resources shall assess the applicant an application 42.29fee of $2,000 for reviewing the application and preparing the easement. The applicant 42.30shall pay the application fee to the commissioner of natural resources. The commissioner 42.31shall not issue the easement until the applicant has paid the application fee in full. The 42.32commissioner shall not return the application fee, even if the application is withdrawn 42.33or denied.43.1(c) Money received under paragraph (b) must be credited to the land management 43.2account in the natural resources fund and is appropriated to the commissioner of natural 43.3resources to cover the reasonable costs incurred under this section.43.4    Sec. 21. Minnesota Statutes 2008, section 85.053, subdivision 10, is amended to read:43.5    Subd. 10. Free entrance; totally and permanently disabled veterans. The 43.6commissioner shall issue an annual park permit for no charge for to any veteran with a 43.7total and permanent service-connected disability, as determined by the United States 43.8Department of Veterans Affairs, who presents each year a copy of their determination 43.9letter to a park attendant or commissioner's designee. For the purposes of this section, 43.10"veteran"with a total and permanent service-connected disability" means a resident who 43.11has a total and permanent service-connected disability as adjudicated by the United States 43.12Veterans Administration or by the retirement board of one of the several branches of the 43.13armed forces has the meaning given in section 197.447.43.14EFFECTIVE DATE.This section is effective July 1, 2009, for state park permits 43.15issued on or after that date.43.16    Sec. 22. Minnesota Statutes 2008, section 85.46, subdivision 3, is amended to read:43.17    Subd. 3. Issuance. The commissioner of natural resources and agents shall issue 43.18and sell horse trail passes. The pass shall include the applicant's signature and other 43.19information deemed necessary by the commissioner. To be valid, a daily or annual pass 43.20must be signed by the person riding, leading, or driving the horse, and a commercial 43.21annual pass must be signed by the owner of the commercial trail riding facility.43.22EFFECTIVE DATE.This section is effective January 1, 2010.43.23    Sec. 23. Minnesota Statutes 2008, section 85.46, subdivision 4, is amended to read:43.24    Subd. 4. Pass fees. (a) The fee for an annual horse trail pass is $20 for an individual 43.2516 years of age and over. The fee shall be collected at the time the pass is purchased. 43.26Annual passes are valid for one year beginning January 1 and ending December 31.43.27(b) The fee for a daily horse trail pass is $4 for an individual 16 years of age and 43.28over. The fee shall be collected at the time the pass is purchased. The daily pass is valid 43.29only for the date designated on the pass form.43.30(c) The fee for a commercial annual horse trail pass is $200 and includes issuance 43.31of 15 passes. Additional or individual commercial annual horse trail passes may be 43.32purchased by the commercial trail riding facility owner at a fee of $20 each. Commercial 43.33annual horse trail passes are valid for one year beginning January 1 and ending December 44.131 and may be affixed to the horse tack, saddle, or person. Commercial annual horse trail 44.2passes are not transferable to another commercial trail riding facility. For the purposes of 44.3this section, a "commercial trail riding facility" is an operation where horses are used for 44.4riding instruction or other equestrian activities for hire or use by others.44.5EFFECTIVE DATE.This section is effective January 1, 2010.44.6    Sec. 24. Minnesota Statutes 2008, section 85.46, subdivision 7, is amended to read:44.7    Subd. 7. Duplicate horse trail passes. The commissioner of natural resources and 44.8agents shall issue a duplicate pass to a person or commercial trail riding facility owner 44.9whose pass is lost or destroyed using the process established under section 
         97A.405, 44.10subdivision 3, and rules adopted thereunder. The fee for a duplicate horse trail pass is $2, 44.11with an issuing fee of 50 cents.44.12EFFECTIVE DATE.This section is effective January 1, 2010.44.13    Sec. 25. [86A.055] PROHIBITION ON SALES OF OUTDOOR RECREATION 44.14SYSTEM LANDS FOR CERTAIN PURPOSES.44.15Notwithstanding Laws 2005, chapter 156, article 2, section 45, as amended by Laws 44.162007, chapter 148, article 2, section 73, or other law to the contrary, a state agency shall 44.17not sell land that, on or after the effective date of this section, is classified as a unit of the 44.18outdoor recreation system under section 86A.05, for the purpose of anticipated savings 44.19to the general fund.44.20EFFECTIVE DATE.This section is effective the day following final enactment.44.21    Sec. 26. Minnesota Statutes 2008, section 92.685, is amended to read:44.2292.685 LAND MANAGEMENT ACCOUNT.44.23The land management account is created in the natural resources fund. Money 44.24credited to the account is appropriated annually to the commissioner of natural resources 44.25for the Lands and Minerals Division to administer the utility easement program under 44.26section 84.415, the easement program under section 84.63, the road easement program 44.27under section 
         84.631, the easement release program under section 84.632, and the trail 44.28easement program under section 85.015, subdivision 1b.44.29    Sec. 27. Minnesota Statutes 2008, section 93.481, subdivision 1, is amended to read:44.30    Subdivision 1. Prohibition against mining without permit; application for 44.31permit. Except as provided in this subdivision, after June 30, 1975, no person shall 45.1engage in or carry out a mining operation for metallic minerals within the state unless the 45.2person has first obtained a permit to mine from the commissioner. Any person engaging 45.3in or carrying out a mining operation as of the effective date of the rules promulgated45.4adopted under section 
         93.47 shall apply for a permit to mine within 180 days after the 45.5effective date of such rules. Any such existing mining operation may continue during the 45.6pendency of the application for the permit to mine. The person applying for a permit shall 45.7apply on forms prescribed by the commissioner and shall submit such information as the 45.8commissioner may require, including but not limited to the following: 45.9(a) (1) a proposed plan for the reclamation or restoration, or both, of any mining 45.10area affected by mining operations to be conducted on and after the date on which permits 45.11are required for mining under this section;45.12(b) (2) a certificate issued by an insurance company authorized to do business in 45.13the United States that the applicant has a public liability insurance policy in force for 45.14the mining operation for which the permit is sought, or evidence that the applicant has 45.15satisfied other state or federal self-insurance requirements, to provide personal injury 45.16and property damage protection in an amount adequate to compensate any persons who 45.17might be damaged as a result of the mining operation or any reclamation or restoration 45.18operations connected with the mining operation;45.19(3) an application fee of:45.20(i) $25,000 for a permit to mine for a taconite mining operation;45.21(ii) $50,000 for a permit to mine for a nonferrous metallic minerals operation;45.22(iii) $10,000 for a permit to mine for a scram mining operation; or45.23(iv) $5,000 for a permit to mine for a peat operation;45.24(c) (4) a bond which may be required pursuant to section 
         93.49; and 45.25(d) (5) a copy of the applicant's advertisement of the ownership, location, and 45.26boundaries of the proposed mining area and reclamation or restoration operations, which 45.27advertisement shall be published in a legal newspaper in the locality of the proposed site 45.28at least once a week for four successive weeks before the application is filed, except that if 45.29the application is for a permit to conduct lean ore stockpile removal the advertisement 45.30need be published only once.45.31    Sec. 28. Minnesota Statutes 2008, section 93.481, subdivision 3, is amended to read:45.32    Subd. 3. Term of permit; amendment. A permit issued by the commissioner 45.33pursuant to this section shall be granted for the term determined necessary by the 45.34commissioner for the completion of the proposed mining operation, including reclamation 45.35or restoration. A permit may be amended upon written application to the commissioner. 46.1A permit amendment application fee must be submitted with the written application. The 46.2permit amendment application fee is ten percent of the amount provided for in subdivision 46.31, clause (3), for an application for the applicable permit to mine. If the commissioner 46.4determines that the proposed amendment constitutes a substantial change to the permit, 46.5the person applying for the amendment shall publish notice in the same manner as for a 46.6new permit, and a hearing shall be held if written objections are received in the same 46.7manner as for a new permit. An amendment may be granted by the commissioner if the 46.8commissioner determines that lawful requirements have been met.46.9    Sec. 29. Minnesota Statutes 2008, section 93.481, subdivision 5, is amended to read:46.10    Subd. 5. Assignment. A permit may not be assigned or otherwise transferred 46.11without the written approval of the commissioner. A permit assignment application fee 46.12must be submitted with the written application. The permit assignment application fee 46.13is ten percent of the amount provided for in subdivision 1, clause (3), for an application 46.14for the applicable permit to mine.46.15    Sec. 30. Minnesota Statutes 2008, section 93.481, subdivision 7, is amended to read:46.16    Subd. 7. Mining administration account. The mining administration account is 46.17established as an account in the natural resources fund. Ferrous mining administrative46.18Fees charged to owners, operators, or managers of mines under this section and section 46.1993.482 shall be credited to the account and may be appropriated to the commissioner 46.20to cover the costs of providing and monitoring permits to mine ferrous metals under 46.21this section. Earnings accruing from investment of the account remain with the account 46.22until appropriated.46.23EFFECTIVE DATE.This section is effective the day following final enactment.46.24    Sec. 31. [93.482] RECLAMATION FEES.46.25    Subdivision 1.Annual permit to mine fee.(a) The commissioner shall charge 46.26every person holding a permit to mine an annual permit fee. The fee is payable to the 46.27commissioner by June 30 of each year, beginning in 2009.46.28(b) The annual permit to mine fee for a taconite mining operation is $60,000 if the 46.29operation had production within the calendar year immediately preceding the year in 46.30which payment is due and $30,000 if there was no production within the immediately 46.31preceding calendar year.46.32(c) The annual permit to mine fee for a nonferrous metallic minerals mining 46.33operation is $75,000 if the operation had production within the calendar year immediately 47.1preceding the year in which payment is due and $37,500 if there was no production within 47.2the immediately preceding calendar year.47.3(d) The annual permit to mine fee for a scram mining operation is $5,000 if the 47.4operation had production within the calendar year immediately preceding the year in 47.5which payment is due and $2,500 if there was no production within the immediately 47.6preceding calendar year.47.7(e) The annual permit to mine fee for a peat mining operation is $1,000 if the 47.8operation had production within the calendar year immediately preceding the year in 47.9which payment is due and $500 if there was no production within the immediately 47.10preceding calendar year.47.11    Subd. 2.Supplemental application fee for taconite and nonferrous metallic 47.12minerals mining operation.(a) In addition to the application fee specified in section 47.1393.481, the commissioner shall assess a person submitting an application for a permit to 47.14mine for a taconite or a nonferrous metallic minerals mining operation the reasonable 47.15costs for reviewing the application and preparing the permit to mine. For nonferrous 47.16metallic minerals mining, the commissioner shall assess reasonable costs for monitoring 47.17construction of the mining facilities.47.18(b) The commissioner must give the applicant an estimate of the supplemental 47.19application fee under this subdivision. The estimate must include a brief description 47.20of the tasks to be performed and the estimated cost of each task. The application fee 47.21under section 93.481 must be subtracted from the estimate of costs to determine the 47.22supplemental application fee.47.23(c) The applicant and the commissioner shall enter into a written agreement to cover 47.24the estimated costs to be incurred by the commissioner.47.25(d) The commissioner shall not issue the permit to mine until the applicant has paid 47.26all fees in full. Upon completion of construction of a nonferrous metallic minerals facility, 47.27the commissioner shall refund the unobligated balance of the monitoring fee revenue.47.28    Subd. 3.Reclamation fee on taconite iron ore produced.(a) For the purposes 47.29of this subdivision:47.30(1) "fee owner" means a person having any right, title, or interest in any minerals 47.31or mineral rights in this state from which taconite iron ore is mined. Fee owner does not 47.32include the United States, the state, or the University of Minnesota; 47.33(2) "taconite iron ore" means a ferruginous chert or ferruginous slate in the form of 47.34compact siliceous rock, in which the iron oxide is so finely disseminated that substantially 47.35all of the iron bearing particles of merchantable grade are smaller than 20 mesh; and47.36(3) "ton" means a gross ton of 2,240 pounds.48.1(b) A fee owner is subject to a reclamation fee of $.0075 per ton of taconite iron ore 48.2mined from the minerals or mineral rights owned by the fee owner.48.3(c) The fee owner shall make payment to the commissioner no later than January 48.420 of each calendar year for ore removed during the previous calendar year. The fee 48.5owner is liable for the payment of the reclamation fee. The fee owner may enter into an 48.6agreement with the mining operator to make the payment on their behalf from royalties 48.7due and owing or other financial terms.48.8EFFECTIVE DATE.This section is effective the day following final enactment.48.9    Sec. 32. Minnesota Statutes 2008, section 94.342, subdivision 3, is amended to read:48.10    Subd. 3. Additional restrictions on riparian land.(a) Land bordering on or 48.11adjacent to any meandered or other public waters and withdrawn from sale by law is 48.12riparian land. Riparian land may not be given in exchange unless:48.13(1) expressly authorized by the legislature or unless;48.14(2) through the same exchange the state acquires land on the same or other public 48.15waters in the same general vicinity affording at least equal opportunity for access to the 48.16waters and other riparian use by the public;48.17(3) Class A land is being exchanged for Class A land; or48.18 provided, that any (4) the exchange with is an agency of  the United States or any 48.19agency thereof may be made free from this limitation upon condition that and the state 48.20land given in exchange bordering on public waters shall be subject to reservations by 48.21the state for public travel along the shores as provided by section 
         92.45, unless waived 48.22as provided in this subdivision paragraph (b), and that there shall be reserved by the 48.23state such additional rights of public use upon suitable portions of such state land as 48.24the commissioner of natural resources, with the approval of the Land Exchange Board, 48.25may deem necessary or desirable for camping, hunting, fishing, access to the water, and 48.26other public uses.48.27In regard to (b) For Class B or riparian land that is contained within that portion 48.28of the Superior National Forest that is designated as the Boundary Waters Canoe Area 48.29Wilderness, the condition that state land given in exchange bordering on public waters 48.30must be subject to the public travel reservations provided in section 
         92.45, may be waived 48.31by the Land Exchange Board upon the recommendation of the commissioner of natural 48.32resources and, if the land is Class B land, the additional recommendation of the county 48.33board in which the land is located.48.34    Sec. 33. Minnesota Statutes 2008, section 97A.075, subdivision 1, is amended to read:49.1    Subdivision 1. Deer, bear, and lifetime licenses. (a) For purposes of this 49.2subdivision, "deer license" means a license issued under section 
         97A.475, subdivisions 2, 49.3clauses
          (5), (6), (7), (11), (13), (15), (16), and (17), and 3, clauses (2), (3), (4), (9), (11), 49.4(12), and (13), and licenses issued under section 
         97B.301, subdivision 4. 49.5    (b) $2 from each annual deer license and $2 annually from the lifetime fish and 49.6wildlife trust fund, established in section 
         97A.4742, for each license issued under section 49.797A.473, subdivision 4
         , shall be credited to the deer management account and shall be 49.8used for deer habitat improvement or deer management programs. 49.9    (c) $1 from each annual deer license and each bear license and $1 annually from 49.10the lifetime fish and wildlife trust fund, established in section 
         97A.4742, for each license 49.11issued under section 
         97A.473, subdivision 4, shall be credited to the deer and bear 49.12management account and shall be used for deer and bear management programs, including 49.13a computerized licensing system. 49.14    (d) Fifty cents from each deer license is credited to the emergency deer feeding 49.15and wild cervidae health management account and is appropriated for emergency deer 49.16feeding and wild cervidae health management. Money appropriated for emergency 49.17deer feeding and wild cervidae health management is available until expended. When 49.18the unencumbered balance in the appropriation for emergency deer feeding and wild 49.19cervidae health management at the end of a fiscal year exceeds $2,500,000 for the first 49.20time, $750,000 is canceled to the unappropriated balance of the game and fish fund.49.21The commissioner must inform the legislative chairs of the natural resources finance 49.22committees every two years on how the money for emergency deer feeding and wild 49.23cervidae health management has been spent. 49.24    Thereafter, When the unencumbered balance in the appropriation for emergency 49.25deer feeding and wild cervidae health management exceeds $2,500,000 at the end of a 49.26fiscal year, the unencumbered balance in excess of $2,500,000 is canceled and available 49.27for deer and bear management programs and computerized licensing.49.28    Sec. 34. Minnesota Statutes 2008, section 103G.271, subdivision 6, is amended to read:49.29    Subd. 6. Water use permit processing fee. (a) Except as described in paragraphs 49.30(b) to (f), a water use permit processing fee must be prescribed by the commissioner in 49.31accordance with the schedule of fees in this subdivision for each water use permit in force 49.32at any time during the year. The schedule is as follows, with the stated fee in each clause 49.33applied to the total amount appropriated:49.34    (1) $140 for amounts not exceeding 50,000,000 gallons per year;50.1    (2) $3.50 per 1,000,000 gallons for amounts greater than 50,000,000 gallons but less 50.2than 100,000,000 gallons per year;50.3    (3) $4 per 1,000,000 gallons for amounts greater than 100,000,000 gallons but less 50.4than 150,000,000 gallons per year;50.5    (4) $4.50 per 1,000,000 gallons for amounts greater than 150,000,000 gallons but 50.6less than 200,000,000 gallons per year;50.7    (5) $5 per 1,000,000 gallons for amounts greater than 200,000,000 gallons but less 50.8than 250,000,000 gallons per year;50.9    (6) $5.50 per 1,000,000 gallons for amounts greater than 250,000,000 gallons but 50.10less than 300,000,000 gallons per year;50.11    (7) $6 per 1,000,000 gallons for amounts greater than 300,000,000 gallons but less 50.12than 350,000,000 gallons per year;50.13    (8) $6.50 per 1,000,000 gallons for amounts greater than 350,000,000 gallons but 50.14less than 400,000,000 gallons per year;50.15    (9) $7 per 1,000,000 gallons for amounts greater than 400,000,000 gallons but less 50.16than 450,000,000 gallons per year;50.17    (10) $7.50 per 1,000,000 gallons for amounts greater than 450,000,000 gallons but 50.18less than 500,000,000 gallons per year; and50.19    (11) $8 per 1,000,000 gallons for amounts greater than 500,000,000 gallons per year.50.20    (b) For once-through cooling systems, a water use processing fee must be prescribed 50.21by the commissioner in accordance with the following schedule of fees for each water use 50.22permit in force at any time during the year:50.23    (1) for nonprofit corporations and school districts, $200 per 1,000,000 gallons; and50.24    (2) for all other users, $420 per 1,000,000 gallons.50.25    (c) The fee is payable based on the amount of water appropriated during the year 50.26and, except as provided in paragraph (f), the minimum fee is $100.50.27    (d) For water use processing fees other than once-through cooling systems:50.28    (1) the fee for a city of the first class may not exceed $250,000 per year;50.29    (2) the fee for other entities for any permitted use may not exceed:50.30    (i) $50,000 $60,000 per year for an entity holding three or fewer permits;50.31    (ii) $75,000 $90,000 per year for an entity holding four or five permits;50.32    (iii) $250,000 $300,000 per year for an entity holding more than five permits;50.33    (3) the fee for agricultural irrigation may not exceed $750 per year;50.34    (4) the fee for a municipality that furnishes electric service and cogenerates steam 50.35for home heating may not exceed $10,000 for its permit for water use related to the 50.36cogeneration of electricity and steam; and51.1    (5) no fee is required for a project involving the appropriation of surface water to 51.2prevent flood damage or to remove flood waters during a period of flooding, as determined 51.3by the commissioner.51.4    (e) Failure to pay the fee is sufficient cause for revoking a permit. A penalty of two 51.5percent per month calculated from the original due date must be imposed on the unpaid 51.6balance of fees remaining 30 days after the sending of a second notice of fees due. A fee 51.7may not be imposed on an agency, as defined in section 
         16B.01, subdivision 2, or federal 51.8governmental agency holding a water appropriation permit.51.9    (f) The minimum water use processing fee for a permit issued for irrigation of 51.10agricultural land is $20 for years in which:51.11    (1) there is no appropriation of water under the permit; or51.12    (2) the permit is suspended for more than seven consecutive days between May 1 51.13and October 1.51.14    (g) A surcharge of $20 $30 per million gallons in addition to the fee prescribed in 51.15paragraph (a) shall be applied to the volume of water used in each of the months of June, 51.16July, and August that exceeds the volume of water used in January for municipal water 51.17use, irrigation of golf courses, and landscape irrigation. The surcharge for municipalities 51.18with more than one permit shall be determined based on the total appropriations from all 51.19permits that supply a common distribution system.51.20    Sec. 35. Minnesota Statutes 2008, section 103G.301, subdivision 2, is amended to read:51.21    Subd. 2. Permit application fees. (a) A permit application fee to defray the costs of 51.22receiving, recording, and processing the application must be paid for a permit authorized 51.23under this chapter and for each request to amend or transfer an existing permit. Fees 51.24established under this subdivision, unless specified in paragraph (c), shall be compliant 51.25with section 16A.1285.51.26    (b) The fee for a project appropriatingProposed projects that require water in excess 51.27of 100 million gallons per year must be assessed fees to recover the reasonable costs 51.28of preparing and processing the permit, including costsincurred to evaluate the project 51.29and the costs incurred for environmental review. Fees collected under this paragraph 51.30must be credited to an account in the natural resources fund and are appropriated to the 51.31commissioner for fiscal years 2008 and 2009.51.32    (c) The fee to apply for a permit to appropriate water, other than a permit subject 51.33to thein addition to any fee under paragraph (b); a permit to construct or repair a dam 51.34that is subject to dam safety inspection; or a state general permit or to apply for the state 51.35water bank program is $150. The application fee for a permit to work in public waters or 52.1to divert waters for mining must be at least $150, but not more than $1,000, according to a 52.2schedule of fees adopted under section 16A.1285.52.3    Sec. 36. Minnesota Statutes 2008, section 103G.301, subdivision 3, is amended to read:52.4    Subd. 3. Field inspection fees. (a) In addition to the application fee, the 52.5commissioner may charge a field inspection fee for:52.6(1) projects requiring a mandatory environmental assessment under chapter 116D;52.7(2) projects undertaken without a required permit or application; and52.8(3) projects undertaken in excess of limitations established in an issued permit.52.9(b) The fee must be at least $100 but not more than actual inspection costs.52.10(c) The fee is to cover actual costs related to a permit applied for under this chapter 52.11or for a project undertaken without proper authorization.52.12(d) The commissioner shall establish a schedule of field inspection fees under section 52.1316A.1285
         . The schedule must include actual costs related to field inspection, including 52.14investigations of the area affected by the proposed activity, analysis of the proposed 52.15activity, consultant services, and subsequent monitoring, if any, of the activity authorized 52.16by the permit. Fees collected under this subdivision must be credited to an account in the 52.17natural resources fund and are appropriated to the commissioner.52.18    Sec. 37. Minnesota Statutes 2008, section 115.03, subdivision 5c, is amended to read:52.19    Subd. 5c. Regulation of storm water discharges. (a) The agency may issue a 52.20general permit to any category or subcategory of point source storm water discharges 52.21that it deems administratively reasonable and efficient without making any findings 52.22under agency rules. Nothing in this subdivision precludes the agency from requiring an 52.23individual permit for a point source storm water discharge if the agency finds that it is 52.24appropriate under applicable legal or regulatory standards.52.25(b) Pursuant to this paragraph, the legislature authorizes the agency to adopt and 52.26enforce rules regulating point source storm water discharges. No further legislative 52.27approval is required under any other legal or statutory provision whether enacted before or 52.28after May 29, 2003.52.29(c) The agency shall develop performance standards, design standards, or other 52.30tools to enable and promote the implementation of low-impact development and other 52.31storm water management techniques. For the purposes of this section, "low-impact 52.32development" means an approach to storm water management that mimics a site's natural 52.33hydrology as the landscape is developed. Using the low-impact development approach, 52.34storm water is managed on-site and the rate and volume of predevelopment storm water 53.1reaching receiving waters is unchanged. The calculation of predevelopment hydrology is 53.2based on native soil and vegetation.53.3    Sec. 38. Minnesota Statutes 2008, section 115.073, is amended to read:53.4115.073 ENFORCEMENT FUNDING.53.5Except as provided in section 
         115C.05, all money recovered by the state under this 53.6chapter and chapters 115A and 116, including civil penalties and money paid under an 53.7agreement, stipulation, or settlement, excluding money paid for past due fees or taxes, 53.8up to the amount appropriated for implementation of Laws 1991, chapter 347, must be 53.9deposited in the state treasury and credited to the environmental fund.  53.10    Sec. 39. Minnesota Statutes 2008, section 115.56, subdivision 4, is amended to read:53.11    Subd. 4. License fee.(a) Until the agency adopts a final rule establishing fees for 53.12licenses under subdivision 2, the fee for a license required under subdivision 2 is $10053.13$200 per year and the annual license fee for a business with multiple licenses shall not 53.14exceed $400.53.15(b) Revenue from the any fees charged by the agency for licenses under subdivision 53.162 must be credited to the environmental fund and is exempt from section 
         16A.1285.  53.17    Sec. 40. Minnesota Statutes 2008, section 115.77, subdivision 1, is amended to read:53.18    Subdivision 1. Fees established. The following fees are established for the 53.19purposes indicated: agency shall collect fees in amounts necessary, but no greater than the 53.20amounts necessary, to cover the reasonable costs of reviewing applications and issuing 53.21certifications.53.22(1) application for examination, $32;53.23(2) issuance of certificate, $23;53.24(3) reexamination resulting from failure to pass an examination, $32;53.25(4) renewal of certificate, $23;53.26(5) replacement certificate, $10; and53.27(6) reinstatement or reciprocity certificate, $40.53.28    Sec. 41. Minnesota Statutes 2008, section 115A.1314, subdivision 2, is amended to 53.29read:53.30    Subd. 2. Creation of account; appropriations. (a) The electronic waste account 53.31is established in the environmental fund. The commissioner of revenue must deposit 53.32receipts from the fee established in subdivision 1 in the account. Any interest earned on 54.1the account must be credited to the account. Money from other sources may be credited to 54.2the account. Beginning in the second program year and continuing each program year 54.3thereafter, as of the last day of each program year, the commissioner of revenue shall 54.4determine the total amount of the variable fees that were collected. By July 15, 2009, and 54.5each July 15 thereafter, the commissioner of the Pollution Control Agency shall inform 54.6the commissioner of revenue of the amount necessary to operate the program in the new 54.7program year. To the extent that the total fees collected by the commissioner of revenue54.8in connection with this section exceed the amount the commissioner of the Pollution 54.9Control Agency determines necessary to operate the program for the new program 54.10year, the commissioner of revenue shall refund on a pro rata basis, to all manufacturers 54.11who paid any fees for the previous program year, the amount of fees collected by the 54.12commissioner of revenue in excess of the amount necessary to operate the program for the 54.13new program year. No individual refund is required of amounts of $100 or less for a fiscal 54.14year. Manufacturers who report collections less than 50 percent of their obligation for the 54.15previous program year are not eligible for a refund. Amounts not refunded pursuant to this 54.16paragraph shall remain in the account. The commissioner of revenue shall issue refunds 54.17by August 10. In lieu of issuing a refund, the commissioner of revenue may grant credit 54.18against a manufacturer's variable fee due by September 1.54.19    (b) Until June 30, 2009 2011, money in the account is annually appropriated to the 54.20Pollution Control Agency:54.21    (1) for the purpose of implementing sections 
         115A.1312 to 
         115A.1330, including 54.22transfer to the commissioner of revenue to carry out the department's duties under 54.23section 
         115A.1320, subdivision 2, and transfer to the commissioner of administration for 54.24responsibilities under section 
         115A.1324; and 54.25    (2) to the commissioner of the Pollution Control Agency to be distributed on a 54.26competitive basis through contracts with counties outside the 11-county metropolitan 54.27area, as defined in paragraph (c), and with private entities that collect for recycling 54.28covered electronic devices in counties outside the 11-county metropolitan area, where the 54.29collection and recycling is consistent with the respective county's solid waste plan, for 54.30the purpose of carrying out the activities under sections 
         115A.1312 to 
         115A.1330. In 54.31awarding competitive grants under this clause, the commissioner must give preference to 54.32counties and private entities that are working cooperatively with manufacturers to help 54.33them meet their recycling obligations under section 
         115A.1318, subdivision 1.54.34    (c) The 11-county metropolitan area consists of the counties of Anoka, Carver, 54.35Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright.55.1    Sec. 42. Minnesota Statutes 2008, section 115A.557, subdivision 1, is amended to read:55.2    Subdivision 1. Distribution; formula. Any funds appropriated to the commissioner 55.3for the purpose of distribution to counties under this section must be distributed each fiscal 55.4year by the commissioner based on population, except a county may not receive less than 55.5$55,000 in a fiscal year. If the amount available for distribution under this section is less 55.6or more than the amount available in fiscal year 2001, the minimum county payment under 55.7this section is reduced or increased proportionately. For purposes of this subdivision, 55.8"population" has the definition given in section 
         477A.011, subdivision 3. A county that 55.9participates in a multicounty district that manages solid waste and that has responsibility 55.10for recycling programs as authorized in section 
         115A.552, must pass through to the 55.11districts funds received by the county in excess of the minimum county payment under 55.12this section in proportion to the population of the county served by that district. 55.13    Sec. 43. [115A.559] COMPOSTING COMPETITIVE GRANT PROGRAM.55.14    Subdivision 1.Grant program established.The commissioner shall make 55.15competitive grants to political subdivisions to increase composting, reduce the amount of 55.16organic wastes entering disposal facilities, and reduce the costs associated with hauling 55.17waste by locating the composting site as close as possible to the site where the waste is 55.18generated. To achieve the purpose of the grant program, the commissioner shall actively 55.19recruit potential applicants beyond traditional solid waste professionals and organizations, 55.20such as soil and water conservation districts and schools. Each grant must include an 55.21educational component on the methods and benefits of composting.55.22    Subd. 2.Application.(a) The commissioner must develop forms and procedures 55.23for soliciting and reviewing applications for grants under this section.55.24(b) The determination of whether to make a grant under this section is within the 55.25discretion of the commissioner, subject to subdivision 4. The commissioner's decisions 55.26are not subject to judicial review, except for abuse of discretion.55.27    Subd. 3.Priorities; eligible projects.(a) If applications for grants exceed the 55.28available appropriations, grants must be made for projects that, in the commissioner's 55.29judgment, provide the highest return in public benefits.55.30(b) To be eligible to receive a grant, a project must:55.31(1) be locally administered;55.32(2) have measurable outcomes; and55.33(3) include at least one of the following elements:55.34(i) the development of erosion control methods that use compost; 56.1(ii) activities to encourage on-site composting by homeowners; or56.2(iii) activities to encourage composting by schools or public institutions.56.3    Subd. 4.Cancellation of grant.If a grant is awarded under this section and 56.4funds are not encumbered for the grant within four years after the award date, the grant 56.5must be canceled.56.6    Sec. 44. Minnesota Statutes 2008, section 115A.931, is amended to read:56.7115A.931 YARD WASTE PROHIBITION.56.8(a) Except as authorized by the agency, in the metropolitan area after January 1, 56.91990, and outside the metropolitan area after January 1, 1992, a person may not place 56.10yard waste:56.11(1) in mixed municipal solid waste;56.12(2) in a disposal facility; or56.13(3) in a resource recovery facility except for the purposes of reuse, composting, or 56.14cocomposting.56.15    (b) [Renumbered 
         115A.03, subd 38] 56.16(c) On or after January 1, 2010, a person may not place yard waste or 56.17source-separated compostable materials generated in a metropolitan county in a plastic bag 56.18delivered to a transfer station or compost facility unless the bag meets all the specifications 56.19in ASTM Standard Specification for Compostable Plastics (D6400). For purposes of this 56.20paragraph, "metropolitan county" has the meaning given in section 473.121, subdivision 56.214, and "ASTM" has the meaning given in section 296A.01, subdivision 6.56.22(d) A person who immediately empties a plastic bag containing yard waste or 56.23source-separated compostable materials delivered to a transfer station or compost facility 56.24and removes the plastic bag from the transfer station or compost facility is exempt from 56.25paragraph (c).56.26(e) Residents of a city of the first class that currently contracts for the collection of 56.27yard waste are exempt from paragraph (c) until January 1, 2013, if, by that date, the 56.28city implements a citywide source-separated compostable materials collection program 56.29using durable carts.56.30    Sec. 45. Minnesota Statutes 2008, section 116.0711, is amended to read:56.31116.0711 FEEDLOT PERMIT CONDITIONS PERMITS; CONDITIONS; 56.32COUNTY GRANTS.56.33    Subdivision 1.Conditions. (a) The agency shall not require feedlot permittees to 56.34maintain records as to rainfall or snowfall as a condition of a general feedlot permit if the 57.1owner directs the commissioner or agent of the commissioner to appropriate data on 57.2precipitation maintained by a government agency or educational institution.57.3(b) A feedlot permittee shall give notice to the agency when the permittee proposes 57.4to transfer ownership or control of the feedlot to a new party. The commissioner shall 57.5not unreasonably withhold or unreasonably delay approval of any transfer request. This 57.6request shall be handled in accordance with sections 
         116.07 and 
         15.992. 57.7(c) The Environmental Quality Board shall review and recommend modifications 57.8to environmental review rules related to phased actions and animal agriculture facilities. 57.9The Environmental Quality Board shall report recommendations to the chairs of the 57.10committees of the senate and house of representatives with jurisdiction over agriculture 57.11and the environment by January 15, 2002.57.12(d) If the owner of an animal feedlot requests an extension for an application for a 57.13national pollutant discharge elimination permit or state disposal system permit by June 1, 57.142001, then the agency shall grant an extension for the application to September 1, 2001.57.15(e) (c) An animal feedlot in shoreland that has been unused may resume operation 57.16after obtaining a permit from the agency or county, regardless of the number of years that 57.17the feedlot was unused.57.18    Subd. 2.County feedlot program grants; three-part formula.(a) Money 57.19appropriated to the commissioner to make grants to delegated counties to administer 57.20the county feedlot program must be distributed according to the three-part formula in 57.21paragraphs (b) to (d).57.22    (b) Number of feedlots in the county: 60 percent of the total appropriation must be 57.23distributed according to the number of feedlots that are required to be registered in the 57.24county. Grants awarded under this paragraph must be matched with a combination of local 57.25cash and in-kind contributions.57.26    (c) Minimum program requirements: 25 percent of the total appropriation must be 57.27distributed based on the county (1) conducting an annual number of inspections at feedlots 57.28that is equal to or greater than seven percent of the total number of registered feedlots that 57.29are required to be registered in the county; and (2) meeting noninspection minimum 57.30program requirements as identified in the county feedlot workplan form. Counties that do 57.31not meet the inspection requirement must not receive 50 percent of the eligible funding 57.32under this paragraph. Counties must receive funding for noninspection requirements under 57.33this paragraph according to a scoring system checklist administered by the commissioner. 57.34The commissioner, in consultation with the Minnesota Association of County Feedlot 57.35Officers executive team, shall make a final decision regarding any appeal by a county 57.36regarding the terms and conditions of this paragraph.58.1    (d) Performance credits: 15 percent of the total appropriation must be distributed 58.2according to work that has been done by the counties during the fiscal year. The amount 58.3must be determined by the number of performance credits a county accumulates during 58.4the year based on a performance credit matrix jointly agreed upon by the commissioner 58.5in consultation with the Minnesota Association of County Feedlot Officers executive 58.6team. To receive an award under this paragraph, the county must meet the requirements 58.7of paragraph (c), clause (1), and achieve 90 percent of the requirements according to 58.8paragraph (c), clause (2), of the formula. The rate of reimbursement per performance 58.9credit item must not exceed $200.58.10    Subd. 3.Minimum grant; prorated grant; transfers.Delegated counties are 58.11eligible for a minimum grant of $7,500. To receive the full $7,500 amount, a county must 58.12meet the requirements under subdivision 2, paragraph (c). Nondelegated counties that 58.13apply for delegation shall receive a grant prorated according to the number of full quarters 58.14remaining in the program year from the date of commissioner approval of the delegation. 58.15Awards to any newly delegated counties must be made out of the appropriation reserved 58.16under subdivision 2, paragraph (d). The commissioner, in consultation with the Minnesota 58.17Association of County Feedlot Officers executive team, may decide to use money reserved 58.18under subdivision 2, paragraph (d), in an amount not to exceed five percent of the total 58.19annual appropriation for initiatives to enhance existing delegated county feedlot programs, 58.20information and education, or technical assistance efforts to reduce feedlot-related 58.21pollution hazards. Any amount remaining after distribution under subdivision 2, 58.22paragraphs (b) and (c), must be transferred for purposes of subdivision 2, paragraph (d).58.23    Sec. 46. Minnesota Statutes 2008, section 116.41, subdivision 2, is amended to read:58.24    Subd. 2. Training and certification programs. The agency shall develop standards 58.25of competence for persons operating and inspecting various classes of disposal facilities. 58.26The agency shall conduct training programs for persons operating facilities for the 58.27disposal of waste and for inspectors of such facilities, and may shall charge such fees as 58.28are necessary to cover the actual costs of the training programs. All fees received shall be 58.29paid into the state treasury and credited to the Pollution Control Agency training account 58.30and are appropriated to the agency to pay expenses relating to the training of disposal 58.31facility personnel.58.32The agency shall require operators and inspectors of such facilities to obtain from 58.33the agency a certificate of competence. The agency shall conduct examinations to test the 58.34competence of applicants for certification, and shall require that certificates be renewed at 58.35reasonable intervals. The agency may charge such fees as are necessary to cover the actual 59.1costs of receiving and processing applications, conducting examinations, and issuing 59.2and renewing certificates. Certificates shall not be required for a private individual for 59.3land-spreading and associated interim and temporary storage of sewage sludge on property 59.4owned or farmed by that individual.59.5    Sec. 47. [116.9401] DEFINITIONS.59.6(a) For the purposes of sections 116.9401 to 116.9407, the following terms have 59.7the meanings given them.59.8(b) "Agency" means the Pollution Control Agency.59.9(c) "Alternative" means a substitute process, product, material, chemical, strategy, 59.10or combination of these that is technically feasible and serves a functionally equivalent 59.11purpose to a chemical in a children's product.59.12(d) "Chemical" means a substance with a distinct molecular composition or a group 59.13of structurally related substances and includes the breakdown products of the substance or 59.14substances that form through decomposition, degradation, or metabolism.59.15(e) "Chemical of high concern" means a chemical identified on the basis of credible 59.16scientific evidence by a state, federal, or international agency as being known or suspected 59.17with a high degree of probability to:59.18(1) harm the normal development of a fetus or child or cause other developmental 59.19toxicity;59.20(2) cause cancer, genetic damage, or reproductive harm;59.21(3) disrupt the endocrine or hormone system;59.22(4) damage the nervous system, immune system, or organs, or cause other systemic 59.23toxicity;59.24(5) be persistent, bioaccumulative, and toxic; or59.25(6) be very persistent and very bioaccumulative.59.26(f) "Child" means a person under 12 years of age.59.27(g) "Children's product" means a consumer product intended for use by children, 59.28such as baby products, toys, car seats, personal care products, and clothing.59.29(h) "Commissioner" means the commissioner of the Pollution Control Agency. 59.30(i) "Department" means the Department of Health.59.31(j) "Distributor" means a person who sells consumer products to retail establishments 59.32on a wholesale basis.59.33(k) "Green chemistry" means an approach to designing and manufacturing products 59.34that minimizes the use and generation of toxic substances.60.1(l) "Manufacturer" means any person who manufactures a final consumer product 60.2sold at retail or whose brand name is affixed to the consumer product. In the case of a 60.3consumer product imported into the United States, manufacturer includes the importer 60.4or domestic distributor of the consumer product if the person who manufactured or 60.5assembled the consumer product or whose brand name is affixed to the consumer product 60.6does not have a presence in the United States.60.7(m) "Priority chemical" means a chemical identified by the Department of Health as 60.8a chemical of high concern that meets the criteria in section 116.9403.60.9(n) "Safer alternative" means an alternative whose potential to harm human health is 60.10less than that of the use of a priority chemical that it could replace.60.11EFFECTIVE DATE.This section is effective the day following final enactment.60.12    Sec. 48. [116.9402] IDENTIFICATION OF CHEMICALS OF HIGH CONCERN.60.13(a) By July 1, 2010, the department shall, after consultation with the agency, 60.14generate a list of chemicals of high concern.60.15(b) The department must periodically review and revise the list of chemicals of high 60.16concern at least every three years. The department may add chemicals to the list if the 60.17chemical meets one or more of the criteria in section 116.9401, paragraph (e).60.18(c) The department shall consider chemicals listed as a suspected carcinogen, 60.19reproductive or developmental toxicant, or as being persistent, bioaccumulative, and 60.20toxic, or very persistent and very bioaccumulative by a state, federal, or international 60.21agency. These agencies may include, but are not limited to, the California Environmental 60.22Protection Agency, the Washington Department of Ecology, the United States Department 60.23of Health, the United States Environmental Protection Agency, the United Nation's World 60.24Health Organization, and European Parliament Annex X1V concerning the Registration, 60.25Evaluation, Authorisation, and Restriction of Chemicals.60.26(d) The department may consider chemicals listed by another state as harmful to 60.27human health or the environment for possible inclusion in the list of chemicals of high 60.28concern.60.29EFFECTIVE DATE.This section is effective the day following final enactment.60.30    Sec. 49. [116.9403] IDENTIFICATION OF PRIORITY CHEMICALS.60.31(a) The department, after consultation with the agency, may designate a chemical of 60.32high concern as a priority chemical if the department finds that the chemical:60.33(1) has been identified as a high-production volume chemical by the United States 60.34Environmental Protection Agency; and61.1(2) meets any of the following criteria:61.2(i) the chemical has been found through biomonitoring to be present in human blood, 61.3including umbilical cord blood, breast milk, urine, or other bodily tissues or fluids;61.4(ii) the chemical has been found through sampling and analysis to be present in 61.5household dust, indoor air, drinking water, or elsewhere in the home environment; or61.6(iii) the chemical has been found through monitoring to be present in fish, wildlife, 61.7or the natural environment.61.8(b) By February 1, 2011, the department shall publish a list of priority chemicals in 61.9the State Register and on the department's Internet Web site and shall update the published 61.10list whenever a new priority chemical is designated.61.11EFFECTIVE DATE.This section is effective the day following final enactment.61.12    Sec. 50. [116.9405] APPLICABILITY.61.13The requirements of sections 116.9401 to 116.9407 do not apply to:61.14(1) chemicals in used children's products;61.15(2) priority chemicals used in the manufacturing process, but that are not present 61.16in the final product;61.17(3) priority chemicals used in agricultural production;61.18(4) motor vehicles as defined in chapter 168 or watercraft as defined in chapter 61.1986B or their component parts, except that the use of priority chemicals in detachable 61.20car seats is not exempt;61.21(5) priority chemicals generated solely as combustion by-products or that are present 61.22in combustible fuels;61.23(6) retailers;61.24(7) pharmaceutical products or biologics;61.25(8) a medical device as defined in the federal Food, Drug, and Cosmetic Act, United 61.26States Code, title 21, section 321(h); 61.27(9) food and food or beverage packaging, except a container containing baby food 61.28or infant formula; 61.29(10) consumer electronics products and electronic components, including but not 61.30limited to personal computers; audio and video equipment; calculators; digital displays; 61.31wireless phones; cameras; game consoles; printers; and handheld electronic and electrical 61.32devices used to access interactive software or their associated peripherals; or products that 61.33comply with the provisions of directive 2002/95/EC of the European Union, adopted by 61.34the European Parliament and Council of the European Union now or hereafter in effect; or62.1    (11) outdoor sport equipment, including snowmobiles as defined in section 84.81, 62.2subdivision 3; all-terrain vehicles as defined in section 84.92, subdivision 8; personal 62.3watercraft as defined in section 86B.005, subdivision 14a; watercraft as defined in section 62.486B.005, subdivision 18; and off-highway motorcycles, as defined in section 84.787, 62.5subdivision 7, and all attachments and repair parts for all of this equipment.62.6EFFECTIVE DATE.This section is effective the day following final enactment.62.7    Sec. 51. [116.9406] DONATIONS TO THE STATE.62.8The commissioner may accept donations, grants, and other funds to carry out the 62.9purposes of sections 116.9401 to 116.9407. All donations, grants, and other funds must 62.10be accepted without preconditions regarding the outcomes of the regulatory oversight 62.11processes set forth in sections 116.9401 to 116.9407.62.12EFFECTIVE DATE.This section is effective the day following final enactment.62.13    Sec. 52. [116.9407] PARTICIPATION IN INTERSTATE CHEMICALS 62.14CLEARINGHOUSE.62.15The state may cooperate with other states in an interstate chemicals clearinghouse 62.16regarding chemicals in consumer products, including the classification of priority 62.17chemicals in commerce; organizing and managing available data on chemicals, including 62.18information on uses, hazards, risks, and environmental and health concerns; and producing 62.19and evaluating  information on safer alternatives to specific uses of priority chemicals.62.20EFFECTIVE DATE.This section is effective the day following final enactment.62.21    Sec. 53. Minnesota Statutes 2008, section 116C.834, subdivision 1, is amended to read:62.22    Subdivision 1. Costs. All costs incurred by the state to carry out its responsibilities 62.23under the compact and under sections 
         116C.833 to 
         116C.843 shall be paid by generators 62.24of low-level radioactive waste in this state through fees assessed by the Pollution Control 62.25Agency. Fees may be reasonably assessed on the basis of volume or degree of hazard of 62.26the waste produced by a generator. Costs for which fees may be assessed include, but 62.27are not limited to:  62.28(1) the state contribution required to join the compact;62.29(2) the expenses of the commission member and state agency costs incurred to 62.30support the work of the Interstate Commission; and62.31(3) regulatory costs.62.32The fees are exempt from section 16A.1285.63.1    Sec. 54. [216H.021] GREENHOUSE GAS EMISSIONS REPORTING.63.2    Subdivision 1.Commissioner to establish reporting system and maintain 63.3inventory.In order to measure the progress in meeting the goals of section 216H.02, 63.4subdivision 1, and to provide information to develop strategies to achieve those goals, the 63.5commissioner of the Pollution Control Agency shall establish a system for reporting and 63.6maintaining an inventory of greenhouse gas emissions. The commissioner must consult 63.7with the chief information officer of the Office of Enterprise Technology about system 63.8design and operation. Greenhouse gas emissions include those emissions described in 63.9section 216H.01, subdivision 2.63.10    Subd. 2.Reporting system design.(a) The commissioner shall, to the extent 63.11practicable, design the system to coordinate with other regional or federal greenhouse gas 63.12emissions-reporting and inventory systems. The coordination may, without limitation, 63.13include the use of similar forms and reports, the sharing of information, and the use of 63.14common facilities, systems, and databases.63.15(b) The reporting system need not include all sources of emissions nor all amounts 63.16of emissions but, at its outset, must include:63.17(1) all stationary sources and other facilities required to obtain a permit under Title 63.18V of the federal Clean Air Act, United States Code, title 42, section 7401 et. seq.; and63.19(2) facilities whose annual carbon dioxide equivalent emissions, as defined in 63.20section 216H.10, subdivision 3, exceed a threshold set by the commissioner at between 63.2110,000 tons and 25,000 tons. The reporting threshold set by the commissioner must 63.22be consistent with the goal of accurately tracking progress in attaining greenhouse 63.23gas emissions-reduction goals and the need for emissions data to assist in developing 63.24greenhouse gas emissions-reduction strategies.63.25(c) In designing the greenhouse gas emissions reporting system, the commissioner 63.26shall consider requiring the reporting of greenhouse gas emissions from transportation 63.27fuels and greenhouse gas emissions from natural gas combustion that are not included 63.28in reporting from stationary sources. In determining whether to include reporting of 63.29these emissions, the commissioner must consider both the goal of accurately tracking 63.30progress in attaining greenhouse gas emissions-reduction goals and the need for emissions 63.31data to assist in developing greenhouse gas emissions-reduction strategies recommended 63.32by the Minnesota Climate Change Advisory Group. If the commissioner decides that 63.33transportation fuels and portions of natural gas combustion should not be included in 63.34the initial emissions reporting system, the commissioner must report to the chairs and 63.35ranking minority members of the senate and house of representatives committees with 63.36primary jurisdiction over energy and environmental policy the reasons for that decision 64.1and suggestions for steps that should be taken to allow their inclusion in the emissions 64.2reporting system in the future.64.3(d) A facility reporting greenhouse gas emissions under this section must maintain 64.4the data used to create the reports for a minimum of five years.64.5    Subd. 3.Rules.The commissioner of the Pollution Control Agency may adopt rules 64.6for the purposes of this section.64.7EFFECTIVE DATE.This section is effective the day following final enactment.64.8    Sec. 55. Minnesota Statutes 2008, section 216H.10, subdivision 7, is amended to read:64.9    Subd. 7.  High-GWP greenhouse gas. "High-GWP greenhouse gas" means 64.10hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride, nitrous trifluoride, and any 64.11other gas the agency determines by rule to have a high global warming potential. 64.12    Sec. 56. Minnesota Statutes 2008, section 216H.11, is amended to read:64.13216H.11 HIGH-GWP GREENHOUSE GAS REPORTING. 64.14    Subdivision 1.  Gas manufacturers.Beginning By October 1, 2008, and each year 64.15thereafter, a manufacturer of a high-GWP greenhouse gas must report to the agency the 64.16total amount of each high-GWP greenhouse gas sold to a purchaser in this state during 64.17the previous year. 64.18    Subd. 2.  Purchases.Beginning By October 1, 2008, and each year thereafter, 64.19a person in this state who purchases 500 10,000 metric tons or more carbon dioxide 64.20equivalent of a high-GWP greenhouse gas for use or retail sale in this state must report 64.21to the agency, on a form prescribed by the commissioner, the total amount of each 64.22high-GWP greenhouse gas purchased for use or retail sale in this state during the previous 64.23year and the purpose for which the gas was used. The commissioner may adopt rules 64.24under chapter 14 to establish a different reporting threshold or to adopt specific reporting 64.25requirements for commercial or industrial facilities that purchase high-GWP gases for use 64.26or retail sale in this state.64.27    Subd. 3.  Acceptance of federal filing. With the approval of the commissioner, this 64.28section may be satisfied by filing with the commissioner a copy of a greenhouse gas 64.29emissions report filed with a federal agency or a regional or national greenhouse gas 64.30registry, provided that the entity with which the report is filed requires the emissions 64.31data to be verified.64.32    Sec. 57. [325E.046] STANDARDS FOR LABELING PLASTIC BAGS.65.1    Subdivision 1."Biodegradable" label.A manufacturer, distributor, or wholesaler 65.2may not offer for sale in this state a plastic bag labeled "biodegradable," "degradable," 65.3or any form of those terms, or in any way imply that the bag will chemically decompose 65.4into innocuous elements in a reasonably short period of time in a landfill, composting, or 65.5other terrestrial environment unless a scientifically based standard for biodegradability is 65.6developed and the bags are certified as meeting the standard.65.7    Subd. 2."Compostable" label.A manufacturer, distributor, or wholesaler may not 65.8offer for sale in this state a plastic bag labeled "compostable" unless, at the time of sale, 65.9the bag meets the ASTM Standard Specification for Compostable Plastics (D6400). Each 65.10bag must be labeled to reflect that it meets the standard. For purposes of this subdivision, 65.11"ASTM" has the meaning given in section 296A.01, subdivision 6.65.12    Subd. 3.Enforcement; civil penalty; injunctive relief.(a) A manufacturer, 65.13distributor, or wholesaler who violates subdivision 1 or 2 is subject to a civil penalty of 65.14$100 for each prepackaged saleable unit offered for sale up to a maximum of $5,000 65.15and may be enjoined from those violations.65.16(b) The attorney general may bring an action in the name of the state in a court of 65.17competent jurisdiction for recovery of civil penalties or for injunctive relief as provided in 65.18this subdivision. The attorney general may accept an assurance of discontinuance of acts 65.19in violation of subdivision 1 or 2 in the manner provided in section 8.31, subdivision 2b.65.20EFFECTIVE DATE.This section is effective January 1, 2010.65.21    Sec. 58. [383B.236] WASTE MANAGEMENT BY HENNEPIN COUNTY.65.22The Hennepin County Board of Commissioners may utilize money received from 65.23the sale of energy and recovered materials and placed in the county solid and hazardous 65.24waste fund under section 473.811, subdivision 9, for program expenses of the Department 65.25of Environmental Services, or the department or office succeeding to the functions of the 65.26Department of Environmental Services. This authority shall be in addition to the authority 65.27given in section 473.811, subdivision 9.65.28    Sec. 59. Laws 2005, chapter 156, article 2, section 45, as amended by Laws 2007, 65.29chapter 148, article 2, section 73, is amended to read:65.30    Sec. 45. SALE OF STATE LAND.65.31    Subdivision 1. State land sales. The commissioner of administration shall 65.32coordinate with the head of each department or agency having control of state-owned land 65.33to identify and sell at least $6,440,000 of state-owned land. Sales should be completed 65.34according to law and as provided in this section as soon as practicable but no later than 66.1June 30, 2009 2011. Notwithstanding Minnesota Statutes, sections 
         16B.281 and 
         16B.282, 66.294.09
          and 
         94.10, or any other law to the contrary, the commissioner may offer land 66.3for public sale by only providing notice of lands or an offer of sale of lands to state 66.4departments or agencies, the University of Minnesota, cities, counties, towns, school 66.5districts, or other public entities.66.6    Subd. 2. Anticipated savings. Notwithstanding Minnesota Statutes, section 66.794.16, subdivision 3
         , or other law to the contrary, the amount of the proceeds from the 66.8sale of land under this section that exceeds the actual expenses of selling the land must 66.9be deposited in the general fund, except as otherwise provided by the commissioner of 66.10finance. Notwithstanding Minnesota Statutes, section 
         94.11 or 
         16B.283, the commissioner 66.11of finance may establish the timing of payments for land purchased under this section. If 66.12the total of all money deposited into the general fund from the proceeds of the sale of land 66.13under this section is anticipated to be less than $6,440,000, the governor must allocate the 66.14amount of the difference as reductions to general fund operating expenditures for other 66.15executive agencies for the biennium ending June 30, 2009 2011.66.16    Subd. 3. Sale of state lands revolving loan fund. $290,000 is appropriated from 66.17the general fund in fiscal year 2006 to the commissioner of administration for purposes 66.18of paying the actual expenses of selling state-owned lands to achieve the anticipated 66.19savings required in this section. From the gross proceeds of land sales under this section, 66.20the commissioner of administration must cancel the amount of the appropriation in this 66.21subdivision to the general fund by June 30, 2009 2011.66.22EFFECTIVE DATE.This section is effective the day following final enactment.66.23    Sec. 60. Laws 2007, chapter 57, article 1, section 4, subdivision 2, is amended to read:

66.2466.25Subd. 2.Land and Mineral Resources Management11,747,00011,272,000

66.26Appropriations by Fund66.27General6,633,0006,230,00066.28Natural Resources3,551,0003,447,00066.29Game and Fish1,363,0001,395,00066.30Permanent School200,000200,000

66.31$475,000 the first year and $475,000 the 66.32second year are for iron ore cooperative 67.1research. Of this amount, $200,000 each year 67.2is from the minerals management account in 67.3the natural resources fund and $275,000 each 67.4year is from the general fund. $237,500 the 67.5first year and $237,500 the second year are 67.6available only as matched by $1 of nonstate 67.7money for each $1 of state money. The 67.8match may be cash or in-kind.67.9$86,000 the first year and $86,000 the 67.10second year are for minerals cooperative 67.11environmental research, of which $43,000 67.12the first year and $43,000 the second year are 67.13available only as matched by $1 of nonstate 67.14money for each $1 of state money. The 67.15match may be cash or in-kind.67.16$2,800,000 the first year and $2,696,000 67.17the second year are from the minerals 67.18management account in the natural resources 67.19fund for use as provided in Minnesota 67.20Statutes, section 
         93.2236, paragraph (c).67.21$200,000 the first year and $200,000 the 67.22second year are from the state forest suspense 67.23account in the permanent school fund to 67.24accelerate land exchanges, land sales, and 67.25commercial leasing of school trust lands and 67.26to identify, evaluate, and lease construction 67.27aggregate located on school trust lands. This 67.28appropriation is to be used for securing 67.29maximum long-term economic return 67.30from the school trust lands consistent with 67.31fiduciary responsibilities and sound natural 67.32resources conservation and management 67.33principles.67.34$15,000 the first year is for a report 67.35by February 1, 2008, to the house and 68.1senate committees with jurisdiction over 68.2environment and natural resources on 68.3proposed minimum legal and conservation 68.4standards that could be applied to 68.5conservation easements acquired with public 68.6money.68.7$1,201,000 the first year and $701,000 the 68.8second year are to support the land records 68.9management system. Of this amount, 68.10$326,000 the first year and $326,000 the 68.11second year are from the game and fish fund 68.12and $375,000 the first year and $375,000 the 68.13second year are from the natural resources 68.14fund. The unexpended balances are available 68.15until June 30, 2011. The commissioner 68.16must report to the legislative chairs on 68.17environmental finance on the outcomes of 68.18the land records management support.68.19$500,000 the first year and $500,000 the 68.20second year are for land asset management. 68.21This is a onetime appropriation.68.22    Sec. 61. Laws 2008, chapter 363, article 5, section 4, subdivision 7, is amended to read:

68.23Subd. 7.Fish and Wildlife Management123,000119,000

68.24Appropriations by Fund68.25General-0-(427,000)68.26Game and Fish123,000546,000

68.27$329,000 in 2009 is a reduction for fish and 68.28wildlife management.68.29$46,000 in 2009 is a reduction in the 68.30appropriation for the Minnesota Shooting 68.31Sports Education Center.68.32$52,000 in 2009 is a reduction for licensing.69.1$123,000 in 2008 and $246,000 in 2009 are 69.2from the game and fish fund to implement 69.3fish virus surveillance, prepare infrastructure 69.4to handle possible outbreaks, and implement 69.5control procedures for highest risk waters 69.6and fish production operations. This is a 69.7onetime appropriation.69.8Notwithstanding Minnesota Statutes, section 69.9297A.94
         , paragraph (e), $300,000 in 2009 69.10is from the second year appropriation in 69.11Laws 2007, chapter 57, article 1, section 4, 69.12subdivision 7, from the heritage enhancement 69.13account in the game and fish fund to study, 69.14predesign, and design a shooting sports 69.15facilities at the Vermillion Highlands Wildlife 69.16Management Area authorized by Laws 2007, 69.17chapter 57, article 1, section 168 facility in 69.18the seven-county metropolitan area. This is 69.19available onetime only and is available until 69.20expended.69.21$300,000 in 2009 is appropriated from the 69.22game and fish fund for only activities that 69.23improve, enhance, or protect fish and wildlife 69.24resources. This is a onetime appropriation.69.25    Sec. 62. SCORE REPORTING.69.26    Subdivision 1.2010 requirement.The requirements for the report specified in 69.27Minnesota Statutes, section 115A.557, subdivision 3, paragraph (b), clause (2), that is due 69.28April 1, 2010, shall be abbreviated in scope. The information collected shall be sufficient 69.29for the commissioner of the Pollution Control Agency to determine that counties have 69.30complied with the requirements of this subdivision.69.31    Subd. 2.Recommendations; report.The commissioner of the Pollution Control 69.32Agency, in consultation with the Association of Minnesota Counties, the Solid Waste 69.33Administrators Association, the Solid Waste Management Coordinating Board, and other 69.34interested parties shall make recommendations to amend the reporting requirements under 70.1Minnesota Statutes, section 115A.557, subdivision 3, in ways that reduce the resources 70.2counties employ to collect the data reported, while ensuring that estimation methods used 70.3to report data are consistent across counties and that the data reported are accurate and 70.4useful as a guide to solid waste management policy makers. The commissioner shall also 70.5make recommendations regarding the feasibility and desirability of multicounty reporting 70.6of the data. The commissioner's recommendations must be presented in a report submitted 70.7to the chairs and ranking minority members of the senate and house of representatives 70.8committees and divisions with primary jurisdiction over solid waste policy and finance 70.9no later than January 15, 2010.70.10    Sec. 63. PRIORITY CHEMICAL REPORTS.70.11(a) By January 15, 2010, the commissioner of health, in consultation with the 70.12Pollution Control Agency, shall report to the chairs and ranking minority members 70.13of the senate and house of representatives committees with primary jurisdiction over 70.14environment and natural resources policy, commerce, and public health regarding the 70.15progress on implementing new Minnesota Statutes, sections 116.9401 to 116.9406, and 70.16information on the progress of federal, international, and other states in identifying, 70.17prioritizing, evaluating, regulating, and reducing the use of chemicals of high concern 70.18and priority chemicals in children's products and in determining the availability of safer 70.19alternatives for specific applications and promoting the use of those safer alternatives.70.20(b) By December 15, 2010, the commissioner of the Pollution Control Agency 70.21shall report to the chairs and ranking minority members of the senate and house of 70.22representatives committees with primary jurisdiction over environment and natural 70.23resources policy, commerce, and public health assessing mechanisms used by other states, 70.24the federal government, and other countries to reduce and phase out the use of priority 70.25chemicals in children's products and promote the use of safer alternatives. The report shall 70.26include potential funding mechanisms to implement this process. The report must include 70.27recommendations to promote and provide incentives for product design that use principles 70.28of green chemistry and life-cycle analysis. In developing the report, the agency may 70.29consult with stakeholders, including representatives of state agencies, manufacturers of 70.30children's products, chemical manufacturers, public health experts, independent scientists, 70.31and public interest groups. The report must include information on any stakeholder 70.32process consulted with or used in developing the report.70.33(c) By January 15, 2010, the agency shall provide an interim report about the 70.34progress in developing the report required under paragraph (b), including information 70.35on the status of any stakeholder process.71.1EFFECTIVE DATE.This section is effective the day following final enactment.71.2    Sec. 64. REORGANIZATION PROHIBITION; ENVIRONMENTAL QUALITY 71.3BOARD.71.4Notwithstanding Minnesota Statutes, section 16B.37, unless expressly provided by 71.5law, the commissioner of administration shall not reorganize the Environmental Quality 71.6Board within another agency, prior to July 1, 2011.71.7    Sec. 65. ENVIRONMENTAL REVIEW STREAMLINING REPORT.71.8By February 15, 2010, the commissioner of the Pollution Control Agency, in 71.9consultation with staff from the Environmental Quality Board, shall submit a report 71.10to the environment and natural resources policy and finance committees of the house 71.11and senate on options to streamline the environmental review process under Minnesota 71.12Statutes, chapter 116D. In preparing the report, the commissioner shall consult with state 71.13agencies, local government units, and business, agriculture, and environmental advocacy 71.14organizations with an interest in the environmental review process. The report shall 71.15include options that will reduce the time required to complete environmental review and 71.16the cost of the process to responsible governmental units and project proposers while 71.17maintaining or improving air, land, and water quality standards.71.18    Sec. 66. COMPENSATION OF GOVERNOR'S STAFF.71.19For fiscal years 2010 and 2011, the Department of Natural Resources, the Pollution 71.20Control Agency, and the Board of Water and Soil Resources may not use funds 71.21appropriated in this article or funds from any statutory or open appropriation to pay 71.22directly or indirectly for the compensation costs of staff in the office of the governor.71.23    Sec. 67. FISH CONSUMPTION ADVISORIES.71.24    The commissioner of natural resources, in cooperation with the commissioner of 71.25health, shall ensure that fish consumption advisories are displayed in at least four different 71.26languages, one of which must be English, to fairly represent the population of the state.71.27    Sec. 68. CARBON SEQUESTRATION FORESTRY REPORT.71.28The Minnesota Forest Resources Council shall review the Minnesota Climate 71.29Change Advisory Group's recommendation to increase carbon sequestration in forests by 71.30planting 1,000,000 acres of trees and shall submit a report to the chairs of the house of 71.31representatives and senate committees with jurisdiction over energy and energy finance, 71.32environment and natural resources, and environment and natural resources finance; the 72.1governor; and the commissioner of natural resources by January 15, 2010. The report 72.2shall, at a minimum, include recommendations on implementation and analysis of the 72.3number and ownership of acres available for tree planting, the types of native species best 72.4suited for planting, the availability of planting stock, and potential costs.72.5    Sec. 69. REPEALER.72.6Laws 2008, chapter 363, article 5, section 30, is repealed.72.7ARTICLE 272.8ENERGY FINANCE

72.9Section 1. SUMMARY OF APPROPRIATIONS.

