HF 2680

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 04/12/2023 12:55pm

A bill for an act
relating to commerce; establishing a biennial budget for Department of Commerce
and related activities; adding and modifying various provisions governing health,
property, life, homeowner's, and automobile insurance; regulating financial
institutions; modifying provisions governing financial institutions; providing for
certain consumer protections and privacy; modifying provisions governing
commerce; making technical changes; establishing civil and criminal penalties;
authorizing administrative rulemaking; requiring reports; appropriating money;
amending Minnesota Statutes 2022, sections 46.131, subdivision 11; 47.0153,
subdivision 1; 47.59, subdivision 2; 47.60, subdivisions 1, 2, by adding a
subdivision; 47.601, subdivisions 1, 2, 6, by adding a subdivision; 53.04,
subdivision 3a; 53C.01, subdivision 12c, by adding a subdivision; 53C.08,
subdivision 1a; 56.131, subdivision 1; 60A.08, subdivision 15; 60A.14, subdivision
1; 61A.031; 61A.60, subdivision 3; 62A.152, subdivision 3; 62A.3099, by adding
a subdivision; 62A.31, subdivisions 1, 1f, 1h, 1p, 1u, 4, by adding a subdivision;
62A.44, subdivision 2; 62D.02, by adding a subdivision; 62D.095, subdivisions
2, 3, 4, 5; 62J.26, subdivisions 1, 2; 62K.10, subdivision 4; 62Q.096; 62Q.19,
subdivision 1; 62Q.46, subdivisions 1, 3; 62Q.47; 62Q.735, subdivisions 1, 5;
62Q.76, by adding a subdivision; 62Q.78, by adding subdivisions; 62Q.81,
subdivision 4, by adding a subdivision; 65B.49, by adding a subdivision; 80A.50;
80E.041, subdivision 4; 103G.291, subdivision 4; 151.071, subdivisions 1, 2;
237.066; 256B.0631, subdivision 1; 256B.69, subdivision 5a; 256L.03, subdivision
5; 325D.01, subdivision 5; 325D.44, subdivisions 1, 2; 325F.662, subdivisions 2,
3; 325F.6641, subdivision 2; 325F.69, subdivision 1, by adding a subdivision;
325F.70, by adding a subdivision; 325G.051, subdivision 1; 327C.015, subdivision
17, by adding subdivisions; 327C.04, subdivisions 1, 2, by adding subdivisions;
515B.3-102; 515B.3-115; 515B.3-1151; 515B.3-116; Laws 2022, chapter 93,
article 1, section 2, subdivision 5; proposing coding for new law in Minnesota
Statutes, chapters 13; 48; 52; 53B; 58; 58B; 60A; 62J; 62Q; 62W; 65A; 325E;
325F; 332; proposing coding for new law as Minnesota Statutes, chapter 325O;
repealing Minnesota Statutes 2022, sections 48.10; 53B.01; 53B.02; 53B.03;
53B.04; 53B.05; 53B.06; 53B.07; 53B.08; 53B.09; 53B.10; 53B.11; 53B.12;
53B.13; 53B.14; 53B.15; 53B.16; 53B.17; 53B.18; 53B.19; 53B.20; 53B.21;
53B.22; 53B.23; 53B.24; 53B.25; 53B.26; 53B.27, subdivisions 1, 2, 5, 6, 7;
62A.31, subdivisions 1b, 1i; 325D.71; 327C.04, subdivision 4; Minnesota Rules,
parts 2675.2610, subparts 1, 3, 4; 2675.2620, subparts 1, 2, 3, 4, 5; 2675.2630,
subpart 3.

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

ARTICLE 1

COMMERCE FINANCE

Section 1. new text begin APPROPRIATIONS. new text end

new text begin The sums shown in the columns marked "Appropriations" are appropriated to the agencies
and for the purposes specified in this article. The appropriations are from the general fund,
or another named fund, and are available for the fiscal years indicated for each purpose.
The figures "2024" and "2025" used in this article mean that the appropriations listed under
them are available for the fiscal year ending June 30, 2024, or June 30, 2025, respectively.
"The first year" is fiscal year 2024. "The second year" is fiscal year 2025. "The biennium"
is fiscal years 2024 and 2025. If an appropriation in this act is enacted more than once in
the 2023 legislative session, the appropriation must be given effect only once.
new text end

			new text begin APPROPRIATIONS new text end
			new text begin Available for the Year new text end
			new text begin Ending June 30 new text end
				new text begin 2024 new text end		new text begin 2025 new text end

Sec. 2. new text begin DEPARTMENT OF COMMERCE new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 34,614,000 new text end

new text begin $ new text end

new text begin 264,880,000 new text end

new text begin Appropriations by Fund new text end
	new text begin 2024 new text end	new text begin 2025 new text end
new text begin General new text end	new text begin 30,873,000 new text end	new text begin 261,230,000 new text end
new text begin Workers' Compensation Fund new text end	new text begin 788,000 new text end	new text begin 815,000 new text end
new text begin Telecommunications Access Fund new text end	new text begin 2,093,000 new text end	new text begin 2,093,000 new text end

new text begin The amounts that may be spent for each
purpose are specified in the following
subdivisions.
new text end

new text begin Subd. 2. new text end new text begin Financial Institutions new text end

new text begin 2,569,000 new text end

new text begin 2,689,000 new text end

new text begin (a) $400,000 each year is for a grant to Prepare
and Prosper to develop, market, evaluate, and
distribute a financial services inclusion
program that (1) assists low-income and
financially underserved populations to build
savings and strengthen credit, and (2) provides
services to assist low-income and financially
underserved populations to become more
financially stable and secure. Money
remaining after the first year is available for
the second year.
new text end

new text begin (b) $197,000 each year is to create and
maintain a student loan advocate position
under Minnesota Statutes, section 58B.011.
new text end

new text begin Subd. 3. new text end new text begin Administrative Services new text end

new text begin 10,076,000 new text end

new text begin 10,102,000 new text end

new text begin (a) $353,000 each year is for information
technology and cybersecurity upgrades for the
unclaimed property program.
new text end

new text begin (b) $564,000 each year is for system
modernization of the unclaimed property
program.
new text end

new text begin (c) $249,000 each year is for the senior safe
fraud prevention program.
new text end

new text begin (d) $568,000 in the first year and $537,000 in
the second year are to create and maintain the
Prescription Drug Affordability Board
established under Minnesota Statutes, section
62J.87. The base in fiscal year 2026 is
$500,000.
new text end

new text begin (e) $150,000 each year is for a grant to Exodus
Lending to expand program and operational
capacity to assist individuals with financial
stability through small dollar consumer loans,
including but not limited to resolving
consumer short-term loans carrying interest
rates greater than 36 percent. Loans issued
under the program must be: (1) interest- and
fee-free; and (2) made to Minnesotans facing
significant barriers to mainstream financial
products. Program participants must be
recruited through a statewide network of
trusted community-based partners. Loan
payments by borrowers must be reported to
the credit bureaus. The appropriations in this
paragraph are onetime and are available until
June 30, 2027.
new text end

new text begin (f) For the purposes of paragraphs (e) and (g),
the following terms have the meanings given:
new text end

new text begin (1) "barriers to financial inclusion" means a
person's financial history, credit history and
credit score requirements, scarcity of
depository institutions in lower income and
communities of color, and low or irregular
income flows;
new text end

new text begin (2) "character-based lending" means the
practice of issuing loans based on a borrower's
involvement in and ties to community-based
organizations that provide client services,
including but not limited to financial coaching;
and
new text end

new text begin (3) "mainstream financial products" means
financial products that are provided most
commonly by regulated financial institutions,
including but not limited to credit cards and
installment loans.
new text end

new text begin (g) $200,000 in fiscal year 2024 is for a grant
to Exodus Lending to assist in the
development of a character-based small dollar
loan program. This is a onetime appropriation
and is available until June 30, 2027.
new text end

new text begin (h) No later than July 15, 2024, and annually
thereafter until the appropriations under
paragraphs (e) and (g) have been exhausted
or canceled, Exodus Lending must submit a
report to the commissioner of commerce on
the activities required of Exodus Lending
under paragraphs (e) and (g). Until July 15,
2027, the report must detail, at a minimum,
each of the following for the prior calendar
year and, after July 15, 2027, the report must
detail, at a minimum, each of the following
that relate to the activities of Exodus Lending
under paragraph (g) for the prior calendar year:
new text end

new text begin (1) the total number of loans granted;
new text end

new text begin (2) the total number of participants granted
loans;
new text end

new text begin (3) an analysis of the participants' race,
ethnicity, gender, and geographic locations;
new text end

new text begin (4) the average loan amount;
new text end

new text begin (5) the total loan amounts paid back by
participants;
new text end

new text begin (6) a list of the trusted community-based
partners;
new text end

new text begin (7) the final criteria developed for
character-based small dollar loan program
determinations under paragraph (g); and
new text end

new text begin (8) summary data on the significant barriers
to mainstream financial products faced by
participants.
new text end

new text begin (i) No later than August 15, 2024, and
annually thereafter until the appropriations
under paragraphs (e) and (g) have been
exhausted or canceled, the commissioner of
commerce must submit a report to the chairs
and ranking minority members of the
legislative committees with primary
jurisdiction over commerce and consumer
protection. The report must detail the
information collected by the commissioner of
commerce under paragraph (h).
new text end

new text begin Subd. 4. new text end new text begin Enforcement new text end

new text begin 7,185,000 new text end

new text begin 7,473,000 new text end

new text begin Appropriations by Fund new text end
new text begin General new text end	new text begin 6,977,000 new text end	new text begin 7,258,000 new text end
new text begin Workers' Compensation new text end	new text begin 208,000 new text end	new text begin 215,000 new text end

new text begin (a) $811,000 each year is for five additional
peace officers in the Commerce Fraud Bureau.
Money under this paragraph is transferred
from the general fund to the insurance fraud
prevention account under Minnesota Statutes,
section 45.0135, subdivision 6.
new text end

new text begin (b) $345,000 each year is for additional staff
to focus on market conduct examinations.
new text end

new text begin (c) $41,000 in the first year and $21,000 in
the second year are for body cameras worn by
Commerce Fraud Bureau agents.
new text end

new text begin (d) $208,000 in the first year and $215,000 in
the second year are from the workers'
compensation fund.
new text end

new text begin (e) $100,000 in the second year is for the
creation and maintenance of the Mental Health
Parity and Substance Abuse Accountability
Office under Minnesota Statutes, section
62Q.465. The base for fiscal year 2026 is
$175,000.
new text end

new text begin Subd. 5. new text end new text begin Telecommunications new text end

new text begin 3,221,000 new text end

new text begin 3,261,000 new text end

new text begin Appropriations by Fund new text end
new text begin General new text end	new text begin 1,128,000 new text end	new text begin 1,168,000 new text end
new text begin Telecommunications Access Fund new text end	new text begin 2,093,000 new text end	new text begin 2,093,000 new text end

new text begin $2,093,000 each year is from the
telecommunications access Minnesota fund
account in the special revenue fund for the
following transfers:
new text end

new text begin (1) $1,620,000 each year is to the
commissioner of human services to
supplement the ongoing operational expenses
of the Commission of Deaf, DeafBlind, and
Hard-of-Hearing Minnesotans. This transfer
is subject to Minnesota Statutes, section
16A.281;
new text end

new text begin (2) $290,000 each year is to the chief
information officer to coordinate technology
accessibility and usability;
new text end

new text begin (3) $133,000 each year is to the Legislative
Coordinating Commission for captioning
legislative coverage. This transfer is subject
to Minnesota Statutes, section 16A.281; and
new text end

new text begin (4) $50,000 each year is to the Office of
MN.IT Services for a consolidated access fund
to provide grants or services to other state
agencies related to accessibility of web-based
services.
new text end

new text begin Subd. 6. new text end new text begin Insurance new text end

new text begin 9,172,000 new text end

new text begin 9,592,000 new text end

new text begin Appropriations by Fund new text end
new text begin General new text end	new text begin 8,592,000 new text end	new text begin 8,992,000 new text end
new text begin Workers' Compensation new text end	new text begin 580,000 new text end	new text begin 600,000 new text end

new text begin (a) $136,000 each year is to advance
standardized health plan options.
new text end

new text begin (b) $318,000 each year is to conduct a
feasibility study on a proposal to offer free
primary care to Minnesotans. The
appropriations in this paragraph are onetime.
new text end

new text begin (c) $105,000 each year is to evaluate
legislation for new mandated health benefits
under Minnesota Statutes, section 62J.26.
new text end

new text begin (d) $180,000 each year is for additional staff
to focus on property- and casualty-related
insurance products.
new text end

new text begin (e) $580,000 in the first year and $600,000 in
the second year are from the workers'
compensation fund.
new text end

new text begin (f) $42,000 each year is for ensuring health
plan company compliance with Minnesota
Statutes, section 62Q.47.
new text end

new text begin (g) $50,000 each year is to evaluate existing
statutory health benefit mandates. The base
for fiscal year 2027 is $80,000.
new text end

new text begin Subd. 7. new text end new text begin Weights and Measures Division new text end

new text begin 1,531,000 new text end

new text begin 1,556,000 new text end

Sec. 3. new text begin DEPARTMENT OF EDUCATION new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 100,000 new text end

new text begin $ new text end

new text begin -0- new text end

new text begin Appropriations by Fund new text end
	new text begin 2024 new text end	new text begin 2025 new text end
new text begin General new text end	new text begin 100,000 new text end	new text begin -0- new text end

new text begin $100,000 in the first year is to issue grants of
$50,000 each year to the Minnesota Council
on Economic Education. This balance does
not cancel but is available in the second year.
This appropriation is onetime.
new text end

Sec. 4. new text begin ATTORNEY GENERAL new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 691,000 new text end

new text begin $ new text end

new text begin 691,000 new text end

new text begin Appropriations by Fund new text end
	new text begin 2024 new text end	new text begin 2025 new text end
new text begin General new text end	new text begin 691,000 new text end	new text begin 691,000 new text end

new text begin The amounts that may be spent for each
purpose are specified in the following
subdivisions.
new text end

new text begin Subd. 2. new text end new text begin Excessive Price Increases to Generic Drugs new text end

new text begin 549,000 new text end

new text begin 549,000 new text end

new text begin $549,000 each year is for the duties under
Minnesota Statutes, sections 62J.841 to
64J.845.
new text end

new text begin Subd. 3. new text end new text begin Age-Appropriate Design new text end

new text begin 142,000 new text end

new text begin 142,000 new text end

new text begin $142,000 each year is to enforce the
Minnesota Age-Appropriate Design Code Act.
new text end

Sec. 5. new text begin DEPARTMENT OF HEALTH new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 69,000 new text end

new text begin $ new text end

new text begin 51,000 new text end

new text begin Appropriations by Fund new text end
	new text begin 2024 new text end	new text begin 2025 new text end
new text begin General new text end	new text begin 69,000 new text end	new text begin 51,000 new text end

new text begin $69,000 in the first year and $51,000 in the
second year are for the duties under Minnesota
Statutes, sections 62J.841 to 64J.845.
new text end

Sec. 6. new text begin CONSUMER EDUCATION ACCOUNT TRANSFER.
new text end

new text begin $100,000 in fiscal year 2024 is transferred from the consumer education account in the
special revenue fund to the general fund.
new text end

Sec. 7. new text begin PREMIUM SECURITY ACCOUNT TRANSFER; IN.
new text end

new text begin $229,465,000 in fiscal year 2025 is transferred from the general fund to the premium
security plan account under Minnesota Statutes, section 62E.25, subdivision 1. This is a
onetime transfer.
new text end

Sec. 8. new text begin PREMIUM SECURITY ACCOUNT TRANSFER; OUT.
new text end

new text begin $275,775,000 in fiscal year 2026 is transferred from the premium security plan account
under Minnesota Statutes, section 62E.25, subdivision 1, to the general fund. This is a
onetime transfer.
new text end

ARTICLE 2

INSURANCE

Section 1.

Minnesota Statutes 2022, section 60A.08, subdivision 15, is amended to read:

Subd. 15.

Classification of insurance filings data.

(a) All forms, rates, and related
information filed with the commissioner under section 61A.02 shall be nonpublic data until
the filing becomes effective.

(b) All forms, rates, and related information filed with the commissioner under section
62A.02 shall be nonpublic data until the filing becomes effective.

(c) All forms, rates, and related information filed with the commissioner under section
62C.14, subdivision 10, shall be nonpublic data until the filing becomes effective.

(d) All forms, rates, and related information filed with the commissioner under section
70A.06 shall be nonpublic data until the filing becomes effective.

(e) All forms, rates, and related information filed with the commissioner under section
79.56 shall be nonpublic data until the filing becomes effective.

new text begin (f) All forms, rates, and related information filed with the commissioner under section
65A.298 are nonpublic data until the filing becomes effective.
new text end

deleted text begin (f) deleted text end new text begin (g) new text end Notwithstanding paragraphs (b) and (c), for all rate increases subject to review
under section 2794 of the Public Health Services Act and any amendments to, or regulations,
or guidance issued under the act that are filed with the commissioner on or after September
1, 2011, the commissioner:

(1) may acknowledge receipt of the information;

(2) may acknowledge that the corresponding rate filing is pending review;

(3) must provide public access from the Department of Commerce's website to parts I
and II of the Preliminary Justifications of the rate increases subject to review; and

(4) must provide notice to the public on the Department of Commerce's website of the
review of the proposed rate, which must include a statement that the public has 30 calendar
days to submit written comments to the commissioner on the rate filing subject to review.

deleted text begin (g) deleted text end new text begin (h) new text end Notwithstanding paragraphs (b) and (c), for all proposed premium rates filed
with the commissioner for individual health plans, as defined in section 62A.011, subdivision
4, and small group health plans, as defined in section 62K.03, subdivision 12, the
commissioner must provide public access on the Department of Commerce's website to
compiled data of the proposed changes to rates, separated by health plan and geographic
rating area, within ten business days after the deadline by which health carriers, as defined
in section 62A.011, subdivision 2, must submit proposed rates to the commissioner for
approval.

Sec. 2.

new text begin [60A.0812] PROPERTY AND CASUALTY POLICY EXCLUSIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Short title. new text end

new text begin This section may be cited as the "Family Protection Act."
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Boat" means a motorized or nonmotorized vessel that floats and is used for personal,
noncommercial use on waters in Minnesota.
new text end

new text begin (c) "Insured" means an insured under a policy specified in subdivisions 3 and 4, including
the named insured and the following persons not identified by name as an insured while
residing in the same household with the named insured:
new text end

new text begin (1) a spouse;
new text end

new text begin (2) a relative of a named insured; or
new text end

new text begin (3) a minor in the custody of a named insured or of a relative residing in the same
household with a named insured.
new text end

new text begin For purposes of this paragraph, a person resides in the same household with the named
insured if the person's home is usually in the same family unit, even if the person is
temporarily living elsewhere.
new text end

new text begin (d) "Permitted exclusion" means an exclusion of or limitation on liability for damages
for bodily injury resulting from fraud, intentional conduct, criminal conduct that intentionally
causes an injury, and other exclusions permitted by law.
new text end

new text begin (e) "Prohibited exclusion" means an exclusion of or limitation on liability for damages
for bodily injury because the injured person is (1) a person other than a named insured, (2)
a resident or member of the insured's household, or (3) related to the insured by blood or
marriage.
new text end

new text begin Subd. 3. new text end

new text begin Prohibited exclusions. new text end

new text begin (a) A plan of reparation security, as defined under
section 65B.43, a boat insurance policy covering a personal injury sustained while using a
boat, a personal excess liability policy, or a personal umbrella policy must not contain a
prohibited exclusion.
new text end

new text begin (b) A prohibited exclusion contained in a plan or policy identified under paragraph (a)
is against public policy and is void.
new text end

new text begin Subd. 4. new text end

new text begin Permitted exclusions. new text end

new text begin A boat insurance policy, personal excess liability policy,
or personal umbrella policy may contain a permitted exclusion.
new text end

new text begin Subd. 5. new text end

new text begin Underlying coverage requirement. new text end

new text begin An excess or umbrella policy may contain
a requirement that coverage for family or household members under an excess or umbrella
policy governed by this section is available only to the extent coverage is first available
from an underlying policy that provides coverage for damages for bodily injury.
new text end

new text begin Subd. 6. new text end

new text begin No endorsement required. new text end

new text begin An endorsement, rider, or contract amendment is
not required for the definitions in this section to be effective.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to contracts
offered, issued, or renewed on or after that date.
new text end

Sec. 3.

Minnesota Statutes 2022, section 60A.14, subdivision 1, is amended to read:

Subdivision 1.

Fees other than examination fees.

In addition to the fees and charges
provided for examinations, the following fees must be paid to the commissioner for deposit
in the general fund:

(a) by township mutual fire insurance companies:

(1) for filing certificate of incorporation $25 and amendments thereto, $10;

(2) for filing annual statements, $15;

(3) for each annual certificate of authority, $15;

(4) for filing bylaws $25 and amendments thereto, $10;

(b) by other domestic and foreign companies including fraternals and reciprocal
exchanges:

(1) for filing an application for an initial certification of authority to be admitted to
transact business in this state, $1,500;

(2) for filing certified copy of certificate of articles of incorporation, $100;

(3) for filing annual statement, deleted text begin $225 deleted text end new text begin $300 new text end ;

(4) for filing certified copy of amendment to certificate or articles of incorporation, $100;

(5) for filing bylaws, $75 or amendments thereto, $75;

(6) for each company's certificate of authority, deleted text begin $575 deleted text end new text begin $750 new text end , annually;

(c) the following general fees apply:

(1) for each certificate, including certified copy of certificate of authority, renewal,
valuation of life policies, corporate condition or qualification, $25;

(2) for each copy of paper on file in the commissioner's office 50 cents per page, and
$2.50 for certifying the same;

(3) for license to procure insurance in unadmitted foreign companies, $575;

(4) for valuing the policies of life insurance companies, deleted text begin one cent deleted text end new text begin two cents new text end per $1,000
of insurance so valued, provided that the fee shall not exceed deleted text begin $13,000 deleted text end new text begin $26,000 new text end per year for
any company. The commissioner may, in lieu of a valuation of the policies of any foreign
life insurance company admitted, or applying for admission, to do business in this state,
accept a certificate of valuation from the company's own actuary or from the commissioner
of insurance of the state or territory in which the company is domiciled;

(5) for receiving and filing certificates of policies by the company's actuary, or by the
commissioner of insurance of any other state or territory, $50;

(6) for each appointment of an agent filed with the commissioner, $30;

(7) for filing forms, rates, and compliance certifications under section 60A.315, $140
per filing, or $125 per filing when submitted via electronic filing system. Filing fees may
be paid on a quarterly basis in response to an invoice. Billing and payment may be made
electronically;

(8) for annual renewal of surplus lines insurer license, deleted text begin $300 deleted text end new text begin $400 new text end .

The commissioner shall adopt rules to define filings that are subject to a fee.

Sec. 4.

Minnesota Statutes 2022, section 61A.031, is amended to read:

61A.031 SUICIDE PROVISIONS.

new text begin (a) new text end The sanity or insanity of a person shall not be a factor in determining whether a
person committed suicide within the terms of an individual or group life insurance policy
regulating the payment of benefits in the event of the insured's suicide. This section shall
not be construed to alter present law but is intended to clarify present law.

new text begin (b) A life insurance policy or certificate issued or delivered in this state may exclude or
restrict liability for any death benefit in the event the insured dies as a result of suicide
within one year from the date the policy or certificate is issued. Any exclusion or restriction
shall be clearly stated in the policy or certificate. Any life insurance policy or certificate
which contains any exclusion or restriction under this paragraph shall also provide that in
the event any death benefit is denied because the insured dies as a result of suicide within
one year from the date the policy or certificate is issued, the insurer shall refund all premiums
paid for coverage providing the denied death benefit on the insured.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to policies
issued or after that date.
new text end

Sec. 5.

Minnesota Statutes 2022, section 61A.60, subdivision 3, is amended to read:

Subd. 3.

Definitions.

The following definitions must appear on the back of the notice
forms provided in subdivisions 1 and 2:

DEFINITIONS

PREMIUMS: Premiums are the payments you make in exchange for an insurance policy
or annuity contract. They are unlike deposits in a savings or investment program, because
if you drop the policy or contract, you might get back less than you paid in.

CASH SURRENDER VALUE: This is the amount of money you can get in cash if you
surrender your life insurance policy or annuity. If there is a policy loan, the cash surrender
value is the difference between the cash value printed in the policy and the loan value. Not
all policies have cash surrender values.

LAPSE: A life insurance policy may lapse when you do not pay the premiums within
the grace period. If you had a cash surrender value, the insurer might change your policy
to as much extended term insurance or paid-up insurance as the cash surrender value will
buy. Sometimes the policy lets the insurer borrow from the cash surrender value to pay the
premiums.

SURRENDER: You surrender a life insurance policy when you either let it lapse or tell
the company you want to drop it. Whenever a policy has a cash surrender value, you can
get it in cash if you return the policy to the company with a written request. Most insurers
will also let you exchange the cash value of the policy for paid-up or extended term insurance.

CONVERT TO PAID-UP INSURANCE: This means you use your cash surrender value
to change your insurance to a paid-up policy with the same insurer. The death benefit
generally will be lower than under the old policy, but you will not have to pay any more
premiums.

PLACE ON EXTENDED TERM: This means you use your cash surrender value to
change your insurance to term insurance with the same insurer. In this case, the net death
benefit will be the same as before. However, you will only be covered for a specified period
of time stated in the policy.

BORROW POLICY LOAN VALUES: If your life insurance policy has a cash surrender
value, you can almost always borrow all or part of it from the insurer. Interest will be charged
according to the terms of the policy, and if the loan with unpaid interest ever exceeds the
cash surrender value, your policy will be surrendered. If you die, the amount of the loan
and any unpaid interest due will be subtracted from the death benefits.

EVIDENCE OF INSURABILITY: This means proof that you are an acceptable risk.
You have to meet the insurer's standards regarding age, health, occupation, etc., to be eligible
for coverage.

INCONTESTABLE CLAUSE: This says that after two years, depending on the policy
or insurer, the life insurer will not resist a claim because you made a false or incomplete
statement when you applied for the policy. For the early years, though, if there are wrong
answers on the application and the insurer finds out about them, the insurer can deny a claim
as if the policy had never existed.

SUICIDE CLAUSE: This says that if you deleted text begin commit deleted text end new text begin complete new text end suicide after being insured
for less than deleted text begin two years deleted text end new text begin one year new text end , depending on the policy and insurer, your beneficiaries
will receive only a refund of the premiums that were paid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to policies
issued on or after that date.
new text end

Sec. 6.

Minnesota Statutes 2022, section 62A.152, subdivision 3, is amended to read:

Subd. 3.

Provider discrimination prohibited.

All group policies and group subscriber
contracts that provide benefits for mental or nervous disorder treatments in a hospital must
provide direct reimbursement for those services new text begin at a hospital or psychiatric residential
treatment facility new text end if performed by a mental health professional qualified according to section
245I.04, subdivision 2, to the extent that the services and treatment are within the scope of
mental health professional licensure.

This subdivision is intended to provide payment of benefits for mental or nervous disorder
treatments performed by a licensed mental health professional in a hospital new text begin or psychiatric
residential treatment facility new text end and is not intended to change or add benefits for those services
provided in policies or contracts to which this subdivision applies.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to health
plans offered, issued, or renewed on or after that date.
new text end

Sec. 7.

Minnesota Statutes 2022, section 62A.3099, is amended by adding a subdivision
to read:

new text begin Subd. 18b. new text end

new text begin Open enrollment period. new text end

new text begin "Open enrollment period" means the time period
described in Code of Federal Regulations, title 42, section 422.62, paragraph (a), clauses
(3) to (5), as amended.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to policies
offered, issued, or renewed on or after that date.
new text end

Sec. 8.

Minnesota Statutes 2022, section 62A.31, subdivision 1, is amended to read:

Subdivision 1.

Policy requirements.

No individual or group policy, certificate, subscriber
contract issued by a health service plan corporation regulated under chapter 62C, or other
evidence of accident and health insurance the effect or purpose of which is to supplement
Medicare coverage, including to supplement coverage under Medicare Advantage plans
established under Medicare Part C, issued or delivered in this state or offered to a resident
of this state shall be sold or issued to an individual covered by Medicare unless the
requirements in subdivisions 1a to deleted text begin 1v deleted text end new text begin 1w new text end are met.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to policies
offered, issued, or renewed on or after that date.
new text end

Sec. 9.

Minnesota Statutes 2022, section 62A.31, subdivision 1f, is amended to read:

Subd. 1f.

Suspension based on entitlement to medical assistance.

(a) The policy or
certificate must provide that benefits and premiums under the policy or certificate shall be
suspended for any period that may be provided by federal regulation at the request of the
policyholder or certificate holder for the period, not to exceed 24 months, in which the
policyholder or certificate holder has applied for and is determined to be entitled to medical
assistance under title XIX of the Social Security Act, but only if the policyholder or certificate
holder notifies the issuer of the policy or certificate within 90 days after the date the
individual becomes entitled to this assistance.

(b) If suspension occurs and if the policyholder or certificate holder loses entitlement
to this medical assistance, the policy or certificate shall be automatically reinstated, effective
as of the date of termination of this entitlement, if the policyholder or certificate holder
provides notice of loss of the entitlement within 90 days after the date of the loss and pays
the premium attributable to the period, effective as of the date of termination of entitlement.

(c) The policy must provide that upon reinstatement (1) there is no deleted text begin additional deleted text end waiting
period with respect to treatment of preexisting conditions, (2) coverage is provided which
is substantially equivalent to coverage in effect before the date of the suspension. If the
suspended policy provided coverage for outpatient prescription drugs, reinstitution of the
policy for Medicare Part D enrollees must be without coverage for outpatient prescription
drugs and must otherwise provide coverage substantially equivalent to the coverage in effect
before the date of suspension, and (3) premiums are classified on terms that are at least as
favorable to the policyholder or certificate holder as the premium classification terms that
would have applied to the policyholder or certificate holder had coverage not been suspended.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to policies
offered, issued, or renewed on or after that date.
new text end

Sec. 10.

Minnesota Statutes 2022, section 62A.31, subdivision 1h, is amended to read:

Subd. 1h.

Limitations on denials, conditions, and pricing of coverage.

No health
carrier issuing Medicare-related coverage in this state may impose preexisting condition
limitations or otherwise deny or condition the issuance or effectiveness of any such coverage
available for sale in this state, nor may it discriminate in the pricing of such coverage,
because of the health status, claims experience, receipt of health care, medical condition,
or age of an applicant where an application for such coverage is submitted new text begin : (1) new text end prior to or
during the six-month period beginning with the first day of the month in which an individual
first enrolled for benefits under Medicare Part B new text begin ; or (2) during the open enrollment period new text end .
This subdivision applies to each Medicare-related coverage offered by a health carrier
regardless of whether the individual has attained the age of 65 years. If an individual who
is enrolled in Medicare Part B due to disability status is involuntarily disenrolled due to loss
of disability status, the individual is eligible for another six-month enrollment period provided
under this subdivision beginning the first day of the month in which the individual later
becomes eligible for and enrolls again in Medicare Part B new text begin and during the open enrollment
period new text end . An individual who is or was previously enrolled in Medicare Part B due to disability
status is eligible for another six-month enrollment period under this subdivision beginning
the first day of the month in which the individual has attained the age of 65 years and either
maintains enrollment in, or enrolls again in, Medicare Part B new text begin and during the open enrollment
period new text end . If an individual enrolled in Medicare Part B voluntarily disenrolls from Medicare
Part B because the individual becomes enrolled under an employee welfare benefit plan,
the individual is eligible for another six-month enrollment period, as provided in this
subdivision, beginning the first day of the month in which the individual later becomes
eligible for and enrolls again in Medicare Part B new text begin and during the open enrollment period new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to policies
offered, issued, or renewed on or after that date.
new text end

Sec. 11.

Minnesota Statutes 2022, section 62A.31, subdivision 1p, is amended to read:

Subd. 1p.

Renewal or continuation provisions.

Medicare supplement policies and
certificates shall include a renewal or continuation provision. The language or specifications
of the provision shall be consistent with the type of contract issued. The provision shall be
appropriately captioned and shall appear on the first page of the policy or certificate, and
shall include any reservation by the issuer of the right to change premiums. Except for riders
or endorsements by which the issuer effectuates a request made in writing by the insured,
exercises a specifically reserved right under a Medicare supplement policy or certificate,
or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all
riders or endorsements added to a Medicare supplement policy or certificate after the date
of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the
policy or certificate shall require a signed acceptance by the insured. After the date of policy
or certificate issue, a rider or endorsement that increases benefits or coverage with a
concomitant increase in premium during the policy or certificate term shall be agreed to in
writing and signed by the insured, unless the benefits are required by the minimum standards
for Medicare supplement policies or if the increased benefits or coverage is required by
law. deleted text begin Where a separate additional premium is charged for benefits provided in connection
with riders or endorsements, the premium charge shall be set forth in the policy, declaration
page, or certificate. If a Medicare supplement policy or certificate contains limitations with
respect to preexisting conditions, the limitations shall appear as a separate paragraph of the
policy or certificate and be labeled as "preexisting condition limitations."
deleted text end

Issuers of accident and sickness policies or certificates that provide hospital or medical
expense coverage on an expense incurred or indemnity basis to persons eligible for Medicare
shall provide to those applicants a "Guide to Health Insurance for People with Medicare"
in the form developed by the Centers for Medicare and Medicaid Services and in a type
size no smaller than 12-point type. Delivery of the guide must be made whether or not such
policies or certificates are advertised, solicited, or issued as Medicare supplement policies
or certificates as defined in this section and section 62A.3099. Except in the case of direct
response issuers, delivery of the guide must be made to the applicant at the time of
application, and acknowledgment of receipt of the guide must be obtained by the issuer.
Direct response issuers shall deliver the guide to the applicant upon request, but no later
than the time at which the policy is delivered.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to policies
offered, issued, or renewed on or after that date.
new text end

Sec. 12.

Minnesota Statutes 2022, section 62A.31, subdivision 1u, is amended to read:

Subd. 1u.

Guaranteed issue for eligible persons.

(a)(1) Eligible persons are those
individuals described in paragraph (b) who seek to enroll under the policy during the period
specified in paragraph (c) and who submit evidence of the date of termination or
disenrollment described in paragraph (b), or of the date of Medicare Part D enrollment, with
the application for a Medicare supplement policy.

(2) With respect to eligible persons, an issuer shall not: deny or condition the issuance
or effectiveness of a Medicare supplement policy described in paragraph (c) that is offered
and is available for issuance to new enrollees by the issuer; discriminate in the pricing of
such a Medicare supplement policy because of health status, claims experience, receipt of
health care, medical condition, or age; or impose an exclusion of benefits based upon a
preexisting condition under such a Medicare supplement policy.

(b) An eligible person is an individual described in any of the following:

(1) the individual is enrolled under an employee welfare benefit plan that provides health
benefits that supplement the benefits under Medicare; and the plan terminates, or the plan
ceases to provide all such supplemental health benefits to the individual;

(2) the individual is enrolled with a Medicare Advantage organization under a Medicare
Advantage plan under Medicare Part C, and any of the following circumstances apply, or
the individual is 65 years of age or older and is enrolled with a Program of All-Inclusive
Care for the Elderly (PACE) provider under section 1894 of the federal Social Security Act,
and there are circumstances similar to those described in this clause that would permit
discontinuance of the individual's enrollment with the provider if the individual were enrolled
in a Medicare Advantage plan:

(i) the organization's or plan's certification under Medicare Part C has been terminated
or the organization has terminated or otherwise discontinued providing the plan in the area
in which the individual resides;

(ii) the individual is no longer eligible to elect the plan because of a change in the
individual's place of residence or other change in circumstances specified by the secretary,
but not including termination of the individual's enrollment on the basis described in section
1851(g)(3)(B) of the federal Social Security Act, United States Code, title 42, section
1395w-21(g)(3)(b) (where the individual has not paid premiums on a timely basis or has
engaged in disruptive behavior as specified in standards under section 1856 of the federal
Social Security Act, United States Code, title 42, section 1395w-26), or the plan is terminated
for all individuals within a residence area;

(iii) the individual demonstrates, in accordance with guidelines established by the
Secretary, that:

(A) the organization offering the plan substantially violated a material provision of the
organization's contract in relation to the individual, including the failure to provide an
enrollee on a timely basis medically necessary care for which benefits are available under
the plan or the failure to provide such covered care in accordance with applicable quality
standards; or

(B) the organization, or agent or other entity acting on the organization's behalf, materially
misrepresented the plan's provisions in marketing the plan to the individual; or

(iv) the individual meets such other exceptional conditions as the secretary may provide;

(3)(i) the individual is enrolled with:

(A) an eligible organization under a contract under section 1876 of the federal Social
Security Act, United States Code, title 42, section 1395mm (Medicare cost);

(B) a similar organization operating under demonstration project authority, effective for
periods before April 1, 1999;

(C) an organization under an agreement under section 1833(a)(1)(A) of the federal Social
Security Act, United States Code, title 42, section 1395l(a)(1)(A) (health care prepayment
plan); or

(D) an organization under a Medicare Select policy under section 62A.318 or the similar
law of another state; and

(ii) the enrollment ceases under the same circumstances that would permit discontinuance
of an individual's election of coverage under clause (2);

(4) the individual is enrolled under a Medicare supplement policy, and the enrollment
ceases because:

(i)(A) of the insolvency of the issuer or bankruptcy of the nonissuer organization; or

(B) of other involuntary termination of coverage or enrollment under the policy;

(ii) the issuer of the policy substantially violated a material provision of the policy; or

(iii) the issuer, or an agent or other entity acting on the issuer's behalf, materially
misrepresented the policy's provisions in marketing the policy to the individual;

(5)(i) the individual was enrolled under a Medicare supplement policy and terminates
that enrollment and subsequently enrolls, for the first time, with any Medicare Advantage
organization under a Medicare Advantage plan under Medicare Part C; any eligible
organization under a contract under section 1876 of the federal Social Security Act, United
States Code, title 42, section 1395mm (Medicare cost); any similar organization operating
under demonstration project authority; any PACE provider under section 1894 of the federal
Social Security Act, or a Medicare Select policy under section 62A.318 or the similar law
of another state; and

(ii) the subsequent enrollment under item (i) is terminated by the enrollee during any
period within the first 12 months of the subsequent enrollment during which the enrollee
is permitted to terminate the subsequent enrollment under section 1851(e) of the federal
Social Security Act;

(6) the individual, upon first enrolling for benefits under Medicare Part B, enrolls in a
Medicare Advantage plan under Medicare Part C, or with a PACE provider under section
1894 of the federal Social Security Act, and disenrolls from the plan by not later than 12
months after the effective date of enrollment; deleted text begin or
deleted text end

(7) the individual enrolls in a Medicare Part D plan during the initial Part D enrollment
period, as defined under United States Code, title 42, section 1395ss(v)(6)(D), and, at the
time of enrollment in Part D, was enrolled under a Medicare supplement policy that covers
outpatient prescription drugs and the individual terminates enrollment in the Medicare
supplement policy and submits evidence of enrollment in Medicare Part D along with the
application for a policy described in paragraph (e), clause (4) deleted text begin . deleted text end new text begin ; or
new text end

new text begin (8) the individual was enrolled in a state public program and is losing coverage due to
the unwinding of the Medicaid continuous enrollment conditions, as provided by Code of
Federal Regulations, title 45, section 155.420(d)(9) and (d)(1), and Public Law 117-328,
section 5131 (2022).
new text end

(c)(1) In the case of an individual described in paragraph (b), clause (1), the guaranteed
issue period begins on the later of: (i) the date the individual receives a notice of termination
or cessation of all supplemental health benefits or, if a notice is not received, notice that a
claim has been denied because of a termination or cessation; or (ii) the date that the applicable
coverage terminates or ceases; and ends 63 days after the later of those two dates.

(2) In the case of an individual described in paragraph (b), clause (2), (3), (5), or (6),
whose enrollment is terminated involuntarily, the guaranteed issue period begins on the
date that the individual receives a notice of termination and ends 63 days after the date the
applicable coverage is terminated.

(3) In the case of an individual described in paragraph (b), clause (4), item (i), the
guaranteed issue period begins on the earlier of: (i) the date that the individual receives a
notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar
notice if any; and (ii) the date that the applicable coverage is terminated, and ends on the
date that is 63 days after the date the coverage is terminated.

(4) In the case of an individual described in paragraph (b), clause (2), (4), (5), or (6),
who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days
before the effective date of the disenrollment and ends on the date that is 63 days after the
effective date.

(5) In the case of an individual described in paragraph (b), clause (7), the guaranteed
issue period begins on the date the individual receives notice pursuant to section
1882(v)(2)(B) of the Social Security Act from the Medicare supplement issuer during the
60-day period immediately preceding the initial Part D enrollment period and ends on the
date that is 63 days after the effective date of the individual's coverage under Medicare Part
D.

(6) In the case of an individual described in paragraph (b) but not described in this
paragraph, the guaranteed issue period begins on the effective date of disenrollment and
ends on the date that is 63 days after the effective date.

new text begin (7) For all individuals described in paragraph (b), the open enrollment period is a
guaranteed issue period.
new text end

(d)(1) In the case of an individual described in paragraph (b), clause (5), or deemed to
be so described, pursuant to this paragraph, whose enrollment with an organization or
provider described in paragraph (b), clause (5), item (i), is involuntarily terminated within
the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with
another such organization or provider, the subsequent enrollment is deemed to be an initial
enrollment described in paragraph (b), clause (5).

(2) In the case of an individual described in paragraph (b), clause (6), or deemed to be
so described, pursuant to this paragraph, whose enrollment with a plan or in a program
described in paragraph (b), clause (6), is involuntarily terminated within the first 12 months
of enrollment, and who, without an intervening enrollment, enrolls in another such plan or
program, the subsequent enrollment is deemed to be an initial enrollment described in
paragraph (b), clause (6).

(3) For purposes of paragraph (b), clauses (5) and (6), no enrollment of an individual
with an organization or provider described in paragraph (b), clause (5), item (i), or with a
plan or in a program described in paragraph (b), clause (6), may be deemed to be an initial
enrollment under this paragraph after the two-year period beginning on the date on which
the individual first enrolled with the organization, provider, plan, or program.

(e) The Medicare supplement policy to which eligible persons are entitled under:

(1) paragraph (b), clauses (1) to (4), is any Medicare supplement policy that has a benefit
package consisting of the basic Medicare supplement plan described in section 62A.316,
paragraph (a), plus any combination of the three optional riders described in section 62A.316,
paragraph (b), clauses (1) to (3), offered by any issuer;

(2) paragraph (b), clause (5), is the same Medicare supplement policy in which the
individual was most recently previously enrolled, if available from the same issuer, or, if
not so available, any policy described in clause (1) offered by any issuer, except that after
December 31, 2005, if the individual was most recently enrolled in a Medicare supplement
policy with an outpatient prescription drug benefit, a Medicare supplement policy to which
the individual is entitled under paragraph (b), clause (5), is:

(i) the policy available from the same issuer but modified to remove outpatient
prescription drug coverage; or

(ii) at the election of the policyholder, a policy described in clause (4), except that the
policy may be one that is offered and available for issuance to new enrollees that is offered
by any issuer;

(3) paragraph (b), clause (6), is any Medicare supplement policy offered by any issuer;

(4) paragraph (b), clause (7), is a Medicare supplement policy that has a benefit package
classified as a basic plan under section 62A.316 if the enrollee's existing Medicare
supplement policy is a basic plan or, if the enrollee's existing Medicare supplement policy
is an extended basic plan under section 62A.315, a basic or extended basic plan at the option
of the enrollee, provided that the policy is offered and is available for issuance to new
enrollees by the same issuer that issued the individual's Medicare supplement policy with
outpatient prescription drug coverage. The issuer must permit the enrollee to retain all
optional benefits contained in the enrollee's existing coverage, other than outpatient
prescription drugs, subject to the provision that the coverage be offered and available for
issuance to new enrollees by the same issuer.

(f)(1) At the time of an event described in paragraph (b), because of which an individual
loses coverage or benefits due to the termination of a contract or agreement, policy, or plan,
the organization that terminates the contract or agreement, the issuer terminating the policy,
or the administrator of the plan being terminated, respectively, shall notify the individual
of the individual's rights under this subdivision, and of the obligations of issuers of Medicare
supplement policies under paragraph (a). The notice must be communicated
contemporaneously with the notification of termination.

(2) At the time of an event described in paragraph (b), because of which an individual
ceases enrollment under a contract or agreement, policy, or plan, the organization that offers
the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer
offering the policy, or the administrator of the plan, respectively, shall notify the individual
of the individual's rights under this subdivision, and of the obligations of issuers of Medicare
supplement policies under paragraph (a). The notice must be communicated within ten
working days of the issuer receiving notification of disenrollment.

(g) Reference in this subdivision to a situation in which, or to a basis upon which, an
individual's coverage has been terminated does not provide authority under the laws of this
state for the termination in that situation or upon that basis.

(h) An individual's rights under this subdivision are in addition to, and do not modify
or limit, the individual's rights under subdivision 1h.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to policies
offered, issued, or renewed on or after that date.
new text end

Sec. 13.

Minnesota Statutes 2022, section 62A.31, is amended by adding a subdivision to
read:

new text begin Subd. 1w. new text end

new text begin Open enrollment. new text end

new text begin A medicare supplement policy or certificate must not be
sold or issued to an eligible individual outside of the time periods described in subdivision
1u.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to policies
offered, issued, or renewed on or after that date.
new text end

Sec. 14.

Minnesota Statutes 2022, section 62A.31, subdivision 4, is amended to read:

Subd. 4.

Prohibited policy provisions.

(a) A Medicare supplement policy or certificate
in force in the state shall not contain benefits that duplicate benefits provided by Medicare
or contain exclusions on coverage that are more restrictive than those of Medicare.
Duplication of benefits is permitted to the extent permitted under subdivision 1s, paragraph
(a), for benefits provided by Medicare Part D.

(b) No Medicare supplement policy or certificate may use waivers to exclude, limit, or
reduce coverage or benefits for specifically named or described preexisting diseases or
physical conditions deleted text begin , except as permitted under subdivision 1b deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to policies
offered, issued, or renewed on or after that date.
new text end

Sec. 15.

Minnesota Statutes 2022, section 62A.44, subdivision 2, is amended to read:

Subd. 2.

Questions.

(a) Application forms shall include the following questions designed
to elicit information as to whether, as of the date of the application, the applicant has another
Medicare supplement or other health insurance policy or certificate in force or whether a
Medicare supplement policy or certificate is intended to replace any other accident and
sickness policy or certificate presently in force. A supplementary application or other form
to be signed by the applicant and agent containing the questions and statements may be
used.

"(1) You do not need more than one Medicare supplement policy or certificate.

(2) If you purchase this policy, you may want to evaluate your existing health coverage
and decide if you need multiple coverages.

(3) You may be eligible for benefits under Medicaid and may not need a Medicare
supplement policy or certificate.

(4) The benefits and premiums under your Medicare supplement policy or certificate
can be suspended, if requested, during your entitlement to benefits under Medicaid for
24 months. You must request this suspension within 90 days of becoming eligible for
Medicaid. If you are no longer entitled to Medicaid, your policy or certificate will be
reinstated if requested within 90 days of losing Medicaid eligibility.

(5) Counseling services may be available in Minnesota to provide advice concerning
medical assistance through state Medicaid, Qualified Medicare Beneficiaries (QMBs),
and Specified Low-Income Medicare Beneficiaries (SLMBs).

To the best of your knowledge:

(1) Do you have another Medicare supplement policy or certificate in force?

(a) If so, with which company?

(b) If so, do you intend to replace your current Medicare supplement policy with this
policy or certificate?

(2) Do you have any other health insurance policies that provide benefits which this
Medicare supplement policy or certificate would duplicate?

(a) If so, please name the company.

(b) What kind of policy?

(3) Are you covered for medical assistance through the state Medicaid program? If so,
which of the following programs provides coverage for you?

(a) Specified Low-Income Medicare Beneficiary (SLMB),

(b) Qualified Medicare Beneficiary (QMB), or

(c) full Medicaid Beneficiary?"

(b) Agents shall list any other health insurance policies they have sold to the applicant.

(1) List policies sold that are still in force.

(2) List policies sold in the past five years that are no longer in force.

(c) In the case of a direct response issuer, a copy of the application or supplemental
form, signed by the applicant, and acknowledged by the insurer, shall be returned to the
applicant by the insurer on delivery of the policy or certificate.

(d) Upon determining that a sale will involve replacement of Medicare supplement
coverage, any issuer, other than a direct response issuer, or its agent, shall furnish the
applicant, before issuance or delivery of the Medicare supplement policy or certificate, a
notice regarding replacement of Medicare supplement coverage. One copy of the notice
signed by the applicant and the agent, except where the coverage is sold without an agent,
shall be provided to the applicant and an additional signed copy shall be retained by the
issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of
the policy or certificate the notice regarding replacement of Medicare supplement coverage.

(e) The notice required by paragraph (d) for an issuer shall be provided in substantially
the following form in no less than 12-point type:

"NOTICE TO APPLICANT REGARDING REPLACEMENT

OF MEDICARE SUPPLEMENT INSURANCE

(Insurance company's name and address)

SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to terminate
existing Medicare supplement insurance and replace it with a policy or certificate to be
issued by (Company Name) Insurance Company. Your new policy or certificate will provide
30 days within which you may decide without cost whether you desire to keep the policy
or certificate.

You should review this new coverage carefully. Compare it with all accident and sickness
coverage you now have. If, after due consideration, you find that purchase of this Medicare
supplement coverage is a wise decision you should terminate your present Medicare
supplement policy. You should evaluate the need for other accident and sickness coverage
you have that may duplicate this policy.

STATEMENT TO APPLICANT BY ISSUER, AGENT, (BROKER OR OTHER
REPRESENTATIVE): I have reviewed your current medical or health insurance
coverage. To the best of my knowledge this Medicare supplement policy will not duplicate
your existing Medicare supplement policy because you intend to terminate the existing
Medicare supplement policy. The replacement policy or certificate is being purchased
for the following reason(s) (check one):

	.	Additional benefits
	.	No change in benefits, but lower premiums
	.	Fewer benefits and lower premiums
	.	Other (please specify)
	.
	.
	.

deleted text begin (1) Health conditions which you may presently have (preexisting conditions) may not
be immediately or fully covered under the new policy or certificate. This could result
in denial or delay of a claim for benefits under the new policy or certificate, whereas a
similar claim might have been payable under your present policy or certificate.
deleted text end

deleted text begin (2) State law provides that your replacement policy or certificate may not contain new
preexisting conditions, waiting periods, elimination periods, or probationary periods.
The insurer will waive any time periods applicable to preexisting conditions, waiting
periods, elimination periods, or probationary periods in the new policy (or coverage)
for similar benefits to the extent the time was spent (depleted) under the original policy
or certificate.
deleted text end

deleted text begin (3) If you still wish to terminate your present policy or certificate and replace it with
new coverage, be certain to truthfully and completely answer all questions on the
application concerning your medical and health history. Failure to include all material
medical information on an application may provide a basis for the company to deny any
future claims and to refund your premium as though your policy or certificate had never
been in force. After the application has been completed and before you sign it, review
it carefully to be certain that all information has been properly recorded. (If the policy
or certificate is guaranteed issue, this paragraph need not appear.)
deleted text end

Do not cancel your present policy or certificate until you have received your new policy
or certificate and you are sure that you want to keep it.

	.
	(Signature of Agent, Broker, or Other Representative)*
	.
	(Typed Name and Address of Issuer, Agent, or Broker)
	.
	(Date)
	.
	(Applicant's Signature)
	.
	(Date)

*Signature not required for direct response sales."

deleted text begin (f) Paragraph (e), clauses (1) and (2), of the replacement notice (applicable to preexisting
conditions) may be deleted by an issuer if the replacement does not involve application of
a new preexisting condition limitation.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to policies
offered, issued, or renewed on or after that date.
new text end

Sec. 16.

Minnesota Statutes 2022, section 62D.02, is amended by adding a subdivision to
read:

new text begin Subd. 17. new text end

new text begin Preventive items and services. new text end

new text begin "Preventive items and services" has the
meaning given in section 62Q.46, subdivision 1, paragraph (a).
new text end

Sec. 17.

