1.1A bill for an act1.2relating to state government; regulating various licensees and other entities; 1.3regulating various insurance coverages and practices; modifying definitions, 1.4informational requirements, continuing education requirements, information 1.5reporting requirements, and notice requirements; making various housekeeping, 1.6technical, and clarifying changes; authorizing certain flexible benefit health 1.7plans; regulating insurance continuation provisions for local government 1.8employees; regulating securities; reorganizing and modifying various provisions 1.9relating to real estate brokers, salespersons, and closing agents; modifying the 1.10membership requirements of, and appointment authority to, the real estate 1.11appraiser advisory board; regulating certain workers' compensation self-insurers; 1.12modifying the eligibility criteria for a University Promise Scholarship; 1.13authorizing and conditioning the issuance of certain on-sale liquor licenses; 1.14modifying certain lien notices; requiring a certain study;amending Minnesota 1.15Statutes 2008, sections 45.0112; 60A.031, subdivision 4; 60A.084; 60A.204; 1.1660A.36, by adding a subdivision; 60K.31, subdivision 10; 61A.092, subdivision 1.173; 62A.046, subdivision 6, by adding a subdivision; 62A.17, subdivision 5; 1.1862A.3099, subdivision 17; 62A.65, subdivision 2; 62E.02, subdivision 15; 1.1962E.14, subdivision 4c; 62L.05, subdivision 4; 62S.24, subdivision 8; 62S.266, 1.20subdivision 4; 62S.29, subdivision 1; 72A.08, subdivision 4; 72A.12, subdivision 1.214; 72A.20, subdivisions 10, 36, 37; 72A.492, subdivision 2; 72A.51, subdivision 1.222; 72B.01; 72B.08, subdivision 8; 79A.03, subdivision 8; 79A.06, subdivision 1.235; 79A.21, subdivision 3; 80A.41; 80A.46; 80A.65, subdivision 6; 82.17, 1.24subdivision 15, by adding subdivisions; 82.19; 82.21, subdivision 2; 82.24, 1.25subdivision 3; 82.29, subdivisions 4, 5, 8; 82.31, subdivisions 1, 2; 82.33, 1.26subdivisions 1, 2, by adding a subdivision; 82.34, subdivisions 1, 2, 4, 5, 13; 1.2782.39; 82.41, subdivisions 1, 2, by adding a subdivision; 82.45, subdivision 3, 1.28by adding subdivisions; 82.48, subdivisions 2, 3; 82B.05, as amended; 82B.06; 1.2982B.14; 326.3382, subdivision 3; 326B.33, subdivision 16; 326B.46, by adding 1.30a subdivision; 326B.56, subdivision 2; 326B.86, subdivision 2; 326B.921, 1.31subdivision 6; 327B.04, subdivision 4; 332.34; 340A.409, subdivision 1; 471.61, 1.32subdivision 2b; 514.20; Minnesota Statutes 2009 Supplement, sections 45.027, 1.33subdivision 1; 45.30, subdivision 4; 60A.39, subdivisions 1, 4, 5; 60A.9572, 1.34subdivision 6; 60K.361; 62A.3099, subdivision 18; 65A.29, subdivision 13; 1.3572B.03, subdivision 2; 72B.045, subdivision 1; 72B.06; 82.31, subdivision 4; 1.3682.32; 137.0225; 326B.46, subdivision 2; 340A.404, subdivision 4a; Laws 2007, 1.37chapter 147, article 12, section 14; proposing coding for new law in Minnesota 1.38Statutes, chapters 62L; 82; 137; 332; repealing Minnesota Statutes 2008, 1.39sections 62L.056; 72B.04; 82.19, subdivision 3; 82.22, subdivisions 1, 6, 7, 8, 9; 2.182.31, subdivision 6; 82.34, subdivision 16; 82.41, subdivisions 3, 7; 332.31, 2.2subdivision 7; 332.335; Minnesota Statutes 2009 Supplement, sections 65B.133, 2.3subdivision 3; 72B.02, subdivision 11.2.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:2.5    Section 1. Minnesota Statutes 2008, section 45.0112, is amended to read:2.645.0112 STREET AND E-MAIL ADDRESSES REQUIRED.2.7Licensees or applicants for licenses issued by the commissioner shall provide to the 2.8commissioner a residence telephone number, a street address where the licensee actually 2.9resides, and a street address where the licensee's business is physically located, and a 2.10current e-mail address for business use. A post office box address is not sufficient to 2.11satisfy this requirement. The individual shall notify the department of any change in street 2.12address, e-mail address for business use, or residence telephone number within ten days.2.13    Sec. 2. Minnesota Statutes 2009 Supplement, section 45.027, subdivision 1, is 2.14amended to read:2.15    Subdivision 1. General powers. In connection with the duties and responsibilities 2.16entrusted to the commissioner, and Laws 1993, chapter 361, section 2, the commissioner 2.17of commerce may:2.18(1) make public or private investigations within or without this state as the 2.19commissioner considers necessary to determine whether any person has violated or is 2.20about to violate any law, rule, or order related to the duties and responsibilities entrusted 2.21to the commissioner;2.22(2) require or permit any person to file a statement in writing, under oath or otherwise 2.23as the commissioner determines, as to all the facts and circumstances concerning the 2.24matter being investigated;2.25(3) hold hearings, upon reasonable notice, in respect to any matter arising out of the 2.26duties and responsibilities entrusted to the commissioner;2.27(4) conduct investigations and hold hearings for the purpose of compiling 2.28information related to the duties and responsibilities entrusted to the commissioner;2.29(5) examine the books, accounts, records, and files of every licensee, and of every 2.30person who is engaged in any activity regulated; the commissioner or a designated 2.31representative shall have free access during normal business hours to the offices and 2.32places of business of the person, and to all books, accounts, papers, records, files, safes, 2.33and vaults maintained in the place of business;2.34(6) publish information which is contained in any order issued by the commissioner; 3.1(7) require any person subject to duties and responsibilities entrusted to the 3.2commissioner, to report all sales or transactions that are regulated. The reports must 3.3be made within ten days after the commissioner has ordered the report. The report is 3.4accessible only to the respondent and other governmental agencies unless otherwise 3.5ordered by a court of competent jurisdiction; and3.6(8) assess a licensee natural person or entity subject to the jurisdiction of the 3.7commissioner the necessary expenses of the investigation performed by the department 3.8when an investigation is made by order of the commissioner. The cost of the investigation 3.9shall be determined by the commissioner and is based on the salary cost of investigators 3.10or assistants and at an average rate per day or fraction thereof so as to provide for the 3.11total cost of the investigation. All money collected must be deposited into the general 3.12fund. A natural person licensed under chapter 60K or 82 shall not be charged costs of 3.13an investigation if the investigation results in no finding of a violation. This clause 3.14does not apply to a natural person or entity already subject to the assessment provisions 3.15of sections 60A.03 and 60A.031.3.16    Sec. 3. Minnesota Statutes 2009 Supplement, section 45.30, subdivision 4, is amended 3.17to read:3.18    Subd. 4. Credit earned. (a) Upon completion of approved courses, students must 3.19earn one hour of continuing education credit for each hour approved by the commissioner. 3.20Continuing education courses must be attended in their entirety in order to receive credit 3.21for the number of approved hours.3.22(b) Qualified instructors will earn three hours of continuing education credit for 3.23each classroom hour of approved instruction that they deliver (1) independently, or (2) 3.24as part of a team presentation in a course of two hours or less, if they attend the course 3.25in its entirety. For licensees other than appraisers, no more than half of the continuing 3.26education hours required for renewal of a license may be earned as a qualified instructor at 3.27the rate of three hours of continuing education credit for each classroom hour of approved 3.28instruction. For licensed appraisers, no more than one-half of the continuing education 3.29hours required for renewal of a license may be earned as a qualified instructor. No credit 3.30will be earned if the licensee has previously obtained credit for the same course as either 3.31a student or instructor during the same licensing period.3.32(c) A licensee must not receive credit for more than eight hours of continuing 3.33education in one day.3.34    Sec. 4. Minnesota Statutes 2008, section 60A.031, subdivision 4, is amended to read:4.1    Subd. 4. Examination report; foreign and domestic companies. (a) The 4.2commissioner shall make a full and true report of every examination conducted pursuant 4.3to this chapter, which shall include (1) a statement of findings of fact relating to the 4.4financial status and other matters ascertained from the books, papers, records, documents, 4.5and other evidence obtained by investigation and examination or ascertained from 4.6the testimony of officers, agents, or other persons examined under oath concerning the 4.7business, affairs, assets, obligations, ability to fulfill obligations, and compliance with 4.8all the provisions of the law of the company, applicant, organization, or person subject 4.9to this chapter and (2) a summary of important points noted in the report, conclusions, 4.10recommendations and suggestions as may reasonably be warranted from the facts so 4.11ascertained in the examinations. The report of examination shall be verified by the oath 4.12of the examiner in charge thereof, and shall be prima facie evidence in any action or 4.13proceedings in the name of the state against the company, applicant, organization, or 4.14person upon the facts stated therein.4.15(b) No later than 60 days following completion of the examination, the examiner 4.16in charge shall file with the department a verified written report of examination under 4.17oath. Upon receipt of the verified report, the department shall transmit the report to the 4.18company examined, together with a notice which provides the company examined with a 4.19reasonable opportunity of not more than 30 days to make a written submission or rebuttal 4.20with respect to matters contained in the examination report.4.21(c) Within 30 days of the end of the period allowed for the receipt of written 4.22submissions or rebuttals, the commissioner shall fully consider and review the report, 4.23together with the written submissions or rebuttals and the relevant portions of the 4.24examiner's workpapers and enter an order:4.25(1) adopting the examination report as filed or with modification or corrections. If 4.26the examination report reveals that the company is operating in violation of any law, rule, 4.27or prior order of the commissioner, the commissioner may order the company to take any 4.28action the commissioner considers necessary and appropriate to cure the violation;4.29(2) rejecting the examination report with directions to the examiners to reopen the 4.30examination for purposes of obtaining additional data, documentation, or information, 4.31and refiling the report as required under paragraph (b); or4.32(3) calling for an investigatory hearing with no less than 20 days' notice to the 4.33company for purposes of obtaining additional documentation, data, information, and 4.34testimony.4.35(d)(1) All orders entered under paragraph (c), clause (1), must be accompanied by 4.36findings and conclusions resulting from the commissioner's consideration and review of 5.1the examination report, relevant examiner workpapers, and any written submissions or 5.2rebuttals. The order is a final administrative decision and may be appealed as provided 5.3under chapter 14. The order must be served upon the company by certified mail, together 5.4with a copy of the adopted examination report. Within 30 days of the issuance of the 5.5adopted report, the company shall file affidavits executed by each of its directors stating 5.6under oath that they have received a copy of the adopted report and related orders.5.7(2) A hearing conducted under paragraph (c), clause (3), by the commissioner or 5.8authorized representative, must be conducted as a nonadversarial confidential investigatory 5.9proceeding as necessary for the resolution of inconsistencies, discrepancies, or disputed 5.10issues apparent upon the face of the filed examination report or raised by or as a result of 5.11the commissioner's review of relevant workpapers or by the written submission or rebuttal 5.12of the company. Within 20 days of the conclusion of the hearing, the commissioner shall 5.13enter an order as required under paragraph (c), clause (1).5.14(3) The commissioner shall not appoint an examiner as an authorized representative 5.15to conduct the hearing. The hearing must proceed expeditiously. Discovery by the 5.16company is limited to the examiner's workpapers which tend to substantiate assertions in a 5.17written submission or rebuttal. The commissioner or the commissioner's representative 5.18may issue subpoenas for the attendance of witnesses or the production of documents 5.19considered relevant to the investigation whether under the control of the department, the 5.20company, or other persons. The documents produced must be included in the record. 5.21Testimony taken by the commissioner or the commissioner's representative must be under 5.22oath and preserved for the record.5.23This section does not require the department to disclose information or records 5.24which would indicate or show the existence or content of an investigation or activity of a 5.25criminal justice agency.5.26(4) The hearing must proceed with the commissioner or the commissioner's 5.27representative posing questions to the persons subpoenaed. Thereafter, the company and 5.28the department may present testimony relevant to the investigation. Cross-examination 5.29may be conducted only by the commissioner or the commissioner's representative. The 5.30company and the department shall be permitted to make closing statements and may 5.31be represented by counsel of their choice.5.32(e)(1) Upon the adoption of the examination report under paragraph (c), clause (1), 5.33the commissioner shall continue to hold the content of the examination report as private 5.34and confidential information for a period of 30 days except as otherwise provided in 5.35paragraph (b). Thereafter, the commissioner may open the report for public inspection if a 5.36court of competent jurisdiction has not stayed its publication.6.1(2) Nothing contained in this subdivision prevents or shall be construed as 6.2prohibiting the commissioner from disclosing the content of an examination report, 6.3preliminary examination report or results, or any matter relating to the reports, to the 6.4Commerce Department or the insurance department of another state or country, or to law 6.5enforcement officials of this or another state or agency of the federal government at any 6.6time, if the agency or office receiving the report or matters relating to the report agrees in 6.7writing to hold it confidential and in a manner consistent with this subdivision.6.8(3) If the commissioner determines that regulatory action is appropriate as a result of 6.9an examination, the commissioner may initiate proceedings or actions as provided by law.6.10(f) All working papers, recorded information, documents and copies thereof 6.11produced by, obtained by, or disclosed to the commissioner or any other person in the 6.12course of an examination made under this subdivision, or in the course of market analysis, 6.13 must be given confidential treatment and are not subject to subpoena and may not be made 6.14public by the commissioner or any other person, except to the extent provided in paragraph 6.15(e). Access may also be granted to the National Association of Insurance Commissioners6.16(NAIC), the National Association of Securities Dealers Financial Industry Regulatory 6.17Authority, and any national securities association registered under the Securities Exchange 6.18Act of 1934. The parties must agree in writing prior to receiving the information to 6.19provide to it the same confidential treatment as required by this section, unless the prior 6.20written consent of the company to which it pertains has been obtained. For purposes of 6.21this section, "market analysis" means a process whereby market conduct surveillance 6.22personnel collect and analyze information from filed schedules, surveys, required reports, 6.23such as the NAIC Market Conduct Annual Statement, or other sources in order to develop 6.24a baseline profile of an insurer, review the operation or activity of an insurer, or to 6.25identify patterns or practices of insurers licensed to do business in this state that deviate 6.26significantly from the norm or that may pose a potential risk to the insurance consumer.6.27    Sec. 5. Minnesota Statutes 2008, section 60A.084, is amended to read:6.2860A.084 NOTIFICATION ON GROUP POLICIES.6.29An employer providing life or health benefits may not change benefits, limit 6.30coverage, or otherwise restrict participation until the certificate holder or enrollee has 6.31been notified of any changes, limitations, or restrictions. Notice in a format which 6.32meets the requirements of the Employee Retirement Income Security Act, United States 6.33Code Annotated, title 29, sections 1001 to 1461,United States Department of Labor is 6.34satisfactory for compliance with this section.7.1    Sec. 6. Minnesota Statutes 2008, section 60A.204, is amended to read:7.260A.204 ADDITIONAL CHARGES AND FEES AND COMMISSIONS.7.3    Subdivision 1.Placement fees.A surplus lines licensee may charge, in addition to 7.4the premium charged by an eligible or ineligible surplus lines insurer, a fee to cover the 7.5cost incurred in the placement of the policy which exceeds $25, but only to the extent that 7.6the actual additional cost incurred for services performed by persons or entities unrelated 7.7to the licensee exceeds that amount.7.8    Subd. 2.Regulation of fees. A surplus lines licensee may charge a fee charged 7.9pursuant to subdivision 1 shall and commission, in addition to the premium, that is not be7.10excessive or discriminatory. The licensee shall maintain complete documentation of all 7.11fees and commissions charged. Those fees shall not be included as part of the premium for 7.12purposes of the computation of the premium taxes.7.13    Subd. 3.Commission charges.Notwithstanding the provisions of subdivision 1, a 7.14licensee may add a commission charge if the insurer quotes a rate net of commission and 7.15the commission is not excessive or discriminatory.7.16    Sec. 7. Minnesota Statutes 2008, section 60A.36, is amended by adding a subdivision 7.17to read:7.18    Subd. 2a.Third-party notices.An insurer shall provide notice to a third party if:7.19(1) the policyholder has, separately from the certificate, notified the insurer of the 7.20identity of the third party; and7.21(2) the third party is a licensing authority authorized by statute to receive the notice or 7.22a state, city, or county governmental unit on whose behalf the insured is providing services.7.23    Sec. 8. Minnesota Statutes 2009 Supplement, section 60A.39, subdivision 1, is 7.24amended to read:7.25    Subdivision 1. Issuance. A licensed insurer or insurance producer may provide to a 7.26third party a certificate of insurance which documents insurance coverage. The purpose of7.27For the purposes of this chapter, a certificate of insurance is to provide a document that 7.28provides evidence of property or liability insurance coverage and the amount of insurance 7.29issued, and does not convey any contractual rights to the certificate holder.7.30    Sec. 9. Minnesota Statutes 2009 Supplement, section 60A.39, subdivision 4, is 7.31amended to read:8.1    Subd. 4. Cancellation notice. A certificate provided to a third party must not 8.2provide for notice of cancellation that exceeds the statutory notice of cancellation provided 8.3to the policyholder or a period of notice specified in the policy.8.4    Sec. 10. Minnesota Statutes 2009 Supplement, section 60A.39, subdivision 5, is 8.5amended to read:8.6    Subd. 5. Filing. An insurer not using the standard ACORD or ISO form "Certificate 8.7of Insurance" shall file with the commissioner, prior to its use, the form of certificate or 8.8memorandum of insurance coverage that will be used a similar alternative "Certificate 8.9of Insurance" covering the same information for use by the insurer. Filed forms may not 8.10be amended at the request of a third party.8.11EFFECTIVE DATE.This section is effective January 1, 2011.8.12    Sec. 11. Minnesota Statutes 2009 Supplement, section 60A.9572, subdivision 6, 8.13is amended to read:8.14    Subd. 6. Disclosures. The applicant shall provide information on forms required 8.15by the commissioner. The commissioner shall have authority, at any time, to require 8.16the applicant to fully disclose the identity of all stockholders who hold more than ten 8.17percent of the shares of the company, partners, officers, members, and employees, and 8.18the commissioner may, in the exercise of the commissioner's discretion, refuse to issue a 8.19license in the name of a legal entity if not satisfied that any officer, employee, stockholder, 8.20partner, or member of the legal entity who may materially influence the applicant's 8.21conduct meets the standards of sections 
         60A.957 to 
         60A.9585.8.22    Sec. 12. Minnesota Statutes 2008, section 60K.31, subdivision 10, is amended to read:8.23    Subd. 10. Limited lines insurance. "Limited lines insurance" means those lines 8.24of insurance defined in section 
         60K.38, subdivision 1, paragraph (c), or any other line of 8.25insurance that the commissioner considers necessary to recognize for the purposes of 8.26complying with section 