72.10    The amounts shown in this section summarize direct appropriations, by fund, made 72.11in this article.

72.1220102011Total72.13General$27,291,000$27,041,000$54,332,00072.14Petroleum Tank Cleanup1,084,0001,084,0002,168,00072.15Workers' Compensation751,000751,0001,502,00072.1672.17Telecommunications Access Minnesota600,000600,0001,200,00072.18Special Revenue1,350,000625,0001,975,00072.19Total$31,076,000$30,101,000$61,177,000

72.20Sec. 2. ENERGY FINANCE APPROPRIATIONS.

72.21    The sums shown in the columns marked "Appropriations" are appropriated to the 72.22agencies and for the purposes specified in this article. The appropriations are from the 72.23general fund, or another named fund, and are available for the fiscal years indicated 72.24for each purpose. The figures "2010" and "2011" used in this article mean that the 72.25appropriations listed under them are available for the fiscal year ending June 30, 2010, or 72.26June 30, 2011, respectively. "The first year" is fiscal year 2010. "The second year" is fiscal 72.27year 2011. "The biennium" is fiscal years 2010 and 2011. Appropriations for the fiscal 72.28year ending June 30, 2009, are effective the day following final enactment.

72.29APPROPRIATIONS72.30Available for the Year72.31Ending June 3072.3220102011

73.1Sec. 3. DEPARTMENT OF COMMERCE

73.2Subdivision 1.Total Appropriation$25,643,000$24,668,000

73.3Appropriations by Fund73.42010201173.5General21,858,00021,608,00073.6Petroleum Cleanup1,084,0001,084,00073.773.8Workers' Compensation751,000751,00073.9Special Revenue1,350,000625,00073.1073.11Telecommunications Access Minnesota600,000600,000

73.12The amounts that may be spent for each 73.13purpose are specified in the following 73.14subdivisions.

73.15Subd. 2.Financial Institutions6,638,0006,638,000

73.16$1,000 each year is for consumer small loan 73.17regulation modifications in article 7. This 73.18appropriation is added to the department's 73.19base.

73.2073.21Subd. 3.Petroleum Tank Release Cleanup Board1,084,0001,084,000

73.22This appropriation is from the petroleum 73.23tank release cleanup fund. The base funding 73.24for this program ends June 30, 2012.

73.25Subd. 4.Administrative Services4,300,0004,300,000

73.26Subd. 5.Telecommunications1,010,0001,010,000

73.27Subd. 6.Market Assurance7,421,0007,421,000

74.1Appropriations by Fund74.2General6,670,0006,670,00074.374.4Workers' Compensation751,000751,000

74.5Subd. 7.Office of Energy Security4,590,0003,615,000

74.6Appropriations by Fund74.7General3,240,0002,990,00074.8Special Revenue1,350,000625,000

74.9$250,000 the first year is for E-85 grants 74.10under Laws 2007, chapter 57, article 2, 74.11section 3, subdivision 6. Grants for on-site 74.12blending pumps must include up to 75 74.13percent of the total cost of the project, up to 74.14a maximum of $15,000 per pump. This is a 74.15onetime appropriation.74.16The utility subject to Minnesota Statutes, 74.17section 116C.779, shall transfer $1,350,000 74.18in fiscal year 2010 and $625,000 in fiscal 74.19year 2011 only to the Department of 74.20Commerce on a schedule determined by the 74.21commissioner of commerce. These funds 74.22must be deposited in the special revenue fund 74.23and are appropriated to the commissioner 74.24for grants to promote renewable energy 74.25projects and community energy outreach and 74.26assistance. Of the amounts identified:74.27(1) $300,000 the first year is for a grant 74.28to the Board of Regents of the University 74.29of Minnesota for the Natural Resources 74.30and Research Institute at the University of 74.31Minnesota, Duluth, to develop statewide 74.32heat flow maps in order to determine 75.1the geothermal potential of the state of 75.2Minnesota;75.3(2) $625,000 each year is for continued 75.4funding of community energy technical 75.5assistance and outreach on renewable 75.6energy and energy efficiency, as described 75.7in Minnesota Statutes, section 216C.385. 75.8Of this amount, $125,000 each year is for 75.9technical assistance in the metropolitan area;75.10(3) $25,000 the first year is for a grant to 75.11a nonprofit organization with experience 75.12in creating innovative partnerships through 75.13collaborative action with diverse interests, 75.14including businesses, government agencies, 75.15environmental organizations, and others, 75.16to manage a stakeholder process on green 75.17jobs that would integrate the work of the 75.18state Green Jobs Task Force and the mayors' 75.19initiative on green manufacturing; and75.20(4) $400,000 the first year is to provide 75.21financial rebates for new solar electricity 75.22projects.

75.2375.24Subd. 8.Telecommunications Access Minnesota600,000600,000

75.25$300,000 the first year and $300,000 75.26the second year are for transfer to the 75.27commissioner of human services to 75.28supplement the ongoing operational expenses 75.29of the Minnesota Commission Serving 75.30Deaf and Hard-of-Hearing People. This 75.31appropriation is from the telecommunication 75.32access Minnesota fund, and is added to 75.33the commission's base. This appropriation 75.34consolidates, and is not in addition to, 76.1appropriation language from Laws 2006, 76.2chapter 282, article 11, section 4, and 76.3Laws 2007, chapter 57, article 2, section 3, 76.4subdivision 7.76.5$300,000 each year is from the 76.6telecommunications access fund to the 76.7commissioner of commerce for a grant to 76.8the Legislative Coordinating Commission 76.9for a pilot program to provide captioning 76.10of live streaming of legislative sessions 76.11on the commission's Web site and a grant 76.12to the Commission of Deaf, DeafBlind, 76.13and Hard-of-Hearing Minnesotans to 76.14provide information on their Web site in 76.15American Sign Language and to provide 76.16technical assistance to state agencies. The 76.17commissioner of commerce may allocate 76.18a portion of this money to the Office 76.19of Technology to coordinate technology 76.20accessibility and usability.

76.21Subd. 9.Transfers

76.22By July 31, 2009, the commissioner of 76.23finance shall transfer $500,000 from the 76.24unexpended balance in the auto theft 76.25prevention account to the general fund.