Minnesota Statutes 2022, section 62D.095, subdivision 2, is amended to read:

Subd. 2.

Co-payments.

A health maintenance contract may impose a co-payment and
coinsurance consistent with the provisions of the Affordable Care Act as defined under
section 62A.011, subdivision 1a new text begin , and for items and services that are not preventive items
and services new text end .

Sec. 18.

Minnesota Statutes 2022, section 62D.095, subdivision 3, is amended to read:

Subd. 3.

Deductibles.

A health maintenance contract deleted text begin may deleted text end new text begin must not new text end impose a deductible
deleted text begin consistent with the provisions of the Affordable Care Act as defined under section 62A.011,
subdivision 1a deleted text end new text begin new text end new text begin for preventive items and services new text end .

Sec. 19.

Minnesota Statutes 2022, section 62D.095, subdivision 4, is amended to read:

Subd. 4.

Annual out-of-pocket maximums.

A health maintenance contract deleted text begin may deleted text end new text begin must
not new text end impose an annual out-of-pocket maximum deleted text begin consistent with the provisions of the
Affordable Care Act as defined under section 62A.011, subdivision 1a deleted text end new text begin for services rendered
that are not listed under section 62D.02, subdivision 17, or for preventive items and services new text end .

Sec. 20.

Minnesota Statutes 2022, section 62D.095, subdivision 5, is amended to read:

Subd. 5.

Exceptions.

deleted text begin No deleted text end Co-payments or deductibles deleted text begin may deleted text end new text begin must not new text end be imposed on
preventive deleted text begin health care deleted text end new text begin items and new text end services deleted text begin consistent with the provisions of the Affordable
Care Act as defined under section 62A.011, subdivision 1a deleted text end .

Sec. 21.

Minnesota Statutes 2022, section 62J.26, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

new text begin (a) new text end For purposes of this section, the following terms have
the meanings given unless the context otherwise requires:

(1) "commissioner" means the commissioner of commerce;

(2) "enrollee" has the meaning given in section 62Q.01, subdivision 2b;

(3) "health plan" means a health plan as defined in section 62A.011, subdivision 3, but
includes coverage listed in clauses (7) and (10) of that definition;

(4) "mandated health benefit proposal" or "proposal" means a proposal that would
statutorily require a health plan company to do the following:

(i) provide coverage or increase the amount of coverage for the treatment of a particular
disease, condition, or other health care need;

(ii) provide coverage or increase the amount of coverage of a particular type of health
care treatment or service or of equipment, supplies, or drugs used in connection with a health
care treatment or service;

(iii) provide coverage for care delivered by a specific type of provider;

(iv) require a particular benefit design or impose conditions on cost-sharing for:

(A) the treatment of a particular disease, condition, or other health care need;

(B) a particular type of health care treatment or service; or

(C) the provision of medical equipment, supplies, or a prescription drug used in
connection with treating a particular disease, condition, or other health care need; or

(v) impose limits or conditions on a contract between a health plan company and a health
care provider.

new text begin (b) new text end "Mandated health benefit proposal" does not include health benefit proposals new text begin :
new text end

new text begin (1) new text end amending the scope of practice of a licensed health care professional deleted text begin . deleted text end new text begin ; or
new text end

new text begin (2) that make state law consistent with federal law.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 22.

Minnesota Statutes 2022, section 62J.26, subdivision 2, is amended to read:

Subd. 2.

Evaluation process and content.

(a) The commissioner, in consultation with
the commissioners of health and management and budget, must evaluate all mandated health
benefit proposals as provided under subdivision 3.

(b) The purpose of the evaluation is to provide the legislature with a complete and timely
analysis of all ramifications of any mandated health benefit proposal. The evaluation must
include, in addition to other relevant information, the following to the extent applicable:

(1) scientific and medical information on the mandated health benefit proposal, on the
potential for harm or benefit to the patient, and on the comparative benefit or harm from
alternative forms of treatment, and must include the results of at least one professionally
accepted and controlled trial comparing the medical consequences of the proposed therapy,
alternative therapy, and no therapy;

(2) public health, economic, and fiscal impacts of the mandated health benefit proposal
on persons receiving health services in Minnesota, on the relative cost-effectiveness of the
proposal, and on the health care system in general;

(3) the extent to which the treatment, service, equipment, or drug is generally utilized
by a significant portion of the population;

(4) the extent to which insurance coverage for the mandated health benefit proposal is
already generally available;

(5) the extent to which the mandated health benefit proposal, by health plan category,
would apply to the benefits offered to the health plan's enrollees;

(6) the extent to which the mandated health benefit proposal will increase or decrease
the cost of the treatment, service, equipment, or drug;

(7) the extent to which the mandated health benefit proposal may increase enrollee
premiums; and

(8) if the proposal applies to a qualified health plan as defined in section 62A.011,
subdivision 7, the cost to the state to defray the cost of the mandated health benefit proposal
using commercial market reimbursement rates in accordance with Code of Federal
Regulations, title 45, section 155.70.

(c) The commissioner shall consider actuarial analysis done by health plan companies
and any other proponent or opponent of the mandated health benefit proposal in determining
the cost of the proposal.

(d) The commissioner must summarize the nature and quality of available information
on these issues, and, if possible, must provide preliminary information to the public. The
commissioner may conduct research on these issues or may determine that existing research
is sufficient to meet the informational needs of the legislature. The commissioner may seek
the assistance and advice of researchers, community leaders, or other persons or organizations
with relevant expertise. new text begin The commissioner must provide the public with at least 45 days'
notice when requesting information pursuant to this section. The commissioner must notify
the chief authors of a bill when a request for information is issued.
new text end

new text begin (e) Information submitted to the commissioner pursuant to this section that meets the
definition of trade secret information, as defined in section 13.37, subdivision 1, paragraph
(b), is nonpublic data."
new text end

Sec. 23.

new text begin [62J.841] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections 62J.841 to 62J.845, the following
definitions apply.
new text end

new text begin Subd. 2. new text end

new text begin Consumer Price Index. new text end

new text begin "Consumer Price Index" means the Consumer Price
Index, Annual Average, for All Urban Consumers, CPI-U: U.S. City Average, All Items,
reported by the United States Department of Labor, Bureau of Labor Statistics, or its
successor or, if the index is discontinued, an equivalent index reported by a federal authority
or, if no such index is reported, "Consumer Price Index" means a comparable index chosen
by the Bureau of Labor Statistics.
new text end

new text begin Subd. 3. new text end

new text begin Generic or off-patent drug. new text end

new text begin "Generic or off-patent drug" means any prescription
drug for which any exclusive marketing rights granted under the Federal Food, Drug, and
Cosmetic Act, section 351 of the federal Public Health Service Act, and federal patent law
have expired, including any drug-device combination product for the delivery of a generic
drug.
new text end

new text begin Subd. 4. new text end

new text begin Manufacturer. new text end

new text begin "Manufacturer" has the meaning given in section 151.01,
subdivision 14a, but does not include an entity that must be licensed solely because the
entity repackages or relabels drugs.
new text end

new text begin Subd. 5. new text end

new text begin Prescription drug. new text end

new text begin "Prescription drug" means a drug for human use subject
to United States Code, title 21, section 353(b)(1).
new text end

new text begin Subd. 6. new text end

new text begin Wholesale acquisition cost. new text end

new text begin "Wholesale acquisition cost" has the meaning
provided in United States Code, title 42, section 1395w-3a.
new text end

new text begin Subd. 7. new text end

new text begin Wholesale distributor. new text end

new text begin "Wholesale distributor" has the meaning provided in
section 151.441, subdivision 14.
new text end

Sec. 24.

new text begin [62J.842] EXCESSIVE PRICE INCREASES PROHIBITED.
new text end

new text begin Subdivision 1. new text end

new text begin Prohibition. new text end

new text begin No manufacturer shall impose, or cause to be imposed, an
excessive price increase, whether directly or through a wholesale distributor, pharmacy, or
similar intermediary, on the sale of any generic or off-patent drug sold, dispensed, or
delivered to any consumer in the state.
new text end

new text begin Subd. 2. new text end

new text begin Excessive price increase. new text end

new text begin A price increase is excessive for purposes of this
section when:
new text end

new text begin (1) the price increase, adjusted for inflation utilizing the Consumer Price Index, exceeds:
new text end

new text begin (i) 15 percent of the wholesale acquisition cost over the immediately preceding calendar
year; or
new text end

new text begin (ii) 40 percent of the wholesale acquisition cost over the immediately preceding three
calendar years; and
new text end

new text begin (2) the price increase, adjusted for inflation utilizing the Consumer Price Index, exceeds
$30 for:
new text end

new text begin (i) a 30-day supply of the drug; or
new text end

new text begin (ii) a course of treatment lasting less than 30 days.
new text end

new text begin Subd. 3. new text end

new text begin Exemption. new text end

new text begin It is not a violation of this section for a wholesale distributor or
pharmacy to increase the price of a generic or off-patent drug if the price increase is directly
attributable to additional costs for the drug imposed on the wholesale distributor or pharmacy
by the manufacturer of the drug.
new text end

Sec. 25.

new text begin [62J.843] REGISTERED AGENT AND OFFICE WITHIN THE STATE.
new text end

new text begin Any manufacturer that sells, distributes, delivers, or offers for sale any generic or
off-patent drug in the state must maintain a registered agent and office within the state.
new text end

Sec. 26.

new text begin [62J.844] ENFORCEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Notification. new text end

new text begin (a) The commissioner of health shall notify the manufacturer
of a generic or off-patent drug and the attorney general of any price increase that the
commissioner believes may violate section 62J.842.
new text end

new text begin (b) The commissioner of management and budget and any other state agency that provides
or purchases a pharmacy benefit except the Department of Human Services, and any entity
under contract with a state agency to provide a pharmacy benefit other than an entity under
contract with the Department of Human Services, may notify the manufacturer of a generic
or off-patent drug and the attorney general of any price increase that the commissioner or
entity believes may violate section 62J.842.
new text end

new text begin Subd. 2. new text end

new text begin Submission of drug cost statement and other information by manufacturer;
investigation by attorney general. new text end

new text begin (a) Within 45 days of receiving a notice under subdivision
1, the manufacturer of the generic or off-patent drug shall submit a drug cost statement to
the attorney general. The statement must:
new text end

new text begin (1) itemize the cost components related to production of the drug;
new text end

new text begin (2) identify the circumstances and timing of any increase in materials or manufacturing
costs that caused any increase during the preceding calendar year, or preceding three calendar
years as applicable, in the price of the drug; and
new text end

new text begin (3) provide any other information that the manufacturer believes to be relevant to a
determination of whether a violation of section 62J.842 has occurred.
new text end

new text begin (b) The attorney general may investigate whether a violation of section 62J.842 has
occurred, in accordance with section 8.31, subdivision 2.
new text end

new text begin Subd. 3. new text end

new text begin Petition to court. new text end

new text begin (a) On petition of the attorney general, a court may issue an
order:
new text end

new text begin (1) compelling the manufacturer of a generic or off-patent drug to:
new text end

new text begin (i) provide the drug cost statement required under subdivision 2, paragraph (a); and
new text end

new text begin (ii) answer interrogatories, produce records or documents, or be examined under oath,
as required by the attorney general under subdivision 2, paragraph (b);
new text end

new text begin (2) restraining or enjoining a violation of sections 62J.841 to 62J.845, including issuing
an order requiring that drug prices be restored to levels that comply with section 62J.842;
new text end

new text begin (3) requiring the manufacturer to provide an accounting to the attorney general of all
revenues resulting from a violation of section 62J.842;
new text end

new text begin (4) requiring the manufacturer to repay to all Minnesota consumers, including any
third-party payers, any money acquired as a result of a price increase that violates section
62J.842;
new text end

new text begin (5) notwithstanding section 16A.151, requiring that all revenues generated from a
violation of section 62J.842 be remitted to the state and deposited into a special fund, to be
used for initiatives to reduce the cost to consumers of acquiring prescription drugs, if a
manufacturer is unable to determine the individual transactions necessary to provide the
repayments described in clause (4);
new text end

new text begin (6) imposing a civil penalty of up to $10,000 per day for each violation of section 62J.842;
new text end

new text begin (7) providing for the attorney general's recovery of costs and disbursements incurred in
bringing an action against a manufacturer found in violation of section 62J.842, including
the costs of investigation and reasonable attorney's fees; and
new text end

new text begin (8) providing any other appropriate relief, including any other equitable relief as
determined by the court.
new text end

new text begin (b) For purposes of paragraph (a), clause (6), every individual transaction in violation
of section 62J.842 is considered a separate violation.
new text end

new text begin Subd. 4. new text end

new text begin Private right of action. new text end

new text begin Any action brought pursuant to section 8.31, subdivision
3a, by a person injured by a violation of section 62J.842 is for the benefit of the public.
new text end

Sec. 27.

new text begin [62J.845] PROHIBITION ON WITHDRAWAL OF GENERIC OR
OFF-PATENT DRUGS FOR SALE.
new text end

new text begin Subdivision 1. new text end

new text begin Prohibition. new text end

new text begin A manufacturer of a generic or off-patent drug is prohibited
from withdrawing that drug from sale or distribution within this state for the purpose of
avoiding the prohibition on excessive price increases under section 62J.842.
new text end

new text begin Subd. 2. new text end

new text begin Notice to board and attorney general. new text end

new text begin Any manufacturer that intends to
withdraw a generic or off-patent drug from sale or distribution within the state shall provide
a written notice of withdrawal to the attorney general at least 90 days prior to the withdrawal.
new text end

new text begin Subd. 3. new text end

new text begin Financial penalty. new text end

new text begin The attorney general shall assess a penalty of $500,000 on
any manufacturer of a generic or off-patent drug that the attorney general determines has
failed to comply with the requirements of this section.
new text end

Sec. 28.

new text begin [62J.846] SEVERABILITY.
new text end

new text begin If any provision of sections 62J.841 to 62J.845 or the application thereof to any person
or circumstance is held invalid for any reason in a court of competent jurisdiction, the
invalidity does not affect other provisions or any other application of sections 62J.841 to
62J.845 that can be given effect without the invalid provision or application.
new text end

Sec. 29.

new text begin [62J.85] CITATION.
new text end

new text begin Sections 62J.85 to 62J.95 may be cited as the "Prescription Drug Affordability Act."
new text end

Sec. 30.

new text begin [62J.86] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of sections 62J.85 to 62J.95, the following
terms have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Advisory council. new text end

new text begin "Advisory council" means the Prescription Drug Affordability
Advisory Council established under section 62J.88.
new text end

new text begin Subd. 3. new text end

new text begin Biologic. new text end

new text begin "Biologic" means a drug that is produced or distributed in accordance
with a biologics license application approved under Code of Federal Regulations, title 42,
section 447.502.
new text end

new text begin Subd. 4. new text end

new text begin Biosimilar. new text end

new text begin "Biosimilar" has the meaning provided in section 62J.84, subdivision
2, paragraph (b).
new text end

new text begin Subd. 5. new text end

new text begin Board. new text end

new text begin "Board" means the Prescription Drug Affordability Board established
under section 62J.87.
new text end

new text begin Subd. 6. new text end

new text begin Brand name drug. new text end

new text begin "Brand name drug" means a drug that is produced or
distributed pursuant to:
new text end

new text begin (1) a new drug application approved under United States Code, title 21, section 355(c),
except for a generic drug as defined under Code of Federal Regulations, title 42, section
447.502; or
new text end

new text begin (2) a biologics license application approved under United States Code, title 45, section
262(a)(c).
new text end

new text begin Subd. 7. new text end

new text begin Generic drug. new text end

new text begin "Generic drug" has the meaning provided in section 62J.84,
subdivision 2, paragraph (e).
new text end

new text begin Subd. 8. new text end

new text begin Group purchaser. new text end

new text begin "Group purchaser" has the meaning given in section 62J.03,
subdivision 6, and includes pharmacy benefit managers, as defined in section 62W.02,
subdivision 15.
new text end

new text begin Subd. 9. new text end

new text begin Manufacturer. new text end

new text begin "Manufacturer" means an entity that:
new text end

new text begin (1) engages in the manufacture of a prescription drug product or enters into a lease with
another manufacturer to market and distribute a prescription drug product under the entity's
own name; and
new text end

new text begin (2) sets or changes the wholesale acquisition cost of the prescription drug product it
manufacturers or markets.
new text end

new text begin Subd. 10. new text end

new text begin Prescription drug product. new text end

new text begin "Prescription drug product" means a brand name
drug, a generic drug, a biologic, or a biosimilar.
new text end

new text begin Subd. 11. new text end

new text begin Wholesale acquisition cost or WAC. new text end

new text begin "Wholesale acquisition cost" or "WAC"
has the meaning given in United States Code, title 42, section 1395W-3a(c)(6)(B).
new text end

Sec. 31.

new text begin [62J.87] PRESCRIPTION DRUG AFFORDABILITY BOARD.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The commissioner of commerce shall establish the
Prescription Drug Affordability Board, which shall be governed as a board under section
15.012, paragraph (a), to protect consumers, state and local governments, health plan
companies, providers, pharmacies, and other health care system stakeholders from
unaffordable costs of certain prescription drugs.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The Prescription Drug Affordability Board consists of nine
members appointed as follows:
new text end

new text begin (1) seven voting members appointed by the governor;
new text end

new text begin (2) one nonvoting member appointed by the majority leader of the senate; and
new text end

new text begin (3) one nonvoting member appointed by the speaker of the house.
new text end

new text begin (b) All members appointed must have knowledge and demonstrated expertise in
pharmaceutical economics and finance or health care economics and finance. A member
must not be an employee of, a board member of, or a consultant to a manufacturer or trade
association for manufacturers, or a pharmacy benefit manager or trade association for
pharmacy benefit managers.
new text end

new text begin (c) Initial appointments must be made by January 1, 2024.
new text end

new text begin Subd. 3. new text end

new text begin Terms. new text end

new text begin (a) Board appointees shall serve four-year terms, except that initial
appointees shall serve staggered terms of two, three, or four years as determined by lot by
the secretary of state. A board member shall serve no more than two consecutive terms.
new text end

new text begin (b) A board member may resign at any time by giving written notice to the board.
new text end

new text begin Subd. 4. new text end

new text begin Chair; other officers. new text end

new text begin (a) The governor shall designate an acting chair from
the members appointed by the governor.
new text end

new text begin (b) The board shall elect a chair to replace the acting chair at the first meeting of the
board by a majority of the members. The chair shall serve for one year.
new text end

new text begin (c) The board shall elect a vice-chair and other officers from its membership as it deems
necessary.
new text end

new text begin Subd. 5. new text end

new text begin Staff; technical assistance. new text end

new text begin (a) The board shall hire an executive director and
other staff, who shall serve in the unclassified service. The executive director must have
knowledge and demonstrated expertise in pharmacoeconomics, pharmacology, health policy,
health services research, medicine, or a related field or discipline.
new text end

new text begin (b) The commissioner of health shall provide technical assistance to the board. The board
may also employ or contract for professional and technical assistance as the board deems
necessary to perform the board's duties.
new text end

new text begin (c) The attorney general shall provide legal services to the board.
new text end

new text begin Subd. 6. new text end

new text begin Compensation. new text end

new text begin The board members shall not receive compensation but may
receive reimbursement for expenses as authorized under section 15.059, subdivision 3.
new text end

new text begin Subd. 7. new text end

new text begin Meetings. new text end

new text begin (a) Meetings of the board are subject to chapter 13D. The board shall
meet publicly at least every three months to review prescription drug product information
submitted to the board under section 62J.90. If there are no pending submissions, the chair
of the board may cancel or postpone the required meeting. The board may meet in closed
session when reviewing proprietary information, as determined under the standards developed
in accordance with section 62J.91, subdivision 3.
new text end

new text begin (b) The board shall announce each public meeting at least three weeks prior to the
scheduled date of the meeting. Any materials for the meeting shall be made public at least
two weeks prior to the scheduled date of the meeting.
new text end

new text begin (c) At each public meeting, the board shall provide the opportunity for comments from
the public, including the opportunity for written comments to be submitted to the board
prior to a decision by the board.
new text end

Sec. 32.

new text begin [62J.88] PRESCRIPTION DRUG AFFORDABILITY ADVISORY
COUNCIL.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The governor shall appoint a 15-member stakeholder
advisory council to provide advice to the board on drug cost issues and to represent
stakeholders' views. The governor shall appoint the members of the advisory council based
on the members' knowledge and demonstrated expertise in one or more of the following
areas: the pharmaceutical business; practice of medicine; patient perspectives; health care
cost trends and drivers; clinical and health services research; and the health care marketplace.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin The council's membership shall consist of the following:
new text end

new text begin (1) two members representing patients and health care consumers;
new text end

new text begin (2) two members representing health care providers;
new text end

new text begin (3) one member representing health plan companies;
new text end

new text begin (4) two members representing employers, with one member representing large employers
and one member representing small employers;
new text end

new text begin (5) one member representing government employee benefit plans;
new text end

new text begin (6) one member representing pharmaceutical manufacturers;
new text end

new text begin (7) one member who is a health services clinical researcher;
new text end

new text begin (8) one member who is a pharmacologist;
new text end

new text begin (9) one member who is an oncologist;
new text end

new text begin (10) one member representing the commissioner of health with expertise in health
economics;
new text end

new text begin (11) one member representing wholesale drug distributors; and
new text end

new text begin (12) one member representing pharmacy benefit managers.
new text end

new text begin Subd. 3. new text end

new text begin Terms. new text end

new text begin (a) The initial appointments to the advisory council must be made by
January 1, 2024. The initial appointed advisory council members shall serve staggered terms
of two, three, or four years, determined by lot by the secretary of state. Following the initial
appointments, the advisory council members shall serve four-year terms.
new text end

new text begin (b) Removal and vacancies of advisory council members shall be governed by section
15.059.
new text end

new text begin Subd. 4. new text end

new text begin Compensation. new text end

new text begin Advisory council members may be compensated according to
section 15.059.
new text end

new text begin Subd. 5. new text end

new text begin Meetings. new text end

new text begin Meetings of the advisory council are subject to chapter 13D. The
advisory council shall meet publicly at least every three months to advise the board on drug
cost issues related to the prescription drug product information submitted to the board under
section 62J.90.
new text end

new text begin Subd. 6. new text end

new text begin Exemption. new text end

new text begin Notwithstanding section 15.059, the advisory council shall not
expire.
new text end

Sec. 33.

new text begin [62J.89] CONFLICTS OF INTEREST.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For purposes of this section, "conflict of interest" means a
financial or personal association that has the potential to bias or have the appearance of
biasing a person's decisions in matters related to the board, the advisory council, or in the
conduct of the board's or council's activities. A conflict of interest includes any instance in
which a person, a person's immediate family member, including a spouse, parent, child, or
other legal dependent, or an in-law of any of the preceding individuals, has received or
could receive a direct or indirect financial benefit of any amount deriving from the result
or findings of a decision or determination of the board. For purposes of this section, a
financial benefit includes honoraria, fees, stock, the value of the member's, immediate family
member's, or in-law's stock holdings, and any direct financial benefit deriving from the
finding of a review conducted under sections 62J.85 to 62J.95. Ownership of securities is
not a conflict of interest if the securities are: (1) part of a diversified mutual or exchange
traded fund; or (2) in a tax-deferred or tax-exempt retirement account that is administered
by an independent trustee.
new text end

new text begin Subd. 2. new text end

new text begin General. new text end

new text begin (a) Prior to the acceptance of an appointment or employment, or prior
to entering into a contractual agreement, a board or advisory council member, board staff
member, or third-party contractor must disclose to the appointing authority or the board
any conflicts of interest. The information disclosed must include the type, nature, and
magnitude of the interests involved.
new text end

new text begin (b) A board member, board staff member, or third-party contractor with a conflict of
interest with regard to any prescription drug product under review must recuse themselves
from any discussion, review, decision, or determination made by the board relating to the
prescription drug product.
new text end

new text begin (c) Any conflict of interest must be disclosed in advance of the first meeting after the
conflict is identified or within five days after the conflict is identified, whichever is earlier.
new text end

new text begin Subd. 3. new text end

new text begin Prohibitions. new text end

new text begin Board members, board staff, or third-party contractors are
prohibited from accepting gifts, bequeaths, or donations of services or property that raise
the specter of a conflict of interest or have the appearance of injecting bias into the activities
of the board.
new text end

Sec. 34.

new text begin [62J.90] PRESCRIPTION DRUG PRICE INFORMATION; DECISION
TO CONDUCT COST REVIEW.
new text end

new text begin Subdivision 1. new text end

new text begin Drug price information from the commissioner of health and other
sources. new text end

new text begin (a) The commissioner of health shall provide to the board the information reported
to the commissioner by drug manufacturers under section 62J.84, subdivisions 3, 4, and 5.
The commissioner shall provide this information to the board within 30 days of the date the
information is received from drug manufacturers.
new text end

new text begin (b) The board may subscribe to one or more prescription drug pricing files, such as
Medispan or FirstDatabank, or as otherwise determined by the board.
new text end

new text begin Subd. 2. new text end

new text begin Identification of certain prescription drug products. new text end

new text begin (a) The board, in
consultation with the advisory council, shall identify selected prescription drug products
based on the following criteria:
new text end

new text begin (1) brand name drugs or biologics for which the WAC increases by more than 15 percent
or by more than $3,000 during any 12-month period or course of treatment if less than 12
months, after adjusting for changes in the consumer price index (CPI);
new text end

new text begin (2) brand name drugs or biologics with a WAC of $60,000 or more per calendar year
or per course of treatment;
new text end

new text begin (3) biosimilar drugs that have a WAC that is not at least 20 percent lower than the
referenced brand name biologic at the time the biosimilar is introduced; and
new text end

new text begin (4) generic drugs for which the WAC:
new text end

new text begin (i) is $100 or more, after adjusting for changes in the CPI, for:
new text end

new text begin (A) a 30-day supply;
new text end

new text begin (B) a course of treatment lasting less than 30 days; or
new text end

new text begin (C) one unit of the drug, if the labeling approved by the Food and Drug Administration
does not recommend a finite dosage; and
new text end

new text begin (ii) increased by 200 percent or more during the immediate preceding 12-month period,
as determined by the difference between the resulting WAC and the average WAC reported
over the preceding 12 months, after adjusting for changes in the CPI.
new text end

new text begin The board is not required to identify all prescription drug products that meet the criteria in
this paragraph.
new text end

new text begin (b) The board, in consultation with the advisory council and the commissioner of health,
may identify prescription drug products not described in paragraph (a) that may impose
costs that create significant affordability challenges for the state health care system or for
patients, including but not limited to drugs to address public health emergencies.
new text end

new text begin (c) The board shall make available to the public the names and related price information
of the prescription drug products identified under this subdivision, with the exception of
information determined by the board to be proprietary under the standards developed by
the board under section 62J.91, subdivision 3, and information provided by the commissioner
of health classified as not public data under section 13.02, subdivision 8a, or as trade secret
information under section 13.37, subdivision 1, paragraph (b), or as trade secret information
under the Defend Trade Secrets Act of 2016, United States Code, title 18, section 1836, as
amended.
new text end

new text begin Subd. 3. new text end

new text begin Determination to proceed with review. new text end

new text begin (a) The board may initiate a cost
review of a prescription drug product identified by the board under this section.
new text end

new text begin (b) The board shall consider requests by the public for the board to proceed with a cost
review of any prescription drug product identified under this section.
new text end

new text begin (c) If there is no consensus among the members of the board on whether to initiate a
cost review of a prescription drug product, any member of the board may request a vote to
determine whether to review the cost of the prescription drug product.
new text end

Sec. 35.

new text begin [62J.91] PRESCRIPTION DRUG PRODUCT REVIEWS.
new text end

new text begin Subdivision 1. new text end

new text begin General. new text end

new text begin Once a decision by the board has been made to proceed with
a cost review of a prescription drug product, the board shall conduct the review and make
a determination as to whether appropriate utilization of the prescription drug under review,
based on utilization that is consistent with the United States Food and Drug Administration
(FDA) label or standard medical practice, has led or will lead to affordability challenges
for the state health care system or for patients.
new text end

new text begin Subd. 2. new text end

new text begin Review considerations. new text end

new text begin In reviewing the cost of a prescription drug product,
the board may consider the following factors:
new text end

new text begin (1) the price at which the prescription drug product has been and will be sold in the state;
new text end

new text begin (2) manufacturer monetary price concessions, discounts, or rebates, and drug-specific
patient assistance;
new text end

new text begin (3) the price of therapeutic alternatives;
new text end

new text begin (4) the cost to group purchasers based on patient access consistent with the FDA-labeled
indications and standard medical practice;
new text end

new text begin (5) measures of patient access, including cost-sharing and other metrics;
new text end

new text begin (6) the extent to which the attorney general or a court has determined that a price increase
for a generic or off-patent prescription drug product was excessive under sections 62J.842
and 62J.844;
new text end

new text begin (7) any information a manufacturer chooses to provide; and
new text end

new text begin (8) any other factors as determined by the board.
new text end

new text begin Subd. 3. new text end

new text begin Public data; proprietary information. new text end

new text begin (a) Any submission made to the board
related to a drug cost review must be made available to the public with the exception of
information determined by the board to be proprietary and information provided by the
commissioner of health classified as not public data under section 13.02, subdivision 8a, or
as trade secret information under section 13.37, subdivision 1, paragraph (b), or as trade
secret information under the Defend Trade Secrets Act of 2016, United States Code, title
18, section 1836, as amended.
new text end

new text begin (b) The board shall establish the standards for the information to be considered proprietary
under paragraph (a) and section 62J.90, subdivision 2, including standards for heightened
consideration of proprietary information for submissions for a cost review of a drug that is
not yet approved by the FDA.
new text end

new text begin (c) Prior to the board establishing the standards under paragraph (b), the public shall be
provided notice and the opportunity to submit comments.
new text end

new text begin (d) The establishment of standards under this subdivision is exempt from the rulemaking
requirements under chapter 14, and section 14.386 does not apply.
new text end

Sec. 36.

new text begin [62J.92] DETERMINATIONS; COMPLIANCE; REMEDIES.
new text end

new text begin Subdivision 1. new text end

new text begin Upper payment limit. new text end

new text begin (a) In the event the board finds that the spending
on a prescription drug product reviewed under section 62J.91 creates an affordability
challenge for the state health care system or for patients, the board shall establish an upper
payment limit after considering:
new text end

new text begin (1) extraordinary supply costs, if applicable;
new text end

new text begin (2) the range of prices at which the drug is sold in the United States according to one or
more pricing files accessed under section 62J.90, subdivision 1, and the range at which
pharmacies are reimbursed in Canada; and
new text end

new text begin (3) any other relevant pricing and administrative cost information for the drug.
new text end

new text begin (b) An upper payment limit applies to all purchases of, and payer reimbursements for,
a prescription drug that is dispensed or administered to individuals in the state in person,
by mail, or by other means, and for which an upper payment limit has been established.
new text end

new text begin Subd. 2. new text end

new text begin Implementation and administration of the upper payment limit. new text end

new text begin (a) An
upper payment limit may take effect no sooner than 120 days following the date of its public
release by the board.
new text end

new text begin (b) When setting an upper payment limit for a drug subject to the Medicare maximum
fair price under United States Code, title 42, section 1191(c), the board shall set the upper
payment limit at the Medicare maximum fair price.
new text end

new text begin (c) Health plan companies and pharmacy benefit managers shall report annually to the
board, in the form and manner specified by the board, on how cost savings resulting from
the establishment of an upper payment limit have been used by the health plan company or
pharmacy benefit manager to benefit enrollees, including but not limited to reducing enrollee
cost-sharing.
new text end

new text begin Subd. 3. new text end

new text begin Noncompliance. new text end

new text begin (a) The board shall, and other persons may, notify the Office
of the Attorney General of a potential failure by an entity subject to an upper payment limit
to comply with that limit.
new text end

new text begin (b) If the Office of the Attorney General finds that an entity was noncompliant with the
upper payment limit requirements, the attorney general may pursue remedies consistent
with chapter 8 or appropriate criminal charges if there is evidence of intentional profiteering.
new text end

new text begin (c) An entity who obtains price concessions from a drug manufacturer that result in a
lower net cost to the stakeholder than the upper payment limit established by the board is
not considered noncompliant.
new text end

new text begin (d) The Office of the Attorney General may provide guidance to stakeholders concerning
activities that could be considered noncompliant.
new text end

new text begin Subd. 4. new text end

new text begin Appeals. new text end

new text begin (a) Persons affected by a decision of the board may request an appeal
of the board's decision within 30 days of the date of the decision. The board shall hear the
appeal and render a decision within 60 days of the hearing.
new text end

new text begin (b) All appeal decisions are subject to judicial review in accordance with chapter 14.
new text end

Sec. 37.

new text begin [62J.93] REPORTS.
new text end

new text begin Beginning March 1, 2024, and each March 1 thereafter, the board shall submit a report
to the governor and legislature on general price trends for prescription drug products and
the number of prescription drug products that were subject to the board's cost review and
analysis, including the result of any analysis as well as the number and disposition of appeals
and judicial reviews.
new text end

Sec. 38.

new text begin [62J.94] ERISA PLANS AND MEDICARE DRUG PLANS.
new text end

new text begin (a) Nothing in sections 62J.85 to 62J.95 shall be construed to require ERISA plans or
Medicare Part D plans to comply with decisions of the board. ERISA plans or Medicare
Part D plans are free to choose to exceed the upper payment limit established by the board
under section 62J.92.
new text end

new text begin (b) Providers who dispense and administer drugs in the state must bill all payers no more
than the upper payment limit without regard to whether an ERISA plan or Medicare Part
D plan chooses to reimburse the provider in an amount greater than the upper payment limit
established by the board.
new text end

new text begin (c) For purposes of this section, an ERISA plan or group health plan is an employee
welfare benefit plan established by or maintained by an employer or an employee
organization, or both, that provides employer sponsored health coverage to employees and
the employee's dependents and is subject to the Employee Retirement Income Security Act
of 1974 (ERISA).
new text end

Sec. 39.

new text begin [62J.95] SEVERABILITY.
new text end

new text begin If any provision of sections 62J.85 to 62J.94 or the application thereof to any person or
circumstance is held invalid for any reason in a court of competent jurisdiction, the invalidity
does not affect other provisions or any other application of sections 62J.85 to 62J.94 that
can be given effect without the invalid provision or application.
new text end

Sec. 40.

Minnesota Statutes 2022, section 62K.10, subdivision 4, is amended to read:

Subd. 4.

Network adequacy.

new text begin (a) new text end Each designated provider network must include a
sufficient number and type of providers, including providers that specialize in mental health
and substance use disorder services, to ensure that covered services are available to all
enrollees without unreasonable delay. In determining network adequacy, the commissioner
of health shall consider availability of services, including the following:

(1) primary care physician services are available and accessible 24 hours per day, seven
days per week, within the network area;

(2) a sufficient number of primary care physicians have hospital admitting privileges at
one or more participating hospitals within the network area so that necessary admissions
are made on a timely basis consistent with generally accepted practice parameters;

(3) specialty physician service is available through the network or contract arrangement;

(4) mental health and substance use disorder treatment providers new text begin , including but not
limited to psychiatric residential treatment facilities, new text end are available and accessible through
the network or contract arrangement;

(5) to the extent that primary care services are provided through primary care providers
other than physicians, and to the extent permitted under applicable scope of practice in state
law for a given provider, these services shall be available and accessible; and

(6) the network has available, either directly or through arrangements, appropriate and
sufficient personnel, physical resources, and equipment to meet the projected needs of
enrollees for covered health care services.

new text begin (b) The commissioner must determine network sufficiency in a manner that is consistent
with the requirements of this section and may establish sufficiency by referencing any
reasonable criteria, which may include but is not limited to:
new text end

new text begin (1) provider-covered person ratios by specialty;
new text end

new text begin (2) primary care professional-covered person ratios;
new text end

new text begin (3) geographic accessibility of providers;
new text end

new text begin (4) geographic variation and population dispersion;
new text end

new text begin (5) waiting times for an appointment with participating providers;
new text end

new text begin (6) hours of operation;
new text end

new text begin (7) the ability of the network to meet the needs of covered persons, which may include:
(i) low-income persons; (ii) children and adults with serious, chronic, or complex health
conditions, physical disabilities, or mental illness; or (iii) persons with limited English
proficiency and persons from underserved communities;
new text end

new text begin (8) other health care service delivery system options, including telemedicine or telehealth,
mobile clinics, centers of excellence, and other ways of delivering care; and
new text end

new text begin (9) the volume of technological and specialty care services available to serve the needs
of covered persons that need technologically advanced or specialty care services.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to paragraph (a) is effective July 1, 2023.
Paragraph (b) is effective January 1, 2025, and apply to health plans offered, issued, or
renewed on or after that date.
new text end

Sec. 41.

Minnesota Statutes 2022, section 62Q.096, is amended to read:

62Q.096 CREDENTIALING OF PROVIDERS.

new text begin (a) new text end If a health plan company has initially credentialed, as providers in its provider network,
individual providers employed by or under contract with an entity that:

(1) is authorized to bill under section 256B.0625, subdivision 5;

(2) is a mental health clinic certified under section 245I.20;

(3) is designated an essential community provider under section 62Q.19; and

(4) is under contract with the health plan company to provide mental health services,
the health plan company must continue to credential at least the same number of providers
from that entity, as long as those providers meet the health plan company's credentialing
standards.

new text begin (b) In order to ensure timely access by patients to mental health services, between July
1, 2023, and June 30, 2025, a health plan company must credential and enter into a contract
for mental health services with any provider of mental health services that:
new text end

new text begin (1) meets the health plan company's credential requirements. For purposes of credentialing
under this paragraph, a health plan company may waive credentialing requirements that are
not directly related to quality of care in order to ensure patient access to providers from
underserved communities or to providers in rural areas;
new text end

new text begin (2) seeks to receive a credential from the health plan company;
new text end

new text begin (3) agrees to the health plan company's contract terms. The contract shall include payment
rates that are usual and customary for the services provided;
new text end

new text begin (4) is accepting new patients; and
new text end

new text begin (5) is not already under a contract with the health plan company under a separate tax
identification number or, if already under a contract with the health plan company, has
provided notice to the health plan company of termination of the existing contract.
new text end

new text begin (c) new text end A health plan company shall not refuse to credential these providers on the grounds
that their provider network has new text begin :
new text end

new text begin (1) new text end a sufficient number of providers of that type new text begin , including but not limited to the provider
types identified in paragraph (a); or
new text end

new text begin (2) a sufficient number of providers of mental health services in the aggregate new text end .

Sec. 42.

Minnesota Statutes 2022, section 62Q.19, subdivision 1, is amended to read:

Subdivision 1.

Designation.

(a) The commissioner shall designate essential community
providers. The criteria for essential community provider designation shall be the following:

(1) a demonstrated ability to integrate applicable supportive and stabilizing services with
medical care for uninsured persons and high-risk and special needs populations, underserved,
and other special needs populations; and

(2) a commitment to serve low-income and underserved populations by meeting the
following requirements:

(i) has nonprofit status in accordance with chapter 317A;

(ii) has tax-exempt status in accordance with the Internal Revenue Service Code, section
501(c)(3);

(iii) charges for services on a sliding fee schedule based on current poverty income
guidelines; and

(iv) does not restrict access or services because of a client's financial limitation;

(3) status as a local government unit as defined in section 62D.02, subdivision 11, a
hospital district created or reorganized under sections 447.31 to 447.37, an Indian Tribal
government, an Indian health service unit, or a community health board as defined in chapter
145A;

(4) a former state hospital that specializes in the treatment of cerebral palsy, spina bifida,
epilepsy, closed head injuries, specialized orthopedic problems, and other disabling
conditions;

(5) a sole community hospital. For these rural hospitals, the essential community provider
designation applies to all health services provided, including both inpatient and outpatient
services. For purposes of this section, "sole community hospital" means a rural hospital
that:

(i) is eligible to be classified as a sole community hospital according to Code of Federal
Regulations, title 42, section 412.92, or is located in a community with a population of less
than 5,000 and located more than 25 miles from a like hospital currently providing acute
short-term services;

(ii) has experienced net operating income losses in two of the previous three most recent
consecutive hospital fiscal years for which audited financial information is available; and

(iii) consists of 40 or fewer licensed beds;

(6) a birth center licensed under section 144.615; deleted text begin or
deleted text end

(7) a hospital and affiliated specialty clinics that predominantly serve patients who are
under 21 years of age and meet the following criteria:

(i) provide intensive specialty pediatric services that are routinely provided in fewer
than five hospitals in the state; and

(ii) serve children from at least one-half of the counties in the state deleted text begin . deleted text end new text begin ; or
new text end

new text begin (8) a psychiatric residential treatment facility, as defined in section 256B.0625,
subdivision 45a, paragraph (b), that is certified and licensed by the commissioner of health.
new text end

(b) Prior to designation, the commissioner shall publish the names of all applicants in
the State Register. The public shall have 30 days from the date of publication to submit
written comments to the commissioner on the application. No designation shall be made
by the commissioner until the 30-day period has expired.

(c) The commissioner may designate an eligible provider as an essential community
provider for all the services offered by that provider or for specific services designated by
the commissioner.

(d) For the purpose of this subdivision, supportive and stabilizing services include at a
minimum, transportation, child care, cultural, and linguistic services where appropriate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to health
plans offered, issued, or renewed on or after that date.
new text end

Sec. 43.

Minnesota Statutes 2022, section 62Q.46, subdivision 1, is amended to read:

Subdivision 1.

Coverage for preventive items and services.

(a) "Preventive items and
services" has the meaning specified in the Affordable Care Act. new text begin Preventive items and services
includes:
new text end

new text begin (1) evidence-based items or services that have in effect a rating of A or B in the current
recommendations of the United States Preventive Services Task Force with respect to the
individual involved;
new text end

new text begin (2) immunizations for routine use in children, adolescents, and adults that have in effect
a recommendation from the Advisory Committee on Immunization Practices of the Centers
for Disease Control and Prevention with respect to the individual involved. For purposes
of this clause, a recommendation from the Advisory Committee on Immunization Practices
of the Centers for Disease Control and Prevention is considered in effect after the
recommendation has been adopted by the Director of the Centers for Disease Control and
Prevention, and a recommendation is considered to be for routine use if the recommendation
is listed on the Immunization Schedules of the Centers for Disease Control and Prevention;
new text end

new text begin (3) with respect to infants, children, and adolescents, evidence-informed preventive care
and screenings provided for in comprehensive guidelines supported by the Health Resources
and Services Administration;
new text end

new text begin (4) with respect to women, additional preventive care and screenings that are not listed
with a rating of A or B by the United States Preventive Services Task Force but that are
provided for in comprehensive guidelines supported by the Health Resources and Services
Administration; and
new text end

new text begin (5) all contraceptive methods established in guidelines published by the United States
Food and Drug Administration.
new text end

(b) A health plan company must provide coverage for preventive items and services at
a participating provider without imposing cost-sharing requirements, including a deductible,
coinsurance, or co-payment. Nothing in this section prohibits a health plan company that
has a network of providers from excluding coverage or imposing cost-sharing requirements
for preventive items or services that are delivered by an out-of-network provider.

(c) A health plan company is not required to provide coverage for any items or services
specified in any recommendation or guideline described in paragraph (a) if the
recommendation or guideline is no longer included as a preventive item or service as defined
in paragraph (a). Annually, a health plan company must determine whether any additional
items or services must be covered without cost-sharing requirements or whether any items
or services are no longer required to be covered.

(d) Nothing in this section prevents a health plan company from using reasonable medical
management techniques to determine the frequency, method, treatment, or setting for a
preventive item or service to the extent not specified in the recommendation or guideline.

(e) This section does not apply to grandfathered plans.

(f) This section does not apply to plans offered by the Minnesota Comprehensive Health
Association.

Sec. 44.

Minnesota Statutes 2022, section 62Q.46, subdivision 3, is amended to read:

Subd. 3.

Additional services not prohibited.

Nothing in this section prohibits a health
plan company from providing coverage for preventive items and services in addition to
those specified deleted text begin in the Affordable Care Act deleted text end new text begin under subdivision 1, paragraph (a) new text end , or from
denying coverage for preventive items and services that are not recommended as preventive
items and services new text begin specified new text end under deleted text begin the Affordable Care Act deleted text end new text begin subdivision 1, paragraph (a) new text end . A
health plan company may impose cost-sharing requirements for a treatment not described
deleted text begin in the Affordable Care Act deleted text end new text begin under subdivision 1, paragraph (a), new text end even if the treatment results
from a preventive item or service described deleted text begin in the Affordable Care Act deleted text end new text begin under subdivision
1, paragraph (a) new text end .

Sec. 45.

new text begin [62Q.465] MENTAL HEALTH PARITY AND SUBSTANCE ABUSE
ACCOUNTABILITY OFFICE.
new text end

new text begin (a) The Mental Health Parity and Substance Abuse Accountability Office is established
within the Department of Commerce to create and execute effective strategies for
implementing the requirements under:
new text end

new text begin (1) section 62Q.47;
new text end

new text begin (2) the federal Mental Health Parity Act of 1996, Public Law 104-204;
new text end

new text begin (3) the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction
Equity Act of 2008, Public Law 110-343, division C, sections 511 and 512;
new text end

new text begin (4) the Affordable Care Act, as defined under section 62A.011, subdivision 1a; and
new text end

new text begin (5) amendments made to, and federal guidance or regulations issued or adopted under,
the acts listed under clauses (2) to (4).
new text end

new text begin (b) The office may oversee compliance reviews, conduct and lead stakeholder
engagement, review consumer and provider complaints, and serve as a resource for ensuring
health plan compliance with mental health and substance abuse requirements.
new text end

Sec. 46.

Minnesota Statutes 2022, section 62Q.47, is amended to read:

62Q.47 ALCOHOLISM, MENTAL HEALTH, AND CHEMICAL DEPENDENCY
SERVICES.

(a) All health plans, as defined in section 62Q.01, that provide coverage for alcoholism,
mental health, or chemical dependency services, must comply with the requirements of this
section.

(b) Cost-sharing requirements and benefit or service limitations for outpatient mental
health and outpatient chemical dependency and alcoholism services, except for persons
placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to
9530.6655, must not place a greater financial burden on the insured or enrollee, or be more
restrictive than those requirements and limitations for outpatient medical services.

(c) Cost-sharing requirements and benefit or service limitations for inpatient hospital
mental health new text begin services, psychiatric residential treatment facility services, new text end and inpatient
hospital and residential chemical dependency and alcoholism services, except for persons
placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to
9530.6655, must not place a greater financial burden on the insured or enrollee, or be more
restrictive than those requirements and limitations for inpatient hospital medical services.

(d) A health plan company must not impose an NQTL with respect to mental health and
substance use disorders in any classification of benefits unless, under the terms of the health
plan as written and in operation, any processes, strategies, evidentiary standards, or other
factors used in applying the NQTL to mental health and substance use disorders in the
classification are comparable to, and are applied no more stringently than, the processes,
strategies, evidentiary standards, or other factors used in applying the NQTL with respect
to medical and surgical benefits in the same classification.

(e) All health plans must meet the requirements of the federal Mental Health Parity Act
of 1996, Public Law 104-204; Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008; the Affordable Care Act; and any amendments to, and federal
guidance or regulations issued under, those acts.

(f) The commissioner may require information from health plan companies to confirm
that mental health parity is being implemented by the health plan company. Information
required may include comparisons between mental health and substance use disorder
treatment and other medical conditions, including a comparison of prior authorization
requirements, drug formulary design, claim denials, rehabilitation services, and other
information the commissioner deems appropriate.

(g) Regardless of the health care provider's professional license, if the service provided
is consistent with the provider's scope of practice and the health plan company's credentialing
and contracting provisions, mental health therapy visits and medication maintenance visits
shall be considered primary care visits for the purpose of applying any enrollee cost-sharing
requirements imposed under the enrollee's health plan.

new text begin (h) All health plan companies offering health plans that provide coverage for alcoholism,
mental health, or chemical dependency benefits shall provide reimbursement for the benefits
delivered through the psychiatric Collaborative Care Model, which must include the following
Current Procedural Terminology or Healthcare Common Procedure Coding System billing
codes:
new text end

new text begin (1) 99492;
new text end

new text begin (2) 99493;
new text end

new text begin (3) 99494;
new text end

new text begin (4) G2214; and
new text end

new text begin (5) G0512.
new text end

new text begin This paragraph does not apply to managed care plans or county-based purchasing plans
when the plan provides coverage to public health care program enrollees under chapter
256B or 256L.
new text end

new text begin (i) The commissioner of commerce shall update the list of codes in paragraph (h) if any
alterations or additions to the billing codes for the psychiatric Collaborative Care Model
are made.
new text end

new text begin (j) "Psychiatric Collaborative Care Model" means the evidence-based, integrated
behavioral health service delivery method described at Federal Register, volume 81, page
80230, which includes a formal collaborative arrangement among a primary care team
consisting of a primary care provider, a care manager, and a psychiatric consultant, and
includes but is not limited to the following elements:
new text end

new text begin (1) care directed by the primary care team;
new text end

new text begin (2) structured care management;
new text end

new text begin (3) regular assessments of clinical status using validated tools; and
new text end

new text begin (4) modification of treatment as appropriate.
new text end

deleted text begin (h) deleted text end new text begin (k) new text end By June 1 of each year, beginning June 1, 2021, the commissioner of commerce,
in consultation with the commissioner of health, shall submit a report on compliance and
oversight to the chairs and ranking minority members of the legislative committees with
jurisdiction over health and commerce. The report must:

(1) describe the commissioner's process for reviewing health plan company compliance
with United States Code, title 42, section 18031(j), any federal regulations or guidance
relating to compliance and oversight, and compliance with this section and section 62Q.53;

(2) identify any enforcement actions taken by either commissioner during the preceding
12-month period regarding compliance with parity for mental health and substance use
disorders benefits under state and federal law, summarizing the results of any market conduct
examinations. The summary must include: (i) the number of formal enforcement actions
taken; (ii) the benefit classifications examined in each enforcement action; and (iii) the
subject matter of each enforcement action, including quantitative and nonquantitative
treatment limitations;

(3) detail any corrective action taken by either commissioner to ensure health plan
company compliance with this section, section 62Q.53, and United States Code, title 42,
section 18031(j); and

(4) describe the information provided by either commissioner to the public about
alcoholism, mental health, or chemical dependency parity protections under state and federal
law.

The report must be written in nontechnical, readily understandable language and must be
made available to the public by, among other means as the commissioners find appropriate,
posting the report on department websites. Individually identifiable information must be
excluded from the report, consistent with state and federal privacy protections.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to health
plans offered, issued, or renewed on or after that date.
new text end

Sec. 47.

new text begin [62Q.481] COST-SHARING FOR PRESCRIPTION DRUGS AND RELATED
MEDICAL SUPPLIES TO TREAT CHRONIC DISEASE.
new text end

new text begin Subdivision 1. new text end

new text begin Cost-sharing limits. new text end

new text begin (a) A health plan must limit the amount of any
enrollee cost-sharing for prescription drugs prescribed to treat a chronic disease to no more
than: (1) $25 per one-month supply for each prescription drug, regardless of the amount or
type of medication required to fill the prescription; and (2) $50 per month in total for all
related medical supplies. The cost-sharing limit for related medical supplies does not increase
with the number of chronic diseases for which an enrollee is treated. Coverage under this
section shall not be subject to any deductible.
new text end

new text begin (b) If application of this section before an enrollee has met the enrollee's plan deductible
results in: (1) health savings account ineligibility under United States Code, title 26, section
223; or (2) catastrophic health plan ineligibility under United States Code, title 42, section
18022(e), this section applies to the specific prescription drug or related medical supply
only after the enrollee has met the enrollee's plan deductible.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following definitions apply.
new text end

new text begin (b) "Chronic disease" means diabetes, asthma, and allergies requiring the use of
epinephrine auto-injectors.
new text end

new text begin (c) "Cost-sharing" means co-payments and coinsurance.
new text end

new text begin (d) "Related medical supplies" means syringes, insulin pens, insulin pumps, test strips,
glucometers, continuous glucose monitors, epinephrine auto-injectors, asthma inhalers, and
other medical supply items necessary to effectively and appropriately treat a chronic disease
or administer a prescription drug prescribed to treat a chronic disease.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to health
plans offered, issued, or renewed on or after that date.
new text end

Sec. 48.

Minnesota Statutes 2022, section 62Q.735, subdivision 1, is amended to read:

Subdivision 1.