         60K.39, subdivision 5 6.  8.27    Sec. 13. Minnesota Statutes 2009 Supplement, section 60K.361, is amended to read:8.2860K.361 INSURANCE EDUCATION.8.29    (a) Prelicense education must consist of 20 hours of education per line of authority.9.1    (b) The first ten hours course must be include an introduction to insurance and 9.2insurance-related concepts covering all of the major lines of authority except variable life 9.3and variable annuities. The course must consist of the following:9.4    (1) rules, regulations, and law;9.5    (2) basic fundamentals of insurance;9.6    (3) property:9.7    (i) types of policies;9.8    (ii) policy provisions;9.9    (iii) perils, exclusions, deductibles, and liability; and9.10    (iv) evaluating needs;9.11    (4) casualty:9.12    (i) types of policies;9.13    (ii) policy provisions;9.14    (iii) perils, exclusions, deductibles, and liability; and9.15    (iv) evaluating needs;9.16    (5) life:9.17    (i) types of policies;9.18    (ii) policy provisions; and9.19    (iii) group insurance; and9.20    (6) accident and health:9.21    (i) types of policies;9.22    (ii) policy provisions; and9.23    (iii) group insurance.9.24    (c) The second ten hours of insurance prelicense education must be composed of9.25Courses that cover a specific major line of authority and consist of must include the 9.26following:9.27    (1) life:9.28    (i) types of life insurance policies; and9.29    (ii) Minnesota laws, rules, and regulations pertinent to life insurance;9.30    (2) accident and health:9.31    (i) types of health insurance policies; and9.32    (ii) Minnesota laws, rules, and regulations pertinent to accident and health insurance;9.33    (3) property:9.34    (i) personal lines;9.35    (ii) commercial lines; and9.36    (iii) Minnesota laws, rules, and regulations pertinent to property insurance.10.1    (4) casualty:10.2    (i) personal lines;10.3    (ii) commercial lines; and10.4    (iii) Minnesota laws, rules, and regulations pertinent to casualty insurance; and10.5    (5) personal lines:10.6    (i) types of property/casualty personal lines insurance policies; and10.7    (ii) Minnesota laws, rules, and regulations pertinent to property/casualty personal 10.8lines insurance.10.9EFFECTIVE DATE.This section is effective July 1, 2010.10.10    Sec. 14. Minnesota Statutes 2008, section 61A.092, subdivision 3, is amended to read:10.11    Subd. 3. Notice of options. Upon termination of or layoff from employment 10.12of a covered employee, the employer shall inform the employee within 14 days after 10.13termination or layoff of:10.14(1) the employee's right to elect to continue the coverage;10.15(2) the amount the employee must pay monthly to the employer to retain the 10.16coverage;10.17(3) the manner in which and the office of the employer to which the payment to 10.18the employer must be made; and10.19(4) the time by which the payments to the employer must be made to retain coverage.10.20The employee has 60 days within which to elect coverage. The 60-day period shall 10.21begin to run on the date coverage would otherwise terminate or on the date upon which 10.22notice of the right to coverage is received, whichever is later.10.23If the covered employee or covered dependent dies during the 60-day election period 10.24and before the covered employee makes an election to continue or reject continuation, 10.25then the covered employee will be considered to have elected continuation of coverage. 10.26The beneficiary previously selected by the former employee or covered dependent would 10.27then be entitled to a death benefit equal to the amount of insurance that could have been 10.28continued less any unpaid premium owing as of the date of death.10.29Notice must be in writing and sent by first class mail to the employee's last known 10.30address which the employee has provided to the employer.10.31A notice in substantially the following form is sufficient: "As a terminated or laid 10.32off employee, the law authorizes you to maintain your group insurance benefits, in an 10.33amount equal to the amount of insurance in effect on the date you terminated or were laid 10.34off from employment, for a period of up to 18 months. To do so, you must notify your 10.35former employer within 60 days of your receipt of this notice that you intend to retain this 11.1coverage and must make a monthly payment of $............ at ............. by the ............. of 11.2each month."11.3    Sec. 15. Minnesota Statutes 2008, section 62A.046, subdivision 6, is amended to read:11.4    Subd. 6. Coordination of benefits. Insurers, vendors of risk management 11.5services, nonprofit health service plan corporations, fraternals, and health maintenance 11.6organizations may coordinate benefits to prohibit greater than 100 percent coverage when 11.7an insured, subscriber, or enrollee is covered by both an individual and a group contract 11.8providing coverage for hospital and medical treatment or expenses. Benefits coordinated 11.9under this paragraph must provide for 100 percent coverage of an insured, subscriber, 11.10or enrollee. To the extent appropriate, all coordination of benefits provisions currently 11.11applicable by law or rule to insurers, vendors of risk management services, nonprofit 11.12health service plan corporations, fraternals, and health maintenance organizations, shall 11.13apply to coordination of benefits between individual and group contracts, except that the 11.14group contract shall always be the primary plan.  Notwithstanding the definition of "plan" 11.15in Minnesota Rules, part 2742.0200, subpart 2, and in Minnesota Rules, part 4685.0910, 11.16subpart 7, an individual contract must coordinate benefits with a group contract under this 11.17subdivision consistent with applicable coordination of benefit rules. When a covered 11.18person's other coverage is Medicare or TRICARE, a health plan company must determine 11.19primacy and coordinate benefits in accordance with the Medicare Secondary Payor or 11.20TRICARE provisions of federal law. This paragraph does not apply to specified accident, 11.21hospital indemnity, specified disease, or other limited benefit insurance policies.11.22    Sec. 16. Minnesota Statutes 2008, section 62A.046, is amended by adding a 11.23subdivision to read:11.24    Subd. 7.High-deductible health plans.If a health carrier is advised by a covered 11.25person that all health plans covering the person are high-deductible health plans and 11.26the person intends to contribute to a health savings account established in accordance 11.27with section 223 of the Internal Revenue Code of 1986, the primary high-deductible 11.28health plan's deductible is not an allowable expense, except for any health care expense 11.29incurred that may not be subject to the deductible as described in section 223(c)(2)(C) of 11.30the Internal Revenue Code of 1986.11.31    Sec. 17. Minnesota Statutes 2008, section 62A.17, subdivision 5, is amended to read:12.1    Subd. 5. Notice of options. Upon the termination of or lay off from employment of 12.2an eligible employee, the employer shall inform the employee within ten14 days after 12.3termination or lay off of:12.4(a) (1) the right to elect to continue the coverage;12.5(b) (2) the amount the employee must pay monthly to the employer to retain the 12.6coverage;12.7(c) (3) the manner in which and the office of the employer to which the payment to 12.8the employer must be made; and12.9(d) (4) the time by which the payments to the employer must be made to retain 12.10coverage.12.11If the policy, contract, or health care plan is administered by a trust, the employer is 12.12relieved of the obligation imposed by clauses (a) (1) to (d) (4). The trust shall inform the 12.13employee of the information required by clauses (a) (1) to (d) (4).12.14The employee shall have 60 days within which to elect coverage. The 60-day period 12.15shall begin to run on the date plan coverage would otherwise terminate or on the date upon 12.16which notice of the right to coverage is received, whichever is later.12.17Notice must be in writing and sent by first class mail to the employee's last known 12.18address which the employee has provided the employer or trust.12.19A notice in substantially the following form shall be sufficient: "As a terminated or 12.20laid off employee, the law authorizes you to maintain your group medical insurance for 12.21a period of up to 18 months. To do so you must notify your former employer within 60 12.22days of your receipt of this notice that you intend to retain this coverage and must make a 12.23monthly payment of $.......... to ........... at .......... by the ............... of each month."12.24    Sec. 18. Minnesota Statutes 2008, section 62A.3099, subdivision 17, is amended to 12.25read:12.26    Subd. 17. Medicare-related coverage. "Medicare-related coverage" means a 12.27policy, contract, or certificate issued as a supplement to Medicare, regulated under 12.28sections 
         62A.3099 to 
         62A.44, including Medicare select coverage; policies, contracts, 12.29or certificates that supplement Medicare issued by health maintenance organizations; or 12.30policies, contracts, or certificates governed by section 1833 (known as "cost" or "HCPP" 12.31contracts) or 1876 (known as "TEFRA" or "risk" "Cost" contracts) of the federal Social 12.32Security Act, United States Code, title 42, section 1395, et seq., as amended; or Section 12.334001 of the Balanced Budget Act of 1997 (BBA)(Public Law 105-33), Sections 1851 to 12.341859 of the Social Security Act establishing Part C of the Medicare program, known as 12.35the "Medicare Advantage program."13.1EFFECTIVE DATE.This section is effective the day following final enactment.13.2    Sec. 19. Minnesota Statutes 2009 Supplement, section 62A.3099, subdivision 18, 13.3is amended to read:13.4    Subd. 18. Medicare supplement policy or certificate. "Medicare supplement 13.5policy or certificate" means a group or individual policy of accident and sickness insurance 13.6or a subscriber contract of hospital and medical service associations or health maintenance 13.7organizations, other than those policies or certificates covered by section 1833 1876 of the 13.8federal Social Security Act, United States Code, title 42, section 1395, et seq., or an issued 13.9policy under a demonstration project specified under amendments to the federal Social 13.10Security Act, which is advertised, marketed, or designed primarily as a supplement to 13.11reimbursements under Medicare for the hospital, medical, or surgical expenses of persons 13.12eligible for Medicare or as a supplement to Medicare Advantage plans established under 13.13Medicare Part C. "Medicare supplement policy" does not include Medicare Advantage 13.14plans established under Medicare Part C, outpatient prescription drug plans established 13.15under Medicare Part D, or any health care prepayment plan that provides benefits under an 13.16agreement under section 1833(a)(1)(A) of the Social Security Act, or any policy issued to 13.17an employer or employers or to the trustee of a fund established by an employer where 13.18only employees or retirees, and dependents of employees or retirees, are eligible for 13.19coverage, or any policy issued to a labor union or similar employee organization.13.20EFFECTIVE DATE.This section is effective the day following final enactment.13.21    Sec. 20. Minnesota Statutes 2008, section 62A.65, subdivision 2, is amended to read:13.22    Subd. 2. Guaranteed renewal. No individual health plan may be offered, sold, 13.23issued, or renewed to a Minnesota resident unless the health plan provides that the plan 13.24is guaranteed renewable at a premium rate that does not take into account the claims 13.25experience or any change in the health status of any covered person that occurred after 13.26the initial issuance of the health plan to the person. The premium rate upon renewal 13.27must also otherwise comply with this section. A health carrier must not refuse to renew 13.28an individual health plan prior to enrollment in Medicare Parts A and B, except for 13.29nonpayment of premiums, fraud, or misrepresentation.13.30    Sec. 21. Minnesota Statutes 2008, section 62E.02, subdivision 15, is amended to read:13.31    Subd. 15. Medicare. "Medicare" means part A and part B of the United States 13.32Social Security Act, title XVIII, as amended, United States Code, title 42, sections 1394, et 13.33seq. the Health Insurance for the Aged Act, title XVIII of the Social Security Amendments 14.1of 1965, United States Code, title 42, sections 1395 to 1395hhh, as amended, or title I, 14.2part I, of Public Law 89-97, as amended.14.3    Sec. 22. Minnesota Statutes 2008, section 62E.14, subdivision 4c, is amended to read:14.4    Subd. 4c. Waiver of preexisting conditions for persons whose coverage is 14.5terminated or who exceed the maximum lifetime benefit. (a) A Minnesota resident 14.6may enroll in the comprehensive health plan with a waiver of the preexisting condition 14.7limitation described in subdivision 3 if that persons's application for coverage is received 14.8by the writing carrier no later than 90 days after termination of prior coverage and if the 14.9termination is for reasons other than fraud or nonpayment of premiums.14.10For purposes of this paragraph, termination of prior coverage includes exceeding the 14.11maximum lifetime benefit of existing coverage.14.12Coverage in the comprehensive health plan is effective on the date of termination 14.13of prior coverage. The availability of conversion rights does not affect a person's rights 14.14under this paragraph.14.15This section does not apply to prior coverage provided under policies designed 14.16primarily to provide coverage payable on a per diem, fixed indemnity, or nonexpense 14.17incurred basis, or policies providing only accident coverage.14.18(b) An eligible individual, as defined under the Health Insurance Portability and 14.19Accountability Act (HIPAA), United States Code, chapter 42, section 300gg-41(b) may 14.20enroll in the comprehensive health insurance plan with a waiver of the preexisting 14.21condition limitation described in subdivision 3 and a waiver of the evidence of rejection or 14.22similar events described in subdivision 1, clause (c). The eligible individual must apply 14.23for enrollment under this paragraph by submitting a substantially complete application 14.24that is received by the writing carrier no later than 63 days after termination of prior 14.25coverage, and coverage under the comprehensive health insurance plan is effective as 14.26of the date of receipt of the complete application. The six-month durational residency 14.27requirement provided in section 
         62E.02, subdivision 13, does not apply with respect to 14.28eligibility for enrollment under this paragraph, but the applicant must be a Minnesota 14.29resident as of the date that the application was received by the writing carrier. A person's 14.30eligibility to enroll under this paragraph does not affect the person's eligibility to enroll 14.31under any other provision.  14.32(c) A qualifying individual, as defined in the Internal Revenue Code of 1986, section 14.3335(e)(2)(B), who is eligible under the Federal Trade Act of 2002 for the credit Health 14.34Coverage Tax Credit (HCTC) for health insurance costs under the Internal Revenue Code 14.35of 1986, section 35, may enroll in the comprehensive health insurance plan with a waiver 15.1of the preexisting condition limitation described in subdivision 3, and without presenting 15.2evidence of rejection or similar requirements described in subdivision 1, paragraph (c). 15.3The six-month durational residency requirement provided in section 
         62E.02, subdivision 15.413
         , does not apply with respect to eligibility for enrollment under this paragraph, but the 15.5applicant must be a Minnesota resident as of the date of application. A person's eligibility 15.6to enroll under this paragraph does not affect the person's eligibility to enroll under any 15.7other provision. This paragraph is intended solely to meet the minimum requirements 15.8necessary to qualify the comprehensive health insurance plan as qualified health coverage 15.9under the Internal Revenue Code of 1986, section 35(e)(2).  15.10    Sec. 23. Minnesota Statutes 2008, section 62L.05, subdivision 4, is amended to read:15.11    Subd. 4. Benefits. The medical services and supplies listed in this subdivision are 15.12the benefits that must be covered by the small employer plans described in subdivisions 15.132 and 3. Benefits under this subdivision may be provided through the managed care 15.14procedures practiced by health carriers:15.15(1) inpatient and outpatient hospital services, excluding services provided for the 15.16diagnosis, care, or treatment of chemical dependency or a mental illness or condition, 15.17other than those conditions specified in clauses (10), and (11), and (12). The health 15.18care services required to be covered under this clause must also be covered if rendered 15.19in a nonhospital environment, on the same basis as coverage provided for those same 15.20treatments or services if rendered in a hospital, provided, however, that this sentence must 15.21not be interpreted as expanding the types or extent of services covered;15.22(2) physician, chiropractor, and nurse practitioner services for the diagnosis or 15.23treatment of illnesses, injuries, or conditions;15.24(3) diagnostic x-rays and laboratory tests;15.25(4) ground transportation provided by a licensed ambulance service to the nearest 15.26facility qualified to treat the condition, or as otherwise required by the health carrier;15.27(5) services of a home health agency if the services qualify as reimbursable services 15.28under Medicare;15.29(6) services of a private duty registered nurse if medically necessary, as determined 15.30by the health carrier;15.31(7) the rental or purchase, as appropriate, of durable medical equipment, other than 15.32eyeglasses and hearing aids, unless coverage is required under section 
         62Q.675; 15.33(8) child health supervision services up to age 18, as defined in section 
         62A.047; 15.34(9) maternity and prenatal care services, as defined in sections 
         62A.041 and 
         62A.047; 16.1(10) inpatient hospital and outpatient services for the diagnosis and treatment of 16.2certain mental illnesses or conditions, as defined by the International Classification of 16.3Diseases-Clinical Modification (ICD-9-CM), seventh edition (1990) and as classified 16.4as ICD-9 codes 295 to 299; and16.5(11) ten hours per year of outpatient mental health diagnosis or treatment for 16.6illnesses or conditions not described in clause (10);16.7(12) 60 hours per year of outpatient treatment of chemical dependency; and16.8(13)(11) 50 percent of eligible charges for prescription drugs, up to a separate 16.9annual maximum out-of-pocket expense of $1,000 per individual for prescription drugs, 16.10and 100 percent of eligible charges thereafter.16.11    Sec. 24. [62L.0561] FLEXIBLE BENEFITS PLANS.16.12    Subdivision 1.Definitions.For the purposes of this section, the terms used in this 16.13section have the meanings defined in section 62Q.01, except that "health plan" includes 16.14individual and group coverage for employer plans with up to 75 participants.16.15    Subd. 2.Flexible benefits plan.Notwithstanding any provision of this chapter, 16.16chapter 363A, or any other law to the contrary, a health plan company may offer, sell, 16.17issue, and renew a health plan that is a flexible benefits plan under this section if the 16.18following requirements are satisfied:16.19(1) the health plan must be offered in compliance with the laws of this state, except 16.20as otherwise permitted in this section;16.21(2) the health plan must be designed to enable covered persons to better manage 16.22costs and coverage options through the use of co-pays, deductibles, and other cost-sharing 16.23arrangements;16.24(3) the health plan may modify or exclude any or all coverages of benefits that 16.25would otherwise be required by law, except for maternity benefits and other benefits 16.26required under federal law;16.27(4) each health plan and plan's premiums must be approved by the commissioner 16.28of health or commerce, whichever is appropriate under section 62Q.01, subdivision 2, 16.29but neither commissioner may disapprove a plan on the grounds of a modification or 16.30exclusion permitted under clause (3); and16.31(5) prior to the sale of the health plan, the purchaser must be given a written list of 16.32the coverages otherwise required by law that are modified or excluded in the health plan. 16.33The list must include a description of each coverage in the list and indicate whether the 16.34coverage is modified or excluded. If coverage is modified, the list must describe the 16.35modification. The list may, but is not required to, also list any or all coverages otherwise 17.1required by law that are included in the health plan and indicate that they are included. 17.2The health plan company must require that a copy of this written list be provided, prior 17.3to the effective date of the health plan, to each enrollee or employee who is eligible for 17.4health coverage under the plan.17.5    Subd. 3.Employer health plan.An employer may provide a health plan permitted 17.6under this section to its employees, the employees' dependents, and other persons eligible 17.7for coverage under the employer's plan, notwithstanding chapter 363A or any other law 17.8to the contrary.17.9EFFECTIVE DATE.This section is effective January 1, 2012.17.10    Sec. 25. Minnesota Statutes 2008, section 62S.24, subdivision 8, is amended to read:17.11    Subd. 8. Exchange for long-term care partnership policy; addition of policy 17.12rider. (a) If authorized by federal law  or a federal waiver is granted With respect to the 17.13long-term care partnership program referenced in section 
         256B.0571, issuers of long-term 17.14care policies may voluntarily exchange a current long-term care insurance policy for a 17.15long-term care partnership policy that meets the requirements of Public Law 109-171, 17.16section 6021, after the effective date of the state plan amendment implementing the 17.17partnership program in this state. The exchange may be in the form of: (1) an amendment 17.18or rider; or (2) a disclosure statement indicating that the coverage is now partnership 17.19qualified.17.20(b) If authorized by federal law  or a federal waiver is granted With respect to the 17.21long-term care partnership program referenced in section 
         256B.0571, allowingto allow an 17.22existing long-term care insurance policy to qualify as a partnership policy by addition of a 17.23policy rider or amendment or disclosure statement, the issuer of the policy is authorized to 17.24add the rider or amendment or disclosure statement to the policy after the effective date of 17.25the state plan amendment implementing the partnership program in this state.17.26(c) The commissioner, in cooperation with the commissioner of human services, 17.27shall pursue any federal law changes or waivers necessary to allow the implementation 17.28of paragraphs (a) and (b).17.29    Sec. 26. Minnesota Statutes 2008, section 62S.266, subdivision 4, is amended to read:17.30    Subd. 4. Contingent benefit upon lapse. (a) After rejection of the offer required 17.31under subdivision 2, for individual and group policies without nonforfeiture benefits 17.32issued after July 1, 2001, the insurer shall provide a contingent benefit upon lapse.18.1    (b) If a group policyholder elects to make the nonforfeiture benefit an option to 18.2the certificate holder, a certificate shall provide either the nonforfeiture benefit or the 18.3contingent benefit upon lapse.18.4    (c) The contingent benefit on lapse must be triggered every time an insurer increases 18.5the premium rates to a level which results in a cumulative increase of the annual premium 18.6equal to or exceeding the percentage of the insured's initial annual premium based on 18.7the insured's issue age provided in this paragraph, and the policy or certificate lapses 18.8within 120 days of the due date of the premium increase. Unless otherwise required, 18.9policyholders shall be notified at least 30 days prior to the due date of the premium 18.10reflecting the rate increase.

18.11Triggers for a Substantial Premium Increase18.1218.13Issue AgePercent Increase Over
                  		Initial Premium18.1429 and Under20018.1530-3419018.1635-3917018.1740-4415018.1845-4913018.1950-5411018.2055-599018.21607018.22616618.23626218.24635818.25645418.26655018.27664818.28674618.29684418.30694218.31704018.32713818.33723618.34733418.35743218.36753018.37762818.38772618.39782418.40792218.41802018.42811919.1821819.2831719.3841619.4851519.5861419.6871319.7881219.8891119.990 and over10

19.10    (d) A contingent benefit on lapse must also be triggered for policies with a fixed 19.11or limited premium paying period every time an insurer increases the premium rates to a 19.12level that results in a cumulative increase of the annual premium equal to or exceeding the 19.13percentage of the insured's initial annual premium set forth below based on the insured's 19.14issue age, the policy or certificate lapses within 120 days of the due date of the premium 19.15so increased, and the ratio in paragraph (e) (f), clause (2), is 40 percent or more. Unless 19.16otherwise required, policyholders shall be notified at least 30 days prior to the due date of 19.17the premium reflecting the rate increase.

