SF 2476

Introduction - 94th Legislature (2025 - 2026)

Posted on 07/15/2025 10:30 a.m.

A bill for an act
relating to commerce; making technical and housekeeping changes to various
provisions governing or administered by the Department of Commerce; authorizing
administrative rulemaking; amending Minnesota Statutes 2024, sections 45.24;
46A.04; 47.77; 53B.61; 55.07, by adding a subdivision; 58B.02, subdivision 8a;
62Q.73, subdivision 4; 80A.66.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 45.24, is amended to read:

45.24 LICENSE TECHNOLOGY FEES.

(a) The commissioner may establish and maintain an electronic licensing database system
for license origination, renewal, and tracking the completion of continuing education
requirements by individual licensees who have continuing education requirements, and
other related purposes.

(b) The commissioner shall pay for the cost of operating and maintaining the electronic
database system described in paragraph (a) through a technology surcharge imposed upon
the fee for license origination and renewal, for individual licenses that require continuing
education.

(c) The surcharge permitted under paragraph (b) shall be up to $40 for each two-year
licensing period, except as otherwise provided in paragraph (f), and shall be payable at the
time of license origination and renewal.

(d) The Commerce Department technology account is hereby created as an account in
the special revenue fund.

(e) The commissioner shall deposit the surcharge permitted under this section in the
account created in paragraph (d), and funds in the account are appropriated to the
commissioner in the amounts needed for purposes of this section. The commissioner of
management and budget shall transfer an amount determined by the commissioner of
commerce from the account to the statewide electronic licensing system account under
section 16E.22 for the costs of the statewide licensing system attributable to the inclusion
of licenses subject to this section.

(f) The commissioner deleted text begin shall deleted text end new text begin may new text end temporarily reduce or suspend the surcharge as necessary
if the balance in the account created in paragraph (d) exceeds $2,000,000 as of the end of new text begin
June in new text end any calendar year and deleted text begin shall deleted text end new text begin must annually review the anticipated costs under
paragraph (b) to determine the amount to new text end increase or decrease the surcharge deleted text begin as necessary deleted text end
to keep the fund balance at an adequate level but not in excess of $2,000,000.

Sec. 2.

Minnesota Statutes 2024, section 46A.04, is amended to read:

46A.04 EXCEPTIONS AND EXEMPTIONS.

(a) The requirements under section 46A.03, subdivisions 3 new text begin , paragraph (b) new text end ; 5, paragraph
deleted text begin (a) deleted text end new text begin (b) new text end ; 9; and 10, do not apply to financial institutions that maintain customer information
concerning fewer than 5,000 consumers.

(b) This chapter does not apply to credit unions or federally insured depository
institutions.

Sec. 3.

Minnesota Statutes 2024, section 47.77, is amended to read:

47.77 TRANSFER OF ACCOUNTS PROHIBITED; NOTICE ON CLOSING.

(a) No financial institution shall initiate a transfer of a deposit account to another deposit
account bearing different identification information without sending at least 30 days' prior
notice to at least one of the deposit account holders at the last known address on file with
the financial institution. If the new account is subject to different terms, the financial
institution must obtain the written consent of at least one of the deposit account holders
before the new terms become effective.

(b) No financial institution shall initiate a closure of a deposit account without first
sending at least one of the deposit account holders a notice of intent to close the deposit
account. The notice must be sent to the deposit account holder's last known address on file
with the financial institution at least 30 days before the financial institution closes the deposit
account deleted text begin ; deleted text end new text begin , new text end except that deleted text begin , deleted text end if the financial institution has reasonable suspicion to believe that
account is being used in connection with a check-related fraud or other crime deleted text begin or that deleted text end new text begin , new text end funds
will not be available to pay items drawn on the account, new text begin or the deposit account holder has
engaged in disruptive, hostile, or harassing behavior toward financial institution employees
or customers, new text end the notice may be sent the same day as the account is closed.