Contract disclosure.

(a) Before requiring a health care provider to sign
a contract, a health plan company shall give to the provider a complete copy of the proposed
contract, including:

(1) all attachments and exhibits;

(2) operating manuals;

(3) a general description of the health plan company's health service coding guidelines
and requirement for procedures and diagnoses with modifiers, and multiple procedures; and

(4) all guidelines and treatment parameters incorporated or referenced in the contract.

(b) The health plan company shall make available to the provider the fee schedule or a
method or process that allows the provider to determine the fee schedule for each health
care service to be provided under the contract.

(c) deleted text begin Notwithstanding paragraph (b), a health plan company that is a dental plan
organization, as defined in section 62Q.76, shall disclose information related to the individual
contracted provider's expected reimbursement from the dental plan organization. deleted text end Nothing
in this section requires a dental plan organization to disclose the plan's aggregate maximum
allowable fee table used to determine other providers' fees. The contracted provider must
not release this information in any way that would violate any state or federal antitrust law.

Sec. 49.

Minnesota Statutes 2022, section 62Q.735, subdivision 5, is amended to read:

Subd. 5.

Fee schedules.

deleted text begin (a) deleted text end A health plan company shall provide, upon request, any
additional fees or fee schedules relevant to the particular provider's practice beyond those
provided with the renewal documents for the next contract year to all participating providers,
excluding claims paid under the pharmacy benefit. Health plan companies may fulfill the
requirements of this section by making the full fee schedules available through a secure
web portal for contracted providers.

deleted text begin (b) A dental organization may satisfy paragraph (a) by complying with section 62Q.735,
subdivision 1, paragraph (c).
deleted text end

Sec. 50.

Minnesota Statutes 2022, section 62Q.76, is amended by adding a subdivision to
read:

new text begin Subd. 9. new text end

new text begin Third party. new text end

new text begin "Third party" means a person or entity that enters into a contract
with a dental organization or with another third party to gain access to the dental care services
or contractual discounts under a dental provider contract. Third party does not include an
enrollee of a dental organization or an employer or other group for whom the dental
organization provides administrative services.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to dental
plans and dental provider agreements offered, issued, or renewed on or after that date.
new text end

Sec. 51.

Minnesota Statutes 2022, section 62Q.78, is amended by adding a subdivision to
read:

new text begin Subd. 7. new text end

new text begin Method of payments. new text end

new text begin A dental provider contract must include a method of
payment for dental care services in which no fees associated with the method of payment,
including credit card fees and fees related to payment in the form of digital or virtual
currency, are incurred by the dentist or dental clinic. Any fees that may be incurred from a
payment must be disclosed to a dentist prior to entering into or renewing a dental provider
contract. For purposes of this section, fees related to a provider's electronic claims processing
vendor, financial institution, or other vendor used by a provider to facilitate the submission
of claims are excluded.
new text end

Sec. 52.

Minnesota Statutes 2022, section 62Q.78, is amended by adding a subdivision to
read:

new text begin Subd. 8. new text end

new text begin Network leasing. new text end

new text begin (a) A dental organization may grant a third party access to
a dental provider contract or a provider's dental care services or contractual discounts
provided pursuant to a dental provider contract if, at the time the dental provider contract
is entered into or renewed, the dental organization allows a dentist to choose not to participate
in third-party access to the dental provider contract without any penalty to the dentist. The
third-party access provision of the dental provider contract must be clearly identified. A
dental organization must not grant a third party access to the dental provider contract of any
dentist who does not participate in third-party access to the dental provider contract.
new text end

new text begin (b) Notwithstanding paragraph (a), if a dental organization exists solely for the purpose
of recruiting dentists for dental provider contracts that establish a network to be leased to
third parties, the dentist waives the right to choose whether to participate in third-party
access.
new text end

new text begin (c) A dental organization may grant a third party access to a dental provider contract,
or a dentist's dental care services or contractual discounts under a dental provider contract,
if the following requirements are met:
new text end

new text begin (1) the dental organization lists all third parties that may have access to the dental provider
contract on the dental organization's website, which must be updated at least once every 90
days;
new text end

new text begin (2) the dental provider contract states that the dental organization may enter into an
agreement with a third party that would allow the third party to obtain the dental
organization's rights and responsibilities as if the third party were the dental organization,
and the dentist chose to participate in third-party access at the time the dental provider
contract was entered into; and
new text end

new text begin (3) the third party accessing the dental provider contract agrees to comply with all
applicable terms of the dental provider contract.
new text end

new text begin (d) A dentist is not bound by and is not required to perform dental care services under
a dental provider contract granted to a third party in violation of this section.
new text end

new text begin (e) This subdivision does not apply when:
new text end

new text begin (1) the dental provider contract is for dental services provided under a public health plan
program, including but not limited to medical assistance, MinnesotaCare, Medicare, or
Medicare Advantage; or
new text end

new text begin (2) access to a dental provider contract is granted to a dental organization, an entity
operating in accordance with the same brand licensee program as the dental organization
or other entity, or to an entity that is an affiliate of the dental organization, provided the
entity agrees to substantially similar terms and conditions as the originating dental provider
contract between the dental organization and the dentist or dental clinic. A list of the dental
organization's affiliates must be posted on the dental organization's website.
new text end

Sec. 53.

Minnesota Statutes 2022, section 62Q.81, subdivision 4, is amended to read:

Subd. 4.

Essential health benefits; definition.

For purposes of this section, "essential
health benefits" has the meaning given under section 1302(b) of the Affordable Care Act
and includes:

(1) ambulatory patient services;

(2) emergency services;

(3) hospitalization;

(4) laboratory services;

(5) maternity and newborn care;

(6) mental health and substance use disorder services, including behavioral health
treatment;

(7) pediatric services, including oral and vision care;

(8) prescription drugs;

(9) preventive and wellness services and chronic disease management;

(10) rehabilitative and habilitative services and devices; and

(11) additional essential health benefits included in the EHB-benchmark plan, as defined
under the Affordable Care Act new text begin , and preventive items and services, as defined under section
62Q.46, subdivision 1, paragraph (a) new text end .

Sec. 54.

Minnesota Statutes 2022, section 62Q.81, is amended by adding a subdivision to
read:

new text begin Subd. 7. new text end

new text begin Standard plans. new text end

new text begin (a) A health plan company that offers individual health plans
must ensure that no less than one individual health plan at each level of coverage described
in subdivision 1, paragraph (b), clause (3), that the health plan company offers in each
geographic rating area the health plan company serves conforms to the standard plan
parameters determined by the commissioner under paragraph (e).
new text end

new text begin (b) An individual health plan offered under this subdivision must be:
new text end

new text begin (1) clearly and appropriately labeled as standard plans to aid the purchaser in the selection
process;
new text end

new text begin (2) marketed as standard plans and in the same manner as other individual health plans
offered by the health plan company; and
new text end

new text begin (3) offered for purchase to any individual.
new text end

new text begin (c) This subdivision does not apply to catastrophic plans, grandfathered plans, small
group health plans, large group health plans, health savings accounts, qualified high
deductible health benefit plans, limited health benefit plans, or short-term limited-duration
health insurance policies.
new text end

new text begin (d) Health plan companies must meet the requirements in this subdivision separately for
plans offered through MNsure under chapter 62V and plans offered outside of MNsure.
new text end

new text begin (e) The commissioner of commerce, in consultation with the commissioner of health,
must annually determine standard plan parameters, including but not limited to cost-sharing
structure and covered benefits, that comprise a standard plan in Minnesota.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to individual
health plans offered, issued, or renewed on or after that date.
new text end

Sec. 55.

new text begin [62W.15] CLINICIAN-ADMINISTERED DRUGS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following definitions
apply.
new text end

new text begin (b) "Affiliated pharmacy" means a pharmacy in which a pharmacy benefit manager or
health carrier has an ownership interest either directly or indirectly, or through an affiliate
or subsidiary.
new text end

new text begin (c) "Clinician-administered drug" means an outpatient prescription drug, other than a
vaccine, that:
new text end

new text begin (1) cannot reasonably be self-administered by the patient to whom the drug is prescribed
or by an individual assisting the patient with self-administration; and
new text end

new text begin (2) is typically administered:
new text end

new text begin (i) by a health care provider authorized to administer the drug, including when acting
under a physician's delegation and supervision; and
new text end

new text begin (ii) in a physician's office, hospital outpatient infusion center, or other clinical setting.
new text end

new text begin Subd. 2. new text end

new text begin Enrollee choice. new text end

new text begin A pharmacy benefit manager or health carrier:
new text end

new text begin (1) shall permit an enrollee to obtain a clinician-administered drug from an in-network
health care provider authorized to administer the drug, or an in-network pharmacy, as long
as payment for the covered drug is subject to the same terms and conditions that apply to a
designated specialty pharmacy for dispensing the covered drug;
new text end

new text begin (2) shall not interfere with the enrollee's right to obtain a clinician-administered drug
from the enrollee's in-network provider or in-network pharmacy of choice;
new text end

new text begin (3) shall not require clinician-administered drugs to be dispensed by a pharmacy selected
by the pharmacy benefit manager or health carrier, provided that:
new text end

new text begin (i) the dispensing specialty pharmacy meets the supply chain security controls and chain
of distribution set by the federal Drug Supply Chain Security Act, Public Law 113-54, as
amended; and
new text end

new text begin (ii) the dispensing specialty pharmacy has policies in place for safety recalls that are
consistent with national accreditation standards for safety recalls issued by a nationally
recognized accrediting body for specialty pharmacy; and
new text end

new text begin (4) shall not limit or exclude coverage for a clinician-administered drug when it is not
dispensed by a pharmacy selected by the pharmacy benefit manager or health carrier, if the
drug would otherwise be covered.
new text end

new text begin (b) A health care provider:
new text end

new text begin (1) must provide the enrollee with information related to the costs associated with the
enrollee's choice before providing the service; and
new text end

new text begin (2) shall not limit, deny, or exclude services to an enrollee who obtains a
clinician-administered drug from a pharmacy selected by the enrollee's pharmacy benefit
manager or health carrier.
new text end

new text begin Subd. 3. new text end

new text begin Exclusions. new text end

new text begin This section does not apply to managed care plans or county-based
purchasing plans when the plan provides coverage to public health care program enrollees
under chapter 256B or 256L.
new text end

new text begin Subd. 4. new text end

new text begin Cost-sharing and reimbursement. new text end

new text begin (a) A pharmacy benefit manager or health
carrier:
new text end

new text begin (1) may impose coverage or benefit limitations on an enrollee who obtains a
clinician-administered drug from a health care provider authorized to administer the drug
or a pharmacy, but only if the limitations would also be imposed if the drug was obtained
from an affiliated pharmacy or a pharmacy selected by the pharmacy benefit manager or
health carrier;
new text end

new text begin (2) may impose cost-sharing requirements on an enrollee who obtains a
clinician-administered drug from a health care provider authorized to administer the drug
or a pharmacy, but only if the requirements would also be imposed if the drug was obtained
from an affiliated pharmacy or a pharmacy selected by the pharmacy benefit manager or
health carrier; and
new text end

new text begin (3) shall not reimburse a health care provider or pharmacy for clinician-administered
drugs and the drugs' administration at an amount that is higher than would be applied to an
affiliated pharmacy or pharmacy selected by the pharmacy benefit manager or health carrier.
new text end

new text begin (b) Nothing in this subdivision shall require a pharmacy benefit manager or health carrier
to reimburse a participating provider in full or at a specified percentage of billed charges.
new text end

new text begin Subd. 5. new text end

new text begin Other requirements. new text end

new text begin A pharmacy benefit manager or health carrier:
new text end

new text begin (1) shall not require or encourage the dispensing of a clinician-administered drug to an
enrollee in a manner that is inconsistent with the supply chain security controls and chain
of distribution set by the federal Drug Supply Chain Security Act, United States Code, title
21, section 360eee, et seq.; and
new text end

new text begin (2) shall not require a specialty pharmacy to dispense a clinician-administered drug
directly to a patient with the intention that the patient transport the drug to a health care
provider for administration.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025.
new text end

Sec. 56.

new text begin [65A.298] HOMEOWNER'S INSURANCE; FORTIFIED PROGRAM
STANDARDS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section the following term has the
meaning given.
new text end

new text begin (b) "Insurable property" means a residential property designated as meeting Fortified
program standards that include a hail supplement as administered by the Insurance Institute
for Business and Home Safety (IBHS).
new text end

new text begin Subd. 2. new text end

new text begin Fortified new property. new text end

new text begin (a) An insurer must provide a premium discount or
an insurance rate reduction to an owner who builds or locates a new insurable property in
Minnesota.
new text end

new text begin (b) An owner of insurable property claiming a premium discount or rate reduction under
this subdivision must submit and maintain a certificate issued by IBHS showing proof of
compliance with the Fortified program standards to the insurer prior to receiving the premium
discount or rate reduction. At the time of policy renewal an insurer may require evidence
that the issued certificate remains in good standing.
new text end

new text begin Subd. 3. new text end

new text begin Fortified existing property. new text end

new text begin (a) An insurer must provide a premium discount
or insurance rate reduction to an owner who retrofits an existing property to meet the
requirements to be an insurable property in Minnesota.
new text end

new text begin (b) An owner of insurable property claiming a premium discount or rate reduction under
this subdivision must submit a certificate issued by IBHS showing proof of compliance
with the Fortified program standards to the insurer prior to receiving the premium discount
or rate reduction.
new text end

new text begin Subd. 4. new text end

new text begin Insurers. new text end

new text begin (a) A participating insurer must submit to the commissioner actuarially
justified rates and a rating plan for a person who builds or locates a new insurable property
in Minnesota.
new text end

new text begin (b) A participating insurer must submit to the commissioner actuarially justified rates
and a rating plan for a person who retrofits an existing property to meet the requirements
to be an insurable property.
new text end

new text begin (c) A participating insurer may offer, in addition to the premium discount and insurance
rate reductions required under subdivisions 2 and 3, more generous mitigation adjustments
to an owner of insurable property.
new text end

new text begin (d) Any premium discount, rate reduction, or mitigation adjustment offered by an insurer
under this section applies only to policies that include wind coverage and may be applied
to: (1) only the portion of the premium for wind coverage; or (2) the total premium, if the
insurer does not separate the premium for wind coverage in the insurer's rate filing.
new text end

new text begin (e) A rate and rating plan submitted to the commissioner under this section must not be
used until 60 days after the rate and rating plan has been filed with the commissioner, unless
the commissioner approves the rate and rating plan before that time. A rating plan, rating
classification, and territories applicable to insurance written by a participating insurer and
any related statistics are subject to chapter 70A. When the commissioner is evaluating rate
and rating plans submitted under this section, the commissioner must evaluate:
new text end

new text begin (i) evidence of cost savings directly attributable to the Fortified program standards as
administered by IBHS; and
new text end

new text begin (ii) whether the cost savings are passed along in full to qualified policyholders.
new text end

new text begin (f) A participating insurer must resubmit a rate and rating plan at least once every five
years following the initial submission under this section.
new text end

new text begin (g) The commissioner may annually publish the premium savings that policyholders
experience pursuant to this section.
new text end

new text begin (h) An insurer must provide the commissioner with all requested information necessary
for the commissioner to meet the requirements of this subdivision.
new text end

Sec. 57.

new text begin [65A.299] STRENGTHEN MINNESOTA HOMES PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Short title. new text end

new text begin This section may be cited as the "Strengthen Minnesota
Homes Act."
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this subdivision have
the meanings given.
new text end

new text begin (b) "Insurable property" has the meaning given in section 65A.298, subdivision 1.
new text end

new text begin (c) "Program" means the Strengthen Minnesota Homes program established under this
section.
new text end

new text begin Subd. 3. new text end

new text begin Program established; purpose, permitted activities. new text end

new text begin The Strengthen Minnesota
Homes program is established within the Department of Commerce. The purpose of the
program is to provide grants to retrofit insurable property to resist loss due to common
perils, including but not limited to tornadoes or other catastrophic windstorm events.
new text end

new text begin Subd. 4. new text end

new text begin Strengthen Minnesota homes account; appropriation. new text end

new text begin (a) A strengthen
Minnesota homes account is created as a separate account in the special revenue fund of
the state treasury. The account consists of money provided by law and any other money
donated, allotted, transferred, or otherwise provided to the account. Earnings, including
interest, dividends, and any other earnings arising from assets of the account, must be
credited to the account. Money remaining in the account at the end of a fiscal year does not
cancel to the general fund and remains in the account until expended. The commissioner
must manage the account.
new text end

new text begin (b) Money in the account is appropriated to the commissioner to pay for (1) grants issued
under the program, and (2) the reasonable costs incurred by the commissioner to administer
the program.
new text end

new text begin Subd. 5. new text end

new text begin Use of grants. new text end

new text begin (a) A grant under this section must be used to retrofit an insurable
property.
new text end

new text begin (b) Grant money provided under this section must not be used for maintenance or repairs,
but may be used in conjunction with repairs or reconstruction necessitated by damage from
wind or hail.
new text end

new text begin (c) A project funded by a grant under this section must be completed within three months
of the date the grant is approved. Failure to complete the project in a timely manner may
result in forfeiture of the grant.
new text end

new text begin Subd. 6. new text end

new text begin Applicant eligibility. new text end

new text begin The commissioner must develop (1) administrative
procedures to implement this section, and (2) criteria used to determine whether an applicant
is eligible for a grant under this section.
new text end

new text begin Subd. 7. new text end

new text begin Contractor eligibility; conflicts of interest. new text end

new text begin (a) To be eligible to work as a
contractor on a projected funded by a grant under this section, the contractor must meet all
of the following program requirements and must maintain a current copy of all certificates,
licenses, and proof of insurance coverage with the program office. The eligible contractor
must:
new text end

new text begin (1) hold a valid residential building contractor and residential remodeler license issued
by the commissioner of labor and industry;
new text end

new text begin (2) not be subject to disciplinary action by the commissioner of labor and industry;
new text end

new text begin (3) hold any other valid state or jurisdictional business license or work permits required
by law;
new text end

new text begin (4) possess an in-force general liability policy with $1,000,000 in liability coverage;
new text end

new text begin (5) possess an in-force workers compensation policy with $1,000,000 in coverage;
new text end

new text begin (6) possess a certificate of compliance from the commissioner of revenue;
new text end

new text begin (7) successfully complete the Fortified Roof for High Wind and Hail training provided
by the IBHS and maintain an active certification. The training may be offered as separate
courses;
new text end

new text begin (8) agree to the terms and successfully register as a vendor with the commissioner of
management and budget and receive direct deposit of payment for mitigation work performed
under the program;
new text end

new text begin (9) maintain Internet access and keep a valid email address on file with the program and
remain active in the commissioner of management and budget's vendor and supplier portal
while working on the program;
new text end

new text begin (10) maintain an active email address for the communication with the program;
new text end

new text begin (11) successfully complete the program training; and
new text end

new text begin (12) agree to follow program procedures and rules established under this section and by
the commissioner.
new text end

new text begin (b) An eligible contractor must not have a financial interest, other than payment on
behalf of the homeowner, in any project for which the eligible contractor performs work
toward a fortified designation under the program. An eligible contractor is prohibited from
acting as the evaluator for a fortified designation on any project funded by the program. An
eligible contractor must report to the commissioner regarding any potential conflict of
interest before work commences on any job funded by the program.
new text end

new text begin Subd. 8. new text end

new text begin Evaluator eligibility; conflicts of interest. new text end

new text begin (a) To be eligible to work on the
program as an evaluator, the evaluator must meet all program eligibility requirements and
must submit to the commissioner and maintain a copy of all current certificates and licenses.
The evaluator must:
new text end

new text begin (1) be in good standing with IBHS and maintain an active certification as a fortified
home evaluator for high wind and hail or a successor certification;
new text end

new text begin (2) possess a Minnesota business license and be registered with the secretary of state;
and
new text end

new text begin (3) successfully complete the program training.
new text end

new text begin (b) An evaluator must not have a financial interest in any project that the evaluator
inspects for designation purposes for the program. An evaluator must not be an eligible
contractor or supplier of any material, product, or system installed in any home that the
evaluator inspects for designation purposes for the program. An evaluator must not be a
sales agent for any home being designated for the program. An evaluator must inform the
commissioner of any potential conflict of interest impacting the evaluator's participation in
the program.
new text end

new text begin Subd. 9. new text end

new text begin Grant approval; allocation. new text end

new text begin (a) The commissioner must review all applications
for completeness and must perform appropriate audits to verify (1) the accuracy of the
information on the application, and (2) that the applicant meets all eligibility rules. All
verified applicants must be placed in the order the application was received. Grants must
be awarded on a first-come, first-served basis, subject to availability of money for the
program.
new text end

new text begin (b) When a grant is approved, an approval letter must be sent to the applicant.
new text end

new text begin (c) An eligible contractor is prohibited from beginning work until a grant is approved.
new text end

new text begin (d) In order to assure equitable distribution of grants in proportion to the income
demographics in counties where the program is made available, grant applications must be
accepted on a first-come, first-served basis. The commissioner may establish pilot projects
as needed to establish a sustainable program distribution system in any geographic area
within Minnesota.
new text end

new text begin Subd. 10. new text end

new text begin Grant award process; release of grant money. new text end

new text begin (a) After a grant application
is approved, the eligible contractor selected by the homeowner may begin the mitigation
work.
new text end

new text begin (b) Once the mitigation work is completed, the eligible contractor must submit a copy
of the signed contract to the commissioner, along with an invoice seeking payment and an
affidavit stating the fortified standards were met by the work.
new text end

new text begin (c) The IBHS evaluator must conduct all required evaluations, including a required
interim inspection during construction and the final inspection, and must confirm that the
work was completed according to the mitigation specifications.
new text end

new text begin (d) Grant money must be released on behalf of an approved applicant only after a fortified
designation certificate has been issued for the home. The program or another designated
entity must, on behalf of the homeowner, directly pay the eligible contractor that performed
the mitigation work. The program or the program's designated entity must pay the eligible
contractor the costs covered by the grant. The homeowner must pay the eligible contractor
for the remaining cost after receiving an IBHS fortified certificate.
new text end

new text begin (e) The program must confirm that the homeowner's insurer provides the appropriate
premium discount.
new text end

new text begin (f) The program must conduct random reinspections to detect any fraud and must submit
any irregularities to the attorney general.
new text end

new text begin Subd. 11. new text end

new text begin Limitations. new text end

new text begin (a) This section does not create an entitlement for property
owners or obligate the state of Minnesota to pay for residential property in Minnesota to be
inspected or retrofitted. The program under this section is subject to legislative appropriations,
the receipt of federal grants or money, or the receipt of other sources of grants or money.
The department may obtain grants or other money from the federal government or other
funding sources to support and enhance program activities.
new text end

new text begin (b) All mitigation under this section is contingent upon securing all required local permits
and applicable inspections to comply with local building codes and applicable Fortified
program standards. A mitigation project receiving a grant under this section is subject to
random reinspection at a later date.
new text end

Sec. 58.

new text begin [65A.303] HOMEOWNER'S LIABILITY INSURANCE; DOGS.
new text end

new text begin Subdivision 1. new text end

new text begin Discrimination prohibited. new text end

new text begin An insurer writing homeowner's insurance
for property is prohibited from (1) refusing to issue or renew an insurance policy or contract,
(2) canceling an insurance policy or contract, or (3) charging or imposing an increased
premium or rate for an insurance policy or contract, based solely on the fact that the
homeowner harbors or owns a dog of a specific breed or mixture of breeds.
new text end

new text begin Subd. 2. new text end

new text begin Exception. new text end

new text begin Subdivision 1 does not prohibit an insurer from (1) refusing to issue
or renew an insurance policy or contract, (2) canceling an insurance contract or policy, or
(3) imposing a reasonably increased premium or rate for an insurance policy or contract,
based on a dog being designated as a dangerous dog or potentially dangerous dog under
section 347.50, or based on sound underwriting and actuarial principles that are reasonably
related to actual or anticipated loss experience.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023, and applies to insurance
policies and contracts offered, issued, or sold on or after that date.
new text end

Sec. 59.

Minnesota Statutes 2022, section 65B.49, is amended by adding a subdivision to
read:

new text begin Subd. 10. new text end

new text begin Time limitations. new text end

new text begin (a) Unless expressly provided for in this chapter, a plan of
reparation security must conform to the six-year time limitation provided under section
541.05, subdivision 1, clause (1).
new text end

new text begin (b) The time limitation for commencing a cause of action relating to underinsured motorist
coverage under subdivision 3a is four years from the date of accrual.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023, and applies to contracts
issued or renewed on or after that date.
new text end

Sec. 60.

Minnesota Statutes 2022, section 151.071, subdivision 1, is amended to read:

Subdivision 1.

Forms of disciplinary action.

When the board finds that a licensee,
registrant, or applicant has engaged in conduct prohibited under subdivision 2, it may do
one or more of the following:

(1) deny the issuance of a license or registration;

(2) refuse to renew a license or registration;

(3) revoke the license or registration;

(4) suspend the license or registration;

(5) impose limitations, conditions, or both on the license or registration, including but
not limited to: the limitation of practice to designated settings; the limitation of the scope
of practice within designated settings; the imposition of retraining or rehabilitation
requirements; the requirement of practice under supervision; the requirement of participation
in a diversion program such as that established pursuant to section 214.31 or the conditioning
of continued practice on demonstration of knowledge or skills by appropriate examination
or other review of skill and competence;

(6) impose a civil penalty not exceeding $10,000 for each separate violation, new text begin except that
a civil penalty not exceeding $25,000 may be imposed for each separate violation of section
62J.842, new text end the amount of the civil penalty to be fixed so as to deprive a licensee or registrant
of any economic advantage gained by reason of the violation, to discourage similar violations
by the licensee or registrant or any other licensee or registrant, or to reimburse the board
for the cost of the investigation and proceeding, including but not limited to, fees paid for
services provided by the Office of Administrative Hearings, legal and investigative services
provided by the Office of the Attorney General, court reporters, witnesses, reproduction of
records, board members' per diem compensation, board staff time, and travel costs and
expenses incurred by board staff and board members; and

(7) reprimand the licensee or registrant.

Sec. 61.

Minnesota Statutes 2022, section 151.071, subdivision 2, is amended to read:

Subd. 2.

Grounds for disciplinary action.

The following conduct is prohibited and is
grounds for disciplinary action:

(1) failure to demonstrate the qualifications or satisfy the requirements for a license or
registration contained in this chapter or the rules of the board. The burden of proof is on
the applicant to demonstrate such qualifications or satisfaction of such requirements;

(2) obtaining a license by fraud or by misleading the board in any way during the
application process or obtaining a license by cheating, or attempting to subvert the licensing
examination process. Conduct that subverts or attempts to subvert the licensing examination
process includes, but is not limited to: (i) conduct that violates the security of the examination
materials, such as removing examination materials from the examination room or having
unauthorized possession of any portion of a future, current, or previously administered
licensing examination; (ii) conduct that violates the standard of test administration, such as
communicating with another examinee during administration of the examination, copying
another examinee's answers, permitting another examinee to copy one's answers, or
possessing unauthorized materials; or (iii) impersonating an examinee or permitting an
impersonator to take the examination on one's own behalf;

(3) for a pharmacist, pharmacy technician, pharmacist intern, applicant for a pharmacist
or pharmacy license, or applicant for a pharmacy technician or pharmacist intern registration,
conviction of a felony reasonably related to the practice of pharmacy. Conviction as used
in this subdivision includes a conviction of an offense that if committed in this state would
be deemed a felony without regard to its designation elsewhere, or a criminal proceeding
where a finding or verdict of guilt is made or returned but the adjudication of guilt is either
withheld or not entered thereon. The board may delay the issuance of a new license or
registration if the applicant has been charged with a felony until the matter has been
adjudicated;

(4) for a facility, other than a pharmacy, licensed or registered by the board, if an owner
or applicant is convicted of a felony reasonably related to the operation of the facility. The
board may delay the issuance of a new license or registration if the owner or applicant has
been charged with a felony until the matter has been adjudicated;

(5) for a controlled substance researcher, conviction of a felony reasonably related to
controlled substances or to the practice of the researcher's profession. The board may delay
the issuance of a registration if the applicant has been charged with a felony until the matter
has been adjudicated;

(6) disciplinary action taken by another state or by one of this state's health licensing
agencies:

(i) revocation, suspension, restriction, limitation, or other disciplinary action against a
license or registration in another state or jurisdiction, failure to report to the board that
charges or allegations regarding the person's license or registration have been brought in
another state or jurisdiction, or having been refused a license or registration by any other
state or jurisdiction. The board may delay the issuance of a new license or registration if an
investigation or disciplinary action is pending in another state or jurisdiction until the
investigation or action has been dismissed or otherwise resolved; and

(ii) revocation, suspension, restriction, limitation, or other disciplinary action against a
license or registration issued by another of this state's health licensing agencies, failure to
report to the board that charges regarding the person's license or registration have been
brought by another of this state's health licensing agencies, or having been refused a license
or registration by another of this state's health licensing agencies. The board may delay the
issuance of a new license or registration if a disciplinary action is pending before another
of this state's health licensing agencies until the action has been dismissed or otherwise
resolved;

(7) for a pharmacist, pharmacy, pharmacy technician, or pharmacist intern, violation of
any order of the board, of any of the provisions of this chapter or any rules of the board or
violation of any federal, state, or local law or rule reasonably pertaining to the practice of
pharmacy;

(8) for a facility, other than a pharmacy, licensed by the board, violations of any order
of the board, of any of the provisions of this chapter or the rules of the board or violation
of any federal, state, or local law relating to the operation of the facility;

(9) engaging in any unethical conduct; conduct likely to deceive, defraud, or harm the
public, or demonstrating a willful or careless disregard for the health, welfare, or safety of
a patient; or pharmacy practice that is professionally incompetent, in that it may create
unnecessary danger to any patient's life, health, or safety, in any of which cases, proof of
actual injury need not be established;

(10) aiding or abetting an unlicensed person in the practice of pharmacy, except that it
is not a violation of this clause for a pharmacist to supervise a properly registered pharmacy
technician or pharmacist intern if that person is performing duties allowed by this chapter
or the rules of the board;

(11) for an individual licensed or registered by the board, adjudication as mentally ill
or developmentally disabled, or as a chemically dependent person, a person dangerous to
the public, a sexually dangerous person, or a person who has a sexual psychopathic
personality, by a court of competent jurisdiction, within or without this state. Such
adjudication shall automatically suspend a license for the duration thereof unless the board
orders otherwise;

(12) for a pharmacist or pharmacy intern, engaging in unprofessional conduct as specified
in the board's rules. In the case of a pharmacy technician, engaging in conduct specified in
board rules that would be unprofessional if it were engaged in by a pharmacist or pharmacist
intern or performing duties specifically reserved for pharmacists under this chapter or the
rules of the board;

(13) for a pharmacy, operation of the pharmacy without a pharmacist present and on
duty except as allowed by a variance approved by the board;

(14) for a pharmacist, the inability to practice pharmacy with reasonable skill and safety
to patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type
of material or as a result of any mental or physical condition, including deterioration through
the aging process or loss of motor skills. In the case of registered pharmacy technicians,
pharmacist interns, or controlled substance researchers, the inability to carry out duties
allowed under this chapter or the rules of the board with reasonable skill and safety to
patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type
of material or as a result of any mental or physical condition, including deterioration through
the aging process or loss of motor skills;

(15) for a pharmacist, pharmacy, pharmacist intern, pharmacy technician, medical gas
dispenser, or controlled substance researcher, revealing a privileged communication from
or relating to a patient except when otherwise required or permitted by law;

(16) for a pharmacist or pharmacy, improper management of patient records, including
failure to maintain adequate patient records, to comply with a patient's request made pursuant
to sections 144.291 to 144.298, or to furnish a patient record or report required by law;

(17) fee splitting, including without limitation:

(i) paying, offering to pay, receiving, or agreeing to receive, a commission, rebate,
kickback, or other form of remuneration, directly or indirectly, for the referral of patients;

(ii) referring a patient to any health care provider as defined in sections 144.291 to
144.298 in which the licensee or registrant has a financial or economic interest as defined
in section 144.6521, subdivision 3, unless the licensee or registrant has disclosed the
licensee's or registrant's financial or economic interest in accordance with section 144.6521;
and

(iii) any arrangement through which a pharmacy, in which the prescribing practitioner
does not have a significant ownership interest, fills a prescription drug order and the
prescribing practitioner is involved in any manner, directly or indirectly, in setting the price
for the filled prescription that is charged to the patient, the patient's insurer or pharmacy
benefit manager, or other person paying for the prescription or, in the case of veterinary
patients, the price for the filled prescription that is charged to the client or other person
paying for the prescription, except that a veterinarian and a pharmacy may enter into such
an arrangement provided that the client or other person paying for the prescription is notified,
in writing and with each prescription dispensed, about the arrangement, unless such
arrangement involves pharmacy services provided for livestock, poultry, and agricultural
production systems, in which case client notification would not be required;

(18) engaging in abusive or fraudulent billing practices, including violations of the
federal Medicare and Medicaid laws or state medical assistance laws or rules;

(19) engaging in conduct with a patient that is sexual or may reasonably be interpreted
by the patient as sexual, or in any verbal behavior that is seductive or sexually demeaning
to a patient;

(20) failure to make reports as required by section 151.072 or to cooperate with an
investigation of the board as required by section 151.074;

(21) knowingly providing false or misleading information that is directly related to the
care of a patient unless done for an accepted therapeutic purpose such as the dispensing and
administration of a placebo;

(22) aiding suicide or aiding attempted suicide in violation of section 609.215 as
established by any of the following:

(i) a copy of the record of criminal conviction or plea of guilty for a felony in violation
of section 609.215, subdivision 1 or 2;

(ii) a copy of the record of a judgment of contempt of court for violating an injunction
issued under section 609.215, subdivision 4;

(iii) a copy of the record of a judgment assessing damages under section 609.215,
subdivision 5; or

(iv) a finding by the board that the person violated section 609.215, subdivision 1 or 2.
The board must investigate any complaint of a violation of section 609.215, subdivision 1
or 2;

(23) for a pharmacist, practice of pharmacy under a lapsed or nonrenewed license. For
a pharmacist intern, pharmacy technician, or controlled substance researcher, performing
duties permitted to such individuals by this chapter or the rules of the board under a lapsed
or nonrenewed registration. For a facility required to be licensed under this chapter, operation
of the facility under a lapsed or nonrenewed license or registration; deleted text begin and
deleted text end

(24) for a pharmacist, pharmacist intern, or pharmacy technician, termination or discharge
from the health professionals services program for reasons other than the satisfactory
completion of the program deleted text begin . deleted text end new text begin ; and
new text end

new text begin (25) for a manufacturer, a violation of section 62J.842 or 62J.845.
new text end

Sec. 62.

Minnesota Statutes 2022, section 256B.0631, subdivision 1, is amended to read:

Subdivision 1.

Cost-sharing.

(a) Except as provided in subdivision 2, the medical
assistance benefit plan shall include the following cost-sharing for all recipients deleted text begin , effective
for services provided on or after September 1, 2011 deleted text end :

(1) $3 per nonpreventive visit, except as provided in paragraph (b). For purposes of this
subdivision, a visit means an episode of service which is required because of a recipient's
symptoms, diagnosis, or established illness, and which is delivered in an ambulatory setting
by a physician or physician assistant, chiropractor, podiatrist, nurse midwife, advanced
practice nurse, audiologist, optician, or optometrist;

(2) $3.50 for nonemergency visits to a hospital-based emergency room, except that this
co-payment shall be increased to $20 upon federal approval;

(3) $3 per brand-name drug prescription, $1 per generic drug prescription, and $1 per
prescription for a brand-name multisource drug listed in preferred status on the preferred
drug list, subject to a $12 per month maximum for prescription drug co-payments. No
co-payments shall apply to antipsychotic drugs when used for the treatment of mental illness;

(4) a family deductible equal to $2.75 per month per family and adjusted annually by
the percentage increase in the medical care component of the CPI-U for the period of
September to September of the preceding calendar year, rounded to the next higher five-cent
increment; deleted text begin and
deleted text end

(5) total monthly cost-sharing must not exceed five percent of family income. For
purposes of this paragraph, family income is the total earned and unearned income of the
individual and the individual's spouse, if the spouse is enrolled in medical assistance and
also subject to the five percent limit on cost-sharing. This paragraph does not apply to
premiums charged to individuals described under section 256B.057, subdivision 9 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (6) cost-sharing for prescription drugs and related medical supplies to treat chronic
disease must comply with the requirements of section 62Q.481.
new text end

(b) Recipients of medical assistance are responsible for all co-payments and deductibles
in this subdivision.

(c) Notwithstanding paragraph (b), the commissioner, through the contracting process
under sections 256B.69 and 256B.692, may allow managed care plans and county-based
purchasing plans to waive the family deductible under paragraph (a), clause (4). The value
of the family deductible shall not be included in the capitation payment to managed care
plans and county-based purchasing plans. Managed care plans and county-based purchasing
plans shall certify annually to the commissioner the dollar value of the family deductible.

(d) Notwithstanding paragraph (b), the commissioner may waive the collection of the
family deductible described under paragraph (a), clause (4), from individuals and allow
long-term care and waivered service providers to assume responsibility for payment.

(e) Notwithstanding paragraph (b), the commissioner, through the contracting process
under section 256B.0756 shall allow the pilot program in Hennepin County to waive
co-payments. The value of the co-payments shall not be included in the capitation payment
amount to the integrated health care delivery networks under the pilot program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024.
new text end

Sec. 63.

Minnesota Statutes 2022, section 256B.69, subdivision 5a, is amended to read:

Subd. 5a.

Managed care contracts.

(a) Managed care contracts under this section and
section 256L.12 shall be entered into or renewed on a calendar year basis. The commissioner
may issue separate contracts with requirements specific to services to medical assistance
recipients age 65 and older.

(b) A prepaid health plan providing covered health services for eligible persons pursuant
to chapters 256B and 256L is responsible for complying with the terms of its contract with
the commissioner. Requirements applicable to managed care programs under chapters 256B
and 256L established after the effective date of a contract with the commissioner take effect
when the contract is next issued or renewed.

(c) The commissioner shall withhold five percent of managed care plan payments under
this section and county-based purchasing plan payments under section 256B.692 for the
prepaid medical assistance program pending completion of performance targets. Each
performance target must be quantifiable, objective, measurable, and reasonably attainable,
except in the case of a performance target based on a federal or state law or rule. Criteria
for assessment of each performance target must be outlined in writing prior to the contract
effective date. Clinical or utilization performance targets and their related criteria must
consider evidence-based research and reasonable interventions when available or applicable
to the populations served, and must be developed with input from external clinical experts
and stakeholders, including managed care plans, county-based purchasing plans, and
providers. The managed care or county-based purchasing plan must demonstrate, to the
commissioner's satisfaction, that the data submitted regarding attainment of the performance
target is accurate. The commissioner shall periodically change the administrative measures
used as performance targets in order to improve plan performance across a broader range
of administrative services. The performance targets must include measurement of plan
efforts to contain spending on health care services and administrative activities. The
commissioner may adopt plan-specific performance targets that take into account factors
affecting only one plan, including characteristics of the plan's enrollee population. The
withheld funds must be returned no sooner than July of the following year if performance
targets in the contract are achieved. The commissioner may exclude special demonstration
projects under subdivision 23.

(d) The commissioner shall require that managed care plans:

(1) use the assessment and authorization processes, forms, timelines, standards,
documentation, and data reporting requirements, protocols, billing processes, and policies
consistent with medical assistance fee-for-service or the Department of Human Services
contract requirements for all personal care assistance services under section 256B.0659 and
community first services and supports under section 256B.85; deleted text begin and
deleted text end

(2) by January 30 of each year that follows a rate increase for any aspect of services
under section 256B.0659 or 256B.85, inform the commissioner and the chairs and ranking
minority members of the legislative committees with jurisdiction over rates determined
under section 256B.851 of the amount of the rate increase that is paid to each personal care
assistance provider agency with which the plan has a contract deleted text begin . deleted text end new text begin ; and
new text end

new text begin (3) use a six-month timely filing standard and provide an exemption to the timely filing
timeliness for the resubmission of claims where there has been a denial, request for more
information, or system issue.
new text end

(e) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (c) a reduction in the health
plan's emergency department utilization rate for medical assistance and MinnesotaCare
enrollees, as determined by the commissioner. For 2012, the reduction shall be based on
the health plan's utilization in 2009. To earn the return of the withhold each subsequent
year, the managed care plan or county-based purchasing plan must achieve a qualifying
reduction of no less than ten percent of the plan's emergency department utilization rate for
medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described
in subdivisions 23 and 28, compared to the previous measurement year until the final
performance target is reached. When measuring performance, the commissioner must
consider the difference in health risk in a managed care or county-based purchasing plan's
membership in the baseline year compared to the measurement year, and work with the
managed care or county-based purchasing plan to account for differences that they agree
are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate
was achieved. The commissioner shall structure the withhold so that the commissioner
returns a portion of the withheld funds in amounts commensurate with achieved reductions
in utilization less than the targeted amount.

The withhold described in this paragraph shall continue for each consecutive contract
period until the plan's emergency room utilization rate for state health care program enrollees
is reduced by 25 percent of the plan's emergency room utilization rate for medical assistance
and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate with the
health plans in meeting this performance target and shall accept payment withholds that
may be returned to the hospitals if the performance target is achieved.

(f) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (c) a reduction in the plan's
hospitalization admission rate for medical assistance and MinnesotaCare enrollees, as
determined by the commissioner. To earn the return of the withhold each year, the managed
care plan or county-based purchasing plan must achieve a qualifying reduction of no less
than five percent of the plan's hospital admission rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and
28, compared to the previous calendar year until the final performance target is reached.
When measuring performance, the commissioner must consider the difference in health risk
in a managed care or county-based purchasing plan's membership in the baseline year
compared to the measurement year, and work with the managed care or county-based
purchasing plan to account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that this reduction in the hospitalization
rate was achieved. The commissioner shall structure the withhold so that the commissioner
returns a portion of the withheld funds in amounts commensurate with achieved reductions
in utilization less than the targeted amount.

The withhold described in this paragraph shall continue until there is a 25 percent
reduction in the hospital admission rate compared to the hospital admission rates in calendar
year 2011, as determined by the commissioner. The hospital admissions in this performance
target do not include the admissions applicable to the subsequent hospital admission
performance target under paragraph (g). Hospitals shall cooperate with the plans in meeting
this performance target and shall accept payment withholds that may be returned to the
hospitals if the performance target is achieved.

(g) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (c) a reduction in the plan's
hospitalization admission rates for subsequent hospitalizations within 30 days of a previous
hospitalization of a patient regardless of the reason, for medical assistance and MinnesotaCare
enrollees, as determined by the commissioner. To earn the return of the withhold each year,
the managed care plan or county-based purchasing plan must achieve a qualifying reduction
of the subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees,
excluding enrollees in programs described in subdivisions 23 and 28, of no less than five
percent compared to the previous calendar year until the final performance target is reached.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that a qualifying reduction in the
subsequent hospitalization rate was achieved. The commissioner shall structure the withhold
so that the commissioner returns a portion of the withheld funds in amounts commensurate
with achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph must continue for each consecutive contract
period until the plan's subsequent hospitalization rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and
28, is reduced by 25 percent of the plan's subsequent hospitalization rate for calendar year
2011. Hospitals shall cooperate with the plans in meeting this performance target and shall
accept payment withholds that must be returned to the hospitals if the performance target
is achieved.

(h) Effective for services rendered on or after January 1, 2013, through December 31,
2013, the commissioner shall withhold 4.5 percent of managed care plan payments under
this section and county-based purchasing plan payments under section 256B.692 for the
prepaid medical assistance program. The withheld funds must be returned no sooner than
July 1 and no later than July 31 of the following year. The commissioner may exclude
special demonstration projects under subdivision 23.

(i) Effective for services rendered on or after January 1, 2014, the commissioner shall
withhold three percent of managed care plan payments under this section and county-based
purchasing plan payments under section 256B.692 for the prepaid medical assistance
program. The withheld funds must be returned no sooner than July 1 and no later than July
31 of the following year. The commissioner may exclude special demonstration projects
under subdivision 23.

(j) A managed care plan or a county-based purchasing plan under section 256B.692 may
include as admitted assets under section 62D.044 any amount withheld under this section
that is reasonably expected to be returned.

(k) Contracts between the commissioner and a prepaid health plan are exempt from the
set-aside and preference provisions of section 16C.16, subdivisions 6, paragraph (a), and
7.

(l) The return of the withhold under paragraphs (h) and (i) is not subject to the
requirements of paragraph (c).

(m) Managed care plans and county-based purchasing plans shall maintain current and
fully executed agreements for all subcontractors, including bargaining groups, for
administrative services that are expensed to the state's public health care programs.
Subcontractor agreements determined to be material, as defined by the commissioner after
taking into account state contracting and relevant statutory requirements, must be in the
form of a written instrument or electronic document containing the elements of offer,
acceptance, consideration, payment terms, scope, duration of the contract, and how the
subcontractor services relate to state public health care programs. Upon request, the
commissioner shall have access to all subcontractor documentation under this paragraph.
Nothing in this paragraph shall allow release of information that is nonpublic data pursuant
to section 13.02.

Sec. 64.

Minnesota Statutes 2022, section 256L.03, subdivision 5, is amended to read:

Subd. 5.

Cost-sharing.

(a) Co-payments, coinsurance, and deductibles do not apply to
children under the age of 21 and to American Indians as defined in Code of Federal
Regulations, title 42, section 600.5.

(b) The commissioner shall adjust co-payments, coinsurance, and deductibles for covered
services in a manner sufficient to maintain the actuarial value of the benefit to 94 percent.
The cost-sharing changes described in this paragraph do not apply to eligible recipients or
services exempt from cost-sharing under state law. The cost-sharing changes described in
this paragraph shall not be implemented prior to January 1, 2016.

(c) The cost-sharing changes authorized under paragraph (b) must satisfy the requirements
for cost-sharing under the Basic Health Program as set forth in Code of Federal Regulations,
title 42, sections 600.510 and 600.520.

new text begin (d) Cost-sharing for prescription drugs and related medical supplies to treat chronic
disease must comply with the requirements of section 62Q.481.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024.
new text end

Sec. 65. new text begin EVALUATION OF EXISTING STATUTORY HEALTH BENEFIT
MANDATES.
new text end

new text begin (a) The commissioner of commerce must evaluate existing Minnesota statutory provisions
that would constitute a "mandated health benefit proposal" under Minnesota Statutes, section
62J.26, subdivision 1, clause (4), if the statutory provision was offered as a legislative
proposal on the date of enactment of this act.
new text end

new text begin (b) The commissioner must conduct the evaluation using the process established under
Minnesota Statutes, section 62J.26, subdivision 2.
new text end

new text begin (c) The commissioner may prioritize and determine the order in which statutory provisions
are evaluated under this section. The commissioner may limit the number of statutory
provisions that are evaluated in order to not exceed the amount appropriated to the
commissioner to perform evaluations under this section.
new text end

new text begin (d) This section expires January 1, 2034.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 66. new text begin GEOGRAPHIC ACCESSIBILITY AND NETWORK ADEQUACY STUDY.
new text end

new text begin (a) The commissioner of health, in consultation with the commissioner of commerce
and stakeholders, must study and develop recommendations on additional methods, other
than maximum distance and travel times for enrollees, to determine adequate geographic
accessibility of health care providers and the adequacy of health care provider networks
maintained by health plan companies. The commissioner may examine the effectiveness
and feasibility of using the following methods to determine geographic accessibility and
network adequacy:
new text end

new text begin (1) establishing ratios of providers to enrollees by provider specialty;
new text end

new text begin (2) establishing ratios of primary care providers to enrollees; and
new text end

new text begin (3) establishing maximum waiting times for appointments with participating providers.
new text end

new text begin (b) The commissioner must examine:
new text end

new text begin (1) geographic accessibility of providers under current law;
new text end

new text begin (2) geographic variation and population dispersion;
new text end

new text begin (3) how provider hours of operations limit access to care;
new text end

new text begin (4) the ability of existing networks to meet the needs of enrollees, which may include
low-income persons; children and adults with serious, chronic, or complex health conditions,
physical disabilities, or mental illness; or persons with limited English proficiency and
persons from underserved communities;
new text end

new text begin (5) other health care service delivery options, including telehealth, mobile clinics, centers
of excellence, and other ways of delivering care; and
new text end

new text begin (6) the availability of services needed to meet the needs of enrollees requiring
technologically advanced or specialty care services.
new text end

new text begin (c) The commissioner must submit to the legislature a report on the study and
recommendations required by this section no later than January 15, 2024.
new text end

Sec. 67. new text begin AUTOMOTIVE SELF-INSURANCE; RULES AMENDMENT; EXPEDITED
RULEMAKING.
new text end

new text begin Subdivision 1. new text end

new text begin Self-insurance working capital condition. new text end

new text begin The commissioner of
commerce must amend Minnesota Rules, part 2770.6500, subpart 2, item B, subitem (5),
to require the commissioner's grant of self-insurance authority to an applicant to be based
on the applicant's net working capital in lieu of the applicant's net funds flow.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner discretion to grant self-insurance authority. new text end

new text begin The commissioner
of commerce must amend Minnesota Rules, part 2770.6500, subpart 2, item D, to,
notwithstanding any other provision of Minnesota Rules, part 2770.6500, permit the
commissioner to grant self-insurance authority to an applicant that is not a political
subdivision and that has not had positive net income or positive working capital in at least
three years of the last five-year period if the working capital, debt structure, profitability,
and overall financial integrity of the applicant and the applicant's parent company, if one
exists, demonstrate the applicant's continuing ability to satisfy any financial obligations that
have been and might be incurred under the no-fault act.
new text end

new text begin Subd. 3. new text end

new text begin Working capital. new text end

new text begin The commissioner of commerce must define working capital
for the purposes of Minnesota Rules, part 2770.6500.
new text end

new text begin Subd. 4. new text end

new text begin Commissioner discretion to revoke self-insurance authority. new text end

new text begin The
commissioner of commerce must amend Minnesota Rules, part 2770.7300, to permit, in
lieu of require, the commissioner to revoke a self-insurer's authorization to self-insure based
on the commissioner's determinations under Minnesota Rules, part 2770.7300, items A and
B.
new text end

new text begin Subd. 5. new text end

new text begin Expedited rulemaking authorized. new text end

new text begin The commissioner of commerce may use
the expedited rulemaking process under Minnesota Statutes, section 14.389, to amend rules
under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 68. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 62A.31, subdivisions 1b and 1i, new text end new text begin are repealed.
new text end

ARTICLE 3

FINANCIAL INSTITUTIONS

Section 1.

Minnesota Statutes 2022, section 46.131, subdivision 11, is amended to read:

Subd. 11.

Financial institutions account; appropriation.

(a) The financial institutions
account is created as a separate account in the special revenue fund. Earnings, including
interest, dividends, and any other earnings arising from account assets, must be credited to
the account.

(b) The account consists of funds received from assessments under subdivision 7,
examination fees under subdivision 8, and funds received pursuant to subdivision 10 and
the following provisions: sections 46.04; 46.041; 46.048, subdivision 1; 47.101; 47.54,
subdivision 1; 47.60, subdivision 3; 47.62, subdivision 4; 48.61, subdivision 7, paragraph
(b); 49.36, subdivision 1; 52.203; deleted text begin 53B.09; 53B.11, subdivision 1; deleted text end new text begin 53B.38; 53B.41; 53B.43; new text end
53C.02; 56.02; 58.10; 58A.045, subdivision 2; 59A.03; 216C.437, subdivision 12; 332A.04;
and 332B.04.

(c) Funds in the account are annually appropriated to the commissioner of commerce
for activities under this section.

Sec. 2.

Minnesota Statutes 2022, section 47.0153, subdivision 1, is amended to read:

Subdivision 1.

Emergency closings.

When the officers of a financial institution are of
the opinion that an emergency exists, or is impending, which affects, or may affect, a
financial institution's offices, they shall have the authority, in the reasonable exercise of
their discretion, to determine not to open any of its offices on any business day or, if having
opened, to close an office during the continuation of the emergency, even if the commissioner
does not issue a proclamation of emergency. The office closed shall remain closed until the
time that the officers determine the emergency has ended, and for the further time reasonably
necessary to reopen. No financial institution office shall remain closed for more than 48
consecutive hours new text begin in a Monday through Friday period new text end , excluding other legal holidays,
without the prior approval of the commissioner.