76.26Sec. 4. PUBLIC UTILITIES COMMISSION$5,433,000$5,433,000

76.27    Sec. 5. Minnesota Statutes 2008, section 45.027, subdivision 1, is amended to read:76.28    Subdivision 1. General powers. In connection with the duties and responsibilities 76.29entrusted to the commissioner, and Laws 1993, chapter 361, section 2, the commissioner 76.30of commerce may:76.31(1) make public or private investigations within or without this state as the 76.32commissioner considers necessary to determine whether any person has violated or is 77.1about to violate any law, rule, or order related to the duties and responsibilities entrusted 77.2to the commissioner;77.3(2) require or permit any person to file a statement in writing, under oath or otherwise 77.4as the commissioner determines, as to all the facts and circumstances concerning the 77.5matter being investigated;77.6(3) hold hearings, upon reasonable notice, in respect to any matter arising out of the 77.7duties and responsibilities entrusted to the commissioner;77.8(4) conduct investigations and hold hearings for the purpose of compiling 77.9information related to the duties and responsibilities entrusted to the commissioner;77.10(5) examine the books, accounts, records, and files of every licensee, and of every 77.11person who is engaged in any activity regulated; the commissioner or a designated 77.12representative shall have free access during normal business hours to the offices and 77.13places of business of the person, and to all books, accounts, papers, records, files, safes, 77.14and vaults maintained in the place of business;77.15(6) publish information which is contained in any order issued by the commissioner; 77.16and77.17(7) require any person subject to duties and responsibilities entrusted to the 77.18commissioner, to report all sales or transactions that are regulated. The reports must 77.19be made within ten days after the commissioner has ordered the report. The report is 77.20accessible only to the respondent and other governmental agencies unless otherwise 77.21ordered by a court of competent jurisdiction.; and77.22(8) assess a licensee the necessary expenses of the investigation performed by the 77.23department when an investigation is made by order of the commissioner. The cost of the 77.24investigation shall be determined by the commissioner and is based on the salary cost 77.25of investigators or assistants and at an average rate per day or fraction thereof so as to 77.26provide for the total cost of the investigations. All money collected must be deposited into 77.27the general fund. A natural person licensed under chapter 60K or 82 shall not be charged 77.28costs of an investigation if the investigation results in no finding of a violation.77.29    Sec. 6. Minnesota Statutes 2008, section 60A.14, subdivision 1, is amended to read:77.30    Subdivision 1. Fees other than examination fees. In addition to the fees and 77.31charges provided for examinations, the following fees must be paid to the commissioner 77.32for deposit in the general fund:77.33(a) by township mutual fire insurance companies;77.34(1) for filing certificate of incorporation $25 and amendments thereto, $10;77.35(2) for filing annual statements, $15;78.1(3) for each annual certificate of authority, $15;78.2(4) for filing bylaws $25 and amendments thereto, $10;78.3(b) by other domestic and foreign companies including fraternals and reciprocal 78.4exchanges;78.5(1) for filing an application for an initial certification of authority to be admitted 78.6to transact business in this state, $1,500;78.7(2) for filing certified copy of certificate of articles of incorporation, $100;78.8(3) for filing annual statement, $225;78.9(4) for filing certified copy of amendment to certificate or articles of incorporation, 78.10$100;78.11(5) for filing bylaws, $75 or amendments thereto, $75;78.12(6) for each company's certificate of authority, $575, annually;78.13(c) the following general fees apply:78.14(1) for each certificate, including certified copy of certificate of authority, renewal, 78.15valuation of life policies, corporate condition or qualification, $25;78.16(2) for each copy of paper on file in the commissioner's office 50 cents per page, 78.17and $2.50 for certifying the same;78.18(3) for license to procure insurance in unadmitted foreign companies, $575;78.19(4) for valuing the policies of life insurance companies, one cent per $1,000 of 78.20insurance so valued, provided that the fee shall not exceed $13,000 per year for any 78.21company. The commissioner may, in lieu of a valuation of the policies of any foreign life 78.22insurance company admitted, or applying for admission, to do business in this state, accept 78.23a certificate of valuation from the company's own actuary or from the commissioner of 78.24insurance of the state or territory in which the company is domiciled;78.25(5) for receiving and filing certificates of policies by the company's actuary, or by 78.26the commissioner of insurance of any other state or territory, $50;78.27(6) for each appointment of an agent filed with the commissioner, $10;78.28(7) for filing forms, rates, and compliance certifications under section 
         60A.315, $9078.29$140 per filing, or $75$125 per filing when submitted via electronic filing system. Filing 78.30fees may be paid on a quarterly basis in response to an invoice. Billing and payment may 78.31be made electronically;78.32(8) for annual renewal of surplus lines insurer license, $300.78.33The commissioner shall adopt rules to define filings that are subject to a fee.78.34    Sec. 7. [116J.438] MINNESOTA GREEN ENTERPRISE ASSISTANCE.79.1(a) The commissioner of employment and economic development, in consultation 79.2with the commissioner of commerce, shall lead a multiagency project to advise, 79.3promote, market, and coordinate state agency collaboration on green enterprise and 79.4green economy projects, as defined in section 116J.437. The multiagency project must 79.5include the commissioners of employment and economic development, natural resources, 79.6agriculture, transportation, and commerce, and the Pollution Control Agency. The 79.7project must involve collaboration with the chairs and ranking minority members of 79.8legislative committees overseeing energy policy and energy finance, state agencies, 79.9local governments, representatives from business and agriculture, and other interested 79.10stakeholders. The objective of the project is to utilize existing state resources to expedite 79.11the delivery of grants, licenses, permits, and other state authorizations and approvals for 79.12green economy projects. The commissioner shall appoint a lead person to coordinate 79.13green enterprise assistance activities.79.14(b) The commissioner of employment and economic development shall seek out and 79.15may select persons from the business community to assist the commissioner in project 79.16activities.79.17(c) The commissioner may accept gifts, contributions, and in-kind services for the 79.18purposes of this section, under the authority provided in section 116J.035, subdivision 79.191. Any funds received must be placed in a special revenue account for the purposes of 79.20this section.79.21EFFECTIVE DATE.This section is effective the day following final enactment.79.22    Sec. 8. Minnesota Statutes 2008, section 216B.62, subdivision 3, is amended to read:79.23    Subd. 3. Assessing all public utilities. The department and commission shall 79.24quarterly, at least 30 days before the start of each quarter, estimate the total of their 79.25expenditures in the performance of their duties relating to (1) public utilities under section 79.26216A.085, sections 216A.085 and 216B.01 to 
         216B.67, other than amounts chargeable 79.27to public utilities under subdivision 2 or, 6, and (2) alternative energy engineering 79.28activity under section 216C.261 or 7. The remainder, except the amount assessed 79.29against cooperatives and municipalities for alternative energy engineering activity under 79.30subdivision 5, shall be assessed by the commission and department to the several public 79.31utilities in proportion to their respective gross operating revenues from retail sales of gas 79.32or electric service within the state during the last calendar year. The assessment shall be 79.33paid into the state treasury within 30 days after the bill has been transmitted via mail, 79.34personal delivery, or electronic service to the several public utilities, which shall constitute 79.35notice of the assessment and demand of payment thereof. The total amount which may 80.1be assessed to the public utilities, under authority of this subdivision, shall not exceed 80.2one-sixth of one percent of the total gross operating revenues of the public utilities 80.3during the calendar year from retail sales of gas or electric service within the state. The 80.4assessment for the third quarter of each fiscal year shall be adjusted to compensate for the 80.5amount by which actual expenditures by the commission and department for the preceding 80.6fiscal year were more or less than the estimated expenditures previously assessed. 80.7    Sec. 9. Minnesota Statutes 2008, section 216B.62, subdivision 4, is amended to read:80.8    Subd. 4. Objections. Within 30 days after the date of the transmittal of any bill as 80.9provided by subdivisions subdivision 2 and, 3, or 7, the public utility against which the bill 80.10has been rendered may file with the commission objections setting out the grounds upon 80.11which it is claimed the bill is excessive, erroneous, unlawful or invalid. The commission 80.12shall within 60 days hold a hearing and issue an order in accordance with its findings. The 80.13order shall be appealable in the same manner as other final orders of the commission.80.14    Sec. 10. Minnesota Statutes 2008, section 216B.62, subdivision 5, is amended to read:80.15    Subd. 5. Assessing cooperatives and municipals. The commission and department 80.16may charge cooperative electric associations, generation and transmission cooperative 80.17electric associations, municipal power agencies, and municipal electric utilities their 80.18proportionate share of the expenses incurred in the review and disposition of resource 80.19plans, adjudication of service area disputes, proceedings under section 
         216B.1691, 80.20216B.2425
         , or 
         216B.243, and the costs incurred in the adjudication of complaints over 80.21service standards, practices, and rates. Cooperative electric associations electing to 80.22become subject to rate regulation by the commission pursuant to section 
         216B.026, 80.23subdivision 4
         , are also subject to this section. Neither a cooperative electric association 80.24nor a municipal electric utility is liable for costs and expenses in a calendar year in excess 80.25of the limitation on costs that may be assessed against public utilities under subdivision 80.262. A cooperative electric association, generation and transmission cooperative electric 80.27association, municipal power agency, or municipal electric utility may object to and appeal 80.28bills of the commission and department as provided in subdivision 4.80.29The department shall assess cooperatives and municipalities for the costs of 80.30alternative energy engineering activities under section 216C.261. Each cooperative and 80.31municipality shall be assessed in proportion that its gross operating revenues for the sale 80.32of gas and electric service within the state for the last calendar year bears to the total of 80.33those revenues for all public utilities, cooperatives, and municipalities.81.1    Sec. 11. Minnesota Statutes 2008, section 216B.62, is amended by adding a subdivision 81.2to read:81.3    Subd. 7.Assessing all utilities.The department shall assess public utilities, 81.4cooperative electric associations, and municipal utilities for the costs of activities under 81.5chapter 216C. The department shall not assess for costs of grants, loans, or other aids or 81.6for costs that can be recovered through other assessment authority. Each public utility, 81.7cooperative, and municipal utility shall be assessed in the proportion that its gross 81.8operating revenue for the sale of gas and electric service within the state for the last 81.9calendar year bears to the total of those revenues for all public utilities, cooperatives, 81.10and municipalities.81.11    Sec. 12. BULK INSTALLATION OF SOLAR PHOTOVOLTAIC PANELS ON 81.12SCHOOL BUILDINGS; FEASIBILITY STUDY AND REPORT.81.13The director of the Office of Energy Security, in consultation with the commissioner 81.14of education, schools, school districts, and solar industry experts, must study the economic 81.15and technical feasibility of bulk installation of solar photovoltaic panels on school 81.16buildings in this state. The study must use a power-purchase agreement model in which 81.17a private company would pay for, install, and own the solar photovoltaic panels. No 81.18later than January 15, 2010, the director of the Office of Energy Security must report 81.19the results of the feasibility study, including whether the proposed model would reduce 81.20carbon emissions and result in savings to school districts, to the chairs and ranking 81.21minority members of the house of representatives and senate committees with jurisdiction 81.22over energy policy and finance.81.23EFFECTIVE DATE.This section is effective the day following final enactment.81.24    Sec. 13. APPROPRIATIONS; CANCELLATIONS.81.25(a) The remaining balance of the fiscal year 2009 special revenue fund appropriation 81.26for the Green Jobs Task Force under Laws 2008, chapter 363, article 6, section 3, 81.27subdivision 4, is transferred and appropriated to the commissioner of employment and 81.28economic development for the purposes of green enterprise assistance under Minnesota 81.29Statutes, section 116J.438. This appropriation is available until spent.81.30(b) The unencumbered balance of the fiscal year 2008 appropriation to the 81.31commissioner of commerce for the rural and energy development revolving loan 81.32fund under Laws 2007, chapter 57, article 2, section 3, subdivision 6, is canceled and 81.33reappropriated as follows:82.1(1) $1,500,000 is for a grant to the Board of Trustees of the Minnesota State Colleges 82.2and Universities for the International Renewable Energy Technology Institute (IRETI) to 82.3be located at Minnesota State University, Mankato, as a public and private partnership to 82.4support applied research in renewable energy and energy efficiency to aid in the transfer of 82.5technology from Sweden to Minnesota and to support technology commercialization from 82.6companies located in Minnesota and throughout the world; and82.7(2) the remaining balance is for a grant to the Board of Regents of the University of 82.8Minnesota for the initiative for renewable energy and the environment to fund start up 82.9costs related to a national solar testing and certification laboratory to test, rate, and certify 82.10the performance of equipment and devices that utilize solar energy for heating and cooling 82.11air and water and for generating electricity.82.12This appropriation is available until expended.82.13EFFECTIVE DATE.This section is effective the day following final enactment.82.14ARTICLE 382.15DEPARTMENT OF COMMERCE; OTHER REGULATORY PROVISIONS82.16    Section 1. Minnesota Statutes 2008, section 47.58, subdivision 1, is amended to read:82.17    Subdivision 1. Definitions. For the purposes of this section, the terms defined in this 82.18subdivision have the meanings given them.82.19(a) "Reverse mortgage loan" means a loan:82.20(1) Made to a borrower wherein the committed principal amount is paid to the 82.21borrower in equal or unequal installments over a period of months or years, interest is 82.22assessed, and authorized closing costs are incurred as specified in the loan agreement;82.23(2) Which is secured by a mortgage on residential property owned solely by the 82.24borrower; and82.25(3) Which is due when the committed principal amount has been fully paid to the 82.26borrower, or upon sale of the property securing the loan, or upon the death of the last 82.27surviving borrower, or upon the borrower terminating use of the property as principal 82.28residence so as to disqualify the property from the homestead credit given in chapter 290A.82.29(b) "Lender" means any bank subject to chapter 48, credit union subject to chapter 82.3052, savings bank organized and operated pursuant to chapter 50, savings association 82.31subject to chapter 51A, any residential mortgage originator subject to chapter 58, or any 82.32insurance company as defined in section 
         60A.02, subdivision 4. "Lender" also includes 82.33any federally chartered bank supervised by the comptroller of the currency or federally 82.34chartered savings association supervised by the Federal Home Loan Bank Board or 83.1federally chartered credit union supervised by the National Credit Union Administration, 83.2to the extent permitted by federal law.  83.3(c) "Borrower" includes any natural person holding an interest in severalty or as joint 83.4tenant or tenant-in-common in the property securing a reverse mortgage loan.83.5(d) "Outstanding loan balance" means the current net amount of money owed by the 83.6borrower to the lender whether or not that sum is suspended pursuant to the terms of the 83.7reverse mortgage loan agreement or is immediately due and payable. The outstanding 83.8loan balance is calculated by adding the current totals of the items described in clauses (1) 83.9to (5) and subtracting the current totals of the item described in clause (6):83.10(1) The sum of all payments made by the lender which are necessary to clear the 83.11property securing the loan of any outstanding mortgage encumbrance or mechanics or 83.12material supplier's lien.83.13(2) The total disbursements made by the lender to date pursuant to the loan 83.14agreement as formulated in accordance with subdivision 3.83.15(3) All taxes, assessments, insurance premiums and other similar charges paid to 83.16date by the lender pursuant to subdivision 6, which charges were not reimbursed by the 83.17borrower within 60 days.83.18(4) All actual closing costs which the borrower has deferred, if a deferral provision 83.19is contained in the loan agreement as authorized by subdivision 7.83.20(5) The total accrued interest to date, as authorized by subdivision 5.83.21(6) All payments made by the borrower pursuant to subdivision 4.83.22(e) "Actual closing costs" mean reasonable charges or sums ordinarily paid at the 83.23time of closing for the following, whether or not retained by the lender:83.24(1) Any insurance premiums on policies covering the mortgaged property including 83.25but not limited to premiums for title insurance, fire and extended coverage insurance, flood 83.26insurance, and private mortgage insurance.83.27(2) Abstracting, title examination and search, and examination of public records 83.28related to the mortgaged property.83.29(3) The preparation and recording of any or all documents required by law or custom 83.30for closing a reverse mortgage loan agreement.83.31(4) Appraisal and survey of real property securing a reverse mortgage loan.83.32(5) A single service charge, which service charge shall include any consideration, 83.33not otherwise specified in this section as an "actual closing cost," paid by the borrower to 83.34the lender for or in relation to the acquisition, making, refinancing or modification of a 83.35reverse mortgage loan, and shall also include any consideration received by the lender 83.36for making a commitment for a reverse mortgage loan, whether or not an actual loan 84.1follows the commitment. The service charge shall not exceed one percent of the bona fide 84.2committed principal amount of the reverse mortgage loan.84.3(6) Charges and fees necessary for or related to the transfer of real property securing 84.4a reverse mortgage loan or the closing of a reverse mortgage loan agreement paid by the 84.5borrower and received by any party other than the lender.84.6    Sec. 2. Minnesota Statutes 2008, section 47.60, subdivision 1, is amended to read:84.7    Subdivision 1. Definitions. For purposes of this section, the terms defined have 84.8the meanings given them:84.9(a) "Consumer small loan" is a loan transaction in which cash is advanced to a 84.10borrower for the borrower's own personal, family, or household purpose. A consumer 84.11small loan is a short-term, unsecured loan to be repaid in a single installment. The cash 84.12advance of a consumer small loan is equal to or less than $350. A consumer small loan 84.13includes an indebtedness evidenced by but not limited to a promissory note or agreement 84.14to defer the presentation of a personal check for a fee.84.15(b) "Consumer small loan lender" is a financial institution as defined in section 84.1647.59
          or a person business entity registered with the commissioner and engaged in the 84.17business of making consumer small loans. 84.18    Sec. 3. Minnesota Statutes 2008, section 47.60, subdivision 3, is amended to read:84.19    Subd. 3. Filing. Before a person business entity other than a financial institution 84.20as defined by section 
         47.59 engages in the business of making consumer small loans to 84.21Minnesota residents, the person business entity shall file with the commissioner as a 84.22consumer small loan lender. The filing must be on a form prescribed by the commissioner 84.23together with a fee of $250 for each place of business and contain the following 84.24information in addition to the information required by the commissioner: 84.25(1) evidence that the filer has available for the operation of the business at the 84.26location specified, liquid assets of at least $50,000; and84.27(2) a biographical statement on the principal person responsible for the operation 84.28and management of the business to be certified.84.29Revocation of the filing and the right to engage in the business of a consumer small 84.30loan lender is the same as in the case of a regulated lender license in section 
         56.09. 84.31For purposes of this subdivision, "business entity" includes one that does not have a 84.32physical location in Minnesota that makes a consumer small loan electronically via the 84.33Internet. 85.1    Sec. 4. Minnesota Statutes 2008, section 47.60, subdivision 6, is amended to read:85.2    Subd. 6. Penalties for violation. A person business entity or the person's entity's85.3members, officers, directors, agents, and employees who violate or participate in the 85.4violation of any of the provisions of this section may be liable in the same manner as in 85.5section 
         56.19. 85.6    Sec. 5. Minnesota Statutes 2008, section 48.21, is amended to read:85.748.21 REAL ESTATE; RESTRICTIONS ON HOLDING.85.8    Subdivision 1. Specific restrictions.(a) A bank may purchase, carry as an asset, 85.9and convey real estate only:85.10(1) as provided for in section 
         47.10;  85.11(2) if acquired through foreclosure of a mortgage given to it in good faith as security 85.12for loans made by or money due to it;85.13(3) if conveyed to it in satisfaction of debts previously contracted in good faith in 85.14the course of its dealings;85.15(4) if acquired by sale on execution or judgment of a court in its favor; or85.16(5) if reasonably necessary to mitigate or avoid loss on a loan or investment 85.17theretofore made.85.18(b) Real estate acquired under paragraph (a), clauses (2) to (5), shall be carried as an 85.19asset only in accordance with rules the commissioner prescribes. The maximum period for 85.20holding other real estate as an asset shall be five years, provided that upon application to 85.21the commissioner, the commissioner may approve the possession of such real estate by a 85.22bank for a period longer than five years, but not to exceed an additional five years, if:85.23(1) the bank has made a good faith attempt to dispose of the real estate within the 85.24initial five-year period; or85.25(2) disposal within the initial five-year period would be detrimental to the bank.85.26    Subd. 2. Real estate holdings not bank liabilities. Real estate owned by a bank as 85.27a result of actions authorized in clauses (2) to (5) of subdivision 1, paragraph (a), clauses 85.28(2) to (5), and subsequently sold to any buyer on a contract for deed may not be considered 85.29creating a liability to a bank for purposes of section 
         48.24.  85.30    Subd. 3. Real estate holdings not sold; authority to write off. Notwithstanding 85.31any rules of the commissioner to the contrary, if real estate owned by a bank pursuant to 85.32clauses (2) to (5) of subdivision 1, paragraph (a), clauses (2) to (5), is not sold or otherwise 85.33disposed of within the maximum period established by rule by the commissioner, the 86.1bank may write off any remaining balance at a rate not less than one-fifth of that balance 86.2each subsequent calendar year.86.3    Sec. 6. Minnesota Statutes 2008, section 58.05, subdivision 3, is amended to read:86.4    Subd. 3. Certificate of exemption. A person must obtain a certificate of exemption 86.5from the commissioner to qualify as an exempt person under section 
         58.04, subdivision 1, 86.6paragraph (c), a financial institution under clause (2), or by order of the commissioner 86.7under clause (6); or under section 
         58.04, subdivision 2, paragraph (b), as a financial 86.8institution under clause (3) (4), or by order of the commissioner under clause (7) (8). 86.9    Sec. 7. Minnesota Statutes 2008, section 58.06, subdivision 2, is amended to read:86.10    Subd. 2. Application contents. (a) The application must contain the name and 86.11complete business address or addresses of the license applicant. The license applicant 86.12must be a partnership, limited liability partnership, association, limited liability company, 86.13corporation, or other form of business organization, and the application must contain the 86.14names and complete business addresses of each partner, member, director, and principal 86.15officer. The application must also include a description of the activities of the license 86.16applicant, in the detail and for the periods the commissioner may require.86.17    (b) An A residential mortgage originator applicant must submit one of the following:86.18    (1) evidence which shows, to the commissioner's satisfaction, that either the federal 86.19Department of Housing and Urban Development or the Federal National Mortgage 86.20Association has approved the residential mortgage originator applicant as a mortgagee;86.21    (2) a surety bond or irrevocable letter of credit in the amount of not less than 86.22$50,000 in a form approved by the commissioner, issued by an insurance company or bank 86.23authorized to do so in this state. The bond or irrevocable letter of credit must be available 86.24for the recovery of expenses, fines, and fees levied by the commissioner under this chapter 86.25and for losses incurred by borrowers. The bond or letter of credit must be submitted with 86.26the license application, and evidence of continued coverage must be submitted with each 86.27renewal. Any change in the bond or letter of credit must be submitted for approval by the 86.28commissioner within ten days of its execution; or86.29    (3) a copy of the residential mortgage originator applicant's most recent audited 86.30financial statement, including balance sheet, statement of income or loss, statements of 86.31changes in shareholder equity, and statement of changes in financial position. Financial 86.32statements must be as of a date within 12 months of the date of application.86.33    (c) The application must also include all of the following:86.34    (1) an affirmation under oath that the applicant:87.1    (i) is in compliance with the requirements of section 
         58.125;87.2    (ii) will maintain a perpetual roster of individuals employed as residential mortgage 87.3originators, including employees and independent contractors, which includes the date87.4dates that mandatory testing, initial education was, and continuing education were87.5completed. In addition, the roster must be made available to the commissioner on demand, 87.6within three business days of the commissioner's request;87.7    (iii) will advise the commissioner of any material changes to the information 87.8submitted in the most recent application within ten days of the change;87.9    (iv) will advise the commissioner in writing immediately of any bankruptcy petitions 87.10filed against or by the applicant or licensee;87.11    (v) will maintain at all times either a net worth, net of intangibles, of at least 87.12$250,000 or a surety bond or irrevocable letter of credit in the amount of at least $50,000;87.13    (vi) complies with federal and state tax laws; and87.14    (vii) complies with sections 
         345.31 to 
         345.60, the Minnesota unclaimed property 87.15law;  87.16    (2) information as to the mortgage lending, servicing, or brokering experience of the 87.17applicant and persons in control of the applicant;87.18    (3) information as to criminal convictions, excluding traffic violations, of persons in 87.19control of the license applicant;87.20    (4) whether a court of competent jurisdiction has found that the applicant or persons 87.21in control of the applicant have engaged in conduct evidencing gross negligence, fraud, 87.22misrepresentation, or deceit in performing an act for which a license is required under 87.23this chapter;87.24    (5) whether the applicant or persons in control of the applicant have been the subject 87.25of: an order of suspension or revocation, cease and desist order, or injunctive order, or 87.26order barring involvement in an industry or profession issued by this or another state or 87.27federal regulatory agency or by the Secretary of Housing and Urban Development within 87.28the ten-year period immediately preceding submission of the application; and87.29    (6) other information required by the commissioner.87.30    Sec. 8. Minnesota Statutes 2008, section 58.126, is amended to read:87.3158.126 EDUCATION AND TESTING REQUIREMENT.87.32    (a) No individual shall engage in residential mortgage origination or make residential 87.33mortgage loans, whether as an employee or independent contractor, before the completion 87.34of 15 20 hours of educational training which has been approved by the commissioner, and 87.35covering state and federal laws concerning residential mortgage lending.88.1(b) In addition to the initial education requirements in paragraph (a), each individual 88.2must also complete eight hours of continuing education annually. The education must 88.3include:88.4(1) three hours of federal law and regulations;88.5(2) two hours of ethics, which must include fraud, consumer protection, and fair 88.6lending; and 88.7(3) two hours of standards governing nontraditional mortgage lending.88.8(c) The commissioner may by rule establish testing requirements for individuals 88.9subject to the requirements of paragraphs (a) and (b). An individual must satisfy the 88.10testing requirements established by the commissioner before engaging in residential 88.11mortgage loan origination or making residential mortgage loans.88.12EFFECTIVE DATE.This section is effective September 1, 2009, and applies to 88.13license applications and renewals made on or after that date.88.14    Sec. 9. Minnesota Statutes 2008, section 58.13, subdivision 1, is amended to read:88.15    Subdivision 1.  Generally. (a) No person acting as a residential mortgage originator 88.16or servicer, including a person required to be licensed under this chapter, and no person 88.17exempt from the licensing requirements of this chapter under section 
         58.04, except as 88.18otherwise provided in paragraph (b), shall: 88.19    (1) fail to maintain a trust account to hold trust funds received in connection with a 88.20residential mortgage loan; 88.21    (2) fail to deposit all trust funds into a trust account within three business days of 88.22receipt; commingle trust funds with funds belonging to the licensee or exempt person; or 88.23use trust account funds for any purpose other than that for which they are received; 88.24    (3) unreasonably delay the processing of a residential mortgage loan application, 88.25or the closing of a residential mortgage loan. For purposes of this clause, evidence of 88.26unreasonable delay includes but is not limited to those factors identified in section 
         47.206, 88.27subdivision 7
         , clause (d); 88.28    (4) fail to disburse funds according to its contractual or statutory obligations; 88.29    (5) fail to perform in conformance with its written agreements with borrowers, 88.30investors, other licensees, or exempt persons; 88.31    (6) charge a fee for a product or service where the product or service is not actually 88.32provided, or misrepresent the amount charged by or paid to a third party for a product 88.33or service; 88.34    (7) fail to comply with sections 
         345.31 to 
         345.60, the Minnesota unclaimed property 88.35law; 89.1    (8) violate any provision of any other applicable state or federal law regulating 89.2residential mortgage loans including, without limitation, sections 
         47.20 to 
         47.208, and 89.347.58; 89.4    (9) make or cause to be made, directly or indirectly, any false, deceptive, or 89.5misleading statement or representation in connection with a residential loan transaction 89.6including, without limitation, a false, deceptive, or misleading statement or representation 89.7regarding the borrower's ability to qualify for any mortgage product; 89.8    (10) conduct residential mortgage loan business under any name other than that 89.9under which the license or certificate of exemption was issued; 89.10    (11) compensate, whether directly or indirectly, coerce or intimidate an appraiser for 89.11the purpose of influencing the independent judgment of the appraiser with respect to the 89.12value of real estate that is to be covered by a residential mortgage or is being offered as 89.13security according to an application for a residential mortgage loan; 89.14    (12) issue any document indicating conditional qualification or conditional approval 89.15for a residential mortgage loan, unless the document also clearly indicates that final 89.16qualification or approval is not guaranteed, and may be subject to additional review; 89.17    (13) make or assist in making any residential mortgage loan with the intent that the 89.18loan will not be repaid and that the residential mortgage originator will obtain title to 89.19the property through foreclosure; 89.20    (14) provide or offer to provide for a borrower, any brokering or lending services 89.21under an arrangement with a person other than a licensee or exempt person, provided that 89.22a person may rely upon a written representation by the residential mortgage originator that 89.23it is in compliance with the licensing requirements of this chapter; 89.24    (15) claim to represent a licensee or exempt person, unless the person is an employee 89.25of the licensee or exempt person or unless the person has entered into a written agency 89.26agreement with the licensee or exempt person; 89.27    (16) fail to comply with the record keeping and notification requirements identified 89.28in section 
         58.14 or fail to abide by the affirmations made on the application for licensure; 89.29    (17) represent that the licensee or exempt person is acting as the borrower's agent 89.30after providing the nonagency disclosure required by section 
         58.15, unless the disclosure 89.31is retracted and the licensee or exempt person complies with all of the requirements of 89.32section 
         58.16; 89.33    (18) make, provide, or arrange for a residential mortgage loan that is of a lower 89.34investment grade if the borrower's credit score or, if the originator does not utilize credit 89.35scoring or if a credit score is unavailable, then comparable underwriting data, indicates 89.36that the borrower may qualify for a residential mortgage loan, available from or through 90.1the originator, that is of a higher investment grade, unless the borrower is informed that 90.2the borrower may qualify for a higher investment grade loan with a lower interest rate 90.3and/or lower discount points, and consents in writing to receipt of the lower investment 90.4grade loan; 90.5    For purposes of this section, "investment grade" refers to a system of categorizing 90.6residential mortgage loans in which the loans are: (i) commonly referred to as "prime" or 90.7"subprime"; (ii) commonly designated by an alphabetical character with "A" being the 90.8highest investment grade; and (iii) are distinguished by interest rate or discount points 90.9or both charged to the borrower, which vary according to the degree of perceived risk 90.10of default based on factors such as the borrower's credit, including credit score and 90.11credit patterns, income and employment history, debt ratio, loan-to-value ratio, and prior 90.12bankruptcy or foreclosure; 90.13    (19) make, publish, disseminate, circulate, place before the public, or cause to be 90.14made, directly or indirectly, any advertisement or marketing materials of any type, or any 90.15statement or representation relating to the business of residential mortgage loans that is 90.16false, deceptive, or misleading; 90.17    (20) advertise loan types or terms that are not available from or through the licensee 90.18or exempt person on the date advertised, or on the date specified in the advertisement. 90.19For purposes of this clause, advertisement includes, but is not limited to, a list of sample 90.20mortgage terms, including interest rates, discount points, and closing costs provided by 90.21licensees or exempt persons to a print or electronic medium that presents the information 90.22to the public; 90.23    (21) use or employ phrases, pictures, return addresses, geographic designations, or 90.24other means that create the impression, directly or indirectly, that a licensee or other 90.25person is a governmental agency, or is associated with, sponsored by, or in any manner 90.26connected to, related to, or endorsed by a governmental agency, if that is not the case; 90.27    (22) violate section 
         82.49, relating to table funding; 90.28(23) make, provide, or arrange for a residential mortgage loan all or a portion 90.29of the proceeds of which are used to fully or partially pay off a "special mortgage" 90.30unless the borrower has obtained a written certification from an authorized independent 90.31loan counselor that the borrower has received counseling on the advisability of the 90.32loan transaction. For purposes of this section, "special mortgage" means a residential 90.33mortgage loan originated, subsidized, or guaranteed by or through a state, tribal, or 90.34local government, or nonprofit organization, that bears one or more of the following 90.35nonstandard payment terms which substantially benefit the borrower: (i) payments vary 90.36with income; (ii) payments of principal or interest are not required or can be deferred under 91.1specified conditions; (iii) principal or interest is forgivable under specified conditions; 91.2or (iv) where no interest or an annual interest rate of two percent or less is charged in 91.3connection with the loan. For purposes of this section, "authorized independent loan 91.4counselor" means a nonprofit, third-party individual or organization providing homebuyer 91.5education programs, foreclosure prevention services, mortgage loan counseling, or credit 91.6counseling certified by the United States Department of Housing and Urban Development, 91.7the Minnesota Home Ownership Center, the Minnesota Mortgage Foreclosure Prevention 91.8Association, AARP, or NeighborWorks America; 91.9    (24) make, provide, or arrange for a residential mortgage loan without verifying 91.10the borrower's reasonable ability to pay the scheduled payments of the following, as 91.11applicable: principal; interest; real estate taxes; homeowner's insurance, assessments, 91.12and mortgage insurance premiums. For loans in which the interest rate may vary, the 91.13reasonable ability to pay shall be determined based on a fully indexed rate and a repayment 91.14schedule which achieves full amortization over the life of the loan. For all residential 91.15mortgage loans, the borrower's income and financial resources must be verified by tax 91.16returns, payroll receipts, bank records, or other similarly reliable documents. 91.17    Nothing in this section shall be construed to limit a mortgage originator's or exempt 91.18person's ability to rely on criteria other than the borrower's income and financial resources 91.19to establish the borrower's reasonable ability to repay the residential mortgage loan, 91.20including criteria established by the United States Department of Veterans Affairs or the 91.21United States Department of Housing and Urban Development for interest rate reduction 91.22refinancing loans or streamline loans, or criteria authorized or promulgated by the 91.23Federal National Mortgage Association or Federal Home Loan Mortgage Corporation; 91.24however, such other criteria must be verified through reasonably reliable methods and 91.25documentation. The mortgage originator's analysis of the borrower's reasonable ability 91.26to repay may include, but is not limited to, consideration of the following items, if 91.27verified: (1) the borrower's current and expected income; (2) current and expected cash 91.28flow; (3) net worth and other financial resources other than the consumer's equity in the 91.29dwelling that secures the loan; (4) current financial obligations; (5) property taxes and 91.30insurance; (6) assessments on the property; (7) employment status; (8) credit history; (9) 91.31debt-to-income ratio; (10) credit scores; (11) tax returns; (12) pension statements; and 91.32(13) employment payment records, provided that no mortgage originator shall disregard 91.33facts and circumstances that indicate that the financial or other information submitted by 91.34the consumer is inaccurate or incomplete. A statement by the borrower to the residential 91.35mortgage originator or exempt person of the borrower's income and resources or sole 92.1reliance on any single item listed above is not sufficient to establish the existence of the 92.2income or resources when verifying the reasonable ability to pay. 92.3    (25) engage in "churning." As used in this section, "churning" means knowingly or 92.4intentionally making, providing, or arranging for a residential mortgage loan when the 92.5new residential mortgage loan does not provide a reasonable, tangible net benefit to the 92.6borrower considering all of the circumstances including the terms of both the new and 92.7refinanced loans, the cost of the new loan, and the borrower's circumstances; 92.8    (26) the first time a residential mortgage originator orally informs a borrower of the 92.9anticipated or actual periodic payment amount for a first-lien residential mortgage loan 92.10which does not include an amount for payment of property taxes and hazard insurance, 92.11the residential mortgage originator must inform the borrower that an additional amount 92.12will be due for taxes and insurance and, if known, disclose to the borrower the amount of 92.13the anticipated or actual periodic payments for property taxes and hazard insurance. This 92.14same oral disclosure must be made each time the residential mortgage originator orally 92.15informs the borrower of a different anticipated or actual periodic payment amount change 92.16from the amount previously disclosed. A residential mortgage originator need not make 92.17this disclosure concerning a refinancing loan if the residential mortgage originator knows 92.18that the borrower's existing loan that is anticipated to be refinanced does not have an 92.19escrow account; or 92.20    (27) make, provide, or arrange for a residential mortgage loan, other than a reverse 92.21mortgage pursuant to United States Code, title 15, chapter 41, if the borrower's compliance 92.22with any repayment option offered pursuant to the terms of the loan will result in negative 92.23amortization during any six-month period. 92.24    (b) Paragraph (a), clauses (24) through (27), do not apply to a state or federally 92.25chartered bank, savings bank, or credit union, an institution chartered by Congress under 92.26the Farm Credit Act, or to a person making, providing, or arranging a residential mortgage 92.27loan originated or purchased by a state agency or a tribal or local unit of government. This 92.28paragraph supersedes any inconsistent provision of this chapter. 92.29    Sec. 10. Minnesota Statutes 2008, section 60A.124, is amended to read:92.3060A.124 INDEPENDENT AUDIT.92.31The audit report of the independent certified public accountant that performs the 92.32audit of an insurer's annual statement as required under section 
         60A.129 60A.1291, 92.33subdivision 3 2, paragraph (a), should contain a statement as to whether anything, in 92.34connection with their audit, came to their attention that caused them to believe that the 93.1insurer failed to adopt and consistently apply the valuation procedure as required by 93.2sections 
         60A.122 and 
         60A.123.  93.3    Sec. 11. [60A.1291] ANNUAL AUDIT.93.4    Subdivision 1.Definitions.The definitions in this subdivision apply to this section.93.5(a) "Accountant" and "independent public accountant" mean an independent certified 93.6public accountant or accounting firm in good standing with the American Institute of 93.7Certified Public Accountants and in all states in which the accountant or firm is licensed 93.8or is required to be licensed to practice. For Canadian and British companies, the term 93.9means a Canadian-chartered or British-chartered accountant.93.10(b) "Audit committee" means a committee or equivalent body established by the 93.11board of directors of an entity for the purpose of overseeing the accounting and financial 93.12reporting processes of an insurer or group of insurers, and audits of financial statements of 93.13the insurer or group of insurers. The audit committee of any entity that controls a group of 93.14insurers may be deemed to be the audit committee for one or more of these controlled 93.15insurers solely for the purposes of this section at the election of the controlling person 93.16under subdivision 15, paragraph (e). If an audit committee is not designated by the insurer, 93.17the insurer's entire board of directors constitutes the audit committee.93.18(c) "Indemnification" means an agreement of indemnity or a release from liability 93.19where the intent or effect is to shift or limit in any manner the potential liability of the 93.20person or firm for failure to adhere to applicable auditing or professional standards, 93.21whether or not resulting in part from knowing of other misrepresentations made by the 93.22insurer or its representatives.93.23(d) "Independent board member" has the same meaning as described in subdivision 93.2415, paragraph (c).93.25(e) "Internal control over financial reporting" means a process effected by an entity's 93.26board of directors, management, and other personnel designed to provide reasonable 93.27assurance regarding the reliability of the financial statements, for example, those items 93.28specified in subdivision 4, paragraphs (a), clauses (2) to (6), (b), and (c), and includes 93.29those policies and procedures that:93.30(1) pertain to the maintenance of records that, in reasonable detail, accurately and 93.31fairly reflect the transactions and dispositions of assets;93.32(2) provide reasonable assurance that transactions are recorded as necessary to permit 93.33preparation of the financial statements, for example, those items specified in subdivision 4, 93.34paragraphs (a), clauses (2) to (6), (b), and (c), and that receipts and expenditures are being 93.35made only in accordance with authorizations of management and directors; and94.1(3) provide reasonable assurance regarding prevention or timely detection of 94.2unauthorized acquisition, use, or disposition of assets that could have a material effect on 94.3the financial statements, for example, those items specified in subdivision 4, paragraphs 94.4(a), clauses (2) to (6), (b), and (c).94.5(f) "SEC" means the United States Securities and Exchange Commission.94.6(g) "Section 404" means Section 404 of the Sarbanes-Oxley Act of 2002 and the 94.7SEC's rules and regulations promulgated under it.94.8(h) "Section 404 report" means management's report on "internal control over 94.9financial reporting" as defined by the SEC and the related attestation report of the 94.10independent certified public accountant as described in paragraph (a).94.11(i) "SOX compliant entity" means an entity that either is required to be 94.12compliant with, or voluntarily is compliant with, all of the following provisions of the 94.13Sarbanes-Oxley Act of 2002: (i) the preapproval requirements of Section 201 (section 94.1410A(i) of the Securities Exchange Act of 1934); (ii) the audit committee independence 94.15requirements of Section 301 (section 10A(m)(3) of the Securities Exchange Act of 1934); 94.16and (iii) the internal control over financial reporting requirements of Section 404 (Item 94.17308 of SEC Regulation S-K).94.18    Subd. 2.Filing requirements.Every insurance company doing business in this 94.19state, including fraternal benefit societies, reciprocal exchanges, service plan corporations 94.20licensed pursuant to chapter 62C, and legal service plans licensed pursuant to chapter 94.2162G, unless exempted by the commissioner pursuant to subdivision 9, paragraph (a), or by 94.22subdivision 18, shall have an annual audit of the financial activities of the most recently 94.23completed calendar year performed by an independent certified public accountant, and 94.24shall file the report of this audit with the commissioner on or before June 1 for the 94.25immediately preceding year ending December 31. The commissioner may require an 94.26insurer to file an audited financial report earlier than June 1 with 90 days' advance notice 94.27to the insurer.94.28Extensions of the June 1 filing date may be granted by the commissioner for 30-day 94.29periods upon a showing by the insurer and its independent certified public accountant of 94.30the reasons for requesting the extension and a determination by the commissioner of good 94.31cause for the extension.94.32The request for extension must be submitted in writing not less than ten days before 94.33the due date in sufficient detail to permit the commissioner to make an informed decision 94.34with respect to the requested extension.95.1If an extension is granted in accordance with this subdivision, a similar extension of 95.230 days is granted to the filing of management's report of internal control over financial 95.3reporting.95.4Every insurer required to file an annual audited financial report pursuant to this 95.5subdivision shall designate a group of individuals as constituting its audit committee. The 95.6audit committee of an entity that controls an insurer may be deemed to be the insurer's 95.7audit committee for purposes of this subdivision at the election of the controlling person.95.8    Subd. 3.Exemptions.Foreign and alien insurers filing audited financial reports 95.9in another state under the other state's requirements of audited financial reports which 95.10have been found by the commissioner to be substantially similar to these requirements 95.11are exempt from this section if a copy of the audited financial report, communication of 95.12internal control related matters noted in an audit, accountant's letter of qualifications, and 95.13report on significant deficiencies in internal controls, which are filed with the other state, 95.14are filed with the commissioner in accordance with the filing dates specified in subdivision 95.152 (Canadian insurers may submit accountants' reports as filed with the Canadian Dominion 95.16Department of Insurance); and a copy of any notification of adverse financial condition 95.17report filed with the other state is filed with the commissioner within the time specified 95.18in subdivision 11. Foreign or alien insurers required to file management's report of 95.19internal control over financial reporting in another state are exempt from filing the report 95.20in this state provided the other state has substantially similar reporting requirements and 95.21the report is filed with the commissioner of the other state within the time specified. 95.22This subdivision does not prohibit or in any way limit the commissioner from ordering, 95.23conducting, and performing examinations of insurers under the authority of this chapter.95.24    Subd. 4.Contents of annual audit; financial report.(a) The annual audited 95.25financial report must report, in conformity with statutory accounting practices required 95.26or permitted by the commissioner of insurance of the state of domicile, the financial 95.27position of the insurer as of the end of the most recent calendar year and the results of 95.28its operations, cash flows, and changes in capital and surplus for the year ended. The 95.29annual audited financial report must include:95.30(1) a report of an independent certified public accountant;95.31(2) a balance sheet reporting admitted assets, liabilities, capital, and surplus;95.32(3) a statement of operations;95.33(4) a statement of cash flows;95.34(5) a statement of changes in capital and surplus; and95.35(6) notes to the financial statements.96.1(b) The notes required under paragraph (a) are those required by the appropriate 96.2National Association of Insurance Commissioners (NAIC) annual statement instructions 96.3and National Association of Insurance Commissioners Accounting Practices and 96.4Procedures Manual and include reconciliation of differences, if any, between the audited 96.5statutory financial statements and the annual statement filed under section 60A.13, 96.6subdivision 1, with a written description of the nature of these differences.96.7(c) The financial statements included in the audited financial report must be prepared 96.8in a form and using language and groupings substantially the same as the relevant sections 96.9of the annual statement of the insurer filed with the commissioner. The financial statement 96.10must be comparative, presenting the amounts as of December 31 of the current year and 96.11the amounts as of the immediately preceding December 31. In the first year in which 96.12an insurer is required to file an audited financial report, the comparative data may be 96.13omitted. The amounts may be rounded to the nearest $1,000, and all immaterial amounts 96.14may be combined.96.15    Subd. 5.Designation of independent certified public accountant.Each insurer 96.16required by this section to file an annual audited financial report must notify the 96.17commissioner in writing of the name and address of the independent certified public 96.18accountant or accounting firm retained to conduct the annual audit within 60 days after 96.19becoming subject to the annual audit requirement. The insurer shall obtain from the 96.20accountant a letter which states that the accountant is aware of the provisions that relate 96.21to accounting and financial matters in the insurance laws and the rules of the insurance 96.22regulatory authority of the state of domicile. The letter shall affirm that the accountant will 96.23express an opinion on the financial statements in terms of their conformity to the statutory 96.24accounting practices prescribed or otherwise permitted by that insurance regulatory 96.25authority, specifying the exceptions believed to be appropriate. A copy of the accountant's 96.26letter shall be filed with the commissioner.96.27    Subd. 6.Report of disagreements.If an accountant who was the accountant for 96.28the immediately preceding filed audited financial report is dismissed or resigns, the 96.29insurer shall notify the commissioner of this event within five business days. Within 96.30ten business days of this notification, the insurer shall also furnish the commissioner 96.31with a separate letter stating whether in the 24 months preceding this event there were 96.32any disagreements with the former accountant on any matter of accounting principles or 96.33practices, financial statement disclosure, or auditing scope or procedure, which, if not 96.34resolved to the satisfaction of the former accountant, would have caused that person to 96.35make reference to the subject matter of the disagreement in connection with the opinion 96.36on the financial statements. The disagreements required to be reported in response to this 97.1subdivision include both those resolved to the former accountant's satisfaction and those 97.2not resolved to the former accountant's satisfaction. Disagreements contemplated by this 97.3subdivision are those disagreements between personnel of the insurer responsible for 97.4presentation of its financial statements and personnel of the accounting firm responsible 97.5for rendering its report. The insurer shall also in writing request the former accountant 97.6to furnish a letter addressed to the insurer stating whether the accountant agrees with 97.7the statements contained in the insurer's letter and, if not, stating the reasons for any 97.8disagreement. The insurer shall furnish this responsive letter from the former accountant 97.9to the commissioner together with its own.97.10    Subd. 7.Qualifications of independent certified public accountant.