(c) As used in this section, the following terms have the meanings given them. "Deposit
account" means a contract of deposit of funds between a depositor and a financial institution,
and includes a checking account, savings account, certificate of deposit share account, and
other like arrangement. "Financial institution" means any organization authorized to do
business under state or federal laws relating to financial institutions, including, without
limitation, banks and trust companies, savings banks, savings associations, industrial loan
and thrift companies, and credit unions.

Sec. 4.

Minnesota Statutes 2024, section 53B.61, is amended to read:

53B.61 MAINTENANCE OF PERMISSIBLE INVESTMENTS.

(a) A licensee must maintain at all times permissible investments that have a market
value computed in accordance with United States generally accepted accounting principles
of not less than the aggregate amount of all of the licensee's outstanding money transmission
obligations.

(b) Except for permissible investments enumerated in section 53B.62, deleted text begin paragraph (a) deleted text end new text begin
subdivision 1 new text end new text begin , clause (1) new text end , the commissioner may by administrative rule or order, with respect
to any licensee, limit the extent to which a specific investment maintained by a licensee
within a class of permissible investments may be considered a permissible investment, if
the specific investment represents undue risk to customers not reflected in the market value
of investments.

(c) Permissible investments, even if commingled with other assets of the licensee, are
held in trust for the benefit of the purchasers and holders of the licensee's outstanding money
transmission obligations in the event of insolvency; the filing of a petition by or against the
licensee under the United States Bankruptcy Code, United States Code, title 11, sections
101 to 110, as amended or recodified from time to time, for bankruptcy or reorganization;
the filing of a petition by or against the licensee for receivership; the commencement of any
other judicial or administrative proceeding for the licensee's dissolution or reorganization;
or in the event of an action by a creditor against the licensee who is not a beneficiary of this
statutory trust. No permissible investments impressed with a trust pursuant to this paragraph
are subject to attachment, levy of execution, or sequestration by order of any court, except
for a beneficiary of the statutory trust.

(d) Upon the establishment of a statutory trust in accordance with paragraph (c), or when
any funds are drawn on a letter of credit pursuant to section 53B.62, paragraph (a), clause
(4), the commissioner must notify the applicable regulator of each state in which the licensee
is licensed to engage in money transmission, if any, of the establishment of the trust or the
funds drawn on the letter of credit, as applicable. Notice is deemed satisfied if performed
pursuant to a multistate agreement or through NMLS. Funds drawn on a letter of credit, and
any other permissible investments held in trust for the benefit of the purchasers and holders
of the licensee's outstanding money transmission obligations, are deemed held in trust for
the benefit of the purchasers and holders of the licensee's outstanding money transmission
obligations on a pro rata and equitable basis in accordance with statutes pursuant to which
permissible investments are required to be held in Minnesota and other states, as defined
by a substantially similar statute in the other state. Any statutory trust established under this
section terminates upon extinguishment of all of the licensee's outstanding money
transmission obligations.

(e) The commissioner may by rule or by order allow other types of investments that the
commissioner determines are of sufficient liquidity and quality to be a permissible
investment. The commissioner is authorized to participate in efforts with other state regulators
to determine that other types of investments are of sufficient liquidity and quality to be a
permissible investment.

Sec. 5.

Minnesota Statutes 2024, section 55.07, is amended by adding a subdivision to
read:

new text begin Subd. 3. new text end

new text begin Safe deposit lease; automatic renewal. new text end

new text begin A safe deposit lease may renew
automatically at the end of the lease's term. A consumer may terminate a safe deposit lease
at any time in writing or in any other manner described in the lease.
new text end

Sec. 6.

Minnesota Statutes 2024, section 58B.02, subdivision 8a, is amended to read:

Subd. 8a.

Lender.