Sec. 3.

Minnesota Statutes 2022, section 47.59, subdivision 2, is amended to read:

Subd. 2.

Application.

Extensions of credit or purchases of extensions of credit by
financial institutions under sections 47.20, 47.21, 47.201, 47.204, 47.58, deleted text begin 47.60, deleted text end 48.153,
48.185, 48.195, 59A.01 to 59A.15, 334.01, 334.011, 334.012, 334.022, 334.06, and 334.061
to 334.19 may, but need not, be made according to those sections in lieu of the authority
set forth in this section to the extent those sections authorize the financial institution to make
extensions of credit or purchase extensions of credit under those sections. If a financial
institution elects to make an extension of credit or to purchase an extension of credit under
those other sections, the extension of credit or the purchase of an extension of credit is
subject to those sections and not this section, except this subdivision, and except as expressly
provided in those sections. A financial institution may also charge an organization a rate of
interest and any charges agreed to by the organization and may calculate and collect finance
and other charges in any manner agreed to by that organization. Except for extensions of
credit a financial institution elects to make under section 334.01, 334.011, 334.012, 334.022,
334.06, or 334.061 to 334.19, chapter 334 does not apply to extensions of credit made
according to this section or the sections listed in this subdivision. This subdivision does not
authorize a financial institution to extend credit or purchase an extension of credit under
any of the sections listed in this subdivision if the financial institution is not authorized to
do so under those sections. A financial institution extending credit under any of the sections
listed in this subdivision shall specify in the promissory note, contract, or other loan document
the section under which the extension of credit is made.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 4.

Minnesota Statutes 2022, section 47.60, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section, the terms defined have the
meanings given them:

(a) "Consumer small loan" is a loan transaction in which cash is advanced to a borrower
for the borrower's own personal, family, or household purpose. A consumer small loan is
a short-term, unsecured loan to be repaid in a single installment. The cash advance of a
consumer small loan is equal to or less than $350. A consumer small loan includes an
indebtedness evidenced by but not limited to a promissory note or agreement to defer the
presentation of a personal check for a fee.

(b) "Consumer small loan lender" is a financial institution as defined in section 47.59
or a business entity registered with the commissioner and engaged in the business of making
consumer small loans.

new text begin (c) "Annual percentage rate" means a measure of the cost of credit, expressed as a yearly
rate, that relates the amount and timing of value received by the consumer to the amount
and timing of payments made. Annual percentage interest rate includes all interest, finance
charges, and fees. The annual percentage rate must be determined in accordance with either
the actuarial method or the United States Rule method.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 5.

Minnesota Statutes 2022, section 47.60, subdivision 2, is amended to read:

Subd. 2.

Authorization, terms, conditions, and prohibitions.

(a) In deleted text begin lieu of the interest,
finance charges, or fees in any other law deleted text end new text begin connection with a consumer small loan new text end , a consumer
small loan lender may charge deleted text begin the following: deleted text end new text begin an annual percentage rate of up to 36 percent.
No other charges or payments are permitted or may be received by the lender in connection
with a consumer small loan.
new text end

deleted text begin (1) on any amount up to and including $50, a charge of $5.50 may be added;
deleted text end

deleted text begin (2) on amounts in excess of $50, but not more than $100, a charge may be added equal
to ten percent of the loan proceeds plus a $5 administrative fee;
deleted text end

deleted text begin (3) on amounts in excess of $100, but not more than $250, a charge may be added equal
to seven percent of the loan proceeds with a minimum of $10 plus a $5 administrative fee;
deleted text end

deleted text begin (4) for amounts in excess of $250 and not greater than the maximum in subdivision 1,
paragraph (a), a charge may be added equal to six percent of the loan proceeds with a
minimum of $17.50 plus a $5 administrative fee.
deleted text end

(b) The term of a loan made under this section shall be for no more than 30 calendar
days.

(c) After maturity, the contract rate must not exceed 2.75 percent per month of the
remaining loan proceeds after the maturity date calculated at a rate of 1/30 of the monthly
rate in the contract for each calendar day the balance is outstanding.

(d) No insurance charges or other charges must be permitted to be charged, collected,
or imposed on a consumer small loan except as authorized in this section.

(e) On a loan transaction in which cash is advanced in exchange for a personal check,
a return check charge may be charged as authorized by section 604.113, subdivision 2,
paragraph (a). The civil penalty provisions of section 604.113, subdivision 2, paragraph
(b), may not be demanded or assessed against the borrower.

(f) A loan made under this section must not be repaid by the proceeds of another loan
made under this section by the same lender or related interest. The proceeds from a loan
made under this section must not be applied to another loan from the same lender or related
interest. No loan to a single borrower made pursuant to this section shall be split or divided
and no single borrower shall have outstanding more than one loan with the result of collecting
a higher charge than permitted by this section or in an aggregate amount of principal exceed
at any one time the maximum of $350.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 6.

Minnesota Statutes 2022, section 47.60, is amended by adding a subdivision to
read:

new text begin Subd. 8. new text end

new text begin No evasion. new text end

new text begin (a) A person must not engage in any device, subterfuge, or pretense
to evade the requirements of this section, including but not limited to:
new text end

new text begin (1) making loans disguised as a personal property sale and leaseback transaction;
new text end

new text begin (2) disguising loan proceeds as a cash rebate for the pretextual installment sale of goods
or services; or
new text end

new text begin (3) making, offering, assisting, or arranging for a debtor to obtain a loan with a greater
rate or amount of interest, consideration, charge, or payment than is permitted by this section
through any method, including mail, telephone, Internet, or any electronic means, regardless
of whether a person has a physical location in Minnesota.
new text end

new text begin (b) A person is a consumer small loan lender subject to the requirements of this section
notwithstanding the fact that a person purports to act as an agent or service provider, or acts
in another capacity for another person that is not subject to this section, if a person:
new text end

new text begin (1) directly or indirectly holds, acquires, or maintains the predominant economic interest,
risk, or reward in a loan or lending business; or
new text end

new text begin (2) both: (i) markets, solicits, brokers, arranges, or facilitates a loan; and (ii) holds or
holds the right, requirement, or first right of refusal to acquire loans, receivables, or other
direct or interest in a loan.
new text end

new text begin (c) A person is a consumer small loan lender subject to the requirements of this section
if the totality of the circumstances indicate that a person is a lender and the transaction is
structured to evade the requirements of this section. Circumstances that weigh in favor of
a person being a lender in a transaction include but are not limited to instances where a
person:
new text end

new text begin (1) indemnifies, insures, or protects a person not subject to this section from any costs
or risks related to a loan;
new text end

new text begin (2) predominantly designs, controls, or operates lending activity;
new text end

new text begin (3) holds the trademark or intellectual property rights in the brand, underwriting system,
or other core aspects of a lending business; or
new text end

new text begin (4) purports to act as an agent or service provider, or acts in another capacity, for a person
not subject to this section while acting directly as a lender in one or more states.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 7.

Minnesota Statutes 2022, section 47.601, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of this section, the terms defined in this
subdivision have the meanings given.

(b) "Borrower" means an individual who obtains a consumer short-term loan primarily
for personal, family, or household purposes.

(c) "Commissioner" means the commissioner of commerce.

(d) "Consumer short-term loan" means a loan to a borrower which has a principal amount,
or an advance on a credit limit, of deleted text begin $1,000 deleted text end new text begin $1,300 new text end or less and requires a minimum payment
within 60 days of loan origination or credit advance of more than 25 percent of the principal
balance or credit advance. For the purposes of this section, each new advance of money to
a borrower under a consumer short-term loan agreement constitutes a new consumer
short-term loan. A "consumer short-term loan" does not include any transaction made under
chapter 325J or a loan made by a consumer short-term lender where, in the event of default
on the loan, the sole recourse for recovery of the amount owed, other than a lawsuit for
damages for the debt, is to proceed against physical goods pledged by the borrower as
collateral for the loan.

(e) "Consumer short-term lender" means an individual or entity engaged in the business
of making or arranging consumer short-term loans, other than a state or federally chartered
bank, savings bank, or credit union. new text begin For the purposes of this paragraph, arranging consumer
short-term loans includes but is not limited to any substantial involvement in facilitating,
marketing, lead-generating, underwriting, servicing, or collecting consumer short-term
loans.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 8.

Minnesota Statutes 2022, section 47.601, subdivision 2, is amended to read:

Subd. 2.

Consumer short-term loan contract.

(a) No contract or agreement between
a consumer short-term loan lender and a borrower residing in Minnesota may contain the
following:

(1) a provision selecting a law other than Minnesota law under which the contract is
construed or enforced;

(2) a provision choosing a forum for dispute resolution other than the state of Minnesota;
or

(3) a provision limiting class actions against a consumer short-term lender for violations
of subdivision 3 or for making consumer short-term loans:

(i) without a required license issued by the commissioner; or

(ii) in which interest rates, fees, charges, or loan amounts exceed those allowable under
section deleted text begin 47.59, subdivision 6, or deleted text end 47.60, subdivision 2 deleted text begin , other than by de minimis amounts if
no pattern or practice exists deleted text end .

(b) Any provision prohibited by paragraph (a) is void and unenforceable.

(c) A consumer short-term loan lender must furnish a copy of the written loan contract
to each borrower. The contract and disclosures must be written in the language in which
the loan was negotiated with the borrower and must contain:

(1) the name; address, which may not be a post office box; and telephone number of the
lender making the consumer short-term loan;

(2) the name and title of the individual employee or representative who signs the contract
on behalf of the lender;

(3) an itemization of the fees and interest charges to be paid by the borrower;

(4) in bold, 24-point type, the annual percentage rate as computed under United States
Code, chapter 15, section 1606; and

(5) a description of the borrower's payment obligations under the loan.

(d) The holder or assignee of a check or other instrument evidencing an obligation of a
borrower in connection with a consumer short-term loan takes the instrument subject to all
claims by and defenses of the borrower against the consumer short-term lender.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 9.

Minnesota Statutes 2022, section 47.601, is amended by adding a subdivision to
read:

new text begin Subd. 5a. new text end

new text begin No evasion. new text end

new text begin (a) A person must not engage in any device, subterfuge, or pretense
to evade the requirements of this section, including but not limited to:
new text end

new text begin (1) making loans disguised as a personal property sale and leaseback transaction;
new text end

new text begin (2) disguising loan proceeds as a cash rebate for the pretextual installment sale of goods
or services; or
new text end

new text begin (3) making, offering, assisting, or arranging for a debtor to obtain a loan with a greater
rate or amount of interest, consideration, charge, or payment than is permitted by this section
through any method, including mail, telephone, Internet, or any electronic means, regardless
of whether a person has a physical location in Minnesota.
new text end

new text begin (b) A person is a consumer short-term loan lender subject to the requirements of this
section notwithstanding the fact that a person purports to act as an agent or service provider,
or acts in another capacity for another person that is not subject to this section, if a person:
new text end

new text begin (1) directly or indirectly holds, acquires, or maintains the predominant economic interest,
risk, or reward in a loan or lending business; or
new text end

new text begin (2) both: (i) markets, solicits, brokers, arranges, or facilitates a loan; and (ii) holds or
holds the right, requirement, or first right of refusal to acquire loans, receivables, or other
direct or interest in a loan.
new text end

new text begin (c) A person is a consumer short-term loan lender subject to the requirements of this
section if the totality of the circumstances indicate that a person is a lender and the transaction
is structured to evade the requirements of this section. Circumstances that weigh in favor
of a person being a lender in a transaction include but are not limited to instances where a
person:
new text end

new text begin (1) indemnifies, insures, or protects a person not subject to this section from any costs
or risks related to a loan;
new text end

new text begin (2) predominantly designs, controls, or operates lending activity;
new text end

new text begin (3) holds the trademark or intellectual property rights in the brand, underwriting system,
or other core aspects of a lending business; or
new text end

new text begin (4) purports to act as an agent or service provider, or acts in another capacity, for a person
not subject to this section while acting directly as a lender in one or more states.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 10.

Minnesota Statutes 2022, section 47.601, subdivision 6, is amended to read:

Subd. 6.

Penalties for violation; private right of action.

(a) Except for a "bona fide
error" as set forth under United States Code, chapter 15, section 1640, subsection (c), an
individual or entity who violates subdivision 2 deleted text begin or deleted text end new text begin , new text end 3 new text begin , or 5a new text end is liable to the borrower for:

(1) all money collected or received in connection with the loan;

(2) actual, incidental, and consequential damages;

(3) statutory damages of up to $1,000 per violation;

(4) costs, disbursements, and reasonable attorney fees; and

(5) injunctive relief.

(b) In addition to the remedies provided in paragraph (a), a loan is void, and the borrower
is not obligated to pay any amounts owing if the loan is made:

(1) by a consumer short-term lender who has not obtained an applicable license from
the commissioner;

(2) in violation of any provision of subdivision 2 or 3; or

(3) in which interest, fees, charges, or loan amounts exceed the interest, fees, charges,
or loan amounts allowable under deleted text begin sections 47.59, subdivision 6, and deleted text end new text begin section new text end 47.60, subdivision
2.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 11.

new text begin [48.591] CLIMATE RISK DISCLOSURE SURVEY.
new text end

new text begin Subdivision 1. new text end

new text begin Requirement. new text end

new text begin By July 30 each year, a banking institution with more
than $1,000,000,000 in assets must submit a completed climate risk disclosure survey to
the commissioner. The commissioner must provide the form used to submit a climate risk
disclosure survey.
new text end

new text begin Subd. 2. new text end

new text begin Data. new text end

new text begin Data submitted to the commissioner under this section are public, except
that trade secret information is nonpublic under section 13.37.
new text end

Sec. 12.

new text begin [52.065] CLIMATE RISK DISCLOSURE SURVEY.
new text end

new text begin Subdivision 1. new text end

new text begin Requirement. new text end

new text begin By July 30 each year, a credit union with more than
$1,000,000,000 in assets must submit a completed climate risk disclosure survey to the
commissioner. The commissioner must provide the form used to submit a climate risk
disclosure survey.
new text end

new text begin Subd. 2. new text end

new text begin Data. new text end

new text begin Data submitted to the commissioner under this section are public, except
that trade secret information is nonpublic under section 13.37.
new text end

Sec. 13.

Minnesota Statutes 2022, section 53.04, subdivision 3a, is amended to read:

Subd. 3a.

Loans.

(a) The right to make loans, secured or unsecured, at the rates and on
the terms and other conditions permitted under chapters 47 and 334. Loans made under this
authority must be in amounts in compliance with section 53.05, clause (7). A licensee making
a loan under this chapter secured by a lien on real estate shall comply with the requirements
of section 47.20, subdivision 8. new text begin A licensee making a loan that is a consumer small loan, as
defined in section 47.60, subdivision 1, paragraph (a), must comply with section 47.60. A
licensee making a loan that is a consumer short-term loan, as defined in section 47.601,
subdivision 1, paragraph (d), must comply with section 47.601.
new text end

(b) Loans made under this subdivision may be secured by real or personal property, or
both. If the proceeds of a loan secured by a first lien on the borrower's primary residence
are used to finance the purchase of the borrower's primary residence, the loan must comply
with the provisions of section 47.20.

(c) An agency or instrumentality of the United States government or a corporation
otherwise created by an act of the United States Congress or a lender approved or certified
by the secretary of housing and urban development, or approved or certified by the
administrator of veterans affairs, or approved or certified by the administrator of the Farmers
Home Administration, or approved or certified by the Federal Home Loan Mortgage
Corporation, or approved or certified by the Federal National Mortgage Association, that
engages in the business of purchasing or taking assignments of mortgage loans and undertakes
direct collection of payments from or enforcement of rights against borrowers arising from
mortgage loans, is not required to obtain a certificate of authorization under this chapter in
order to purchase or take assignments of mortgage loans from persons holding a certificate
of authorization under this chapter.

(d) This subdivision does not authorize an industrial loan and thrift company to make
loans under an overdraft checking plan.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 14.

new text begin [53B.28] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Terms. new text end

new text begin For the purposes of this chapter, the terms defined in this section
have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Acting in concert. new text end

new text begin "Acting in concert" means persons knowingly acting together
with a common goal of jointly acquiring control of a licensee, whether or not pursuant to
an express agreement.
new text end

new text begin Subd. 3. new text end

new text begin Authorized delegate. new text end

new text begin "Authorized delegate" means a person a licensee
designates to engage in money transmission on behalf of the licensee.
new text end

new text begin Subd. 4. new text end

new text begin Average daily money transmission liability. new text end

new text begin "Average daily money
transmission liability" means the amount of the licensee's outstanding money transmission
obligations in Minnesota at the end of each day in a given period of time, added together,
and divided by the total number of days in the given period of time. For purposes of
calculating average daily money transmission liability under this chapter for any licensee
required to do so, the given period of time shall be the quarters ending March 31, June 30,
September 30, and December 31.
new text end

new text begin Subd. 5. new text end

new text begin Bank Secrecy Act. new text end

new text begin "Bank Secrecy Act" means the Bank Secrecy Act under
United States Code, title 31, section 5311, et seq., and the Bank Secrecy Act's implementing
regulations, as amended and recodified from time to time.
new text end

new text begin Subd. 6. new text end

new text begin Closed loop stored value. new text end

new text begin "Closed loop stored value" means stored value that
is redeemable by the issuer only for a good or service provided by the issuer, the issuer's
affiliate, the issuer's franchisees, or an affiliate of the issuer's franchisees, except to the
extent required by applicable law to be redeemable in cash for the good or service's cash
value.
new text end

new text begin Subd. 7. new text end

new text begin Control. new text end

new text begin "Control" means:
new text end

new text begin (1) the power to vote, directly or indirectly, at least 25 percent of the outstanding voting
shares or voting interests of a licensee or person in control of a licensee;
new text end

new text begin (2) the power to elect or appoint a majority of key individuals or executive officers,
managers, directors, trustees, or other persons exercising managerial authority of a person
in control of a licensee; or
new text end

new text begin (3) the power to exercise, directly or indirectly, a controlling influence over the
management or policies of a licensee or person in control of a licensee.
new text end

new text begin Subd. 8. new text end

new text begin Eligible rating. new text end

new text begin "Eligible rating" means a credit rating of any of the three highest
rating categories provided by an eligible rating service, whereby each category may include
rating category modifiers such as "plus" or "minus" or the equivalent for any other eligible
rating service. Long-term credit ratings are deemed eligible if the rating is equal to A- or
higher or the equivalent from any other eligible rating service. Short-term credit ratings are
deemed eligible if the rating is equal to or higher than A-2 or SP-2 by S&P, or the equivalent
from any other eligible rating service. In the event that ratings differ among eligible rating
services, the highest rating shall apply when determining whether a security bears an eligible
rating.
new text end

new text begin Subd. 9. new text end

new text begin Eligible rating service. new text end

new text begin "Eligible rating service" means any Nationally
Recognized Statistical Rating Organization (NRSRO), as defined by the United States
Securities and Exchange Commission and any other organization designated by the
commissioner by rule or order.
new text end

new text begin Subd. 10. new text end

new text begin Federally insured depository financial institution. new text end

new text begin "Federally insured
depository financial institution" means a bank, credit union, savings and loan association,
trust company, savings association, savings bank, industrial bank, or industrial loan company
organized under the laws of the United States or any state of the United States, when the
bank, credit union, savings and loan association, trust company, savings association, savings
bank, industrial bank, or industrial loan company has federally insured deposits.
new text end

new text begin Subd. 11. new text end

new text begin In Minnesota. new text end

new text begin "In Minnesota" means at a physical location within the state
of Minnesota for a transaction requested in person. For a transaction requested electronically
or by telephone, the provider of money transmission may determine if the person requesting
the transaction is in Minnesota by relying on other information provided by the person
regarding the location of the individual's residential address or a business entity's principal
place of business or other physical address location, and any records associated with the
person that the provider of money transmission may have that indicate the location, including
but not limited to an address associated with an account.
new text end

new text begin Subd. 12. new text end

new text begin Individual. new text end

new text begin "Individual" means a natural person.
new text end

new text begin Subd. 13. new text end

new text begin Key individual. new text end

new text begin "Key individual" means any individual ultimately responsible
for establishing or directing policies and procedures of the licensee, including but not limited
to as an executive officer, manager, director, or trustee.
new text end

new text begin Subd. 14. new text end

new text begin Licensee. new text end

new text begin "Licensee" means a person licensed under this chapter.
new text end

new text begin Subd. 15. new text end

new text begin Material litigation. new text end

new text begin "Material litigation" means litigation that, according to
United States generally accepted accounting principles, is significant to a person's financial
health and would be required to be disclosed in the person's annual audited financial
statements, report to shareholders, or similar records.
new text end

new text begin Subd. 16. new text end

new text begin Money. new text end

new text begin "Money" means a medium of exchange that is authorized or adopted
by the United States or a foreign government. Money includes a monetary unit of account
established by an intergovernmental organization or by agreement between two or more
governments.
new text end

new text begin Subd. 17. new text end

new text begin Monetary value. new text end

new text begin "Monetary value" means a medium of exchange, whether
or not redeemable in money.
new text end

new text begin Subd. 18. new text end

new text begin Money transmission. new text end

new text begin (a) "Money transmission" means:
new text end

new text begin (1) selling or issuing payment instruments to a person located in this state;
new text end

new text begin (2) selling or issuing stored value to a person located in this state; or
new text end

new text begin (3) receiving money for transmission from a person located in this state.
new text end

new text begin (b) Money includes payroll processing services. Money does not include the provision
solely of online or telecommunications services or network access.
new text end

new text begin Subd. 19. new text end

new text begin Money services business accredited state or MSB accredited state. new text end

new text begin "Money
services businesses accredited state" or "MSB accredited state" means a state agency that
is accredited by the Conference of State Bank Supervisors and Money Transmitter Regulators
Association for money transmission licensing and supervision.
new text end

new text begin Subd. 20. new text end

new text begin Multistate licensing process. new text end

new text begin "Multistate licensing process" means any
agreement entered into by and among state regulators relating to coordinated processing of
applications for money transmission licenses, applications for the acquisition of control of
a licensee, control determinations, or notice and information requirements for a change of
key individuals.
new text end

new text begin Subd. 21. new text end

new text begin NMLS. new text end

new text begin "NMLS" means the Nationwide Multistate Licensing System and
Registry developed by the Conference of State Bank Supervisors and the American
Association of Residential Mortgage Regulators and owned and operated by the State
Regulatory Registry, LLC, or any successor or affiliated entity, for the licensing and
registration of persons in financial services industries.
new text end

new text begin Subd. 22. new text end

new text begin Outstanding money transmission obligations. new text end

new text begin (a) "Outstanding money
transmission obligations" must be established and extinguished in accordance with applicable
state law and means:
new text end

new text begin (1) any payment instrument or stored value issued or sold by the licensee to a person
located in the United States or reported as sold by an authorized delegate of the licensee to
a person that is located in the United States that has not yet been paid or refunded by or for
the licensee, or escheated in accordance with applicable abandoned property laws; or
new text end

new text begin (2) any money received for transmission by the licensee or an authorized delegate in the
United States from a person located in the United States that has not been received by the
payee or refunded to the sender, or escheated in accordance with applicable abandoned
property laws.
new text end

new text begin (b) For purposes of this subdivision, "in the United States" includes, to the extent
applicable, a person in any state, territory, or possession of the United States; the District
of Columbia; the Commonwealth of Puerto Rico; or a U.S. military installation that is
located in a foreign country.
new text end

new text begin Subd. 23. new text end

new text begin Passive investor. new text end

new text begin "Passive investor" means a person that:
new text end

new text begin (1) does not have the power to elect a majority of key individuals or executive officers,
managers, directors, trustees, or other persons exercising managerial authority of a person
in control of a licensee;
new text end

new text begin (2) is not employed by and does not have any managerial duties of the licensee or person
in control of a licensee;
new text end

new text begin (3) does not have the power to exercise, directly or indirectly, a controlling influence
over the management or policies of a licensee or person in control of a licensee; and
new text end

new text begin (4) attests to clauses (1), (2), and (3), in a form and in a medium prescribed by the
commissioner, or commits to the passivity characteristics under clauses (1), (2), and (3) in
a written document.
new text end

new text begin Subd. 24. new text end

new text begin Payment instrument. new text end

new text begin (a) "Payment instrument" means a written or electronic
check, draft, money order, traveler's check, or other written or electronic instrument for the
transmission or payment of money or monetary value, whether or not negotiable.
new text end

new text begin (b) Payment instrument does not include stored value or any instrument that is: (1)
redeemable by the issuer only for goods or services provided by the issuer, the issuer's
affiliate, the issuer's franchisees, or an affiliate of the issuer's franchisees, except to the
extent required by applicable law to be redeemable in cash for its cash value; or (2) not sold
to the public but issued and distributed as part of a loyalty, rewards, or promotional program.
new text end

new text begin Subd. 25. new text end

new text begin Payroll processing services. new text end

new text begin "Payroll processing services" means receiving
money for transmission pursuant to a contract with a person to deliver wages or salaries,
make payment of payroll taxes to state and federal agencies, make payments relating to
employee benefit plans, or make distributions of other authorized deductions from wages
or salaries. The term payroll processing services does not include an employer performing
payroll processing services on the employer's own behalf or on behalf of the employer's
affiliate, or a professional employment organization subject to regulation under other
applicable state law.
new text end

new text begin Subd. 26. new text end

new text begin Person. new text end

new text begin "Person" means any individual, general partnership, limited partnership,
limited liability company, corporation, trust, association, joint stock corporation, or other
corporate entity identified by the commissioner.
new text end

new text begin Subd. 27. new text end

new text begin Receiving money for transmission or money received for
transmission. new text end

new text begin "Receiving money for transmission" or "money received for transmission"
means receiving money or monetary value in the United States for transmission within or
outside the United States by electronic or other means.
new text end

new text begin Subd. 28. new text end

new text begin Stored value. new text end

new text begin (a) "Stored value" means monetary value representing a claim
against the issuer evidenced by an electronic or digital record, and that is intended and
accepted for use as a means of redemption for money or monetary value, or payment for
goods or services. Stored value includes but is not limited to prepaid access, as defined
under Code of Federal Regulations, title 31, part 1010.100, as amended or recodified from
time to time.
new text end

new text begin (b) Notwithstanding this subdivision, stored value does not include: (1) a payment
instrument or closed loop stored value; or (2) stored value not sold to the public but issued
and distributed as part of a loyalty, rewards, or promotional program.
new text end

new text begin Subd. 29. new text end

new text begin Tangible net worth. new text end

new text begin "Tangible net worth" means the aggregate assets of a
licensee excluding all intangible assets, less liabilities, as determined in accordance with
United States generally accepted accounting principles.
new text end

Sec. 15.

new text begin [53B.29] EXEMPTIONS.
new text end

new text begin This chapter does not apply to:
new text end

new text begin (1) an operator of a payment system, to the extent the operator of a payment system
provides processing, clearing, or settlement services between or among persons exempted
by this section or licensees in connection with wire transfers, credit card transactions, debit
card transactions, stored-value transactions, automated clearing house transfers, or similar
funds transfers;
new text end

new text begin (2) a person appointed as an agent of a payee to collect and process a payment from a
payor to the payee for goods or services, other than money transmission itself, provided to
the payor by the payee, provided that:
new text end

new text begin (i) there exists a written agreement between the payee and the agent directing the agent
to collect and process payments from payors on the payee's behalf;
new text end

new text begin (ii) the payee holds the agent out to the public as accepting payments for goods or services
on the payee's behalf; and
new text end

new text begin (iii) payment for the goods and services is treated as received by the payee upon receipt
by the agent so that the payor's obligation is extinguished and there is no risk of loss to the
payor if the agent fails to remit the funds to the payee;
new text end

new text begin (3) a person that acts as an intermediary by processing payments between an entity that
has directly incurred an outstanding money transmission obligation to a sender, and the
sender's designated recipient, provided that the entity:
new text end

new text begin (i) is properly licensed or exempt from licensing requirements under this chapter;
new text end

new text begin (ii) provides a receipt, electronic record, or other written confirmation to the sender
identifying the entity as the provider of money transmission in the transaction; and
new text end

new text begin (iii) bears sole responsibility to satisfy the outstanding money transmission obligation
to the sender, including the obligation to make the sender whole in connection with any
failure to transmit the funds to the sender's designated recipient;
new text end

new text begin (4) the United States; a department, agency, or instrumentality of the United States; or
an agent of the United States;
new text end

new text begin (5) money transmission by the United States Postal Service or by an agent of the United
States Postal Service;
new text end

new text begin (6) a state; county; city; any other governmental agency, governmental subdivision, or
instrumentality of a state; or the state's agent;
new text end

new text begin (7) a federally insured depository financial institution; bank holding company; office of
an international banking corporation; foreign bank that establishes a federal branch pursuant
to the International Bank Act, United States Code, title 12, section 3102, as amended or
recodified from time to time; corporation organized pursuant to the Bank Service Corporation
Act, United States Code, title 12, sections 1861 to 1867, as amended or recodified from
time to time; or corporation organized under the Edge Act, United States Code, title 12,
sections 611 to 633, as amended or recodified from time to time;
new text end

new text begin (8) electronic funds transfer of governmental benefits for a federal, state, county, or
governmental agency by a contractor on behalf of the United States or a department, agency,
or instrumentality thereof, or on behalf of a state or governmental subdivision, agency, or
instrumentality thereof;
new text end

new text begin (9) a board of trade designated as a contract market under the federal Commodity
Exchange Act, United States Code, title 7, sections 1 to 25, as amended or recodified from
time to time; or a person that in the ordinary course of business provides clearance and
settlement services for a board of trade to the extent of its operation as or for a board;
new text end

new text begin (10) a registered futures commission merchant under the federal commodities laws, to
the extent of the registered futures commission merchant's operation as a merchant;
new text end

new text begin (11) a person registered as a securities broker-dealer under federal or state securities
laws, to the extent of the person's operation as a securities broker-dealer;
new text end

new text begin (12) an individual employed by a licensee, authorized delegate, or any person exempted
from the licensing requirements under this chapter when acting within the scope of
employment and under the supervision of the licensee, authorized delegate, or exempted
person as an employee and not as an independent contractor;
new text end

new text begin (13) a person expressly appointed as a third-party service provider to or agent of an
entity exempt under clause (7), solely to the extent that:
new text end

new text begin (i) the service provider or agent is engaging in money transmission on behalf of and
pursuant to a written agreement with the exempt entity that sets forth the specific functions
that the service provider or agent is to perform; and
new text end

new text begin (ii) the exempt entity assumes all risk of loss and all legal responsibility for satisfying
the outstanding money transmission obligations owed to purchasers and holders of the
outstanding money transmission obligations upon receipt of the purchaser's or holder's
money or monetary value by the service provider or agent; or
new text end

new text begin (14) a person exempt by regulation or order if the commissioner finds that (i) the
exemption is in the public interest, and (ii) the regulation of the person is not necessary for
the purposes of this chapter.
new text end

Sec. 16.

new text begin [53B.30] AUTHORITY TO REQUIRE DEMONSTRATION OF
EXEMPTION.
new text end

new text begin The commissioner may require any person that claims to be exempt from licensing under
section 53B.29 to provide to the commissioner information and documentation that
demonstrates the person qualifies for any claimed exemption.
new text end

Sec. 17.

new text begin [53B.31] IMPLEMENTATION.
new text end

new text begin Subdivision 1. new text end

new text begin General authority. new text end

new text begin In order to carry out the purposes of this chapter, the
commissioner may, subject to section 53B.32, paragraphs (a) and (b):
new text end

new text begin (1) enter into agreements or relationships with other government officials or federal and
state regulatory agencies and regulatory associations in order to (i) improve efficiencies
and reduce regulatory burden by standardizing methods or procedures, and (ii) share
resources, records, or related information obtained under this chapter;
new text end

new text begin (2) use, hire, contract, or employ analytical systems, methods, or software to examine
or investigate any person subject to this chapter;
new text end

new text begin (3) accept from other state or federal government agencies or officials any licensing,
examination, or investigation reports made by the other state or federal government agencies
or officials; and
new text end

new text begin (4) accept audit reports made by an independent certified public accountant or other
qualified third-party auditor for an applicant or licensee and incorporate the audit report in
any report of examination or investigation.
new text end

new text begin Subd. 2. new text end

new text begin Administrative authority. new text end

new text begin The commissioner is granted broad administrative
authority to: (1) administer, interpret, and enforce this chapter; (2) adopt regulations to
implement this chapter; and (3) recover the costs incurred to administer and enforce this
chapter by imposing and collecting proportionate and equitable fees and costs associated
with applications, examinations, investigations, and other actions required to achieve the
purpose of this chapter.
new text end

Sec. 18.

new text begin [53B.32] CONFIDENTIALITY.
new text end

new text begin (a) All information or reports obtained by the commissioner contained in or related to
an examination that is prepared by, on behalf of, or for the use of the commissioner are
confidential and are not subject to disclosure under section 46.07.
new text end

new text begin (b) The commissioner may disclose information not otherwise subject to disclosure
under paragraph (a) to representatives of state or federal agencies pursuant to section 53B.31,
subdivision 1.
new text end

new text begin (c) This section does not prohibit the commissioner from disclosing to the public a list
of all licensees or the aggregated financial or transactional data concerning those licensees.
new text end

Sec. 19.

new text begin [53B.33] SUPERVISION.
new text end

new text begin (a) The commissioner may conduct an examination or investigation of a licensee or
authorized delegate or otherwise take independent action authorized by this chapter, or by
a rule adopted or order issued under this chapter, as reasonably necessary or appropriate to
administer and enforce this chapter, rules implementing this chapter, and other applicable
law, including the Bank Secrecy Act and the USA PATRIOT Act, Public Law 107-56. The
commissioner may:
new text end

new text begin (1) conduct an examination either on site or off site as the commissioner may reasonably
require;
new text end

new text begin (2) conduct an examination in conjunction with an examination conducted by
representatives of other state agencies or agencies of another state or of the federal
government;
new text end

new text begin (3) accept the examination report of another state agency or an agency of another state
or of the federal government, or a report prepared by an independent accounting firm, which
on being accepted is considered for all purposes as an official report of the commissioner;
and
new text end

new text begin (4) summon and examine under oath a key individual or employee of a licensee or
authorized delegate and require the person to produce records regarding any matter related
to the condition and business of the licensee or authorized delegate.
new text end

new text begin (b) A licensee or authorized delegate must provide, and the commissioner has full and
complete access to, all records the commissioner may reasonably require to conduct a
complete examination. The records must be provided at the location and in the format
specified by the commissioner. The commissioner may use multistate record production
standards and examination procedures when the standards reasonably achieve the
requirements of this paragraph.
new text end

new text begin (c) Unless otherwise directed by the commissioner, a licensee must pay all costs
reasonably incurred in connection with an examination of the licensee or the licensee's
authorized delegates.
new text end

Sec. 20.

new text begin [53B.34] NETWORKED SUPERVISION.
new text end

new text begin (a) To efficiently and effectively administer and enforce this chapter and to minimize
regulatory burden, the commissioner is authorized to participate in multistate supervisory
processes established between states and coordinated through the Conference of State Bank
Supervisors, the Money Transmitter Regulators Association, and the affiliates and successors
of the Conference of State Bank Supervisors and the Money Transmitter Regulators
Association for all licensees that hold licenses in this state and other states. As a participant
in multistate supervision, the commissioner may:
new text end

new text begin (1) cooperate, coordinate, and share information with other state and federal regulators
in accordance with section 53B.32;
new text end

new text begin (2) enter into written cooperation, coordination, or information-sharing contracts or
agreements with organizations the membership of which is made up of state or federal
governmental agencies; and
new text end

new text begin (3) cooperate, coordinate, and share information with organizations the membership of
which is made up of state or federal governmental agencies, provided that the organizations
agree in writing to maintain the confidentiality and security of the shared information in
accordance with section 53B.32.
new text end

new text begin (b) The commissioner is prohibited from waiving, and nothing in this section constitutes
a waiver of, the commissioner's authority to conduct an examination or investigation or
otherwise take independent action authorized by this chapter, or a rule adopted or order
issued under this chapter, to enforce compliance with applicable state or federal law.
new text end

new text begin (c) A joint examination or investigation, or acceptance of an examination or investigation
report, does not waive an examination fee provided for in this chapter.
new text end

Sec. 21.

new text begin [53B.35] RELATIONSHIP TO FEDERAL LAW.
new text end

new text begin (a) In the event state money transmission jurisdiction is conditioned on a federal law,
any inconsistencies between a provision of this chapter and the federal law governing money
transmission is governed by the applicable federal law to the extent of the inconsistency.
new text end

new text begin (b) In the event of any inconsistencies between this chapter and a federal law that governs
pursuant to paragraph (a), the commissioner may provide interpretive guidance that:
new text end

new text begin (1) identifies the inconsistency; and
new text end

new text begin (2) identifies the appropriate means of compliance with federal law.
new text end

Sec. 22.

new text begin [53B.36] LICENSE REQUIRED.
new text end

new text begin (a) A person is prohibited from engaging in the business of money transmission, or
advertising, soliciting, or representing that the person provides money transmission, unless
the person is licensed under this chapter.
new text end

new text begin (b) Paragraph (a) does not apply to:
new text end

new text begin (1) a person that is an authorized delegate of a person licensed under this chapter acting
within the scope of authority conferred by a written contract with the licensee; or
new text end

new text begin (2) a person that is exempt under section 53B.29 and does not engage in money
transmission outside the scope of the exemption.
new text end

new text begin (c) A license issued under section 53B.40 is not transferable or assignable.
new text end

Sec. 23.

new text begin [53B.37] CONSISTENT STATE LICENSING.
new text end

new text begin (a) To establish consistent licensing between Minnesota and other states, the
commissioner is authorized to:
new text end

new text begin (1) implement all licensing provisions of this chapter in a manner that is consistent with
(i) other states that have adopted substantially similar licensing requirements, or (ii) multistate
licensing processes; and
new text end

new text begin (2) participate in nationwide protocols for licensing cooperation and coordination among
state regulators, provided that the protocols are consistent with this chapter.
new text end

new text begin (b) In order to fulfill the purposes of this chapter, the commissioner is authorized to
establish relationships or contracts with NMLS or other entities designated by NMLS to
enable the commissioner to:
new text end

new text begin (1) collect and maintain records;
new text end

new text begin (2) coordinate multistate licensing processes and supervision processes;
new text end

new text begin (3) process fees; and
new text end

new text begin (4) facilitate communication between the commissioner and licensees or other persons
subject to this chapter.
new text end

new text begin (c) The commissioner is authorized to use NMLS for all aspects of licensing in accordance
with this chapter, including but not limited to license applications, applications for
acquisitions of control, surety bonds, reporting, criminal history background checks, credit
checks, fee processing, and examinations.
new text end

new text begin (d) The commissioner is authorized to use NMLS forms, processes, and functions in
accordance with this chapter. If NMLS does not provide functionality, forms, or processes
for a requirement under this chapter, the commissioner is authorized to implement the
requirements in a manner that facilitates uniformity with respect to licensing, supervision,
reporting, and regulation of licensees which are licensed in multiple jurisdictions.
new text end

new text begin (e) For the purpose of participating in the NMLS registry, the commissioner is authorized
to, by rule or order: (1) waive or modify, in whole or in part, any or all of the requirements;
and (2) establish new requirements as reasonably necessary to participate in the NMLS
registry.
new text end

Sec. 24.

new text begin [53B.38] APPLICATION FOR LICENSE.
new text end

new text begin (a) An applicant for a license must apply in a form and in a medium as prescribed by
the commissioner. The application must state or contain, as applicable:
new text end

new text begin (1) the legal name and residential and business addresses of the applicant and any
fictitious or trade name used by the applicant in conducting business;
new text end

new text begin (2) a list of any criminal convictions of the applicant and any material litigation in which
the applicant has been involved in the ten-year period next preceding the submission of the
application;
new text end

new text begin (3) a description of any money transmission previously provided by the applicant and
the money transmission that the applicant seeks to provide in this state;
new text end

new text begin (4) a list of the applicant's proposed authorized delegates and the locations in this state
where the applicant and the applicant's authorized delegates propose to engage in money
transmission;
new text end

new text begin (5) a list of other states in which the applicant is licensed to engage in money transmission
and any license revocations, suspensions, or other disciplinary action taken against the
applicant in another state;
new text end

new text begin (6) information concerning any bankruptcy or receivership proceedings affecting the
licensee or a person in control of a licensee;
new text end

new text begin (7) a sample form of contract for authorized delegates, if applicable;
new text end

new text begin (8) a sample form of payment instrument or stored value, as applicable;
new text end

new text begin (9) the name and address of any federally insured depository financial institution through
which the applicant plans to conduct money transmission; and
new text end

new text begin (10) any other information the commissioner or NMLS reasonably requires with respect
to the applicant.
new text end

new text begin (b) If an applicant is a corporation, limited liability company, partnership, or other legal
entity, the applicant must also provide:
new text end

new text begin (1) the date of the applicant's incorporation or formation and state or country of
incorporation or formation;
new text end

new text begin (2) if applicable, a certificate of good standing from the state or country in which the
applicant is incorporated or formed;
new text end

new text begin (3) a brief description of the structure or organization of the applicant, including any
parents or subsidiaries of the applicant, and whether any parents or subsidiaries are publicly
traded;
new text end

new text begin (4) the legal name, any fictitious or trade name, all business and residential addresses,
and the employment, as applicable, in the ten-year period next preceding the submission of
the application of each key individual and person in control of the applicant;
new text end

new text begin (5) a list of any criminal convictions and material litigation in which a person in control
of the applicant that is not an individual has been involved in the ten-year period preceding
the submission of the application;
new text end

new text begin (6) a copy of audited financial statements of the applicant for the most recent fiscal year
and for the two-year period next preceding the submission of the application or, if the
commissioner deems acceptable, certified unaudited financial statements for the most recent
fiscal year or other period acceptable to the commissioner;
new text end

new text begin (7) a certified copy of unaudited financial statements of the applicant for the most recent
fiscal quarter;
new text end

new text begin (8) if the applicant is a publicly traded corporation, a copy of the most recent report filed
with the United States Securities and Exchange Commission under section 13 of the federal
Securities Exchange Act of 1934, United States Code, title 15, section 78m, as amended or
recodified from time to time;
new text end

new text begin (9) if the applicant is a wholly owned subsidiary of:
new text end

new text begin (i) a corporation publicly traded in the United States, a copy of audited financial
statements for the parent corporation for the most recent fiscal year or a copy of the parent
corporation's most recent report filed under section 13 of the Securities Exchange Act of
1934, United States Code, title 15, section 78m, as amended or recodified from time to time;
or
new text end

new text begin (ii) a corporation publicly traded outside the United States, a copy of similar
documentation filed with the regulator of the parent corporation's domicile outside the
United States;
new text end

new text begin (10) the name and address of the applicant's registered agent in this state; and
new text end

new text begin (11) any other information the commissioner reasonably requires with respect to the
applicant.
new text end

new text begin (c) A nonrefundable application fee of $4,000 must accompany an application for a
license under this section.
new text end

new text begin (d) The commissioner may: (1) waive one or more requirements of paragraphs (a) and
(b); or (2) permit an applicant to submit other information in lieu of the required information.
new text end

Sec. 25.

new text begin [53B.39] INFORMATION REQUIREMENTS; CERTAIN INDIVIDUALS.
new text end

new text begin Subdivision 1. new text end

new text begin Individuals with or seeking control. new text end

new text begin Any individual in control of a
licensee or applicant, any individual that seeks to acquire control of a licensee, and each
key individual must furnish to the commissioner through NMLS:
new text end

new text begin (1) the individual's fingerprints for submission to the Federal Bureau of Investigation
and the commissioner for a national criminal history background check, unless the person
currently resides outside of the United States and has resided outside of the United States
for the last ten years; and
new text end

new text begin (2) personal history and business experience in a form and in a medium prescribed by
the commissioner, to obtain:
new text end

new text begin (i) an independent credit report from a consumer reporting agency;
new text end

new text begin (ii) information related to any criminal convictions or pending charges; and
new text end

new text begin (iii) information related to any regulatory or administrative action and any civil litigation
involving claims of fraud, misrepresentation, conversion, mismanagement of funds, breach
of fiduciary duty, or breach of contract.
new text end

new text begin Subd. 2. new text end

new text begin Individuals having resided outside the United States. new text end

new text begin (a) If an individual
has resided outside of the United States at any time in the last ten years, the individual must
also provide an investigative background report prepared by an independent search firm
that meets the requirements of this subdivision.
new text end

new text begin (b) At a minimum, the search firm must:
new text end

new text begin (1) demonstrate that the search firm has sufficient knowledge, resources, and employs
accepted and reasonable methodologies to conduct the research of the background report;
and
new text end

new text begin (2) not be affiliated with or have an interest with the individual the search firm is
researching.
new text end

new text begin (c) At a minimum, the investigative background report must be written in English and
must contain:
new text end

new text begin (1) if available in the individual's current jurisdiction of residency, a comprehensive
credit report, or any equivalent information obtained or generated by the independent search
firm to accomplish a credit report, including a search of the court data in the countries,
provinces, states, cities, towns, and contiguous areas where the individual resided and
worked;
new text end

new text begin (2) criminal records information for the past ten years, including but not limited to
felonies, misdemeanors, or similar convictions for violations of law in the countries,
provinces, states, cities, towns, and contiguous areas where the individual resided and
worked;
new text end

new text begin (3) employment history;
new text end

new text begin (4) media history, including an electronic search of national and local publications, wire
services, and business applications; and
new text end

new text begin (5) financial services-related regulatory history, including but not limited to money
transmission, securities, banking, consumer finance, insurance, and mortgage-related
industries.
new text end

Sec. 26.

new text begin [53B.40] LICENSE ISSUANCE.
new text end

new text begin (a) When an application for an original license under this chapter includes all of the
items and addresses all of the matters that are required, the application is complete and the
commissioner must promptly notify the applicant in a record of the date on which the
application is determined to be complete.
new text end

new text begin (b) The commissioner's determination that an application is complete and accepted for
processing means only that the application, on the application's face, appears to include all
of the items, including the criminal background check response from the Federal Bureau
of Investigation, and address all of the matters that are required. The commissioner's
determination that an application is complete is not an assessment of the substance of the
application or of the sufficiency of the information provided.
new text end

new text begin (c) When an application is filed and considered complete under this section, the
commissioner must investigate the applicant's financial condition and responsibility, financial
and business experience, character, and general fitness. The commissioner may conduct an
investigation of the applicant, the reasonable cost of which the applicant must pay. The
commissioner must issue a license to an applicant under this section if the commissioner
finds:
new text end

new text begin (1) the applicant has complied with sections 53B.38 and 53B.39; and
new text end

new text begin (2) the financial condition and responsibility; financial and business experience,
competence, character, and general fitness of the applicant; and the competence, experience,
character, and general fitness of the key individuals and persons in control of the applicant
indicate that it is in the interest of the public to permit the applicant to engage in money
transmission.
new text end

new text begin (d) If an applicant avails itself of or is otherwise subject to a multistate licensing process:
new text end

new text begin (1) the commissioner is authorized to accept the investigation results of a lead
investigative state for the purposes of paragraph (c); or
new text end

new text begin (2) if Minnesota is a lead investigative state, the commissioner is authorized to investigate
the applicant pursuant to paragraph (c) and the time frames established by agreement through
the multistate licensing process, provided that the time frame complies with the application
review period provided under paragraph (e).
new text end

new text begin (e) The commissioner must approve or deny the application within 120 days after the
date the application is deemed complete. If the application is not approved or denied within
120 days after the completion date, the application is approved and the license takes effect
on the first business day after the 120-day period expires.
new text end

new text begin (f) The commissioner must issue a formal written notice of the denial of a license
application within 30 days of the date the decision to deny the application is made. The
commissioner must set forth in the notice of denial the specific reasons for the denial of the
application. An applicant whose application is denied by the commissioner under this
paragraph may appeal within 30 days of the date the written notice of the denial is received.
The commissioner must set a hearing date that is not later than 60 days after service of the
response, unless a later date is set with the consent of the denied applicant.
new text end

new text begin (g) The initial license term begins on the day the application is approved. The license
expires on December 31 of the year in which the license term began, unless the initial license
date is between November 1 and December 31, in which case the initial license term runs
through December 31 of the following year. If a license is approved between November 1
and December 31, the applicant is subject to the renewal fee under section 53B.31, paragraph
(a).
new text end

Sec. 27.

new text begin [53B.41] LICENSE RENEWAL.
new text end

new text begin (a) A license under this chapter must be renewed annually. An annual renewal fee of
$2,500 must be paid no more than 60 days before the license expires. The renewal term is
a period of one year and begins on January 1 each year after the initial license term. The
renewal term expires on December 31 of the year the renewal term begins.
new text end

new text begin (b) A licensee must submit a renewal report with the renewal fee, in a form and in a
medium prescribed by the commissioner. The renewal report must state or contain a
description of each material change in information submitted by the licensee in the licensee's
original license application that has not been previously reported to the commissioner.
new text end

new text begin (c) The commissioner may grant an extension of the renewal date for good cause.
new text end

new text begin (d) The commissioner is authorized to use the NMLS to process license renewals,
provided that the NMLS functionality is consistent with this section.
new text end

Sec. 28.

new text begin [53B.42] MAINTENANCE OF LICENSE.
new text end

new text begin (a) If a licensee does not continue to meet the qualifications or satisfy the requirements
that apply to an applicant for a new money transmission license, the commissioner may
suspend or revoke the licensee's license in accordance with the procedures established by
this chapter or other applicable state law for license suspension or revocation.
new text end

new text begin (b) An applicant for a money transmission license must demonstrate that the applicant
meets or will meet, and a money transmission licensee must at all times meet, the
requirements in sections 53B.59 to 53B.61.
new text end

Sec. 29.