19.18Triggers for a Substantial Premium Increase19.19Issue AgePercent Increase Over Initial Premium19.20Under 6550%19.2165-8030%19.22Over 8010%

19.23    This provision shall be in addition to the contingent benefit provided by paragraph 19.24(c) and where both are triggered, the benefit provided must be at the option of the insured.19.25    (e) On or before the effective date of a substantial premium increase as defined in 19.26paragraph (c), the insurer shall:19.27    (1) offer to reduce policy benefits provided by the current coverage without the 19.28requirement of additional underwriting so that required premium payments are not 19.29increased;19.30    (2) offer to convert the coverage to a paid-up status with a shortened benefit period 19.31according to the terms of subdivision 5. This option may be elected at any time during the 19.32120-day period referenced in paragraph (c); and19.33    (3) notify the policyholder or certificate holder that a default or lapse at any time 19.34during the 120-day period referenced in paragraph (c) is deemed to be the election of 19.35the offer to convert in clause (2).19.36    (f) On or before the effective date of a substantial premium increase as defined in 19.37paragraph (d), the insurer shall:20.1    (1) offer to reduce policy benefits provided by the current coverage without the 20.2requirement of additional underwriting so that required premium payments are not 20.3increased;20.4    (2) offer to convert the coverage to a paid-up status where the amount payable for 20.5each benefit is 90 percent of the amount payable in effect immediately prior to lapse times 20.6the ratio of the number of completed months of paid premiums divided by the number of 20.7months in the premium paying period. This option may be elected at any time during the 20.8120-day period referenced in paragraph (d); and20.9    (3) notify the policyholder or certificate holder that a default or lapse at any time 20.10during the 120-day period referenced in paragraph (d) shall be deemed to be the election 20.11of the offer to convert in clause (2) if the ratio is 40 percent or more.20.12    Sec. 27. Minnesota Statutes 2008, section 62S.29, subdivision 1, is amended to read:20.13    Subdivision 1. Requirements. An insurer or other entity marketing long-term care 20.14insurance coverage in this state, directly or through its producers, shall:20.15(1) establish marketing procedures and agent training requirements to assure that 20.16any marketing activities, including any comparison of policies by its agents or other 20.17producers, are fair and accurate;20.18(2) establish marketing procedures to assure excessive insurance is not sold or issued;20.19(3) display prominently by type, stamp, or other appropriate means, on the first page 20.20of the outline of coverage and policy, the following:20.21"Notice to buyer: This policy may not cover all of the costs associated with 20.22long-term care incurred by the buyer during the period of coverage. The buyer is advised 20.23to review carefully all policy limitations.";20.24(4) provide copies of the disclosure forms required in section 
         62S.081, subdivision 20.254, to the applicant;20.26(5) inquire and otherwise make every reasonable effort to identify whether a 20.27prospective applicant or enrollee for long-term care insurance already has long-term care 20.28insurance and the types and amounts of the insurance;20.29(6) establish auditable procedures for verifying compliance with this subdivision; 20.30(7) if applicable, provide written notice to the prospective policyholder and 20.31certificate holder, at solicitation, that a senior insurance counseling program approved by 20.32the commissioner, the Senior LinkAge Line, is available and the name, address, and 20.33telephone number of the program;20.34(8) use the terms "noncancelable" or "level premium" only when the policy or 20.35certificate conforms to section 
         62S.14; and21.1(9) provide an explanation of contingent benefit upon lapse provided for in section 21.262S.266
         .21.3    Sec. 28. Minnesota Statutes 2009 Supplement, section 65A.29, subdivision 13, is 21.4amended to read:21.5    Subd. 13. Notice of possible cancellation. (a) A written notice must be provided 21.6to all applicants for homeowners' insurance, at the time the application is submitted, 21.7containing the following language in bold print: "THE INSURER MAY ELECT 21.8TO CANCEL COVERAGE AT ANY TIME DURING THE FIRST 6059 DAYS 21.9FOLLOWING ISSUANCE OF THE COVERAGE FOR ANY REASON WHICH IS 21.10NOT SPECIFICALLY PROHIBITED BY STATUTE."21.11(b) If the insurer provides the notice on the insurer's Web site, the insurer or agent 21.12may advise the applicant orally or in writing of its availability for review on the insurer's 21.13Web site in lieu of providing a written notice, if the insurer advises the applicant of the 21.14availability of a written notice upon the applicant's request. The insurer shall provide the 21.15notice in writing if requested by the applicant. An oral notice shall be presumed delivered 21.16if the agent or insurer makes a contemporaneous notation in the applicant's record of 21.17the notice having been delivered or if the insurer or agent retains an audio recording of 21.18the notification provided to the applicant.21.19    Sec. 29. Minnesota Statutes 2008, section 72A.08, subdivision 4, is amended to read:21.20    Subd. 4. Exceptions.(a) The provisions of this section shall not apply to any policy 21.21procured by officers, agents, subagents, employees, intermediaries, or representatives 21.22wholly and solely upon property of which they are, respectively, the owner at the time of 21.23procuring the policy, where the officers, agents, subagents, employees, intermediaries, or 21.24representatives are, and have been for more than six months prior to the issuing of the 21.25policy, regularly employed by, or connected with, the company or association issuing the 21.26policy; and any life insurance company doing business in this state may issue industrial 21.27policies of life or endowment insurance, with or without annuities, with special rates of 21.28premiums less than the usual rates of premiums for these policies, to members of labor 21.29organizations, credit unions, lodges, beneficial societies, or similar organizations, or 21.30employees of one employer, who, through their secretary or employer, may take out 21.31insurance in an aggregate of not less than 50 members and pay their premiums through 21.32the secretary or employer.22.1(b) A promotional advertising item of $25 or less or a gift of $25 or less per year 22.2is not a rebate if the receipt of the item or gift is not conditioned upon purchase of an 22.3insurance policy or product.22.4EFFECTIVE DATE.This section is effective the day following final enactment.22.5    Sec. 30. Minnesota Statutes 2008, section 72A.12, subdivision 4, is amended to read:22.6    Subd. 4. Discrimination; rebates.(a) No life insurance company doing business in 22.7this state shall make or permit any distinction or discrimination in favor of individuals 22.8between insurants of the same class and equal expectation of life in the amount or 22.9payment of premiums or rates charged for policies of life or endowment insurance, 22.10or in the dividends or other benefits payable thereon, or in any other of the terms and 22.11conditions of the contracts it makes; nor shall any such company or agent thereof make 22.12any contract of insurance or agreement as to such contract other than as plainly expressed 22.13in the policy issued thereon; nor shall any such company or any officer, agent, solicitor, 22.14or representative thereof pay, allow or give, or offer to pay, allow or give, directly or 22.15indirectly, as inducement to insurance, any rebate of premium payable on the policy, or 22.16any special favor or advantage in the dividends or other benefits to accrue thereon or any 22.17paid employment or contract for services of any kind, or any valuable consideration or 22.18inducement whatever not specified in the policy contract of insurance.22.19Any violation of the provisions of this subdivision shall be a misdemeanor and 22.20punishable as such.22.21(b) A promotional advertising item of $25 or less or a gift of $25 or less per year 22.22is not a rebate if the receipt of the item or gift is not conditioned upon purchase of an 22.23insurance policy or product.22.24EFFECTIVE DATE.This section is effective the day following final enactment.22.25    Sec. 31. Minnesota Statutes 2008, section 72A.20, subdivision 10, is amended to read:22.26    Subd. 10. Rebates.(a) Except as otherwise expressly provided by law, knowingly 22.27permitting or offering to make or making any contract of life insurance, annuity, or 22.28accident and health insurance, or agreement as to such contract, other than as plainly 22.29expressed in the contract issued thereon, or paying or allowing or giving, or offering to 22.30pay, allow, or give, directly or indirectly, as inducement to such insurance or annuity, any 22.31rebate of premiums payable on the contract, or any special favor or advantage in the 22.32dividends or other benefits thereon, or any valuable consideration or inducement whatever 22.33not specified in the contract; or giving or selling or purchasing, or offering to give, sell, 23.1or purchase, as inducement to such insurance or annuity, or in connection therewith, 23.2any stocks, bonds, or other securities of any insurance company or other corporation, 23.3association, or partnership, or any dividends or profits accrued thereon, or anything 23.4of value whatsoever not specified in the contract, shall constitute an unfair method of 23.5competition and an unfair and deceptive act or practice.23.6(b) A promotional advertising item of $25 or less or a gift of $25 or less per year 23.7is not a rebate if the receipt of the item or gift is not conditioned upon purchase of an 23.8insurance policy or product.23.9EFFECTIVE DATE.This section is effective the day following final enactment.23.10    Sec. 32. Minnesota Statutes 2008, section 72A.20, subdivision 36, is amended to read:23.11    Subd. 36. Limitations on the use of credit information. (a) No insurer or group of 23.12affiliated insurers may reject, cancel, or nonrenew a policy of private passenger motor 23.13vehicle insurance as defined under section 
         65B.01 or a policy of homeowner's insurance 23.14as defined under section 
         65A.27, for any person in whole or in part on the basis of credit 23.15information, including a credit reporting product known as a "credit score" or "insurance 23.16score," without consideration and inclusion of any other applicable underwriting factor.23.17(b) If credit information, credit scoring, or insurance scoring is to be used in 23.18underwriting, the insurer must disclose to the consumer that credit information will be 23.19obtained and used as part of the insurance underwriting process.23.20(c) Insurance inquiries and non-consumer-initiated inquiries must not be used as part 23.21of the credit scoring or insurance scoring process.23.22(d) If a credit score, insurance score, or other credit information relating to a 23.23consumer, with respect to the types of insurance referred to in paragraph (a), is adversely 23.24impacted or cannot be generated because of the absence of a credit history, the insurer 23.25must exclude the use of credit as a factor in the decision to reject, cancel, or nonrenew.23.26(e) Insurers must upon the request of a policyholder reevaluate the policyholder's 23.27score. Any change in premium resulting from the reevaluation must be effective upon 23.28the renewal of the policy. An insurer is not required to reevaluate a policyholder's score 23.29pursuant to this paragraph more than twice in any given calendar year.23.30(f) Insurers must upon request of the applicant or policyholder provide reasonable 23.31underwriting exceptions based upon prior credit histories for persons whose credit 23.32information is unduly influenced by expenses related to a catastrophic injury or illness, 23.33temporary loss of employment, or the death of an immediate family member. The insurer 23.34may require reasonable documentation of these events prior to granting an exception.24.1(g) A credit scoring or insurance scoring methodology must not be used by an 24.2insurer if the credit scoring or insurance scoring methodology incorporates the gender, 24.3race, nationality, or religion of an insured or applicant.24.4(h) Insurers that employ a credit scoring or insurance scoring system in underwriting 24.5of coverage described in paragraph (a) must have on file with the commissioner:24.6(1) the insurer's credit scoring or insurance scoring methodology; and24.7(2) information that supports the insurer's use of a credit score or insurance score as 24.8an underwriting criterion.24.9(i) Insurers described in paragraph (g)(h) shall file the required information with the 24.10commissioner within 120 days of August 1, 2002, or prior to implementation of a credit 24.11scoring or insurance scoring system by the insurer, if that date is later.24.12(j) Information provided by, or on behalf of, an insurer to the commissioner under 24.13this subdivision is trade secret information under section 
         13.37.24.14    Sec. 33. Minnesota Statutes 2008, section 72A.20, subdivision 37, is amended to read:24.15    Subd. 37. Electronic transmission of required information.(a) A health carrier, 24.16as defined in section 
         62A.011, subdivision 2, is not in violation of this chapter for 24.17electronically transmitting or electronically making available information otherwise 24.18required to be delivered in writing under chapters 62A to 62Q and 72A to an enrollee as 24.19defined in section 
         62Q.01, subdivision 2a, or to a health plan as defined in paragraph (b), 24.20and with the requirements of those chapters if the following conditions are met: 24.21(1) the health carrier informs the group policyholder or the enrollee or both that 24.22electronic transmission or access is available and, at the discretion of the health carrier, the 24.23enrollee is given one of the following options:24.24(i) electronic transmission or access will occur only if the group policyholder or the 24.25enrollee or both affirmatively requests to the health carrier that the required information 24.26be electronically transmitted or available and a record of that request is retained by the 24.27health carrier; or24.28(ii) electronic transmission or access will automatically occur if the group 24.29policyholder or the enrollee or both has not opted out of that manner of transmission by 24.30request to the health carrier and requested that the information be provided in writing. If 24.31the group policyholder or the enrollee or both opts out of electronic transmission, a record 24.32of that request must be retained by the health carrier;24.33(2) the group policyholder or the enrollee or both is allowed to withdraw the request 24.34at any time;25.1(3) if the information transmitted electronically contains individually identifiable 25.2data, it must be transmitted to a secured mailbox. If the information made available 25.3electronically contains individually identifiable data, it must be made available at a 25.4password-protected secured Web site;25.5(4) the group policyholder or the enrollee or both is provided a customer service 25.6number on the enrollee's member card that may be called to request a written copy of 25.7the document; and25.8(5) the electronic transmission or electronic availability meets all other requirements 25.9of this chapter including, but not limited to, size of the typeface and any required time 25.10frames for distribution.25.11(b) For the purpose of this section, "health plan" means a health plan as defined 25.12in section 62A.011 or a policy of accident and sickness insurance as defined in section 25.1362A.01.25.14    Sec. 34. Minnesota Statutes 2008, section 72A.492, subdivision 2, is amended to read:25.15    Subd. 2. Covered persons. The rights granted by sections 
         72A.49 to 
         72A.50525.16extend to:25.17(1) a person who is a resident of this state and is the subject of information collected, 25.18received, or maintained in connection with an insurance transaction; and25.19(2) a person who is a resident of this state and engages in or seeks to engage in 25.20an insurance transaction.25.21    Sec. 35. Minnesota Statutes 2008, section 72A.51, subdivision 2, is amended to read:25.22    Subd. 2. Return of policy or contract; notice. Any individual person may cancel 25.23an individual policy of insurance against loss or damage by reason of the sickness of the 25.24assured or the assured's dependents, a nonprofit health service plan contract providing 25.25benefits for hospital, surgical and medical care, a health maintenance organization 25.26subscriber contract, or a policy of insurance authorized by section 
         60A.06, subdivision 1, 25.27clause (4), except Medicare-related coverage as defined in section 62A.3099, subdivision 25.2817, and long-term care insurance as defined in section 62S.01, subdivision 18, by 25.29returning the policy or contract and by giving written notice of cancellation any time 25.30before midnight of the tenth day following the date of purchase. Notice of cancellation 25.31may be given personally or by mail. The policy or contract may be returned personally or 25.32by mail. If by mail, the notice or return of the policy or contract is effective upon being 25.33postmarked, properly addressed and postage prepaid.25.34EFFECTIVE DATE.This section is effective the day following final enactment.26.1    Sec. 36. Minnesota Statutes 2008, section 72B.01, is amended to read:26.272B.01 PURPOSE AND SCOPE.26.3It is the purpose of sections 
         72B.01 to 
         72B.14 to provide high quality service to 26.4insureds and insurance claimants in the state of Minnesota by providing for well trained 26.5adjusters and persons engaged in soliciting business for adjusters, who are qualified to deal 26.6with the public in the interest of a fair resolution of insurance claims. Sections 72B.01 to 26.772B.14 shall apply to all adjusters, and adjusters' solicitors, except as specifically stated to 26.8the contrary; but nothing in sections 72B.01 to 72B.14 shall apply to:26.9(a) An attorney at law who is licensed or otherwise allowed to practice law in this 26.10state and who does not hold out to be an adjuster, or adjuster's solicitor.26.11(b) A licensed agent of an authorized insurer who adjusts losses for such insurer 26.12solely under policies issued by the agent or the agent's agency or on which the agent is the 26.13agent of record, provided the agent receives no extra compensation for such services.26.14(c) Personnel of township mutual companies.26.15(d) Adjusters for crop hail and farm windstorm damage claims who are on the staff 26.16of companies covering such risks.26.17(e) Persons who process life insurance annuity contract or accident and health 26.18insurance claims.26.19(f) Persons processing or adjusting wet marine or inland transportation claims or 26.20losses.26.21    Sec. 37. Minnesota Statutes 2009 Supplement, section 72B.03, subdivision 2, is 26.22amended to read:26.23    Subd. 2. Classes of licenses. (a) Unless denied licensure pursuant to section 
         72B.08, 26.24persons who have met the requirements of section 
         72B.04 72B.041 must be issued an 26.25adjuster license. There shall be four classes of licenses, as follows:26.26(1) independent adjuster's license;26.27(2) public adjuster's license;26.28(3) public adjuster solicitor's license; and26.29(4) crop hail adjuster's license.26.30(b) An independent adjuster and a public adjuster may qualify for a license in one or 26.31more of the following lines of authority:26.32(1) property and casualty; or26.33(2) workers' compensation; or26.34(3) crop.27.1(c) Any person holding a license pursuant to this section is not required to hold any 27.2other independent adjuster, public adjuster, insurance, or self-insurance administrator 27.3license in this state pursuant to section 
         60A.23, subdivision 8, or any other provision, 27.4provided that the person does not act as an adjuster with respect to life, health, or annuity 27.5insurance, other than disability insurance.27.6(d) An adjuster license remains in effect unless probated, suspended, revoked, or 27.7refused as long as the fee set forth in section 
         72B.04, subdivision 10 72B.041, subdivision 27.89, is paid and all other requirements for license renewal are met by the due date, otherwise, 27.9the license expires.27.10(e) An adjuster whose license expires may, within 12 months of the renewal date, 27.11be reissued an adjuster license upon receipt of the renewal request, as prescribed by the 27.12commissioner; however, a penalty in the amount of double the unpaid renewal fee is 27.13required to reissue the expired license.27.14(f) An adjuster who is unable to comply with license renewal procedures and 27.15requirements due to military service, long-term medical disability, or some other 27.16extenuating circumstance may request a waiver of same and a waiver of any examination 27.17requirement, fine, or other sanction imposed for failure to comply with renewal procedures.27.18(g) An adjuster is subject to sections 
         72A.17 to 
         72A.32.27.19(h) The adjuster must inform the commissioner by any means acceptable of any 27.20change in resident or business addresses for the home state or in legal name within 30 27.21days of the change.27.22(i) The license must contain the licensee's name, address, and personal identification 27.23number; the dates of issuance and expiration; and any other information the commissioner 27.24deems necessary.27.25(j) In order to assist in the performance of the commissioner's duties, the 27.26commissioner may contract with nongovernmental entities, including the National 27.27Association of Insurance Commissioners, its affiliates, or its subsidiaries, to perform any 27.28ministerial functions related to licensing that the commissioner may deem appropriate, 27.29including the collection of fees and data.27.30    Sec. 38. Minnesota Statutes 2009 Supplement, section 72B.045, subdivision 1, is 27.31amended to read:27.32    Subdivision 1. Requirement. An individual who holds an independent or public27.33adjuster license and who is not exempt under this section must satisfactorily complete 27.34a minimum of 24 hours of continuing education courses, of which three hours must 28.1be in ethics, reported to the commissioner on a biennial basis in conjunction with the 28.2individual's license renewal cycle.28.3    Sec. 39. Minnesota Statutes 2009 Supplement, section 72B.06, is amended to read:28.472B.06 CATASTROPHE OR EMERGENCY SITUATIONS.28.5(a) In the event of a declared catastrophe or the occurrence of an emergency 28.6situation,For purposes of this chapter, a catastrophe exists when, due to a specific, 28.7infrequent, and sudden natural or man-made disaster or phenomenon, there have arisen 28.8losses to property in Minnesota that are covered by insurance, and the losses are so 28.9numerous and severe that resolution of claims related to such covered property losses will 28.10not occur expeditiously without the licensing of emergency independent adjusters due to 28.11the magnitude of the catastrophic damage. A failure of claims to be resolved expeditiously 28.12shall exist upon an insurer's filing with the department a written statement that one of the 28.13following conditions exists: (1) the insurer expects to incur at least 500 claims as a result 28.14of the event; or (2) the magnitude of the event is expected to generate twice the mean 28.15number of claims for one month for the affected area. Such written statement may be 28.16sent electronically to the commissioner. An insurer must notify the commissioner via an 28.17application for registration of each individualindependent adjuster not already licensed in 28.18the state where the catastrophe has been declared or an emergency situation has occurred28.19Minnesota, that will act as an emergency independent adjuster on behalf of the insurer28.20pursuant to paragraph (b).28.21(b) A person who is otherwise qualified to adjust claims, but not already licensed in 28.22the state where the catastrophe has been declared or an emergency situation has occurred28.23Minnesota, may act as an emergency independent adjuster and adjust claims, if, within 28.24five days of deployment to adjust claims arising from the declared catastrophe or the 28.25occurrence of an emergency situation, the insurer or the independent adjuster's employer, 28.26in the notification required by paragraph (a), notifies the commissioner by providing the 28.27following information in a format prescribed by the commissioner:28.28(1) the name of the individual;28.29(2) the Social Security number of the individual;28.30(3) the name of the insurer the independent adjuster will represent;28.31(4) the effective date of the contract between the insurer and independent adjuster or 28.32the independent adjuster's employer;28.33(5) the catastrophe, emergency situation, or loss control number;28.34(6) the catastrophe or emergency situation event name; and28.35(7) other information the commissioner deems necessary.29.1(c) An emergency independent adjuster's license or registration remains in force for 29.2the period of time established by the commissioner 180 days; such license or registration 29.3shall be effective for all catastrophes described in paragraph (a), clauses (1) and (2). Such 29.4license or registration may be extended for 180 days.29.5The commissioner may summarily suspend or revoke the right of any person 29.6adjusting in this state under the authority of this section to continue to adjust in this state, 29.7if the commissioner finds that that person has engaged in any of the practices forbidden 29.8to a licensed adjuster under sections 
         72B.01 to 
         72B.14. Notice of such suspension or 29.9revocation may be given personally or by mail sent to the temporary address stated in the 29.10registration and to the insurer or independent adjusting firm company who submitted the 29.11independent adjuster information.29.12    Sec. 40. Minnesota Statutes 2008, section 72B.08, subdivision 8, is amended to read:29.13    Subd. 8. Bond. In the case of any licensee or permit holder who has had a license or 29.14permit suspended or revoked or whose license renewal has been prohibited by a lawful 29.15order of the commissioner, the commissioner may condition the issuance of a new license 29.16on the filing of a surety bond in an amount not to exceed $10,000, made and conditioned in 29.17accordance with the requirements of section 
         72B.04, subdivision 4 72B.041, subdivision 29.183, relating to public adjusters' bonds. Nothing in this subdivision shall reduce or alter the 29.19bonding requirements for a public adjuster.29.20    Sec. 41. Minnesota Statutes 2008, section 79A.03, subdivision 8, is amended to read:29.21    Subd. 8. Processing application. The commissioner shall grant or deny the group's 29.22application to self-insure within 60 days after a complete application has been filed, 29.23provided that the time may be extended for an additional 30 days upon 15 days' prior 29.24notice to the applicant. The commissioner shall grant approval for self-insurance upon 29.25a determination that the financial ability of the self-insurer's group is sufficient to fulfill 29.26all joint and several obligations of the member companies that may arise under chapter 29.27176 or this chapter; the gross annual premium of the group members is at least $300,00029.28150 percent of the WCRA minimum retention in effect at the time of the application; the 29.29group has established a fund pursuant to Minnesota Rules, parts 2780.4100 to 2780.5000; 29.30the group has contracted with a licensed workers' compensation service company to 29.31administer its program; and the required securities or surety bond shall be on deposit prior 29.32to the effective date of coverage for any member. Approval shall be effective until revoked 29.33by order of the commissioner or until the employer members of the group become insured.30.1EFFECTIVE DATE.This section is effective August 1, 2010, and applies to 30.2applications processed on or after that date, but not to self-insured groups existing as of 30.3that date.30.4    Sec. 42. Minnesota Statutes 2008, section 79A.06, subdivision 5, is amended to read:30.5    Subd. 5. Private employers who have ceased to be self-insured. (a) Private 30.6employers who have ceased to be private self-insurers shall discharge their continuing 30.7obligations to secure the payment of compensation which is accrued during the period of 30.8self-insurance, for purposes of Laws 1988, chapter 674, sections 1 to 21, by compliance 30.9with all of the following obligations of current certificate holders:30.10    (1) Filing reports with the commissioner to carry out the requirements of this chapter;30.11    (2) Depositing and maintaining a security deposit for accrued liability for the 30.12payment of any compensation which may become due, pursuant to chapter 176. However, 30.13if a private employer who has ceased to be a private self-insurer purchases an insurance 30.14policy from an insurer authorized to transact workers' compensation insurance in this state 30.15which provides coverage of all claims for compensation arising out of injuries occurring 30.16during the entire period the employer was self-insured, whether or not reported during 30.17that period, the policy will:30.18    (i) discharge the obligation of the employer to maintain a security deposit for the 30.19payment of the claims covered under the policy;30.20    (ii) discharge any obligation which the self-insurers' security fund has or may have 30.21for payment of all claims for compensation arising out of injuries occurring during the 30.22period the employer was self-insured, whether or not reported during that period; and30.23    (iii) discharge the obligations of the employer to pay any future assessments to 30.24the self-insurers' security fund; provided, however, that a member that terminates its 30.25self-insurance authority on or after August 1, 2010, shall be liable for an assessment under 30.26paragraph (b). The actuarial opinion shall not take into consideration any transfer of the 30.27member's liabilities to an insurance policy if the member obtains a replacement policy as 30.28described in this subdivision within one year of the date of terminating its self-insurance.30.29    A private employer who has ceased to be a private self-insurer may instead buy an 30.30insurance policy described above, except that it covers only a portion of the period of time 30.31during which the private employer was self-insured; purchase of such a policy discharges 30.32any obligation that the self-insurers' security fund has or may have for payment of all 30.33claims for compensation arising out of injuries occurring during the period for which the 30.34policy provides coverage, whether or not reported during that period.31.1    A policy described in this clause may not be issued by an insurer unless it has 31.2previously been approved as to form and substance by the commissioner; and31.3    (3) Paying within 30 days all assessments of which notice is sent by the security 31.4fund, for a period of seven years from the last day its certificate of self-insurance was in 31.5effect. Thereafter, the private employer who has ceased to be a private self-insurer may 31.6either: (i) continue to pay within 30 days all assessments of which notice is sent by the 31.7security fund until it has no incurred liabilities for the payment of compensation arising 31.8out of injuries during the period of self-insurance; or (ii) pay the security fund a cash 31.9payment equal to four percent of the net present value of all remaining incurred liabilities 31.10for the payment of compensation under sections 