"Lender" means an entity engaged in the business of securing, making,
or extending student loans. Lender does not include, to the extent that state regulation is
preempted by federal law:

(1) a bank, savings banks, savings and loan association, or credit union;

(2) a wholly owned subsidiary of a bank or credit union;

(3) an operating subsidiary where each owner is wholly owned by the same bank or
credit union;

(4) the United States government, through Title IV of the Higher Education Act of 1965,
as amended, and administered by the United States Department of Education;

(5) an agency, instrumentality, or political subdivision of Minnesota;

(6) a regulated lender organized under chapter 56, except that a regulated lender must
file the annual report required for lenders under section 58B.03, subdivision deleted text begin 11 deleted text end new text begin 10 new text end ; or

(7) a person who is not in the business of making student loans and who makes no more
than three student loans, with the person's own funds, during any 12-month period.

Sec. 7.

Minnesota Statutes 2024, section 62Q.73, subdivision 4, is amended to read:

Subd. 4.

Contract.

Pursuant to a request for proposal, deleted text begin the commissioner of administration,
in consultation with deleted text end the commissioners of health and commerce deleted text begin , shall deleted text end new text begin must new text end contract with
deleted text begin at least three organizations deleted text end new text begin more than one organization new text end or business deleted text begin entities deleted text end new text begin entity new text end to provide
independent external reviews of all adverse determinations submitted for external review.
The contract deleted text begin shall deleted text end new text begin must new text end ensure that the fees for services rendered in connection with the
reviews are reasonable.

Sec. 8.

Minnesota Statutes 2024, section 80A.66, is amended to read:

80A.66 SECTION 411; POSTREGISTRATION REQUIREMENTS.

(a) Financial requirements. Subject to Section 15(h) of the Securities Exchange Act
of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940
(15 U.S.C. Section 80b-22), a rule adopted or order issued under this chapter may establish
minimum financial requirements for broker-dealers registered or required to be registered
under this chapter and investment advisers registered or required to be registered under this
chapter.

(b) Financial reports. Subject to Section 15(h) of the Securities Exchange Act of 1934
(15 U.S.C. Section 78o(h)) or Section 222(b) of the Investment Advisers Act of 1940 (15
U.S.C. Section 80b-22), a broker-dealer registered or required to be registered under this
chapter and an investment adviser registered or required to be registered under this chapter
shall file such financial reports as are required by a rule adopted or order issued under this
chapter. If the information contained in a record filed under this subsection is or becomes
inaccurate or incomplete in a material respect, the registrant shall promptly file a correcting
amendment.

(c) Record keeping. Subject to Section 15(h) of the Securities Exchange Act of 1934
(15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940 (15
U.S.C. Section 80b-22):

(1) a broker-dealer registered or required to be registered under this chapter and an
investment adviser registered or required to be registered under this chapter shall make and
maintain the accounts, correspondence, memoranda, papers, books, and other records
required by rule adopted or order issued under this chapter;

(2) broker-dealer records required to be maintained under paragraph (1) may be
maintained in any form of data storage acceptable under Section 17(a) of the Securities
Exchange Act of 1934 (15 U.S.C. Section 78q(a)) if they are readily accessible to the
administrator; and

(3) investment adviser records required to be maintained under paragraph (d)(1) may
be maintained in any form of data storage required by rule adopted or order issued under
this chapter.

(d) Records and reports of private funds.

(1) In general. An investment adviser to a private fund shall maintain such records of,
and file with the administrator such reports and amendments thereto, that an exempt reporting
adviser is required to file with the Securities and Exchange Commission pursuant to SEC
Rule 204-4, Code of Federal Regulations, title 17, section 275.204-4.

(2) Treatment of records. The records and reports of any private fund to which an
investment adviser provides investment advice shall be deemed to be the records and reports
of the investment adviser.