new text begin [53B.43] ACQUISITION OF CONTROL.
new text end

new text begin (a) Any person, or group of persons acting in concert, seeking to acquire control of a
licensee must obtain the commissioner's written approval before acquiring control. An
individual is not deemed to acquire control of a licensee and is not subject to these acquisition
of control provisions when that individual becomes a key individual in the ordinary course
of business.
new text end

new text begin (b) For the purpose of this section, a person is presumed to exercise a controlling influence
when the person holds the power to vote, directly or indirectly, at least ten percent of the
outstanding voting shares or voting interests of a licensee or person in control of a licensee.
A person presumed to exercise a controlling influence as defined by this subdivision can
rebut the presumption of control if the person is a passive investor.
new text end

new text begin (c) For purposes of determining the percentage of a person controlled by any other
person, the person's interest must be aggregated with the interest of any other immediate
family member, including the person's spouse, parents, children, siblings, mothers- and
fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and any other person
who shares the person's home.
new text end

new text begin (d) A person, or group of persons acting in concert, seeking to acquire control of a
licensee must, in cooperation with the licensee:
new text end

new text begin (1) submit an application in a form and in a medium prescribed by the commissioner;
and
new text end

new text begin (2) submit a nonrefundable fee of $4,000 with the request for approval.
new text end

new text begin (e) Upon request, the commissioner may permit a licensee or the person, or group of
persons acting in concert, to submit some or all information required by the commissioner
pursuant to paragraph (d), clause (1), without using NMLS.
new text end

new text begin (f) The application required by paragraph (d), clause (1), must include information
required by section 53B.39 for any new key individuals that have not previously completed
the requirements of section 53B.39 for a licensee.
new text end

new text begin (g) When an application for acquisition of control under this section appears to include
all of the items and address all of the matters that are required, the application is considered
complete and the commissioner must promptly notify the applicant in a record of the date
on which the application was determined to be complete.
new text end

new text begin (h) The commissioner must approve or deny the application within 60 days after the
completion date. If the application is not approved or denied within 60 days after the
completion date, the application is approved and the person, or group of persons acting in
concert, are not prohibited from acquiring control. The commissioner may extend the
application period for good cause.
new text end

new text begin (i) The commissioner's determination that an application is complete and is accepted for
processing means only that the application, on the application's face, appears to include all
of the items and address all of the matters that are required. The commissioner's determination
that an application is complete is not an assessment of the application's substance or of the
sufficiency of the information provided.
new text end

new text begin (j) When an application is filed and considered complete under paragraph (g), the
commissioner must investigate the financial condition and responsibility; the financial and
business experience; character; and the general fitness of the person, or group of persons
acting in concert, seeking to acquire control. The commissioner must approve an acquisition
of control under this section if the commissioner finds:
new text end

new text begin (1) the requirements of paragraphs (d) and (f) have been met, as applicable; and
new text end

new text begin (2) the financial condition and responsibility, financial and business experience,
competence, character, and general fitness of the person, or group of persons acting in
concert, seeking to acquire control; and the competence, experience, character, and general
fitness of the key individuals and persons that control the licensee after the acquisition of
control indicate that it is in the interest of the public to permit the person, or group of persons
acting in concert, to control the licensee.
new text end

new text begin (k) If an applicant avails itself of or is otherwise subject to a multistate licensing process:
new text end

new text begin (1) the commissioner is authorized to accept the investigation results of a lead
investigative state for the purposes of paragraph (j); or
new text end

new text begin (2) if Minnesota is a lead investigative state, the commissioner is authorized to investigate
the applicant under paragraph (j) and consistent with the time frames established by
agreement through the multistate licensing process.
new text end

new text begin (l) The commissioner must issue a formal written notice of the denial of an application
to acquire control. The commissioner must set forth in the notice of denial the specific
reasons the application was denied. An applicant whose application is denied by the
commissioner under this paragraph may appeal the denial within 30 days of the date the
written notice of the denial is received. Chapter 14 applies to appeals under this paragraph.
new text end

new text begin (m) Paragraphs (a) and (d) do not apply to:
new text end

new text begin (1) a person that acts as a proxy for the sole purpose of voting at a designated meeting
of the shareholders or holders of voting shares or voting interests of a licensee or a person
in control of a licensee;
new text end

new text begin (2) a person that acquires control of a licensee by devise or descent;
new text end

new text begin (3) a person that acquires control of a licensee as a personal representative, custodian,
guardian, conservator, or trustee, or as an officer appointed by a court of competent
jurisdiction or by operation of law;
new text end

new text begin (4) a person that is exempt under section 53B.29, clause (7);
new text end

new text begin (5) a person that the commissioner determines is not subject to paragraph (a), based on
the public interest;
new text end

new text begin (6) a public offering of securities of a licensee or a person in control of a licensee; or
new text end

new text begin (7) an internal reorganization of a person controlling the licensee, where the ultimate
person controlling the licensee remains the same.
new text end

new text begin (n) A person identified in paragraph (m), clause (2), (3), (4), or (6), that is cooperating
with the licensee must notify the commissioner within 15 days of the date the acquisition
of control occurs.
new text end

new text begin (o) Paragraphs (a) and (d) do not apply to a person that has complied with and received
approval to engage in money transmission under this chapter, or that was identified as a
person in control in a prior application filed with and approved by the commissioner or by
another state pursuant to a multistate licensing process, provided that:
new text end

new text begin (1) the person has not had a license revoked or suspended or controlled a licensee that
has had a license revoked or suspended while the person was in control of the licensee in
the previous five years;
new text end

new text begin (2) if the person is a licensee, the person is well managed and has received at least a
satisfactory rating for compliance at the person's most recent examination by an
MSB-accredited state if a rating was given;
new text end

new text begin (3) the licensee to be acquired is projected to meet the requirements of sections 53B.59
to 53B.61 after the acquisition of control is completed, and if the person acquiring control
is a licensee, the acquiring licensee is also projected to meet the requirements of sections
53B.59 to 53B.61 after the acquisition of control is completed;
new text end

new text begin (4) the licensee to be acquired does not implement any material changes to the acquired
licensee's business plan as a result of the acquisition of control, and if the person acquiring
control is a licensee, the acquiring licensee does not implement any material changes to the
acquiring licensee's business plan as a result of the acquisition of control; and
new text end

new text begin (5) the person provides notice of the acquisition in cooperation with the licensee and
attests to clauses (1), (2), (3), and (4) in a form and in a medium prescribed by the
commissioner.
new text end

new text begin (p) If the notice under paragraph (o), clause (5), is not disapproved within 30 days after
the date on which the notice was determined to be complete, the notice is deemed approved.
new text end

new text begin (q) Before filing an application for approval to acquire control of a licensee, a person
may request in writing a determination from the commissioner as to whether the person
would be considered a person in control of a licensee upon consummation of a proposed
transaction. If the commissioner determines that the person would not be a person in control
of a licensee, the proposed person and transaction is not subject to paragraphs (a) and (d).
new text end

new text begin (r) If a multistate licensing process includes a determination pursuant to paragraph (q)
and an applicant avails itself or is otherwise subject to the multistate licensing process:
new text end

new text begin (1) the commissioner is authorized to accept the control determination of a lead
investigative state with sufficient staffing, expertise, and minimum standards for the purposes
of paragraph (q); or
new text end

new text begin (2) if Minnesota is a lead investigative state, the commissioner is authorized to investigate
the applicant under paragraph (q) and consistent with the time frames established by
agreement through the multistate licensing process.
new text end

Sec. 30.

new text begin [53B.44] CHANGE OF KEY INDIVIDUALS; NOTICE AND
INFORMATION REQUIREMENTS.
new text end

new text begin (a) A licensee that adds or replaces any key individual must:
new text end

new text begin (1) provide notice, in a manner prescribed by the commissioner, within 15 days after
the effective date of the key individual's appointment; and
new text end

new text begin (2) provide the information required under section 53B.39 within 45 days of the effective
date of the key individual's appointment.
new text end

new text begin (b) Within 90 days of the date on which the notice provided under section 53B.44,
paragraph (a), was determined to be complete, the commissioner may issue a notice of
disapproval of a key individual if the commissioner finds that the competence, business
experience, character, or integrity of the individual is not in the best interests of the public
or the customers of the licensee.
new text end

new text begin (c) A notice of disapproval must contain a statement of the basis for disapproval and
must be sent to the licensee and the disapproved individual. A licensee may appeal a notice
of disapproval pursuant to chapter 14 within 30 days of the date the notice of disapproval
is received.
new text end

new text begin (d) If the notice provided under paragraph (a) is not disapproved within 90 days after
the date on which the notice was determined to be complete, the key individual is deemed
approved.
new text end

new text begin (e) If a multistate licensing process includes a key individual notice review and
disapproval process under this section and the licensee avails itself of or is otherwise subject
to the multistate licensing process:
new text end

new text begin (1) the commissioner is authorized to accept the determination of another state if the
investigating state has sufficient staffing, expertise, and minimum standards for the purposes
of this section; or
new text end

new text begin (2) if Minnesota is a lead investigative state, the commissioner is authorized to investigate
the applicant under paragraph (b) and the time frames established by agreement through
the multistate licensing process.
new text end

Sec. 31.

new text begin [53B.45] REPORT OF CONDITION.
new text end

new text begin (a) Each licensee must submit a report of condition within 45 days of the end of the
calendar quarter, or within any extended time the commissioner prescribes.
new text end

new text begin (b) The report of condition must include:
new text end

new text begin (1) financial information at the licensee level;
new text end

new text begin (2) nationwide and state-specific money transmission transaction information in every
jurisdiction in the United States where the licensee is licensed to engage in money
transmission;
new text end

new text begin (3) a permissible investments report;
new text end

new text begin (4) transaction destination country reporting for money received for transmission, if
applicable; and
new text end

new text begin (5) any other information the commissioner reasonably requires with respect to the
licensee.
new text end

new text begin (c) The commissioner is authorized to use NMLS to submit the report required under
paragraph (a).
new text end

new text begin (d) The information required by paragraph (b), clause (4), must only be included in a
report of condition submitted within 45 days of the end of the fourth calendar quarter.
new text end

Sec. 32.

new text begin [53B.46] AUDITED FINANCIAL STATEMENTS.
new text end

new text begin (a) Each licensee must, within 90 days after the end of each fiscal year, or within any
extended time the commissioner prescribes, file with the commissioner:
new text end

new text begin (1) an audited financial statement of the licensee for the fiscal year prepared in accordance
with United States generally accepted accounting principles; and
new text end

new text begin (2) any other information the commissioner may reasonably require.
new text end

new text begin (b) The audited financial statements must be prepared by an independent certified public
accountant or independent public accountant who is satisfactory to the commissioner.
new text end

new text begin (c) The audited financial statements must include or be accompanied by a certificate of
opinion prepared by the independent certified public accountant or independent public
accountant that is satisfactory in form and content to the commissioner. If the certificate or
opinion is qualified, the commissioner may order the licensee to take any action the
commissioner finds necessary to enable the independent or certified public accountant or
independent public accountant to remove the qualification.
new text end

Sec. 33.

new text begin [53B.47] AUTHORIZED DELEGATE REPORTING.
new text end

new text begin (a) Each licensee must submit a report of authorized delegates within 45 days of the end
of the calendar quarter. The commissioner is authorized to use NMLS to submit the report
required by this paragraph, provided that the functionality is consistent with the requirements
of this section.
new text end

new text begin (b) The authorized delegate report must include, at a minimum, each authorized delegate's:
new text end

new text begin (1) company legal name;
new text end

new text begin (2) taxpayer employer identification number;
new text end

new text begin (3) principal provider identifier;
new text end

new text begin (4) physical address;
new text end

new text begin (5) mailing address;
new text end

new text begin (6) any business conducted in other states;
new text end

new text begin (7) any fictitious or trade name;
new text end

new text begin (8) contact person name, telephone number, and email;
new text end

new text begin (9) start date as the licensee's authorized delegate;
new text end

new text begin (10) end date acting as the licensee's authorized delegate, if applicable;
new text end

new text begin (11) court orders under section 53B.53; and
new text end

new text begin (12) any other information the commissioner reasonably requires with respect to the
authorized delegate.
new text end

Sec. 34.

new text begin [53B.48] REPORTS OF CERTAIN EVENTS.
new text end

new text begin (a) A licensee must file a report with the commissioner within ten business days after
the licensee has reason to know any of the following events has occurred:
new text end

new text begin (1) 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 has been filed;
new text end

new text begin (2) 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 the
making of a general assignment for the benefit of the licensee's creditors has been filed; or
new text end

new text begin (3) a proceeding to revoke or suspend the licensee's license in a state or country in which
the licensee engages in business or is licensed has been commenced.
new text end

new text begin (b) A licensee must file a report with the commissioner within ten business days after
the licensee has reason to know any of the following events has occurred:
new text end

new text begin (1) the licensee or a key individual or person in control of the licensee is charged with
or convicted of a felony related to money transmission activities; or
new text end

new text begin (2) an authorized delegate is charged with or convicted of a felony related to money
transmission activities.
new text end

Sec. 35.

new text begin [53B.49] BANK SECRECY ACT REPORTS.
new text end

new text begin A licensee and an authorized delegate must file all reports required by federal currency
reporting, record keeping, and suspicious activity reporting requirements as set forth in the
Bank Secrecy Act and other federal and state laws pertaining to money laundering. A licensee
and authorized delegate that timely files with the appropriate federal agency a complete and
accurate report required under this section is deemed to comply with the requirements of
this section.
new text end

Sec. 36.

new text begin [53B.50] RECORDS.
new text end

new text begin (a) A licensee must maintain the following records, for purposes of determining the
licensee's compliance with this chapter, for at least three years:
new text end

new text begin (1) a record of each outstanding money transmission obligation sold;
new text end

new text begin (2) a general ledger posted at least monthly containing all asset, liability, capital, income,
and expense accounts;
new text end

new text begin (3) bank statements and bank reconciliation records;
new text end

new text begin (4) records of outstanding money transmission obligations;
new text end

new text begin (5) records of each outstanding money transmission obligation paid within the three-year
period;
new text end

new text begin (6) a list of the last known names and addresses of all of the licensee's authorized
delegates; and
new text end

new text begin (7) any other records the commissioner reasonably requires by administrative rule.
new text end

new text begin (b) The items specified in paragraph (a) may be maintained in any form of record.
new text end

new text begin (c) The records specified in paragraph (a) may be maintained outside of Minnesota if
the records are made accessible to the commissioner upon seven business-days' notice that
is sent in a record.
new text end

new text begin (d) All records maintained by the licensee as required under paragraphs (a) to (c) are
open to inspection by the commissioner under section 53B.33, paragraph (a).
new text end

Sec. 37.

new text begin [53B.51] RELATIONSHIP BETWEEN LICENSEE AND AUTHORIZED
DELEGATE.
new text end

new text begin (a) For purposes of this section, "remit" means to make direct payments of money to (1)
a licensee, or (2) a licensee's representative authorized to receive money or to deposit money
in a bank in an account specified by the licensee.
new text end

new text begin (b) Before a licensee is authorized to conduct business through an authorized delegate
or allows a person to act as the licensee's authorized delegate, the licensee must:
new text end

new text begin (1) adopt, and update as necessary, written policies and procedures reasonably designed
to ensure that the licensee's authorized delegates comply with applicable state and federal
law;
new text end

new text begin (2) enter into a written contract that complies with paragraph (d); and
new text end

new text begin (3) conduct a reasonable risk-based background investigation sufficient for the licensee
to determine whether the authorized delegate has complied and will likely comply with
applicable state and federal law.
new text end

new text begin (c) An authorized delegate must operate in full compliance with this chapter.
new text end

new text begin (d) The written contract required by paragraph (b) must be signed by the licensee and
the authorized delegate. The written contract must, at a minimum:
new text end

new text begin (1) appoint the person signing the contract as the licensee's authorized delegate with the
authority to conduct money transmission on behalf of the licensee;
new text end

new text begin (2) set forth the nature and scope of the relationship between the licensee and the
authorized delegate and the respective rights and responsibilities of the parties;
new text end

new text begin (3) require the authorized delegate to agree to fully comply with all applicable state and
federal laws, rules, and regulations pertaining to money transmission, including this chapter
and regulations implementing this chapter, relevant provisions of the Bank Secrecy Act and
the USA PATRIOT Act, Public Law 107-56;
new text end

new text begin (4) require the authorized delegate to remit and handle money and monetary value in
accordance with the terms of the contract between the licensee and the authorized delegate;
new text end

new text begin (5) impose a trust on money and monetary value net of fees received for money
transmission for the benefit of the licensee;
new text end

new text begin (6) require the authorized delegate to prepare and maintain records as required by this
chapter or administrative rules implementing this chapter, or as reasonably requested by
the commissioner;
new text end

new text begin (7) acknowledge that the authorized delegate consents to examination or investigation
by the commissioner;
new text end

new text begin (8) state that the licensee is subject to regulation by the commissioner and that as part
of that regulation the commissioner may (1) suspend or revoke an authorized delegate
designation, or (2) require the licensee to terminate an authorized delegate designation; and
new text end

new text begin (9) acknowledge receipt of the written policies and procedures required under paragraph
(b), clause (1).
new text end

new text begin (e) If the licensee's license is suspended, revoked, surrendered, or expired, within five
business days the licensee must provide documentation to the commissioner that the licensee
has notified all applicable authorized delegates of the licensee whose names are in a record
filed with the commissioner of the suspension, revocation, surrender, or expiration of a
license. Upon suspension, revocation, surrender, or expiration of a license, applicable
authorized delegates must immediately cease to provide money transmission as an authorized
delegate of the licensee.
new text end

new text begin (f) An authorized delegate of a licensee holds in trust for the benefit of the licensee all
money net of fees received from money transmission. If an authorized delegate commingles
any funds received from money transmission with other funds or property owned or
controlled by the authorized delegate, all commingled funds and other property are considered
held in trust in favor of the licensee in an amount equal to the amount of money net of fees
received from money transmission.
new text end

new text begin (g) An authorized delegate is prohibited from using a subdelegate to conduct money
transmission on behalf of a licensee.
new text end

Sec. 38.

new text begin [53B.52] UNAUTHORIZED ACTIVITIES.
new text end

new text begin A person is prohibited from engaging in the business of money transmission on behalf
of a person not licensed under this chapter or not exempt under sections 53B.29 and 53B.30.
A person that engages in the business of money transmission on behalf of a person that is
not licensed under this chapter or not exempt under sections 53B.29 and 53B.30 provides
money transmission to the same extent as if the person were a licensee, and is jointly and
severally liable with the unlicensed or nonexempt person.
new text end

Sec. 39.

new text begin [53B.53] PROHIBITED AUTHORIZED DELEGATES.
new text end

new text begin (a) The district court in an action brought by a licensee has jurisdiction to grant
appropriate equitable or legal relief, including without limitation prohibiting the authorized
delegate from directly or indirectly acting as an authorized delegate for any licensee in
Minnesota and the payment of restitution, damages, or other monetary relief, if the district
court finds that an authorized delegate failed to remit money in accordance with the written
contract required by section 53B.51, paragraph (b), or as otherwise directed by the licensee
or required by law.
new text end

new text begin (b) If the district court issues an order prohibiting a person from acting as an authorized
delegate for any licensee under paragraph (a), the licensee that brought the action must
report the order to the commissioner within 30 days of the date of the order and must report
the order through NMLS within 90 days of the date of the order.
new text end

Sec. 40.

new text begin [53B.54] TIMELY TRANSMISSION.
new text end

new text begin (a) Every licensee must forward all money received for transmission in accordance with
the terms of the agreement between the licensee and the sender, unless the licensee has a
reasonable belief or a reasonable basis to believe that the sender may be a victim of fraud
or that a crime or violation of law, rule, or regulation has occurred, is occurring, or may
occur.
new text end

new text begin (b) If a licensee fails to forward money received for transmission as provided under this
section, the licensee must respond to inquiries by the sender with the reason for the failure,
unless providing a response would violate a state or federal law, rule, or regulation.
new text end

Sec. 41.

new text begin [53B.55] REFUNDS.
new text end

new text begin (a) This section does not apply to:
new text end

new text begin (1) money received for transmission that is subject to the federal remittance rule under
Code of Federal Regulations, title 12, part 1005, subpart B, as amended or recodified from
time to time; or
new text end

new text begin (2) money received for transmission pursuant to a written agreement between the licensee
and payee to process payments for goods or services provided by the payee.
new text end

new text begin (b) A licensee must refund to the sender within ten days of the date the licensee receives
the sender's written request for a refund of any and all money received for transmission,
unless:
new text end

new text begin (1) the money has been forwarded within ten days of the date on which the money was
received for transmission;
new text end

new text begin (2) instructions have been given committing an equivalent amount of money to the
person designated by the sender within ten days of the date on which the money was received
for transmission;
new text end

new text begin (3) the agreement between the licensee and the sender instructs the licensee to forward
the money at a time that is beyond ten days of the date on which the money was received
for transmission. If money has not been forwarded in accordance with the terms of the
agreement between the licensee and the sender, the licensee must issue a refund in accordance
with the other provisions of this section; or
new text end

new text begin (4) the refund is requested for a transaction that the licensee has not completed based
on a reasonable belief or a reasonable basis to believe that a crime or violation of law, rule,
or regulation has occurred, is occurring, or may occur.
new text end

new text begin (c) A refund request does not enable the licensee to identify:
new text end

new text begin (1) the sender's name and address or telephone number; or
new text end

new text begin (2) the particular transaction to be refunded in the event the sender has multiple
transactions outstanding.
new text end

Sec. 42.

new text begin [53B.56] RECEIPTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For purposes of this section, "receipt" means a paper receipt,
electronic record, or other written confirmation.
new text end

new text begin Subd. 2. new text end

new text begin Exemption. new text end

new text begin This section does not apply to:
new text end

new text begin (1) money received for transmission that is subject to the federal remittance rule under
Code of Federal Regulations, title 12, part 1005, subpart B, as amended or recodified from
time to time;
new text end

new text begin (2) money received for transmission that is not primarily for personal, family, or
household purposes;
new text end

new text begin (3) money received for transmission pursuant to a written agreement between the licensee
and payee to process payments for goods or services provided by the payee; or
new text end

new text begin (4) payroll processing services.
new text end

new text begin Subd. 3. new text end

new text begin Transaction types; receipts form. new text end

new text begin For a transaction conducted in person, the
receipt may be provided electronically if the sender requests or agrees to receive an electronic
receipt. For a transaction conducted electronically or by telephone, a receipt may be provided
electronically. All electronic receipts must be provided in a retainable form.
new text end

new text begin Subd. 4. new text end

new text begin Receipts required. new text end

new text begin (a) Every licensee or the licensee's authorized delegate
must provide the sender a receipt for money received for transmission.
new text end

new text begin (b) The receipt must contain, as applicable:
new text end

new text begin (1) the name of the sender;
new text end

new text begin (2) the name of the designated recipient;
new text end

new text begin (3) the date of the transaction;
new text end

new text begin (4) the unique transaction or identification number;
new text end

new text begin (5) the name of the licensee, NMLS Unique ID, the licensee's business address, and the
licensee's customer service telephone number;
new text end

new text begin (6) the transaction amount, expressed in United States dollars;
new text end

new text begin (7) any fee the licensee charges the sender for the transaction; and
new text end

new text begin (8) any taxes the licensee collects from the sender for the transaction.
new text end

new text begin (c) The receipt required by this section must be provided in (1) English, and (2) the
language principally used by the licensee or authorized delegate to advertise, solicit, or
negotiate, either orally or in writing, for a transaction conducted in person, electronically,
or by telephone, if the language principally used is a language other than English.
new text end

Sec. 43.

new text begin [53B.57] NOTICE.
new text end

new text begin Every licensee or authorized delegate must include on a receipt or disclose on the
licensee's website or mobile application the name and telephone number of the department
and a statement that the licensee's customers can contact the department with questions or
complaints about the licensee's money transmission services.
new text end

Sec. 44.

new text begin [53B.58] PAYROLL PROCESSING SERVICES; DISCLOSURES.
new text end

new text begin (a) A licensee that provides payroll processing services must:
new text end

new text begin (1) issue reports to clients detailing client payroll obligations in advance of the payroll
funds being deducted from an account; and
new text end

new text begin (2) make available worker pay stubs or an equivalent statement to workers.
new text end

new text begin (b) Paragraph (a) does not apply to a licensee providing payroll processing services if
the licensee's client designates the intended recipients to the licensee and is responsible for
providing the disclosures required by paragraph (a), clause (2).
new text end

Sec. 45.

new text begin [53B.59] NET WORTH.
new text end

new text begin (a) A licensee under this chapter must maintain at all times a tangible net worth that is
the greater of: (1) $100,000; or (2) three percent of total assets for the first $100,000,000;
two percent of additional assets between $100,000,000 to $1,000,000,000; and one-half
percent of additional assets over $1,000,000,000.
new text end

new text begin (b) Tangible net worth must be demonstrated in the initial application by the applicant's
most recent audited or unaudited financial statements under section 53B.38, paragraph (b),
clause (6).
new text end

new text begin (c) Notwithstanding paragraphs (a) and (b), the commissioner has the authority, for good
cause shown, to exempt any applicant or licensee in-part or in whole from the requirements
of this section.
new text end

Sec. 46.

new text begin [53B.60] SURETY BOND.
new text end

new text begin (a) An applicant for a money transmission license must provide and a licensee must at
all times maintain (1) security consisting of a surety bond in a form satisfactory to the
commissioner, or (2) with the commissioner's approval, a deposit instead of a bond in
accordance with this section.
new text end

new text begin (b) The amount of the required security under this section is:
new text end

new text begin (1) the greater of (i) $100,000, or (ii) an amount equal to one hundred percent of the
licensee's average daily money transmission liability in Minnesota, calculated for the most
recently completed three-month period, up to a maximum of $500,000; or
new text end

new text begin (2) in the event that the licensee's tangible net worth exceeds ten percent of total assets,
the licensee must maintain a surety bond of $100,000.
new text end

new text begin (c) A licensee that maintains a bond in the maximum amount provided for in paragraph
(b), clause (1) or (2), as applicable, is not required to calculate the licensee's average daily
money transmission liability in Minnesota for purposes of this section.
new text end

new text begin (d) A licensee may exceed the maximum required bond amount pursuant to section
53B.62, paragraph (a), clause (5).
new text end

new text begin (e) The security device remains effective until cancellation, which may occur only after
30 days' written notice to the commissioner. Cancellation does not affect the rights of any
claimant for any liability incurred or accrued during the period for which the bond was in
force.
new text end

new text begin (f) The security device must remain in place for no longer than five years after the
licensee ceases money transmission operations in Minnesota. Notwithstanding this paragraph,
the commissioner may permit the security device to be reduced or eliminated before that
time to the extent that the amount of the licensee's payment instruments outstanding in
Minnesota are reduced. The commissioner may also permit a licensee to substitute a letter
of credit or other form of security device acceptable to the commissioner for the security
device in place at the time the licensee ceases money transmission operations in Minnesota.
new text end

Sec. 47.

new text begin [53B.61] MAINTENANCE OF PERMISSIBLE INVESTMENTS.
new text end

new text begin (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.
new text end

new text begin (b) Except for permissible investments enumerated in section 53B.62, paragraph (a),
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.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

Sec. 48.

new text begin [53B.62] PERMISSIBLE INVESTMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Certain investments permissible. new text end

new text begin The following investments are
permissible under section 53B.61:
new text end

new text begin (1) cash, including demand deposits, savings deposits, and funds in accounts held for
the benefit of the licensee's customers in a federally insured depository financial institution;
and cash equivalents, including ACH items in transit to the licensee and ACH items or
international wires in transit to a payee, cash in transit via armored car, cash in smart safes,
cash in licensee-owned locations, debit card or credit card funded transmission receivables
owed by any bank, or money market mutual funds rated AAA or the equivalent from any
eligible rating service;
new text end

new text begin (2) certificates of deposit or senior debt obligations of an insured depository institution,
as defined in section 3 of the Federal Deposit Insurance Act, United States Code, title 12,
section 1813, as amended or recodified from time to time, or as defined under the federal
Credit Union Act, United States Code, title 12, section 1781, as amended or recodified from
time to time;
new text end

new text begin (3) an obligation of the United States or a commission, agency, or instrumentality thereof;
an obligation that is guaranteed fully as to principal and interest by the United States; or an
obligation of a state or a governmental subdivision, agency, or instrumentality thereof;
new text end

new text begin (4) the full drawable amount of an irrevocable standby letter of credit, for which the
stated beneficiary is the commissioner, that stipulates that the beneficiary need only draw
a sight draft under the letter of credit and present the sight draft to obtain funds up to the
letter of credit amount within seven days of presentation of the items required by subdivision
2, paragraph (c); and
new text end

new text begin (5) one hundred percent of the surety bond or deposit provided for under section 53B.60
that exceeds the average daily money transmission liability in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Letter of credit; requirements. new text end

new text begin (a) A letter of credit under subdivision 1,
clause (4), must:
new text end

new text begin (1) be issued by a federally insured depository financial institution, a foreign bank that
is authorized under federal law to maintain a federal agency or federal branch office in a
state or states, or a foreign bank that is authorized under state law to maintain a branch in
a state that: (i) bears an eligible rating or whose parent company bears an eligible rating;
and (ii) is regulated, supervised, and examined by United States federal or state authorities
having regulatory authority over banks, credit unions, and trust companies;
new text end

new text begin (2) be irrevocable, unconditional, and indicate that it is not subject to any condition or
qualifications outside of the letter of credit;
new text end

new text begin (3) not contain reference to any other agreements, documents, or entities, or otherwise
provide for any security interest in the licensee; and
new text end

new text begin (4) contain an issue date and expiration date, and expressly provide for automatic
extension without a written amendment, for an additional period of one year from the present
or each future expiration date, unless the issuer of the letter of credit notifies the
commissioner in writing by certified or registered mail or courier mail or other receipted
means, at least 60 days before any expiration date, that the irrevocable letter of credit will
not be extended.
new text end

new text begin (b) In the event of any notice of expiration or nonextension of a letter of credit issued
under paragraph (a), clause (4), the licensee must demonstrate to the satisfaction of the
commissioner, 15 days before the letter or credit's expiration, that the licensee maintains
and will maintain permissible investments in accordance with section 53B.61, paragraph
(a), upon the expiration of the letter of credit. If the licensee is not able to do so, the
commissioner may draw on the letter of credit in an amount up to the amount necessary to
meet the licensee's requirements to maintain permissible investments in accordance with
section 53B.61, paragraph (a). Any draw under this paragraph must be offset against the
licensee's outstanding money transmission obligations. The drawn funds must be held in
trust by the commissioner or the commissioner's designated agent, to the extent authorized
by law, as agent for the benefit of the purchasers and holders of the licensee's outstanding
money transmission obligations.
new text end

new text begin (c) The letter of credit must provide that the issuer of the letter of credit must honor, at
sight, a presentation made by the beneficiary to the issuer of the following documents on
or before the expiration date of the letter of credit:
new text end

new text begin (1) the original letter of credit, including any amendments; and
new text end

new text begin (2) a written statement from the beneficiary stating that any of the following events have
occurred:
new text end

new text begin (i) 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;
new text end

new text begin (ii) the filing of a petition by or against the licensee for receivership, or the
commencement of any other judicial or administrative proceeding for the licensee's
dissolution or reorganization;
new text end

new text begin (iii) the seizure of assets of a licensee by a commissioner of any other state pursuant to
an emergency order issued in accordance with applicable law, on the basis of an action,
violation, or condition that has caused or is likely to cause the insolvency of the licensee;
or
new text end

new text begin (iv) the beneficiary has received notice of expiration or nonextension of a letter of credit
and the licensee failed to demonstrate to the satisfaction of the beneficiary that the licensee
will maintain permissible investments in accordance with section 53B.61, paragraph (a),
upon the expiration or nonextension of the letter of credit.
new text end

new text begin (d) The commissioner may designate an agent to serve on the commissioner's behalf as
beneficiary to a letter of credit, provided the agent and letter of credit meet requirements
the commissioner establishes. The commissioner's agent may serve as agent for multiple
licensing authorities for a single irrevocable letter of credit if the proceeds of the drawable
amount for the purposes of subdivision 1, clause (4), and this subdivision are assigned to
the commissioner.
new text end

new text begin (e) The commissioner is authorized to participate in multistate processes designed to
facilitate the issuance and administration of letters of credit, including but not limited to
services provided by the NMLS and State Regulatory Registry, LLC.
new text end

new text begin Subd. 3. new text end

new text begin Other permissible investments. new text end

new text begin Unless the commissioner by administrative
rule or order otherwise permits an investment to exceed the limit set forth in this subdivision,
the following investments are permissible under section 53B.61 to the extent specified:
new text end

new text begin (1) receivables that are payable to a licensee from its authorized delegates in the ordinary
course of business that are less than seven days old, up to 50 percent of the aggregate value
of the licensee's total permissible investments;
new text end

new text begin (2) of the receivables permissible under clause (1), receivables that are payable to a
licensee from a single authorized delegate in the ordinary course of business may not exceed
ten percent of the aggregate value of the licensee's total permissible investments;
new text end

new text begin (3) the following investments are permissible up to 20 percent per category and combined
up to 50 percent of the aggregate value of the licensee's total permissible investments:
new text end

new text begin (i) a short-term investment of up to six months bearing an eligible rating;
new text end

new text begin (ii) commercial paper bearing an eligible rating;
new text end

new text begin (iii) a bill, note, bond, or debenture bearing an eligible rating;
new text end

new text begin (iv) United States tri-party repurchase agreements collateralized at 100 percent or more
with United States government or agency securities, municipal bonds, or other securities
bearing an eligible rating;
new text end

new text begin (v) money market mutual funds rated less than "AAA" and equal to or higher than "A-"
by S&P, or the equivalent from any other eligible rating service; and
new text end

new text begin (vi) a mutual fund or other investment fund composed solely and exclusively of one or
more permissible investments listed in subdivision 1, clauses (1) to (3); and
new text end

new text begin (4) cash, including demand deposits, savings deposits, and funds in accounts held for
the benefit of the licensee's customers, at foreign depository institutions are permissible up
to ten percent of the aggregate value of the licensee's total permissible investments, if the
licensee has received a satisfactory rating in the licensee's most recent examination and the
foreign depository institution:
new text end

new text begin (i) has an eligible rating;
new text end

new text begin (ii) is registered under the Foreign Account Tax Compliance Act, Public Law 111-147;
new text end

new text begin (iii) is not located in any country subject to sanctions from the Office of Foreign Asset
Control; and
new text end

new text begin (iv) is not located in a high-risk or noncooperative jurisdiction, as designated by the
Financial Action Task Force.
new text end

Sec. 49.

new text begin [53B.63] SUSPENSION; REVOCATION.
new text end

new text begin (a) The commissioner may suspend or revoke a license or order a licensee to revoke the
designation of an authorized delegate if:
new text end

new text begin (1) the licensee violates this chapter, or an administrative rule adopted or an order issued
under this chapter;
new text end

new text begin (2) the licensee does not cooperate with an examination or investigation conducted by
the commissioner;
new text end

new text begin (3) the licensee engages in fraud, intentional misrepresentation, or gross negligence;
new text end

new text begin (4) an authorized delegate is convicted of a violation of a state or federal statute
prohibiting money laundering, or violates an administrative rule adopted or an order issued
under this chapter, as a result of the licensee's willful misconduct or willful blindness;
new text end

new text begin (5) the competence, experience, character, or general fitness of the licensee, authorized
delegate, person in control of a licensee, key individual, or responsible person of the
authorized delegate indicates that it is not in the public interest to permit the person to
provide money transmission;
new text end

new text begin (6) the licensee engages in an unsafe or unsound practice;
new text end

new text begin (7) the licensee is insolvent, suspends payment of the licensee's obligations, or makes a
general assignment for the benefit of the licensee's creditors; or
new text end

new text begin (8) the licensee does not remove an authorized delegate after the commissioner issues
and serves upon the licensee a final order that includes a finding that the authorized delegate
has violated this chapter.
new text end

new text begin (b) When determining whether a licensee is engaging in an unsafe or unsound practice,
the commissioner may consider the size and condition of the licensee's money transmission,
the magnitude of the loss, the gravity of the violation of this chapter, and the previous
conduct of the person involved.
new text end

Sec. 50.

new text begin [53B.64] AUTHORIZED DELEGATES; SUSPENSION AND
REVOCATION.
new text end

new text begin (a) The commissioner may issue an order suspending or revoking the designation of an
authorized delegate if the commissioner finds:
new text end

new text begin (1) the authorized delegate violated this chapter, or an administrative rule adopted or an
order issued under this chapter;
new text end

new text begin (2) the authorized delegate did not cooperate with an examination or investigation
conducted by the commissioner;
new text end

new text begin (3) the authorized delegate engaged in fraud, intentional misrepresentation, or gross
negligence;
new text end

new text begin (4) the authorized delegate is convicted of a violation of a state or federal anti-money
laundering statute;
new text end

new text begin (5) the competence, experience, character, or general fitness of the authorized delegate
or a person in control of the authorized delegate indicates that it is not in the public interest
to permit the authorized delegate to provide money transmission; or
new text end

new text begin (6) the authorized delegate is engaging in an unsafe or unsound practice.
new text end

new text begin (b) When determining whether an authorized delegate is engaging in an unsafe or unsound
practice, the commissioner may consider the size and condition of the authorized delegate's
provision of money transmission, the magnitude of the loss, the gravity of the violation of
this chapter, or an administrative rule adopted or order issued under this chapter, and the
previous conduct of the authorized delegate.
new text end

new text begin (c) An authorized delegate may apply for relief from a suspension or revocation of
designation as an authorized delegate in the same manner as a licensee.
new text end

Sec. 51.

new text begin [53B.65] ENFORCEMENT.
new text end

new text begin Section 45.027 applies to this chapter.
new text end

Sec. 52.

new text begin [53B.66] CRIMINAL PENALTIES.
new text end

new text begin (a) A person who intentionally makes a false statement, misrepresentation, or false
certification in a record filed or required to be maintained under this chapter or that
intentionally makes a false entry or omits a material entry in a record filed or required to
be maintained under this chapter is guilty of a felony.
new text end

new text begin (b) A person who knowingly engages in an activity for which a license is required under
this chapter without being licensed under this chapter, and who receives more than $1,000
in compensation within a 30-day period from the activity, is guilty of a felony.
new text end

new text begin (c) A person who knowingly engages in an activity for which a license is required under
this chapter without being licensed under this chapter, and who receives more than $500
but less than $1,000 in compensation within a 30-day period from the activity, is guilty of
a gross misdemeanor.
new text end

new text begin (d) A person who knowingly engages in an activity for which a license is required under
this chapter without being licensed under this chapter, and who receives no more than $500
in compensation within a 30-day period from the activity, is guilty of a misdemeanor.
new text end

Sec. 53.

new text begin [53B.67] SEVERABILITY.
new text end

new text begin If any provision of this chapter or the chapter's application to any person or circumstance
is held invalid, the invalidity does not affect other provisions or applications of this chapter
that can be given effect without the invalid provision or application.
new text end

Sec. 54.

new text begin [53B.68] TRANSITION PERIOD.
new text end

new text begin (a) A person licensed in Minnesota to engage in the business of money transmission is
not subject to the provisions of this chapter to the extent that this chapter's provisions conflict
with current law or establish new requirements not imposed under current law until the
licensee renews the licensee's current license or for five months after the effective date of
this chapter, whichever is later.
new text end

new text begin (b) Notwithstanding paragraph (a), a licensee is only required to amend the licensee's
authorized delegate contracts for contracts entered into or amended after the effective date
or the completion of any transition period contemplated under paragraph (a). Nothing in
this section limits an authorized delegate's obligations to operate in full compliance with
this chapter, as required under section 53B.51, paragraph (c).
new text end

Sec. 55.

new text begin [53B.69] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Terms. new text end

new text begin For purposes of sections 53B.70 to 53B.74, the following terms
have the meaning given them.
new text end

new text begin Subd. 2. new text end

new text begin Control of virtual currency. new text end

new text begin "Control of virtual currency," when used in
reference to a transaction or relationship involving virtual currency, means the power to
execute unilaterally or prevent indefinitely a virtual currency transaction.
new text end

new text begin Subd. 3. new text end

new text begin Exchange. new text end

new text begin "Exchange," used as a verb, means to assume control of virtual
currency from or on behalf of a person, at least momentarily, to sell, trade, or convert:
new text end

new text begin (1) virtual currency for money, bank credit, or one or more forms of virtual currency;
or
new text end

new text begin (2) money or bank credit for one or more forms of virtual currency.
new text end

new text begin Subd. 4. new text end

new text begin Transfer. new text end

new text begin "Transfer" means to assume control of virtual currency from or on
behalf of a person and to:
new text end

new text begin (1) credit the virtual currency to the account of another person;
new text end

new text begin (2) move the virtual currency from one account of a person to another account of the
same person; or
new text end

new text begin (3) relinquish control of virtual currency to another person.
new text end

new text begin Subd. 5. new text end

new text begin United States dollar equivalent of virtual currency. new text end

new text begin "United States dollar
equivalent of virtual currency" means the equivalent value of a particular virtual currency
in United States dollars shown on a virtual-currency exchange based in the United States
for a particular date or period specified in this chapter.
new text end

new text begin Subd. 6. new text end

new text begin Virtual currency. new text end

new text begin (a) "Virtual currency" means a digital representation of value
that:
new text end

new text begin (1) is used as a medium of exchange, unit of account, or store of value; and
new text end

new text begin (2) is not money, whether or not denominated in money.
new text end

new text begin (b) Virtual currency does not include:
new text end

new text begin (1) a transaction in which a merchant grants, as part of an affinity or rewards program,
value that cannot be taken from or exchanged with the merchant for money, bank credit, or
virtual currency; or
new text end

new text begin (2) a digital representation of value issued by or on behalf of a publisher and used solely
within an online game, game platform, or family of games sold by the same publisher or
offered on the same game platform.
new text end

new text begin Subd. 7. new text end

new text begin Virtual-currency administration. new text end

new text begin "Virtual-currency administration" means
issuing virtual currency with the authority to redeem the currency for money, bank credit,
or other virtual currency.
new text end

new text begin Subd. 8. new text end

new text begin Virtual-currency business activity. new text end

new text begin "Virtual-currency business activity" means:
new text end

new text begin (1) exchanging, transferring, or storing virtual currency or engaging in virtual-currency
administration, whether directly or through an agreement with a virtual-currency
control-services vendor;
new text end

new text begin (2) holding electronic precious metals or electronic certificates representing interests in
precious metals on behalf of another person or issuing shares or electronic certificates
representing interests in precious metals; or
new text end

new text begin (3) exchanging one or more digital representations of value used within one or more
online games, game platforms, or family of games for:
new text end

new text begin (i) virtual currency offered by or on behalf of the same publisher from which the original
digital representation of value was received; or
new text end

new text begin (ii) money or bank credit outside the online game, game platform, or family of games
offered by or on behalf of the same publisher from which the original digital representation
of value was received.
new text end

new text begin Subd. 9. new text end

new text begin Virtual-currency control-services vendor. new text end

new text begin "Virtual-currency control-services
vendor" means a person that has control of virtual currency solely under an agreement with
a person that, on behalf of another person, assumes control of virtual currency.
new text end

Sec. 56.

new text begin [53B.70] SCOPE.
new text end

new text begin (a) Sections 53B.71 to 53B.74 do not apply to the exchange, transfer, or storage of virtual
currency or to virtual-currency administration to the extent the Electronic Fund Transfer
Act of 1978, United States Code, title 15, sections 1693 to 1693r, as amended or recodified
from time to time; the Securities Exchange Act of 1934, United States Code, title 15, sections
78a to 78oo, as amended or recodified from time to time; the Commodities Exchange Act
of 1936, United States Code, title 7, sections 1 to 27f, as amended or recodified from time
to time; or chapter 80A govern the activity.
new text end

new text begin (b) Sections 53B.71 to 53B.74 do not apply to activity by:
new text end

new text begin (1) a person that:
new text end

new text begin (i) contributes only connectivity software or computing power to a decentralized virtual
currency, or to a protocol governing transfer of the digital representation of value;
new text end

new text begin (ii) provides only data storage or security services for a business engaged in
virtual-currency business activity and does not otherwise engage in virtual-currency business
activity on behalf of another person; or
new text end

new text begin (iii) provides only to a person otherwise exempt from this chapter virtual currency as
one or more enterprise solutions used solely among each other and has no agreement or
relationship with a person that is an end-user of virtual currency;
new text end

new text begin (2) a person using virtual currency, including creating, investing, buying or selling, or
obtaining virtual currency as payment for the purchase or sale of goods or services, solely:
new text end

new text begin (i) on the person's own behalf;
new text end

new text begin (ii) for personal, family, or household purposes; or
new text end

new text begin (iii) for academic purposes;
new text end

new text begin (3) a person whose virtual-currency business activity with or on behalf of persons is
reasonably expected to be valued, in the aggregate, on an annual basis at $5,000 or less,
measured by the United States dollar equivalent of virtual currency;
new text end

new text begin (4) an attorney to the extent of providing escrow services to a person;
new text end

new text begin (5) a title insurance company to the extent of providing escrow services to a person; or
new text end

new text begin (6) a securities intermediary, as defined under section 336.8-102(14), or a commodity
intermediary, as defined under section 336.9-102(17), that:
new text end

new text begin (i) does not engage in the ordinary course of business in virtual-currency business activity
with or on behalf of a person in addition to maintaining securities accounts or commodities
accounts and is regulated as a securities intermediary or commodity intermediary under
federal law, law of Minnesota other than this chapter, or law of another state; and
new text end

new text begin (ii) affords a person protections comparable to those set forth under section 53B.37.
new text end

new text begin (c) Sections 53B.71 to 53B.74 do not apply to a secured creditor, as defined under
sections 336.9-101 to 336.9-809, or to a creditor with a judicial lien or lien arising by
operation of law on collateral that is virtual currency, if the virtual-currency business activity
of the creditor is limited to enforcement of the security interest in compliance with sections
336.9-101 to 336.9-809 or lien in compliance with the law applicable to the lien.
new text end

new text begin (d) Sections 53B.71 to 53B.74 do not apply to a virtual-currency control-services vendor.
new text end

new text begin (e) Sections 53B.71 to 53B.74 do not apply to a person that:
new text end

new text begin (1) does not receive compensation from a person to:
new text end

new text begin (i) provide virtual-currency products or services; or
new text end

new text begin (ii) conduct virtual-currency business activity; or
new text end

new text begin (2) is engaged in testing products or services with the person's own money.
new text end

new text begin (f) The commissioner may determine that a person or class of persons, given facts
particular to the person or class, should be exempt from this chapter, whether the person or
class is covered by requirements imposed under federal law on a money-service business.
new text end

Sec. 57.

new text begin [53B.71] VIRTUAL CURRENCY BUSINESS ACTIVITY; CONDITIONS
PRECEDENT.
new text end

new text begin (a) A person may not engage in virtual-currency business activity, or hold itself out as
being able to engage in virtual-currency business activity, with or on behalf of another
person unless the person is:
new text end

new text begin (1) licensed in Minnesota by the commissioner under section 53B.40; or
new text end

new text begin (2) exempt from licensing under section 53B.29.
new text end

new text begin (b) A person that is licensed to engage in virtual-currency business activity is engaged
in the business of money transmission and is subject to the requirements of this chapter.
new text end

Sec. 58.

new text begin [53B.72] REQUIRED DISCLOSURES.
new text end

new text begin (a) A licensee that engages in virtual currency business activity must provide to a person
who uses the licensee's products or services the disclosures required by paragraph (b) and
any additional disclosure the commissioner by administrative rule determines reasonably
necessary to protect persons. The commissioner must determine by administrative rule the
time and form required for disclosure. A disclosure required by this section must be made
separately from any other information provided by the licensee and in a clear and conspicuous
manner in a record the person may keep. A licensee may propose for the commissioner's
approval alternate disclosures as more appropriate for the licensee's virtual-currency business
activity with or on behalf of persons.
new text end

new text begin (b) Before establishing a relationship with a person, a licensee must disclose, to the
extent applicable to the virtual-currency business activity the licensee undertakes with the
person:
new text end

new text begin (1) a schedule of fees and charges the licensee may assess, the manner by which fees
and charges are calculated if the fees and charges are not set in advance and disclosed, and
the timing of the fees and charges;
new text end

new text begin (2) whether the product or service provided by the licensee is covered by:
new text end

new text begin (i) a form of insurance or is otherwise guaranteed against loss by an agency of the United
States:
new text end

new text begin (A) up to the full United States dollar equivalent of virtual currency purchased from the
licensee or for control of virtual currency by the licensee as of the date of the placement or
purchase, including the maximum amount provided by insurance under the Federal Deposit
Insurance Corporation or otherwise available from the Securities Investor Protection
Corporation; or
new text end

new text begin (B) if not provided at the full United States dollar equivalent of virtual currency purchased
from the licensee or for control of virtual currency by the licensee, the maximum amount
of coverage for each person expressed in the United States dollar equivalent of the virtual
currency; or
new text end

new text begin (ii) private insurance against theft or loss, including cyber theft or theft by other means;
new text end

new text begin (3) the irrevocability of a transfer or exchange and any exception to irrevocability;
new text end

new text begin (4) a description of:
new text end

new text begin (i) liability for an unauthorized, mistaken, or accidental transfer or exchange;
new text end

new text begin (ii) the person's responsibility to provide notice to the licensee of the transfer or exchange;
new text end

new text begin (iii) the basis for any recovery by the person from the licensee;
new text end

new text begin (iv) general error-resolution rights applicable to the transfer or exchange; and
new text end

new text begin (v) the method for the person to update the person's contact information with the licensee;
new text end

new text begin (5) that the date or time when the transfer or exchange is made and the person's account
is debited may differ from the date or time when the person initiates the instruction to make
the transfer or exchange;
new text end

new text begin (6) whether the person has a right to stop a preauthorized payment or revoke authorization
for a transfer, and the procedure to initiate a stop-payment order or revoke authorization
for a subsequent transfer;
new text end

new text begin (7) the person's right to receive a receipt, trade ticket, or other evidence of the transfer
or exchange;
new text end

new text begin (8) the person's right to at least 30 days' prior notice of a change in the licensee's fee
schedule, other terms and conditions of operating the licensee's virtual-currency business
activity with the person, and the policies applicable to the person's account; and
new text end

new text begin (9) that virtual currency is not money.
new text end

new text begin (c) Except as otherwise provided in paragraph (d), at the conclusion of a virtual-currency
transaction with or on behalf of a person, a licensee must provide the person a confirmation
in a record. The record must contain:
new text end

new text begin (1) the name and contact information of the licensee, including information the person
may need to ask a question or file a complaint;
new text end

new text begin (2) the type, value, date, precise time, and amount of the transaction; and
new text end

new text begin (3) the fee charged for the transaction, including any charge for conversion of virtual
currency to money, bank credit, or other virtual currency.
new text end

new text begin (d) If a licensee discloses that it provides a daily confirmation in the initial disclosure
under paragraph (c), the licensee may elect to provide a single, daily confirmation for all
transactions with or on behalf of a person on that day instead of a per-transaction
confirmation.
new text end

Sec. 59.

new text begin [53B.73] PROPERTY INTERESTS AND ENTITLEMENTS TO VIRTUAL
CURRENCY.
new text end

new text begin (a) A licensee that has control of virtual currency for one or more persons must maintain
control of virtual currency in each type of virtual currency sufficient to satisfy the aggregate
entitlements of the persons to the type of virtual currency.
new text end

new text begin (b) If a licensee violates paragraph (a), the property interests of the persons in the virtual
currency are pro rata property interests in the type of virtual currency to which the persons
are entitled, without regard to the time the persons became entitled to the virtual currency
or the licensee obtained control of the virtual currency.
new text end

new text begin (c) The virtual currency referred to in this section is:
new text end

new text begin (1) held for the persons entitled to the virtual currency;
new text end

new text begin (2) not property of the licensee;
new text end

new text begin (3) not subject to the claims of creditors of the licensee; and
new text end

new text begin (4) a permissible investment under this chapter.
new text end

Sec. 60.

new text begin [53B.74] VIRTUAL CURRENCY BUSINESS ACTIVITIES; ADDITIONAL
REQUIREMENTS.
new text end

new text begin (a) A licensee engaged in virtual currency business activities may include virtual currency
in the licensee's calculation of tangible net worth, by measuring the average value of the
virtual currency in United States dollar equivalent over the prior six months, excluding
control of virtual currency for a person entitled to the protections under section 53B.73.
new text end

new text begin (b) A licensee must maintain, for all virtual-currency business activity with or on behalf
of a person five years after the date of the activity, a record of:
new text end

new text begin (1) each of the licensee's transactions with or on behalf of the person, or for the licensee's
account in Minnesota, including:
new text end

new text begin (i) the identity of the person;
new text end

new text begin (ii) the form of the transaction;
new text end

new text begin (iii) the amount, date, and payment instructions given by the person; and
new text end

new text begin (iv) the account number, name, and United States Postal Service address of the person,
and, to the extent feasible, other parties to the transaction;
new text end

new text begin (2) the aggregate number of transactions and aggregate value of transactions by the
licensee with or on behalf of the person and for the licensee's account in this state, expressed
in the United States dollar equivalent of the virtual currency for the previous 12 calendar
months;
new text end

new text begin (3) each transaction in which the licensee exchanges one form of virtual currency for
money or another form of virtual currency with or on behalf of the person;
new text end

new text begin (4) a general ledger posted at least monthly that lists all of the licensee's assets, liabilities,
capital, income, and expenses;
new text end

new text begin (5) each business-call report the licensee is required to create or provide to the department
or NMLS;
new text end

new text begin (6) bank statements and bank reconciliation records for the licensee and the name,
account number, and United States Postal Service address of each bank the licensee uses
to conduct virtual-currency business activity with or on behalf of the person;
new text end

new text begin (7) a report of any dispute with the person; and
new text end

new text begin (8) a report of any virtual-currency business activity transaction with or on behalf of a
person which the licensee was unable to complete.
new text end

new text begin (c) A licensee must maintain records required by paragraph (b) in a form that enables
the commissioner to determine whether the licensee is in compliance with this chapter, any
court order, and law of Minnesota other than this chapter.
new text end

Sec. 61.

Minnesota Statutes 2022, section 56.131, subdivision 1, is amended to read:

Subdivision 1.

Interest rates and charges.