         176.101 and 
         176.111 as certified by a 31.11member of the casualty actuarial society. Assessments shall be based on the benefits paid 31.12by the employer during the calendar year immediately preceding the calendar year in 31.13which the employer's right to self-insure is terminated or withdrawn.31.14    (b) With respect to a self-insurer who terminates its self-insurance authority after 31.15April 1, 1998, that member shall obtain and file with the commissioner an actuarial 31.16opinion of its outstanding liabilities as determined by an associate or fellow of the 31.17Casualty Actuarial Society within 120 days of the date of its termination. If the actuarial 31.18opinion is not timely filed, the self-insurers' security fund may, at its discretion, engage 31.19the services of an actuary for this purpose. The expense of this actuarial opinion must 31.20be assessed against and be the obligation of the self-insurer. The commissioner may 31.21issue a certificate of default against the self-insurer for failure to pay this assessment 31.22to the self-insurers' security fund as provided by section 
         79A.04, subdivision 9. The 31.23opinion must separate liability for indemnity benefits from liability from medical benefits, 31.24and must may discount each liabilities up to four percent per annum to net present 31.25value. Within 30 60 days after notification of approval of the actuarial opinion by the 31.26commissioner, the exiting member shall pay to the security fund an amount equal to 120 31.27percent of that discounted outstanding indemnity liability, multiplied by the greater of the 31.28average annualized assessment rate since inception of the security fund or the annual 31.29rate at the time of the most recent assessment before termination determined as follows:31.30a percentage will be determined by dividing the security fund's members' deficit as 31.31determined by the most recent audited financial statement of the security fund by the total 31.32actuarial liability of all members of the security fund as calculated by the commissioner 31.33within 30 days of the exit date of the member. This quotient will then be multiplied by 31.34that exiting member's total future liability as contained in the exiting member's actuarial 31.35opinion. If the payment is not made within 30 days of the notification, interest on it at the 32.1rate prescribed by section 
         549.09 must be paid by the former member to the security fund 32.2until the principal amount is paid in full.32.3    (c) A former member who terminated its self-insurance authority before April 1, 32.41998, who has paid assessments to the self-insurers' security fund for seven years, and 32.5whose annualized assessment is $15,000 or less, may buy out of its outstanding liabilities 32.6to the self-insurers' security fund by an amount calculated as follows: 
         1.35 multiplied by 32.7the indemnity case reserves at the time of the calculation, multiplied by the then current 32.8self-insurers' security fund annualized assessment rate.32.9    (d) A former member who terminated its self-insurance authority before April 1, 32.101998, and who is paying assessments within the first seven years after ceasing to be 32.11self-insured under paragraph (a), clause (3), may elect to buy out its outstanding liabilities 32.12to the self-insurers' security fund by obtaining and filing with the commissioner an 32.13actuarial opinion of its outstanding liabilities as determined by an associate or fellow of 32.14the Casualty Actuarial Society. The opinion must separate liability for indemnity benefits 32.15from liability for medical benefits, and must discount each up to four percent per annum to 32.16net present value. Within 30 days after notification of approval of the actuarial opinion 32.17by the commissioner, the member shall pay to the security fund an amount equal to 120 32.18percent of that discounted outstanding indemnity liability, multiplied by the greater of the 32.19average annualized assessment rate since inception of the security fund or the annual rate 32.20at the time of the most recent assessment.32.21    (e) A former member who has paid the security fund according to paragraphs (b) to 32.22(d) and subsequently receives authority from the commissioner to again self-insure shall be 32.23assessed under section 
         79A.12, subdivision 2, only on indemnity benefits paid on injuries 32.24that occurred after the former member received authority to self-insure again; provided 32.25that the member furnishes verified data regarding those benefits to the security fund.32.26    (f) In addition to proceedings to establish liabilities and penalties otherwise 32.27provided, a failure to comply may be the subject of a proceeding before the commissioner. 32.28An appeal from the commissioner's determination may be taken pursuant to the contested 32.29case procedures of chapter 14 within 30 days of the commissioner's written determination.32.30    Any current or past member of the self-insurers' security fund is subject to service of 32.31process on any claim arising out of chapter 176 or this chapter in the manner provided by 32.32section 
         5.25, or as otherwise provided by law. The issuance of a certificate to self-insure 32.33to the private self-insured employer shall be deemed to be the agreement that any process 32.34which is served in accordance with this section shall be of the same legal force and effect 32.35as if served personally within this state.33.1EFFECTIVE DATE.This section is effective August 1, 2010, and applies to 33.2terminations of self-insurance authority that become effective on or after that date.33.3    Sec. 43. Minnesota Statutes 2008, section 79A.21, subdivision 3, is amended to read:33.4    Subd. 3. Approval. The commissioner shall approve an application for 33.5self-insurance upon a determination that all of the following conditions are met:33.6(1) a completed application and all required documents have been submitted to 33.7the commissioner;33.8(2) the financial ability of the commercial self-insurance group is sufficient to fulfill 33.9all obligations that may arise under this chapter or chapter 176;33.10(3) the annual premium of the commercial self-insurance group to be charged to 33.11initial members is at least $400,000 150 percent of the WCRA minimum retention in 33.12effect at the time of the application;33.13(4) the commercial self-insurance group has contracted with a service company to 33.14administer its program; and33.15(5) the required securities or surety bond shall be on deposit prior to the effective 33.16date of coverage for the commercial self-insurance group.33.17EFFECTIVE DATE.This section is effective August 1, 2010, and applies to 33.18applications processed on or after that date, but not to self-insured groups existing as of 33.19that date.33.20    Sec. 44. Minnesota Statutes 2008, section 80A.41, is amended to read:33.2180A.41 SECTION 102; DEFINITIONS. 33.22    In this chapter, unless the context otherwise requires: 33.23(1) "Accredited investor" means an accredited investor as the term is defined in Rule 33.24501(a) of Regulation D adopted pursuant to the Securities Act of 1933. 33.25    (2) "Administrator" means the commissioner of commerce. 33.26    (3) "Agent" means an individual, other than a broker-dealer, who represents a 33.27broker-dealer in effecting or attempting to effect purchases or sales of securities or 33.28represents an issuer in effecting or attempting to effect purchases or sales of the issuer's 33.29securities.  But a partner, officer, or director of a broker-dealer or issuer, or an individual 33.30having a similar status or performing similar functions is an agent only if the individual 33.31otherwise comes within the term.  The term does not include an individual excluded by 33.32rule adopted or order issued under this chapter. 33.33    (4) "Bank" means: 34.1    (A) a banking institution organized under the laws of the United States; 34.2    (B) a member bank of the Federal Reserve System; 34.3    (C) any other banking institution, whether incorporated or not, doing business 34.4under the laws of a state or of the United States, a substantial portion of the business 34.5of which consists of receiving deposits or exercising fiduciary powers similar to those 34.6permitted to be exercised by national banks under the authority of the Comptroller of the 34.7Currency pursuant to Section 1 of Public Law 87-722 (12 U.S.C. Section 92a), and which 34.8is supervised and examined by a state or federal agency having supervision over banks, 34.9and which is not operated for the purpose of evading this chapter; and 34.10    (D) a receiver, conservator, or other liquidating agent of any institution or firm 34.11included in subparagraph (A), (B), or (C). 34.12    (5) "Broker-dealer" means a person engaged in the business of effecting transactions 34.13in securities for the account of others or for the person's own account.  The term does 34.14not include: 34.15    (A) an agent; 34.16    (B) an issuer; 34.17    (C) a depository institution; provided such activities are conducted in accordance 34.18with such rules as may be adopted by the administrator; 34.19    (D) an international banking institution; or 34.20    (E) a person excluded by rule adopted or order issued under this chapter. 34.21    (6) "Depository institution" means: 34.22    (A) a bank; or 34.23    (B) a savings institution, trust company, credit union, or similar institution that 34.24is organized or chartered under the laws of a state or of the United States, authorized 34.25to receive deposits, and supervised and examined by an official or agency of a state or 34.26the United States if its deposits or share accounts are insured to the maximum amount 34.27authorized by statute by the Federal Deposit Insurance Corporation, the National Credit 34.28Union Share Insurance Fund, or a successor authorized by federal law.  The term does 34.29not include: 34.30    (i) an insurance company or other organization primarily engaged in the business 34.31of insurance; 34.32    (ii) a Morris Plan bank; or 34.33    (iii) an industrial loan company that is not an "insured depository institution" as 34.34defined in section 3(c)(2) of the Federal Deposit Insurance Act, United States Code, title 34.3512, section 1813(c)(2), or any successor federal statute. 35.1    (7) "Federal covered investment adviser" means a person registered under the 35.2Investment Advisers Act of 1940. 35.3    (8) "Federal covered security" means a security that is, or upon completion of a 35.4transaction will be, a covered security under Section 18(b) of the Securities Act of 1933 35.5(15 U.S.C. Section 77r(b)) or rules or regulations adopted pursuant to that provision. 35.6    (9) "Filing" means the receipt under this chapter of a record by the administrator or 35.7a designee of the administrator. 35.8    (10) "Fraud," "deceit," and "defraud" are not limited to common law deceit. 35.9    (11) "Guaranteed" means guaranteed as to payment of all principal and all interest. 35.10    (12) "Institutional investor" means any of the following, whether acting for itself or 35.11for others in a fiduciary capacity: 35.12    (A) a depository institution or international banking institution; 35.13    (B) an insurance company; 35.14    (C) a separate account of an insurance company; 35.15    (D) an investment company as defined in the Investment Company Act of 1940; 35.16    (E) a broker-dealer registered under the Securities Exchange Act of 1934; 35.17    (F) an employee pension, profit-sharing, or benefit plan if the plan has total assets 35.18in excess of $10,000,000 or its investment decisions are made by a named fiduciary, as 35.19defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer 35.20registered under the Securities Exchange Act of 1934, an investment adviser registered 35.21or exempt from registration under the Investment Advisers Act of 1940, an investment 35.22adviser registered under this chapter, a depository institution, or an insurance company; 35.23    (G) a plan established and maintained by a state, a political subdivision of a state, or 35.24an agency or instrumentality of a state or a political subdivision of a state for the benefit 35.25of its employees, if the plan has total assets in excess of $10,000,000 or its investment 35.26decisions are made by a duly designated public official or by a named fiduciary, as 35.27defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer 35.28registered under the Securities Exchange Act of 1934, an investment adviser registered 35.29or exempt from registration under the Investment Advisers Act of 1940, an investment 35.30adviser registered under this chapter, a depository institution, or an insurance company; 35.31    (H) a trust, if it has total assets in excess of $10,000,000, its trustee is a depository 35.32institution, and its participants are exclusively plans of the types identified in subparagraph 35.33(F) or (G), regardless of the size of their assets, except a trust that includes as participants 35.34self-directed individual retirement accounts or similar self-directed plans; 35.35    (I) an organization described in Section 501(c)(3) of the Internal Revenue Code (26 35.36U.S.C. Section 501(c)(3)), corporation, Massachusetts trust or similar business trust, 36.1limited liability company, or partnership, not formed for the specific purpose of acquiring 36.2the securities offered, with total assets in excess of $10,000,000; 36.3    (J) a small business investment company licensed by the Small Business 36.4Administration under Section 301(c) of the Small Business Investment Act of 1958 (15 36.5U.S.C. Section 681(c)) with total assets in excess of $10,000,000; 36.6    (K) a private business development company as defined in Section 202(a)(22) of 36.7the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(22)) with total assets 36.8in excess of $10,000,000; 36.9    (L) a federal covered investment adviser acting for its own account; 36.10    (M) a "qualified institutional buyer" as defined in Rule 144A(a)(1), other than Rule 36.11144A(a)(1)(i)(H), adopted under the Securities Act of 1933 (17 C.F.R. 230.144A); 36.12    (N) a "major U.S. institutional investor" as defined in Rule 15a-6(b)(4)(i) adopted 36.13under the Securities Exchange Act of 1934 (17 C.F.R. 240.15a-6); 36.14    (O) any other person, other than an individual, of institutional character with total 36.15assets in excess of $10,000,000 not organized for the specific purpose of evading this 36.16chapter; or 36.17    (P) any other person specified by rule adopted or order issued under this chapter; 36.18    (13) "Insurance company" means a company organized as an insurance company 36.19whose primary business is writing insurance or reinsuring risks underwritten by insurance 36.20companies and which is subject to supervision by the insurance commissioner or a similar 36.21official or agency of a state. 36.22    (14) "Insured" means insured as to payment of all principal and all interest. 36.23    (15) "International banking institution" means an international financial institution 36.24of which the United States is a member and whose securities are exempt from registration 36.25under the Securities Act of 1933. 36.26    (16) "Investment adviser" means a person that, for compensation, engages in the 36.27business of advising others, either directly or through publications or writings, as to the 36.28value of securities or the advisability of investing in, purchasing, or selling securities or 36.29that, for compensation and as a part of a regular business, issues or promulgates analyses 36.30or reports concerning securities.  The term includes a financial planner or other person 36.31that, as an integral component of other financially related services, provides investment 36.32advice to others for compensation as part of a business or that holds itself out as providing 36.33investment advice to others for compensation.  The term does not include: 36.34    (A) an investment adviser representative; 36.35    (B) a lawyer, accountant, engineer, or teacher whose performance of investment 36.36advice is solely incidental to the practice of the person's profession; 37.1    (C) a broker-dealer or its agents whose performance of investment advice is solely 37.2incidental to the conduct of business as a broker-dealer and that does not receive special 37.3compensation for the investment advice; 37.4    (D) a publisher of a bona fide newspaper, news magazine, or business or financial 37.5publication of general and regular circulation; 37.6    (E) a federal covered investment adviser; 37.7    (F) a bank or savings institution; 37.8    (G) any other person that is excluded by the Investment Advisers Act of 1940 from 37.9the definition of investment adviser; or 37.10    (H) any other person excluded by rule adopted or order issued under this chapter. 37.11    (17) "Investment adviser representative" means an individual employed by or 37.12associated with an investment adviser or federal covered investment adviser and who 37.13makes any recommendations or otherwise gives investment advice regarding securities, 37.14manages accounts or portfolios of clients, determines which recommendation or advice 37.15regarding securities should be given, provides investment advice or holds herself or 37.16himself out as providing investment advice, receives compensation to solicit, offer, or 37.17negotiate for the sale of or for selling investment advice, or supervises employees who 37.18perform any of the foregoing.  The term does not include an individual who: 37.19    (A) performs only clerical or ministerial acts; 37.20    (B) is an agent whose performance of investment advice is solely incidental to 37.21the individual acting as an agent and who does not receive special compensation for 37.22investment advisory services; 37.23    (C) is employed by or associated with a federal covered investment adviser, unless 37.24the individual has a "place of business" in this state as that term is defined by rule adopted 37.25under Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a) 37.26and is 37.27    (i) an "investment adviser representative" as that term is defined by rule adopted 37.28under Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a); or 37.29    (ii) not a "supervised person" as that term is defined in Section 202(a)(25) of the 37.30Investment Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(25)); or 37.31    (D) is excluded by rule adopted or order issued under this chapter. 37.32    (18) "Issuer" means a person that issues or proposes to issue a security, subject to 37.33the following: 37.34    (A) The issuer of a voting trust certificate, collateral trust certificate, certificate of 37.35deposit for a security, or share in an investment company without a board of directors or 37.36individuals performing similar functions is the person performing the acts and assuming 38.1the duties of depositor or manager pursuant to the trust or other agreement or instrument 38.2under which the security is issued. 38.3    (B) The issuer of an equipment trust certificate or similar security serving the same 38.4purpose is the person by which the property is or will be used or to which the property 38.5or equipment is or will be leased or conditionally sold or that is otherwise contractually 38.6responsible for assuring payment of the certificate. 38.7    (C) The issuer of a fractional undivided interest in an oil, gas, or other mineral lease 38.8or in payments out of production under a lease, right, or royalty is the owner of an interest 38.9in the lease or in payments out of production under a lease, right, or royalty, whether 38.10whole or fractional, that creates fractional interests for the purpose of sale. 38.11    (19) "Nonissuer transaction" or "nonissuer distribution" means a transaction or 38.12distribution not directly or indirectly for the benefit of the issuer. 38.13    (20) "Offer to purchase" includes an attempt or offer to obtain, or solicitation of an 38.14offer to sell, a security or interest in a security for value.  The term does not include a 38.15tender offer that is subject to Section 14(d) of the Securities Exchange Act of 1934 (15 38.16U.S.C. Section 78n(d)). 38.17    (21) "Person" means an individual; corporation; business trust; estate; trust; 38.18partnership; limited liability company; association; joint venture; government; 38.19governmental subdivision, agency, or instrumentality; public corporation; or any other 38.20legal or commercial entity. 38.21    (22) "Place of business" of a broker-dealer, an investment adviser, or a federal 38.22covered investment adviser means: 38.23    (A) an office at which the broker-dealer, investment adviser, or federal covered 38.24investment adviser regularly provides brokerage or investment advice or solicits, meets 38.25with, or otherwise communicates with customers or clients; or 38.26    (B) any other location that is held out to the general public as a location at which 38.27the broker-dealer, investment adviser, or federal covered investment adviser provides 38.28brokerage or investment advice or solicits, meets with, or otherwise communicates with 38.29customers or clients. 38.30    (23) "Predecessor Act" means Minnesota Statutes 2002, sections 80A.01 to 80A.31. 38.31    (24) "Price amendment" means the amendment to a registration statement filed under 38.32the Securities Act of 1933 or, if an amendment is not filed, the prospectus or prospectus 38.33supplement filed under the Securities Act of 1933 that includes a statement of the offering 38.34price, underwriting and selling discounts or commissions, amount of proceeds, conversion 38.35rates, call prices, and other matters dependent upon the offering price. 39.1    (25) "Principal place of business" of a broker-dealer or an investment adviser means 39.2the executive office of the broker-dealer or investment adviser from which the officers, 39.3partners, or managers of the broker-dealer or investment adviser direct, control, and 39.4coordinate the activities of the broker-dealer or investment adviser. 39.5    (26) Only for purposes of calculating the number of purchasers under section 39.680A.46(1) and 80A.46(14), "purchaser" does not include: 39.7    (A) any relative, spouse, or relative of the spouse of a purchaser who has the same 39.8principal residence as the purchaser; 39.9    (B) any trust or estate in which a purchaser and any of the persons related to him as 39.10specified in Regulation D, Rule 501(e)(1)(i) or (e)(1)(ii) collectively have more than 50 39.11percent of the beneficial interest (excluding contingent interests); 39.12    (C) any corporation or other organization of which a purchaser and any of the 39.13persons related to the purchaser as specified in Regulation D, Rule 501(e)(1)(i) or 39.14(e)(1)(ii) collectively are beneficial owners of more than 50 percent of the equity securities 39.15(excluding directors' qualifying shares) or equity interests; and 39.16    (D) any accredited investor. 39.17    A corporation, partnership, or other entity must be counted as one purchaser.  If, 39.18however, that entity is organized for the specific purpose of acquiring the securities offered 39.19and is not an accredited investor, then each beneficial owner of equity securities or equity 39.20interests in the entity shall count as a separate purchaser for all provisions of Regulation 39.21D, except to the extent provided in Regulation D, Rule 501(e)(1). 39.22    A noncontributory employee benefit plan within the meaning of Title I of the 39.23Employee Retirement Income Security Act of 1974 shall be counted as one purchaser 39.24where the trustee makes all investment decisions for the plan. 39.25    (27) "Record," except in the phrases "of record," "official record," and "public 39.26record," means information that is inscribed on a tangible medium or that is stored in an 39.27electronic or other medium and is retrievable in perceivable form. 39.28    (28) "Sale" includes every contract of sale, contract to sell, or disposition of, a 39.29security or interest in a security for value, and "offer to sell" includes every attempt or 39.30offer to dispose of, or solicitation of an offer to purchase, a security or interest in a 39.31security for value. 39.32    (A) A security given or delivered with, or as a bonus on account of, any purchase of 39.33securities or any other thing is considered to constitute part of the subject of the purchase 39.34and to have been offered and sold for value. 39.35    (B) A gift of assessable stock is considered to involve an offer and sale. 40.1    (C) A sale or offer of a warrant or right to purchase or subscribe to another security 40.2of the same or another issuer and a sale or offer of a security that gives the holder a present 40.3or future right or privilege to convert the security into another security of the same or 40.4another issuer, are each considered to include an offer of the other security. 40.5    (29) "Securities and Exchange Commission" means the United States Securities and 40.6Exchange Commission. 40.7    (30) "Security" means a note; stock; treasury stock; security future; bond; debenture; 40.8evidence of indebtedness; certificate of interest or participation in a profit-sharing 40.9agreement; collateral trust certificate; preorganization certificate or subscription; 40.10transferable share; investment contract; voting trust certificate; certificate of deposit for a 40.11security; fractional undivided interest in oil, gas, or other mineral rights; put, call, straddle, 40.12option, or privilege on a security, certificate of deposit, or group or index of securities, 40.13including an interest therein or based on the value thereof; put, call, straddle, option, or 40.14privilege entered into on a national securities exchange relating to foreign currency; or, 40.15in general, an interest or instrument commonly known as a "security"; or a certificate of 40.16interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or 40.17warrant or right to subscribe to or purchase, any of the foregoing.  The term: 40.18    (A) includes both a certificated and an uncertificated security; 40.19    (B) does not include an insurance or endowment policy or annuity contract under 40.20which an insurance company promises to pay a fixed or variable sum of money either in a 40.21lump sum or periodically for life or other specified period; 40.22    (C) does not include an interest in a contributory or noncontributory pension or 40.23welfare plan subject to the Employee Retirement Income Security Act of 1974; 40.24    (D)  includes as an "investment contract," among other contracts, an interest in 40.25a limited partnership and a limited liability company and an investment in a viatical 40.26settlement or similar agreement; and 40.27    (E) does not include any equity interest of a closely held corporation or other entity 40.28with not more than 35 holders of the equity interest of such entity offered or sold pursuant 40.29to a transaction in which 100 percent of the equity interest of such entity is sold as a means 40.30to effect the sale of the business of the entity if the transaction has been negotiated on 40.31behalf of all purchasers and if all purchasers have access to inside information regarding 40.32the entity before consummating the transaction. 40.33    (31) "Self-regulatory organization" means a national securities exchange registered 40.34under the Securities Exchange Act of 1934, a national securities association of 40.35broker-dealers registered under the Securities Exchange Act of 1934, a clearing agency 41.1registered under the Securities Exchange Act of 1934, or the Municipal Securities 41.2Rulemaking Board established under the Securities Exchange Act of 1934. 41.3    (32) "Sign" means, with present intent to authenticate or adopt a record: 41.4    (A) to execute or adopt a tangible symbol; or 41.5    (B) to attach or logically associate with the record an electronic symbol, sound, 41.6or process. 