(a) The 97.11commissioner shall not recognize any person or firm as a qualified independent certified 97.12public accountant that is not in good standing with the American Institute of Certified 97.13Public Accountants and in all states in which the accountant is licensed or is required 97.14to be licensed to practice, or for a Canadian or British company, that is not a chartered 97.15accountant, or that has either directly or indirectly entered into an agreement of indemnity 97.16or release from liability (collectively referred to as an indemnification agreement) with 97.17respect to the audit of the insurer. Except as otherwise provided, an independent certified 97.18public accountant must be recognized as qualified as long as the person conforms to the 97.19standards of the person's profession, as contained in the Code of Professional Conduct 97.20of the American Institute of Certified Public Accountants and the Code of Professional 97.21Conduct of the Minnesota Board of Public Accountancy or similar code and the person is 97.22properly licensed in good standing with all required state boards of accountancy.97.23(b) The lead or coordinating audit partner, having primary responsibility for the 97.24audit, may not act in that capacity for more than five consecutive years. The person shall 97.25be disqualified from acting in that or a similar capacity for the same company or its 97.26insurance subsidiaries or affiliates for a period of five consecutive years. An insurer may 97.27make application to the commissioner for relief from this rotation requirement on the 97.28basis of unusual circumstances. This application must be made at least 30 days before 97.29the end of the calendar year. The commissioner may consider the following factors in 97.30determining if the relief should be granted:97.31(1) number of partners, expertise of the partners, or the number of insurance clients 97.32in the currently registered firm;97.33(2) premium volume of the insurer; or97.34(3) number of jurisdictions in which the insurer transacts business.97.35The insurer shall file, with its annual statement filing, the approval for relief from this 97.36paragraph with the states that it is licensed in or doing business in and with the NAIC. If 98.1the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the 98.2approval in an electronic format acceptable to the NAIC.98.3(c) The commissioner shall not recognize as a qualified independent certified public 98.4accountant, nor accept an annual audited financial report, prepared in whole or in part by 98.5an accountant who provides to an insurer, contemporaneously with the audit, the following 98.6nonaudit services:98.7(1) bookkeeping or other services related to the accounting records or financial 98.8statements of the insurer;98.9(2) financial information systems design and implementation;98.10(3) appraisal or valuation services, fairness opinions, or contribution in-kind reports;98.11(4) actuarially oriented advisory services involving the determination of amounts 98.12recorded in the financial statements. The accountant may assist an insurer in understanding 98.13the methods, assumptions, and inputs used in the determination of amounts recorded in the 98.14financial statement only if it is reasonable to conclude that the services provided will not 98.15be subject to audit procedures during an audit of the insurer's financial statements. An 98.16accountant's actuary may also issue an actuarial opinion or certification on an insurer's 98.17reserves if the following conditions have been met:98.18(i) neither the accountant nor the accountant's actuary has performed any 98.19management functions or made any management decisions;98.20(ii) the insurer has competent personnel, or engages a third-party actuary, to estimate 98.21the loss reserves for which management takes responsibility; and98.22(iii) the accountant's actuary tests the reasonableness of the reserves after the 98.23insurer's management has determined the amount of the loss reserves;98.24(5) internal audit outsourcing services;98.25(6) management functions or human resources;98.26(7) broker or dealer, investment adviser, or investment banking services;98.27(8) legal services or expert services unrelated to the audit; and98.28(9) any other services that the commissioner determines, by rule, are impermissible.98.29(d) The commissioner shall not recognize as a qualified independent certified public 98.30accountant, nor accept any audited financial report, prepared in whole or in part by any 98.31natural person who has been convicted of fraud, bribery, a violation of the Racketeer 98.32Influenced and Corrupt Organizations Act, United States Code, title 18, sections 1961 to 98.331968, or any dishonest conduct or practices under federal or state law, has been found to 98.34have violated the insurance laws of this state with respect to any previous reports submitted 98.35under this section, or has demonstrated a pattern or practice of failing to detect or disclose 98.36material information in previous reports filed under the provisions of this section.99.1(e) The commissioner, after notice and hearing under chapter 14, may find that 99.2the accountant is not qualified for purposes of expressing an opinion on the financial 99.3statements in the annual audited financial report. The commissioner may require the 99.4insurer to replace the accountant with another whose relationship with the insurer is 99.5qualified within the meaning of this section.99.6    Subd. 8.Exemptions to qualifications of certified public accountant.(a) Insurers 99.7having direct written and assumed premiums of less than $100,000,000 in any calendar 99.8year may request an exemption from subdivision 7, paragraph (c). The insurer shall 99.9file with the commissioner a written statement discussing the reasons why the insurer 99.10should be exempt from these provisions. If the commissioner finds, upon review of this 99.11statement, that compliance with this section would constitute a financial or organizational 99.12hardship upon the insurer, an exemption may be granted.99.13(b) A qualified independent certified public accountant who performs the audit 99.14may engage in other nonaudit services, including tax services, that are not described in 99.15subdivision 7, paragraph (c), only if the activity is approved in advance by the audit 99.16committee, in accordance with paragraph (c).99.17(c) All auditing services and nonaudit services provided to an insurer by the qualified 99.18independent certified public accountant of the insurer must be preapproved by the audit 99.19committee. The preapproval requirement is waived with respect to nonaudit services if 99.20the insurer is a SOX compliant entity or a direct or indirect wholly owned subsidiary of a 99.21SOX compliant entity or:99.22(1) the aggregate amount of all such nonaudit services provided to the insurer 99.23constitutes not more than five percent of the total amount of fees paid by the insurer to 99.24its qualified independent certified public accountant during the fiscal year in which the 99.25nonaudit services are provided;99.26(2) the services were not recognized by the insurer at the time of the engagement to 99.27be nonaudit services; and99.28(3) the services are promptly brought to the attention of the audit committee and 99.29approved before the completion of the audit by the audit committee or by one or more 99.30members of the audit committee who are the members of the board of directors to whom 99.31authority to grant such approvals has been delegated by the audit committee.99.32(d) The audit committee may delegate to one or more designated members of the 99.33audit committee the authority to grant the preapprovals required by paragraph (c). The 99.34decisions of any member to whom this authority is delegated must be presented to the full 99.35audit committee at each of its scheduled meetings.100.1(e) The commissioner shall not recognize an independent certified public accountant 100.2as qualified for a particular insurer if a member of the board, president, chief executive 100.3officer, controller, chief financial officer, chief accounting officer, or any person serving in 100.4an equivalent position for that insurer, was employed by the independent certified public 100.5accountant and participated in the audit of that insurer during the one-year period preceding 100.6the date that the most current statutory opinion is due. This paragraph applies only to 100.7partners and senior managers involved in the audit. An insurer may make application to 100.8the commissioner for relief from this paragraph on the basis of unusual circumstances.100.9(f) The insurer shall file, with its annual statement filing, the approval for relief with 100.10the states that it is licensed in or doing business in and the NAIC. If the nondomestic state 100.11accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic 100.12format acceptable to the NAIC.100.13    Subd. 9.Consolidated or combined audits.(a) The commissioner may allow 100.14an insurer to file consolidated or combined audited financial statements required by 100.15subdivision 2, in lieu of separate annual audited financial statements, where it can be 100.16demonstrated that an insurer is part of a group of insurance companies that has a pooling 100.17or 100 percent reinsurance agreement which substantially affects the solvency and 100.18integrity of the reserves of the insurer and the insurer cedes all of its direct and assumed 100.19business to the pool. An affiliated insurance company not meeting these requirements may 100.20be included in the consolidated or combined audited financial statements, if the company's 100.21total admitted assets are less than five percent of the consolidated group's total admitted 100.22assets. If these circumstances exist, then the company may file a written application to 100.23file consolidated or combined audited financial statements. This application must be for 100.24a specified period.100.25(b) Upon written application by a domestic insurer, the commissioner may 100.26authorize the domestic insurer to include additional affiliated insurance companies in the 100.27consolidated or combined audited financial statements. A foreign insurer must obtain the 100.28prior written authorization of the commissioner of its state of domicile in order to submit 100.29an application for authority to file consolidated or combined audited financial statements. 100.30This application must be for a specified period.100.31(c) A consolidated annual audit filing must include a columnar consolidated or 100.32combining worksheet. Amounts shown on the audited consolidated or combined financial 100.33statement must be shown on the worksheet. Amounts for each insurer must be stated 100.34separately. Noninsurance operations may be shown on the worksheet on a combined or 100.35individual basis. Explanations of consolidating or eliminating entries must be shown on 100.36the worksheet. A reconciliation of any differences between the amounts shown in the 101.1individual insurer columns of the worksheet and comparable amounts shown on the annual 101.2statement of the insurers must be included on the worksheet.101.3    Subd. 10.Scope of audit and report of independent certified public accountant.101.4Financial statements furnished pursuant to subdivision 4 must be examined by an 101.5independent certified public accountant. The audit of the insurer's financial statements 101.6must be conducted in accordance with generally accepted auditing standards. In 101.7accordance with AICPA Statement on Auditing Standards (SAS) No. 109, Understanding 101.8the Entity and its Environment and Assessing the Risks of Material Misstatement, or its 101.9replacement, the independent certified public accountant should obtain an understanding 101.10of internal control sufficient to plan the audit. To the extent required by SAS No. 109, 101.11for those insurers required to file a management's report of internal control over financial 101.12reporting pursuant to subdivision 17, the independent certified public accountant should 101.13consider (as that term is defined in SAS No. 102, Defining Professional Requirements in 101.14Statements on Auditing Standards or its replacement) the most recently available report in 101.15planning and performing the audit of the statutory financial statements. Consideration 101.16should be given to other procedures illustrated in the Financial Condition Examiners 101.17Handbook promulgated by the National Association of Insurance Commissioners as the 101.18independent certified public accountant deems necessary.101.19    Subd. 11.Notification of adverse financial condition.The insurer required to 101.20furnish the annual audited financial report shall require the independent certified public 101.21accountant to provide written notice within five business days to the board of directors of 101.22the insurer or its audit committee of any determination by that independent certified public 101.23accountant that the insurer has materially misstated its financial condition as reported to 101.24the commissioner as of the balance sheet date currently under audit or that the insurer does 101.25not meet the minimum capital and surplus requirement of sections 60A.07, 66A.32, and 101.2666A.33 as of that date. An insurer required to file an annual audited financial report who 101.27received a notification of adverse financial condition from the accountant shall file a 101.28copy of the notification with the commissioner within five business days of the receipt 101.29of the notification. The insurer shall provide the independent certified public accountant 101.30making the notification with evidence of the report being furnished to the commissioner. 101.31If the independent certified public accountant fails to receive the evidence within the 101.32required five-day period, the independent certified public accountant shall furnish to the 101.33commissioner a copy of the notification to the board of directors or its audit committee 101.34within the next five business days. No independent certified public accountant is liable in 101.35any manner to any person for any statement made in connection with this subdivision if 101.36the statement is made in good faith in compliance with this subdivision. If the accountant 102.1becomes aware of facts which might have affected the audited financial report after 102.2the date it was filed, the accountant shall take the action prescribed by AU section 102.3561, Subsequent Discovery of Facts Existing at the Date of the Auditor's Report of the 102.4Professional Standards issued by the American Institute of Certified Public Accountants, 102.5or its replacement.102.6    Subd. 12.Communication of internal control related matters noted in an 102.7audit.In addition to the annual audited financial report, each insurer shall furnish the 102.8commissioner with a written communication as to any unremediated material weaknesses 102.9in its internal control over financial reporting noted during the audit. The communication 102.10must be prepared by the accountant within 60 days after the filing of the annual audited 102.11financial report, and must contain a description of any unremediated material weakness, as 102.12the term material weakness is defined by SAS No. 115, Communicating Internal Control 102.13Related Matters Identified in an Audit, or its replacement, as of December 31 immediately 102.14preceding so as to coincide with the audited financial report discussed in subdivision 2 in 102.15the insurer's internal control over financial reporting noted by the accountant during the 102.16course of their audit of the financial statements. If no unremediated material weaknesses 102.17were noted, the communication should so state.102.18The insurer is required to provide a description of remedial actions taken or 102.19proposed to correct unremediated material weaknesses, if the actions are not described in 102.20the accountant's communication.102.21    Subd. 13.Accountant's letter of qualification.The accountant shall furnish the 102.22insurer in connection with, and for inclusion in, the filing of the annual audited financial 102.23report, a letter stating that the accountant is independent with respect to the insurer and 102.24conforms to the standards of the accountant's profession as contained in the Code of 102.25Professional Conduct of the American Institute of Certified Public Accountants and the 102.26Code of Professional Conduct of the Minnesota Board of Accountancy or similar code; 102.27the background and experience in general, and the experience in audits of insurers of the 102.28staff assigned to the engagement and whether each is an independent certified public 102.29accountant; that the accountant understands that the annual audited financial report and the 102.30opinion on it will be filed in compliance with this statute and that the commissioner will 102.31be relying on this information in the monitoring and regulation of the financial position of 102.32insurers; that the accountant consents to the requirements of subdivision 14 and that the 102.33accountant consents and agrees to make available for review by the commissioner, or the 102.34commissioner's designee or appointed agent, the work papers, as defined in subdivision 102.3514; a representation that the accountant is properly licensed in good standing by the 102.36appropriate state licensing authorities and is a member in good standing in the American 103.1Institute of Certified Public Accountants; and a representation that the accountant complies 103.2with subdivision 7. Nothing in this section prohibits the accountant from utilizing staff 103.3the accountant deems appropriate where use is consistent with the standards prescribed 103.4by generally accepted auditing standards.103.5    Subd. 14.Availability and maintenance of independent certified public 103.6accountants' work papers.Work papers are the records kept by the independent certified 103.7public accountant of the procedures followed, tests performed, information obtained, and 103.8conclusions reached pertinent to the independent certified public accountant's audit of the 103.9financial statements of an insurer. Work papers may include audit planning documents, 103.10work programs, analyses, memoranda, letters of confirmation and representation, 103.11management letters, abstracts of company documents, and schedules or commentaries 103.12prepared or obtained by the independent certified public accountant in the course of the 103.13audit of the financial statements of an insurer and that support the accountant's opinion. 103.14Every insurer required to file an audited financial report shall require the accountant, 103.15through the insurer, to make available for review by the examiners the work papers 103.16prepared in the conduct of the audit and any communications related to the audit between 103.17the accountant and the insurer. The work papers must be made available at the offices of 103.18the insurer, at the offices of the commissioner, or at any other reasonable place designated 103.19by the commissioner. The insurer shall require that the accountant retain the audit work 103.20papers and communications until the commissioner has filed a report on examination 103.21covering the period of the audit but no longer than seven years after the period reported 103.22upon, provided retention of the working papers beyond the seven years is not required by 103.23other professional or regulatory requirements. In the conduct of the periodic review by 103.24the examiners, it must be agreed that photocopies of pertinent audit work papers may be 103.25made and retained by the commissioner. These copies shall be part of the commissioner's 103.26work papers and must be given the same confidentiality as other examination work papers 103.27generated by the commissioner.103.28    Subd. 15.Requirements for audit committee.(a) The audit committee must 103.29be directly responsible for the appointment, compensation, and oversight of the work 103.30of any accountant including resolution of disagreements between management and the 103.31accountant regarding financial reporting for the purpose of preparing or issuing the audited 103.32financial report or related work pursuant to this section. Each accountant shall report 103.33directly to the audit committee.103.34(b) Each member of the audit committee must be a member of the board of directors 103.35of the insurer or a member of the board of directors of an entity elected pursuant to 103.36paragraph (e) and subdivision 1, paragraph (b).104.1(c) In order to be considered independent for purposes of this section, a member of 104.2the audit committee may not, other than in his or her capacity as a member of the audit 104.3committee, the board of directors, or any other board committee, accept any consulting, 104.4advisory, or other compensatory fee from the entity or be an affiliated person of the entity 104.5or any subsidiary of the entity. However, if law requires board participation by otherwise 104.6nonindependent members, that law shall prevail and such members may participate in the 104.7audit committee and be designated as independent for audit committee purposes, unless 104.8they are an officer or employee of the insurer or one of its affiliates.104.9(d) If a member of the audit committee ceases to be independent for reasons outside 104.10the member's reasonable control, that person, with notice by the responsible entity to the 104.11state, may remain an audit committee member of the responsible entity until the earlier of 104.12the next annual meeting of the responsible entity or one year from the occurrence of the 104.13event that caused the member to be no longer independent.104.14(e) To exercise the election of the controlling person to designate the audit committee 104.15for purposes of this section, the ultimate controlling person shall provide written notice to 104.16the commissioners of the affected insurers. Notification must be made timely before the 104.17issuance of the statutory audit report and include a description of the basis for the election. 104.18The election can be changed through notice to the commissioner by the insurer, which 104.19shall include a description of the basis for the change. The election remains in effect for 104.20perpetuity, until rescinded.104.21(f) The audit committee shall require the accountant that performs for an insurer any 104.22audit required by this section to timely report to the audit committee in accordance with 104.23the requirements of SAS No. 114, The Auditor's Communication with Those Charged 104.24with Governance, or its replacement, including:104.25(1) all significant accounting policies and material permitted practices;104.26(2) all material alternative treatments of financial information within statutory 104.27accounting principles that have been discussed with management officials of the insurer, 104.28ramifications of the use of the alternative disclosures and treatments, and the treatment 104.29preferred by the accountant; and 104.30(3) other material written communications between the accountant and the 104.31management of the insurer, such as any management letter or schedule of unadjusted 104.32differences.104.33(g) If an insurer is a member of an insurance holding company system, the reports 104.34required by paragraph (f) may be provided to the audit committee on an aggregate basis 104.35for insurers in the holding company system, provided that any substantial differences 104.36among insurers in the system are identified to the audit committee.105.1(h) The proportion of independent audit committee members shall meet or exceed 105.2the following criteria:105.3(1) for companies with prior calendar year direct written and assumed premiums $0 105.4to $300,000,000, no minimum requirements;105.5(2) for companies with prior calendar year direct written and assumed premiums 105.6over $300,000,000 to $500,000,000, majority of members must be independent; and105.7(3) for companies with prior calendar year direct written and assumed premiums 105.8over $500,000,000, 75 percent or more must be independent.105.9(i) An insurer with direct written and assumed premium, excluding premiums 105.10reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less 105.11than $500,000,000 may make application to the commissioner for a waiver from the 105.12requirements of this subdivision based upon hardship. The insurer shall file, with its 105.13annual statement filing, the approval for relief from this subdivision with the states that 105.14it is licensed in or doing business in and the NAIC. If the nondomestic state accepts 105.15electronic filing with the NAIC, the insurer shall file the approval in an electronic format 105.16acceptable to the NAIC.105.17This subdivision does not apply to foreign or alien insurers licensed in this state or 105.18an insurer that is a SOX compliant entity or a direct or indirect wholly-owned subsidiary 105.19of a SOX compliant entity.105.20    Subd. 16.Conduct of insurer in connection with the preparation of required 105.21reports and documents.(a) No director or officer of an insurer shall, directly or indirectly:105.22(1) make or cause to be made a materially false or misleading statement to an 105.23accountant in connection with any audit, review, or communication required under this 105.24section; or105.25(2) omit to state, or cause another person to omit to state, any material fact necessary 105.26in order to make statements made, in light of the circumstances under which the statements 105.27were made, not misleading to an accountant in connection with any audit, review, or 105.28communication required under this section.105.29(b) No officer or director of an insurer, or any other person acting under the direction 105.30thereof, shall directly or indirectly take any action to coerce, manipulate, mislead, or 105.31fraudulently influence any accountant engaged in the performance of an audit pursuant to 105.32this section if that person knew or should have known that the action, if successful, could 105.33result in rendering the insurer's financial statements materially misleading.105.34(c) For purposes of paragraph (b), actions that, "if successful, could result in 105.35rendering the insurer's financial statements materially misleading" include, but are not 106.1limited to, actions taken at any time with respect to the professional engagement period to 106.2coerce, manipulate, mislead, or fraudulently influence an accountant:106.3(1) to issue or reissue a report on an insurer's financial statements that is not 106.4warranted in the circumstances due to material violations of statutory accounting 106.5principles prescribed by the commissioner, generally accepted auditing standards, or 106.6other professional or regulatory standards;106.7(2) not to perform audit, review, or other procedures required by generally accepted 106.8auditing standards or other professional standards;106.9(3) not to withdraw an issued report; or106.10(4) not to communicate matters to an insurer's audit committee.106.11    Subd. 17.Management's report of internal control over financial reporting.106.12(a) Every insurer required to file an audited financial report pursuant to this section that 106.13has annual direct written and assumed premiums, excluding premiums reinsured with the 106.14Federal Crop Insurance Corporation and Federal Flood Program, of $500,000,000 or 106.15more, shall prepare a report of the insurer's or group of insurers' internal control over 106.16financial reporting, as these terms are defined in subdivision 1. The report must be filed 106.17with the commissioner along with the communication of internal control related matters 106.18noted in an audit described under subdivision 12. Management's report of internal control 106.19over financial reporting shall be as of December 31 immediately preceding.106.20(b) Notwithstanding the premium threshold in paragraph (a), the commissioner may 106.21require an insurer to file management's report of internal control over financial reporting 106.22if the insurer is in any RBC level event, or meets any one or more of the standards of 106.23an insurer deemed to be in hazardous financial condition pursuant to sections 60G.20 106.24to 60G.22.106.25(c) An insurer or a group of insurers that is:106.26(1) directly subject to Section 404;106.27(2) part of a holding company system whose parent is directly subject to Section 404;106.28(3) not directly subject to Section 404 but is a SOX compliant entity; or106.29(4) a member of a holding company system whose parent is not directly subject to 106.30Section 404 but is a SOX compliant entity;106.31may file its or its parent's Section 404 report and an addendum in satisfaction of this 106.32requirement provided that those internal controls of the insurer or group of insurers 106.33having a material impact on the preparation of the insurer's or group of insurers' audited 106.34statutory financial statements, consisting of those items included in subdivision 4, 106.35paragraphs (a), clauses (2) to (6), (b), and (c), were included in the scope of the Section 106.36404 report. The addendum shall be a positive statement by management that there are 107.1no material processes with respect to the preparation of the insurer's or group of insurers' 107.2audited statutory financial statements, consisting of those items included in subdivision 4, 107.3paragraphs (a), clauses (2) to (6), (b), and (c), excluded from the Section 404 report. If 107.4there are internal controls of the insurer or group of insurers that have a material impact on 107.5the preparation of the insurer's or group of insurers' audited statutory financial statements 107.6and those internal controls were not included in the scope of the Section 404 report, the 107.7insurer or group of insurers may either file (i) a report under this subdivision, or (ii) the 107.8Section 404 report and a report under this subdivision for those internal controls that have 107.9a material impact on the preparation of the insurer's or group of insurers' audited statutory 107.10financial statements not covered by the Section 404 report.107.11(d) Management's report of internal control over financial reporting shall include:107.12(1) a statement that management is responsible for establishing and maintaining 107.13adequate internal control over financial reporting;107.14(2) a statement that management has established internal control over financial 107.15reporting and an assertion, to the best of management's knowledge and belief, after diligent 107.16inquiry, as to whether its internal control over financial reporting is effective to provide 107.17reasonable assurance regarding the reliability of financial statements in accordance with 107.18statutory accounting principles;107.19(3) a statement that briefly describes the approach or processes by which 107.20management evaluated the effectiveness of its internal control over financial reporting;107.21(4) a statement that briefly describes the scope of work that is included and whether 107.22any internal controls were excluded;107.23(5) disclosure of any unremediated material weaknesses in the internal control over 107.24financial reporting identified by management as of December 31 immediately preceding. 107.25Management is not permitted to conclude that the internal control over financial reporting 107.26is effective to provide reasonable assurance regarding the reliability of financial statements 107.27in accordance with statutory accounting principles if there is one or more unremediated 107.28material weaknesses in its internal control over financial reporting;107.29(6) a statement regarding the inherent limitations of internal control systems; and107.30(7) signatures of the chief executive officer and the chief financial officer or 107.31equivalent position or title.107.32(e) Management shall document and make available upon financial condition 107.33examination the basis upon which its assertions, required in paragraph (d), are made. 107.34Management may base its assertions, in part, upon its review, monitoring, and testing of 107.35internal controls undertaken in the normal course of its activities.108.1(1) Management has discretion as to the nature of the internal control framework 108.2used, and the nature and extent of documentation, in order to make its assertion in a 108.3cost-effective manner and, as such, may include assembly of or reference to existing 108.4documentation.108.5(2) Management's report on internal control over financial reporting, required by 108.6paragraph (a), and any documentation provided in support of the report during the course 108.7of a financial condition examination, must be kept confidential by the Department of 108.8Commerce.108.9    Subd. 18.Exemptions.(a) Upon written application of any insurer, the 108.10commissioner may grant an exemption from compliance with the provisions of this 108.11section. In order to receive an exemption, an insurer must demonstrate to the satisfaction 108.12of the commissioner that compliance would constitute a financial or organizational 108.13hardship upon the insurer. An exemption may be granted at any time and from time 108.14to time for specified periods. Within ten days from the denial of an insurer's written 108.15request for an exemption, the insurer may request in writing a hearing on its application 108.16for an exemption. This hearing must be held in accordance with chapter 14. Upon written 108.17application of any insurer, the commissioner may permit an insurer to file annual audited 108.18financial reports on some basis other than a calendar year basis for a specified period. An 108.19exemption may not be granted until the insurer presents an alternative method satisfying 108.20the purposes of this section. Within ten days from a denial of a written request for an 108.21exemption, the insurer may request in writing a hearing on its application. The hearing 108.22must be held in accordance with chapter 14.108.23(b) This section applies to all insurers, unless otherwise indicated, required to file 108.24an annual audit by subdivision 2, except insurers having less than $1,000,000 of direct 108.25written premiums in this state in any calendar year and fewer than 1,000 policyholders 108.26or certificate holders of directly written policies nationwide at the end of the calendar 108.27year, are exempt from this section for that year, unless the commissioner makes a 108.28specific finding that compliance is necessary for the commissioner to carry out statutory 108.29responsibilities, except that insurers having assumed premiums from reinsurance contracts 108.30or treaties of $1,000,000 or more are not exempt.108.31    Subd. 19.Canadian and British companies.(a) In the case of Canadian and 108.32British insurers, the annual audited financial report means the annual statement of total 108.33business on the form filed by these companies with their domiciliary supervision authority 108.34and duly audited by an independent chartered accountant.108.35(b) For these insurers the letter required in subdivision 5 shall state that the 108.36accountant is aware of the requirements relating to the annual audited statement filed 109.1with the commissioner under subdivision 2, and shall affirm that the opinion expressed 109.2is in conformity with those requirements.109.3    Subd. 20.Commercial mortgage loan valuation procedures.A report of the 109.4independent certified public accountant that performs the audit of an insurer's annual 109.5statement as required under subdivision 2, shall be filed and contain a statement as to 109.6whether anything in connection with the audit came to the accountant's attention that 109.7caused the accountant to believe that the insurer failed to adopt and consistently apply the 109.8valuation procedures as required by sections 60A.122 and 60A.123. 109.9    Subd. 21.Examinations.(a) The commissioner or a designated representative shall 109.10determine the nature, scope, and frequency of examinations under this section conducted 109.11by examiners under section 60A.031. These examinations may cover all aspects of the 109.12insurer's assets, condition, affairs, and operations and may include and be supplemented 109.13by audit procedures performed by independent certified public accountants. Scheduling 109.14of examinations will take into account all relevant matters with respect to the insurer's 109.15condition, including results of the National Association of Insurance Commissioners, 109.16Insurance Regulatory Information Systems, changes in management, results of market 109.17conduct examinations, and audited financial reports. The type of examinations performed 109.18by examiners under this section must be compliance examinations, targeted examinations, 109.19and comprehensive examinations. 109.20(b) Compliance examinations will consist of a review of the accountant's workpapers 109.21defined under this section and a general review of the insurer's corporate affairs and 109.22insurance operations to determine compliance with the Minnesota insurance laws and 109.23the rules of the Department of Commerce. The examiners may perform alternative or 109.24additional examination procedures to supplement those performed by the accountant 109.25when the examiners determine that the procedures are necessary to verify the financial 109.26condition of the insurer.109.27(c) Targeted examinations may cover limited areas of the insurer's operations as 109.28the commissioner may deem appropriate.109.29(d) Comprehensive examinations will be performed when the report of the 109.30accountant as provided for in subdivision 7, paragraph (b), the notification required by 109.31subdivision 7, paragraph (c), the results of compliance or targeted examinations, or other 109.32circumstances indicate in the judgment of the commissioner or a designated representative 109.33that a complete examination of the condition and affairs of the insurer is necessary.109.34(e) Upon completion of each targeted, compliance, or comprehensive examination, 109.35the examiner appointed by the commissioner shall make a full and true report on the 109.36results of the examination. Each report shall include a general description of the audit 110.1procedures performed by the examiners and the procedures of the accountant that 110.2the examiners may have utilized to supplement their examination procedures and the 110.3procedures that were performed by the registered independent certified public accountant 110.4if included as a supplement to the examination.110.5    Subd. 22.Penalties.An annual statement, report, or document related to the 110.6business of insurance must not be filed with the commissioner or issued to the public if it 110.7is signed by anyone who is represented in the instrument as an "accountant," unless the 110.8person is qualified as defined by this section. A violation of this subdivision is a violation 110.9of section 72A.19 and punishable in accordance with section 72A.25.110.10EFFECTIVE DATE.(a) Domestic insurers retaining a certified public accountant 110.11on the effective date of this section who qualify as independent shall comply with this 110.12section for the year ending December 31, 2010, and each year thereafter unless the 110.13commissioner permits otherwise.110.14(b) Domestic insurers not retaining a certified public accountant on the effective 110.15date of this section who qualifies as independent shall meet the following schedule for 110.16compliance unless the commissioner permits otherwise.110.17(1) As of December 31, 2010, file with the commissioner an audited financial report.110.18(2) For the year ending December 31, 2010, and each year thereafter, such insurers 110.19shall file with the commissioner all reports and communication required by this section.110.20(c) Foreign insurers shall comply with this section for the year ending December 31, 110.212010, and each year thereafter, unless the commissioner permits otherwise.110.22(d) The requirements of subdivision 7, paragraph (b), are in effect for audits of the 110.23year beginning January 1, 2010, and thereafter.110.24(e) The requirements of subdivision 15 are in effect January 1, 2010. An insurer or 110.25group of insurers that is not required to have independent audit committee members or 110.26only a majority of independent audit committee members, as opposed to a supermajority, 110.27because the total written and assumed premium is below the threshold and subsequently 110.28becomes subject to one of the independence requirements due to changes in premium has 110.29one year following the year the threshold is exceeded, but not earlier than January 1, 110.302010, to comply with the independence requirements. Likewise, an insurer that becomes 110.31subject to one of the independence requirements as a result of a business combination 110.32has one calendar year following the date of acquisition or combination to comply with 110.33the independence requirements.110.34(f) An insurer or group of insurers that is not required to file a report because the total 110.35written premium is below the threshold and subsequently becomes subject to the reporting 110.36requirements has two years following the year the threshold is exceeded, but not earlier 111.1than December 31, 2010, to file a report. Likewise, an insurer acquired in a business 111.2combination has two calendar years following the date of acquisition or combination to 111.3comply with the reporting requirements.111.4(g) The requirements and provisions contained in this section are effective January 111.51, 2010, and thereafter.111.6    Sec. 12. Minnesota Statutes 2008, section 60B.03, subdivision 15, is amended to read:111.7    Subd. 15. Insolvency. "Insolvency" means:111.8(a) For an insurer organized under sections 
         67A.01 to 
         67A.26, the inability to pay 111.9any uncontested debt as it becomes due or any other loss within 30 days after the due date 111.10specified in the first assessment notice issued pursuant to section 67A.17.  111.11(b) For any other insurer, that it is unable to pay its debts or meet its obligations 111.12as they mature or that its assets do not exceed its liabilities plus the greater of (1) any 111.13capital and surplus required by law to be constantly maintained, or (2) its authorized and 111.14issued capital stock. For purposes of this subdivision, "assets" includes one-half of the 111.15maximum total assessment liability of the policyholders of the insurer, and "liabilities" 111.16includes reserves required by law. For policies issued on the basis of unlimited assessment 111.17liability, the maximum total liability, for purposes of determining solvency only, shall be 111.18deemed to be that amount that could be obtained if there were 100 percent collection of an 111.19assessment at the rate of ten mills per dollar of insurance written by it and in force.111.20    Sec. 13. Minnesota Statutes 2008, section 60L.02, subdivision 3, is amended to read:111.21    Subd. 3. Additional requirements. (a) In order to be eligible to be governed by 111.22sections 
         60L.01 to 
         60L.15, the insurer must meet the requirements specified under this 111.23subdivision.  111.24(b) The insurer shall:111.25(1) have been in continuous operation for a minimum of five years; and111.26(2) maintain a minimum claims-paying, financial strength, or equivalent rating from 111.27at least one nationally recognized statistical rating organization in one of the organization's 111.28three highest rating categories for the time period during which sections 
         60L.01 to 
         60L.15111.29apply to the insurer. For purposes of this subdivision, the rating must be based on a 111.30review of the insurer by the nationally recognized statistical rating organization with the 111.31cooperation of the insurer; must not depend on a guarantee or other credit enhancement 111.32from another entity; and must not be modified or otherwise qualified to show dependence 111.33of the rating on the performance or a contractual obligation of, or the insurer's affiliation 111.34with, another insurer.  112.1(c) The insurer or an affiliate, as defined in section 
         60D.15, subdivision 2, of the 112.2insurer shall employ at least one individual as a professional investment manager for 112.3the insurer's investments whom the board of directors or trustees of the insurer finds 112.4is qualified on the basis of experience, education or training, competence, personal 112.5integrity, and who conducts professional investment management activities in accordance 112.6with the Code of Ethics and Standards of Professional Conduct of the Association for 112.7Investment Management and Research. For purposes of complying with this paragraph, 112.8an employee of an affiliate may only be used if they are responsible for managing the 112.9insurer's investments.  112.10(d) The board of directors of the insurer must annually adopt a resolution finding 112.11that the insurer or an affiliate, as defined in section 
         60D.15, subdivision 2, of the insurer 112.12has employed a professional investment manager for the insurer's investments with 112.13sufficient expertise and has sufficient other resources to implement and monitor the 112.14insurer's investment policies and strategies.  112.15(e) In the report required under section 
         60A.129 60A.1291, subdivision 3 12, 112.16paragraph (l), the insurer's independent auditor shall not have identified any significant 112.17deficiencies in the insurer's internal control structure related to investments during any of 112.18the five years immediately preceding the date on which sections 
         60L.01 to 
         60L.15 begin to 112.19apply to the insurer, and as long as sections 
         60L.01 to 
         60L.15 apply to the insurer.  112.20    Sec. 14. [61A.258] PRENEED INSURANCE PRODUCTS; MINIMUM 112.21MORTALITY STANDARDS FOR RESERVES AND NONFORFEITURE VALUES.112.22    Subdivision 1.Definitions.For the purposes of this section, the following terms 112.23have the meanings given them:112.24(1) "2001 CSO Mortality Table (2001 CSO)" means that mortality table, consisting 112.25of separate rates of mortality for male and female lives, developed by the American 112.26Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table 112.27developed by the Society of Actuaries Individual Life Insurance Valuation Mortality 112.28Task Force, and adopted by the National Association of Insurance Commissioners 112.29(NAIC) in December 2002. The 2001 CSO Mortality Table (2001 CSO) is included in 112.30the Proceedings of the NAIC (2nd Quarter 2002). Unless the context indicates otherwise, 112.31the "2001 CSO Mortality Table (2001 CSO)" includes both the ultimate form of that 112.32table and the select and ultimate form of that table and includes both the smoker and 112.33nonsmoker mortality tables and the composite mortality tables. It also includes both the 112.34age-nearest-birthday and age-last-birthday bases of the mortality tables;113.1(2) "Ultimate 1980 CSO" means the Commissioners' 1980 Standard Ordinary Life 113.2Valuation Mortality Tables (1980 CSO) without ten-year selection factors, incorporated 113.3into the 1980 amendments to the NAIC Standard Valuation Law approved in December 113.41983; and113.5(3) "preneed insurance" is any life insurance policy or certificate that is issued 113.6in combination with, in support of, with an assignment to, or as a guarantee for a 113.7prearrangement agreement for goods and services to be provided at the time of and 113.8immediately following the death of the insured. Goods and services may include, but 113.9are not limited to embalming, cremation, body preparation, viewing or visitation, coffin 113.10or urn, memorial stone, and transportation of the deceased. The status of the policy or 113.11contract as preneed insurance is determined at the time of issue in accordance with the 113.12policy form filing.113.13    Subd. 2.Minimum valuation mortality standards.For preneed insurance 113.14contracts, the minimum mortality standard for determining reserve liabilities and 113.15nonforfeiture values for both male and female insureds shall be the Ultimate 1980 CSO.113.16    Subd. 3.Minimum valuation interest rate standards.(a) The interest rates used 113.17in determining the minimum standard for valuation of preneed insurance shall be the 113.18calendar year statutory valuation interest rates as defined in section 61A.25.113.19(b) The interest rates used in determining the minimum standard for nonforfeiture 113.20values for preneed insurance shall be the calendar year statutory nonforfeiture interest 113.21rates as defined in section 61A.24.113.22    Subd. 4.Minimum valuation method standards.(a) The method used in 113.23determining the standard for the minimum valuation of reserves of preneed insurance shall 113.24be the method defined in section 61A.25.113.25(b) The method used in determining the standard for the minimum nonforfeiture 113.26values for preneed insurance shall be the method defined in section 61A.24.113.27EFFECTIVE DATE; TRANSITION RULES.(a) This section is effective January 113.281, 2009, and applies to preneed insurance policies and certificates issued on or after that 113.29date.113.30(b) For preneed insurance policies issued on or after the effective date of this 113.31section and before January 1, 2012, the 2001 CSO may be used as the minimum standard 113.32for reserves and minimum standard for nonforfeiture benefits for both male and female 113.33insureds.113.34(c) If an insurer elects to use the 2001 CSO as a minimum standard for any policy 113.35issued on or after the effective date of this section and before January 1, 2012, the insurer 114.1shall provide, as a part of the actuarial opinion memorandum submitted in support of 114.2the company's asset adequacy testing, an annual written notification to the domiciliary 114.3commissioner. The notification shall include:114.4(1) a complete list of all preneed policy forms that use the 2001 CSO as a minimum 114.5standard;114.6(2) a certification signed by the appointed actuary stating that the reserve 114.7methodology employed by the company in determining reserves for the preneed policies 114.8issued after the effective date and using the 2001 CSO as a minimum standard, develops 114.9adequate reserves (For the purposes of this certification, the preneed insurance policies 114.10using the 2001 CSO as a minimum standard cannot be aggregated with any other 114.11policies.); and114.12(3) supporting information regarding the adequacy of reserves for preneed insurance 114.13policies issued after the effective date of this section and using the 2001 CSO as a 114.14minimum standard for reserves.114.15(d) Preneed insurance policies issued on or after January 1, 2012, must use the 114.16Ultimate 1980 CSO in the calculation of minimum nonforfeiture values and minimum 114.17reserves.114.18    Sec. 15. Minnesota Statutes 2008, section 61B.19, subdivision 4, is amended to read:114.19    Subd. 4. Limitation of benefits. The benefits for which the association may become 114.20liable shall in no event exceed the lesser of:114.21(1) the contractual obligations for which the insurer is liable or would have been 114.22liable if it were not an impaired or insolvent insurer; or114.23(2) subject to the limitation in clause (5), with respect to any one life, regardless of 114.24the number of policies or contracts:114.25(i) $300,000 $500,000 in life insurance death benefits, but not more than $100,000114.26$130,000 in net cash surrender and net cash withdrawal values for life insurance;114.27(ii) $300,000 $500,000 in health insurance benefits, including any net cash surrender 114.28and net cash withdrawal values;114.29(iii) $100,000 $250,000 in annuity net cash surrender and net cash withdrawal values;114.30(iv) $300,000 $410,000 in present value of annuity benefits for structured settlement 114.31annuities or for annuities in regard to which periodic annuity benefits, for a period of not 114.32less than the annuitant's lifetime or for a period certain of not less than ten years, have 114.33begun to be paid, on or before the date of impairment or insolvency; or114.34(3) subject to the limitations in clauses (5) and (6), with respect to each individual 114.35resident participating in a retirement plan, except a defined benefit plan, established under 115.1section 401, 403(b), or 457 of the Internal Revenue Code of 1986, as amended through 115.2December 31, 1992, covered by an unallocated annuity contract, or the beneficiaries 115.3of each such individual if deceased, in the aggregate, $100,000 $250,000 in net cash 115.4surrender and net cash withdrawal values;115.5(4) where no coverage limit has been specified for a covered policy or benefit, the 115.6coverage limit shall be $300,000 $500,000 in present value;115.7(5) in no event shall the association be liable to expend more than $300,000115.8$500,000 in the aggregate with respect to any one life under clause (2), items (i), (ii), (iii), 115.9(iv), and clause (4), and any one individual under clause (3);115.10(6) in no event shall the association be liable to expend more than $7,500,000115.11$10,000,000 with respect to all unallocated annuities of a retirement plan, except a defined 115.12benefit plan, established under section 401, 403(b), or 457 of the Internal Revenue Code 115.13of 1986, as amended through December 31, 1992. If total claims from a plan exceed 115.14$7,500,000 $10,000,000, the $7,500,000 $10,000,000 shall be prorated among the 115.15claimants;115.16(7) for purposes of applying clause (2)(ii) and clause (5), with respect only to 115.17health insurance benefits, the term "any one life" applies to each individual covered by a 115.18health insurance policy;115.19(8) where covered contractual obligations are equal to or less than the limits stated in 115.20this subdivision, the association will pay the difference between the covered contractual 115.21obligations and the amount credited by the estate of the insolvent or impaired insurer, if 115.22that amount has been determined or, if it has not, the covered contractual limit, subject 115.23to the association's right of subrogation;115.24(9) where covered contractual obligations exceed the limits stated in this subdivision, 115.25the amount payable by the association will be determined as though the covered 115.26contractual obligations were equal to those limits. In making the determination, the estate 115.27shall be deemed to have credited the covered person the same amount as the estate would 115.28credit a covered person with contractual obligations equal to those limits; or115.29(10) the following illustrates how the principles stated in clauses (8) and (9) apply. 115.30The example illustrated concerns hypothetical claims subject to the limit stated in clause 115.31(2)(iii). The principles stated in clauses (8) and (9), and illustrated in this clause, apply 115.32to claims subject to any limits stated in this subdivision.115.33CONTRACTUAL OBLIGATIONS OF:

116.1$50,000116.2116.3EstateGuaranty 
                  		Association116.4116.50% recovery 
                  		from estate$ 0$ 50,000116.6116.725% recovery 
                  		from estate$ 12,500$ 37,500116.8116.950% recovery 
                  		from estate$ 25,000$ 25,000116.10116.1175% recovery 
                  		from estate$ 37,500$ 12,500116.12$100,000116.13116.14EstateGuaranty 
                  		Association116.15116.160% recovery 
                  		from estate$ 0$ 100,000116.17116.1825% recovery 
                  		from estate$ 25,000$ 75,000116.19116.2050% recovery 
                  		from estate$ 50,000$ 50,000116.21116.2275% recovery 
                  		from estate$ 75,000$ 25,000116.23$200,000116.24116.25EstateGuaranty 
                  		Association116.26116.270% recovery 
                  		from estate$ 0$ 100,000116.28116.2925% recovery 
                  		from estate$ 50,000$ 75,000117.1117.250% recovery 
                  		from estate$ 100,000$ 50,000117.3117.475% recovery 
                  		from estate$ 150,000$ 25,000

117.5For purposes of this subdivision, the commissioner shall determine the discount rate 117.6to be used in determining the present value of annuity benefits.117.7EFFECTIVE DATE.This section is effective the day following final enactment 117.8and applies to member insurers who are first determined to be impaired or insolvent on or 117.9after that date. Member insurers who are subject to an order of impairment in effect on the 117.10effective date but are not declared insolvent until after the effective date shall continue to 117.11be governed by the law in effect prior to the effective date.117.12    Sec. 16. Minnesota Statutes 2008, section 61B.28, subdivision 4, is amended to read:117.13    Subd. 4. Prohibited sales practice. No person, including an insurer, agent, or 117.14affiliate of an insurer, shall make, publish, disseminate, circulate, or place before the 117.15public, or cause directly or indirectly, to be made, published, disseminated, circulated, 117.16or placed before the public, in any newspaper, magazine, or other publication, or in the 117.17form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television 117.18station, or in any other way, an advertisement, announcement, or statement, written or 117.19oral, which uses the existence of the Minnesota Life and Health Insurance Guaranty 117.20Association for the purpose of sales, solicitation, or inducement to purchase any form of 117.21insurance covered by sections 
         61B.18 to 
         61B.32. The notice required by subdivision 8 117.22is not a violation of this subdivision nor is it a violation of this subdivision to explain 117.23verbally to an applicant or potential applicant the coverage provided by the Minnesota 117.24Life and Health Insurance Guaranty Association at any time during the application process 117.25or thereafter. This subdivision does not apply to the Minnesota Life and Health Insurance 117.26Guaranty Association or an entity that does not sell or solicit insurance. A person violating 117.27this section is guilty of a misdemeanor.117.28    Sec. 17. Minnesota Statutes 2008, section 61B.28, subdivision 8, is amended to read:117.29    Subd. 8. Form. The form of notice referred to in subdivision 7, paragraph (a), 117.30is as follows:117.31"....................117.32....................117.33....................118.1(insert name, current address, and118.2telephone number of insurer)118.3NOTICE CONCERNING POLICYHOLDER RIGHTS IN AN118.4INSOLVENCY UNDER THE MINNESOTA LIFE AND HEALTH118.5INSURANCE GUARANTY ASSOCIATION LAW118.6If the insurer that issued your life, annuity, or health insurance policy becomes 118.7impaired or insolvent, you are entitled to compensation for your policy from the assets of 118.8that insurer. The amount you recover will depend on the financial condition of the insurer.118.9In addition, residents of Minnesota who purchase life insurance, annuities, or health 118.10insurance from insurance companies authorized to do business in Minnesota are protected, 118.11SUBJECT TO LIMITS AND EXCLUSIONS, in the event the insurer becomes financially 118.12impaired or insolvent. This protection is provided by the Minnesota Life and Health 118.13Insurance Guaranty Association.118.14Minnesota Life and Health Insurance Guaranty Association118.15(insert current118.16address and telephone number)118.17The maximum amount the guaranty association will pay for all policies issued on 118.18one life by the same insurer is limited to $300,000 $500,000. Subject to this $300,000118.19$500,000 limit, the guaranty association will pay up to $300,000 $500,000 in life 118.20insurance death benefits, $100,000 $130,000 in net cash surrender and net cash withdrawal 118.21values for life insurance, $300,000 $500,000 in health insurance benefits, including any 118.22net cash surrender and net cash withdrawal values, $100,000 $250,000 in annuity net 118.23cash surrender and net cash withdrawal values, $300,000 $410,000 in present value of 118.24annuity benefits for annuities which are part of a structured settlement or for annuities 118.25in regard to which periodic annuity benefits, for a period of not less than the annuitant's 118.26lifetime or for a period certain of not less than ten years, have begun to be paid on or 118.27before the date of impairment or insolvency, or if no coverage limit has been specified 118.28for a covered policy or benefit, the coverage limit shall be $300,000 $500,000 in present 118.29value. Unallocated annuity contracts issued to retirement plans, other than defined benefit 118.30plans, established under section 401, 403(b), or 457 of the Internal Revenue Code of 118.311986, as amended through December 31, 1992, are covered up to $100,000 $250,000 in 118.32net cash surrender and net cash withdrawal values, for Minnesota residents covered by 118.33the plan provided, however, that the association shall not be responsible for more than 118.34$7,500,000 $10,000,000 in claims from all Minnesota residents covered by the plan. If 118.35total claims exceed $7,500,000 $10,000,000, the $7,500,000 $10,000,000 shall be prorated 118.36among all claimants. These are the maximum claim amounts. Coverage by the guaranty 118.37association is also subject to other substantial limitations and exclusions and requires 118.38continued residency in Minnesota. If your claim exceeds the guaranty association's limits, 119.1you may still recover a part or all of that amount from the proceeds of the liquidation of 119.2the insolvent insurer, if any exist. Funds to pay claims may not be immediately available. 119.3The guaranty association assesses insurers licensed to sell life and health insurance in 119.4Minnesota after the insolvency occurs. Claims are paid from this assessment.119.5THE COVERAGE PROVIDED BY THE GUARANTY ASSOCIATION IS NOT 119.6A SUBSTITUTE FOR USING CARE IN SELECTING INSURANCE COMPANIES 119.7THAT ARE WELL MANAGED AND FINANCIALLY STABLE. IN SELECTING AN 119.8INSURANCE COMPANY OR POLICY, YOU SHOULD NOT RELY ON COVERAGE 119.9BY THE GUARANTY ASSOCIATION.119.10THIS NOTICE IS REQUIRED BY MINNESOTA STATE LAW TO ADVISE 119.11POLICYHOLDERS OF LIFE, ANNUITY, OR HEALTH INSURANCE POLICIES 119.12OF THEIR RIGHTS IN THE EVENT THEIR INSURANCE CARRIER BECOMES 119.13FINANCIALLY INSOLVENT. THIS NOTICE IN NO WAY IMPLIES THAT THE 119.14COMPANY CURRENTLY HAS ANY TYPE OF FINANCIAL PROBLEMS. ALL LIFE, 119.15ANNUITY, AND HEALTH INSURANCE POLICIES ARE REQUIRED TO PROVIDE 119.16THIS NOTICE."119.17Additional language may be added to the notice if approved by the commissioner 119.18prior to its use in the form. This section does not apply to fraternal benefit societies 119.19regulated under chapter 64B.119.20    Sec. 18. Minnesota Statutes 2008, section 67A.01, is amended to read:119.2167A.01 NUMBER OF MEMBERS REQUIRED, PROPERTY AND 119.22TERRITORY.119.23    Subdivision 1.Number of members.(a) It shall be lawful for any number of 119.24persons, not less than 25, residing in adjoining townships counties in this state, who shall 119.25collectively own property worth at least $50,000, to form themselves into a corporation 119.26for mutual insurance against loss or damage by the perils listed in section 
         67A.13.  119.27(b) Except as otherwise provided in this section, the company shall operate in no 119.28more than 150 adjoining townships in the aggregate at the same time. The company may, 119.29if approval has been granted by the commissioner, operate in more than 150 adjoining 119.30townships in the aggregate at the same time, subject to a maximum of 300 townships. 119.31If the company confines its operations to one county it may transact business in that 119.32county by so providing in its certificate of incorporation. In case of merger of two or 119.33more companies having contiguous territories, the surviving company in the merger may 119.34transact business in the entire territory of the merged companies, but the territory of the 119.35surviving company in the merger must not be larger than 300 townships.120.1    Subd. 2.Authorized territory.(a) A township mutual fire insurance company may 120.2be authorized to write business in up to nine adjoining counties in the aggregate at the 120.3same time. If policyholder surplus is at least $500,000 as reported in the company's last 120.4annual financial statement filed with the commissioner, the company may, if approval has 120.5been granted by the commissioner, be authorized to write business in ten or more counties 120.6in the aggregate at the same time, subject to a maximum of 20 adjoining counties, in 120.7accordance with the following schedule:

120.8120.9Number of CountiesSurplus Requirement120.1010$500,000120.1111600,000120.1212700,000120.1313800,000120.1414900,000120.15151,000,000120.16161,100,000120.17171,200,000120.18181,300,000120.19191,400,000120.20201,500,000