(a) On any loan in a principal amount not
exceeding $100,000 or 15 percent of a Minnesota corporate licensee's capital stock and
surplus as defined in section 53.015, if greater, a licensee may contract for and receive
interest, finance charges, and other charges as provided in section 47.59.

new text begin (b) A licensee making a loan that is a consumer small loan, as defined in section 47.60,
subdivision 1, paragraph (a), must comply with section 47.60. A licensee making a loan
that is a consumer short-term loan, as defined in section 47.601, subdivision 1, paragraph
(d), must comply with section 47.601.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end With respect to a loan secured by an interest in real estate, and having a maturity
of more than 60 months, the original schedule of installment payments must fully amortize
the principal and interest on the loan. The original schedule of installment payments for any
other loan secured by an interest in real estate must provide for payment amounts that are
sufficient to pay all interest scheduled to be due on the loan.

deleted text begin (c) deleted text end new text begin (d) new text end A licensee may contract for and collect a delinquency charge as provided for in
section 47.59, subdivision 6, paragraph (a), clause (4).

deleted text begin (d) deleted text end new text begin (e) new text end A licensee may grant extensions, deferments, or conversions to interest-bearing
as provided in section 47.59, subdivision 5.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and
applies to consumer small loans and consumer short-term loans originated on or after that
date.
new text end

Sec. 62.

new text begin [58.20] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of this section to section 58.23, the terms defined
in this section have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Allowable assets for liquidity. new text end

new text begin "Allowable assets for liquidity" means assets
that may be used to satisfy the liquidity requirements under section 58.22, including:
new text end

new text begin (1) unrestricted cash and cash equivalents; and
new text end

new text begin (2) unencumbered investment grade assets held for sale or trade, including agency
mortgage-backed securities, obligations of government-sponsored enterprises, and United
States Treasury obligations.
new text end

new text begin Subd. 3. new text end

new text begin Board of directors. new text end

new text begin "Board of directors" means the formal body established
by a covered institution that is responsible for corporate governance and compliance with
sections 58.21 to 58.23.
new text end

new text begin Subd. 4. new text end

new text begin Corporate governance. new text end

new text begin "Corporate governance" means the structure of the
covered institution and how the covered institution is managed, including the corporate
rules, policies, processes, and practices used to oversee and manage the covered institution.
new text end

new text begin Subd. 5. new text end

new text begin Covered institution. new text end

new text begin "Covered institution" means a mortgage servicer that
services or subservices for others at least 2,000 or more residential mortgage loans in the
United States, excluding whole loans owned, and loans being interim serviced prior to sale
as of the most recent calendar year end, reported on the NMLS mortgage call report.
new text end

new text begin Subd. 6. new text end

new text begin External audit. new text end

new text begin "External audit" means the formal report, prepared by an
independent certified public accountant, expressing an opinion on whether the financial
statements are:
new text end

new text begin (1) presented fairly, in all material aspects, in accordance with the applicable financial
reporting framework; and
new text end

new text begin (2) inclusive of an evaluation of the adequacy of a company's internal control structure.
new text end

new text begin Subd. 7. new text end

new text begin Government-sponsored enterprises. new text end

new text begin "Government-sponsored enterprises"
means the Federal National Mortgage Association, and the Federal Home Loan Mortgage
Corporation.
new text end

new text begin Subd. 8. new text end

new text begin Interim serviced prior to sale. new text end

new text begin "Interim serviced prior to sale" means the
collection of a limited number of contractual mortgage payments immediately after
origination on loans held for sale but no longer than a period of ninety days prior to the
loans being sold into the secondary market.
new text end

new text begin Subd. 9. new text end

new text begin Internal audit. new text end

new text begin "Internal audit" means the internal activity of performing
independent and objective assurance and consulting to evaluate and improve the effectiveness
of company operations, risk management, internal controls, and governance processes.
new text end

new text begin Subd. 10. new text end

new text begin Mortgage-backed security. new text end

new text begin "Mortgage-backed security" means a financial
instrument, often debt securities, collateralized by residential mortgages.
new text end

new text begin Subd. 11. new text end

new text begin Mortgage call report. new text end

new text begin "Mortgage call report" means the quarterly or annual
report of residential real estate loan origination, servicing, and financial information
completed by companies licensed in NMLS.
new text end

new text begin Subd. 12. new text end

new text begin Mortgage servicing rights. new text end

new text begin "Mortgage servicing rights" means the contractual
right to service a residential mortgage loan on behalf of the owner of the associated mortgage
in exchange for compensation specified in the servicing contract.
new text end

new text begin Subd. 13. new text end

new text begin Mortgage servicing rights investor. new text end

new text begin "Mortgage servicing rights investor" or
"master servicer" means an entity that (1) invests in and owns mortgage servicing rights;
and (2) relies on subservicers to administer the loans on the mortgage servicing rights
investor's behalf.
new text end

new text begin Subd. 14. new text end

new text begin Nationwide Multistate Licensing System. new text end

new text begin "Nationwide Multistate Licensing
System" or "NMLS" has the meaning given in section 58A.02, subdivision 8.
new text end

new text begin Subd. 15. new text end

new text begin Operating liquidity. new text end

new text begin "Operating liquidity" means the money necessary for
an entity to perform normal business operations, including payment of rent, salaries, interest
expenses, and other typical expenses associated with operating the entity.
new text end

new text begin Subd. 16. new text end

new text begin Residential mortgage loans serviced. new text end

new text begin "Residential mortgage loans serviced"
means the specific portfolio or portfolios of residential mortgage loans for which a licensee
is contractually responsible to the owner or owners of the mortgage loans for the defined
servicing activities.
new text end

new text begin Subd. 17. new text end

new text begin Reverse mortgage. new text end

new text begin "Reverse mortgage" has the meaning given in section
47.58, subdivision 1, paragraph (a).
new text end

new text begin Subd. 18. new text end

new text begin Risk management assessment. new text end

new text begin "Risk management assessment" means the
functional evaluations performed under the risk management program and the reports
provided to the board of directors under the relevant governance protocol.
new text end

new text begin Subd. 19. new text end

new text begin Risk management program. new text end

new text begin "Risk management program" means the policies
and procedures designed to identify, measure, monitor, and mitigate risk commensurate
with the covered institution's size and complexity.
new text end

new text begin Subd. 20. new text end

new text begin Servicer. new text end

new text begin "Servicer" has the meaning given in section 58.02, subdivision 20.
new text end

new text begin Subd. 21. new text end

new text begin Servicing liquidity. new text end

new text begin "Servicing liquidity" or "liquidity" means the financial
resources necessary to manage liquidity risk arising from servicing functions required in
acquiring and financing mortgage servicing rights; hedging costs, including margin calls,
associated with the mortgage servicing rights asset and financing facilities; and advances
or costs of advance financing for principal, interest, taxes, insurance, and any other servicing
related advances.
new text end

new text begin Subd. 22. new text end

new text begin Subservicer. new text end

new text begin "Subservicer" means the entity performing routine administration
of residential mortgage loans as the agent of a servicer or mortgage servicing rights investor
under the terms of a subservicing contract.
new text end

new text begin Subd. 23. new text end

new text begin Subservicing for others. new text end

new text begin "Subservicing for others" means the contractual
activities performed by subservicers on behalf of a servicer or mortgage servicing rights
investor.
new text end

new text begin Subd. 24. new text end

new text begin Tangible net worth. new text end

new text begin "Tangible net worth" means total equity less receivables
due from related entities, less goodwill and other intangibles, less pledged assets.
new text end

new text begin Subd. 25. new text end

new text begin Whole loans. new text end

new text begin "Whole loans" means a loan where a mortgage and the underlying
credit risk is owned and held on a balance sheet of the entity possessing all ownership rights.
new text end

Sec. 63.

new text begin [58.21] APPLICABILITY; EXCLUSIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin Sections 58.20 to 58.23 apply to covered institutions. For
entities within a holding company or an affiliated group of companies, sections 58.20 to
58.23 apply at the covered institution level.
new text end

new text begin Subd. 2. new text end

new text begin Exclusions. new text end

new text begin (a) Sections 58.20 to 58.23 do not apply to (1) persons exempt
from licensing under sections 58.04 and 58.05, and (2) an institution of the Farm Credit
System established and authorized in accordance with the Farm Credit Act of 1971, as
amended, United States Code, title 12, section 2001 et seq.
new text end

new text begin (b) Section 58.22 does not apply to (1) servicers that solely own or conduct reverse
mortgage servicing, or (2) the reverse mortgage portfolio administered by a covered
institution.
new text end

Sec. 64.

new text begin [58.22] FINANCIAL CONDITION.
new text end

new text begin Subdivision 1. new text end

new text begin Compliance required. new text end

new text begin A covered institution must maintain capital and
liquidity in compliance with this section.
new text end

new text begin Subd. 2. new text end

new text begin Generally accepted new text end new text begin accounting principles. new text end

new text begin For the purposes of complying
with the capital and liquidity requirements of this section, all financial data must be
determined in accordance with generally accepted accounting principles.
new text end

new text begin Subd. 3. new text end

new text begin Federal Housing Finance Agency eligibility requirements; policies and
procedures. new text end

new text begin (a) A covered institution that meets the Federal Housing Finance Agency
eligibility requirements for enterprise single-family sellers and servicers with respect to
capital, net worth ratio, and liquidity meets the requirements of subdivisions 1 and 2,
regardless of whether the servicer is approved for government-sponsored enterprise servicing.
new text end

new text begin (b) A covered institution must maintain written policies and procedures that implement
the capital and servicing liquidity requirements of this section. The policies and procedures
implemented pursuant to this paragraph must include a sustainable written methodology to
satisfy the requirements of paragraph (a) and must be made available to the commissioner
upon request.
new text end

new text begin Subd. 4. new text end

new text begin Operating liquidity. new text end

new text begin (a) A covered institution must maintain sufficient allowable
assets for liquidity, in addition to the amounts required for servicing liquidity, to cover
normal business operations.
new text end

new text begin (b) Covered institutions must have sound cash management and business operating plans
that (1) match the complexity of the institution; and (2) ensure normal business operations.
new text end

new text begin (c) Management must develop, establish, and implement plans, policies, and procedures
to maintain operating liquidity sufficient for the ongoing needs of the covered institution.
Plans, policies, and procedures implemented pursuant to this paragraph must contain
sustainable, written methodologies to maintain sufficient operating liquidity and must be
made available to the commissioner upon request.
new text end

Sec. 65.

new text begin [58.23] CORPORATE GOVERNANCE.
new text end

new text begin Subdivision 1. new text end

new text begin Board of directors required. new text end

new text begin A covered institution must establish and
maintain a board of directors that is responsible for oversight of the covered institution.
new text end

new text begin Subd. 2. new text end

new text begin Board of directors; alternative. new text end

new text begin If a covered institution has not received
approval to service loans by a government-sponsored enterprise or the Government National
Mortgage Association, or if a government-sponsored enterprise or the Government National
Mortgage Association has granted approval for a board of directors alternative, the covered
institution may establish a similar body constituted to exercise oversight and fulfill the
responsibilities specified under subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Board of directors; responsibilities. new text end

new text begin The board of directors must:
new text end

new text begin (1) establish a written corporate governance framework, including appropriate internal
controls designed to monitor corporate governance and assess compliance with the corporate
governance framework, and must make the corporate governance framework available to
the commissioner upon request;
new text end

new text begin (2) monitor and ensure the covered institution complies with (i) the corporate governance
framework; and (ii) sections 58.20 to this section; and
new text end

new text begin (3) perform accurate and timely regulatory reporting, including filing the mortgage call
report.
new text end

new text begin Subd. 4. new text end

new text begin Internal audit. new text end

new text begin The board of directors must establish internal audit requirements
that (1) are appropriate for the size, complexity, and risk profile of the servicer; and (2)
ensure appropriate independence to provide a reliable evaluation of the servicer's internal
control structure, risk management, and governance. The board-established internal audit
requirements and the results of internal audits must be made available to the commissioner
upon request.
new text end

new text begin Subd. 5. new text end

new text begin External audit. new text end

new text begin (a) A covered institution must receive an external audit,
including audited financial statements and audit reports, that is conducted by an independent
public accountant annually. The external audit must be made available to the commissioner
upon request.
new text end

new text begin (b) The external audit must include, at a minimum:
new text end

new text begin (1) annual financial statements, including (i) a balance sheet; (ii) a statement of operations
and income statement; and (iii) cash flows, including notes and supplemental schedules
prepared in accordance with generally accepted accounting principles;
new text end

new text begin (2) an assessment of the internal control structure;
new text end

new text begin (3) a computation of tangible net worth;
new text end

new text begin (4) validation of mortgage servicing rights valuation and reserve methodology, if
applicable;
new text end

new text begin (5) verification of adequate fidelity and errors and omissions insurance; and
new text end

new text begin (6) testing of controls related to risk management activities, including compliance and
stress testing, if applicable.
new text end

new text begin Subd. 6. new text end

new text begin Risk management. new text end

new text begin (a) Under oversight by the board of directors, a covered
institution must establish a risk management program that identifies, measures, monitors,
and controls risk commensurate with the covered institution's size and complexity. The risk
management program must have appropriate processes and models in place to measure,
monitor, and mitigate financial risks and changes to the servicer's risk profile and assets
being serviced.
new text end

new text begin (b) The risk management program must be scaled to the size and complexity of the
organization, including but not limited to:
new text end

new text begin (1) the potential that a borrower or counterparty fails to perform on an obligation;
new text end

new text begin (2) the potential that the servicer (i) is unable to meet the servicer's obligations as the
obligations come due as a result of an inability to liquidate assets or obtain adequate funding;
or (ii) cannot easily unwind or offset specific exposures;
new text end

new text begin (3) the risk resulting from (i) inadequate or failed internal processes, people, and systems;
or (ii) external events;
new text end

new text begin (4) the risk to the servicer's condition resulting from adverse movements in market rates
or prices;
new text end

new text begin (5) the risk of regulatory sanctions, fines, penalties, or losses resulting from the failure
to comply with laws, rules, regulations, or other supervisory requirements that apply to the
servicer;
new text end

new text begin (6) the potential that legal proceedings against the institution resulting in unenforceable
contracts, lawsuits, legal sanctions, or adverse judgments can disrupt or otherwise negatively
affect the servicer's operations or condition; and
new text end

new text begin (7) the risk to earnings and capital arising from negative publicity regarding the servicer's
business practices.
new text end

new text begin Subd. 7. new text end

new text begin Risk management assessment. new text end

new text begin A covered institution must conduct a risk
management assessment on an annual basis. The risk management assessment must conclude
with a formal report to the board of directors and must be made available to the commissioner
upon request. A covered institution must maintain evidence of risk management activities
throughout the year and must include the evidence of risk management activities as part of
the report. The risk management assessment must include issue findings and the response
or action taken to address the issue findings.
new text end

Sec. 66.

new text begin [58B.011] STUDENT LOAN ADVOCATE.
new text end

new text begin Subdivision 1. new text end

new text begin Designation of a student loan advocate. new text end

new text begin The commissioner of commerce
must designate a student loan advocate within the Department of Commerce to provide
timely assistance to borrowers and to effectuate this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Duties. new text end

new text begin The student loan advocate has the following duties:
new text end

new text begin (1) receive, review, and attempt to resolve complaints from borrowers, including but
not limited to attempts to resolve borrower complaints in collaboration with institutions of
higher education, student loan servicers, and any other participants in student loan lending;
new text end

new text begin (2) compile and analyze data on borrower complaints received under clause (1);
new text end

new text begin (3) help borrowers understand the rights and responsibilities under the terms of student
loans;
new text end

new text begin (4) provide information to the public, state agencies, legislators, and relevant stakeholders
regarding the problems and concerns of borrowers;
new text end

new text begin (5) make recommendations to resolve the problems of borrowers;
new text end

new text begin (6) analyze and monitor the development and implementation of federal, state, and local
laws, regulations, and policies relating to borrowers, and recommend any changes deemed
necessary;
new text end

new text begin (7) review the complete student loan history for any borrower who has provided written
consent to conduct the review;
new text end

new text begin (8) increase public awareness that the advocate is available to assist in resolving the
student loan servicing concerns of potential and actual borrowers, institutions of higher
education, student loan servicers, and any other participant in student loan lending; and
new text end

new text begin (9) take other actions as necessary to fulfill the duties of the advocate, as provided under
this section.
new text end

new text begin Subd. 3. new text end

new text begin Student loan education course. new text end

new text begin The advocate must establish and maintain a
borrower education course. The course must include educational presentations and materials
regarding important topics in student loans, including but not limited to:
new text end

new text begin (1) the meaning of important terminology used in student lending;
new text end

new text begin (2) documentation requirements;
new text end

new text begin (3) monthly payment obligations;
new text end

new text begin (4) income-based repayment options;
new text end

new text begin (5) the availability of state and federal loan forgiveness programs; and
new text end

new text begin (6) disclosure requirements.
new text end

new text begin Subd. 4. new text end

new text begin Reporting. new text end

new text begin By January 15 of each odd-numbered year, the advocate must report
to the legislative committees with primary jurisdiction over commerce and higher education.
The report must describe the advocate's implementation of this section, the outcomes achieved
by the advocate during the previous two years, and recommendations to improve the
regulation of student loan servicers.
new text end

Sec. 67.

Minnesota Statutes 2022, section 80A.50, is amended to read:

80A.50 SECTION 302; FEDERAL COVERED SECURITIES; SMALL
CORPORATE OFFERING REGISTRATION.

(a) Federal covered securities.

(1) Required filing of records. With respect to a federal covered security, as defined
in Section 18(b)(2) of the Securities Act of 1933 (15 U.S.C. Section 77r(b)(2)), that is not
otherwise exempt under sections 80A.45 through 80A.47, a rule adopted or order issued
under this chapter may require the filing of any or all of the following records:

(A) before the initial offer of a federal covered security in this state, all records that are
part of a federal registration statement filed with the Securities and Exchange Commission
under the Securities Act of 1933 and a consent to service of process complying with section
80A.88 signed by the issuer;

(B) after the initial offer of the federal covered security in this state, all records that are
part of an amendment to a federal registration statement filed with the Securities and
Exchange Commission under the Securities Act of 1933; and

(C) to the extent necessary or appropriate to compute fees, a report of the value of the
federal covered securities sold or offered to persons present in this state, if the sales data
are not included in records filed with the Securities and Exchange Commission.

(2) Notice filing effectiveness and renewal. A notice filing under subsection (a) is
effective for one year commencing on the later of the notice filing or the effectiveness of
the offering filed with the Securities and Exchange Commission. On or before expiration,
the issuer may renew a notice filing by filing a copy of those records filed by the issuer with
the Securities and Exchange Commission that are required by rule or order under this chapter
to be filed. A previously filed consent to service of process complying with section 80A.88
may be incorporated by reference in a renewal. A renewed notice filing becomes effective
upon the expiration of the filing being renewed.

(3) Notice filings for federal covered securities under section 18(b)(4)(D). With
respect to a security that is a federal covered security under Section 18(b)(4)(D) of the
Securities Act of 1933 (15 U.S.C. Section 77r(b)(4)(D)), a rule under this chapter may
require a notice filing by or on behalf of an issuer to include a copy of Form D, including
the Appendix, as promulgated by the Securities and Exchange Commission, and a consent
to service of process complying with section 80A.88 signed by the issuer not later than 15
days after the first sale of the federal covered security in this state.

(4) Stop orders. Except with respect to a federal security under Section 18(b)(1) of the
Securities Act of 1933 (15 U.S.C. Section 77r(b)(1)), if the administrator finds that there is
a failure to comply with a notice or fee requirement of this section, the administrator may
issue a stop order suspending the offer and sale of a federal covered security in this state.
If the deficiency is corrected, the stop order is void as of the time of its issuance and no
penalty may be imposed by the administrator.

(b) Small corporation offering registration.

(1) Registration required. A security meeting the conditions set forth in this section
may be registered as set forth in this section.

(2) Availability. Registration under this section is available only to the issuer of securities
and not to an affiliate of the issuer or to any other person for resale of the issuer's securities.
The issuer must be organized under the laws of one of the states or possessions of the United
States. The securities offered must be exempt from registration under the Securities Act of
1933 pursuant to Rule 504 of Regulation D (15 U.S.C. Section 77c).

(3) Disqualification. Registration under this section is not available to any of the
following issuers:

(A) an issuer subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934;

(B) an investment company;

(C) a development stage company that either has no specific business plan or purpose
or has indicated that its business plan is to engage in a merger or acquisition with an
unidentified company or companies or other entity or person;

(D) an issuer if the issuer or any of its predecessors, officers, directors, governors,
partners, ten percent stock or equity holders, promoters, or any selling agents of the securities
to be offered, or any officer, director, governor, or partner of the selling agent:

(i) has filed a registration statement that is the subject of a currently effective registration
stop order entered under a federal or state securities law within five years before the filing
of the small corporate offering registration application;

(ii) has been convicted within five years before the filing of the small corporate offering
registration application of a felony or misdemeanor in connection with the offer, purchase,
or sale of a security or a felony involving fraud or deceit, including, but not limited to,
forgery, embezzlement, obtaining money under false pretenses, larceny, or conspiracy to
defraud;

(iii) is currently subject to a state administrative enforcement order or judgment entered
by a state securities administrator or the Securities and Exchange Commission within five
years before the filing of the small corporate offering registration application, or is subject
to a federal or state administrative enforcement order or judgment in which fraud or deceit,
including, but not limited to, making untrue statements of material facts or omitting to state
material facts, was found and the order or judgment was entered within five years before
the filing of the small corporate offering registration application;

(iv) is currently subject to an order, judgment, or decree of a court of competent
jurisdiction temporarily restraining or enjoining, or is subject to an order, judgment, or
decree of a court of competent jurisdiction permanently restraining or enjoining the party
from engaging in or continuing any conduct or practice in connection with the purchase or
sale of any security or involving the making of a false filing with a state or with the Securities
and Exchange Commission entered within five years before the filing of the small corporate
offering registration application; or

(v) is subject to a state's administrative enforcement order, or judgment that prohibits,
denies, or revokes the use of an exemption for registration in connection with the offer,
purchase, or sale of securities,

(I) except that clauses (i) to (iv) do not apply if the person subject to the disqualification
is duly licensed or registered to conduct securities-related business in the state in which the
administrative order or judgment was entered against the person or if the dealer employing
the party is licensed or registered in this state and the form BD filed in this state discloses
the order, conviction, judgment, or decree relating to the person, and

(II) except that the disqualification under this subdivision is automatically waived if the
state securities administrator or federal agency that created the basis for disqualification
determines upon a showing of good cause that it is not necessary under the circumstances
to deny the registration.

(4) Filing and effectiveness of registration statement. A small corporate offering
registration statement must be filed with the administrator. If no stop order is in effect and
no proceeding is pending under section 80A.54, such registration statement shall become
effective automatically at the close of business on the 20th day after filing of the registration
statement or the last amendment of the registration statement or at such earlier time as the
administrator may designate by rule or order. For the purposes of a nonissuer transaction,
other than by an affiliate of the issuer, all outstanding securities of the same class identified
in the small corporate offering registration statement as a security registered under this
chapter are considered to be registered while the small corporate offering registration
statement is effective. A small corporate offering registration statement is effective for one
year after its effective date or for any longer period designated in an order under this chapter.
A small corporate offering registration statement may be withdrawn only with the approval
of the administrator.

(5) Contents of registration statement. A small corporate offering registration statement
under this section shall be on Form U-7, including exhibits required by the instructions
thereto, as adopted by the North American Securities Administrators Association, or such
alternative form as may be designated by the administrator by rule or order and must include:

(A) a consent to service of process complying with section 80A.88;

(B) a statement of the type and amount of securities to be offered and the amount of
securities to be offered in this state;

(C) a specimen or copy of the security being registered, unless the security is
uncertificated, a copy of the issuer's articles of incorporation and bylaws or their substantial
equivalents in effect, and a copy of any indenture or other instrument covering the security
to be registered;

(D) a signed or conformed copy of an opinion of counsel concerning the legality of the
securities being registered which states whether the securities, when sold, will be validly
issued, fully paid, and nonassessable and, if debt securities, binding obligations of the issuer;

(E) the states (i) in which the securities are proposed to be offered; (ii) in which a
registration statement or similar filing has been made in connection with the offering
including information as to effectiveness of each such filing; and (iii) in which a stop order
or similar proceeding has been entered or in which proceedings or actions seeking such an
order are pending;

(F) a copy of the offering document proposed to be delivered to offerees; and

(G) a copy of any other pamphlet, circular, form letter, advertisement, or other sales
literature intended as of the effective date to be used in connection with the offering and
any solicitation of interest used in compliance with section 80A.46(17)(B).

(6) Copy to purchaser. A copy of the offering document as filed with the administrator
must be delivered to each person purchasing the securities prior to sale of the securities to
such person.

new text begin (c) Offering limit. Offers and sales of securities under a small corporate offering
registration as set forth in this section are allowed up to the limit prescribed by Code of
Federal Regulations, title 17, part 230.504(b)(2), as amended.
new text end

Sec. 68.

new text begin [332.71] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 332.71 to 332.75, the definitions in
this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Coerced debt. new text end

new text begin (a) "Coerced debt" means all or a portion of debt in a debtor's
name that has been incurred as a result of:
new text end

new text begin (1) the use of the debtor's personal information without the debtor's knowledge,
authorization, or consent;
new text end

new text begin (2) the use or threat of force, intimidation, undue influence, harassment, fraud, deception,
coercion, or other similar means against the debtor; or
new text end

new text begin (3) economic abuse perpetrated against the debtor.
new text end

new text begin (b) Coerced debt does not include secured debt.
new text end

new text begin Subd. 3. new text end

new text begin Creditor. new text end

new text begin "Creditor" means a person, or the person's successor, assignee, or
agent, claiming to own or have the right to collect a debt owed by the debtor.
new text end

new text begin Subd. 4. new text end

new text begin Debtor. new text end

new text begin "Debtor" means a person who (1) is a victim of domestic abuse,
harassment, or sex or labor trafficking, and (2) owes coerced debt.
new text end

new text begin Subd. 5. new text end

new text begin Documentation. new text end

new text begin "Documentation" means a writing that identifies a debt or a
portion of a debt as coerced debt, describes the circumstances under which the coerced debt
was incurred, and takes the form of:
new text end

new text begin (1) a police report;
new text end

new text begin (2) a Federal Trade Commission identity theft report;
new text end

new text begin (3) an order in a dissolution proceeding under chapter 518 that declares that one or more
debts are coerced; or
new text end

new text begin (4) a sworn written certification.
new text end

new text begin Subd. 6. new text end

new text begin Domestic abuse. new text end

new text begin "Domestic abuse" has the meaning given in section 518B.01,
subdivision 2.
new text end

new text begin Subd. 7. new text end

new text begin Economic abuse. new text end

new text begin "Economic abuse" means behavior in the context of a domestic
relationship that controls, restrains, restricts, impairs, or interferes with the ability of a victim
of domestic abuse, harassment, or sex or labor trafficking to acquire, use, or maintain
economic resources, including but not limited to:
new text end

new text begin (1) withholding or restricting access to, or the acquisition of, money, assets, credit, or
financial information;
new text end

new text begin (2) interfering with the victim's ability to work and earn wages; or
new text end

new text begin (3) exerting undue influence over a person's financial and economic behavior or decisions.
new text end

new text begin Subd. 8. new text end

new text begin Harassment. new text end

new text begin "Harassment" has the meaning given in section 609.748.
new text end

new text begin Subd. 9. new text end

new text begin Labor trafficking. new text end

new text begin "Labor trafficking" has the meaning given in section 609.281,
subdivision 5.
new text end

new text begin Subd. 10. new text end

new text begin Qualified third-party professional. new text end

new text begin "Qualified third-party professional"
means:
new text end

new text begin (1) a domestic abuse advocate, as defined under section 595.02, subdivision 1, paragraph
(l);
new text end

new text begin (2) a sexual assault counselor, as defined under section 595.02, subdivision 1, paragraph
(k);
new text end

new text begin (3) a licensed health care provider, mental health care provider, social worker, or marriage
and family therapist; or
new text end

new text begin (4) a nonprofit organization in Minnesota that provides direct assistance to victims of
domestic abuse, sexual assault, or sex or labor trafficking.
new text end

new text begin Subd. 11. new text end

new text begin Sex trafficking. new text end

new text begin "Sex trafficking" has the meaning given in section 609.321,
subdivision 7a.
new text end

new text begin Subd. 12. new text end

new text begin Sworn written certification. new text end

new text begin "Sworn written certification" means a statement
by a qualified third-party professional in the following form:
new text end

new text begin CERTIFICATION OF QUALIFIED THIRD-PARTY PROFESSIONAL
new text end

new text begin I, .................... (name of qualified third-party professional), do hereby certify under
penalty of perjury as follows:
new text end

new text begin 1. I am a licensed health care provider, mental health care provider, social worker,
marriage and family therapist, domestic abuse advocate, as that term is defined in Minnesota
Statutes, section 595.02, subdivision 1, paragraph (l), or sexual assault counselor, as that
term is defined in Minnesota Statutes, section 595.02, subdivision 1, paragraph (k), or a
staff member of a nonprofit organization that provides direct assistance to victims of domestic
abuse, sexual assault, or sex or labor trafficking, who has had in-person contact or
face-to-face contact through an electronic medium with .................... (name of debtor).
new text end

new text begin 2. Based on my professional interactions with the debtor and information presented to
me in my professional capacity, I have a reasonable basis to believe .................... (name of
debtor) is a victim of domestic abuse, harassment, sex trafficking or labor trafficking and
has incurred all or a portion of debt that is coerced debt, as that term is defined in Minnesota
Statutes, section 332.71, subdivision 2.
new text end

new text begin 3. Based on my professional interactions with the debtor and on information presented
to me, I have reason to believe that the circumstances under which the coerced debt was
incurred are as follows:
new text end

new text begin 4. The following debts or portions of the debts have been identified to me as coerced:
new text end

new text begin I attest that the foregoing is true and correct.
new text end

new text begin (Printed name of qualified third party)
new text end

new text begin (Signature of qualified third party)
new text end

new text begin (Business address and business telephone)
new text end

new text begin (Date)
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and
applies to all debts incurred on or after that date.
new text end

Sec. 69.

new text begin [332.72] COERCED DEBT PROHIBITED.
new text end

new text begin A person is prohibited from causing another person to incur coerced debt.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and
applies to all debts incurred on or after that date.
new text end

Sec. 70.

new text begin [332.73] NOTICE TO CREDITOR OF COERCED DEBT.
new text end

new text begin Subdivision 1. new text end

new text begin Notification. new text end

new text begin (a) Before taking an affirmative action under section 332.74,
a debtor must, by certified mail, notify a creditor that the debt or a portion of a debt on
which the creditor demands payment is coerced debt and request that the creditor cease all
collection activity on the coerced debt. The notification and request must be in writing and
include documentation. The creditor, within 30 days of the date the notification and request
is received, must notify the debtor in writing of the creditor's decision to either immediately
cease all collection activity or continue to pursue collection.
new text end

new text begin (b) If a creditor ceases collection but subsequently decides to resume collection activity,
the creditor must notify the debtor ten days prior to the date the collection activity resumes.
new text end

new text begin (c) A debtor must not proceed with an action under section 332.74 until the 30-day
period provided under paragraph (a) has expired.
new text end

new text begin Subd. 2. new text end

new text begin Sale or assignment of coerced debt. new text end

new text begin A creditor may sell or assign a debt to
another party if the creditor selling or assigning the debt includes notification to the buyer
or assignee that the debtor has asserted the debt is coerced debt.
new text end

new text begin Subd. 3. new text end

new text begin No inference upon cessation of collection activity. new text end

new text begin The fact that a creditor
ceases collection activity under this section or section 332.74 does not create an inference
or presumption regarding the validity or invalidity of a debt for which a debtor is liable or
not liable. The exercise or nonexercise of rights under this section is not a waiver of any
other debtor or creditor rights or defenses.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and
applies to all debts incurred on or after that date.
new text end

Sec. 71.

new text begin [332.74] DEBTOR REMEDIES.
new text end

new text begin Subdivision 1. new text end

new text begin Right to petition for declaration and injunction. new text end

new text begin A debtor alleging
violation of section 332.72 may petition for equitable relief in the district court in the county
where the debtor lives or where the coerced debt was incurred. The petition must include:
new text end

new text begin (1) the notice to the creditor required under section 332.73, subdivision 1;
new text end

new text begin (2) consistent with Rule 11 of the Minnesota Rules of General Practice, information
identifying (i) the account or accounts associated with the coerced debt, and (ii) the person
in whose name the debt was incurred; and
new text end

new text begin (3) the identity and, if known, contact information of the person who caused the debtor
to incur coerced debt, unless the debtor signs a sworn statement that disclosing the
information is likely to result in domestic abuse or other harm to the debtor, the debtor's
children, parents, other relatives, or a family pet.
new text end

new text begin Subd. 2. new text end

new text begin Procedural safeguards. new text end

new text begin The court must take appropriate steps necessary to
prevent abuse of the debtor or to the debtor, the debtor's children, parents, other relatives,
or a family pet. For purposes of this subdivision, appropriate steps include but are not limited
to sealing the file, marking the file as confidential, redacting personally identifiable
information about the debtor, and directing that any deposition or evidentiary hearing be
conducted remotely.
new text end

new text begin Subd. 3. new text end

new text begin Relief. new text end

new text begin (a) If a debtor shows by a preponderance of the evidence that the debtor
has been aggrieved by a violation of section 332.72 and the debtor has incurred coerced
debt, the debtor is entitled to one or more of the following:
new text end

new text begin (1) a declaratory judgment that the debt or portion of a debt is coerced debt;
new text end

new text begin (2) an injunction prohibiting the creditor from (i) holding or attempting to hold the debtor
liable for the debt or portion of a debt, or (ii) enforcing a judgment related to the coerced
debt; and
new text end

new text begin (3) an order dismissing any cause of action brought by the creditor to enforce or collect
the coerced debt from the debtor or, if only a portion of the debt is established as coerced
debt, an order directing that the judgment, if any, in the action be amended to reflect only
the portion of the debt that is not coerced debt.
new text end

new text begin (b) If the court orders relief for the debtor under paragraph (a), the court, after the
creditor's motion has been served by United States mail to the last known address of the
person who violated section 332.72, must issue a judgment in favor of the creditor against
the person in the amount of the debt or a portion of the debt.
new text end

new text begin (c) This subdivision applies regardless of the judicial district in which the creditor's
action or the debtor's petition was filed.
new text end

new text begin Subd. 4. new text end

new text begin Affirmative defense. new text end

new text begin In an action against a debtor to satisfy a debt, it is an
affirmative defense that the debtor incurred coerced debt.
new text end

new text begin Subd. 5. new text end

new text begin Burden. new text end

new text begin In any affirmative action taken under subdivision 1 or any affirmative
defense asserted in subdivision 3, the debtor bears the burden to show by a preponderance
of the evidence that the debtor incurred coerced debt. There is a presumption that the debtor
has incurred coerced debt if the person alleged to have caused the debtor to incur the coerced
debt has been criminally convicted, entered a guilty plea, or entered an Alford plea under
section 609.27, 609.282, 609.322, or 609.527.
new text end

new text begin Subd. 6. new text end

new text begin Statute of limitations tolled. new text end

new text begin (a) The statute of limitations under section 541.05
is tolled during the pendency of a proceeding instituted under this section.
new text end

new text begin (b) A creditor is prohibited from filing a collection action regarding a debt that is the
subject of a proceeding instituted under this section while the proceeding is pending.
new text end

new text begin (c) If a debtor commences a proceeding under this section while a collection action is
pending against the debtor regarding a debt that is subject to the proceeding, the court must
immediately stay the collection action pending the disposition of the proceeding under this
section.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and
applies to all debts incurred on or after that date.
new text end

Sec. 72.

new text begin [332.75] CREDITOR REMEDIES.
new text end

new text begin Nothing in sections 332.71 to 332.74 diminishes the rights of a creditor to seek payment
recovery for a coerced debt from the person who caused the debtor to incur the coerced
debt.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and
applies to all debts incurred on or after that date.
new text end

Sec. 73. new text begin UNAUDITED FINANCIAL STATEMENTS; RULEMAKING.
new text end

new text begin The commissioner of commerce shall amend Minnesota Rules, part 2876.3021, subpart
2, to remove the prohibition on use of unaudited financial statements if the aggregate amount
of all previous sales of securities by the applicant, exclusive of debt financing with banks
and similar commercial lenders, exceeds $1,000,000. The commissioner of commerce may
use the good cause exemption under Minnesota Statutes, section 14.388, subdivision 1,
clause (3), to amend the rule under this section, and Minnesota Statutes, section 14.386,
does not apply except as provided under Minnesota Statutes, section 14.388.
new text end

Sec. 74. new text begin MINNESOTA COUNCIL ON ECONOMIC EDUCATION; GRANTS.
new text end

new text begin (a) The grants provided under article 1, section 3, to the Minnesota Council on Economic
Education must be used by the council to:
new text end

new text begin (1) provide professional development to Minnesota teachers of courses or content related
to personal finance or consumer protection for students in grades 9 through 12;
new text end

new text begin (2) support the direct-to-student ancillary personal finance programs that Minnesota
teachers supervise and coach or that the Minnesota Council on Economic Education delivers
directly to students; and
new text end

new text begin (3) provide support to geographically diverse affiliated higher education-based centers
for economic education engaged in financial literacy education as it pertains to financial
literacy education initiatives, including those based at Minnesota State University Mankato,
St. Cloud State University, and St. Catherine University, as their work relates to activities
in clauses (1) and (2).
new text end

new text begin (b) The Minnesota Council on Economic Education must prepare and submit reports to
the commissioner of education in the form and manner prescribed by the commissioner
that:
new text end

new text begin (1) describe the number and type of in-person and online teacher professional
development opportunities provided by the Minnesota Council on Economic Education or
its affiliated state centers;
new text end

new text begin (2) list the content, length, and location of the programs;
new text end

new text begin (3) identify the number of preservice and licensed teachers receiving professional
development through each of these opportunities;
new text end

new text begin (4) summarize evaluations of professional opportunities for teachers; and
new text end

new text begin (5) list the number, types, and summary evaluations of the direct-to-student ancillary
personal finance programs that are supported with funds from the grant.
new text end

new text begin (c) By February 15 of each year following the receipt of a grant, the Minnesota Council
on Economic Education must provide a mid-year report to the commissioner of education
and, on August 15 of each year following receipt of a grant, the Minnesota Council on
Economic Education must prepare a year-end report according to the requirements of
paragraph (b). The reports must be prepared and filed according to Minnesota Statutes,
section 3.195. The commissioner may request additional information as necessary.
new text end

Sec. 75. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2022, sections 53B.01; 53B.02; 53B.03; 53B.04; 53B.05; 53B.06;
53B.07; 53B.08; 53B.09; 53B.10; 53B.11; 53B.12; 53B.13; 53B.14; 53B.15; 53B.16;
53B.17; 53B.18; 53B.19; 53B.20; 53B.21; 53B.22; 53B.23; 53B.24; 53B.25; 53B.26; and
53B.27, subdivisions 1, 2, 5, 6, and 7, new text end new text begin are repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2022, section 48.10, new text end new text begin is repealed.
new text end

new text begin (c) new text end new text begin Minnesota Rules, parts 2675.2610, subparts 1, 3, and 4; 2675.2620, subparts 1, 2, 3,
4, and 5; and 2675.2630, subpart 3, new text end new text begin are repealed.
new text end

ARTICLE 4

COMMERCIAL REGULATION AND CONSUMER PROTECTION

Section 1.

new text begin [13.6505] ATTORNEY GENERAL DATA CODED ELSEWHERE.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin The sections referred to in this section are codified outside this
chapter. Those sections classify attorney general data as other than public, place restrictions
on access to government data, or involve data sharing.
new text end

new text begin Subd. 2. new text end

new text begin Data protection impact assessments. new text end

new text begin A data protection impact assessment
collected or maintained by the attorney general under section 325O.04 is classified under
section 325O.04, subdivision 4.
new text end

Sec. 2.

Minnesota Statutes 2022, section 53C.01, is amended by adding a subdivision to
read:

new text begin Subd. 4a. new text end

new text begin Global positioning system starter interrupt device. new text end

new text begin "Global positioning
system starter interrupt device" or "GPS starter interrupt device" means a device installed
on a motor vehicle by a motor vehicle dealer that enables an individual who is not in
possession of the motor vehicle to remotely disable the motor vehicle's ignition. GPS starter
interrupt device includes a device commonly referred to as a fuel or ignition kill switch.
new text end

Sec. 3.

Minnesota Statutes 2022, section 53C.01, subdivision 12c, is amended to read:

Subd. 12c.

Theft deterrent device.

"Theft deterrent device" means the following devices:

(1) a vehicle alarm system;

(2) a window etch product;

(3) a body part marking product;

(4) a steering lock; new text begin or
new text end

(5) a pedal or ignition lock deleted text begin ; or
deleted text end

deleted text begin (6) a fuel or ignition kill switch deleted text end .

Sec. 4.

Minnesota Statutes 2022, section 53C.08, subdivision 1a, is amended to read:

Subd. 1a.

Disclosures required.

Prior to the execution of a retail installment contract,
the seller shall provide to a buyer, and obtain the buyer's signature on, a written disclosure
that sets forth the following information:

(1) a description and the total price of all items sold in the following categories if the
contract includes a charge for the item:

(i) a service contract;

(ii) an insurance product;

(iii) a debt cancellation agreement;

(iv) a theft deterrent device; or

(v) a surface protection product;

(2) new text begin whether a GPS starter interrupt device is installed on the motor vehicle, regardless
of whether the contract includes a charge for the GPS starter interrupt device;
new text end

new text begin (3) new text end the amount that would be calculated under the contract as the regular installment
payment if charges for the items referenced under clause (1) are not included in the contract;

deleted text begin (3) deleted text end new text begin (4) new text end the amount that would be calculated under the contract as the regular installment
payment if charges for the items referenced under clause (1) are included in the contract;
and

deleted text begin (4) deleted text end new text begin (5) new text end the disclosures required under this subdivision must be in at least ten-point type
and must be contained in a single document that is separate from the retail installment
contract and any other vehicle purchase documents.

Sec. 5.

Minnesota Statutes 2022, section 80E.041, subdivision 4, is amended to read:

Subd. 4.

Retail rate for labor.

(a) Compensation for warranty labor must equal the
dealer's effective nonwarranty labor rate multiplied by the time deleted text begin allowances recognized by
the manufacturer to compensate its dealers for warranty work deleted text end new text begin guide used by the dealer for
nonwarranty customer-paid service repair orders new text end . new text begin If no time guide exists for a warranty
repair, compensation for warranty labor must equal the dealer's effective nonwarranty labor
rate multiplied by the time actually spent to complete the repair order and must not be less
than the time charged to retail customers for the same or similar work performed. new text end The
effective nonwarranty labor rate is determined by dividing the total customer labor charges
for qualifying nonwarranty repairs in the repair orders submitted under subdivision 2 by
the total number of labor hours that generated those sales. Compensation for warranty labor
must include deleted text begin reasonable deleted text end new text begin all new text end diagnostic time for repairs performed under this section new text begin , including
but not limited to all time spent communicating with the manufacturer's technical assistance
or external manufacturer source in order to provide a warranty repair, and must not be less
than the time charged to retail customers for the same or similar work performed new text end .

(b) A manufacturer may disapprove a dealer's effective nonwarranty labor rate if:

(1) the disapproval is provided to the dealer in writing;

(2) the disapproval is sent to the dealer within 30 days of the submission of the effective
nonwarranty labor rate by the dealer to the manufacturer;

(3) the disapproval includes a reasonable substantiation that the effective nonwarranty
labor rate submission is inaccurate, incomplete, or unreasonable in light of a comparison
to the retail rate charged by other similarly situated franchised motor vehicle dealers in a
comparable geographic area in the state offering the same line-make vehicles; and

(4) the manufacturer proposes an adjustment of the effective nonwarranty labor rate.

(c) If a manufacturer fails to approve or disapprove the rate within this time period, the
rate is approved. If a manufacturer disapproves a dealer's effective nonwarranty labor rate,
and the dealer does not agree to the manufacturer's proposed adjustment, the parties shall
use the manufacturer's internal dispute resolution procedure, if any, within a reasonable
time after the dealer notifies the manufacturer of their failure to agree. If the manufacturer's
internal dispute resolution procedure is unsuccessful, or if the procedure is not implemented
within a reasonable time after the dealer notifies the manufacturer of their failure to agree,
the dealer may use the civil remedies available under section 80E.17. A dealer must file a
civil suit under section 80E.17, as permitted by this subdivision, within 60 days of receiving
the manufacturer's proposed adjustment to the effective nonwarranty labor rate, or the
conclusion of the manufacturer's internal dispute resolution procedure, whichever is later.

Sec. 6.

Minnesota Statutes 2022, section 325D.01, subdivision 5, is amended to read:

Subd. 5.

Cost.

The term "cost," as applied to the wholesale or retail vendor, means:

(1) the actual current delivered invoice or replacement cost, whichever is lower, without
deducting customary cash discounts, plus any excise or sales taxes imposed on such
commodity, goods, wares or merchandise subsequent to the purchase thereof and prior to
the resale thereof, plus the cost of doing business at that location by the vendor; new text begin and
new text end

(2) where a manufacturer publishes a list price and discounts, in determining such "cost"
the manufacturer's published list price then currently in effect, less the published trade
discount but without deducting the customary cash discount, plus any excise or sales taxes
imposed on such commodity, goods, wares or merchandise subsequent to the purchase
thereof and prior to the resale thereof, plus the cost of doing business by the vendor shall
be prima facie evidence of "cost" deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (3) for purposes of gasoline offered for sale by way of posted price or indicating meter
by a retailer, at a retail location where gasoline is dispensed into passenger automobiles and
trucks by the consumer, "cost" means the average terminal price on the day, at the terminal
from which the most recent supply of gasoline delivered to the retail location was acquired,
plus all applicable state and federal excise taxes and fees, plus the lesser of six percent or
eight cents.
deleted text end

Sec. 7.

Minnesota Statutes 2022, section 325D.44, subdivision 1, is amended to read:

Subdivision 1.

Acts constituting.

A person engages in a deceptive trade practice when,
in the course of business, vocation, or occupation, the person:

(1) passes off goods or services as those of another;

(2) causes likelihood of confusion or of misunderstanding as to the source, sponsorship,
approval, or certification of goods or services;

(3) causes likelihood of confusion or of misunderstanding as to affiliation, connection,
or association with, or certification by, another;

(4) uses deceptive representations or designations of geographic origin in connection
with goods or services;

(5) represents that goods or services have sponsorship, approval, characteristics,
ingredients, uses, benefits, or quantities that they do not have or that a person has a
sponsorship, approval, status, affiliation, or connection that the person does not have;

(6) represents that goods are original or new if they are deteriorated, altered,
reconditioned, reclaimed, used, or secondhand;

(7) represents that goods or services are of a particular standard, quality, or grade, or
that goods are of a particular style or model, if they are of another;

(8) disparages the goods, services, or business of another by false or misleading
representation of fact;

(9) advertises goods or services with intent not to sell them as advertised;

(10) advertises goods or services with intent not to supply reasonably expectable public
demand, unless the advertisement discloses a limitation of quantity;

(11) makes false or misleading statements of fact concerning the reasons for, existence
of, or amounts of price reductions;

(12) in attempting to collect delinquent accounts, implies or suggests that health care
services will be withheld in an emergency situation; deleted text begin or
deleted text end

new text begin (13) engages in (i) unfair methods of competition, or (ii) unfair or unconscionable acts
or practices; or
new text end

deleted text begin (13) deleted text end new text begin (14) new text end engages in any other conduct which similarly creates a likelihood of confusion
or of misunderstanding.

Sec. 8.

Minnesota Statutes 2022, section 325D.44, subdivision 2, is amended to read:

Subd. 2.