41.7    (33) "State" means a state of the United States, the District of Columbia, Puerto 41.8Rico, the United States Virgin Islands, or any territory or insular possession subject to the 41.9jurisdiction of the United States. 41.10    (34) "Associated with" with respect to a person means any partner, officer, director, 41.11or manager of such person or any person occupying a similar status or performing 41.12similar functions or any person directly or indirectly controlling, controlled by, or in 41.13common control with, such person, but does not include a person whose primary duties 41.14are ministerial or clerical.  41.15    Sec. 45. Minnesota Statutes 2008, section 80A.46, is amended to read:41.1680A.46 SECTION 202; EXEMPT TRANSACTIONS. 41.17    The following transactions are exempt from the requirements of sections 80A.49 41.18through 80A.54 and 80A.71: 41.19    (1) isolated nonissuer transactions, consisting of sale to not more than ten purchasers 41.20in Minnesota during any period of 12 consecutive months, whether effected by or through 41.21a broker-dealer or not; 41.22    (2) a nonissuer transaction by or through a broker-dealer registered, or exempt from 41.23registration under this chapter, and a resale transaction by a sponsor of a unit investment 41.24trust registered under the Investment Company Act of 1940, in a security of a class that 41.25has been outstanding in the hands of the public for at least 90 days, if, at the date of 41.26the transaction: 41.27    (A) the issuer of the security is engaged in business, the issuer is not in the 41.28organizational stage or in bankruptcy or receivership, and the issuer is not a blank check, 41.29blind pool, or shell company that has no specific business plan or purpose or has indicated 41.30that its primary business plan is to engage in a merger or combination of the business with, 41.31or an acquisition of, an unidentified person; 41.32    (B) the security is sold at a price reasonably related to its current market price; 41.33    (C) the security does not constitute the whole or part of an unsold allotment to, or 41.34a subscription or participation by, the broker-dealer as an underwriter of the security 41.35or a redistribution; 42.1    (D) a nationally recognized securities manual or its electronic equivalent designated 42.2by rule adopted or order issued under this chapter or a record filed with the Securities and 42.3Exchange Commission that is publicly available contains: 42.4    (i) a description of the business and operations of the issuer; 42.5    (ii) the names of the issuer's executive officers and the names of the issuer's 42.6directors, if any; 42.7    (iii) an audited balance sheet of the issuer as of a date within 18 months before the 42.8date of the transaction or, in the case of a reorganization or merger when the parties to 42.9the reorganization or merger each had an audited balance sheet, a pro forma balance 42.10sheet for the combined organization; and 42.11    (iv) an audited income statement for each of the issuer's two immediately previous 42.12fiscal years or for the period of existence of the issuer, whichever is shorter, or, in the case 42.13of a reorganization or merger when each party to the reorganization or merger had audited 42.14income statements, a pro forma income statement; and 42.15    (E) any one of the following requirements is met: 42.16    (i) the issuer of the security has a class of equity securities listed on a national 42.17securities exchange registered under Section 6 of the Securities Exchange Act of 1934 42.18or designated for trading on the National Association of Securities Dealers Automated 42.19Quotation System; 42.20    (ii) the issuer of the security is a unit investment trust registered under the Investment 42.21Company Act of 1940; 42.22    (iii) the issuer of the security, including its predecessors, has been engaged in 42.23continuous business for at least three years; or 42.24    (iv) the issuer of the security has total assets of at least $2,000,000 based on an 42.25audited balance sheet as of a date within 18 months before the date of the transaction or, in 42.26the case of a reorganization or merger when the parties to the reorganization or merger 42.27each had such an audited balance sheet, a pro forma balance sheet for the combined 42.28organization; 42.29    (3) a nonissuer transaction by or through a broker-dealer registered or exempt from 42.30registration under this chapter in a security of a foreign issuer that is a margin security 42.31defined in regulations or rules adopted by the Board of Governors of the Federal Reserve 42.32System; 42.33    (4) a nonissuer transaction by or through a broker-dealer registered or exempt 42.34from registration under this chapter in an outstanding security if the guarantor of the 42.35security files reports with the Securities and Exchange Commission under the reporting 43.1requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 43.2Sections 78m or 78o(d)); 43.3    (5) a nonissuer transaction by or through a broker-dealer registered or exempt from 43.4registration under this chapter in a security that: 43.5    (A) is rated at the time of the transaction by a nationally recognized statistical rating 43.6organization in one of its four highest rating categories; or 43.7    (B) has a fixed maturity or a fixed interest or dividend, if: 43.8    (i) a default has not occurred during the current fiscal year or within the three 43.9previous fiscal years or during the existence of the issuer and any predecessor if less than 43.10three fiscal years, in the payment of principal, interest, or dividends on the security; and 43.11    (ii) the issuer is engaged in business, is not in the organizational stage or in 43.12bankruptcy or receivership, and is not and has not been within the previous 12 months a 43.13blank check, blind pool, or shell company that has no specific business plan or purpose or 43.14has indicated that its primary business plan is to engage in a merger or combination of the 43.15business with, or an acquisition of, an unidentified person; 43.16    (6) a nonissuer transaction by or through a broker-dealer registered or exempt from 43.17registration under this chapter effecting an unsolicited order or offer to purchase; 43.18    (7) a nonissuer transaction executed by a bona fide pledgee without the purpose 43.19of evading this chapter; 43.20    (8) a nonissuer transaction by a federal covered investment adviser with investments 43.21under management in excess of $100,000,000 acting in the exercise of discretionary 43.22authority in a signed record for the account of others; 43.23    (9) a transaction in a security, whether or not the security or transaction is otherwise 43.24exempt, in exchange for one or more bona fide outstanding securities, claims, or property 43.25interests, or partly in such exchange and partly for cash, if the terms and conditions of 43.26the issuance and exchange or the delivery and exchange and the fairness of the terms and 43.27conditions have been approved by the administrator after a hearing; 43.28    (10) a transaction between the issuer or other person on whose behalf the offering is 43.29made and an underwriter, or among underwriters; 43.30    (11) a transaction in a note, bond, debenture, or other evidence of indebtedness 43.31secured by a mortgage or other security agreement if: 43.32    (A) the note, bond, debenture, or other evidence of indebtedness is offered and sold 43.33with the mortgage or other security agreement as a unit; 43.34    (B) a general solicitation or general advertisement of the transaction is not made; and 43.35    (C) a commission or other remuneration is not paid or given, directly or indirectly, to 43.36a person not registered under this chapter as a broker-dealer or as an agent; 44.1    (12) a transaction by an executor, administrator of an estate, sheriff, marshal, 44.2receiver, trustee in bankruptcy, guardian, or conservator; 44.3    (13) a sale or offer to sell to: 44.4    (A) an institutional investor; 44.5    (B) an accredited investor; 44.6    (C) a federal covered investment adviser; or 44.7    (D) any other person exempted by rule adopted or order issued under this chapter; 44.8    (14) a sale or an offer to sell securities by an issuer, if the transaction is part of 44.9a single issue in which: 44.10    (A) not more than 35 purchasers are present in this state during any 12 consecutive 44.11months, other than those designated in paragraph (13); 44.12    (B) a general solicitation or general advertising is not made in connection with 44.13the offer to sell or sale of the securities; 44.14    (C) a commission or other remuneration is not paid or given, directly or indirectly, to 44.15a person other than a broker-dealer registered under this chapter or an agent registered 44.16under this chapter for soliciting a prospective purchaser in this state; and 44.17    (D) the issuer reasonably believes that all the purchasers in this state, other than 44.18those designated in paragraph (13), are purchasing for investment. 44.19Any issuer selling to purchasers in this state in reliance on this clause (14) exemption 44.20must provide to the administrator notice of the transaction by filing a statement of issuer 44.21form as adopted by rule. Notice must be filed at least ten days in advance of any sale or 44.22such shorter period as permitted by the administrator. However, an issuer who makes sales 44.23to ten or fewer purchasers in Minnesota during any period of 12 consecutive months is not 44.24required to provide this notice; 44.25    (15) a transaction under an offer to existing security holders of the issuer, including 44.26persons that at the date of the transaction are holders of convertible securities, options, 44.27or warrants, if a commission or other remuneration, other than a standby commission, is 44.28not paid or given, directly or indirectly, for soliciting a security holder in this state. The 44.29person making the offer and effecting the transaction must provide to the administrator 44.30notice of the transaction by filing a written description of the transaction. Notice must be 44.31filed at least ten days in advance of any transaction or such shorter period as permitted by 44.32the administrator; 44.33    (16) an offer to sell, but not a sale, of a security not exempt from registration under 44.34the Securities Act of 1933 if: 45.1    (A) a registration or offering statement or similar record as required under the 45.2Securities Act of 1933 has been filed, but is not effective, or the offer is made in compliance 45.3with Rule 165 adopted under the Securities Act of 1933 (17 C.F.R. 230.165); and 45.4    (B) a stop order of which the offeror is aware has not been issued against the offeror 45.5by the administrator or the Securities and Exchange Commission, and an audit, inspection, 45.6or proceeding that is public and that may culminate in a stop order is not known by the 45.7offeror to be pending; 45.8    (17) an offer to sell, but not a sale, of a security exempt from registration under the 45.9Securities Act of 1933 if: 45.10    (A) a registration statement has been filed under this chapter, but is not effective; 45.11    (B) a solicitation of interest is provided in a record to offerees in compliance with a 45.12rule adopted by the administrator under this chapter; and 45.13    (C) a stop order of which the offeror is aware has not been issued by the administrator 45.14under this chapter and an audit, inspection, or proceeding that may culminate in a stop 45.15order is not known by the offeror to be pending; 45.16    (18) a transaction involving the distribution of the securities of an issuer to the 45.17security holders of another person in connection with a merger, consolidation, exchange 45.18of securities, sale of assets, or other reorganization to which the issuer, or its parent 45.19or subsidiary and the other person, or its parent or subsidiary, are parties. The person 45.20distributing the issuer's securities must provide to the administrator notice of the 45.21transaction by filing a written description of the transaction along with a consent to service 45.22of process complying with section 
         80A.88. Notice must be filed at least ten days in 45.23advance of any transaction or such shorter period as permitted by the administrator; 45.24    (19) a rescission offer, sale, or purchase under section 80A.77;. The person making 45.25the rescission offer must provide to the administrator notice of the transaction by filing a 45.26written description of the transaction and a copy of the record that must be delivered to the 45.27offeree under section 80A.77. Notice must be filed at least ten days in advance of any 45.28rescission offer under section 80A.77 or a shorter period as permitted by the administrator;45.29    (20) an offer or sale of a security to a person not a resident of this state and not 45.30present in this state if the offer or sale does not constitute a violation of the laws of the 45.31state or foreign jurisdiction in which the offeree or purchaser is present and is not part of 45.32an unlawful plan or scheme to evade this chapter; 45.33    (21) employees' stock purchase, savings, option, profit-sharing, pension, or 45.34similar employees' benefit plan, including any securities, plan interests, and guarantees 45.35issued under a compensatory benefit plan or compensation contract, contained in a 45.36record, established by the issuer, its parents, its majority-owned subsidiaries, or the 46.1majority-owned subsidiaries of the issuer's parent for the participation of their employees 46.2including offers or sales of such securities to: 46.3    (A) directors; general partners; trustees, if the issuer is a business trust; officers; 46.4consultants; and advisors; 46.5    (B) family members who acquire such securities from those persons through gifts or 46.6domestic relations orders; 46.7    (C) former employees, directors, general partners, trustees, officers, consultants, and 46.8advisors if those individuals were employed by or providing services to the issuer when 46.9the securities were offered; and 46.10    (D) insurance agents who are exclusive insurance agents of the issuer, or the issuer's 46.11subsidiaries or parents, or who derive more than 50 percent of their annual income from 46.12those organizations. 46.13A person establishing an employee benefit plan under the exemption in this clause 46.14(21) must provide to the administrator notice of the transaction by filing a written 46.15description of the transaction along with a consent to service of process complying with 46.16section 
         80A.88. Notice must be filed at least ten days in advance of any transaction or 46.17such shorter period as permitted by the administrator; 46.18    (22) a transaction involving: 46.19    (A) a stock dividend or equivalent equity distribution, whether the corporation or 46.20other business organization distributing the dividend or equivalent equity distribution is 46.21the issuer or not, if nothing of value is given by stockholders or other equity holders for 46.22the dividend or equivalent equity distribution other than the surrender of a right to a cash 46.23or property dividend if each stockholder or other equity holder may elect to take the 46.24dividend or equivalent equity distribution in cash, property, or stock; 46.25    (B) an act incident to a judicially approved reorganization in which a security is 46.26issued in exchange for one or more outstanding securities, claims, or property interests, or 46.27partly in such exchange and partly for cash; or 46.28    (C) the solicitation of tenders of securities by an offeror in a tender offer in 46.29compliance with Rule 162 adopted under the Securities Act of 1933 (17 C.F.R. 230.162); 46.30    (23) a nonissuer transaction in an outstanding security by or through a broker-dealer 46.31registered or exempt from registration under this chapter, if the issuer is a reporting 46.32issuer in a foreign jurisdiction designated by this paragraph or by rule adopted or order 46.33issued under this chapter; has been subject to continuous reporting requirements in the 46.34foreign jurisdiction for not less than 180 days before the transaction; and the security is 46.35listed on the foreign jurisdiction's securities exchange that has been designated by this 46.36paragraph or by rule adopted or order issued under this chapter, or is a security of the same 47.1issuer that is of senior or substantially equal rank to the listed security or is a warrant or 47.2right to purchase or subscribe to any of the foregoing.  For purposes of this paragraph, 47.3Canada, together with its provinces and territories, is a designated foreign jurisdiction 47.4and The Toronto Stock Exchange, Inc., is a designated securities exchange.  After an 47.5administrative hearing in compliance with chapter 14, the administrator, by rule adopted 47.6or order issued under this chapter, may revoke the designation of a securities exchange 47.7under this paragraph, if the administrator finds that revocation is necessary or appropriate 47.8in the public interest and for the protection of investors; 47.9    (24) any transaction effected by or through a Canadian broker-dealer exempted from 47.10broker-dealer registration pursuant to section 80A.56(b)(3); or 47.11    (25)(A) the offer and sale by a cooperative organized under chapter 308A, or 47.12under the laws of another state, of its securities when the securities are offered and sold 47.13only to its members, or when the purchase of the securities is necessary or incidental to 47.14establishing membership in the cooperative, or when the securities are issued as patronage 47.15dividends. This paragraph applies to a cooperative organized under chapter 308A, or under 47.16the laws of another state, only if the cooperative has filed with the administrator a consent 47.17to service of process under section 80A.88 and has, not less than ten days before the 47.18issuance or delivery, furnished the administrator with a written general description of the 47.19transaction and any other information that the administrator requires by rule or otherwise; 47.20    (B) the offer and sale by a cooperative organized under chapter 308B of its securities 47.21when the securities are offered and sold to its existing members or when the purchase of the 47.22securities is necessary or incidental to establishing patron membership in the cooperative, 47.23or when such securities are issued as patronage dividends. The administrator has the 47.24power to define "patron membership" for purposes of this paragraph. This paragraph 47.25applies to securities, other than securities issued as patronage dividends, only when: 47.26    (i) the issuer, before the completion of the sale of the securities, provides each 47.27offeree or purchaser disclosure materials that, to the extent material to an understanding of 47.28the issuer, its business, and the securities being offered, substantially meet the disclosure 47.29conditions and limitations found in rule 502(b) of Regulation D promulgated by the 47.30Securities and Exchange Commission, Code of Federal Regulations, title 17, section 47.31230.502; and 47.32    (ii) within 15 days after the completion of the first sale in each offering completed in 47.33reliance upon this exemption, the cooperative has filed with the administrator a consent to 47.34service of process under section 80A.88 (or has previously filed such a consent), and has 47.35furnished the administrator with a written general description of the transaction and any 47.36other information that the administrator requires by rule or otherwise; and 48.1(C) a cooperative may, at or about the same time as offers or sales are being 48.2completed in reliance upon the exemptions from registration found in this subpart and as 48.3part of a common plan of financing, offer or sell its securities in reliance upon any other 48.4exemption from registration available under this chapter.  The offer or sale of securities in 48.5reliance upon the exemptions found in this subpart will not be considered or deemed a part 48.6of or be integrated with any offer or sale of securities conducted by the cooperative in 48.7reliance upon any other exemption from registration available under this chapter, nor will 48.8offers or sales of securities by the cooperative in reliance upon any other exemption from 48.9registration available under this chapter be considered or deemed a part of or be integrated 48.10with any offer or sale conducted by the cooperative in reliance upon this paragraph. 48.11    Sec. 46. Minnesota Statutes 2008, section 80A.65, subdivision 6, is amended to read:48.12    Subd. 6. Rescission offer filing fee. The filing of a rescission offer under section 48.1380A.77 80A.46(19), shall be accompanied by the fees as calculated in subdivision 1.48.14    Sec. 47. Minnesota Statutes 2008, section 82.17, is amended by adding a subdivision 48.15to read:48.16    Subd. 1a.Brokerage; business entity."Brokerage" or "business entity" means a 48.17corporation, partnership, limited liability company, limited liability partnership, or other 48.18business structure that holds a real estate broker license.48.19    Sec. 48. Minnesota Statutes 2008, section 82.17, subdivision 15, is amended to read:48.20    Subd. 15. Protective list. "Protective list" means the written list of names and 48.21addresses of prospective purchasersbuyers with whom a licensee has negotiated the sale 48.22or rental of the property or to whom a licensee has exhibited the property before the 48.23expiration of the listing agreement. For the purposes of this subdivision, "property" means 48.24the property that is the subject of the listing agreement in question.48.25    Sec. 49. Minnesota Statutes 2008, section 82.17, is amended by adding a subdivision 48.26to read:48.27    Subd. 20a.Responsible person."Responsible person" means a natural person that 48.28is an officer of a corporation, a partner of a partnership, a general partner of a limited 48.29liability partnership, or a manager of a limited liability company.48.30    Sec. 50. Minnesota Statutes 2008, section 82.19, is amended to read:48.3182.19 COMPENSATION.49.1    Subdivision 1. Licensee to receive only from broker. A licensee shall not 49.2accept a commission, compensation, referral fee, or other valuable consideration for the 49.3performance of any acts requiring a real estate license from any person except the real 49.4estate broker to whom the licensee is licensed or to whom the licensee was licensed at the 49.5time of the transaction.49.6    Subd. 1a.Commission-splitting, rebates, referral fee, and fees.(a) In connection 49.7with a real estate or business opportunity transaction, a real estate broker or real estate 49.8salesperson shall not offer, pay, or give, and a person shall not accept, any compensation 49.9or other thing of value from a real estate broker or real estate salesperson by way of 49.10commission-splitting, rebate, referral fees, finder's fees, or otherwise.49.11(b) This subdivision does not apply to transactions:49.12(1) between a licensed real estate broker or salesperson and the parties to the 49.13transaction;49.14(2) among persons licensed as provided in this chapter;49.15(3) between a licensed real estate broker or salesperson and persons from other 49.16jurisdictions similarly licensed in that jurisdiction;49.17(4) involving timeshare or other recreational lands where the amount offered or paid 49.18does not exceed $150, and payment is not conditioned upon any sale but is made merely 49.19for providing the referral and the person paying the fee is bound by any representations 49.20made by the person receiving the fee; and49.21(5) involving a person who receives a referral fee from a person or an agent of a 49.22person licensed under this section, provided that in any 12-month period, no recipient may 49.23earn more than the value of one month's rent, that the recipient is a resident of the property 49.24or has lived there within 60 days of the payment of the fee, and that the person paying the 49.25fee is bound by any representations made by the recipient of the fee.49.26    Subd. 2. Undisclosed compensation. A licensee shall not accept, give, or charge 49.27any undisclosed compensation or realize any direct or indirect remuneration that inures to 49.28the benefit of the licensee on an expenditure made for a principal.49.29    Subd. 2a.Sharing of compensation with other brokers.The seller may, in 49.30the listing agreement, authorize the seller's broker to disburse part of the broker's 49.31compensation to other brokers, including the buyer's brokers solely representing the buyer.49.32    Subd. 3. Limitation on broker when transaction not completed. When the owner 49.33fails or is unable to consummate a real estate transaction, through no fault of the purchaser, 49.34the listing broker may not claim any portion of any trust funds deposited with the broker 49.35by the purchaser, absent a separate agreement with the purchaser.50.1    Subd. 3a.Directing payment of compensation.A licensed real estate broker 50.2or salesperson may assign or direct that commissions or other compensation earned in 50.3connection with a real estate or business opportunity transaction be paid to a corporation, 50.4limited liability company, or sole proprietorship of which the licensed real estate broker 50.5or salesperson is the sole owner.50.6    Subd. 3b.Closing agent fee.A real estate closing agent may not charge a fee for 50.7closing services to a borrower, and a borrower may not be required to pay such a fee at 50.8settlement, if the fee was not previously disclosed in writing at least one business day 50.9before the settlement. This disclosure requirement is satisfied if a disclosure is made or 50.10an estimate given under section 507.45.50.11    Sec. 51. Minnesota Statutes 2008, section 82.21, subdivision 2, is amended to read:50.12    Subd. 2. Listing agreements. (a) Requirement. Licensees shall obtain a signed 50.13listing agreement or other signed written authorization from the owner of real property or 50.14from another person authorized to offer the property for sale or lease before advertising to 50.15the general public that the real property is available for sale or lease. 50.16For the purposes of this section "advertising" includes placing a sign on the owner's 50.17property that indicates that the property is being offered for sale or lease.50.18(b) Contents. All listing agreements must be in writing and must include: 50.19(1) a definite expiration date;50.20(2) a description of the real property involved;50.21(3) the list price and any terms required by the seller;50.22(4) the amount of any compensation or commission or the basis for computing 50.23the commission;50.24(5) a clear statement explaining the events or conditions that will entitle a broker to 50.25a commission;50.26(6) a clear statement explaining if the agreement may be canceled and the terms 50.27under which the agreement may be canceled;50.28(6)(7) information regarding an override clause, if applicable, including a statement 50.29to the effect that the override clause will not be effective unless the licensee supplies the 50.30seller with a protective list within 72 hours after the expiration of the listing agreement;50.31(7)(8) the following notice in not less than ten point boldface type immediately 50.32preceding any provision of the listing agreement relating to compensation of the licensee:50.33"NOTICE: THE COMPENSATION FOR THE SALE, LEASE, RENTAL, OR 50.34MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN 50.35EACH INDIVIDUAL BROKER AND THE BROKER'S CLIENT.";51.1(8)(9) for residential property listings, the following "dual agency" disclosure 51.2statement:51.3If a buyer represented by broker wishes to buy the seller's property, a dual agency 51.4will be created. This means that broker will represent both the seller(s) and the buyer(s), 51.5and owe the same duties to the buyer(s) that broker owes to the seller(s). This conflict 51.6of interest will prohibit broker from advocating exclusively on the seller's behalf. Dual 51.7agency will limit the level of representation broker can provide. If a dual agency should 51.8arise, the seller(s) will need to agree that confidential information about price, terms, and 51.9motivation will still be kept confidential unless the seller(s) instruct broker in writing to 51.10disclose specific information about the seller(s). All other information will be shared. 51.11Broker cannot act as a dual agent unless both the seller(s) and the buyer(s) agree to it. By 51.12agreeing to a possible dual agency, the seller(s) will be giving up the right to exclusive 51.13representation in an in-house transaction. However, if the seller(s) should decide not to 51.14agree to a possible dual agency, and the seller(s) want broker to represent the seller(s), the 51.15seller(s) may give up the opportunity to sell the property to buyers represented by broker.51.16Seller's Instructions to Broker51.17Having read and understood this information about dual agency, seller(s) now 51.18instructs broker as follows:

51.1951.20
                     							.....
                     						Seller(s) will agree to a dual agency representation and will consider 
                  		offers made by buyers represented by broker.51.2151.22
                     							.....
                     						Seller(s) will not agree to a dual agency representation and will not 
                  		consider offers made by buyers represented by broker.

51.23
                     							.....
                     						
                     							.....
                     						51.24SellerReal Estate Company Name51.25
                     							.....
                     						By:
                     							.....
                     						51.26SellerSalesperson51.27Date : 
                     							.....