120.21(b) In the case of a merger of two or more companies having contiguous territories, 120.22the surviving company in the merger may transact business in the entire territory of the 120.23merged companies; however, the territory of the surviving company in the merger may not 120.24be larger than 20 counties.120.25(c) A township mutual fire insurance company may write new and renewal insurance 120.26on property in cities within the company's authorized territory having a population less 120.27than 25,000. A township mutual may continue to write new and renewal insurance once 120.28the population increases to 25,000 or greater provided that amended and restated articles 120.29are filed with the commissioner along with a certification that such city's population has 120.30increased to 25,000 or greater.120.31(d) A township mutual fire insurance company may write new and renewal insurance 120.32on property in cities within the company's authorized territory with a population of 25,000 120.33or greater, but less than 150,000, if approval has been granted by the commissioner. 121.1No township mutual fire insurance company shall insure any property in cities with a 121.2population of 150,000 or greater.121.3(e) If a township mutual fire insurance company provides evidence to the 121.4commissioner that the company had insurance in force on December 31, 2007, in a city 121.5within the company's authorized territory with a population of 25,000 or greater, but less 121.6than 150,000, the company may write new and renewal insurance on property in that city 121.7provided that the company files amended and restated articles by July 31, 2010, naming 121.8that city.121.9    Sec. 19. Minnesota Statutes 2008, section 67A.06, is amended to read:121.1067A.06 POWERS OF CORPORATION.121.11Every corporation formed under the provisions of sections 
         67A.01 to 
         67A.26, 121.12shall have power:121.13(1) to have succession by its corporate name for the time stated in its certificate of 121.14incorporation;121.15(2) to sue and be sued in any court;121.16(3) to have and use a common seal and alter the same at pleasure;121.17(4) to acquire, by purchase or otherwise, and to hold, enjoy, improve, lease, 121.18encumber, and convey all real and personal property necessary for the purpose of its 121.19organization, subject to such limitations as may be imposed by law or by its articles of 121.20incorporation;121.21(5) to elect or appoint in such manner as it may determine all necessary or proper 121.22officers, agents, boards, and committees, fix their compensation, and define their powers 121.23and duties;121.24(6) to make and amend consistently with law bylaws providing for the management 121.25of its property and the regulation and government of its affairs;121.26(7) to wind up and liquidate its business in the manner provided by chapter 60B; and121.27(8) to indemnify certain persons against expenses and liabilities as provided in 121.28section 
         302A.521. In applying section 
         302A.521 for this purpose, the term "members" 121.29shall be substituted for the terms "shareholders" and "stockholders."; and121.30(9) to eliminate or limit a director's personal liability to the company or its members 121.31for monetary damages for breach of fiduciary duty as a director. A company shall not 121.32eliminate or limit the liability of a director:121.33(i) for breach of loyalty to the company or its members;121.34(ii) for acts or omissions made in bad faith or with intentional misconduct or 121.35knowing violation of law;122.1(iii) for transactions from which the director derived an improper personal benefit; or122.2(iv) for acts or omissions occurring before the date that the provisions in the articles 122.3eliminating or limiting liability become effective.122.4    Sec. 20. Minnesota Statutes 2008, section 67A.07, is amended to read:122.567A.07 PRINCIPAL OFFICE.122.6The principal office of a township mutual fire insurance company shall be located in 122.7a township or in a city in a township county in which the company is authorized to do 122.8business.122.9    Sec. 21. Minnesota Statutes 2008, section 67A.14, subdivision 1, is amended to read:122.10    Subdivision 1. Kinds of property; property outside authorized territory. (a) 122.11Township mutual fire insurance companies may insure qualified property. Qualified 122.12property means dwellings, household goods, appurtenant structures, farm buildings, farm 122.13personal property, churches, church personal property, county fair buildings, community 122.14and township meeting halls and their usual contents.122.15(b) Township mutual fire insurance companies may extend coverage to include 122.16an insured's secondary property if the township mutual fire insurance company covers 122.17qualified property belonging to the insured. Secondary property means any real or 122.18personal property that is not considered qualified property for a township mutual fire 122.19insurance company to cover under this chapter. The maximum amount of coverage that a 122.20township mutual fire insurance company may write for secondary property is 25 percent of 122.21the total limit of liability of the policy issued to an insured covering the qualified property.122.22(c) A township mutual fire insurance company may insure any real or personal 122.23property, including qualified or secondary property, subject to the limitations in 122.24subdivision 1, paragraph (b), located outside the limits of the territory in which the 122.25company is authorized by its certificate or articles of incorporation to transact business, if 122.26the company is already covering qualified property belonging to the insured, inside the 122.27limits of the company's territory.122.28(d) A township mutual fire insurance company may insure property temporarily 122.29outside of the authorized territory of the township mutual fire insurance company.122.30    Sec. 22. Minnesota Statutes 2008, section 67A.14, subdivision 7, is amended to read:122.31    Subd. 7. Amount of insurable risk. No township mutual fire insurance company 122.32shall insure or reinsure a single risk or hazard in a larger sum than the greater of $3,000, or 122.33one tenth of its net assets plus two tenths of a mill of its insurance in force; provided that 123.1no portion of any such risk or hazard which shall have been reinsured, as authorized by 123.2the laws of this state, shall be included in determining the limitation of risk prescribed 123.3by this subdivision.123.4    Sec. 23. [67A.175] SURPLUS REQUIREMENTS.123.5    Subdivision 1.Minimum.Township mutual fire insurance companies shall maintain 123.6a minimum policyholders' surplus of $300,000 at all times.123.7    Subd. 2.Corrective action plan; filing.A township mutual fire insurance company 123.8that falls below the $300,000 minimum surplus requirement must file a corrective action 123.9plan with the commissioner. The plan shall state how the company will correct its surplus 123.10deficiency. The plan must be submitted within 45 days of the company falling below the 123.11minimum surplus level.123.12    Subd. 3.Corrective action plan; commissioner's notification.Within 30 days 123.13after the submission by a township mutual fire insurance company of a corrective action 123.14plan, the commissioner shall notify the insurer whether the plan may be implemented or 123.15is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines 123.16the plan is unsatisfactory, the notification to the company must set forth the reasons for the 123.17determination, and may set forth proposed revisions that will render the plan satisfactory 123.18in the judgment of the commissioner. Upon notification from the commissioner, the 123.19insurer shall prepare a revised corrective action plan that may incorporate by reference 123.20any revisions proposed by the commissioner, and shall submit the revised plan to the 123.21commissioner within 45 days.123.22    Sec. 24. Minnesota Statutes 2008, section 67A.18, subdivision 1, is amended to read:123.23    Subdivision 1. By member. Any member may terminate membership in the 123.24company by giving written notice or returning the member's policy to the secretary and 123.25paying the withdrawing member's share of all existing claims.123.26    Sec. 25. REPEALER.123.27    Subdivision 1.Annual audits.Minnesota Statutes 2008, section 60A.129, is 123.28repealed.123.29    Subd. 2.Township mutual insured properties, joint or partial risks, and 123.30assessments.Minnesota Statutes 2008, sections 67A.14, subdivision 5; 67A.17; and 123.3167A.19, are repealed.124.1    Subd. 3.Banking procedures; real estate tax records.Minnesota Rules, part 124.22675.2180, is repealed.124.3    Subd. 4.Debt prorating companies.Minnesota Rules, parts 2675.7100; 124.42675.7110; 2675.7120; 2675.7130; and 2675.7140, are repealed.124.5    Subd. 5.Guaranty association; inflation indexing.Minnesota Statutes 2008, 124.6section 61B.19, subdivision 6, is repealed.124.7ARTICLE 4124.8DEBT MANAGEMENT SERVICES124.9    Section 1. Minnesota Statutes 2008, section 45.011, subdivision 1, is amended to read:124.10    Subdivision 1. Scope. As used in chapters 45 to 83, 155A,  332, 332A, 332B, 124.11345, and 359, and sections 
         325D.30 to 
         325D.42, 
         326B.802 to 
         326B.885, and 
         386.61 to 124.12386.78
         , unless the context indicates otherwise, the terms defined in this section have 124.13the meanings given them. 124.14    Sec. 2. Minnesota Statutes 2008, section 46.04, subdivision 1, is amended to read:124.15    Subdivision 1. General. The commissioner of commerce, referred to in chapters 46 124.16to 59A, and chapter 332A, and 332B as the commissioner, is vested with all the powers, 124.17authority, and privileges which, prior to the enactment of Laws 1909, chapter 201, were 124.18conferred by law upon the public examiner, and shall take over all duties in relation to 124.19state banks, savings banks, trust companies, savings associations, and other financial 124.20institutions within the state which, prior to the enactment of chapter 201, were imposed 124.21upon the public examiner. The commissioner of commerce shall exercise a constant 124.22supervision, either personally or through the examiners herein provided for, over the 124.23books and affairs of all state banks, savings banks, trust companies, savings associations, 124.24credit unions, industrial loan and thrift companies, and other financial institutions doing 124.25business within this state; and shall, through examiners, examine each financial institution 124.26at least once every 24 calendar months. In satisfying this examination requirement, the 124.27commissioner may accept reports of examination prepared by a federal agency having 124.28comparable supervisory powers and examination procedures. With the exception of 124.29industrial loan and thrift companies which do not have deposit liabilities and licensed 124.30regulated lenders, it shall be the principal purpose of these examinations to inspect and 124.31verify the assets and liabilities of each and so far investigate the character and value of 124.32the assets of each institution as to determine with reasonable certainty that the values are 124.33correctly carried on its books. Assets and liabilities shall be verified in accordance with 124.34methods of procedure which the commissioner may determine to be adequate to carry out 125.1the intentions of this section. It shall be the further purpose of these examinations to 125.2assess the adequacy of capital protection and the capacity of the institution to meet usual 125.3and reasonably anticipated deposit withdrawals and other cash commitments without 125.4resorting to excessive borrowing or sale of assets at a significant loss, and to investigate 125.5each institution's compliance with applicable laws and rules. Based on the examination 125.6findings, the commissioner shall make a determination as to whether the institution 125.7is being operated in a safe and sound manner. None of the above provisions limits the 125.8commissioner in making additional examinations as deemed necessary or advisable. The 125.9commissioner shall investigate the methods of operation and conduct of these institutions 125.10and their systems of accounting, to ascertain whether these methods and systems are 125.11in accordance with law and sound banking principles. The commissioner may make 125.12requirements as to records as deemed necessary to facilitate the carrying out of the 125.13commissioner's duties and to properly protect the public interest. The commissioner may 125.14examine, or cause to be examined by these examiners, on oath, any officer, director, 125.15trustee, owner, agent, clerk, customer, or depositor of any financial institution touching 125.16the affairs and business thereof, and may issue, or cause to be issued by the examiners, 125.17subpoenas, and administer, or cause to be administered by the examiners, oaths. In 125.18case of any refusal to obey any subpoena issued under the commissioner's direction, 125.19the refusal may at once be reported to the district court of the district in which the bank 125.20or other financial institution is located, and this court shall enforce obedience to these 125.21subpoenas in the manner provided by law for enforcing obedience to subpoenas of the 125.22court. In all matters relating to official duties, the commissioner of commerce has the 125.23power possessed by courts of law to issue subpoenas and cause them to be served and 125.24enforced, and all officers, directors, trustees, and employees of state banks, savings banks, 125.25trust companies, savings associations, and other financial institutions within the state, 125.26and all persons having dealings with or knowledge of the affairs or methods of these 125.27institutions, shall afford reasonable facilities for these examinations, make returns and 125.28reports to the commissioner of commerce as the commissioner may require; attend and 125.29answer, under oath, the commissioner's lawful inquiries; produce and exhibit any books, 125.30accounts, documents, and property as the commissioner may desire to inspect, and in all 125.31things aid the commissioner in the performance of duties. 125.32    Sec. 3. Minnesota Statutes 2008, section 46.05, is amended to read:125.3346.05 SUPERVISION OVER FINANCIAL INSTITUTIONS.125.34    Every state bank, savings bank, trust company, savings association, debt management 125.35services provider, debt settlement services provider, and other financial institutions shall 126.1be at all times under the supervision and subject to the control of the commissioner 126.2of commerce. If, and whenever in the performance of duties, the commissioner finds 126.3it necessary to make a special investigation of any financial institution under the 126.4commissioner's supervision, and other than a complete examination, the commissioner 126.5shall make a charge therefor to include only the necessary costs thereof. Such a fee shall 126.6be payable to the commissioner on the commissioner's making a request for payment.126.7    Sec. 4. Minnesota Statutes 2008, section 46.131, subdivision 2, is amended to read:126.8    Subd. 2. Assessment authority. Each bank, trust company, savings bank, savings 126.9association, regulated lender, industrial loan and thrift company, credit union, motor 126.10vehicle sales finance company, debt management services provider, debt settlement 126.11services provider, and insurance premium finance company organized under the laws of 126.12this state or required to be administered by the commissioner of commerce shall pay 126.13into the state treasury its proportionate share of the cost of maintaining the Department 126.14of Commerce.126.15    Sec. 5. Minnesota Statutes 2008, section 325E.311, subdivision 6, is amended to read:126.16    Subd. 6. Telephone solicitation. "Telephone solicitation" means any voice 126.17communication over a telephone line for the purpose of encouraging the purchase or 126.18rental of, or investment in, property, goods, or services, whether the communication is 126.19made by a live operator, through the use of an automatic dialing-announcing device as 126.20defined in section 
         325E.26, subdivision 2, or by other means. Telephone solicitation 126.21does not include communications:126.22    (1) to any residential subscriber with that subscriber's prior express invitation or 126.23permission; or126.24    (2) by or on behalf of any person or entity with whom a residential subscriber has a 126.25prior or current business or personal relationship.126.26Telephone solicitation also does not include communications if the caller is identified by a 126.27caller identification service and the call is:126.28    (i) by or on behalf of an organization that is identified as a nonprofit organization 126.29under state or federal law, unless the organization is a debt management services provider 126.30defined in section 
         332A.02 or a debt settlement services provider defined in section 126.31332B.02;126.32    (ii) by a person soliciting without the intent to complete, and who does not in 126.33fact complete, the sales presentation during the call, but who will complete the sales 127.1presentation at a later face-to-face meeting between the solicitor who makes the call 127.2and the prospective purchaser; or127.3    (iii) by a political party as defined under section 
         200.02, subdivision 6.127.4    Sec. 6. Minnesota Statutes 2008, section 332A.02, is amended by adding a subdivision 127.5to read:127.6    Subd. 2a.Advertise."Advertise" means to solicit business through any means or 127.7medium.127.8    Sec. 7. Minnesota Statutes 2008, section 332A.02, subdivision 5, is amended to read:127.9    Subd. 5. Controlling or affiliated party. "Controlling or affiliated party" means 127.10any person or entity that controls or is controlled, directly or indirectly controlling, 127.11controlled by, or is under common control with another person. Controlling or affiliated 127.12party includes, but is not limited to, employees, officers, independent contractors, 127.13corporations, partnerships, and limited liability corporations.127.14    Sec. 8. Minnesota Statutes 2008, section 332A.02, is amended by adding a subdivision 127.15to read:127.16    Subd. 5a.Creditor."Creditor" means any party:127.17(1) named by the debtor as a creditor in the debt management services plan or debt 127.18management services agreement;127.19(2) that acquires or holds the debt; or127.20(3) to whom interactions with the debt management services is assigned in relation 127.21to the debt listed in the debt management services plan or debt management services 127.22agreement.127.23    Sec. 9. Minnesota Statutes 2008, section 332A.02, subdivision 8, is amended to read:127.24    Subd. 8. Debt management services provider. "Debt management services 127.25provider" means any person offering or providing debt management services to a debtor 127.26domiciled in this state, regardless of whether or not a fee is charged for the services and 127.27regardless of whether the person maintains a physical presence in the state. This term 127.28includes any person to whom debt management services are delegated, and does not 127.29include services performed by the following when engaged in the regular course of their 127.30respective businesses and professions:127.31    (1) attorneys at law, escrow agents, accountants, broker-dealers in securities;128.1    (2) state or national banks, credit unions, trust companies, savings associations, 128.2title insurance companies, insurance companies, and all other lending institutions duly 128.3authorized to transact business in Minnesota, provided no fee is charged for the service;128.4    (3) persons who, as employees on a regular salary or wage of an employer not 128.5engaged in the business of debt management, perform credit services for their employer;128.6    (4) public officers acting in their official capacities and persons acting as a debt 128.7management services provider pursuant to court order;128.8    (5) any person while performing services incidental to the dissolution, winding up, 128.9or liquidation of a partnership, corporation, or other business enterprise;128.10    (6) the state, its political subdivisions, public agencies, and their employees;128.11    (7) credit unions and collection agencies, provided no fee is charged for the service128.12that the services are provided to a creditor;128.13    (8) "qualified organizations" designated as representative payees for purposes of the 128.14Social Security and Supplemental Security Income Representative Payee System and the 128.15federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508;128.16    (9) accelerated mortgage payment providers. "Accelerated mortgage payment 128.17providers" are persons who, after satisfying the requirements of sections 
         332.30 to 128.18332.303
         , receive funds to make mortgage payments to a lender or lenders, on behalf 128.19of mortgagors, in order to exceed regularly scheduled minimum payment obligations 128.20under the terms of the indebtedness. The term does not include: (i) persons or entities 128.21described in clauses (1) to (8); (ii) mortgage lenders or servicers, industrial loan and 128.22thrift companies, or regulated lenders under chapter 56; or (iii) persons authorized to 128.23make loans under section 
         47.20, subdivision 1. For purposes of this clause and sections 128.24332.30
          to 
         332.303, "lender" means the original lender or that lender's assignee, whichever 128.25is the current mortgage holder;128.26    (10) trustees, guardians, and conservators; and128.27    (11) debt settlement services providers. 128.28    Sec. 10. Minnesota Statutes 2008, section 332A.02, subdivision 9, is amended to read:128.29    Subd. 9. Debt management services. "Debt management services" means the 128.30provision of any one or more of the following services in connection with debt incurred 128.31primarily for personal, family, or household services:128.32    (1) managing the financial affairs of an individual by distributing income or money 128.33to the individual's creditors; 128.34    (2) receiving funds for the purpose of distributing the funds among creditors in 128.35payment or partial payment of obligations of a debtor; or129.1    (3) adjusting, prorating, pooling, or liquidating the indebtedness of a debtor  whereby 129.2a debt management services provider assists in managing the financial affairs of a debtor 129.3by distributing periodic payments to the debtor's creditors from funds that the debt 129.4management services provider receives from the debtor and where the primary purpose of 129.5the services is to effect full repayment of debt incurred primarily for personal, family, or 129.6household services. 129.7Any person so engaged or holding out as so engaged is deemed to be engaged in the 129.8provision of debt management services regardless of whether or not a fee is charged for 129.9such services.129.10    Sec. 11. Minnesota Statutes 2008, section 332A.02, subdivision 10, is amended to read:129.11    Subd. 10. Debtor. "Debtor" means the person for whom the debt prorating service 129.12is management services are performed.129.13    Sec. 12. Minnesota Statutes 2008, section 332A.02, subdivision 13, is amended to read:129.14    Subd. 13. Debt settlement services provider. "Debt settlement services provider" 129.15means any person engaging in or holding out as engaging in the business of negotiating, 129.16adjusting, or settling debt incurred primarily for personal, family, or household purposes 129.17without holding or receiving the debtor's funds or personal property and without paying 129.18the debtor's funds to, or distributing the debtor's property among, creditors has the 129.19meaning given in section 332B.02, subdivision 11. The term shall not include persons 129.20listed in subdivision 8, clauses (1) to (10).129.21    Sec. 13. Minnesota Statutes 2008, section 332A.04, subdivision 6, is amended to read:129.22    Subd. 6. Right of action on bond. If the registrant has failed to account to a debtor 129.23or distribute to the debtor's creditors the amounts required by this chapter and, or has 129.24failed to perform any of the services promised in  the debt management services agreement 129.25between the debtor and registrant, the registrant is in default. The debtor or the debtor's 129.26legal representative or receiver, the commissioner, or the attorney general, shall have, in 129.27addition to all other legal remedies, a right of action in the name of the debtor on the bond 129.28or the security given under this section, for loss suffered by the debtor, not exceeding the 129.29face amount of the bond or security, and without the necessity of joining the registrant 129.30in the suit or action based on the default.129.31    Sec. 14. Minnesota Statutes 2008, section 332A.08, is amended to read:129.32332A.08 DENIAL OF REGISTRATION.130.1    The commissioner, with notice to the applicant by certified mail sent to the address 130.2listed on the application, may deny an application for a registration upon finding that 130.3the applicant:130.4    (1) has submitted an application required under section 
         332A.04 that contains 130.5incorrect, misleading, incomplete, or materially untrue information. An application is 130.6incomplete if it does not include all the information required in section 
         332A.04;130.7    (2) has failed to pay any fee or pay or maintain any bond required by this chapter, 130.8or failed to comply with any order, decision, or finding of the commissioner made under 130.9and within the authority of this chapter;130.10    (3) has violated any provision of this chapter or any rule or direction lawfully made 130.11by the commissioner under and within the authority of this chapter;130.12    (4) or any controlling or affiliated party has ever been convicted of a crime or found 130.13civilly liable for an offense involving moral turpitude, including forgery, embezzlement, 130.14obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any 130.15other similar offense or violation, or any violation of a federal or state law or regulation 130.16in connection with activities relating to the rendition of debt management services or 130.17any consumer fraud, false advertising, deceptive trade practices, or similar consumer 130.18protection law;130.19    (5) has had a registration or license previously revoked or suspended in this state or 130.20any other state or the applicant or licensee has been permanently or temporarily enjoined 130.21by any court of competent jurisdiction from engaging in or continuing any conduct or 130.22practice involving any aspect of the debt management services provider business; or 130.23any controlling or affiliated party has been an officer, director, manager, or shareholder 130.24owning more than a ten percent interest in a debt management services provider whose 130.25registration has previously been revoked or suspended in this state or any other state, or 130.26who has been permanently or temporarily enjoined by any court of competent jurisdiction 130.27from engaging in or continuing any conduct or practice involving any aspect of the debt 130.28management services provider business;130.29    (6) has made any false statement or representation to the commissioner;130.30    (7) is insolvent;130.31    (8) refuses to fully comply with an investigation or examination of the debt 130.32management services provider by the commissioner;130.33    (9) has improperly withheld, misappropriated, or converted any money or properties 130.34received in the course of doing business;130.35    (10) has failed to have a trust account with an actual cash balance equal to or greater 130.36than the sum of the escrow balances of each debtor's account;131.1    (11) has defaulted in making payments to creditors on behalf of debtors as required 131.2by agreements between the provider and debtor; or131.3    (12) has used fraudulent, coercive, or dishonest practices, or demonstrated 131.4incompetence, untrustworthiness, or financial irresponsibility in this state or elsewhere; or131.5(13) has been shown to have engaged in a pattern of failing to perform the services 131.6promised.131.7    Sec. 15. Minnesota Statutes 2008, section 332A.10, is amended to read:131.8332A.10 WRITTEN DEBT MANAGEMENT SERVICES AGREEMENT.131.9    Subdivision 1. Written agreement required.(a) A debt management services 131.10provider may not perform any debt management services or receive any money related 131.11to a debt management services plan until the provider has obtained a debt management 131.12services agreement that contains all  terms of the agreement between the debt management 131.13services provider and the debtor.131.14(b) A debt management services agreement must:131.15(1) be in writing, dated, and signed by the debt management services provider and 131.16the debtor;131.17(2) conspicuously indicate whether or not the debt management services provider 131.18is registered with the Minnesota Department of Commerce and include any registration 131.19number; and131.20(3) be written in the debtor's primary language if the debt management services 131.21provider advertised in that language. 131.22(c) The registrant must furnish the debtor with a copy of the signed contract upon 131.23execution.131.24    Subd. 2. Actions prior to written agreement. No person may provide debt 131.25management services for a debtor or execute a debt management services agreement 131.26unless the person first has:131.27    (1) provided the debtor individualized counseling and educational information 131.28that, at a minimum, addresses managing household finances, managing credit and debt, 131.29budgeting, and personal savings strategies;131.30    (2) prepared in writing and provided to the debtor, in a form that the debtor may 131.31keep, an individualized financial analysis and a proposed debt management services 131.32plan listing the debtor's known debts with specific recommendations regarding actions 131.33the debtor should take to reduce or eliminate the amount of the debts, including written 131.34disclosure that debt management services are not suitable for all debtors and that there are 131.35other ways, including bankruptcy, to deal with indebtedness;132.1    (3) made a determination supported by an individualized financial analysis that the 132.2debtor can reasonably meet the requirements of the proposed debt management services 132.3plan and that there is a net tangible benefit to the debtor of entering into the proposed debt 132.4management services plan; and132.5    (4) prepared, in a form the debtor may keep, a written list identifying all known 132.6creditors of the debtor that the provider reasonably expects to participate in the plan 132.7and the creditors, including secured creditors, that the provider reasonably expects not 132.8to participate; and132.9(5) disclosed, in addition to the written disclosure on the agreement required under 132.10subdivision 1, whether or not the debt management services provider is registered with the 132.11Minnesota Department of Commerce and any registration number.132.12    Subd. 3. Required terms. (a) Each debt management services agreement must 132.13contain the following terms, which must be disclosed prominently and clearly in bold print 132.14on the front page of the agreement, segregated by bold lines from all other information on 132.15the page:132.16    (1) the origination fee amount to be paid by the debtor and whether all or a portion 132.17of the initial origination fee amount is refundable or nonrefundable;132.18    (2) the monthly fee amount or percentage to be paid by the debtor; and132.19    (3) the total amount of fees reasonably anticipated to be paid by the debtor over 132.20the term of the agreement.132.21    (b) Each debt management services agreement must also contain the following:132.22    (1) a disclosure that if the amount of debt owed is increased by interest, late fees, 132.23over the limit fees, and other amounts imposed by the creditors, the length of the debt 132.24management services agreement will be extended and remain in force and that the total 132.25dollar charges agreed upon may increase at the rate agreed upon in the original contract 132.26agreement;132.27    (2) a prominent statement describing the terms upon which the debtor may cancel 132.28the contract as set forth in section 
         332A.11;132.29    (3) a detailed description of all services to be performed by the debt management 132.30services provider for the debtor;132.31    (4) the debt management services provider's refund policy; and132.32    (5) the debt management services provider's principal business address and the name 132.33and address of its agent in this state authorized to receive service of process.132.34    Subd. 4. Prohibited terms. The following terms shall not be included in the debt 132.35management services agreement:132.36    (1) a hold harmless clause;133.1    (2) a confession of judgment, or a power of attorney to confess judgment against the 133.2debtor or appear as the debtor in any judicial proceeding;133.3    (3) a waiver of the right to a jury trial, if applicable, in any action brought by 133.4or against a debtor;133.5    (4) an assignment of or an order for payment of wages or other compensation for 133.6services;133.7    (5) a provision in which the debtor agrees not to assert any claim or defense arising 133.8out of the debt management services agreement;133.9    (6) a waiver of any provision of this chapter or a release of any obligation required 133.10to be performed on the part of the debt management services provider; or133.11    (7) a mandatory arbitration clause or a clause selecting a law other than the laws of 133.12Minnesota under which the debt management services agreement or any other dispute 133.13involving the provision of debt management services is governed or enforced.133.14    Subd. 5.  New debt management services agreements; modification of existing 133.15agreements. (a) Separate and additional debt management services agreements that 133.16comply with this chapter may be entered into by the debt management services provider 133.17and the debtor provided that no additional initial origination fee may be charged by the 133.18debt management services provider. 133.19    (b) Any modification of an existing debt management services agreement, including 133.20any increase in the number or amount of debts included in the debt management service133.21services agreement, must be in writing and signed by both parties, except that the signature 133.22of the debtor is not required if: 133.23    (1) a creditor is added to or deleted from a debt management services agreement 133.24at the request of the debtor or a debtor voluntarily increases the amount of a payment, 133.25provided the debt management services provider must provide an updated payment 133.26schedule to the debtor within seven days; or 133.27    (2) the payment amount to a creditor in the agreement increases by $10 or less 133.28and the total payment amount to all creditors increases a total of $20 or less as a result 133.29of incorrect or incomplete information provided by the debtor regarding the amount of 133.30debt owed a creditor, provided the debt management services provider must notify the 133.31debtor of the increase within seven days. 133.32    No fees, charges, or other consideration may be demanded from the debtor for 133.33the modification, other than an increase in the amount of the monthly maintenance fee 133.34established in the original debt management services agreement. 133.35    Sec. 16. Minnesota Statutes 2008, section 332A.11, subdivision 2, is amended to read:134.1    Subd. 2. Notice of debtor's right to cancel. A debt management services 134.2agreement must contain, on its face, in an easily readable typeface type immediately 134.3adjacent to the space for signature by the debtor, the following notice: "Right To Cancel: 134.4You have the right to cancel this contract at any time on ten days' written notice." 134.5    Sec. 17. Minnesota Statutes 2008, section 332A.14, is amended to read:134.6332A.14 PROHIBITIONS.134.7    A registrant No debt management services provider shall not:134.8    (1) purchase from a creditor any obligation of a debtor;134.9    (2) use, threaten to use, seek to have used, or seek to have threatened the use of any 134.10legal process, including but not limited to garnishment and repossession of personal 134.11property, against any debtor while the debt management services agreement between the 134.12registrant and the debtor remains executory;134.13    (3) advise, counsel, or encourage a debtor to stop paying a creditor until a debt 134.14management services plan is in place, or imply, infer, encourage, or in any other way 134.15indicate, that it is advisable to stop paying a creditor;134.16(4) sanction or condone the act by a debtor of ceasing payments or imply, infer, 134.17or in any manner indicate that the act of ceasing payments is advisable or beneficial to 134.18the debtor;134.19    (4) (5) require as a condition of performing debt management services the purchase 134.20of any services, stock, insurance, commodity, or other property or any interest therein 134.21either by the debtor or the registrant;134.22    (5) (6) compromise any debts unless the prior written or contractual approval of the 134.23debtor has been obtained to such compromise and unless such compromise inures solely 134.24to the benefit of the debtor;134.25    (6) (7) receive from any debtor as security or in payment of any fee a promissory 134.26note or other promise to pay or any mortgage or other security, whether as to real or 134.27personal property;134.28    (7) (8) lend money or provide credit to any debtor if any interest or fee is charged, 134.29or directly or indirectly collect any fee for referring, advising, procuring, arranging, or 134.30assisting a consumer in obtaining any extension of credit or other debtor service from a 134.31lender or debt management services provider;134.32    (8) (9) structure a debt management services agreement that would result in negative 134.33amortization of any debt in the plan;134.34    (9) (10) engage in any unfair, deceptive, or unconscionable act or practice in 134.35connection with any service provided to any debtor;135.1    (10) (11) offer, pay, or give any material cash fee, gift, bonus, premium, reward, or 135.2other compensation to any person for referring any prospective customer to the registrant 135.3or for enrolling a debtor in a debt management services plan, or provide any other 135.4incentives for employees or agents of the debt management services provider to induce 135.5debtors to enter into a debt management services plan;135.6    (11) (12) receive any cash, fee, gift, bonus, premium, reward, or other compensation 135.7from any person other than the debtor or a person on the debtor's behalf in connection 135.8with activities as a registrant, provided that this paragraph does not apply to a registrant 135.9which is a bona fide nonprofit corporation duly organized under chapter 317A or under 135.10the similar laws of another state;135.11    (12) (13) enter into a contract with a debtor unless a thorough written budget analysis 135.12indicates that the debtor can reasonably meet the requirements of the financial adjustment 135.13plan and will be benefited by the plan;135.14    (13) (14) in any way charge or purport to charge or provide any debtor credit 135.15insurance in conjunction with any contract or agreement involved in the debt management 135.16services plan;135.17    (14) (15) operate or employ a person who is an employee or owner of a collection 135.18agency or process-serving business; or135.19    (15) (16) solicit, demand, collect, require, or attempt to require payment of a sum 135.20that the registrant states, discloses, or advertises to be a voluntary contribution to a debt 135.21management services provider or designee from the debtor.135.22    Sec. 18. Minnesota Statutes 2008, section 332A.16, is amended to read:135.23332A.16 ADVERTISEMENT OF DEBT MANAGEMENT SERVICES PLANS.135.24    No debt management services provider may make false, deceptive, or misleading 135.25statements or omissions about the rates, terms, or conditions of an actual or proposed 135.26debt management services plan or its debt management services, or create the likelihood 135.27of consumer confusion or misunderstanding regarding its services, including but not 135.28limited to the following:135.29    (1) represent that the debt management services provider is a nonprofit, 135.30not-for-profit, or has similar status or characteristics if some or all of the debt management 135.31services will be provided by a for-profit company that is a controlling or affiliated party to 135.32the debt management services provider; or135.33    (2) make any communication that gives the impression that the debt management 135.34services provider is acting on behalf of a government agency.136.1    Sec. 19. [332B.02] DEFINITIONS.136.2    Subdivision 1.Scope.Unless a different meaning is clearly indicated by the context, 136.3for the purposes of this chapter, the terms defined in this section have the meanings given 136.4them.136.5    Subd. 2.Accreditation."Accreditation" means certification as an accredited credit 136.6counseling provider by the Council on Accreditation, the Bureau Veritas Certification 136.7North America, Inc., or BSI Management Systems America, Inc.136.8    Subd. 3.Advertise."Advertise" means to solicit business through any means or 136.9medium.136.10    Subd. 4.Aggregate debt."Aggregate debt" means the total of principal and interest 136.11that is owed by the debtor to the creditors at the time of execution of the debt settlement 136.12agreement.136.13    Subd. 5.Attorney general."Attorney general" means the attorney general of the 136.14state of Minnesota.136.15    Subd. 6.Commissioner."Commissioner" means the commissioner of commerce.136.16    Subd. 7.Controlling or affiliated party."Controlling or affiliated party" means 136.17any person or entity that controls or is controlled, directly or indirectly, or is under 136.18common control with another person. Controlling or affiliated party includes, but is not 136.19limited to, employees, officers, independent contractors, corporations, partnerships, and 136.20limited liability corporations.136.21    Subd. 8.Credit counseling."Credit counseling" means the provision of counseling 136.22and advice on managing household finances, including but not limited to, managing credit 136.23and debt, budgeting, and personal savings.136.24    Subd. 9.Creditor."Creditor" means any party:136.25(1) named by the debtor as a creditor in the debt settlement services plan or debt 136.26settlement services agreement;136.27(2) that acquires or holds the debt; or136.28(3) to whom interactions with the debt settlement services is assigned in relation to 136.29the debt listed in the debt settlement services plan or debt settlement services agreement.136.30    Subd. 10.Debt settlement services."Debt settlement services" means any one or 136.31more of the following activities:136.32(1) offering to provide advice, or offering to act or acting as an intermediary between 136.33a debtor and one or more of the debtor's creditors, where the primary purpose of the 136.34advice or action is to obtain a settlement for less than the full amount of debt, whether 137.1in