Proof.

new text begin (a) new text end In order to prevail in an action under sections 325D.43 to 325D.48,
a complainant need not prove competition between the parties or actual confusion or
misunderstanding.

new text begin (b) For purposes of subdivision 1, clause (13), the standard of proof provided under
section 325F.69, subdivision 7, applies.
new text end

Sec. 9.

new text begin [325E.72] DIGITAL FAIR REPAIR.
new text end

new text begin Subdivision 1. new text end

new text begin Short title. new text end

new text begin This act may be cited as the "Digital Fair Repair Act."
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Authorized repair provider" means an individual or business who is unaffiliated
with an original equipment manufacturer and who has: (1) an arrangement with the original
equipment manufacturer, for a definite or indefinite period, under which the original
equipment manufacturer grants to the individual or business a license to use a trade name,
service mark, or other proprietary identifier to offer diagnostic, maintenance, or repair
services for digital electronic equipment under the name of the original equipment
manufacturer; or (2) an arrangement with the original equipment manufacturer to offer
diagnostic, maintenance, or repair services for digital electronic equipment on behalf of the
original equipment manufacturer. An original equipment manufacturer that offers diagnostic,
maintenance, or repair services for the original equipment manufacturer's digital electronic
equipment is considered an authorized repair provider with respect to the digital electronic
equipment if the original equipment manufacturer does not have an arrangement described
in this paragraph with an unaffiliated individual or business.
new text end

new text begin (c) "Digital electronic equipment" or "equipment" means any product that depends, in
whole or in part, on digital electronics embedded in or attached to the product in order for
the product to function.
new text end

new text begin (d) "Documentation" means a manual, diagram, reporting output, service code description,
schematic diagram, or similar information provided to an authorized repair provider to
facilitate diagnostic, maintenance, or repair services for digital electronic equipment.
new text end

new text begin (e) "Embedded software" means any programmable instructions provided on firmware
delivered with digital electronic equipment, or with a part for the equipment, in order to
operate the equipment. Embedded software includes all relevant patches and fixes made by
the manufacturer of the equipment or part in order to operate the equipment.
new text end

new text begin (f) "Fair and reasonable terms" means, with respect to:
new text end

new text begin (1) parts offered by an original equipment manufacturer:
new text end

new text begin (i) costs that are fair to both parties, considering the agreed-upon conditions, promised
quality, and timeliness of delivery; and
new text end

new text begin (ii) terms that do not impose on an owner or an independent repair provider:
new text end

new text begin (A) a substantial obligation to use or restrict the use of the part to diagnose, maintain,
or repair agricultural equipment sold, leased, or otherwise supplied by the original equipment
manufacturer, including a condition that the owner or independent repair provider become
an authorized repair provider of the original equipment manufacturer; or
new text end

new text begin (B) a requirement that a part be registered, paired with, or approved by the original
equipment manufacturer or an authorized repair provider before the part is operational or
prohibit an original equipment manufacturer from imposing any additional cost or burden
that is not reasonably necessary or is designed to be an impediment on the owner or
independent repair provider;
new text end

new text begin (2) tools, software, and documentation offered by an original equipment manufacturer:
new text end

new text begin (i) costs that are equivalent to the lowest actual cost for which the original equipment
manufacturer offers the tool, software, or documentation to an authorized repair provider,
including any discount, rebate, or other financial incentive offered to an authorized repair
provider; and
new text end

new text begin (ii) terms that are equivalent to the most favorable terms under which an original
equipment manufacturer offers the tool, software, or documentation to an authorized repair
provider, including the methods and timeliness of delivery of the tool, software, or
documentation, do not impose on an owner or an independent repair provider:
new text end

new text begin (A) a substantial obligation to use or restrict the use of the tool, software, or
documentation to diagnose, maintain, or repair agricultural equipment sold, leased, or
otherwise supplied by the original equipment manufacturer, including a condition that the
owner or independent repair provider become an authorized repair provider of the original
equipment manufacturer; or
new text end

new text begin (B) a requirement that a tool be registered, paired with, or approved by the original
equipment manufacturer or an authorized repair provider before the part or tool is operational;
and
new text end

new text begin (3) documentation offered by an original equipment manufacturer: that the documentation
is made available by the original equipment manufacturer at no charge, except that when
the documentation is requested in physical printed form, a charge may be included for the
reasonable actual costs of preparing and sending the copy.
new text end

new text begin (g) "Firmware" means a software program or set of instructions programmed on digital
electronic equipment, or on a part of the equipment, in order to allow the equipment or part
to communicate with other computer hardware.
new text end

new text begin (h) "Independent repair provider" means an individual or business operating in Minnesota
that: (1) does not have an arrangement described in paragraph (b) with an original equipment
manufacturer; (2) is not affiliated with any individual or business that has an arrangement
described in paragraph (b); and (3) is engaged in providing diagnostic, maintenance, or
repair services for digital electronic equipment. An original equipment manufacturer or,
with respect to the original equipment manufacturer, an individual or business that has an
arrangement with the original equipment manufacturer or is affiliated with an individual or
business that has an arrangement with that original equipment manufacturer, is considered
an independent repair provider for purposes of the instances the original equipment
manufacturer engages in diagnostic, maintenance, or repair services for digital electronic
equipment that is not manufactured by or sold under the name of the original equipment
manufacturer.
new text end

new text begin (i) "Manufacturer of motor vehicle equipment" means a business engaged in the business
of manufacturing or supplying components used to manufacture, maintain, or repair a motor
vehicle.
new text end

new text begin (j) "Motor vehicle" means a vehicle that is: (1) designed to transport persons or property
on a street or highway; and (2) certified by the manufacturer under (i) all applicable federal
safety and emissions standards, and (ii) all requirements for distribution and sale in the
United States. Motor vehicle does not include a motorcycle, a recreational vehicle, or an
auto home equipped for habitation.
new text end

new text begin (k) "Motor vehicle dealer" means an individual or business that, in the ordinary course
of business: (1) is engaged in the business of selling or leasing new motor vehicles to an
individual or business pursuant to a franchise agreement; (2) has obtained a license under
section 168.27; and (3) is engaged in providing diagnostic, maintenance, or repair services
for motor vehicles or motor vehicle engines pursuant to a franchise agreement.
new text end

new text begin (l) "Motor vehicle manufacturer" means a business engaged in the business of
manufacturing or assembling new motor vehicles.
new text end

new text begin (m) "Original equipment manufacturer" means a business engaged in the business of
selling or leasing to any individual or business new digital electronic equipment manufactured
by or on behalf of the original equipment manufacturer.
new text end

new text begin (n) "Owner" means an individual or business that owns or leases digital electronic
equipment purchased or used in Minnesota.
new text end

new text begin (o) "Part" means any replacement part, either new or used, made available by an original
equipment manufacturer to facilitate the maintenance or repair of digital electronic equipment
manufactured or sold by the original equipment manufacturer.
new text end

new text begin (p) "Trade secret" has the meaning given in section 325C.01, subdivision 5.
new text end

new text begin Subd. 3. new text end

new text begin Requirements. new text end

new text begin (a) For digital electronic equipment and parts for the equipment
sold or used in Minnesota, an original equipment manufacturer must make available to any
independent repair provider or to the owner of digital electronic equipment manufactured
by or on behalf of, or sold by, the original equipment manufacturer, on fair and reasonable
terms, documentation, parts, and tools, inclusive of any updates to information or embedded
software, for diagnostic, maintenance, or repair purposes. Nothing in this section requires
an original equipment manufacturer to make available a part if the part is no longer available
to the original equipment manufacturer.
new text end

new text begin (b) For equipment that contains an electronic security lock or other security-related
function, the original equipment manufacturer must make available to the owner and to
independent repair providers on fair and reasonable terms any special documentation, tools,
and parts needed to reset the lock or function when disabled in the course of performing
diagnostic, maintenance, or repair services on the equipment. Documentation, tools, and
parts may be made available through appropriate secure release systems.
new text end

new text begin Subd. 4. new text end

new text begin Enforcement by attorney general. new text end

new text begin A violation of this section is an unlawful
practice under section 325D.44. All remedies, penalties, and authority granted to the attorney
general under section 8.31 are available to the attorney general to enforce this section.
new text end

new text begin Subd. 5. new text end

new text begin Limitations. new text end

new text begin (a) Nothing in this section requires an original equipment
manufacturer to divulge a trade secret to an owner or an independent service provider,
except as necessary to provide documentation, parts, and tools on fair and reasonable terms.
new text end

new text begin (b) Nothing in this section alters the terms of any arrangement described in subdivision
2, paragraph (b), including but not limited to the performance or provision of warranty or
recall repair work by an authorized repair provider on behalf of an original equipment
manufacturer pursuant to the arrangement, in force between an authorized repair provider
and an original equipment manufacturer. A provision in the terms of an arrangement
described in subdivision 2, paragraph (b), that purports to waive, avoid, restrict, or limit the
original equipment manufacturer's obligations to comply with this section is void and
unenforceable.
new text end

new text begin (c) Nothing in this section requires an original equipment manufacturer or an authorized
repair provider to provide to an owner or independent repair provider access to information,
other than documentation, that is provided by the original equipment manufacturer to an
authorized repair provider pursuant to the terms of an arrangement described in subdivision
2, paragraph (b).
new text end

new text begin (d) Nothing in this section requires an original equipment manufacturer or authorized
repair provider to make available any parts, tools, or documentation for the purpose of
making modifications to any digital electronic equipment.
new text end

new text begin Subd. 6. new text end

new text begin Exclusions. new text end

new text begin (a) Nothing in this section applies to: (1) a motor vehicle
manufacturer, manufacturer of motor vehicle equipment, or motor vehicle dealer acting in
that capacity; or (2) any product or service of a motor vehicle manufacturer, manufacturer
of motor vehicle equipment, or motor vehicle dealer acting in that capacity.
new text end

new text begin (b) Nothing in this section applies to manufacturers or distributors of a medical device,
as defined in the Federal Food, Drug, and Cosmetic Act under United States Code, title 21,
section 301 et seq., or a digital electronic product or software manufactured for use in a
medical setting, including diagnostic, monitoring, or control equipment or any product or
service that the manufacturer or distributor of a medical device offers.
new text end

new text begin Subd. 7. new text end

new text begin Applicability. new text end

new text begin This section applies to equipment sold or in use on or after
January 1, 2024.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024.
new text end

Sec. 10.

new text begin [325E.80] ABNORMAL MARKET DISRUPTIONS; UNCONSCIONABLY
EXCESSIVE PRICES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this subdivision
have the meanings given.
new text end

new text begin (b) "Essential consumer good or service" means a good or service that is vital and
necessary for the health, safety, and welfare of the public, including without limitation:
food; water; fuel; gasoline; shelter; transportation; health care services; pharmaceuticals;
and medical, personal hygiene, sanitation, and cleaning supplies.
new text end

new text begin (c) "Seller" means a manufacturer, supplier, wholesaler, distributor, or retail seller of
goods and services.
new text end

new text begin (d) "Unconscionably excessive price" means a price that represents a gross disparity
compared to the seller's average price of an essential good or service, offered for sale or
sold in the usual course of business, in the 60-day period before an abnormal market
disruption is declared under subdivision 2. None of the following is an unconscionably
excessive price:
new text end

new text begin (1) a price that is substantially related to an increase in the cost of manufacturing,
obtaining, replacing, providing, or selling a good or service;
new text end

new text begin (2) a price that is no more than 25 percent above the seller's average price during the
60-day period before an abnormal market disruption is declared under subdivision 2;
new text end

new text begin (3) a price that is consistent with the fluctuations in applicable commodity markets or
seasonal fluctuations; or
new text end

new text begin (4) a contract price, or the results of a price formula, that was established before an
abnormal market disruption is declared under subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Abnormal market disruption. new text end

new text begin (a) The governor may by executive order declare
an abnormal market disruption if, in the governor's sole determination, there has been or is
likely to be a substantial and atypical change in the market for an essential consumer good
or service caused by an event or circumstances that result in a declaration of a state of
emergency by the governor. The governor may specify an effective period for a declaration
under this section that is shorter than the effective period for the state of emergency
declaration.
new text end

new text begin (b) The governor's abnormal market disruption declaration must state that the declaration
is activating this section and must specify the geographic area of Minnesota to which the
declaration applies.
new text end

new text begin (c) Unless an earlier date is specified by the governor, an abnormal market disruption
declaration under this subdivision terminates 30 days after the date that the state of emergency
for which it was activated ends.
new text end

new text begin Subd. 3. new text end

new text begin Notice. new text end

new text begin Upon the implementation, renewal, limitation, or termination of an
abnormal market disruption declaration made under subdivision 2: (1) the governor must
immediately post notice on applicable government websites and provide notice to the media;
and (2) the commissioner of commerce must provide notice directly to sellers by any practical
means.
new text end

new text begin Subd. 4. new text end

new text begin Prohibition. new text end

new text begin If the governor declares an abnormal market disruption, a person
is prohibited from selling or offering to sell an essential consumer good or service for an
amount that represents an unconscionably excessive price during the period in which the
abnormal market disruption declaration is effective.
new text end

new text begin Subd. 5. new text end

new text begin Civil penalty. new text end

new text begin A person who is found to have violated this section is subject
to a civil penalty of not more than $1,000 per sale or transaction, with a maximum penalty
of $25,000 per day. No other penalties may be imposed for the same conduct regulated
under this section.
new text end

new text begin Subd. 6. new text end

new text begin Enforcement authority. new text end

new text begin (a) The attorney general may investigate and bring
an action against a seller for an alleged violation of this section.
new text end

new text begin (b) Nothing in this section creates a private cause of action in favor of a person injured
by a violation of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 11.

Minnesota Statutes 2022, section 325F.662, subdivision 2, is amended to read:

Subd. 2.

Written warranty required.

(a) Every used motor vehicle sold by a dealer is
covered by an express warranty which the dealer shall provide to the consumer new text begin in writing new text end .
At a minimum, the express warranty applies for the following terms:

(1) if the used motor vehicle has less than 36,000 miles, the warranty must remain in
effect for at least 60 days or 2,500 miles, whichever comes first;

(2) if the used motor vehicle has 36,000 miles or more, but less than 75,000 miles, the
warranty must remain in effect for at least 30 days or 1,000 miles, whichever comes first new text begin ;
and
new text end

new text begin (3) unless the vehicle is sold by a new motor vehicle dealer, as defined in section 168.27,
subdivision 2, if the used motor vehicle has 75,000 miles or more, the warranty must remain
in effect for at least 15 days or 500 miles, whichever comes first new text end .

(b) The express warranty must require the dealer, in the event of a malfunction, defect,
or failure in a covered part, to repair or replace the covered part, or at the dealer's election,
to accept return of the used motor vehicle from the consumer and provide a refund to the
consumer.

(c) For used motor vehicles with less than 36,000 miles, the dealer's express warranty
shall cover, at minimum, the following parts:

(1) with respect to the engine, all lubricated parts, intake manifolds, engine block, cylinder
head, rotary engine housings, and ring gear;

(2) with respect to the transmission, the automatic transmission case, internal parts, and
the torque converter; or, the manual transmission case, and the internal parts;

(3) with respect to the drive axle, the axle housings and internal parts, axle shafts, drive
shafts and output shafts, and universal joints; but excluding the secondary drive axle on
vehicles, other than passenger vans, mounted on a truck chassis;

(4) with respect to the brakes, the master cylinder, vacuum assist booster, wheel cylinders,
hydraulic lines and fittings, and disc brakes calipers;

(5) with respect to the steering, the steering gear housing and all internal parts, power
steering pump, valve body, piston, and rack;

(6) the water pump;

(7) the externally mounted mechanical fuel pump;

(8) the radiator;

(9) the alternator, generator, and starter.

(d) For used motor vehicles with 36,000 miles or more deleted text begin , but less than 75,000 miles, deleted text end the
dealer's express warranty shall cover, at minimum, the following parts:

(1) with respect to the engine, all lubricated parts, intake manifolds, engine block, cylinder
head, rotary engine housings, and ring gear;

(2) with respect to the transmission, the automatic transmission case, internal parts, and
the torque converter; or, the manual transmission case, and internal parts;

(3) with respect to the drive axle, the axle housings and internal parts, axle shafts, drive
shafts and output shafts, and universal joints; but excluding the secondary drive axle on
vehicles, other than passenger vans, mounted on a truck chassis;

(4) with respect to the brakes, the master cylinder, vacuum assist booster, wheel cylinders,
hydraulic lines and fittings, and disc brake calipers;

(5) with respect to the steering, the steering gear housing and all internal parts, power
steering pump, valve body, and piston;

(6) the water pump;

(7) the externally mounted mechanical fuel pump.

(e)(1) A dealer's obligations under the express warranty remain in effect notwithstanding
the fact that the warranty period has expired, if the consumer promptly notified the dealer
of the malfunction, defect, or failure in the covered part within the specified warranty period
and, within a reasonable time after notification, brings the vehicle or arranges with the dealer
to have the vehicle brought to the dealer for inspection and repair.

(2) If a dealer does not have a repair facility, the dealer shall designate where the vehicle
must be taken for inspection and repair.

(3) In the event the malfunction, defect, or failure in the covered part occurs at a location
which makes it impossible or unreasonable to return the vehicle to the selling dealer, the
consumer may have the repairs completed elsewhere with the consent of the selling dealer,
which consent may not be unreasonably withheld.

(4) Notwithstanding the provisions of this paragraph, a consumer may have nonwarranty
maintenance and nonwarranty repairs performed other than by the selling dealer and without
the selling dealer's consent.

(f) Nothing in this section diminishes the obligations of a manufacturer under an express
warranty issued by the manufacturer. The express warranties created by this section do not
require a dealer to repair or replace a covered part if the repair or replacement is covered
by a manufacturer's new car warranty, or the manufacturer otherwise agrees to repair or
replace the part.

(g) The express warranties created by this section do not cover defects or repair problems
which result from collision, abuse, negligence, or lack of adequate maintenance following
sale to the consumer.

(h) The terms of the express warranty, including the duration of the warranty and the
parts covered, must be fully, accurately, and conspicuously disclosed by the dealer on the
front of the Buyers Guide.

Sec. 12.

Minnesota Statutes 2022, section 325F.662, subdivision 3, is amended to read:

Subd. 3.

Exclusions.

Notwithstanding the provisions of subdivision 2, a dealer is not
required to provide an express warranty for a used motor vehicle:

(1) new text begin except for a used motor vehicle described in subdivision 2, paragraph (a), clause (3),
new text end sold for a total cash sale price of less than $3,000, including the trade-in value of any vehicle
traded in by the consumer, but excluding tax, license fees, registration fees, and finance
charges;

(2) with an engine designed to use diesel fuel;

(3) with a gross weight, as defined in section 168.002, subdivision 13, in excess of 9,000
pounds;

(4) that has been custom-built or modified for show or for racing;

(5) new text begin except for a used motor vehicle described in subdivision 2, paragraph (a), clause (3),
new text end that is eight years of age or older, as calculated from the first day in January of the designated
model year of the vehicle;

(6) that has been produced by a manufacturer which has never manufactured more than
10,000 motor vehicles in any one year;

deleted text begin (7) that has 75,000 miles or more at time of sale;
deleted text end

deleted text begin (8) deleted text end new text begin (7) new text end that has not been manufactured in compliance with applicable federal emission
standards in force at the time of manufacture as provided by the Clean Air Act, United
States Code, title 42, sections 7401 deleted text begin through deleted text end new text begin to new text end 7642, and regulations adopted pursuant
thereto, and safety standards as provided by the National Traffic and Motor Safety Act,
United States Code, title 15, sections 1381 deleted text begin through deleted text end new text begin to new text end 1431, and regulations adopted pursuant
thereto; or

deleted text begin (9) deleted text end new text begin (8) new text end that has been issued a certificate of title that bears a "salvage" brand or stamp
under section 168A.151.

Sec. 13.

Minnesota Statutes 2022, section 325F.6641, subdivision 2, is amended to read:

Subd. 2.

Disclosure requirements.

(a) If a motor vehicle dealer licensed under section
168.27 offers a vehicle for sale in the course of a sales presentation to any prospective buyer
the dealer must provide a written disclosure deleted text begin , deleted text end and deleted text begin an oral disclosure deleted text end new text begin , new text end except for sales
performed online, new text begin an oral disclosure new text end of:

(1) prior vehicle damage as required under subdivision 1;

(2) the existence or requirement of any title brand under section 168A.05, subdivision
3, 168A.151, 325F.6642, or 325F.665, subdivision 14, if the dealer has actual knowledge
of the brand; and

(3) if a motor vehicle, which is part of a licensed motor vehicle dealer's inventory, has
been submerged or flooded above the bottom dashboard while parked on the dealer's lot.

(b) If a person receives a flood disclosure as described in paragraph (a), clause (3),
whether from a motor vehicle dealer or another seller, and subsequently offers that vehicle
for sale, the person must provide the same disclosure to any prospective subsequent buyer.

(c) Written disclosure under this subdivision must be signed by the buyer and maintained
in the motor vehicle dealer's sales file in the manner prescribed by the registrar of motor
vehicles.

(d) The disclosure required in subdivision 1 must be made in substantially the following
form: "To the best of my knowledge, this vehicle has ..... has not ..... sustained damage in
excess of 80 percent actual cash value."

Sec. 14.

Minnesota Statutes 2022, section 325F.69, subdivision 1, is amended to read:

Subdivision 1.

Fraud, misrepresentation, deceptive new text begin or unfair new text end practices.

The act, use,
or employment by any person of any fraud, new text begin unfair or unconscionable practice, new text end false pretense,
false promise, misrepresentation, misleading statement or deceptive practice, with the intent
that others rely thereon in connection with the sale of any merchandise, whether or not any
person has in fact been misled, deceived, or damaged thereby, is enjoinable as provided in
section 325F.70.

Sec. 15.

Minnesota Statutes 2022, section 325F.69, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Unfair or unconscionable acts or practices; standard of proof. new text end

new text begin For purposes
of this section, an unfair method of competition or an unfair or unconscionable act or practice
is any method of competition, act, or practice that: (1) offends public policy as established
by the statutes, rules, or common law of Minnesota; (2) is unethical, oppressive, or
unscrupulous; or (3) is substantially injurious to consumers.
new text end

Sec. 16.

Minnesota Statutes 2022, section 325F.70, is amended by adding a subdivision
to read:

new text begin Subd. 3. new text end

new text begin Private enforcement. new text end

new text begin (a) In addition to the remedies otherwise provided by
law, an individual or family farmer injured by a violation of sections 325F.68 to 325F.70
may bring a civil action and recover damages, together with costs and disbursements,
including costs of investigation and reasonable attorney fees, and receive other equitable
relief as determined by the court. An action brought under this section benefits the public.
new text end

new text begin (b) For the purposes of this subdivision:
new text end

new text begin (1) "family farmer" means a person or persons operating a family farm; and
new text end

new text begin (2) "family farm" has the meaning given in section 116B.02, subdivision 6.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective on August 1, 2023, and applies to causes
of action commenced on or after that date.
new text end

Sec. 17.

new text begin [325F.995] GENETIC INFORMATION PRIVACY ACT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Biological sample" means any material part of a human, discharge from a material
part of a human, or derivative from a material part of a human, including but not limited to
tissue, blood, urine, or saliva, that is known to contain deoxyribonucleic acid (DNA).
new text end

new text begin (c) "Consumer" means an individual who is a Minnesota resident.
new text end

new text begin (d) "Deidentified data" means data that cannot reasonably be used to infer information
about, or otherwise be linked to, an identifiable consumer and that is subject to:
new text end

new text begin (1) administrative and technical measures to ensure the data cannot be associated with
a particular consumer;
new text end

new text begin (2) public commitment by the company to (i) maintain and use data in deidentified form,
and (ii) not attempt to reidentify the data; and
new text end

new text begin (3) legally enforceable contractual obligations that prohibit any recipients of the data
from attempting to reidentify the data.
new text end

new text begin (e) "Direct-to-consumer genetic testing company" or "company" means an entity that:
(1) offers consumer genetic testing products or services directly to consumers; or (2) collects,
uses, or analyzes genetic data that was (i) collected via a direct-to-consumer genetic testing
product or service, and (ii) provided to the company by a consumer. Direct-to-consumer
genetic testing company does not include an entity that collects, uses, or analyzes genetic
data or biological samples only in the context of research, as defined in Code of Federal
Regulations, title 45, section 164.501, that is conducted in a manner that complies with the
federal policy for the protection of human research subjects under Code of Federal
Regulations, title 45, part 46; the Good Clinical Practice Guideline issued by the International
Council for Harmonisation; or the United States Food and Drug Administration Policy for
the Protection of Human Subjects under Code of Federal Regulations, title 21, parts 50 and
56.
new text end

new text begin (f) "Express consent" means a consumer's affirmative written response to a clear,
meaningful, and prominent written notice regarding the collection, use, or disclosure of
genetic data for a specific purpose. Written notices and responses may be presented and
captured electronically.
new text end

new text begin (g) "Genetic data" means any data, regardless of the data's format, that concerns a
consumer's genetic characteristics. Genetic data includes but is not limited to:
new text end

new text begin (1) raw sequence data that results from sequencing a consumer's complete extracted
DNA or a portion of the extracted DNA;
new text end

new text begin (2) genotypic and phenotypic information that results from analyzing the raw sequence
data; and
new text end

new text begin (3) self-reported health information that a consumer submits to a company regarding
the consumer's health conditions and that is (i) used for scientific research or product
development, and (ii) analyzed in connection with the consumer's raw sequence data.
new text end

new text begin Genetic data does not include deidentified data.
new text end

new text begin (h) "Genetic testing" means any laboratory test of a consumer's complete DNA, regions
of a consumer's DNA, chromosomes, genes, or gene products to determine the presence of
genetic characteristics.
new text end

new text begin (i) "Person" means an individual, partnership, corporation, association, business, business
trust, sole proprietorship, other entity, or representative of an organization.
new text end

new text begin (j) "Service provider" means a person that is involved in the collection, transportation,
analysis of, or any other service in connection with a consumer's biological sample, extracted
genetic material, or genetic data on behalf of the direct-to-consumer genetic testing company,
or on behalf of any other person that collects, uses, maintains, or discloses biological samples,
extracted genetic material, or genetic data collected or derived from a direct-to-consumer
genetic testing product or service, or is directly provided by a consumer, or the delivery of
the results of the analysis of the biological sample, extracted genetic material, or genetic
data.
new text end

new text begin Subd. 2. new text end

new text begin Disclosure and consent requirements. new text end

new text begin (a) To safeguard the privacy,
confidentiality, security, and integrity of a consumer's genetic data, a direct-to-consumer
genetic testing company must:
new text end

new text begin (1) provide easily accessible, clear, and complete information regarding the company's
policies and procedures governing the collection, use, maintenance, and disclosure of genetic
data by making available to a consumer all of the following written in plain language:
new text end

new text begin (i) a high-level privacy policy overview that includes basic, essential information about
the company's collection, use, or disclosure of genetic data;
new text end

new text begin (ii) a prominent, publicly available privacy notice that includes at a minimum information
about the company's data collection, consent, use, access, disclosure, maintenance, transfer,
security, retention, and deletion practices of genetic data; and
new text end

new text begin (iii) information that clearly describes how to file a complaint alleging a violation of
this section, pursuant to section 45.027;
new text end

new text begin (2) obtain a consumer's express consent to collect, use, and disclose the consumer's
genetic data, including at a minimum:
new text end

new text begin (i) initial express consent that clearly (A) describes the uses of the genetic data collected
through the genetic testing product service, and (B) specifies who has access to the test
results and how the genetic data may be shared;
new text end

new text begin (ii) separate express consent, which must include the name of the person receiving the
information, for each transfer or disclosure of the consumer's genetic data or biological
sample to any person other than the company's vendors and service providers;
new text end

new text begin (iii) separate express consent for each use of genetic data or the biological sample that
is beyond the primary purpose of the genetic testing product or service and inherent
contextual uses;
new text end

new text begin (iv) separate express consent to retain any biological sample provided by the consumer
following completion of the initial testing service requested by the consumer;
new text end

new text begin (v) informed consent in compliance with federal policy for the protection of human
research subjects under Code of Federal Regulations, title 45, part 46, to transfer or disclose
the consumer's genetic data to a third-party person for research purposes or research
conducted under the control of the company for publication or generalizable knowledge
purposes; and
new text end

new text begin (vi) express consent for marketing by (A) the direct-to-consumer genetic testing company
to a consumer based on the consumer's genetic data, or (B) a third party to a consumer based
on the consumer having ordered or purchased a genetic testing product or service. For
purposes of this clause, "marketing" does not include customized content or offers provided
on the websites or through the applications or services provided by the direct-to-consumer
genetic testing company with the first-party relationship to the customer;
new text end

new text begin (3) not disclose genetic data to law enforcement or any other governmental agency
without a consumer's express written consent, unless the disclosure is made pursuant to a
valid search warrant or court order;
new text end

new text begin (4) develop, implement, and maintain a comprehensive security program and measures
to protect a consumer's genetic data against unauthorized access, use, or disclosure; and
new text end

new text begin (5) provide a process for a consumer to:
new text end

new text begin (i) access the consumer's genetic data;
new text end

new text begin (ii) delete the consumer's account and genetic data; and
new text end

new text begin (iii) request and obtain the destruction of the consumer's biological sample.
new text end

new text begin (b) Notwithstanding any other provisions in this section, a direct-to-consumer genetic
testing company is prohibited from disclosing a consumer's genetic data without the
consumer's written consent to: (1) any entity offering health insurance, life insurance,
disability insurance, or long-term care insurance; or (2) any employer of the consumer. Any
consent under this paragraph must clearly identify the recipient of the consumer's genetic
data proposed to be disclosed.
new text end

new text begin (c) A company that is subject to the requirements described in paragraph (a), clause (2),
shall provide effective mechanisms, without any unnecessary steps, for a consumer to revoke
any consent of the consumer or all of the consumer's consents after a consent is given,
including at least one mechanism which utilizes the primary medium through which the
company communicates to the consumer. If a consumer revokes consent provided pursuant
to paragraph (a), clause (2), the company shall honor the consumer's consent revocation as
soon as practicable, but not later than 30 days after the consumer revokes consent. The
company shall destroy a consumer's biological sample within 30 days of receipt of revocation
of consent to store the sample.
new text end

new text begin (d) A direct-to-consumer genetic testing company must provide a clear and complete
notice to a consumer that the consumer's deidentified data may be shared with or disclosed
to third parties for research purposes in accordance with Code of Federal Regulations, title
45, part 46.
new text end

new text begin Subd. 3. new text end

new text begin Service provider agreements. new text end

new text begin (a) A contract between the company and a
service provider must prohibit the service provider from retaining, using, or disclosing any
biological sample, extracted genetic material, genetic data, or information regarding the
identity of the consumer, including whether that consumer has solicited or received genetic
testing, as applicable, for any purpose other than for the specific purpose of performing the
services specified in the service contract. The mandatory prohibition set forth in this
subdivision requires a service contract to include, at minimum, the following provisions:
new text end

new text begin (1) a provision prohibiting the service provider from retaining, using, or disclosing the
biological sample, extracted genetic material, genetic data, or any information regarding
the identity of the consumer, including whether the consumer has solicited or received
genetic testing, as applicable, for any purpose other than providing the services specified
in the service contract; and
new text end

new text begin (2) a provision prohibiting the service provider from associating or combining the
biological sample, extracted genetic material, genetic data, or any information regarding
the identity of the consumer, including whether that consumer has solicited or received
genetic testing, as applicable, with information the service provider has received from or
on behalf of another person or persons, or has collected from the service provider's own
interaction with consumers or as required by law.
new text end

new text begin (b) A service provider subject to this subdivision is subject to the same confidentiality
obligations as a direct-to-consumer genetic testing company with respect to all biological
samples, extracted genetic materials, and genetic material, or any information regarding the
identity of any consumer in the service provider's possession.
new text end

new text begin Subd. 4. new text end

new text begin Enforcement. new text end

new text begin The commissioner of commerce may enforce this section under
section 45.027.
new text end

new text begin Subd. 5. new text end

new text begin Limitations. new text end

new text begin This section does not apply to:
new text end

new text begin (1) protected health information that is collected by a covered entity or business associate,
as those terms are defined in Code of Federal Regulations, title 45, parts 160 and 164;
new text end

new text begin (2) a public or private institution of higher education; or
new text end

new text begin (3) an entity owned or operated by a public or private institution of higher education.
new text end

new text begin Subd. 6. new text end

new text begin Construction. new text end

new text begin This section does not supersede the requirements and rights
described in section 13.386 or the remedies available under chapter 13 for violations of
section 13.386.
new text end

Sec. 18.

Minnesota Statutes 2022, section 325G.051, subdivision 1, is amended to read:

Subdivision 1.

Limitation; prohibition.

(a) A seller new text begin or lessor new text end of goods or services new text begin doing
business in Minnesota new text end may impose a surcharge on new text begin transactions in Minnesota with new text end a deleted text begin purchaser deleted text end new text begin
customer new text end who elects to use a credit new text begin or charge new text end card in lieu of payment by cash, check, or
similar means, provided new text begin :
new text end

(1) new text begin if the sale or lease of goods or services is processed in person, new text end the seller new text begin or lessor new text end
informs the deleted text begin purchaser deleted text end new text begin customer new text end of the surcharge both orally at the time of sale and by a sign
conspicuously posted on the seller's new text begin or lessor's new text end premises deleted text begin , deleted text end new text begin ;
new text end

new text begin (2) if the sale or lease of goods or services is processed through a website or mobile
device, the seller or lessor informs the customer of the surcharge by conspicuously posting
a surcharge notice during the sale, at the point of sale, on the customer order summary, or
on the checkout page of the website;
new text end

new text begin (3) if the sale or lease of services is processed over the telephone, the seller or lessor
informs the customer of the surcharge orally; new text end and

deleted text begin (2) deleted text end new text begin (4) new text end the surcharge does not exceed five percent of the purchase price.

(b) A seller new text begin or lessor new text end of goods or services that establishes and is responsible for deleted text begin its deleted text end new text begin the
seller or lessor's new text end own customer credit new text begin or charge new text end card may not impose a surcharge on a
deleted text begin purchaser deleted text end new text begin customer new text end who elects to use that credit new text begin or charge new text end card in lieu of payment by cash,
check, or similar means.

(c) For purposes of this section "surcharge" means a fee or charge imposed by a seller new text begin
or lessor new text end upon a deleted text begin buyer deleted text end new text begin customer new text end that increases the price of goods or services to the deleted text begin buyer deleted text end new text begin
customer new text end because the deleted text begin buyer deleted text end new text begin customer new text end uses a credit new text begin or charge new text end card to purchase new text begin or lease new text end the
goods or services. The term does not include a discount offered by a seller new text begin or lessor new text end to a
deleted text begin buyer deleted text end new text begin customer new text end who makes payment for goods or services by cash, check, or similar means
not involving a credit new text begin or charge new text end card if the discount is offered to all prospective deleted text begin buyers deleted text end new text begin
customers new text end and its availability is clearly and conspicuously disclosed to all prospective deleted text begin buyers deleted text end new text begin
customers new text end .

new text begin (d) This subdivision applies to an agent of a seller or lessor.
new text end

Sec. 19.

new text begin [325O.01] CITATION; CONSTRUCTION.
new text end

new text begin Subdivision 1. new text end

new text begin Citation. new text end

new text begin This chapter may be cited as the "Minnesota Age-Appropriate
Design Code Act."
new text end

new text begin Subd. 2. new text end

new text begin Construction. new text end

new text begin (a) A business that develops and provides online services,
products, or features that children are likely to access must consider the best interests of
children when designing, developing, and providing that online service, product, or feature.
new text end

new text begin (b) If a conflict arises between commercial interests of a business and the best interests
of children likely to access an online product, service, or feature, the business must prioritize
the privacy, safety, and well-being of children over the business's commercial interests.
new text end

Sec. 20.

new text begin [325O.02] DEFINITIONS.
new text end

new text begin (a) For purposes of this chapter, the following terms have the meanings given.
new text end

new text begin (b) "Affiliate" means a legal entity that controls, is controlled by, or is under common
control with that other legal entity. For these purposes, "control" or "controlled" means:
ownership of or the power to vote more than 50 percent of the outstanding shares of any
class of voting security of a company; control in any manner over the election of a majority
of the directors or of individuals exercising similar functions; or the power to exercise a
controlling influence over the management of a company.
new text end

new text begin (c) "Business" means:
new text end

new text begin (1) a sole proprietorship, partnership, limited liability company, corporation, association,
or other legal entity that is organized or operated for the profit or financial benefit of its
shareholders or other owners; and
new text end

new text begin (2) an affiliate of a business that shares common branding with the business. For purposes
of this clause, "common branding" means a shared name, servicemark, or trademark that
the average consumer would understand that two or more entities are commonly owned.
new text end

new text begin For purposes of this chapter, for a joint venture or partnership composed of businesses in
which each business has at least a 40 percent interest, the joint venture or partnership and
each business that composes the joint venture or partnership shall separately be considered
a single business, except that personal data in the possession of each business and disclosed
to the joint venture or partnership must not be shared with the other business.
new text end

new text begin (d) "Child" means a consumer who is under 18 years of age.
new text end

new text begin (e) "Collect" means buying, renting, gathering, obtaining, receiving, or accessing any
personal data pertaining to a consumer by any means. This includes receiving data from the
consumer, either actively or passively, or by observing the consumer's behavior.
new text end

new text begin (f) "Consumer" means a natural person who is a Minnesota resident, however identified,
including by any unique identifier.
new text end

new text begin (g) "Dark pattern" means a user interface designed or manipulated with the substantial
effect of subverting or impairing user autonomy, decision making, or choice.
new text end

new text begin (h) "Data protection impact assessment" means a systematic survey to assess and mitigate
risks to children who are reasonably likely to access the online service, product, or feature
that arise from the data management practices of the business.
new text end

new text begin (i) "Default" means a preselected option adopted by the business for the online service,
product, or feature.
new text end

new text begin (j) "Deidentified" means data that cannot reasonably be used to infer information about,
or otherwise be linked to, an identified or identifiable natural person, or a device linked to
such person, provided that the business that possesses the data:
new text end

new text begin (1) takes reasonable measures to ensure that the data cannot be associated with a natural
person;
new text end

new text begin (2) publicly commits to maintain and use the data only in a deidentified fashion and not
attempt to reidentify the data; and
new text end

new text begin (3) contractually obligates any recipients of the data to comply with all provisions of
this paragraph.
new text end

new text begin (k) "Likely to be accessed by children" means an online service, product, or feature that
it is reasonable to expect would be accessed by children based on any of the following
indicators:
new text end

new text begin (1) the online service, product, or feature is directed to children, as defined by the
Children's Online Privacy Protection Act, United States Code, title 15, section 6501 et seq.;
new text end

new text begin (2) the online service, product, or feature is determined, based on competent and reliable
evidence regarding audience composition, to be routinely accessed by a significant number
of children;
new text end

new text begin (3) the online service, product, or feature contains advertisements marketed to children;
new text end

new text begin (4) the online service, product, or feature is substantially similar or the same as an online
service, product, or feature subject to clause (2);
new text end

new text begin (5) the online service, product, or feature has design elements that are known to be of
interest to children, including but not limited to games, cartoons, music, and celebrities who
appeal to children; or
new text end

new text begin (6) a significant amount of the audience of the online service, product, or feature is
determined, based on internal company research, to be children.
new text end

new text begin (l) "Online service, product, or feature" does not mean any of the following:
new text end

new text begin (1) telecommunications service, as defined in United States Code, title 47, section 153;
new text end

new text begin (2) broadband service, as defined in section 116J.39, subdivision 1; or
new text end

new text begin (3) the delivery or use of a physical product.
new text end

new text begin (m) "Personal data" means any information that is linked or reasonably linkable to an
identified or identifiable natural person. Personal data does not include deidentified data or
publicly available information. For purposes of this paragraph, "publicly available
information" means information that (1) is lawfully made available from federal, state, or
local government records or widely distributed media, and (2) a controller has a reasonable
basis to believe a consumer has lawfully made available to the general public.
new text end

new text begin (n) "Precise geolocation" means any data that is derived from a device and that is used
or intended to be used to locate a consumer within a geographic area that is equal to or less
than the area of a circle with a radius of 1,850 feet, except as prescribed by regulations.
new text end

new text begin (o) "Process" or "processing" means any operation or set of operations that are performed
on personal data or on sets of personal data, whether or not by automated means, such as
the collection, use, storage, disclosure, analysis, deletion, or modification of personal data.
new text end

new text begin (p) "Profiling" means any form of automated processing of personal data to evaluate,
analyze, or predict personal aspects concerning an identified or identifiable natural person's
economic situation, health, personal preferences, interests, reliability, behavior, location,
or movements.
new text end

new text begin (q) "Sale," "sell," or "sold" means the exchange of personal data for monetary or other
valuable consideration by a business to a third party. Sale does not include the following:
new text end

new text begin (1) the disclosure of personal data to a third party who processes the personal data on
behalf of the business;
new text end

new text begin (2) the disclosure of personal data to a third party with whom the consumer has a direct
relationship for purposes of providing a product or service requested by the consumer;
new text end

new text begin (3) the disclosure or transfer of personal data to an affiliate of the business;
new text end

new text begin (4) the disclosure of data that the consumer intentionally made available to the general
public via a channel of mass media and did not restrict to a specific audience; or
new text end

new text begin (5) the disclosure or transfer of personal data to a third party as an asset that is part of a
completed or proposed merger, acquisition, bankruptcy, or other transaction in which the
third party assumes control of all or part of the business's assets.
new text end

new text begin (r) "Share" means sharing, renting, releasing, disclosing, disseminating, making available,
transferring, or otherwise communicating orally, in writing, or by electronic or other means
a consumer's personal data by the business to a third party for cross-context behavioral
advertising, whether or not for monetary or other valuable consideration, including
transactions between a business and a third party for cross-context behavioral advertising
for the benefit of a business in which no money is exchanged.
new text end

new text begin (s) "Third party" means a natural or legal person, public authority, agency, or body other
than the consumer or the business.
new text end

Sec. 21.

new text begin [325O.03] SCOPE; EXCLUSIONS.
new text end

new text begin (a) A business is subject to this chapter if the business:
new text end

new text begin (1) collects consumers' personal data or has consumers' personal data collected on the
business's behalf by a third party;
new text end

new text begin (2) alone or jointly with others, determines the purposes and means of the processing
of consumers' personal data;
new text end

new text begin (3) does business in Minnesota; and
new text end

new text begin (4) satisfies one or more of the following thresholds:
new text end

new text begin (i) has annual gross revenues in excess of $25,000,000, as adjusted every odd-numbered
year to reflect the Consumer Price Index;
new text end

new text begin (ii) alone or in combination, annually buys, receives for the business's commercial
purposes, sells, or shares for commercial purposes, alone or in combination, the personal
data of 50,000 or more consumers, households, or devices; or
new text end

new text begin (iii) derives 50 percent or more of its annual revenues from selling consumers' personal
data.
new text end

new text begin (b) This chapter does not apply to:
new text end

new text begin (1) protected health information that is collected by a covered entity or business associate
governed by the privacy, security, and breach notification rules issued by the United States
Department of Health and Human Services, Code of Federal Regulations, title 45, parts 160
and 164, established pursuant to the Health Insurance Portability and Accountability Act
of 1996, Public Law 104-191, and the Health Information Technology for Economic and
Clinical Health Act, Public Law 111-5;
new text end

new text begin (2) a covered entity governed by the privacy, security, and breach notification rules
issued by the United States Department of Health and Human Services, Code of Federal
Regulations, title 45, parts 160 and 164, established pursuant to the Health Insurance
Portability and Accountability Act of 1996, Public Law 104-191, to the extent the provider
or covered entity maintains patient information in the same manner as medical information
or protected health information as described in clause (1); or
new text end

new text begin (3) information collected as part of a clinical trial subject to the federal policy for the
protection of human subjects, also known as the common rule, pursuant to good clinical
practice guidelines issued by the International Council for Harmonisation or pursuant to
human subject protection requirements of the United States Food and Drug Administration.
new text end

Sec. 22.

new text begin [325O.04] BUSINESS OBLIGATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Requirements for businesses. new text end

new text begin A business that provides an online service,
product, or feature likely to be accessed by children must:
new text end

new text begin (1) before any new online services, products, or features are offered to the public,
complete a data protection impact assessment for any online service, product, or feature
likely to be accessed by children and maintain documentation of this assessment as long as
the online service, product, or feature is likely to be accessed by children;
new text end

new text begin (2) biennially review all data protection impact assessments;
new text end

new text begin (3) document any risk of material detriment to children that arises from the data
management practices of the business identified in the data protection impact assessment
required by clause (1) and create a timed plan to mitigate or eliminate the risk before the
online service, product, or feature is accessed by children;
new text end

new text begin (4) within three business days of a written request by the attorney general, provide to
the attorney general a list of all data protection impact assessments the business has
completed;
new text end

new text begin (5) within five business days of a written request by the attorney general, provide the
attorney general with a copy of any data protection impact assessment;
new text end

new text begin (6) estimate the age of child users with a reasonable level of certainty appropriate to the
risks that arise from the data management practices of the business or apply the privacy and
data protections afforded to children to all consumers;
new text end

new text begin (7) configure all default privacy settings provided to children by the online service,
product, or feature to settings that offer a high level of privacy, unless the business can
demonstrate a compelling reason that a different setting is in the best interests of children;
new text end

new text begin (8) provide any privacy information, terms of service, policies, and community standards
concisely, prominently, and using clear language suited to the age of children likely to
access that online service, product, or feature;
new text end

new text begin (9) if the online service, product, or feature allows a child's parent, guardian, or any
other consumer to monitor the child's online activity or track the child's location, provide
an obvious signal to the child when the child is being monitored or tracked;
new text end

new text begin (10) enforce published terms, policies, and community standards established by the
business, including but not limited to privacy policies and those concerning children; and
new text end

new text begin (11) provide prominent, accessible, and responsive tools to help children, or if applicable
their parents or guardians, exercise their privacy rights and report concerns.
new text end

new text begin Subd. 2. new text end

new text begin Data protection impact assessments; requirements. new text end

new text begin (a) A data protection
impact assessment required by this section must:
new text end

new text begin (1) identify the purpose of the online service, product, or feature; how it uses children's
personal data; and the risks of material detriment to children that arise from the data
management practices of the business; and
new text end

new text begin (2) address, to the extent applicable:
new text end

new text begin (i) whether the design of the online product, service, or feature could harm children,
including by exposing children to harmful, or potentially harmful, content on the online
product, service, or feature;
new text end

new text begin (ii) whether the design of the online product, service, or feature could lead to children
experiencing or being targeted by harmful, or potentially harmful, contacts on the online
product, service, or feature;
new text end

new text begin (iii) whether the design of the online product, service, or feature could permit children
to witness, participate in, or be subject to harmful, or potentially harmful, conduct on the
online product, service, or feature;
new text end

new text begin (iv) whether the design of the online product, service, or feature could allow children
to be party to or exploited by a harmful, or potentially harmful, contact on the online product,
service, or feature;
new text end

new text begin (v) whether algorithms used by the online product, service, or feature could harm children;
new text end

new text begin (vi) whether targeted advertising systems used by the online product, service, or feature
could harm children;
new text end

new text begin (vii) whether and how the online product, service, or feature uses system design features
to increase, sustain, or extend use of the online product, service, or feature by children,
including the automatic playing of media, rewards for time spent, and notifications; and
new text end

new text begin (viii) whether, how, and for what purpose the online product, service, or feature collects
or processes personal data of children.
new text end

new text begin (b) A data protection impact assessment conducted by a business for the purpose of
compliance with any other law complies with this section if the data protection impact
assessment meets the requirements of this chapter.
new text end

new text begin (c) A single data protection impact assessment may contain multiple similar processing
operations that present similar risks only if each relevant online service, product, or feature
is addressed.
new text end

new text begin Subd. 3. new text end

new text begin Prohibitions on businesses. new text end

new text begin A business that provides an online service, product,
or feature likely to be accessed by children must not:
new text end

new text begin (1) use the personal data of any child in a way that the business knows, or has reason to
know, is materially detrimental to the physical health, mental health, or well-being of a
child;
new text end

new text begin (2) profile a child by default unless both of the following criteria are met:
new text end

new text begin (i) the business can demonstrate it has appropriate safeguards in place to protect children;
and
new text end

new text begin (ii) either of the following is true:
new text end

new text begin (A) profiling is necessary to provide the online service, product, or feature requested
and only with respect to the aspects of the online service, product, or feature with which a
child is actively and knowingly engaged; or
new text end

new text begin (B) the business can demonstrate a compelling reason that profiling is in the best interests
of children;
new text end

new text begin (3) collect, sell, share, or retain any personal data that is not necessary to provide an
online service, product, or feature with which a child is actively and knowingly engaged,
or as described below, unless the business can demonstrate a compelling reason that the
collecting, selling, sharing, or retaining of the personal data is in the best interests of children
likely to access the online service, product, or feature;
new text end

new text begin (4) if the end user is a child, use personal data for any reason other than a reason for
which that personal data was collected, unless the business can demonstrate a compelling
reason that use of the personal data is in the best interests of children;
new text end

new text begin (5) collect, sell, or share any precise geolocation information of children by default,
unless the collection of that precise geolocation information is strictly necessary for the
business to provide the service, product, or feature requested and then only for the limited
time that the collection of precise geolocation information is necessary to provide the service,
product, or feature;
new text end

new text begin (6) collect any precise geolocation information of a child without providing an obvious
sign to the child for the duration of that collection that precise geolocation information is
being collected;
new text end

new text begin (7) use dark patterns to lead or encourage children to provide personal data beyond what
is reasonably expected to provide that online service, product, or feature to forego privacy
protections, or to take any action that the business knows, or has reason to know, is materially
detrimental to the child's physical health, mental health, or well-being; or
new text end

new text begin (8) use any personal data collected to estimate age or age range for any purpose other
than to fulfill the requirements of subdivision 1, clause (6), or retain that personal data longer
than necessary to estimate age. Age assurance must be proportionate to the risks and data
practice of an online service, product, or feature.
new text end

new text begin Subd. 4. new text end

new text begin Data practices. new text end

new text begin (a) A data protection impact assessment collected or maintained
by the attorney general under subdivision 1 is classified as nonpublic data or private data
on individuals under section 13.02, subdivisions 9 and 12.
new text end

new text begin (b) To the extent any information contained in a data protection impact assessment
disclosed to the attorney general includes information subject to attorney-client privilege
or work product protection, disclosure pursuant to this section does not constitute a waiver
of the privilege or protection.
new text end

Sec. 23.

new text begin [325O.05] ATTORNEY GENERAL ENFORCEMENT.
new text end

new text begin (a) A business that violates this chapter may be subject to an injunction and liable for a
civil penalty of not more than $2,500 per affected child for each negligent violation, or not
more than $7,500 per affected child for each intentional violation, which may be assessed
and recovered only in a civil action brought by the attorney general in accordance with
section 8.31. If the state prevails in an action to enforce this chapter, the state may, in addition
to penalties provided by this paragraph or other remedies provided by law, be allowed an
amount determined by the court to be the reasonable value of all or part of the state's litigation
expenses incurred.
new text end

new text begin (b) Any penalties, fees, and expenses recovered in an action brought under this chapter
must be deposited in an account in the special revenue fund and are appropriated to the
attorney general to offset costs incurred by the attorney general in connection with
enforcement of this chapter.
new text end

new text begin (c) If a business is in substantial compliance with the requirements of section 325O.04,
subdivision 1, clauses (1) to (5), the attorney general must, before initiating a civil action
under this section, provide written notice to the business identifying the specific provisions
of this chapter that the attorney general alleges have been or are being violated. If, within
90 days of the notice required by this paragraph, the business cures any noticed violation
and provides the attorney general a written statement that the alleged violations have been
cured, and sufficient measures have been taken to prevent future violations, the business is
not liable for a civil penalty for any violation cured pursuant to this section.
new text end

new text begin (d) Nothing in this chapter provides a private right of action under this chapter, section
8.31, or any other law.
new text end

Sec. 24. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 325D.71, new text end new text begin is repealed.
new text end

Sec. 25. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Sections 15 to 19 are effective July 1, 2024.
new text end

new text begin (b) By July 1, 2025, a business must complete a data protection impact assessment for
any online service, product, or feature likely to be accessed by children offered to the public
before July 1, 2024, unless that online service, product, or feature is exempt under paragraph
(c).
new text end

new text begin (c) Sections 15 to 19 do not apply to an online service, product, or feature that is not
offered to the public on or after July 1, 2024.
new text end

ARTICLE 5

MISCELLANEOUS COMMERCE POLICY

Section 1.

Minnesota Statutes 2022, section 103G.291, subdivision 4, is amended to read:

Subd. 4.

Demand reduction measures.

(a) For the purposes of this section, "demand
reduction measures" means measures that reduce water demand, water losses, peak water
demands, and nonessential water uses. Demand reduction measures must include a
conservation rate structure, or a uniform rate structure with a conservation program that
achieves demand reduction. A "conservation rate structure" means a rate structure that
encourages conservation and may include increasing block rates, seasonal rates, time of use
rates, individualized goal rates, or excess use rates. If a conservation rate is applied to
multifamily dwellings new text begin or a manufactured home park, as defined in section 327C.015,
subdivision 8 new text end , the rate structure must consider each residential unit as an individual user.

(b) To encourage conservation, a public water supplier serving more than 1,000 people
must implement demand reduction measures by January 1, 2015.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024, and applies to a billing
period that begins on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2022, section 237.066, is amended to read:

237.066 STATE GOVERNMENT PRICING PLANS.

Subdivision 1.

Purpose.

A state government new text begin or Tribal government new text end telecommunications
pricing plan is authorized and found to be in the public interest as it will:

(1) provide and ensure availability of high-quality, technologically advanced
telecommunications services at a reasonable cost to the state new text begin or Tribal government new text end ; and

(2) further the state telecommunications goals as set forth in section 237.011.

Subd. 2.

Program participation.

A state government new text begin or Tribal government new text end
telecommunications pricing plan may be available to serve individually or collectively:
state agencies; new text begin Tribal governments; new text end educational institutions, including public schools new text begin and
Tribal schools new text end complying with section 120A.05, subdivision 9, 11, 13, or 17, and nonpublic
schools complying with sections 120A.22, 120A.24, and 120A.41; private colleges; public
corporations; and political subdivisions of the state new text begin or a Tribal Nation new text end . Plans shall be available
to carry out the commissioner of administration's duties under sections 16E.17 and 16E.18
and shall also be available to those entities not using the commissioner for contracting for
telecommunications services.

Subd. 3.

Rates.

Notwithstanding section 237.09, 237.14, 237.60, subdivision 3, or
237.74, a telephone company or a telecommunications carrier may, individually or in
cooperation with other telephone companies or telecommunications carriers, develop and
offer basic or advanced telecommunications services at discounted or reduced rates as a
state government new text begin or Tribal government new text end telecommunications pricing plan. Any
telecommunications services provided under any state government new text begin or Tribal government new text end
telecommunications pricing plan shall be used exclusively by deleted text begin those deleted text end new text begin the new text end entities described
in subdivision 2 subject to the plan solely for deleted text begin their deleted text end new text begin the entities' new text end own use and shall not be
made available to any other entities by resale, sublease, or in any other way.

Subd. 4.

Applicability to other customers.

A telephone company or telecommunications
carrier providing telecommunications services under a state government new text begin or Tribal government new text end
telecommunications pricing plan is not required to provide any other person or entity those
services at the rates made available to the state new text begin or Tribal government new text end .

Subd. 5.

Commission review.

new text begin (a) new text end The terms and conditions of any state government new text begin or
Tribal government new text end telecommunications pricing plan must be submitted to the commission
for deleted text begin its deleted text end review and approval within 90 days before implementation to:

(1) ensure that the terms and conditions benefit the state new text begin or Tribal Nation new text end and not any
private entity;

(2) ensure that the rates for any telecommunications service in any state government new text begin or
Tribal government new text end telecommunications pricing plan are at or below any applicable tariffed
rates; and

(3) ensure that the state telecommunications new text begin or Tribal government new text end pricing plan meets
the requirements of this section and is in the public interest.

new text begin (b) new text end The commission shall reject any state government new text begin or Tribal government new text end
telecommunications pricing plan that does not meet deleted text begin these deleted text end new text begin the new text end criteria new text begin in paragraph (a) new text end .

Sec. 3.

Minnesota Statutes 2022, section 327C.015, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Commodity rate. new text end

new text begin "Commodity rate" means the per unit price for utility service
that varies directly with the volume of a resident's consumption of utility service and that
is established or approved by the Minnesota Public Utilities Commission or a municipal
public utilities commission, an electric cooperative association, or a municipality and charged
to a user of the service.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2022, section 327C.015, is amended by adding a subdivision
to read:

new text begin Subd. 11a. new text end

new text begin Public utility. new text end

new text begin "Public utility" has the meaning given in section 216B.02,
subdivision 4.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2022, section 327C.015, subdivision 17, is amended to read:

Subd. 17.

Substantial modification.

"Substantial modification" means any change in
a rule which: (a) significantly diminishes or eliminates any material obligation of the park
owner; (b) significantly diminishes or eliminates any material right, privilege or freedom
of action of a resident; or (c) involves a significant new expense for a resident. new text begin The
installation of water and sewer meters and the subsequent metering of and billing for water
and sewer service is not a substantial modification of the lease, provided the park owner
complies with section 327C.04, subdivision 6.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for meter installations initiated on or
after August 1, 2023.
new text end

Sec. 6.