                     						;

51.28(9)(10) a notice requiring the seller to indicate in writing whether it is acceptable to 51.29the seller to have the licensee arrange for closing services or whether the seller wishes to 51.30arrange for others to conduct the closing; and51.31(10)(11) for residential listings, a notice stating that after the expiration of the 51.32listing agreement, the seller will not be obligated to pay the licensee a fee or commission 51.33if the seller has executed another valid listing agreement pursuant to which the seller is 51.34obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of 51.35the real property in question. This notice may be used in the listing agreement for any 51.36other type of real estate.52.1(c) Prohibited provisions. Except as otherwise provided in paragraph (d), clause 52.2(2), licensees shall not include in a listing agreement a holdover clause, automatic 52.3extension, or any similar provision, or an override clause the length of which is more than 52.4six months after the expiration of the listing agreement.52.5(d) Override clauses. (1) Licensees shall not seek to enforce an override clause 52.6unless a protective list has been furnished to the seller within 72 hours after the expiration 52.7of the listing agreement.52.8(2) A listing agreement may contain an override clause of up to two years in length 52.9when used in conjunction with the purchase or sale of a business. The length of the 52.10override clause must be negotiable between the licensee and the seller of the business. The 52.11protective list provided in connection with the override clause must include the written 52.12acknowledgment of each party named on the protective list, that the business which is the 52.13subject of the listing agreement was presented to that party by the licensee.52.14(e) Protective lists. A broker or salesperson has the burden of demonstrating that 52.15each person on the protective list has, during the period of the listing agreement, either 52.16made an affirmative showing of interest in the property by responding to an advertisement 52.17or by contacting the broker or salesperson involved or has been physically shown the 52.18property by the broker or salesperson. For the purpose of this section, the mere mailing or 52.19other distribution by a licensee of literature setting forth information about the property in 52.20question does not, of itself, constitute an affirmative showing of interest in the property on 52.21the part of a subsequent purchaser.52.22For listings of nonresidential real property which do not contain the notice described 52.23in paragraph (b), clause (10) (11), the protective list must contain the following notice in 52.24boldface type:52.25"IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE 52.26PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME 52.27APPEARS ON THIS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS 52.28TO BOTH BROKERS. IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK 52.29COMPETENT ADVICE."52.30    Sec. 52. Minnesota Statutes 2008, section 82.24, subdivision 3, is amended to read:52.31    Subd. 3. Broker payment consolidation. For all license renewal fees, recovery 52.32fund renewal fees, and recovery fund assessments pursuant to this section and section 52.3382.43
         , the broker must remit the fees or assessments for the company, broker, and all 52.34salespersons licensed to the broker, in the form of a single check payment.  53.1    Sec. 53. Minnesota Statutes 2008, section 82.29, subdivision 4, is amended to read:53.2    Subd. 4. Broker's examination. (a) The examination for a real estate broker's 53.3license shall be more exacting than that for a real estate salesperson, and shall require a 53.4higher degree of knowledge of the fundamentals of real estate practice and law.53.5(b) Every application for a broker's examination shall be accompanied by proof that 53.6the applicant has had a minimum of two years of actual experience within the previous 53.7five-year period prior to application as a licensed real estate salesperson in this or in 53.8another state having comparable requirements or is, in the opinion of the commissioner, 53.9otherwise or similarly qualified by reason of education or practical experience. The 53.10applicant shall have completed educational requirements in accordance with subdivision 8. 53.11(c) An applicant for a limited broker's license pursuant to section 
         82.34, subdivision 53.1213
         , shall not be required to have a minimum of two years of actual experience as a real 53.13estate person in order to obtain a limited broker's license to act as principal only. 53.14    Sec. 54. Minnesota Statutes 2008, section 82.29, subdivision 5, is amended to read:53.15    Subd. 5. Waivers. The commissioner may waivegrant a waiver of the real estate 53.16licensing experience requirement for the broker's examination to a qualified applicant for 53.17a waiver.53.18(a) AnA qualified applicant for a waiver shall provide evidence of is an individual 53.19who:53.20(1) successful completion of a minimum of 90 quarter credits or 270 classroom 53.21hours of real estate-related studies has a degree in real estate from an accredited college 53.22or university;53.23(2) a minimum of five consecutive years of practical experience in real estate-related 53.24areas is a licensed practicing attorney whose practice involves real estate law; or53.25(3) successful completion of 30 credits or 90 classroom hours and three consecutive 53.26years of practical experience in real estate-related areas is a public officer whose official 53.27duties involve real estate law or real estate transactions.53.28(b) A request for a waiver shall be submitted to the commissioner in writing on a 53.29form prescribed by the commissioner and be accompanied by documents necessary to 53.30evidence qualification as set forth in paragraph (a).53.31(c) The waiver will lapse if the applicant fails to successfully complete the broker's 53.32examination within one year from the date of the granting of the waiver.53.33    Sec. 55. Minnesota Statutes 2008, section 82.29, subdivision 8, is amended to read:54.1    Subd. 8. Instruction; new licenses. (a) Every An applicant for a salesperson's 54.2license shall be required to successfully complete a course of study in the real estate field 54.3consisting of 30 hours of instruction approved by the commissioner before taking the 54.4examination specified in subdivision 1. Every An applicant for a salesperson's license 54.5shall be required to successfully complete an additional course of study in the real estate 54.6field consisting of 60 hours of instruction approved by the commissioner, of which three 54.7hours shall consist of training in state and federal fair housing laws, regulations, and 54.8rules, and of which two hours must consist of training in laws and regulations on agency 54.9representation and disclosure, before filing an application for the license. This subdivision 54.10does not apply to salespeople licensed in Minnesota before July 1, 1969.54.11(b) An applicant for a broker's license must successfully complete a course of study 54.12in the real estate field consisting of 30 hours of instruction approved by the commissioner, 54.13of which three hours shall consist of training in state and federal fair housing laws, 54.14regulations, and rules. The course must have been completed within 12 months prior to 54.15the date of application for the broker's license.54.16(c) An applicant for a real estate closing agent's license must successfully complete 54.17a course of study relating to closing services consisting of eight hours of instruction 54.18approved by the commissioner.54.19    Sec. 56. Minnesota Statutes 2008, section 82.31, subdivision 1, is amended to read:54.20    Subdivision 1. Qualification of applicants.Every An applicant for a real estate 54.21broker,or real estate salesperson, or real estate closing agent license shall be at least 18 54.22years of age at the time of making application for said license.54.23    Sec. 57. Minnesota Statutes 2008, section 82.31, subdivision 2, is amended to read:54.24    Subd. 2. Application for license; contents. (a) Every An applicant for a license 54.25as a real estate broker,or real estate salesperson, or closing agent shall make an 54.26application in writing upon forms prepared and furnishedthe format prescribed by the 54.27commissioner. Each The application shall be signed and sworn to by the applicant and 54.28shall be accompanied by the license fee required by this chapter.54.29(b) Each application for a real estate broker license,or real estate salesperson 54.30license, or real estate closing agent license shall contain such information as required 54.31by the commissioner consistent with the administration of the provisions and purposes 54.32of this chapter.55.1(c) Each The application for a real estate salesperson license shall give the applicant's 55.2legal name, age, residence address, and the name and place of business of the real estate 55.3broker on whose behalf the salesperson is to be acting.55.4(d) Each application for a real estate closing agent license shall give the applicant's 55.5name, age, residence address, and the name and place of business of the closing agent.55.6(e)(d) The commissioner may require such further information as the commissioner 55.7deems appropriate to administer the provisions and further the purposes of this chapter.55.8(f) Applicants (e) An applicant for a real estate salesperson license shall submit 55.9to the commissioner, along with the application for licensure, a copy of the course 55.10completion certificate for courses I, II, and III and passing examination results.55.11    Sec. 58. Minnesota Statutes 2009 Supplement, section 82.31, subdivision 4, is 55.12amended to read:55.13    Subd. 4. Corporate and partnership Business entity; brokerage licenses.55.14(a) A corporation business entity applying for a license shall have at least one officer55.15responsible person individually licensed to act as broker for the corporation brokerage. 55.16The corporation business entity broker's license shall extend no authority to act as broker 55.17to any person other than the corporate business entity. Each officer responsible person55.18who intends to act as a broker shall obtain a license.55.19(b) A partnership business entity applying for a license shall have at least one partner55.20responsible person individually licensed to act as broker for the partnership business entity. 55.21Each partner responsible person who intends to act as a broker shall obtain a license.55.22(c) Applications An application for a business entity license made by a corporation 55.23shall be verified by the president and one other officer. Applications made by a partnership55.24shall be verified by at least two partners responsible persons for the business entity.55.25(d) Any partner or officer A responsible person who ceases to act as broker for 55.26a partnership or corporation business entity shall notify the commissioner upon said 55.27termination. The individual licenses of all salespersons acting on behalf of a corporation 55.28or partnership,brokerage are automatically ineffective upon the revocation or suspension 55.29of the license of the partnership or corporation brokerage. The commissioner may suspend 55.30or revoke the license of an officer or partner a responsible person licensee without 55.31suspending or revoking the license of the corporation or partnership business entity.55.32(e) The application of all officersresponsible persons of a corporation or partners 55.33in a partnership business entity who intend to act as a broker brokers on behalf of a 55.34corporation or partnership business entity shall accompany the initial license application 55.35of the corporation or partnership business entity. Officers or partners Responsible persons56.1intending to act as brokers subsequent to the licensing of the corporation or partnership56.2business entity shall procure an individual real estate broker's license prior to acting in the 56.3capacity of a broker. No corporate officer, or partner, responsible person who maintains a 56.4salesperson's license may exercise any authority over any trust account administered by 56.5the broker nor may they be vested with any supervisory authority over the broker.56.6(f) The corporation or partnership business entity applicant shall make available 56.7upon request, such records and data required by the commissioner for enforcement 56.8of this chapter.56.9(g) The commissioner may require further information, as the commissioner deems 56.10appropriate, to administer the provisions and further the purposes of this chapter.56.11    Sec. 59. Minnesota Statutes 2009 Supplement, section 82.32, is amended to read:56.1282.32 LICENSING: CONTINUING EDUCATION AND INSTRUCTION.56.13(a) All real estate salespersons and all real estate brokers shall be required to 56.14successfully complete 30 hours of real estate continuing education, either as a student or 56.15a lecturer, in courses of study approved by the commissioner, during the initial license 56.16period and during each succeeding 24-month license period. At least 15 of the 30 credit 56.17hours must be completed during the first 12 months of the 24-month licensing period. 56.18Licensees may not claim credit for continuing education not actually completed as of the 56.19date their report of continuing education compliance is filed.56.20(b) The commissioner may adopt rules defining the standards for course and 56.21instructor approval, and may adopt rules for the proper administration of prelicense 56.22instruction as required under section 
         82.29, subdivision 8, and continuing education as 56.23required under this section and sections 
         82.29; 
         82.31, subdivisionssubdivision 5 and 6; 56.2482.33, subdivisions 1 and 4
          to 6; and 
         82.44. The commissioner may not approve a course 56.25which can be completed by the student at home or outside the classroom without the 56.26supervision of an instructor except accredited courses using new delivery technology, 56.27including interactive technology, and the Internet. The commissioner may approve 56.28courses of study in the real estate field offered in educational institutions of higher learning 56.29in this state or courses of study in the real estate field developed by and offered under 56.30the auspices of the National Association of Realtors, its affiliates, or private real estate 56.31schools. Courses in motivation, salesmanship, psychology, or time management shall not 56.32be approved by the commissioner for continuing education credit. The commissioner may 56.33approve courses in any other subjects, including, but not limited to, communication, 56.34marketing, negotiation, and technology for continuing education credit. 57.1(c) As part of the continuing education requirements of this section and sections 57.282.29
         ; 
         82.31, subdivisions 5 and 6; 
         82.33, subdivisions 1 and 4 to 6; and 
         82.44, the 57.3commissioner shall require that all real estate brokers and salespersons receive: 57.4(1) at least one hour of training during each license period in courses in laws or 57.5regulations on agency representation and disclosure; and57.6(2) at least one hour of training during each license period in courses in state and 57.7federal fair housing laws, regulations, and rules, other antidiscrimination laws, or courses 57.8designed to help licensees to meet the housing needs of immigrant and other underserved 57.9populations.57.10Clauses (1) and (2) do not apply to real estate salespersons and real estate brokers 57.11engaged solely in the commercial real estate business who file with the commissioner 57.12a verification of this status along with the continuing education report required under 57.13paragraph (a).57.14(d) The commissioner is authorized to establish a procedure for renewal of course 57.15accreditation.57.16(e) Approved continuing education courses may be sponsored or offered by a broker 57.17of a real estate company and may be held on the premises of a company licensed under 57.18this chapter. All continuing education course offerings must be open to any interested 57.19individuals. Access may be restricted by the education provider based on class size 57.20only. Courses must not be approved if attendance is restricted to any particular group of 57.21people. A broker must comply with all continuing education rules prescribed by the 57.22commissioner. The commissioner shall not approve any prelicense instruction courses 57.23offered by, sponsored by, or affiliated with any person or company licensed to engage in 57.24the real estate business.57.25(f) Credit may not be earned if the licensee has previously obtained credit for the 57.26same course as either a student or instructor during the same licensing period.57.27(g) The real estate education course completion certificate must be in the form set 57.28forth by the commissioner. Students are responsible for maintaining copies of course 57.29completion certificates.57.30(h) An approved prelicense 30-hour broker course may be used for continuing 57.31education credit by a real estate salesperson or broker if the course is completed during 57.32the appropriate licensing period.57.33    Sec. 60. Minnesota Statutes 2008, section 82.33, subdivision 1, is amended to read:57.34    Subdivision 1. Duration.No The renewal of a salesperson's license shall be is not57.35effective beyond a date two years after the granting of such the salesperson's license unless 58.1the salesperson has furnished evidence of compliance with section 
         82.29, subdivision 8. 58.2The commissioner shall cancel the license of any a salesperson who fails to comply with 58.3section 
         82.29, subdivision 8. This subdivision shall not apply to salespeople licensed in 58.4Minnesota prior to July 1, 1969.58.5    Sec. 61. Minnesota Statutes 2008, section 82.33, is amended by adding a subdivision 58.6to read:58.7    Subd. 1a.Broker's responsibility.(a) A broker shall renew the license of each 58.8eligible salesperson who is and will continue to be associated with the broker. For 58.9the purposes of this subdivision, an eligible salesperson is one who has demonstrated 58.10compliance with all renewal requirements before June 15 of the renewal year.58.11(b) When a broker does not intend to renew the license of an eligible salesperson 58.12who is associated with the broker, the broker must notify the salesperson in writing 30 58.13days before June 15 of the renewal year.58.14(c) When the broker responsible for the salesperson's license renewal does not renew 58.15an eligible salesperson's license before the renewal deadline, the broker shall pay on the 58.16salesperson's behalf any additional higher license fees that result.58.17    Sec. 62. Minnesota Statutes 2008, section 82.33, subdivision 2, is amended to read:58.18    Subd. 2. Timely renewals.PersonsA person whose applications haveapplication 58.19for a license renewal has not been properly and timely filed and who havehas not received 58.20notice of denialapproval of renewal are deemed to have been approved for renewal and58.21may not continue to transact business either as a real estate broker, salesperson, or closing 58.22agent whether or not the renewed license has been received on or before July 1after June 58.2330 of the renewal year until approval of renewal is received. Application for renewal of a 58.24license shall be deemed to have been is timely filed if received by the commissioner by, or 58.25mailed with proper postage and postmarked by,:58.26(1) all requirements for renewal, including continuing education requirements, 58.27have been completed by June 15 of the renewal year. Applications for renewal shall be 58.28deemed properly filed if made; and58.29(2) the application is submitted before the renewal deadline in the manner 58.30prescribed by the commissioner upon forms duly executed and sworn to, accompanied 58.31by fees prescribed by this chapter, and containcontaining any information which the 58.32commissioner may require requires.58.33    Sec. 63. Minnesota Statutes 2008, section 82.34, subdivision 1, is amended to read:59.1    Subdivision 1. Generally. (a) The commissioner shall issue a license as a real estate 59.2broker,or real estate salesperson, or closing agent to any person who qualifies for such59.3the license under the terms of this chapter.59.4(b) The commissioner is authorized to establish by rule a special license for real 59.5estate brokers and real estate salespeople engaged solely in the rental or management of 59.6an interest or estate in real estate, to prescribe qualifications for the license, and to issue 59.7the license consistent with the terms of this chapter. This clause shall not be construed to 59.8require those owners or managers or their agents or employees who are excluded by section 59.982.23
         , clause (d), from the definition of real estate broker, to obtain the special license.  59.10    Sec. 64. Minnesota Statutes 2008, section 82.34, subdivision 2, is amended to read:59.11    Subd. 2. Additional broker's license. An individual who holds a broker's license 59.12in his or her the broker's own name or for or on behalf of a corporation or partnership59.13business entity must be issued an additional broker's license only upon demonstrating:59.14(1) that the additional license is necessary in order to serve a legitimate business 59.15purpose; 59.16(2) that the broker will be capable of supervising all salespersons over whom he or 59.17she the broker will have supervisory responsibility or, in the alternative, that the broker 59.18will have no supervisory responsibilities under the additional license; and 59.19(3) that the broker:59.20(i) has a substantialat least 51 percent ownership interest in each corporation or 59.21partnershipbusiness entity for or on whose behalf he or she the broker holds or will 59.22hold a broker's license.; or59.23(ii) is an elected or appointed officer, signing partner, or managing member of both 59.24the business entity for which or on whose behalf the broker already holds a license, and 59.25an affiliated business entity for which or on whose behalf the broker is applying for an 59.26additional license.59.27The requirement of a substantial ownership interest does not apply where the broker 59.28seeking the additional license or licenses is an officer of a corporation for or on whose 59.29behalf the broker already holds a license and the broker is applying for the additional 59.30license or licenses for or on behalf of an affiliated corporation or corporations of which he 59.31or she is also an officer. For the purpose of this section and sections 
         82.31, subdivisions 1 59.32to 4
         ; 
         82.33, subdivisions 1 to 3; 
         82.35, subdivision 2; and 
         82.39, "affiliated corporation59.33business entity" means a corporation which is directly or indirectly controlledbusiness 59.34entity that is majority-owned by the same persons as the corporationbusiness entity for 59.35which or on whose behalf the broker is already licensed to act.  60.1For the purposes of this section and sections 
         82.31, subdivisions 1 to 4; 
         82.33, 60.2subdivisions 1 to 3
         ; 
         82.35, subdivision 2; and 
         82.39, a legitimate business purpose 60.3includes engaging in a different and specialized area of real estate or maintaining an 60.4existing business name.  60.5    Sec. 65. Minnesota Statutes 2008, section 82.34, subdivision 4, is amended to read:60.6    Subd. 4. Issuance of license; salesperson. A salesperson must be licensed to act 60.7on behalf of a licensed broker and may not be licensed to act on behalf of more than 60.8one broker in this state during the same period of time. The license of each real estate 60.9salesperson shall be mailed to and remain in the possession of the licensed broker with 60.10whom the salesperson is or is to be associated until canceled or until such licensee leaves 60.11such broker.60.12    Sec. 66. Minnesota Statutes 2008, section 82.34, subdivision 5, is amended to read:60.13    Subd. 5. Effective date of license.Licenses A license renewed pursuant to this 60.14chapter are is valid for a period of 24 months. New licenses A new license issued during a 60.1524-month licensing period will expire on June 30 of the expiration year assigned to the 60.16license. Implementation of the 24-month licensing program must be staggered so that 60.17approximately one-half of the licenses will expire on June 30 of each even-numbered year 60.18and the other one-half on June 30 of each odd-numbered year. Those licensees who will 60.19receive a 12-month license on July 1, 1995, because of the staggered implementation 60.20schedule will pay for the license a fee reduced by an amount equal to one-half the fee 60.21for renewal of the license.60.22    Sec. 67. Minnesota Statutes 2008, section 82.34, subdivision 13, is amended to read:60.23    Subd. 13. Limited broker's license.(a) The commissioner shall have the authority 60.24to issue a limited real estate broker's license authorizing the licensee to engage in 60.25transactions as principal only. Such license shall be issued only after receipt of the 60.26application described in section 82.31, subdivision 2, and payment of the fee prescribed 60.27by section 82.24, subdivision 1. No salesperson may be licensed to act on behalf of an 60.28individual holding a limited broker's license. An officer of a corporation or partner of a 60.29partnership licensed as a limited broker may act on behalf of that corporation or partnership 60.30without being subject to the licensing requirements. following limited activities:60.31(b) A limited broker's license shall also authorize the licensee to engage in 60.32negotiation of mortgage loans, other than residential mortgage loans, as described in 60.33section 82.17, subdivision 18, clause (b).  61.1(1) the licensee to engage in transactions as principal only; or61.2(2) the licensee to engage in negotiations of mortgage loans, other than residential 61.3mortgage loans, as described in section 82.17, subdivision 18, clause (b).61.4The license may be issued only after receipt of the application described in section 61.582.31, subdivision 2, and payment of the fee prescribed by section 82.24, subdivision 1. A 61.6salesperson may not be licensed to act on behalf of an individual holding a limited broker's 61.7license. A responsible person of a business entity licensed as a limited broker may act on 61.8behalf of that business entity without being subject to the licensing requirements.61.9    Sec. 68. Minnesota Statutes 2008, section 82.39, is amended to read:61.1082.39 NOTICE TO COMMISSIONER.61.11    Subdivision 1. Notice Change of application information. Notice in writing 61.12or in the format prescribed by the commissioner shall be given to the commissioner by 61.13each a licensee of any change inof information contained in the license application on file 61.14with the commissioner, including but not limited to personal name, trade name, address or 61.15business location not later than ten days after such the change. The commissioner shall 61.16issue a new license if required for the unexpired period.61.17    Subd. 2. Mandatory.Licensees The licensee shall notify the commissioner in 61.18writing or in the format prescribed by the commissioner within ten days of the facts in 61.19subdivisions 3 to 5.61.20    Subd. 3. Civil judgment.Licensees The licensee must notify the commissioner 61.21in writing within ten days of a final adverse decision or order of a court, whether or not 61.22the decision or order is appealed, regarding any proceeding in which the licensee was 61.23named as a defendant, and which alleged fraud, misrepresentation, or the conversion of 61.24funds, if the final adverse decision relates to the allegations of fraud, misrepresentation, or 61.25the conversion of funds.61.26    Subd. 4. Disciplinary action. The licensee must notify the commissioner in writing 61.27within ten days of the suspension or revocation of the licensee's real estate or other 61.28occupational license issued by this state or another jurisdiction.61.29    Subd. 5. Criminal offense. The licensee must notify the commissioner in writing 61.30within ten days if the licensee is charged with, adjudged guilty of, or enters a plea of 61.31guilty or nolo contendere to a charge of any felony, or of any gross misdemeanor alleging 61.32fraud, misrepresentation, conversion of funds, or a similar violation of any real estate 61.33licensing law.61.34    Sec. 69. Minnesota Statutes 2008, section 82.41, subdivision 1, is amended to read:62.1    Subdivision 1. License required. No person shall act as a real estate broker,62.2or real estate salesperson, or real estate closing agent unless licensed as herein provided62.3in this section.62.4    Sec. 70. Minnesota Statutes 2008, section 82.41, subdivision 2, is amended to read:62.5    Subd. 2. Misrepresenting status as licensee. No persons shall advertise or 62.6represent themselves to be real estate brokers, salespeople, or closing agents or real estate 62.7salespersons unless licensed as herein provided in this section.62.8    Sec. 71. Minnesota Statutes 2008, section 82.41, is amended by adding a subdivision 62.9to read:62.10    Subd. 3a.Limitation on broker when transaction not completed.When the 62.11owner fails or is unable to consummate a real estate transaction, through no fault of the 62.12purchaser, the listing broker may not claim any portion of any trust funds deposited with 62.13the broker by the purchaser, absent a separate agreement with the purchaser.62.14    Sec. 72. Minnesota Statutes 2008, section 82.45, subdivision 3, is amended to read:62.15    Subd. 3. Retention. A licensed real estate broker shall retain for threesix years 62.16copies of all listings, buyer representation and facilitator services contracts, deposit 62.17receipts, purchase money contracts, canceled checks, trust account records, and such 62.18other documents as may reasonably be related to carrying on a real estate brokerage 62.19business. The retention period shall run from the date of the closing of the transaction, 62.20or from the date of the document if the document is not consummated. The following 62.21documents need not be retained:62.22(1) agency disclosure forms provided to prospective buyers or sellers, where no 62.23contractual relationship is subsequently created and no services are provided by the 62.24licensee; and62.25(2) facilitator services contracts or buyer representation contracts entered into with 62.26prospective buyers, where the prospective buyer abandons the contractual relationship 62.27before any services have been provided by the licensee.62.28    Sec. 73. Minnesota Statutes 2008, section 82.45, is amended by adding a subdivision 62.29to read:62.30    Subd. 4.Storage.Storage of documents identified in subdivision 3 may be stored 62.31by electronic means.63.1    Sec. 74. Minnesota Statutes 2008, section 82.45, is amended by adding a subdivision 63.2to read:63.3    Subd. 5.Destruction.After the retention period specified in subdivision 3 has 63.4elapsed and the broker no longer wishes to retain the documents, the broker must ensure 63.5that the documents are disposed of according to the confidential record destruction 63.6procedures of the Fair and Accurate Credit Transaction Act of 2003, Public Law 108-159.63.7    Sec. 75. Minnesota Statutes 2008, section 82.48, subdivision 2, is amended to read:63.8    Subd. 2. Penalty for noncompliance. The methods, acts, or practices set forth in 63.9subdivisions 1 and 3 and sections 