principal, interest, fees, or other charges, incurred primarily for personal, family, or 137.2household purposes including, but not limited to, offering debt negotiation, debt reduction, 137.3or debt relief services; or137.4(2) advising, encouraging, assisting, or counseling a debtor to accumulate funds in 137.5an account for future payment of a reduced amount of debt to one or more of the debtor's 137.6creditors.137.7Any person so engaged or holding out as so engaged is deemed to be engaged in 137.8the provision of debt settlement services, regardless of whether or not a fee is charged for 137.9such services.137.10    Subd. 11.Debt settlement services agreement."Debt settlement services 137.11agreement" means the written contract between the debt settlement services provider 137.12and the debtor.137.13    Subd. 12.Debt settlement services plan."Debt settlement services plan" means 137.14the debtor's individualized package of debt settlement services set forth in the debt 137.15settlement services agreement.137.16    Subd. 13.Debt settlement services provider."Debt settlement services provider" 137.17means any person offering or providing debt settlement services to a debtor domiciled 137.18in this state, regardless of whether or not a fee is charged for the services and regardless 137.19of whether the person maintains a physical presence in the state. The term includes 137.20any person to whom debt settlement duties are delegated. The term shall not include 137.21persons listed in section 332A.02, subdivision 8, clauses (1) to (10), or a debt management 137.22services provider.137.23    Subd. 14.Lead generator."Lead generator" means a person that, without providing 137.24debt settlement services: (1) solicits debtors to engage in debt settlement through mail, 137.25in person, or electronic Web site-based solicitation or any other means, (2) acts as an 137.26intermediary or referral agent between a debtor and an entity actually providing debt 137.27settlement services, or (3) obtains a debtor's personally identifiable information and 137.28transmits that information to a debt settlement services provider.137.29    Subd. 15.Person."Person" means an individual, firm, partnership, association, 137.30or corporation.137.31    Subd. 16.Registrant."Registrant" means any person registered by the 137.32commissioner pursuant to this chapter and, where used in conjunction with an act or 137.33omission required or prohibited by this chapter, shall mean any person performing debt 137.34settlement services.138.1    Sec. 20. [332B.03] REQUIREMENT OF REGISTRATION.138.2On or after August 1, 2009, it is unlawful for any person, whether or not located 138.3in this state, to operate as a debt settlement services provider or provide debt settlement 138.4services including, but not limited to, offering, advertising, or executing or causing to be 138.5executed any debt settlement services or debt settlement services agreement, except as 138.6authorized by law, without first becoming registered as provided in this chapter. Debt 138.7settlement services providers may continue to provide debt settlement services without 138.8complying with this chapter to those debtors who entered into a contract to participate 138.9in a debt settlement services plan prior to August 1, 2009, but may not enter into a debt 138.10settlement services agreement with a debt on or after August 1, 2009, without complying 138.11with this chapter.138.12    Sec. 21. [332B.04] REGISTRATION.138.13    Subdivision 1.Form.Application for registration to operate as a debt settlement 138.14services provider in this state must be made in writing to the commissioner, under oath, in 138.15the form prescribed by the commissioner, and must contain:138.16(1) the full name of each principal of the entity applying;138.17(2) the address, which must not be a post office box, and the telephone number and, 138.18if applicable, the e-mail address, of the applicant;138.19(3) consent to the jurisdiction of the courts of this state;138.20(4) the name and address of the registered agent authorized to accept service of 138.21process on behalf of the applicant or appointment of the commissioner as the applicant's 138.22agent for purposes of accepting service of process;138.23(5) disclosure of:138.24(i) whether any controlling or affiliated party has ever been convicted of a crime 138.25or found civilly liable for an offense involving moral turpitude, including forgery, 138.26embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to 138.27defraud, or any other similar offense or violation, or any violation of a federal or state 138.28law or regulation in connection with activities relating to the rendition of debt settlement 138.29services or involving any consumer fraud, false advertising, deceptive trade practices, or 138.30similar consumer protection law;138.31(ii) any judgments, private or public litigation, tax liens, written complaints, 138.32administrative actions, or investigations by any government agency against the applicant 138.33or any officer, director, manager, or shareholder owning more than five percent interest 138.34in the applicant, unresolved or otherwise, filed or otherwise commenced within the 138.35preceding ten years;139.1(iii) whether the applicant or any person employed by the applicant has had a record 139.2of having defaulted in the payment of money collected for others, including the discharge 139.3of debts through bankruptcy proceedings; and139.4(iv) whether the applicant's license or registration to provide debt settlement services 139.5in any other state has ever been revoked or suspended;139.6(6) a copy of the applicant's standard debt settlement services agreement that the 139.7applicant intends to execute with debtors;139.8(7) proof of accreditation, unless the applicant submits an affidavit attesting that the 139.9applicant does not provide credit counseling services; and139.10(8) any other information and material as the commissioner may require.139.11The commissioner may, for good cause shown, temporarily waive any requirement 139.12of this subdivision.139.13    Subd. 2.Term and scope of registration.A registration is effective until 11:59 139.14p.m. on December 31 of the year for which the application for registration is filed or until 139.15it is surrendered by the registrant or revoked or suspended by the commissioner. The 139.16registration is limited solely to the business of providing debt settlement services.139.17    Subd. 3.Fees; bond.An applicant for registration as a debt settlement services 139.18provider must comply with the requirements of section 332A.04, subdivisions 3, 4, and 5.139.19    Subd. 4.Right of action on bond.If the registrant has failed to account to a debtor, 139.20or has failed to perform any of the services promised, the registrant is in default. The 139.21debtor or the debtor's legal representative or receiver, the commissioner, or the attorney 139.22general, shall have, in addition to all other legal remedies, a right of action in the name of 139.23the debtor on the bond or the security given under this section, for loss suffered by the 139.24debtor, not exceeding the face amount of the bond or security, and without the necessity of 139.25joining the registrant in the suit or action based on the default.139.26    Subd. 5.Registrant list.The commissioner must maintain a list of registered debt 139.27settlement services providers. The list must be made available to the public in written 139.28form upon request and on the Department of Commerce Web site.139.29    Subd. 6.Renewal of registration.Each year, each registrant under the provisions 139.30of this chapter must, not more than 60 nor less than 30 days before its registration is to 139.31expire, apply to the commissioner for renewal of its registration on a form prescribed by 139.32the commissioner. The application must be signed by the registrant under penalty of 139.33perjury, contain current information on all matters required in the original application, and 139.34be accompanied by a payment of $250. The registrant must maintain a continuous surety 139.35bond that satisfies the requirements of section 332A.04, subdivision 4. The renewal is 140.1effective for one year. The commissioner may, for good cause shown, temporarily waive 140.2any requirement of this section.140.3    Sec. 22. [332B.05] DENIAL, SUSPENSION, REVOCATION, OR 140.4NONRENEWAL OF REGISTRATION.140.5    Subdivision 1.Denial.The commissioner, with notice to the applicant by certified 140.6mail sent to the address listed on the application, may deny an application for a registration 140.7for any of the reasons specified under section 332A.08.140.8    Subd. 2.Suspension, revocation, or nonrenewal.The commissioner may suspend, 140.9revoke, or refuse to renew any registration issued under this chapter, or may levy a civil 140.10penalty under section 45.027, or any combination of actions, if the debt settlement services 140.11provider or any controlling or affiliated person has committed any act or omission for 140.12which the commissioner could have refused to issue an initial registration.140.13    Subd. 3.Procedure.Suspension, revocation, or nonrenewal must be upon notice 140.14and under the conditions prescribed in section 332A.09, subdivision 1. Upon issuance of 140.15an order suspending, revoking, or refusing to renew a registration, the commissioner:140.16(1) shall follow the procedure established in section 332A.09, subdivision 2; and140.17(2) may follow the procedure specified in section 332A.09, subdivision 3, concerning 140.18the appointment of a receiver for funds of sanctioned registrants.140.19    Sec. 23. [332B.06] WRITTEN DEBT SETTLEMENT SERVICES AGREEMENT; 140.20DISCLOSURES; TRUST ACCOUNT.140.21    Subdivision 1.Written agreement required.(a) A debt settlement services 140.22provider may not perform, or impose any charges or receive any payment for, any debt 140.23settlement services until the provider and the debtor have executed a debt settlement 140.24services agreement that contains all terms of the agreement between the debt settlement 140.25services provider and the debtor and complies with all the applicable requirements of 140.26this chapter.140.27(b) A debt settlement services agreement must:140.28(1) be in writing, dated, and signed by the debt settlement services provider and 140.29the debtor;140.30(2) conspicuously indicate whether or not the debt settlement services provider is 140.31registered with the Minnesota Department of Commerce and include any registration 140.32number; and140.33(3) be written in the debtor's primary language if the debt settlement services 140.34provider advertises in that language.141.1(c) The registrant must furnish the debtor with a copy of the signed contract upon 141.2execution.141.3    Subd. 2.Actions prior to executing a written agreement.No person may provide 141.4debt settlement services for a debtor or execute a debt settlement services agreement 141.5unless the person first has: 141.6(1) informed the debtor, in writing, that debt settlement is not appropriate for all 141.7debtors and that there are other ways to deal with debt, including using credit counseling 141.8or debt management services, or filing bankruptcy;141.9(2) prepared in writing and provided to the debtor, in a form the debtor may keep, 141.10an individualized financial analysis of the debtor's financial circumstances, including 141.11income and liabilities, and made a determination supported by the individualized financial 141.12analysis that:141.13(i) the debt settlement plan proposed for addressing the debt is suitable for the 141.14individual debtor;141.15(ii) the debtor can reasonably meet the requirements of the proposed debt settlement 141.16services plan; and141.17(iii) based on the totality of the circumstances, there is a net tangible benefit to the 141.18debtor of entering into the proposed debt settlement services plan; and141.19(3) provided, on a document separate from any other document, the total amount and 141.20an itemization of fees, including any origination fees, monthly fees, and settlement fees 141.21reasonably anticipated to be paid by the debtor over the term of the agreement.141.22    Subd. 3.Determination concerning creditor participation.(a) Before executing a 141.23debt settlement services agreement or providing any services, a debt settlement services 141.24provider must make a determination, supported by sufficient bases, which creditors listed 141.25by the debtor are reasonably likely, and which are not reasonably likely, to participate in 141.26the debt settlement services plan set forth in the debt settlement services agreement.141.27(b) A debt settlement services provider has a defense against a claim that no 141.28sufficient basis existed to make a determination that a creditor was likely to participate if 141.29the debt settlement services provider can produce:141.30(1) written confirmation from the creditor that, at the time the determination was 141.31made, the creditor and the debt settlement services provider were engaged in negotiations 141.32to settle a debt for another debtor; or141.33(2) evidence that the provider and the creditor had entered into a settlement of a debt 141.34within the six months prior to the date of the determination.141.35(c) The debt settlement services provider must notify the debtor as soon as 141.36practicable after the provider has made a determination of the likelihood of participation 142.1or nonparticipation of all the creditors listed for inclusion in the debt settlement services 142.2agreement or debt settlement services plan. If not all creditors listed in the debt settlement 142.3services agreement are reasonably likely to participate in the debt settlement services plan, 142.4the debt settlement services provider must obtain the written authorization from the debtor 142.5to proceed with the debt settlement services agreement without the likely participation of 142.6all listed creditors.142.7    Subd. 4.Disclosures.(a) A person offering to provide or providing debt settlement 142.8services must disclose both orally and in writing whether or not the person is registered 142.9with the Minnesota Department of Commerce and any registration number.142.10(b) No person may provide debt settlement services unless the person first has 142.11provided, both orally and in writing, on a single sheet of paper, separate from any other 142.12document or writing, the following verbatim notice:142.13CAUTION142.14We CANNOT GUARANTEE that you will successfully reduce or eliminate your 142.15debt.142.16If you stop paying your creditors, there is a strong likelihood some or all of the 142.17following may happen:142.18• YOUR WAGES OR BANK ACCOUNT MAY STILL BE GARNISHED.142.19• YOU MAY STILL BE CONTACTED BY CREDITORS.142.20• YOU MAY STILL BE SUED BY CREDITORS for the money you owe.142.21• FEES, INTEREST, AND OTHER CHARGES WILL CONTINUE TO MOUNT 142.22UP DURING THE (INSERT NUMBER) MONTHS THIS PLAN IS IN EFFECT.142.23Even if we do settle your debt, YOU MAY STILL HAVE TO PAY TAXES on 142.24the amount forgiven.142.25Your credit rating may be adversely affected.142.26(c) The heading, "CAUTION," must be in bold, underlined, 28-point type, and the 142.27remaining text must be in 14-point type, with a double space between each statement.142.28(d) The disclosures and notices required under this subdivision must be provided 142.29in the debtor's primary language if the debt settlement services provider advertises in 142.30that language.142.31    Subd. 5.Required terms.(a) Each debt settlement services agreement must contain 142.32on the front page of the agreement, segregated by bold lines from all other information 142.33on the page and disclosed prominently and clearly in bold print, the total amount and an 142.34itemization of fees, including any origination fees, monthly fees, and settlement fees 142.35reasonably anticipated to be paid by the debtor over the term of the agreement.142.36(b) Each debt settlement services agreement must also contain the following:143.1(1) a prominent statement describing the terms upon which the debtor may cancel 143.2the contract as set forth in section 332B.07;143.3(2) a detailed description of all services to be performed by the debt settlement 143.4services provider for the debtor;143.5(3) the debt settlement services provider's refund policy;143.6(4) the debt settlement services provider's principal business address, which must 143.7not be a post office box, and the name and address of its agent in this state authorized to 143.8receive service of process; and143.9(5) the name of each creditor the debtor has listed and the aggregate debt owed to 143.10each creditor that will be the subject of settlement.143.11    Subd. 6.Prohibited terms.A debt settlement services agreement may not contain 143.12any of the terms prohibited under section 332A.10, subdivision 4.143.13    Subd. 7.New debt settlement services agreements; modifications of existing 143.14agreements.(a) Separate and additional debt settlement services agreements that comply 143.15with this chapter may be entered into by the debt settlement services provider and the 143.16debtor, provided that no additional origination fee may be charged by the debt settlement 143.17services provider.143.18(b) Any modification of an existing debt settlement services agreement, including 143.19any increase in the number or amount of debts included in the debt settlement services 143.20agreement, must be in writing and signed by both parties. No fee may be charged to 143.21modify an existing agreement.143.22    Subd. 8. Funds held in trust.Debtor funds may be held in trust for the purpose 143.23of writing exchange checks for no longer than 42 days. If the registrant holds debtor 143.24funds, the registrant must maintain a separate trust account, except that the registrant may 143.25commingle debtor funds with the registrant's own funds, in the form of an imprest fund, 143.26to the extent necessary to ensure maintenance of a minimum balance, if the financial 143.27institution at which the trust account is held requires a minimum balance to avoid the 143.28assessment of fees or penalties for failure to maintain a minimum balance.143.29    Sec. 24. [332B.07] RIGHT TO CANCEL.143.30    Subdivision 1.Debtor's right to cancel.(a) A debtor has the right to cancel a debt 143.31settlement services agreement without cause at any time upon ten days' written notice 143.32to the debt settlement services provider.143.33(b) In the event of cancellation, the debt settlement services provider must, within 143.34ten days of the cancellation, notify the debtor's creditors with whom the debt settlement 144.1services provider is or has been, under the terms of the debt settlement agreement, in 144.2communication, of the cancellation and immediately refund all fees paid by the debtor to 144.3the debt settlement services provider that exceed the fees allowed under section 332B.09.144.4(c) Upon cancellation, the debt settlement services provider must cease collection of 144.5any monthly fees beginning in the month following cancellation.144.6    Subd. 2.Notice of debtor's right to cancel.A debt settlement services agreement 144.7must contain, on its face, in an easily readable type immediately adjacent to the space for 144.8signature by the debtor, the following notice: "Right to Cancel: You have the right to 144.9cancel this contract at any time on ten days' written notice."144.10    Subd. 3.Automatic termination.Upon the payment of all listed or settled debts 144.11and fees, the debt settlement services agreement must automatically terminate, and all 144.12funds held by the debt settlement services provider that exceed the fees allowed under 144.13section 332B.09 must be immediately returned to the debtor.144.14    Subd. 4.Debt settlement services provider's right to cancel.(a) A debt settlement 144.15services provider may cancel a debt settlement services agreement with good cause upon 144.1630 days' written notice to the debtor.144.17(b) Within ten days after the cancellation, the debt settlement services provider 144.18must notify the debtor's creditors with whom the debt settlement services provider is or 144.19has been, under the terms of the debt settlement services agreement, in communication, 144.20of the cancellation.144.21(c) Upon cancellation, the debt settlement services provider must cease collection of 144.22any monthly fees beginning in the month following cancellation.144.23(d) A debt settlement services provider is entitled to the full amount of the fees 144.24provided for in the debt settlement services agreement if the provider can show that:144.25(1) the provider obtained a settlement offer from the creditor or creditors in 144.26accordance with the debt settlement services agreement;144.27(2) the debtor rejected the settlement offer; or144.28(3) within the period contemplated in the debt settlement services agreement, the 144.29debtor entered into a settlement agreement with the same creditor or creditors for an 144.30amount equal to or lower than the settlement offer obtained by the provider.144.31    Sec. 25. [332B.08] BOOKS, RECORDS, AND INFORMATION.144.32    Subdivision 1.Records retention; annual report.Every registrant must keep, and 144.33use in the registrant's business, such books, accounts, and records, including electronic 144.34records, as will enable the commissioner to determine whether the registrant is complying 145.1with this chapter and the rules, orders, and directives adopted by the commissioner under 145.2this chapter. Every registrant must preserve such books, accounts, and records for at least 145.3six years after making the final entry on any transaction recorded therein. Examinations 145.4of the books, records, and method of operations conducted under the supervision of the 145.5commissioner shall be done at the cost of the registrant. The cost must be assessed as 145.6determined under section 46.131.145.7    Subd. 2.Annual report.On or before March 15 of each calendar year, 145.8each registrant must file a report with the commissioner containing information the 145.9commissioner may require about the preceding calendar year. The report must be in a 145.10form the commissioner prescribes.145.11    Subd. 3.Statements to debtors.(a) Each registrant must:145.12(1) maintain and make available records and accounts that will enable each debtor to 145.13ascertain the amounts paid to the creditors, if any. A statement showing amounts received 145.14from the debtor, disbursements, if any, to each creditor, amounts that any creditor has 145.15agreed to as payment in full for any debt owed the creditor by the debtor, fees deducted by 145.16the registrant, and other information the commissioner may prescribe, must be furnished 145.17by the registrant to the debtor at least monthly and, in addition, upon any cancellation or 145.18termination of the contract;145.19(2) include in the statement furnished to debtors a list of all activities conducted 145.20pursuant to the contract, including the nature of communications and progress of 145.21negotiations with each creditor during the reporting period; and145.22(3) prepare and retain in the file of each debtor a written analysis of the debtor's 145.23income and expenses to substantiate that the plan of payment is feasible and practicable.145.24(b) Each debtor must have reasonable access, without cost, by electronic or other 145.25means, to information in the registrant's files applicable to the debtor. These statements, 145.26records, and accounts must otherwise remain confidential, except for duly authorized 145.27state and government officials, the commissioner, the attorney general, the debtor, and 145.28the debtor's representative and designees.145.29    Sec. 26. [332B.09] FEES; WITHDRAWAL OF CREDITORS; NOTIFICATION 145.30TO DEBTOR OF SETTLEMENT OFFER.145.31    Subdivision 1.Choice of fee structure.A debt settlement services provider may 145.32calculate fees on a percentage of debt basis or on a percentage of savings basis. The fee 145.33structure shall be clearly disclosed and explained in the debt settlement services agreement.146.1    Subd. 2.Fees as a percentage of debt.(a) The total amount of the fees claimed, 146.2demanded, charged, collected, or received under this subdivision shall be calculated as 146.315 percent of the aggregate debt. A debt settlement services provider that calculates 146.4fees as a percentage of debt may:146.5(1) charge an origination fee, which may be designated by the debt settlement 146.6services provider as nonrefundable, of:146.7(i) $200 on aggregate debt of less than $20,000; or146.8(ii) $400 on aggregate debt of $20,000 or more;146.9(2) charge a monthly fee of:146.10(i) no greater than $50 per month on aggregate debt of less than $40,000; and 146.11(ii) no greater than $60 per month on aggregate debt of $40,000 or more; and146.12(3) charge a settlement fee for the remainder of the allowable fees, which may be 146.13demanded and collected no earlier than upon delivery to the debt settlement services 146.14provider by a creditor of a bona fide written settlement offer consistent with the terms of 146.15the debt settlement services agreement. A settlement fee may be assessed for each debt 146.16settled, but the sum total of the origination fee, the monthly fee, and the settlement fee 146.17may not exceed 15 percent of the aggregate debt.146.18(b) When a settlement offer is obtained by a debt settlement services provider from a 146.19creditor, the collection of any monthly fees shall cease beginning the month following the 146.20month in which the settlement offer was obtained by the debt settlement services provider.146.21(c) In no event may more than 40 percent of the total amount of fees allowable be 146.22claimed, demanded, charged, collected, or received by a debt settlement services provider 146.23any earlier than upon delivery to the debt settlement services provider by a creditor of 146.24a bona fide written settlement offer consistent with the terms of the debt settlement 146.25services agreement.146.26    Subd. 3.Fees as a percentage of savings.(a) The total amount of the fees claimed, 146.27demanded, charged, collected, or received under this subdivision shall be calculated as 30 146.28percent of the savings actually negotiated by the debt settlement services provider. The 146.29savings shall be calculated as the difference between the aggregate debt that is stated 146.30in the debt settlement services agreement at the time of its execution and total amount 146.31that the debtor actually pays to settle all the debts stated in the debt settlement services 146.32agreement, provided that only savings resulting from concessions actually negotiated by 146.33the debt settlement services provider may be counted. A debt settlement services provider 146.34that calculates fees as a percentage of debt may:146.35(1) charge an origination fee, which may be designated by the debt settlement 146.36services provider as nonrefundable, of:147.1(i) $300 on aggregate debt of less than $20,000; or147.2(ii) $500 on aggregate debt of $20,000 or more;147.3(2) charge a monthly fee of:147.4(i) no greater than $65 on aggregate debt of less than $40,000; and147.5(ii) no greater than $75 on aggregate debt of $40,000 or more; and147.6(3) charge a settlement fee for the remainder of the allowable fees, which may be 147.7demanded and collected no earlier than upon delivery to the debt settlement services 147.8provider by a creditor of a bona fide, final written settlement offer consistent with the 147.9terms of the debt settlement services agreement. A settlement fee may be assessed for each 147.10debt settled, but the sum total of the origination fee, the monthly fee, and the settlement 147.11fee may not exceed 30 percent of the savings, as calculated under paragraph (a).147.12(b) The collection of monthly fees shall cease under this subdivision when the 147.13total of monthly fees and the origination fee equals 50 percent of the total fees allowable 147.14under this subdivision. For the purposes of this subdivision, 50 percent of the total fees 147.15allowable shall assume a settlement of 50 cents on the dollar.147.16(c) In no event may more than 50 percent of the total amount of fees allowable be 147.17claimed, demanded, charged, collected, or received by a debt settlement services provider 147.18any earlier than upon delivery to the debt settlement services provider by a creditor of a 147.19bona fide, final written settlement offer consistent with the terms of the debt settlement 147.20services agreement.147.21    Subd. 4.Fees exclusive.No fees, charges, assessments, or any other compensation 147.22may be claimed, demanded, charged, collected, or received other than the fees allowed 147.23under this section. Any fees collected in excess of those allowed under this section must 147.24be immediately returned to the debtor.147.25    Subd. 5.Withdrawal of creditor.Whenever a creditor withdraws from a debt 147.26settlement services plan, the debt settlement services provider must promptly notify the 147.27debtor of the withdrawal, identify the creditor, and inform the debtor of the right to modify 147.28the debt settlement services agreement, unless at least 50 percent of the listed creditors 147.29withdraw, in which case the debt settlement services provider must notify the debtor of the 147.30debtor's right to cancel. In no case may this notice be provided more than 15 days after the 147.31debt settlement services provider learns of the creditor's decision to withdraw from a plan.147.32    Subd. 6.Timely notification of settlement offer.A debt settlement services 147.33provider must make all reasonable efforts to notify the debtor within 24 hours of a 147.34settlement offer made by a creditor.147.35    Sec. 27. [332B.10] PROHIBITIONS.148.1No debt settlement services provider shall:148.2(1) engage in any activity, act, or omission prohibited under section 332A.14;148.3(2) promise, guarantee, or directly or indirectly imply, infer, or in any manner 148.4represent that any debt will be settled prior to the presentation to the debtor of an offer by 148.5the creditors participating in the debt settlement plan to settle;148.6(3) misrepresent the timing of negotiations with creditors;148.7(4) imply, infer, or in any manner represent that:148.8(i) fees, interest, and other charges will not continue to accrue prior to the time 148.9debts are settled;148.10(ii) wages or bank accounts are not subject to garnishment;148.11(iii) creditors will not continue to contact the debtor;148.12(iv) the debtor is not subject to legal action; and148.13(v) the debtor will not be subject to tax consequences for the portion of any debts 148.14forgiven;148.15(5) execute a power of attorney or any other agreement, oral or written, express 148.16or implied, that extinguishes or limits the debtor's right at any time to contract or 148.17communicate with any creditor or the creditor's right at any time to communicate with 148.18the debtor;148.19(6) exercise or attempt to exercise a power of attorney after an individual has 148.20terminated an agreement;148.21(7) state, imply, infer, or, in any other manner, indicate that entering into a debt 148.22settlement services agreement or settling debts will either have no effect on, or improve, 148.23the debtor's credit, credit rating, and credit score;148.24(8) challenge a debt without the written consent of the debtor;148.25(9) make any false or misleading claim regarding a creditor's right to collect a debt;148.26(10) falsely represent that the debt settlement services provider can negotiate better 148.27settlement terms with a creditor than the debtor alone can negotiate;148.28(11) provide or offer to provide legal advice or legal services unless the person 148.29providing or offering to provide legal advice is licensed to practice law in the state;148.30(12) misrepresent that it is authorized or competent to furnish legal advice or 148.31perform legal services; and148.32(13) settle a debt or lead an individual to believe that a payment to a creditor is in 148.33settlement of a debt to the creditor unless, at the time of settlement, the individual receives 148.34a certification from the creditor that the payment is in full settlement of the debt.149.1    Sec. 28. [332B.11] ADVERTISEMENT AND SOLICITATION OF DEBT 149.2SETTLEMENT SERVICES.149.3    Subdivision 1.Advertisement.No debt settlement services provider or lead 149.4generator may:149.5(1) make any false, deceptive, or misleading statements or omissions about the rates, 149.6terms, or conditions of an actual or proposed debt settlement services plan, or create the 149.7likelihood of consumer confusion or misunderstanding regarding its services;149.8(2) represent that the debt settlement services provider is a nonprofit, not-for-profit, 149.9or has similar status or characteristics if some or all of the debt settlement services will 149.10be provided by a for-profit company that is a controlling or affiliated party to the debt 149.11settlement services provider;149.12(3) make any communication that gives the impression that the debt settlement 149.13services provider is acting on behalf of a government agency; or149.14(4) represent, claim, imply, or infer that secured debts may be settled.149.15    Subd. 2.Solicitation by lead generators.(a) In all print, electronic, and nonprint 149.16solicitations, including Web sites and radio or television advertising, a lead generator must 149.17prominently make the following verbatim disclosure: "This company does not actually 149.18provide any debt settlement, debt consolidation, or other credit counseling services. We 149.19ONLY refer you to companies that want to provide some or all of those services."149.20(b) A lead generator may not, in any advertising or solicitation to debtors:149.21(1) represent that any service is guaranteed; or149.22(2) misrepresent the benefits of its services or debt settlement or consolidation in 149.23comparison to credit counseling, debt management, or bankruptcy.149.24    Sec. 29. [332B.12] DEBT SETTLEMENT SERVICES AGREEMENT 149.25RESCISSION.149.26Any debtor has the right to rescind any debt settlement services agreement with a 149.27debt settlement services provider that commits a material violation of this chapter. On 149.28rescission, all fees paid to the debt settlement services provider or any other person other 149.29than creditors of the debtor must be returned to the debtor entering into the debt settlement 149.30services agreement within ten days of rescission of the debt settlement services agreement.149.31    Sec. 30. [332B.13] ENFORCEMENT; REMEDIES.149.32    Subdivision 1.Violation as deceptive practice.A violation of any of the provisions 149.33of this chapter is considered an unfair or deceptive trade practice under section 8.31, 150.1subdivision 1. A private right of action under section 8.31 by an aggrieved debtor is in 150.2the public interest.150.3    Subd. 2.Private right of action.(a) A debt settlement provider who fails to 150.4comply with any of the provisions of this chapter, or a lead generator who violates section 150.5332B.11, is liable under this section in an individual action for the sum of:150.6(1) actual, incidental, and consequential damages sustained by the debtor as a result 150.7of the failure; and150.8(2) statutory damages of up to $5,000.150.9(b) A debt settlement provider who fails to comply with any of the provisions of 150.10this chapter, or a lead generator who violates section 332B.11, is liable to the named 150.11plaintiffs under this section in a class action for the amount that each named plaintiff 150.12could recover under paragraph (a), clause (1), and to the other class members for such 150.13amount as the court may allow.150.14(c) In determining the amount of statutory damages, the court shall consider, among 150.15other relevant factors:150.16(1) the frequency, nature, and persistence of noncompliance;150.17(2) the extent to which the noncompliance was intentional; and150.18(3) in the case of a class action, the number of debtors adversely affected.150.19(d) A plaintiff or class successful in a legal or equitable action under this section is 150.20entitled to the costs of the action, plus reasonable attorney fees.150.21    Subd. 3.Injunctive relief.(a) A debtor may sue a debt settlement services provider 150.22for temporary or permanent injunctive or other appropriate equitable relief to prevent 150.23violations of any provision of this chapter. A court must grant injunctive relief on a 150.24showing that the debt settlement services provider has violated any provision of this 150.25chapter, or in the case of a temporary injunction, on a showing that the debtor is likely to 150.26prevail on allegations that the debt settlement services provider violated any provision 150.27of this chapter.150.28(b) A debtor may sue a lead generator for temporary or permanent injunctive or other 150.29appropriate equitable relief to prevent violations of section 332B.11. A court must grant 150.30injunctive relief on a showing that the lead generator has violated section 332B.11, or in 150.31the case of a temporary injunction, on a showing that the debtor is likely to prevail on 150.32allegations that the lead generator violated section 332B.11.150.33    Subd. 4.Remedies cumulative.The remedies provided in this section are 150.34cumulative and do not restrict any remedy that is otherwise available. The provisions 151.1of this chapter are not exclusive and are in addition to any other requirements, rights, 151.2remedies, and penalties provided by law.151.3    Subd. 5.Public enforcement.The attorney general shall enforce this chapter 151.4under section 8.31.151.5    Sec. 31. [332B.14] INVESTIGATIONS.151.6At any reasonable time, the commissioner may examine the books and records of 151.7every registrant and of any person engaged in the business of providing debt settlement 151.8services. The commissioner, once during any calendar year, may require the submission 151.9of an audit prepared by a certified public accountant of the books and records of each 151.10registrant. If the registrant has, within one year previous to the commissioner's demand, 151.11had an audit prepared for some other purpose, this audit may be submitted to satisfy the 151.12requirement of this section. The commissioner may investigate any complaint concerning 151.13violations of this chapter and may require the attendance and sworn testimony of witnesses 151.14and the production of documents."151.15Delete the title and insert:151.16"A bill for an act151.17relating to state government; appropriating money for environment, natural 151.18resources, and energy; authorizing sale of gift cards and certificates; establishing 151.19composting competitive grant program; modifying regulation of storm water 151.20discharges; modifying waste management reporting requirements; requiring 151.21nonresident all-terrain vehicle state trail pass; modifying horse trail and state park 151.22pass requirements; extending certain land sale requirements; prohibiting certain 151.23sales of outdoor recreation system lands; providing for exchange of riparian land; 151.24requiring disclosure of certain chemicals in children's products by manufacturers; 151.25requiring plastic yard waste bags to be compostable and establishing labeling 151.26standards; modifying feedlot permit and grant provisions; authorizing uses of 151.27the Hennepin County solid and hazardous waste fund; modifying greenhouse 151.28gas emissions provisions and requiring a registry; establishing, modifying, 151.29and authorizing fees and surcharges; providing for disposition of certain fees; 151.30modifying and establishing assessments for certain regulatory expenses; 151.31modifying prior appropriations; prohibiting certain reorganizations; providing for 151.32fish consumption advisories in different languages; limiting use of certain funds; 151.33requiring studies and reports; appropriating money to Department of Commerce 151.34and Public Utilities Commission to finance activities related to commerce and 151.35energy; providing for green enterprise assistance; modifying provisions related to 151.36insurance audits, insurers and insurance products, certain financial institutions, 151.37regulated activities related to certain mortgage transactions and professionals, 151.38and debt management and debt settlement services; providing penalties and 151.39remedies;amending Minnesota Statutes 2008, sections 45.011, subdivision 1; 151.4045.027, subdivision 1; 46.04, subdivision 1; 46.05; 46.131, subdivision 2; 47.58, 151.41subdivision 1; 47.60, subdivisions 1, 3, 6; 48.21; 58.05, subdivision 3; 58.06, 151.42subdivision 2; 58.126; 58.13, subdivision 1; 60A.124; 60A.14, subdivision 151.431; 60B.03, subdivision 15; 60L.02, subdivision 3; 61B.19, subdivision 4; 151.4461B.28, subdivisions 4, 8; 67A.01; 67A.06; 67A.07; 67A.14, subdivisions 151.451, 7; 67A.18, subdivision 1; 84.0835, subdivision 3; 84.415, subdivision 151.465, by adding a subdivision; 84.63; 84.631; 84.632; 84.922, subdivision 1a; 152.184D.15, subdivision 2; 85.015, subdivision 1b; 85.053, subdivision 10; 85.46, 152.2subdivisions 3, 4, 7; 92.685; 93.481, subdivisions 1, 3, 5, 7; 94.342, subdivision 152.33; 97A.075, subdivision 1; 103G.271, subdivision 6; 103G.301, subdivisions 2, 152.43; 115.03, subdivision 5c; 115.073; 115.56, subdivision 4; 115.77, subdivision 152.51; 115A.1314, subdivision 2; 115A.557, subdivision 1; 115A.931; 116.0711; 152.6116.41, subdivision 2; 116C.834, subdivision 1; 216B.62, subdivisions 3, 4, 5, by 152.7adding a subdivision; 216H.10, subdivision 7; 216H.11; 325E.311, subdivision 152.86; 332A.02, subdivisions 5, 8, 9, 10, 13, by adding subdivisions; 332A.04, 152.9subdivision 6; 332A.08; 332A.10; 332A.11, subdivision 2; 332A.14; 332A.16; 152.10Laws 2005, chapter 156, article 2, section 45, as amended; Laws 2007, chapter 152.1157, article 1, section 4, subdivision 2; Laws 2008, chapter 363, article 5, section 152.124, subdivision 7; proposing coding for new law in Minnesota Statutes, chapters 152.1360A; 61A; 67A; 84; 86A; 93; 115A; 116; 116J; 216H; 325E; 383B; proposing 152.14coding for new law as Minnesota Statutes, chapter 332B; repealing Minnesota 152.15Statutes 2008, sections 60A.129; 61B.19, subdivision 6; 67A.14, subdivision 5; 152.1667A.17; 67A.19; Laws 2008, chapter 363, article 5, section 30; Minnesota Rules, 152.17parts 2675.2180; 2675.7100; 2675.7110; 2675.7120; 2675.7130; 2675.7140."
         		We request the adoption of this report and repassage of the bill.House Conferees: (Signed) Jean Wagenius, Bill Hilty, Kate Knuth, Rick Hansen, Jenifer LoonSenate Conferees: (Signed) Ellen Anderson, Tom Saxhaug, Satveer Chaudhary, Dennis Frederickson, Patricia Torres Ray

153.1We request the adoption of this report and repassage of the bill.153.2House Conferees:(Signed)153.3
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                     						153.4Jean WageniusBill Hilty153.5
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                     						153.6Kate KnuthRick Hansen153.7
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                     						153.8Jenifer Loon153.9Senate Conferees:(Signed)153.10
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                     						153.11Ellen AndersonTom Saxhaug153.12
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                     						153.13Satveer ChaudharyDennis Frederickson153.14
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                     						153.15Patricia Torres Ray