(3) Required information. The records and reports required to be maintained by an
investment adviser, which are subject to inspection by a representative of the administrator
at any time, shall include for each private fund advised by the investment adviser, a
description of:

(A) the amount of assets under management;

(B) the use of leverage, including off-balance-sheet leverage, as to the assets under
management;

(C) counterparty credit risk exposure;

(D) trading and investment positions;

(E) valuation policies and practices of the fund;

(F) types of assets held;

(G) side arrangements or side letters, whereby certain investors in a fund obtain more
favorable rights or entitlements than other investors;

(H) trading practices; and

(I) such other information as the administrator determines is necessary and appropriate
in the public interest and for the protection of investors, which may include the establishment
of different reporting requirements for different classes of fund advisers, based on the type
or size of the private fund being advised.

(4) Filing of records. A rule or order under this chapter may require each investment
adviser to a private fund to file reports containing such information as the administrator
deems necessary and appropriate in the public interest and for the protection of investors.

(e) Audits or inspections. The records of a broker-dealer registered or required to be
registered under this chapter and of an investment adviser registered or required to be
registered under this chapter, including the records of a private fund described in paragraph
(d) and the records of investment advisers to private funds, are subject to such reasonable
periodic, special, or other audits or inspections by a representative of the administrator,
within or without this state, as the administrator considers necessary or appropriate in the
public interest and for the protection of investors. An audit or inspection may be made at
any time and without prior notice. The administrator may copy, and remove for audit or
inspection copies of, all records the administrator reasonably considers necessary or
appropriate to conduct the audit or inspection. The administrator may assess a reasonable
charge for conducting an audit or inspection under this subsection.

(f) Custody and discretionary authority bond or insurance. Subject to Section 15(h)
of the Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the
Investment Advisers Act of 1940 (15 U.S.C. Section 80b-22), a rule adopted or order issued
under this chapter may require a broker-dealer or investment adviser that has custody of or
discretionary authority over funds or securities of a customer or client to obtain insurance
or post a bond or other satisfactory form of security in an amount of at least $25,000, but
not to exceed $100,000. The administrator may determine the requirements of the insurance,
bond, or other satisfactory form of security. Insurance or a bond or other satisfactory form
of security may not be required of a broker-dealer registered under this chapter whose net
capital exceeds, or of an investment adviser registered under this chapter whose minimum
financial requirements exceed, the amounts required by rule or order under this chapter.
The insurance, bond, or other satisfactory form of security must permit an action by a person
to enforce any liability on the insurance, bond, or other satisfactory form of security if
instituted within the time limitations in section 80A.76(j)(2).

(g) Requirements for custody. Subject to Section 15(h) of the Securities Exchange Act
of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940
(15 U.S.C. Section 80b-22), an agent may not have custody of funds or securities of a
customer except under the supervision of a broker-dealer and an investment adviser
representative may not have custody of funds or securities of a client except under the
supervision of an investment adviser or a federal covered investment adviser. A rule adopted
or order issued under this chapter may prohibit, limit, or impose conditions on a broker-dealer
regarding custody of funds or securities of a customer and on an investment adviser regarding
custody of securities or funds of a client.

(h) Investment adviser brochure rule. With respect to an investment adviser registered
or required to be registered under this chapter, a rule adopted or order issued under this
chapter may require that information or other record be furnished or disseminated to clients
or prospective clients in this state as necessary or appropriate in the public interest and for
the protection of investors and advisory clients.

(i) Continuing education. A rule adopted or order issued under this chapter may require
an individual registered under section 80A.57 or 80A.58 to participate in a continuing
education program approved by the Securities and Exchange Commission and administered
by a self-regulatory organization new text begin , the North American Securities Administrators Association,
or the commissioner new text end .

Sec. 9. new text begin SECURITIES BROKER-DEALER CONDUCT; EXPEDITED
RULEMAKING.
new text end

new text begin The commissioner of commerce must adopt rules amending Minnesota Rules, part
2876.5021, to reflect that NASD is now referred to as FINRA and to comply with FINRA's
new securities broker-dealer conduct rules. The commissioner of commerce may use the
expedited rulemaking process under Minnesota Statutes, section 14.389, to amend Minnesota
Rules, part 2876.5021, under this section.
new text end