         82.19; 
         82.22; 
         82.27; 
         82.31, subdivision 6;82.37; and 63.1082.41, subdivision 11
         , are standards of conduct governing the activities of real estate 63.11brokers and salespersons. Failure to comply with these standards shall constitute grounds 63.12for license denial, suspension, or revocation, or for censure of the licensee. 63.13    Sec. 76. Minnesota Statutes 2008, section 82.48, subdivision 3, is amended to read:63.14    Subd. 3. Responsibilities of brokers. (a) Supervision of personnel.Brokers A 63.15broker shall adequately supervise the activities of their the broker's salespersons and 63.16employees. Supervision includes the ongoing monitoring of listing agreements, purchase 63.17agreements, other real estate-related documents which are prepared or drafted by the 63.18broker's salespersons or employees or which are otherwise received by the broker's office, 63.19and the review of all trust account books and records. If an individual broker maintains 63.20more than one place of business, each place of business shall be under the broker's direction 63.21and supervision. If a partnership or corporate brokerbrokerage maintains more than one 63.22place of business, each place of business shall be under the direction and supervision of an 63.23individual broker licensed to act on behalf of the partnership or corporation brokerage. 63.24The primary broker shall maintain records specifying the name of each broker 63.25responsible for the direction and supervision of each place of business. If an individual 63.26broker, who may be the primary broker, is responsible for supervising more than one 63.27place of business, the primary broker shall, upon written request of the commissioner, 63.28file a written statement specifying the procedures which have been established to ensure 63.29that all salespersons and employees are adequately supervised. Designation of another 63.30broker to supervise a place of business does not relieve the primary broker of the ultimate 63.31responsibility for the actions of licensees.63.32(b)  Preparation and safekeeping of documents.Brokers shall be A broker is63.33responsible for the preparation, custody, safety, and accuracy of all real estate contracts, 64.1documents, and records, even though another person may be assigned these duties by 64.2the broker. 64.3(c)  Documentation and resolution of complaints.Brokers A broker shall 64.4investigate and attempt to resolve complaints made regarding the practices of any 64.5individual licensed to them the broker and shall maintain, with respect to each individual 64.6licensed to them the broker, a complaint file containing all material relating to any 64.7complaints received in writing for a period of three years. 64.8(d)  Disclosure of listed property information. A broker may allow any unlicensed 64.9person, who is authorized by the broker, to disclose any factual information pertaining 64.10to the properties listed with the broker, if the factual information is provided to the 64.11unlicensed person in written form by the broker representing or assisting the seller(s). 64.12    Sec. 77. [82.52] ADVERTISING REQUIREMENTS.64.13A licensee shall identify himself or herself as either a broker or an agent salesperson 64.14in any advertising for the purchase, sale, lease, exchange, mortgaging, transfer, or other 64.15disposition of real property, whether the advertising pertains to the licensee's own property 64.16or the property of others.64.17If a salesperson or broker is part of a team or group within the brokerage, the licensee 64.18may include the team or group name in the advertising only under the following conditions:64.19(1) the inclusion of the team or group name is authorized by the primary broker of 64.20the brokerage to which the salesperson or broker is licensed; and64.21(2) the real estate brokerage name is included and more prominently displayed than 64.22the team or group name in the advertising.64.23    Sec. 78. [82.53] REAL ESTATE CLOSING AGENT LICENSING.64.24    Subdivision 1.Generally.The commissioner shall issue a license as a closing agent 64.25to a person who qualifies for the license under the terms of this chapter.64.26    Subd. 2.Qualification of applicants.An applicant for a real estate closing agent 64.27license must be at least 18 years of age at the time of making application for the license.64.28    Subd. 3.Application for license; contents.(a) An applicant for a real estate closing 64.29agent license shall make an application in the format prescribed by the commissioner. The 64.30application must be accompanied by the license fee required by this chapter.64.31(b) An application for a real estate closing agent license must contain the information 64.32required by the commissioner consistent with this chapter.64.33(c) An application for a real estate closing agent license shall give the applicant's 64.34legal name, age, residence address, and the name and place of business of the closing agent.65.1(d) The commissioner may require further information the commissioner considers 65.2appropriate to administer this chapter.65.3    Subd. 4.Instruction.An applicant for a real estate closing agent's license must 65.4successfully complete a course of study relating to closing services consisting of eight 65.5hours of instruction approved by the commissioner.65.6    Subd. 5.Change of application information.The commissioner must be notified 65.7in the format prescribed by the commissioner of a change of information contained in the 65.8license application on file with the commissioner within ten days of the change.65.9    Subd. 6.Exemption.The following persons, when acting as closing agents, are 65.10exempt from the requirements of sections 82.41 and 82.50 unless otherwise required 65.11in this chapter:65.12(1) a direct employee of a title insurance company authorized to do business in this 65.13state, or a direct employee of a title company, or a person who has an agency agreement 65.14with a title insurance company or a title company in which the agent agrees to perform 65.15closing services on the title insurance company's or title company's behalf and the title 65.16insurance company or title company assumes responsibility for the actions of the agent as 65.17if the agent were a direct employee of the title insurance company or title company;65.18(2) a licensed attorney or a direct employee of a licensed attorney;65.19(3) a licensed real estate broker or salesperson;65.20(4) a direct employee of a licensed real estate broker if the broker maintains all funds 65.21received in connection with the closing services in the broker's trust account;65.22(5) a bank, trust company, savings association, credit union, industrial loan and thrift 65.23company, regulated lender under chapter 56, public utility, or land mortgage or farm loan 65.24association organized under the laws of this state or the United States, when engaged in 65.25the transaction of businesses within the scope of its corporate powers as provided by law;65.26(6) a title insurance company authorized to do business in this state; and65.27(7) a title company that has a contractual agency relationship with a title insurance 65.28company authorized to do business in this state, where the title insurance company 65.29assumes responsibility for the actions of the title company and its employees or agents as 65.30if they were employees or agents of the title insurance company.65.31    Sec. 79. [82.54] OTHER DISCLOSURE REQUIREMENTS.65.32    Subdivision 1.Agent of broker disclosure.A salesperson shall only conduct 65.33business under the licensed name of and on behalf of the broker to whom the salesperson 65.34is licensed. An individual broker shall only conduct business under the brokerage's 65.35licensed name. A broker licensed to a business entity shall only conduct business under 66.1the licensed business entity name. A licensee shall affirmatively disclose, before the 66.2negotiation or consummation of any transaction, the licensed name of the brokerage under 66.3whom the licensee is authorized to conduct business according to this section.66.4    Subd. 2.Financial interests or relative or business associate disclosure; 66.5licensee.(a) Before the negotiation or consummation of any transaction, a licensee shall 66.6affirmatively disclose to the owner of real property that the licensee is a real estate broker 66.7or agent salesperson, and in what capacity the licensee is acting, if the licensee directly, or 66.8indirectly through a third party, purchases for himself or herself or acquires, or intends to 66.9acquire, any interest in, or any option to purchase, the owner's property.66.10(b) When a principal in the transaction is a licensee or a relative or business associate 66.11of the licensee, that fact must be disclosed in writing.66.12    Subd. 3.Material facts.(a) A licensee shall disclose to a prospective purchaser 66.13all material facts of which the licensee is aware, which could adversely and significantly 66.14affect an ordinary purchaser's use or enjoyment of the property, or any intended use of the 66.15property of which the licensee is aware.66.16    (b) It is not a material fact relating to real property offered for sale the fact or 66.17suspicion that the property:66.18    (1) is or was occupied by an owner or occupant who is or was suspected 66.19to be infected with human immunodeficiency virus or diagnosed with acquired 66.20immunodeficiency syndrome;66.21    (2) was the site of a suicide, accidental death, natural death, or perceived paranormal 66.22activity; or66.23    (3) is located in a neighborhood containing any adult family home, community-based 66.24residential facility, or nursing home.66.25    (c) A licensee or employee of the licensee has no duty to disclose information 66.26regarding an offender who is required to register under section 243.166, or about whom 66.27notification is made under that section, if the broker or salesperson, in a timely manner, 66.28provides a written notice that information about the predatory offender registry and 66.29persons registered with the registry may be obtained by contacting local law enforcement 66.30where the property is located or the Department of Corrections.66.31    (d) A licensee or employee of the licensee has no duty to disclose information 66.32regarding airport zoning regulations if the broker or salesperson, in a timely manner, 66.33provides a written notice that a copy of the airport zoning regulations as adopted can be 66.34reviewed or obtained at the office of the county recorder where the zoned area is located.66.35    (e) A licensee is not required to disclose, except as otherwise provided in paragraph 66.36(f), information relating to the physical condition of the property or any other information 67.1relating to the real estate transaction, if a written report that discloses the information has 67.2been prepared by a qualified third party and provided to the person. For the purposes of 67.3this paragraph, "qualified third party" means a federal, state, or local governmental agency, 67.4or any person whom the broker, salesperson, or a party to the real estate transaction 67.5reasonably believes has the expertise necessary to meet the industry standards of practice 67.6for the type of inspection or investigation that has been conducted by the third party 67.7in order to prepare the written report and who is acceptable to the person to whom the 67.8disclosure is being made.67.9    (f) A licensee shall disclose to the parties to a real estate transaction any facts known 67.10by the broker or salesperson that contradict any information included in a written report 67.11described in paragraph (e), if a copy of the report is provided to the licensee.67.12    (g) The limitation on disclosures in paragraphs (b) and (c) shall modify any common 67.13law duties with respect to disclosure of material facts.67.14    Subd. 4.Nonperformance of party.If a licensee is put on notice by a party to a 67.15real estate transaction that the party will not perform according to the terms of a purchase 67.16agreement or other similar written agreement to convey real estate, the licensee shall 67.17immediately disclose the fact of that party's intent not to perform to the other party or 67.18parties to the transaction. The licensee shall, if reasonably possible, inform the party who 67.19will not perform of the licensee's obligation to disclose this fact to the other party or 67.20parties to the transaction before making the disclosure. The obligation required by this 67.21section does not apply to notice of a party's inability to keep or fulfill any contingency to 67.22which the real estate transaction has been made subject.67.23    Sec. 80. Minnesota Statutes 2008, section 82B.05, as amended by Laws 2009, chapter 67.2463, section 62, is amended to read:67.2582B.05 REAL ESTATE APPRAISER ADVISORY BOARD.67.26    Subdivision 1. Members. The Real Estate Appraiser Advisory Board consists of 67.2715 nine members appointed by the commissioner of commerce. Three of the members 67.28must be public members, four must be consumers of appraisal services, of whom one 67.29member must be employed in the financial lending industry, and eightsix must be real 67.30estate appraisers who are currently licensed in good standing, of whom not less than two67.31three members must be trainee real property appraisers, licensed real property appraisers, 67.32or certified residential real property appraisers, not less than twoand three members must 67.33be certified general real property appraisers, and not less than. At least one member of the 67.34board must be certified by the Appraisal Qualification Board of the Appraisal Foundation 68.1to teach the Uniform Standards of Professional Appraisal Practice. The board is governed 68.2by section 
         15.0575.68.3    Subd. 3. Terms. The term of office for members is three years.68.4Upon expiration of their terms, members of the board shall continue to hold office 68.5until the appointment and qualification of their successors. No person may serve as a 68.6member of the board for more than two consecutive terms. The commissioner may 68.7remove a member for cause.68.8    Subd. 4.Practice of public members prohibited.The public members of the board 68.9may not be engaged in the practice of real estate appraising.68.10    Subd. 5. Conduct of meetings. Places of regular board meetings must be decided 68.11by the vote of members. Written notice must be given to each member of the time and 68.12place of each meeting of the board at least ten days before the scheduled date of regular 68.13board meetings. The board shall establish procedures for emergency board meetings and 68.14other operational procedures, subject to the approval of the commissioner.68.15The members of the board shall elect a chair to preside at board meetings, a 68.16vice-chair, and a secretary from among the members to preside at board meetings.68.17A quorum of the board is eightfive members.68.18The board shall meet at least once every sixthree months as determined by a 68.19majority vote of the members or a call of the commissioner.68.20    Subd. 6. Compensation. Each member of the board is entitled to a per diem 68.21allowance of $35 for each meeting of the board at which the member is present and for each 68.22day or substantial part of a day actually spent in the conduct of the business of the board, 68.23plus all appropriate expenses unless a greater amount is authorized by section 
         15.0575.  68.24    Subd. 7.Enforcement reports.The commissioner shall, on a regular basis, provide 68.25the board with the commissioner's public enforcement data.68.26EFFECTIVE DATE.This section is effective January 1, 2011.68.27    Sec. 81. Minnesota Statutes 2008, section 82B.06, is amended to read:68.2882B.06 POWERS OF THE BOARD.68.29The board shall make recommendations to the commissioner as the commissioner 68.30requests or at the board's own initiative on:68.31(1) rules with respect to each category of licensed real estate appraiser, the type of 68.32educational experience, appraisal experience, and equivalent experience that will meet 68.33the requirements of this chapter;69.1(2) examination specifications for each category of licensed real estate appraiser, 69.2to assist in providing or obtaining appropriate examination questions and answers, and 69.3procedures for grading examinations;69.4(3) rules with respect to each category of licensed real estate appraiser, the 69.5continuing education requirements for the renewal of licensing that will meet the 69.6requirements provided in this chapter;69.7(4) periodic review of the standards for the development and communication of 69.8real estate appraisals provided in this chapter and rules explaining and interpreting the 69.9standards; and69.10(5) other matters necessary in carrying out the provisions of this chapter.69.11EFFECTIVE DATE.This section is effective January 1, 2011.69.12    Sec. 82. Minnesota Statutes 2008, section 82B.14, is amended to read:69.1382B.14 EXPERIENCE REQUIREMENT.69.14(a) As a prerequisite for licensing as a licensed real property appraiser, an applicant 69.15must present evidence satisfactory to the commissioner that the person has obtained 2,000 69.16hours of experience in real property appraisal obtained in no fewer than 12 months.69.17As a prerequisite for licensing as a certified residential real property appraiser, an 69.18applicant must present evidence satisfactory to the commissioner that the person has 69.19obtained 2,500 hours of experience in real property appraisal obtained in no fewer than 69.2024 months.69.21As a prerequisite for licensing as a certified general real property appraiser, an 69.22applicant must present evidence satisfactory to the commissioner that the person has 69.23obtained 3,000 hours of experience in real property appraisal obtained in no fewer than 30 69.24months. At least 50 percent, or 1,500 hours, must be in nonresidential appraisal work.69.25(b) Each applicant for license under section 
         82B.11, subdivision 3, 4, or 5, shall 69.26give under oath a detailed listing of the real estate appraisal reports or file memoranda 69.27for which experience is claimed by the applicant. Upon request, the applicant shall make 69.28available to the commissioner for examination, a sample of appraisal reports that the 69.29applicant has prepared in the course of appraisal practice.69.30(c) Notwithstanding section 45.22, a college or university real estate course may be 69.31approved retroactively by the commissioner for appraiser prelicense education credit if:69.32(1) the course was offered by a college or university physically located in Minnesota;69.33(2) the college or university was an approved education provider at the time the 69.34course was offered;70.1(3) the commissioner's approval is made to the same extent in terms of courses and 70.2hours and with the same time limits as those specified by the Appraiser Qualifications 70.3Board. 70.4(d) Applicants may not receive credit for experience accumulated while unlicensed, 70.5if the experience is based on activities which required a license under this section.70.6(d) (e) Experience for all classifications must be obtained after January 30, 1989, 70.7and must be USPAP compliant.70.8    Sec. 83. Minnesota Statutes 2009 Supplement, section 137.0225, is amended to read:70.9137.0225 UNIVERSITY PROMISE SCHOLARSHIP.70.10    The Board of Regents may establish a scholarship to help offset the impact of 70.11rising tuition for Minnesota students from middle-income families. To be eligible for a 70.12scholarship under this section, a student must be a Minnesota resident undergraduate 70.13from a family that is not Pell Grant eligible with an annual adjusted gross income not 70.14to exceed $100,000.70.15EFFECTIVE DATE.This section is effective the day following final enactment.70.16    Sec. 84. [137.66] SCHOLARSHIP FUNDING PROGRAM.70.17As a condition of the license under section 340A.404, subdivision 4a, paragraph (a), 70.18clause (3), the University of Minnesota shall deposit at least 75 percent of the revenue 70.19generated through the existence of this license for scholarships under section 137.0225 for 70.20Minnesota resident men and women attending the University of Minnesota.70.21EFFECTIVE DATE.This section is effective the day following final enactment.70.22    Sec. 85. Minnesota Statutes 2008, section 326.3382, subdivision 3, is amended to read:70.23    Subd. 3. Proof of insurance. (a) No license may be issued to a private detective 70.24or protective agent applicant until the applicant has complied with the requirements in 70.25this subdivision.70.26(b) The applicant shall execute a surety bond to the state of Minnesota in the penal 70.27sum of $10,000 and file it with the board. The surety bond must be executed by a 70.28company authorized to do business in the state of Minnesota, must name the applicant as 70.29principal, and must state that the applicant and each of the applicant's employees shall 70.30faithfully observe all of the laws of Minnesota and of the United States and shall pay all 70.31damages suffered by any person by reason of a violation of law by the applicant or by the 70.32commission of any willful and malicious wrong by the applicant in the course of business.71.1(c) The applicant shall furnish proof, acceptable to the board, of the applicant's 71.2ability to respond in damages for liability on account of accidents or wrongdoings arising 71.3out of the ownership and operation of a private detective or protective agent business. 71.4Compliance with paragraph (d), (e), or (f) is satisfactory proof of financial responsibility 71.5for purposes of this paragraph.71.6(d) The applicant may file with the board a certificate of insurance demonstrating 71.7coverage for general liability, completed operations, and personal injury. Personal injury 71.8insurance must include coverage for:71.9(1) false arrest, detention, imprisonment, and malicious prosecution;71.10(2) libel, slander, defamation, and violation of rights of privacy; and71.11(3) wrongful entry, eviction, and other invasion of rights of private occupancy.71.12The certificate must provide that the insurance may not be modified or canceled 71.13unless 30 days prior notice is given to the board. In the event of a policy cancellation, 71.14the insurer will send notice to the board at the same time that a cancellation request is 71.15received from or a notice is sent to the insured.71.16(e) The applicant may file with the board an annual net worth statement, signed 71.17by a licensed certified public accountant, evidencing that the applicant has a net worth 71.18of at least the following:71.19(1) for an applicant with no employees, $10,000;71.20(2) for an applicant with one to ten employees, $15,000;71.21(3) for an applicant with 11 to 25 employees, $25,000;71.22(4) for an applicant with 26 to 50 employees, $50,000; or71.23(5) for an applicant with 51 or more employees, $100,000.71.24Data indicating with which of the above requirements an applicant must comply is 71.25public data. The contents of the net worth statement are private data on individuals or 71.26nonpublic data, as defined in section 
         13.02.  71.27(f) The applicant may file with the board an irrevocable letter of credit from a 71.28financial institution acceptable to the board in the amount listed in the appropriate 71.29category in paragraph (e).71.30    Sec. 86. Minnesota Statutes 2008, section 326B.33, subdivision 16, is amended to read:71.31    Subd. 16. Insurance required. Each contractor shall have and maintain in effect 71.32general liability insurance, which includes premises and operations insurance and products 71.33and completed operations insurance, with limits of at least $100,000 per occurrence, 71.34$300,000 aggregate limit for bodily injury, and property damage insurance with limits of 71.35at least $50,000 or a policy with a single limit for bodily injury and property damage of 72.1$300,000 per occurrence and $300,000 aggregate limits. Such insurance shall be written 72.2by an insurer licensed to do business in the state of Minnesota and each contractor shall 72.3maintain on file with the commissioner a certificate evidencing such insurance which 72.4provides that such insurance shall not be canceled without the insurer first giving 15 72.5days written notice to the commissioner of such cancellation. In the event of a policy 72.6cancellation, the insurer shall send written notice to the commissioner at the same time 72.7that a cancellation request is received from or a notice is sent to the insured.72.8    Sec. 87. Minnesota Statutes 2009 Supplement, section 326B.46, subdivision 2, is 72.9amended to read:72.10    Subd. 2. Bond; insurance. Any person contracting to do plumbing work must give 72.11bond to the state in the amount of at least $25,000 for (1) all plumbing work entered 72.12into within the state or (2) all plumbing work and subsurface sewage treatment work 72.13entered into within the state. If the bond is for both plumbing work and subsurface sewage 72.14treatment work, the bond must comply with the requirements of this section and section 72.15115.56, subdivision 2
         , paragraph (e). The bond shall be for the benefit of persons injured 72.16or suffering financial loss by reason of failure to comply with the requirements of the 72.17State Plumbing Code and, if the bond is for both plumbing work and subsurface sewage 72.18treatment work, financial loss by reason of failure to comply with the requirements of 72.19sections 
         115.55 and 
         115.56. The bond shall be filed with the commissioner and shall be 72.20written by a corporate surety licensed to do business in the state. 72.21    In addition, each applicant for a master plumber license or restricted master plumber 72.22license, or renewal thereof, shall provide evidence of public liability insurance, including 72.23products liability insurance with limits of at least $50,000 per person and $100,000 per 72.24occurrence and property damage insurance with limits of at least $10,000. The insurance 72.25shall be written by an insurer licensed to do business in the state of Minnesota and 72.26each licensed master plumber shall maintain on file with the commissioner a certificate 72.27evidencing the insurance providing that the insurance shall not be canceled without the 72.28insurer first giving 15 days written notice to the commissioner. The term of the insurance 72.29shall be concurrent with the term of the license. In the event of a policy cancellation, the 72.30insurer shall send written notice to the commissioner at the same time that a cancellation 72.31request is received from or a notice is sent to the insured.72.32    Sec. 88. Minnesota Statutes 2008, section 326B.46, is amended by adding a 72.33subdivision to read:73.1    Subd. 6.Well contractor exempt from licensing and bond; conditions.No 73.2license, registration, or bond under sections 326B.42 to 326B.49 is required of a well 73.3contractor or a limited well/boring contractor who is licensed and bonded under section 73.4103I.525 or 103I.531 and is engaged in the work or business of installing (1) water service 73.5pipe from a well to a pressure tank or a frost-free water hydrant with an antisiphon device 73.6which is located entirely outside of a structure requiring potable water, or (2) a temporary 73.7shut-off valve on a well water service pipe. For the purposes of this subdivision, 73.8"temporary" means a time period not to exceed six months. This subdivision expires one 73.9year after the date of enactment.73.10EFFECTIVE DATE.This section is effective the day following final enactment.73.11    Sec. 89. Minnesota Statutes 2008, section 326B.56, subdivision 2, is amended to read:73.12    Subd. 2. Insurance. (a) Each applicant for a water conditioning contractor or 73.13installer license or renewal thereof who is required by any political subdivision to 73.14maintain insurance to obtain or maintain the license may comply with any political 73.15subdivision's insurance requirement by maintaining the insurance described in paragraph 73.16(b). No applicant for a water conditioning contractor or installer license who maintains the 73.17insurance described in paragraph (b) shall be otherwise required to meet the insurance 73.18requirements of any political subdivision.73.19    (b) The insurance shall provide coverage, including products liability coverage, 73.20for all damages in connection with licensed work for which the licensee is liable, with 73.21personal damage limits of at least $50,000 per person and $100,000 per occurrence and 73.22property damage insurance with limits of at least $10,000. The insurance shall be written 73.23by an insurer licensed to do business in this state and a certificate evidencing the insurance 73.24shall be filed with the commissioner. The insurance must remain in effect at all times while 73.25the application is pending and while the license is in effect. The insurance shall not be 73.26canceled without the insurer first giving 15 days' written notice to the commissioner. In the 73.27event of a policy cancellation, the insurer shall send written notice to the commissioner at 73.28the same time that a cancellation request is received from or a notice is sent to the insured.73.29    Sec. 90. Minnesota Statutes 2008, section 326B.86, subdivision 2, is amended to read:73.30    Subd. 2. Insurance. Each licensee shall have and maintain in effect commercial 73.31general liability insurance, which includes premises and operations insurance and products 73.32and completed operations insurance, with limits of at least $100,000 per occurrence, 73.33$300,000 aggregate limit for bodily injury, and property damage insurance with limits of 73.34at least $25,000 or a policy with a single limit for bodily injury and property damage of 74.1$300,000 per occurrence and $300,000 aggregate limits. The insurance must be written by 74.2an insurer licensed to do business in this state. Each licensee shall maintain on file with 74.3the commissioner a certificate evidencing the insurance which provides that the insurance 74.4shall not be canceled without the insurer first giving 15 days' written notice of cancellation 74.5to the commissioner. In the event of a policy cancellation, the insurer shall send written 74.6notice to the commissioner at the same time that a cancellation request is received from or 74.7a notice is sent to the insured. The commissioner may increase the minimum amount of 74.8insurance required for any licensee or class of licensees if the commissioner considers it to 74.9be in the public interest and necessary to protect the interests of Minnesota consumers.74.10    Sec. 91. Minnesota Statutes 2008, section 326B.921, subdivision 6, is amended to read:74.11    Subd. 6. Insurance. In addition to the bond described in subdivision 5, each 74.12applicant for a high pressure pipefitting business license or renewal shall have in force 74.13public liability insurance, including products liability insurance, with limits of at least 74.14$100,000 per person and $300,000 per occurrence and property damage insurance with 74.15limits of at least $50,000.74.16    The insurance must be kept in force for the entire term of the high pressure 74.17pipefitting business license, and the license shall be suspended by the department if at any 74.18time the insurance is not in force.74.19    The insurance must be written by an insurer licensed to do business in the state and 74.20shall be in lieu of any other insurance required by any subdivision of government for high 74.21pressure pipefitting. Each person holding a high pressure pipefitting business license shall 74.22maintain on file with the department a certificate evidencing the insurance. Any purported 74.23cancellation of insurance shall not be effective without the insurer first giving 30 days' 74.24written notice to the department. In the event of a policy cancellation, the insurer shall 74.25send written notice to the commissioner at the same time that a cancellation request is 74.26received from or a notice is sent to the insured.74.27    Sec. 92. Minnesota Statutes 2008, section 327B.04, subdivision 4, is amended to read:74.28    Subd. 4.  License prerequisites. No application shall be granted nor license issued 74.29until the applicant proves to the commissioner that: 74.30    (a) the applicant has a permanent, established place of business at each licensed 74.31location. An "established place of business" means a permanent enclosed building other 74.32than a residence, or a commercial office space, either owned by the applicant or leased by 74.33the applicant for a term of at least one year, located in an area where zoning regulations 74.34allow commercial activity, and where the books, records and files necessary to conduct 75.1the business are kept and maintained. The owner of a licensed manufactured home park 75.2who resides in or adjacent to the park may use the residence as the established place of 75.3business required by this subdivision, unless prohibited by local zoning ordinance. 75.4    If a license is granted, the licensee may use unimproved lots and premises for sale, 75.5storage, and display of manufactured homes, if the licensee first notifies the commissioner 75.6in writing; 75.7    (b) if the applicant desires to sell, solicit or advertise the sale of new manufactured 75.8homes, it has a bona fide contract or franchise in effect with a manufacturer or distributor 75.9of the new manufactured home it proposes to deal in; 75.10    (c) the applicant has secured: (1) a surety bond in the amount of $20,000 for each 75.11agency and each subagency location that bears the applicant's name and the name under 75.12which the applicant will be licensed and do business in this state. Each bond is for the 75.13protection of consumer customers, and must be executed by the applicant as principal and 75.14issued by a surety company admitted to do business in this state. Each bond shall be 75.15exclusively for the purpose of reimbursing consumer customers and shall be conditioned 75.16upon the faithful compliance by the applicant with all of the laws and rules of this state 75.17pertaining to the applicant's business as a dealer or manufacturer, including sections 75.18325D.44
         , 
         325F.67 and 
         325F.69, and upon the applicant's faithful performance of all its 75.19legal obligations to consumer customers; and (2) a certificate of liability insurance in 75.20the amount of $1,000,000 that provides aggregate coverage for the agency and each 75.21subagency location. In the event of a policy cancellation, the insurer shall send written 75.22notice to the commissioner at the same time that a cancellation request is received from 75.23or a notice is sent to the insured; 75.24    (d) the applicant has established a trust account as required by section 
         327B.08, 75.25subdivision 3
         , unless the applicant states in writing its intention to limit its business to 75.26selling, offering for sale, soliciting or advertising the sale of new manufactured homes; and 75.27    (e) the applicant has provided evidence of having had at least two years' prior 75.28experience in the sale of manufactured homes, working for a licensed dealer. 75.29    Sec. 93. [332.3351] EXEMPTION FROM LICENSURE.75.30A collection agency shall be exempt from the licensing and registration requirements 75.31of this chapter if all of the following conditions are met:75.32(1) the agency is located in another state that regulates and licenses collection 75.33agencies, but does not require a Minnesota collection agency to obtain a license to collect 75.34debts in their state if the agency's collection activities are limited in the same manner;76.1(2) the agency's collection activities are limited to collecting debts not incurred in 76.2this state from consumers located in this state; and76.3(3) the agency's collection activities in Minnesota are conducted by means of 76.4interstate communications, including telephone, mail, electronic mail, or facsimile 76.5transmission.76.6EFFECTIVE DATE.This section is effective January 1, 2011.76.7    Sec. 94. Minnesota Statutes 2008, section 332.34, is amended to read:76.8332.34 BOND.76.9The commissioner of commerce shall require each collection agency licensee to 76.10annually file and maintain in force a corporate surety bond, in a form to be prescribed 76.11by, and acceptable to, the commissioner, and in a sum of at least $20,000 $50,000 plus 76.12an additional $5,000 for each $100,000 received by the collection agency from debtors 76.13located in Minnesota during the previous calendar year, less commissions earned by the 76.14collection agency on those collections for the previous calendar year. The total amount of 76.15the bond shall not exceed $100,000. A collection agency may deposit cash in and with a 76.16depository acceptable to the commissioner in an amount and in the manner prescribed and 76.17approved by the commissioner in lieu of a bond.76.18EFFECTIVE DATE.This section is effective for bonds obtained or renewed after 76.19January 1, 2011.76.20    Sec. 95. Minnesota Statutes 2009 Supplement, section 340A.404, subdivision 4a, 76.21is amended to read:76.22    Subd. 4a. Publicly owned recreation; entertainment facilities. (a) 76.23Notwithstanding any other law, local ordinance, or charter provision, the commissioner 76.24may issue on-sale intoxicating liquor licenses:76.25    (1) to the state agency administratively responsible for, or to an entity holding a 76.26concession or facility management contract with such agency for beverage sales at, the 76.27premises of any Giants Ridge Recreation Area building or recreational improvement area 76.28owned by the state in the city of Biwabik, St. Louis County;76.29    (2) to the state agency administratively responsible for, or to an entity holding a 76.30concession or facility management contract with such agency for beverage sales at, the 76.31premises of any Ironworld Discovery Center building or facility owned by the state at 76.32Chisholm;77.1    (3) to the Board of Regents of the University of Minnesota for events at Northrop 77.2Auditorium, the intercollegiate football stadium, or at no more than seven other locations 77.3within the boundaries of the University of Minnesota, provided that the Board of Regents 77.4has approved an application for a license for the specified location and provided that a 77.5license for an arena or stadium location is void unless it requires the sale or service of 77.6intoxicating liquor throughout the arena or stadium if intoxicating liquor is sold or served 77.7anywhere in the arena or stadium in a public portion consisting of at least one-third of 77.8the general seating of a stadium or arena, and provided that areas be designated where 77.9alcohol is not served, to be referred to as family sections; and77.10(4) to the Duluth Entertainment and Convention Center Authority for beverage 77.11sales on the premises of the Duluth Entertainment and Convention Center Arena during 77.12intercollegiate hockey games.77.13    The commissioner shall charge a fee for licenses issued under this subdivision in an 77.14amount comparable to the fee for comparable licenses issued in surrounding cities.77.15    (b) No alcoholic beverage may be sold or served at TCF Bank Stadium unless the 77.16Board of Regents holds an on-sale intoxicating liquor license for the stadium as provided 77.17in paragraph (a), clause (3).77.18EFFECTIVE DATE.This section is effective the day following final enactment.77.19    Sec. 96. Minnesota Statutes 2008, section 340A.409, subdivision 1, is amended to read:77.20    Subdivision 1. Insurance required.(a) No retail license may be issued, maintained 77.21or renewed unless the applicant demonstrates proof of financial responsibility with regard 77.22to liability imposed by section 
         340A.801. The issuing authority must submit to the 77.23commissioner the applicant's proof of financial responsibility. This subdivision does not 77.24prohibit a local unit of government from requiring higher insurance or bond coverages, or 77.25a larger deposit of cash or securities. The minimum requirement for proof of financial 77.26responsibility may be given by filing: 77.27(1) a certificate that there is in effect for the license period an insurance policy 77.28issued by an insurer required to be licensed under section 
         60A.07, subdivision 4, or by 77.29an insurer recognized as an eligible surplus lines carrier pursuant to section 
         60A.206 or 77.30pool providing at least $50,000 of coverage because of bodily injury to any one person in 77.31any one occurrence, $100,000 because of bodily injury to two or more persons in any one 77.32occurrence, $10,000 because of injury to or destruction of property of others in any one 77.33occurrence, $50,000 for loss of means of support of any one person in any one occurrence, 77.34and $100,000 for loss of means of support of two or more persons in any one occurrence; 77.35(2) a bond of a surety company with minimum coverages as provided in clause (1); or78.1(3) a certificate of the commissioner of management and budget that the licensee 78.2has deposited with the commissioner of management and budget $100,000 in cash or 78.3securities which may legally be purchased by savings banks or for trust funds having a 78.4market value of $100,000.78.5(b) This subdivision does not prohibit an insurer from providing the coverage 78.6required by this subdivision in combination with other insurance coverage.78.7(c) An annual aggregate policy limit for dram shop insurance of not less than 78.8$300,000 per policy year may be included in the policy provisions.78.9(d) A liability insurance policy required by this section must provide that it may 78.10not be canceled for:78.11(1) any cause, except for nonpayment of premium, by either the insured or the 78.12insurer unless the canceling party has first given 30 60 days' notice in writing to the 78.13issuing authority insured of intent to cancel the policy; and78.14(2) nonpayment of premium unless the canceling party has first given ten days' 78.15notice in writing to the issuing authority insured of intent to cancel the policy.; and78.16(3) in the event of a policy cancellation, the insurer will send notice to the issuing 78.17authority at the same time that a cancellation request is received from or a notice is sent 78.18to the insured.78.19    Sec. 97. Minnesota Statutes 2008, section 471.61, subdivision 2b, is amended to read:78.20    Subd. 2b. Insurance continuation. A unit of local government must allow a former 78.21employee and the employee's dependents to continue to participate indefinitely in the 78.22employer-sponsored hospital, medical, and dental insurance group that the employee 78.23participated in immediately before retirement, under the following conditions:78.24(a) The continuation requirement of this subdivision applies only to a former 78.25employee who is receiving a disability benefit or an annuity from a Minnesota public 78.26pension plan other than a volunteer firefighter plan, or who has met age and service 78.27requirements necessary to receive an annuity from such a plan.78.28(b) Until the former employee reaches age 65, the former employee and dependents 78.29must be pooled in the same group as active employees for purposes of establishing 78.30premiums and coverage for hospital, medical, and dental insurance. However, a former 78.31employee under the age of 65 who is enrolled in Medicare Parts A and B due to the former 78.32employee's disability and for whom Medicare's obligation to pay claims is primary, and 78.33the former employee's dependents, must be pooled in the same group for purposes of this 78.34paragraph as former employees who have reached age 65.79.1(c) A former employee may receive dependent coverage only if the employee 79.2received dependent coverage immediately before leaving employment. This subdivision 79.3does not require dependent coverage to continue after the death of the former employee. 79.4For purposes of this subdivision, "dependent" has the same meaning for former employees 79.5as it does for active employees in the unit of local government.79.6(d) Coverage for a former employee and dependents may not discriminate on the 79.7basis of evidence of insurability or preexisting conditions unless identical conditions are 79.8imposed on active employees in the group that the employee left.79.9(e) The former employee must pay the entire premium for continuation coverage, 79.10except as otherwise provided in a collective bargaining agreement or personnel policy. 79.11A unit of local government may discontinue coverage if a former employee fails to pay 79.12the premium within the deadline provided for payment of premiums under federal law 79.13governing insurance continuation.79.14(f) An employer must notify an employee before termination of employment of the 79.15options available under this subdivision, and of the deadline for electing to continue 79.16to participate.79.17(g) A former employee must notify the employer of intent to participate within 79.18the deadline provided for notice of insurance continuation under federal law. A former 79.19employee who does not elect to continue participation does not have a right to reenter 79.20the employer's group insurance program.79.21(h) A former employee who initially selects dependent coverage may later drop 79.22dependent coverage while retaining individual coverage. A former employee may not 79.23drop individual coverage and retain dependent coverage.79.24(i) This subdivision does not limit rights granted to former employees under other 79.25state or federal law, or under collective bargaining agreements or personnel plans.79.26(j) Unless otherwise provided by a collective bargaining agreement, if retired 79.27employees were not permitted to remain in the active employee group prior to August 79.281, 1992, a public employer may assess active employees through payroll deduction for 79.29all or part of the additional premium costs from the inclusion of retired employees in the 79.30active employee group. This paragraph does not apply to employees covered by section 79.31179A.03, subdivision 7
         .  79.32(k) Notwithstanding section 
         179A.20, subdivision 2a, insurance continuation under 79.33this subdivision may be provided for in a collective bargaining agreement or personnel 79.34policy.  79.35EFFECTIVE DATE.This section is effective August 1, 2010, and applies to 79.36coverage in existence on or after that date.80.1    Sec. 98. Minnesota Statutes 2008, section 514.20, is amended to read:80.2514.20 SALE.80.3If any sum secured by such lien be not paid within 90 days after it becomes due, the 80.4lienholder may sell the property and out of the proceeds of such sale there shall be paid, 80.5first, the disbursements aforesaid; second, all charges against the property paid by such 80.6person to any other person; and, third, the total indebtedness then secured by the lien. The 80.7remainder, if any, shall be paid on demand to the owner or other person entitled thereto. If 80.8the property subject to the lien is a motor vehicle registered in this state and subject to a 80.9certificate of title, then the lienholder must provide written notice, by registered certified80.10mail, to all secured creditors listed on the certificate of title 45 days before the lienholder's 80.11right to sell the motor vehicle is considered effective. The notice must state the name, 80.12address, and telephone number of the lienholder, the amount of money owed, and the rate 80.13at which storage charges, if any, are accruing. Costs for registered certified mail and 80.14other reasonable costs related to complying with this notice provision constitute "lawful 80.15charges" pursuant to section 
         514.19. Failure to comply with the notice provision in this 80.16section renders any lien created by this chapter ineffective against any secured party listed 80.17on the certificate of title of the motor vehicle involved.  80.18EFFECTIVE DATE.This section is effective the day following final enactment, 80.19and applies to notices mailed on or after that date, provided however that it is also 80.20permissible to send notices under this section by registered mail prior to August 1, 2010, 80.21and the costs of those notices are lawful charges under this section.80.22    Sec. 99. Laws 2007, chapter 147, article 12, section 14, is amended to read:80.23    Sec. 14. AGRICULTURAL COOPERATIVE HEALTH PLAN FOR 80.24FARMERS.80.25    Subdivision 1. Pilot project requirements. Notwithstanding contrary provisions of 80.26Minnesota Statutes, chapter 62H, the following apply to a joint self-insurance pilot project 80.27administered by a trust sponsored by one or more agricultural cooperatives organized 80.28under Minnesota Statutes, chapter 308A or 308B, or under a federal charter for the 80.29purpose of offering health coverage to members of the cooperatives and their families, 80.30provided the project satisfies the other requirements of Minnesota Statutes, chapter 62H:80.31    (1) Minnesota Statutes, section 
         62H.02, paragraph (b), does not apply;80.32    (2) the notice period required under Minnesota Statutes, section 
         62H.02, paragraph 80.33(e), is 90 days;81.1    (3) a joint self-insurance plan may elect to treat the sale of a health plan to or for 81.2an employer that has only one eligible employee who has not waived coverage as the 81.3sale of an individual health plan as allowed under Minnesota Statutes, section 
         62L.02, 81.4subdivision 26
         ;81.5    (4) Minnesota Statutes, section 
         297I.05, subdivision 12, paragraph (c), applies; and81.6    (5) the trust must pay the assessment for the Minnesota Comprehensive Health 81.7Association as provided under Minnesota Statutes, section 
         62E.11.81.8    Subd. 2. Evaluation and renewal. The pilot project authorized under this section 81.9is for a period of four years from the date of initial enrollment. The commissioner of 81.10commerce shall grant an extension of four additional years if the trust provides evidence 81.11that it remains in compliance with the requirements of this section and other applicable 81.12laws and rules. If the commissioner determines that the operation of the trust has not 81.13improved access, expanded health plan choices, or improved the affordability of health 81.14coverage for farm families, or that it has significantly damaged access, choice, or 81.15affordability for other consumers not enrolled in the trust, the commissioner shall provide 81.16at least 180 days' advance written notice to the trust and to the chairs of the senate and 81.17house finance and policy committees with jurisdiction over health and insurance of the 81.18commissioner's intention not to renew the pilot project at the expiration of a four-year 81.19period.81.20    Subd. 3.Use of surplus lines.Plans created under this section may use surplus lines 81.21carriers to fulfill its obligations under Minnesota Statutes, chapter 62H.81.22    Sec. 100. ON-SALE LICENSE; THEATRE L'HOMME DIEU.81.23Notwithstanding any law, ordinance, or charter provision to the contrary, Douglas 81.24County may issue a wine and intoxicating malt liquor license to Theatre L'Homme Dieu. 81.25The license authorizes sales on all days of the week to holders of tickets for performances 81.26presented by the theater and to members of the nonprofit corporations holding the license 81.27and to their guests.81.28EFFECTIVE DATE.This section is effective upon approval by the licensing 81.29authority in the manner specified by Minnesota Statutes, section 645.021, subdivisions 81.302 and 3.81.31    Sec. 101. 2011 APPOINTMENTS TO REAL ESTATE APPRAISER ADVISORY 81.32BOARD.81.33The terms of all members of the Real Estate Appraiser Advisory Board expire the 81.34effective date of this section. The commissioner of commerce shall, as soon as practicable 82.1after this date, appoint members to an initial term of office as follows: three years for one 82.2consumer of appraisal services member, one certified residential real property appraiser 82.3member, and one certified general real property appraiser member; two years for one 82.4consumer of appraisal services member, one certified residential real property appraiser 82.5member, and one certified general real property appraiser member; and one year for one 82.6consumer of appraisal services member, one certified residential real property appraiser 82.7member, and one certified general real property appraiser member.82.8Upon the expiration of the term of office established in this section, the successor 82.9must be appointed pursuant to Minnesota Statutes, section 82B.05.82.10All provisions of Minnesota Statutes, section 82B.05, not inconsistent with this 82.11section apply to the initial board appointed pursuant to this section.82.12EFFECTIVE DATE.This section is effective January 1, 2011.82.13    Sec. 102. COORDINATION OF BENEFITS STUDY.82.14The commissioner of commerce, in consultation with the commissioner of 82.15health and health plan companies, shall consider the appropriateness of adopting the 82.16National Association of Insurance Commissioners 2005 Coordination of Benefits Model 82.17Regulation. The commissioner shall submit recommendations and draft legislation, if any, 82.18needed to implement the recommendations, to the legislature by January 15, 2011.82.19    Sec. 103. SAUK RAPIDS; ON-SALE LICENSE.82.20Notwithstanding any other law, ordinance, or charter provision to the contrary, 82.21the city of Sauk Rapids may issue an on-sale intoxicating liquor license, or an on-sale 82.223.2 percent malt liquor license, to the owner of an arena located on the Benton County 82.23Fairgrounds or to an entity holding a concession contract with the owner for use on the 82.24premises of that arena. Any license authorized by this section may be issued for space that 82.25is not compact or contiguous, provided that all of the space is within the boundaries of the 82.26arena and is included in the description of the licensed premises on the approved license 82.27application. A license issued under this section authorizes sales on all days of the week 82.28to persons attending activities or events at the arena. All other provisions of Minnesota 82.29Statutes, chapter 340A not inconsistent with this section apply to the license authorized 82.30under this section.82.31EFFECTIVE DATE.This section is effective the day following final enactment.82.32    Sec. 104.  REPEALER.83.1Minnesota Statutes 2008, sections 82.19, subdivision 3; 82.22, subdivisions 1, 6, 7, 83.28, and 9; 82.31, subdivision 6; 82.34, subdivision 16; 82.41, subdivisions 3 and 7; 332.31, 83.3subdivision 7; and 332.335, are repealed.83.4Minnesota Statutes 2009 Supplement, section 65B.133, subdivision 3; and 72B.02, 83.5subdivision 11,  are repealed.83.6Minnesota Statutes 2008, section 72B.04, is repealed effective July 1, 2010.83.7Minnesota Statutes 2008, section 62L.056, is repealed effective January 1, 2012.