Minnesota Statutes 2022, section 327C.015, is amended by adding a subdivision
to read:

new text begin Subd. 17a. new text end

new text begin Utility provider. new text end

new text begin "Utility provider" means a public utility, an electric
cooperative association, or a municipal utility.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2022, section 327C.04, subdivision 1, is amended to read:

Subdivision 1.

Billing permitted.

A park owner who new text begin either new text end provides utility service new text begin
directly new text end to residents new text begin or who redistributes to residents utility service provided to the park
owner by a utility provider new text end may charge the residents for that service, only if the charges
comply with this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2022, section 327C.04, subdivision 2, is amended to read:

Subd. 2.

Metering required.

A park owner who charges residents for a utility service
must charge each household the same amount, unless the park owner has installed measuring
devices which accurately meter each household's use of the utility. new text begin Utility measuring devices
installed by the park owner must be installed or repaired only by a licensed plumber, licensed
electrician, or licensed manufactured home installer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023, and applies to meters
installed or repaired on or after that date.
new text end

Sec. 9.

Minnesota Statutes 2022, section 327C.04, is amended by adding a subdivision to
read:

new text begin Subd. 5. new text end

new text begin Utility charge for metered service. new text end

new text begin (a) A park owner who redistributes utility
service may not charge a resident a commodity rate that exceeds the commodity rate at
which the park owner purchases utility service from a utility provider. Before billing residents
for redistributed utility service, a park owner must deduct utility service used exclusively
or primarily for the park owner's purposes.
new text end

new text begin (b) If a utility bill that a park owner receives from a utility provider separates from
variable consumption charges a fixed service or meter charge or fee, taxes, surcharges, or
other miscellaneous charges, the park owner must deduct the park owner's pro rata share
of these separately itemized charges and apportion the remaining fixed portion of the bill
equally among residents based on the total number of occupied units in the park.
new text end

new text begin (c) A park owner may not charge to or collect from residents any administrative, capital,
or other expenses associated with the distribution of utility services, including but not limited
to disconnection, reconnection, and late payment fees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 10.

Minnesota Statutes 2022, section 327C.04, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Rent increases following the installation of water meters. new text end

new text begin A park owner may
not increase lot rents for 13 months following the commencement of utility bills for a resident
whose lease included water and sewer service. In each of the three months prior to
commencement of utility billing, a park owner must provide the resident with a sample bill
for water and sewer service.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023, and applies to meter
installations initiated on or after that date.
new text end

Sec. 11.

Minnesota Statutes 2022, section 515B.3-102, is amended to read:

515B.3-102 POWERS OF UNIT OWNERS' ASSOCIATION.

(a) Except as provided in subsections (b), (c), (d), deleted text begin and deleted text end (e), new text begin and (f) new text end and subject to the
provisions of the declaration or bylaws, the association shall have the power to:

(1) adopt, amend and revoke rules and regulations not inconsistent with the articles of
incorporation, bylaws and declaration, as follows: (i) regulating the use of the common
elements; (ii) regulating the use of the units, and conduct of unit occupants, which may
jeopardize the health, safety or welfare of other occupants, which involves noise or other
disturbing activity, or which may damage the common elements or other units; (iii) regulating
or prohibiting animals; (iv) regulating changes in the appearance of the common elements
and conduct which may damage the common interest community; (v) regulating the exterior
appearance of the common interest community, including, for example, balconies and patios,
window treatments, and signs and other displays, regardless of whether inside a unit; (vi)
implementing the articles of incorporation, declaration and bylaws, and exercising the
powers granted by this section; and (vii) otherwise facilitating the operation of the common
interest community;

(2) adopt and amend budgets for revenues, expenditures and reserves, and levy and
collect assessments for common expenses from unit owners;

(3) hire and discharge managing agents and other employees, agents, and independent
contractors;

(4) institute, defend, or intervene in litigation or administrative proceedings (i) in its
own name on behalf of itself or two or more unit owners on matters affecting the common
elements or other matters affecting the common interest community or, (ii) with the consent
of the owners of the affected units on matters affecting only those units;

(5) make contracts and incur liabilities;

(6) regulate the use, maintenance, repair, replacement, and modification of the common
elements and the units;

(7) cause improvements to be made as a part of the common elements, and, in the case
of a cooperative, the units;

(8) acquire, hold, encumber, and convey in its own name any right, title, or interest to
real estate or personal property, but (i) common elements in a condominium or planned
community may be conveyed or subjected to a security interest only pursuant to section
515B.3-112, or (ii) part of a cooperative may be conveyed, or all or part of a cooperative
may be subjected to a security interest, only pursuant to section 515B.3-112;

(9) grant or amend easements for public utilities, public rights-of-way or other public
purposes, and cable television or other communications, through, over or under the common
elements; grant or amend easements, leases, or licenses to unit owners for purposes authorized
by the declaration; and, subject to approval by a vote of unit owners other than declarant
or its affiliates, grant or amend other easements, leases, and licenses through, over or under
the common elements;

(10) impose and receive any payments, fees, or charges for the use, rental, or operation
of the common elements, other than limited common elements, and for services provided
to unit owners;

(11) impose interest and late charges for late payment of assessments and, after notice
and an opportunity to be heard before the board or a committee appointed by it, levy
reasonable fines for violations of the declaration, bylaws, and rules and regulations of the
association new text begin , provided that attorney fees and costs must not be charged or collected from a
unit owner who disputes a fine or assessment and, if after being heard by the board or a
committee of the board, the board does not adopt a resolution levying the fine or upholding
the assessment against the unit owner or owner's unit new text end ;

(12) impose reasonable charges for the review, preparation and recordation of
amendments to the declaration, resale certificates required by section 515B.4-107, statements
of unpaid assessments, or furnishing copies of association records;

(13) provide for the indemnification of its officers and directors, and maintain directors'
and officers' liability insurance;

(14) provide for reasonable procedures governing the conduct of meetings and election
of directors;

(15) exercise any other powers conferred by law, or by the declaration, articles of
incorporation or bylaws; and

(16) exercise any other powers necessary and proper for the governance and operation
of the association.

(b) Notwithstanding subsection (a) the declaration or bylaws may not impose limitations
on the power of the association to deal with the declarant which are more restrictive than
the limitations imposed on the power of the association to deal with other persons.

new text begin (c) An association that levies a fine pursuant to subsection (a)(11), or an assessment
pursuant to section 515B.3-115(g), or 515B.3-1151(g), must provide a dated, written notice
to a unit owner that:
new text end

new text begin (1) states the amount and reason for the fine or assessment;
new text end

new text begin (2) for fines levied under section 515B.3-102(a)(11), specifies: (i) the violation for which
a fine is being levied; and (ii) the specific section of the declaration, bylaws, rules, or
regulations allegedly violated;
new text end

new text begin (3) for assessments levied under section 515B.3-115(g) or 515B.3-1151(g), identifies:
(i) the damage caused; and (ii) the act or omission alleged to have caused the damage;
new text end

new text begin (4) states that all unpaid fines and assessments are liens which, if not satisfied, could
lead to foreclosure of the lien against the owner's unit;
new text end

new text begin (5) describes the unit owner's right to be heard by the board or a committee appointed
by the board;
new text end

new text begin (6) states that if the assessment, fine, late fees, and other allowable charges are not paid,
the amount may increase as a result of the imposition of attorney fees and other collection
costs; and
new text end

new text begin (7) informs the unit owner that homeownership assistance is available from, and includes
the contact information for, the Minnesota Homeownership Center.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end Notwithstanding subsection (a), powers exercised under this section must comply
with section 500.215.

deleted text begin (d) deleted text end new text begin (e) new text end Notwithstanding subsection (a)(4) or any other provision of this chapter, the
association, before instituting litigation or arbitration involving construction defect claims
against a development party, shall:

(1) mail or deliver written notice of the anticipated commencement of the action to each
unit owner at the addresses, if any, established for notices to owners in the declaration and,
if the declaration does not state how notices are to be given to owners, to the owner's last
known address. The notice shall specify the nature of the construction defect claims to be
alleged, the relief sought, and the manner in which the association proposes to fund the cost
of pursuing the construction defect claims; and

(2) obtain the approval of owners of units to which a majority of the total votes in the
association are allocated. Votes allocated to units owned by the declarant, an affiliate of the
declarant, or a mortgagee who obtained ownership of the unit through a foreclosure sale
are excluded. The association may obtain the required approval by a vote at an annual or
special meeting of the members or, if authorized by the statute under which the association
is created and taken in compliance with that statute, by a vote of the members taken by
electronic means or mailed ballots. If the association holds a meeting and voting by electronic
means or mailed ballots is authorized by that statute, the association shall also provide for
voting by those methods. Section 515B.3-110(c) applies to votes taken by electronic means
or mailed ballots, except that the votes must be used in combination with the vote taken at
a meeting and are not in lieu of holding a meeting, if a meeting is held, and are considered
for purposes of determining whether a quorum was present. Proxies may not be used for a
vote taken under this paragraph unless the unit owner executes the proxy after receipt of
the notice required under subsection deleted text begin (d)(1) deleted text end new text begin (e)(1) new text end and the proxy expressly references this
notice.

deleted text begin (e) deleted text end new text begin (f) new text end The association may intervene in a litigation or arbitration involving a construction
defect claim or assert a construction defect claim as a counterclaim, crossclaim, or third-party
claim before complying with subsections deleted text begin (d)(1) deleted text end new text begin (e)(1) new text end and deleted text begin (d)(2) deleted text end new text begin (e)(2) new text end but the association's
complaint in an intervention, counterclaim, crossclaim, or third-party claim shall be dismissed
without prejudice unless the association has complied with the requirements of subsection
deleted text begin (d) deleted text end new text begin (e) new text end within 90 days of the association's commencement of the complaint in an intervention
or the assertion of the counterclaim, crossclaim, or third-party claim.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, for fines and assessments
levied on or after that date.
new text end

Sec. 12.

Minnesota Statutes 2022, section 515B.3-115, is amended to read:

515B.3-115 ASSESSMENTS FOR COMMON EXPENSES; CIC CREATED
BEFORE AUGUST 1, 2010.

(a) The obligation of a unit owner to pay common expense assessments shall be as
follows:

(1) If a common expense assessment has not been levied, the declarant shall pay all
operating expenses of the common interest community, and shall fund the replacement
reserve component of the common expenses as required by subsection (b).

(2) If a common expense assessment has been levied, all unit owners, including the
declarant, shall pay the assessments allocated to their units, subject to the following:

(i) If the declaration so provides, a declarant's liability, and the assessment lien, for the
common expense assessments, exclusive of replacement reserves, on any unit owned by
the declarant may be limited to 25 percent or more of any assessment, exclusive of
replacement reserves, until the unit or any building located in the unit is substantially
completed. Substantial completion shall be evidenced by a certificate of occupancy in any
jurisdiction that issues the certificate.

(ii) If the declaration provides for a reduced assessment pursuant to paragraph (2)(i),
the declarant shall be obligated, within 60 days following the termination of the period of
declarant control, to make up any operating deficit incurred by the association during the
period of declarant control. The existence and amount, if any, of the operating deficit shall
be determined using the accrual basis of accounting applied as of the date of termination
of the period of declarant control, regardless of the accounting methodology previously
used by the association to maintain its accounts.

(b) The replacement reserve component of the common expenses shall be funded for
each unit in accordance with the projected annual budget required by section
515B.4-102(a)(23) provided that the funding of replacement reserves with respect to a unit
shall commence no later than the date that the unit or any building located within the unit
boundaries is substantially completed. Substantial completion shall be evidenced by a
certificate of occupancy in any jurisdiction that issues the certificate.

(c) After an assessment has been levied by the association, assessments shall be levied
at least annually, based upon a budget approved at least annually by the association.

(d) Except as modified by subsections (a)(1) and (2), (e), (f), and (g), all common
expenses shall be assessed against all the units in accordance with the allocations established
by the declaration pursuant to section 515B.2-108.

(e) Unless otherwise required by the declaration:

(1) any common expense associated with the maintenance, repair, or replacement of a
limited common element shall be assessed against the units to which that limited common
element is assigned, equally, or in any other proportion the declaration provides;

(2) any common expense or portion thereof benefiting fewer than all of the units may
be assessed exclusively against the units benefited, equally, or in any other proportion the
declaration provides;

(3) the costs of insurance may be assessed in proportion to risk or coverage, and the
costs of utilities may be assessed in proportion to usage;

(4) reasonable deleted text begin attorneys deleted text end new text begin attorney new text end fees and costs incurred by the association in connection
with (i) the collection of assessments new text begin against a unit owner, new text end and deleted text begin , deleted text end (ii) the enforcement of this
chapter, the articles, bylaws, declaration, or rules and regulations deleted text begin , deleted text end against a unit owner, may
be assessed against the unit owner's unit new text begin subject to section 515B.3-116(h) new text end ; and

(5) fees, charges, late charges, fines and interest may be assessed as provided in section
515B.3-116(a).

(f) Assessments levied under section 515B.3-116 to pay a judgment against the association
may be levied only against the units in the common interest community at the time the
judgment was entered, in proportion to their common expense liabilities.

(g) If any damage to the common elements or another unit is caused by the act or omission
of any unit owner, or occupant of a unit, or their invitees, the association may assess the
costs of repairing the damage exclusively against the unit owner's unit to the extent not
covered by insurance.

(h) Subject to any shorter period specified by the declaration or bylaws, if any installment
of an assessment becomes more than 60 days past due, then the association may, upon ten
days' written notice to the unit owner, declare the entire amount of the assessment
immediately due and payable in full new text begin , except that any portion of the assessment that represents
installments that are not due and payable without acceleration as of the date of reinstatement
must not be included in the amount that a unit owner must pay to reinstate under section
580.30 or chapter 581 new text end .

(i) If common expense liabilities are reallocated for any purpose authorized by this
chapter, common expense assessments and any installment thereof not yet due shall be
recalculated in accordance with the reallocated common expense liabilities.

(j) An assessment against fewer than all of the units must be levied within three years
after the event or circumstances forming the basis for the assessment, or shall be barred.

(k) This section applies only to common interest communities created before August 1,
2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023.
new text end

Sec. 13.

Minnesota Statutes 2022, section 515B.3-1151, is amended to read:

515B.3-1151 ASSESSMENTS FOR COMMON EXPENSES; CIC CREATED ON
OR AFTER AUGUST 1, 2010.

(a) The association shall approve an annual budget of common expenses at or prior to
the conveyance of the first unit in the common interest community to a purchaser and
annually thereafter. The annual budget shall include all customary and necessary operating
expenses and replacement reserves for the common interest community, consistent with
this section and section 515B.3-114. For purposes of replacement reserves under subsection
(b), until an annual budget has been approved, the reserves shall be paid based upon the
budget contained in the disclosure statement required by section 515B.4-102. The obligation
of a unit owner to pay common expenses shall be as follows:

(1) If a common expense assessment has not been levied by the association, the declarant
shall pay all common expenses of the common interest community, including the payment
of the replacement reserve component of the common expenses for all units in compliance
with subsection (b).

(2) If a common expense assessment has been levied by the association, all unit owners,
including the declarant, shall pay the assessments levied against their units, except as follows:

(i) The declaration may provide for an alternate common expense plan whereby the
declarant's common expense liability, and the corresponding assessment lien against the
units owned by the declarant, is limited to: (A) paying when due, in compliance with
subsection (b), an amount equal to the full share of the replacement reserves allocated to
units owned by the declarant, as set forth in the association's annual budget approved as
provided in this subsection; and (B) paying when due all accrued expenses of the common
interest community in excess of the aggregate assessments payable with respect to units
owned by persons other than a declarant; provided, that the alternate common expense plan
shall not affect a declarant's obligation to make up any operating deficit pursuant to item
(iv), and shall terminate upon the termination of any period of declarant control unless
terminated earlier pursuant to item (iii).

(ii) The alternate common expense plan may be authorized only by including in the
declaration and the disclosure statement required by section 515B.4-102 provisions
authorizing and disclosing the alternate common expense plan as described in item (i), and
including in the disclosure statement either (A) a statement that the alternate common
expense plan will have no effect on the level of services or amenities anticipated by the
association's budget contained in the disclosure statement, or (B) a statement describing
how the services or amenities may be affected.

(iii) A declarant shall give notice to the association of its intent to utilize the alternate
common expense plan and a commencement date after the date the notice is given. The
alternate common expense plan shall be valid only for periods after the notice is given. A
declarant may terminate its right to utilize the alternate common expense plan prior to the
termination of the period of declarant control only by giving notice to the association and
the unit owners at least 30 days prior to a selected termination date set forth in the notice.

(iv) If a declarant utilizes an alternate common expense plan, that declarant shall cause
to be prepared and delivered to the association, at the declarant's expense, within 90 days
after the termination of the period of declarant control, an audited balance sheet and profit
and loss statement certified to the association and prepared by an accountant having the
qualifications set forth in section 515B.3-121(b). The audit shall be binding on the declarant
and the association.

(v) If the audited profit and loss statement shows an accumulated operating deficit, the
declarant shall be obligated to make up the deficit within 15 days after delivery of the audit
to the association, and the association shall have a claim against the declarant for an amount
equal to the deficit until paid. A declarant who does not utilize an alternate common expense
plan is not liable to make up any operating deficit. If more than one declarant utilizes an
alternate common expense plan, all declarants who utilize the plan are jointly and severally
liable to the association for any operating deficit.

(vi) The existence and amount, if any, of the operating deficit shall be determined using
the accrual method of accounting applied as of the date of termination of the period of
declarant control, regardless of the accounting methodology previously used by the
association to maintain its accounts.

(vii) Unless approved by a vote of the unit owners other than the declarant and its
affiliates, the operating deficit shall not be made up, prior to the election by the unit owners
of a board of directors pursuant to section 515B.3-103(d), through the use of a special
assessment described in subsection (c) or by assessments described in subsections (e), (f),
and (g).

(viii) The use by a declarant of an alternate common expense plan shall not affect the
obligations of the declarant or the association as provided in the declaration, the bylaws, or
this chapter, or as represented in the disclosure statement required by section 515B.4-102,
except as to matters authorized by this chapter.

(b) The replacement reserves required by section 515B.3-114 shall be paid to the
association by each unit owner for each unit owned by that unit owner in accordance with
the association's annual budget approved pursuant to subsection (a), regardless of whether
an annual assessment has been levied or whether the declarant has utilized an alternate
common expense plan under subsection (a)(2). Replacement reserves shall be paid with
respect to a unit commencing as of the later of (1) the date of creation of the common interest
community or (2) the date that the structure and exterior of the building containing the unit,
or the structure and exterior of any building located within the unit boundaries, but excluding
the interior finishing of the structure itself, are substantially completed. If the association
has not approved an annual budget as of the commencement date for the payment of
replacement reserves, then the reserves shall be paid based upon the budget contained in
the disclosure statement required by section 515B.4-102.

(c) After an assessment has been levied by the association, assessments shall be levied
at least annually, based upon an annual budget approved by the association. In addition to
and not in lieu of annual assessments, an association may, if so provided in the declaration,
levy special assessments against all units in the common interest community based upon
the same formula required by the declaration for levying annual assessments. Special
assessments may be levied only (1) to cover expenditures of an emergency nature, (2) to
replenish underfunded replacement reserves, (3) to cover unbudgeted capital expenditures
or operating expenses, or (4) to replace certain components of the common interest
community described in section 515B.3-114(a), if such alternative method of funding is
approved under section 515B.3-114(a)(5). The association may also levy assessments against
fewer than all units as provided in subsections (e), (f), and (g). An assessment under
subsection (e)(2) for replacement reserves is subject to the requirements of section
515B.3-1141(a)(5).

(d) Except as modified by subsections (a), clauses (1) and (2), (e), (f), and (g), all common
expenses shall be assessed against all the units in accordance with the allocations established
by the declaration pursuant to section 515B.2-108.

(e) Unless otherwise required by the declaration:

(1) any common expense associated with the maintenance, repair, or replacement of a
limited common element shall be assessed against the units to which that limited common
element is assigned, equally, or in any other proportion the declaration provides;

(2) any common expense or portion thereof benefiting fewer than all of the units may
be assessed exclusively against the units benefited, equally, or in any other proportion the
declaration provides;

(3) the costs of insurance may be assessed in proportion to risk or coverage, and the
costs of utilities may be assessed in proportion to usage;

(4) reasonable attorney fees and costs incurred by the association in connection with (i)
the collection of assessments, and (ii) the enforcement of this chapter, the articles, bylaws,
declaration, or rules and regulations, against a unit owner, may be assessed against the unit
owner's unit new text begin , subject to section 515B.3-116(h) new text end ; and

(5) fees, charges, late charges, fines, and interest may be assessed as provided in section
515B.3-116(a).

(f) Assessments levied under section 515B.3-116 to pay a judgment against the association
may be levied only against the units in the common interest community at the time the
judgment was entered, in proportion to their common expense liabilities.

(g) If any damage to the common elements or another unit is caused by the act or omission
of any unit owner, or occupant of a unit, or their invitees, the association may assess the
costs of repairing the damage exclusively against the unit owner's unit to the extent not
covered by insurance.

(h) Subject to any shorter period specified by the declaration or bylaws, if any installment
of an assessment becomes more than 60 days past due, then the association may, upon ten
days' written notice to the unit owner, declare the entire amount of the assessment
immediately due and payable in full new text begin , except that any portion of the assessment that represents
installments that are not due and payable without acceleration as of the date of reinstatement
must not be included in the amount that a unit owner must pay to reinstate under section
580.30 or chapter 581 new text end .

(i) If common expense liabilities are reallocated for any purpose authorized by this
chapter, common expense assessments and any installment thereof not yet due shall be
recalculated in accordance with the reallocated common expense liabilities.

(j) An assessment against fewer than all of the units must be levied within three years
after the event or circumstances forming the basis for the assessment, or shall be barred.

(k) This section applies only to common interest communities created on or after August
1, 2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023.
new text end

Sec. 14.

Minnesota Statutes 2022, section 515B.3-116, is amended to read:

515B.3-116 LIEN FOR ASSESSMENTS.

(a) The association has a lien on a unit for any assessment levied against that unit from
the time the assessment becomes due. If an assessment is payable in installments, the full
amount of the assessment is a lien from the time the first installment thereof becomes due.
Unless the declaration otherwise provides, fees, charges, late charges, fines and interest
charges pursuant to section 515B.3-102(a)(10), (11) and (12) are liens, and are enforceable
as assessments, under this section. Recording of the declaration constitutes record notice
and perfection of any assessment lien under this section, and no further recording of any
notice of or claim for the lien is required.

(b) Subject to subsection (c), a lien under this section is prior to all other liens and
encumbrances on a unit except (i) liens and encumbrances recorded before the declaration
and, in a cooperative, liens and encumbrances which the association creates, assumes, or
takes subject to, (ii) any first mortgage encumbering the fee simple interest in the unit, or,
in a cooperative, any first security interest encumbering only the unit owner's interest in the
unit, (iii) liens for real estate taxes and other governmental assessments or charges against
the unit, and (iv) a master association lien under section 515B.2-121(h). This subsection
shall not affect the priority of mechanic's liens.

(c) If a first mortgage on a unit is foreclosed, the first mortgage was recorded after June
1, 1994, and no owner or person who acquires the owner's interest in the unit redeems
pursuant to chapter 580, 581, or 582, the holder of the sheriff's certificate of sale from the
foreclosure of the first mortgage or any person who acquires title to the unit by redemption
as a junior creditor shall take title to the unit subject to a lien in favor of the association for
unpaid assessments for common expenses levied pursuant to section 515B.3-115(a), (e)(1)
to (3), (f), and (i) which became due, without acceleration, during the six months immediately
preceding the end of the owner's period of redemption. The common expenses shall be
based upon the association's then current annual budget, notwithstanding the use of an
alternate common expense plan under section 515B.3-115(a)(2). If a first security interest
encumbering a unit owner's interest in a cooperative unit which is personal property is
foreclosed, the secured party or the purchaser at the sale shall take title to the unit subject
to unpaid assessments for common expenses levied pursuant to section 515B.3-115(a),
(e)(1) to (3), (f), and (i) which became due, without acceleration, during the six months
immediately preceding the first day following either the disposition date pursuant to section
336.9-610 or the date on which the obligation of the unit owner is discharged pursuant to
section 336.9-622.

(d) Proceedings to enforce an assessment lien shall be instituted within three years after
the last installment of the assessment becomes payable, or shall be barred.

(e) The unit owner of a unit at the time an assessment is due shall be personally liable
to the association for payment of the assessment levied against the unit. If there are multiple
owners of the unit, they shall be jointly and severally liable.

(f) This section does not prohibit actions to recover sums for which subsection (a) creates
a lien nor prohibit an association from taking a deed in lieu of foreclosure.

(g) The association shall furnish to a unit owner or the owner's authorized agent upon
written request of the unit owner or the authorized agent a statement setting forth the amount
of unpaid assessments currently levied against the owner's unit. If the unit owner's interest
is real estate, the statement shall be in recordable form. The statement shall be furnished
within ten business days after receipt of the request and is binding on the association and
every unit owner.

(h) The association's lien may be foreclosed as provided in this subsection.

(1) In a condominium or planned community, the association's lien may be foreclosed
in a like manner as a mortgage containing a power of sale pursuant to chapter 580, or by
action pursuant to chapter 581. The association shall have a power of sale to foreclose the
lien pursuant to chapter 580 new text begin , except that any portion of the assessment that represents
attorney fees or costs shall not be included in the amount a unit owner must pay to reinstate
under section 580.30 or chapter 581 new text end .

(2) In a cooperative whose unit owners' interests are real estate, the association's lien
shall be foreclosed in a like manner as a mortgage on real estate as provided in paragraph
(1).

(3) In a cooperative whose unit owners' interests in the units are personal property, the
association's lien shall be foreclosed in a like manner as a security interest under article 9
of chapter 336. In any disposition pursuant to section 336.9-610 or retention pursuant to
sections 336.9-620 to 336.9-622, the rights of the parties shall be the same as those provided
by law, except (i) notice of sale, disposition, or retention shall be served on the unit owner
90 days prior to sale, disposition, or retention, (ii) the association shall be entitled to its
reasonable costs and attorney fees not exceeding the amount provided by section 582.01,
subdivision 1a, (iii) the amount of the association's lien shall be deemed to be adequate
consideration for the unit subject to disposition or retention, notwithstanding the value of
the unit, and (iv) the notice of sale, disposition, or retention shall contain the following
statement in capital letters with the name of the association or secured party filled in:

"THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of association or
secured party) HAS BEGUN PROCEEDINGS UNDER MINNESOTA STATUTES,
CHAPTER 515B, TO FORECLOSE ON YOUR INTEREST IN YOUR UNIT FOR THE
REASON SPECIFIED IN THIS NOTICE. YOUR INTEREST IN YOUR UNIT WILL
TERMINATE 90 DAYS AFTER SERVICE OF THIS NOTICE ON YOU UNLESS
BEFORE THEN:

(a) THE PERSON AUTHORIZED BY (fill in the name of association or secured party)
AND DESCRIBED IN THIS NOTICE TO RECEIVE PAYMENTS RECEIVES FROM
YOU:

(1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS

(2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS

(3) $500 TO APPLY TO deleted text begin ATTORNEYS deleted text end new text begin ATTORNEY new text end FEES ACTUALLY EXPENDED
OR INCURRED; PLUS

(4) ANY ADDITIONAL AMOUNTS FOR YOUR UNIT BECOMING DUE TO (fill
in name of association or secured party) AFTER THE DATE OF THIS NOTICE; OR

(b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
FORECLOSURE OF YOUR RIGHTS TO YOUR UNIT BE SUSPENDED UNTIL YOUR
CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR
SETTLEMENT. YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND
GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES.

IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS WITHIN
THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR OWNERSHIP RIGHTS IN
YOUR UNIT WILL TERMINATE AT THE END OF THE PERIOD, YOU WILL LOSE
ALL THE MONEY YOU HAVE PAID FOR YOUR UNIT, YOU WILL LOSE YOUR
RIGHT TO POSSESSION OF YOUR UNIT, YOU MAY LOSE YOUR RIGHT TO
ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE, AND YOU WILL
BE EVICTED. IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT
AN ATTORNEY IMMEDIATELY."

(4) In any foreclosure pursuant to chapter 580, 581, or 582, the rights of the parties shall
be the same as those provided by law, except (i) the period of redemption for unit owners
shall be six months from the date of sale or a lesser period authorized by law, (ii) in a
foreclosure by advertisement under chapter 580, the foreclosing party shall be entitled to
costs and disbursements of foreclosure and deleted text begin attorneys deleted text end new text begin attorney new text end fees authorized by the
declaration or bylaws, notwithstanding the provisions of section 582.01, subdivisions 1 and
1a, (iii) in a foreclosure by action under chapter 581, the foreclosing party shall be entitled
to costs and disbursements of foreclosure and attorneys fees as the court shall determine,
and (iv) the amount of the association's lien shall be deemed to be adequate consideration
for the unit subject to foreclosure, notwithstanding the value of the unit.

(i) If a holder of a sheriff's certificate of sale, prior to the expiration of the period of
redemption, pays any past due or current assessments, or any other charges lienable as
assessments, with respect to the unit described in the sheriff's certificate, then the amount
paid shall be a part of the sum required to be paid to redeem under section 582.03.

(j) In a cooperative, if the unit owner fails to redeem before the expiration of the
redemption period in a foreclosure of the association's assessment lien, the association may
bring an action for eviction against the unit owner and any persons in possession of the unit,
and in that case section 504B.291 shall not apply.

(k) An association may assign its lien rights in the same manner as any other secured
party.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023, and applies to foreclosures
initiated on or after that date.
new text end

Sec. 15.

Laws 2022, chapter 93, article 1, section 2, subdivision 5, is amended to read:

Subd. 5. Enforcement and Examinations

-0-

522,000

$522,000 in fiscal year 2023 is for the auto
theft prevention library under Minnesota
Statutes, section 65B.84, subdivision 1,
paragraph (d). This is a onetime appropriation new text begin
and is available until June 30, 2024 new text end .

Sec. 16. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 327C.04, subdivision 4, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

APPENDIX

Repealed Minnesota Statutes: H2680-1

48.10 ANNUAL AUDIT; REPORT.

The board of directors of a bank, bank and trust, or trust company shall annually examine its books, either in person, or by appointing an examining committee, or an auditor, who may be an independent auditor or accountant. The examining committee or auditor shall be solely responsible to the directors. A report shall be made to the directors as to the scope of the examination or audit, and also to show those assets, excluding marketable securities and fixed assets, which are carried on the books for more than actual value. This report shall be retained as a permanent record or incorporated in the minutes of the meeting.

53B.01 CITATION.

This chapter may be cited as the "Minnesota Money Transmitters Act."

53B.02 LICENSE REQUIRED.

On or after January 1, 2002, no person except those exempt pursuant to section 53B.04 shall engage in the business of money transmission without a license as provided in this chapter. A licensee may conduct business in this state at one or more locations, directly or indirectly owned, or through one or more authorized delegates, or both, under a single license granted to the licensee.

53B.03 DEFINITIONS.

Subdivision 1.

Scope.

For purposes of this chapter, the definitions in this section apply unless the context requires otherwise.

Subd. 2.

Applicant.

"Applicant" means a person filing an application for a license under this chapter.

Subd. 3.

Authorized delegate.

"Authorized delegate" means an entity designated by the licensee under this chapter, or by an exempt entity, to sell or issue payment instruments or engage in the business of transmitting money on behalf of a licensee.

Subd. 4.

Commissioner.

"Commissioner" means the commissioner of commerce.

Subd. 5.

Control.

"Control" means ownership of, or the power to vote, ten percent or more of the outstanding voting securities of a licensee or controlling person. For purposes of determining the percentage of a licensee controlled by any person, the person's interest must be aggregated with the interest of any other person controlled by the person or by any spouse, parent, or child of the person.

Subd. 6.

Controlling person.

"Controlling person" means any person in control of a licensee.

Subd. 7.

Electronic instrument.

"Electronic instrument" means a card or other tangible object for the transmission or payment of money that contains a microprocessor chip, magnetic stripe, or other means for the storage of information, that is prefunded and for which the value is decreased upon each use. The term does not include a prepaid telephone card, electronic benefits transfer card, or any other card or other tangible object that is redeemable by the issuer in the issuer's goods or services.

Subd. 8.

Executive officer.

"Executive officer" means the licensee's president, chair of the executive committee, senior officer responsible for the licensee's business, chief financial officer, and any other person who performs similar functions.

Subd. 9.

Exempt entity.

"Exempt entity" means a person to which this chapter does not apply under section 53B.04.

Subd. 10.

Key shareholder.

"Key shareholder" means any person, or group of persons acting in concert, who is the owner of ten percent or more of any voting class of an applicant's stock.

Subd. 11.

Licensee.

"Licensee" means a person licensed under this chapter.

Subd. 12.

Material litigation.

"Material litigation" means any litigation in which an applicant or a licensee has been a defendant or been named in a civil judgment involving claims of fraud, misrepresentation, conversion, mismanagement of funds, breach of fiduciary duty, or breach of contract.

Subd. 13.

Money transmission.

"Money transmission" means selling or issuing payment instruments or engaging in the business of receiving money for transmission or transmitting money within the United States or to locations abroad by any and all means, including but not limited to payment instrument, wire, facsimile, or electronic transfer.

Subd. 14.

Outstanding payment instrument.

"Outstanding payment instrument" means any payment instrument issued by the licensee that has been sold in the United States directly by the licensee or any payment instrument issued by the licensee that has been sold by an authorized delegate of the licensee in the United States, and that has not yet been paid by or for the licensee.

Subd. 15.

Payment instrument.

"Payment instrument" means any electronic or written check, draft, money order, travelers check, or other electronic or written instrument or order for the transmission or payment of money, sold or issued to one or more persons, whether or not the instrument is negotiable. The term does not include any credit card voucher, letter of credit, or instrument that is redeemable by the issuer in goods or services.

Subd. 16.

Permissible investments.

"Permissible investments" means:

(1) cash;

(2) certificates of deposit or other debt obligations of a financial institution, either domestic or foreign;

(3) bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers' acceptances, that are eligible for purchase by member banks of the Federal Reserve System;

(4) any investment bearing a rating of one of the three highest grades as defined by a nationally recognized organization that rates these securities;

(5) investment securities that are obligations of the United States, its agencies or instrumentalities, or obligations that are guaranteed fully as to principal and interest of the United States, or any obligations of any state, municipality, or any political subdivision of a state or municipality;

(6) shares in a money market mutual fund, interest-bearing bills or notes or bonds, debentures, or a fund composed of one or more permissible investments;

(7) any demand borrowing agreement or agreements made to a corporation or a subsidiary of a corporation whose capital stock is listed on a national exchange;

(8) receivables that are due to a licensee from its authorized delegates under a contract described in section 53B.20, that are not past due or doubtful of collection; or

(9) any other investments or security device approved by the commissioner.

Subd. 17.

Person.

"Person" means any individual, corporation, limited liability company, business trust, general or limited partnership, association, sole proprietorship, or similar organization.

Subd. 18.

Remit.

"Remit" means either to make direct payment of the funds to the licensee or its representatives authorized to receive those funds or to deposit the funds in a bank, credit union, savings association, or other similar financial institution in an account specified by the licensee.

53B.04 EXEMPTIONS.

Authorized delegates of a licensee or of an exempt entity, acting within the scope of authority conferred by a written contract as described in section 53B.20, are not required to obtain a license under this chapter. This chapter does not apply to:

(1) the United States or any department, agency, or instrumentality of the United States;

(2) the United States Postal Service;

(3) the state or any political subdivision of the state;

(4) banks, credit unions, savings associations, savings banks, mutual banks organized under the laws of any state or the United States, or bank holding companies which have a banking subsidiary located in Minnesota and whose debt securities have an investment grade rating by a national rating agency, provided that if they issue or sell payment instruments through authorized delegates who are not banks, bank holding companies, credit unions, savings associations, savings banks, or mutual banks, those authorized delegates must comply with all requirements imposed upon authorized delegates under this chapter; and

(5) the provision of electronic transfer of government benefits for any federal, state, or county governmental agency as defined in Federal Reserve Board Regulation E, by a contractor for and on behalf of the United States or any department, agency, or instrumentality of the United States, or any state or any political subdivision of the state.

53B.05 LICENSE QUALIFICATIONS.

Subdivision 1.

Net worth.

Each licensee engaging in money transmission in three or fewer locations in the state, either directly or through authorized delegates, must have a net worth of at least $25,000. Each licensee engaging in money transmission at more than three locations in the state, but fewer than seven locations, either directly or through authorized delegates, must have a net worth of at least $50,000. Each licensee engaging in money transmission at more than six locations in the state, either directly or through authorized delegates, shall have a net worth of $100,000 and an additional net worth of $50,000 for each location or authorized delegate located in the state in excess of seven, to a maximum of $500,000. Net worth shall be calculated in accordance with generally accepted accounting principles.

Subd. 2.

Corporate applicant; good standing.

Every corporate applicant, at the time of the filing of an application for a license under this chapter and at all times after a license is issued, must be in good standing in the state of its incorporation. All noncorporate applicants shall, at the time of the filing of an application for a license under this chapter and at all times after a license is issued, be registered or qualified to do business in the state.

53B.06 PERMISSIBLE INVESTMENTS AND STATUTORY TRUST.

(a) Each licensee under this chapter must at all times possess permissible investments having an aggregate market value, calculated in accordance with generally accepted accounting principles, of not less than the aggregate face amount of all outstanding payment instruments sold by the licensee or reported as sold by an authorized delegate in the United States. This requirement may be waived by the commissioner if the dollar volume of a licensee's outstanding payment instruments does not exceed the bond or other security devices posted by the licensee under section 53B.08.

(b) Permissible investments, even if commingled with other assets of the licensee, are considered to be held in trust for the benefit of the purchasers and holders of the licensee's outstanding payment instruments in the event of the bankruptcy of the licensee.

53B.07 LICENSE APPLICATION.

Subdivision 1.

Requirements.

An application for a license under this chapter must be made in writing, under oath, and in a form prescribed by the commissioner.

Subd. 2.

General contents.

An application must contain:

(1) the exact name of the applicant, the applicant's principal address, any fictitious or trade name used by the applicant in the conduct of its business, and the location of the applicant's business records;

(2) the history of the applicant's or any controlling person's material litigation during the preceding ten years and criminal convictions;

(3) a description of the activities conducted by the applicant and a history of operations;

(4) a description of the business activities in which the applicant seeks to be engaged in the state;

(5) a list identifying the applicant's proposed authorized delegates in the state, if any, at the time of the filing of the license application;

(6) a sample authorized delegate contract, if applicable;

(7) a sample form of payment instrument, if applicable;

(8) the location or locations at which the applicant and its authorized delegates, if any, propose to conduct the licensed activities in the state; and

(9) the name, address, and account numbers for the clearing bank or banks on which the applicant's payment instruments will be drawn or through which these payment instruments will be payable.

Subd. 3.

Additional information from corporations.

If the applicant is a corporation, the applicant must also provide:

(1) the date of the applicant's incorporation and state of incorporation;

(2) a certificate of good standing from the state in which the applicant was incorporated;

(3) a description of the corporate structure of the applicant, including the identity of any parent or subsidiary of the applicant, and the disclosure of whether any parent or subsidiary is publicly traded on any stock exchange;

(4) the name, business and residence address, and employment history for the past five years of the applicant's executive officers and the officers or managers who will be in charge of the applicant's activities to be licensed under this chapter;

(5) the name, business and residence address, and employment history for the period five years prior to the date of the application of any key shareholder of the applicant;

(6) the history of material litigation during the preceding ten years and criminal convictions of every executive officer or key shareholder of the applicant;

(7) a copy of the applicant's most recent audited financial statement, including balance sheet, statement of income or loss, statement of changes in shareholder equity, and statement of changes in financial position, and, if available, the applicant's audited financial statements for the immediately preceding two-year period. However, if the applicant is a wholly owned subsidiary of another corporation, the applicant may submit either the parent corporation's consolidated audited financial statements for the current year and for the immediately preceding two-year period or the parent corporation's Form 10K reports filed with the United States Securities and Exchange Commission for the prior three years in lieu of the applicant's financial statements. If the applicant is a wholly owned subsidiary of a corporation having its principal place of business outside the United States, similar documentation filed with the parent corporation's non-United States regulator may be submitted to satisfy this provision; and

(8) copies of all filings, if any, made by the applicant with the United States Securities and Exchange Commission, or with a similar regulator in a country other than the United States, within the year preceding the date of filing the application.

Subd. 4.

Additional information from noncorporate applicants.

If the applicant is not a corporation, the applicant must also provide:

(1) the name, business and residence address, personal financial statement, and employment history for the past five years, of each principal of the applicant and the name, business and residence address, and employment history for the past five years of any other person or persons who will be in charge of the applicant's activities to be licensed under this chapter;

(2) the place and date of the applicant's registration or qualification to do business in this state;

(3) the history of material litigation during the preceding ten years and criminal convictions for each individual having any ownership interest in the applicant and each individual who exercises supervisory responsibility with respect to the applicant's activities; and

(4) copies of the applicant's audited financial statements, including balance sheet, statement of income or loss, and statement of changes in financial position, for the current year and, if available, for the immediately preceding two-year period.

Subd. 5.

Waiver.

The commissioner may, for good cause shown, waive any requirement of this section with respect to any license application or to permit a license applicant to submit substituted information in its license application in lieu of the information required by this section.

Subd. 6.

Records and fees; maintenance and processing.

Section 58A.04, subdivisions 2 and 3, apply to this section.

53B.08 BOND OR OTHER SECURITY DEVICE.

Subdivision 1.

Requirement.

Each application must be accompanied by a surety bond, irrevocable letter of credit, or other similar security device acceptable to the commissioner in the amount of $25,000. If the applicant proposes to engage in business under this chapter at more than three locations, but less than seven locations, through authorized delegates or otherwise, then the amount of the security device must be increased to $50,000. If the applicant proposes to engage in business under this chapter at more than six locations, through authorized delegates or otherwise, then the amount of the security device must be increased by $50,000 for each location over six, up to a maximum of $250,000. The security device must be in a form satisfactory to the commissioner and must run to the state for the benefit of any claimants against the licensee to secure the faithful performance of the obligations of the licensee with respect to the receipt, handling, transmission, and payment of money in connection with the sale and issuance of payment instruments or transmission of money. In the case of a bond, the aggregate liability of the surety in no event shall exceed the principal sum of the bond. Claimants against the licensee may themselves bring suit directly on the security device or the commissioner may bring suit on behalf of these claimants, either in one action or in successive actions.

Subd. 2.

Acceptable alternatives.

In lieu of a security device under subdivision 1 or of any portion of the principal of the security device, as required by subdivision 1, the licensee may deposit with the commissioner, or with banks in this state that the licensee designates and the commissioner approves, cash, interest-bearing stocks and bonds, notes, debentures, or other obligations of the United States or any agency or instrumentality of the United States, or guaranteed by the United States, or of this state, or of a city, county, town, village, school district, or instrumentality of this state, or guaranteed by this state, to an aggregate amount, based upon principal amount or market value, whichever is lower, of not less than the amount of the security device or portion of the security device. The securities or cash must be deposited and held to secure the same obligations as would the security device. The depositor shall receive all interest and dividends. The depositor may, with the approval of the commissioner, substitute other securities for those deposited, and is required to do so on written order of the commissioner made for good cause shown.

Subd. 3.

Cancellation.

The security device remains in effect until cancellation, which may occur only after 30 days' written notice to the commissioner. Cancellation does not affect the rights of any claimant for any liability incurred or accrued during the period for which the bond was in force.

Subd. 4.

Duration.

The security device must remain in place for no longer than five years after the licensee ceases money transmission operations in the state. However, notwithstanding this provision, the commissioner may permit the security device to be reduced or eliminated before that time to the extent that the amount of the licensee's payment instruments outstanding in this state are reduced. The commissioner may also permit a licensee to substitute a letter of credit or other form of security device acceptable to the commissioner for the security device in place at the time the licensee ceases money transmission operations in the state.

53B.09 APPLICATION FEE.

Each application must be accompanied by a nonrefundable application fee in the amount of $4,000.

53B.10 ISSUANCE OF LICENSE.

Subdivision 1.

Investigation.

Upon the filing of a complete application, the commissioner shall investigate the financial condition and responsibility, financial and business experience, character, and general fitness of the applicant. The commissioner may conduct an on-site investigation of the applicant, the reasonable cost of which must be borne by the applicant. If the commissioner finds that the requirements imposed by this chapter have been met and that the required license fee has been paid, the commissioner shall issue a license to the applicant authorizing the applicant to engage in the licensed activities in this state for a term of one year. If these requirements have not been met, the commissioner shall deny the application in writing, setting forth the reasons for the denial.

Subd. 2.

Denial hearing.

Any applicant aggrieved by a denial issued by the commissioner under this section may at any time within 30 days from the date of receipt of written notice of the denial contest the denial by serving a response on the commissioner. The commissioner shall set a date for a hearing not later than 60 days after service of the response, unless a later date is set with the consent of the denied applicant.

53B.11 RENEWAL OF LICENSE AND ANNUAL REPORT.

Subdivision 1.

Fee.

The annual fee for renewal of a license under this chapter is $2,500.

Subd. 2.

Report.

The renewal fee must be accompanied by a report, in a form prescribed by the commissioner. The form must be sent by the commissioner to each licensee no later than three months immediately preceding the date established by the commissioner for license renewal. The licensee must include in this annual renewal report:

(1) a copy of its most recent audited consolidated annual financial statement, including balance sheet, statement of income or loss, statement of changes in shareholder's equity, and statement of changes in financial position, or, in the case of a licensee that is a wholly owned subsidiary of another corporation, the consolidated audited annual financial statement of the parent corporation may be filed in lieu of the licensee's audited annual financial statement;

(2) for the most recent quarter for which data are available prior to the date of the filing of the renewal application, but in no event more than 120 days prior to the renewal date, the licensee must provide the number of payment instruments sold by the licensee in the state, the dollar amount of those instruments, and the dollar amount of those instruments currently outstanding;

(3) any material changes to any of the information submitted by the licensee on its original application that have not previously been reported to the commissioner on any other report required to be filed under this chapter;

(4) a list of the licensee's permissible investments; and

(5) a list of the locations within this state at which business regulated by this chapter is being conducted by either the licensee or its authorized delegate.

Subd. 3.

License display.

A copy of the license issued by the commissioner to the licensee shall be prominently displayed in each location where money transmission services are offered.

53B.12 EXTRAORDINARY REPORTING REQUIREMENTS.

Within 15 days of the occurrence of any one of the events listed below, a licensee shall file a written report with the commissioner describing the event and its expected impact on the licensee's activities in the state:

(1) the filing for bankruptcy or reorganization by the licensee;

(2) the institution of revocation or suspension proceedings against the licensee by any state or governmental authority with regard to the licensee's money transmission activities;

(3) any felony indictment of the licensee or any of its key officers or directors related to money transmission activities; or

(4) any felony conviction of the licensee or any of its key officers or directors related to money transmission activities.

53B.13 CHANGES IN CONTROL OF A LICENSEE.

Any purchaser of ten percent or more of an ownership interest in a licensee must notify the commissioner at least 30 days in advance of the purchase and submit a completed license application form. The commissioner may revoke the license if the new ownership would have resulted in a denial of the initial license under this chapter. The commissioner may waive this notification requirement if, in the commissioner's discretion, the change in control does not pose any risk to the interests of the public.

53B.14 EXAMINATIONS.

The commissioner has under this chapter the same powers with respect to financial examinations that the commissioner has under section 46.04.

53B.15 MAINTENANCE OF RECORDS.

Subdivision 1.

Requirement.

Each licensee shall make, keep, and preserve the following books, accounts, and other records for a period of three years:

(1) a record or records of each payment instrument sold;

(2) a general ledger containing all assets, liability, capital, income, and expense accounts, which must be posted at least monthly;

(3) bank statements and bank reconciliation records;

(4) records of outstanding payment instruments;

(5) records of each payment instrument paid within the three-year period; and

(6) a list of the names and addresses of all of the licensee's authorized delegates.

Subd. 2.

Compliance.

(a) Any licensee selling money orders shall maintain a record of the date, amount, serial number, and the location of the sale for each money order sold in this state.

(b) Any licensee engaged in the business of receiving money for transmission or transmitting money shall maintain a record of the identity of the remitter, identity of the recipient, amount of the transmission, date of the transaction, date funds were transmitted, and the location from which the funds were remitted for each transaction initiated in this state.

(c) Maintenance of the documents required by this section in a photographic, electronic, or other similar form constitutes compliance with this section.

Subd. 3.

Location.

Records may be maintained at a location other than within this state if they are made accessible to the commissioner on seven days' written notice.

53B.16 CONFIDENTIALITY OF DATA SUBMITTED TO THE COMMISSIONER.

Data or other information obtained by the commissioner under this chapter, whether as a result of the license application or renewal process or examinations, is subject to chapter 13.

53B.17 SOLVENCY REQUIRED.

If the commissioner determines that a licensee is insolvent, that its capital is impaired, or that its condition is such as to render the continuance of its business hazardous to the public or to those having funds in its custody, the commissioner may apply to the district court for the county in which the main office is located, or for Ramsey County if the licensee does not have a main office in Minnesota, for appointment of a receiver to receive the assets of the licensee for the purpose of liquidating or rehabilitating its business and for such other relief as the interest of the public may require. The reasonable and necessary expenses of the receivership have priority over all other claims on the bond required by this chapter.

53B.18 PROHIBITED PRACTICES.

(a) No licensee shall:

(1) fail to comply with chapter 345 as it relates to unclaimed property requirements;

(2) refuse to indemnify an instrument holder for any misappropriation of money caused by any of its authorized delegates in conducting activities on behalf of the licensee for whom it acts as an authorized delegate; or

(3) fail to comply with section 53B.27.

(b) A licensee must transmit all money received for transmission in accordance with the sender's instructions within five business days of the date the licensee receives the money from the sender unless:

(1) otherwise ordered by the sender;

(2) the licensee or its authorized delegate has a reasonable belief or a reasonable basis to believe that a crime or violation of law, rule, or regulation has occurred, is occurring, or may occur as a result of transmission; or

(3) the transmission is payment for goods or services.

(c) A licensee must conspicuously state in an agreement with a merchant to transmit money from a sender for goods or services:

(1) that the licensee has the authority to place a hold on or delay the transmission of a sender's money for more than five business days; and

(2) the general circumstances under which a transmittal may be subject to a hold or delay.

(d) A licensee that receives money from a sender for transmission to a merchant to pay for goods or services must transmit the money to the merchant within the time frame agreed upon in the merchant's agreement with the licensee.

(e) If a licensee fails to transmit money received for transmission in accordance with this section, the licensee must respond to inquiries by the sender or recipient with the reason for the failure unless the response violates state or federal law.

(f) A licensee or its authorized delegate must refund to the customer all money received for transmittal within ten days of receipt of a request for a refund unless any of the following has occurred:

(1) the money has been transmitted and delivered to the person designated by the customer prior to receipt of the written request for a refund;

(2) instructions have been given committing an equivalent amount of money to the person designated by the customer prior to the receipt of a request for a refund; or

(3) the licensee is otherwise barred by law from making a refund.

53B.19 SUSPENSION OR REVOCATION OF LICENSES.

After notice and hearing, the commissioner may suspend or revoke a licensee's license if the commissioner finds that:

(1) any fact or condition exists that, if it had existed at the time when the licensee applied for its license, would have been grounds for denying the application;

(2) the licensee's net worth becomes inadequate and the licensee, after ten days' written notice from the commissioner, fails to take steps the commissioner considers necessary to remedy the deficiency;

(3) the licensee violates any material provision of this chapter or any rule or order validly adopted by the commissioner under authority of this chapter;

(4) the licensee is conducting its business in an unsafe or unsound manner;

(5) the licensee is insolvent;

(6) the licensee has suspended payment of its obligations, has made an assignment for the benefit of its creditors, or has admitted in writing its inability to pay its debts as they become due;

(7) the licensee has applied for an adjudication of bankruptcy, reorganization, arrangement, or other relief under any bankruptcy;

(8) the licensee refuses to permit the commissioner to make any examination authorized by this chapter; or

(9) the licensee fails to make any report required by this chapter.

53B.20 AUTHORIZED DELEGATE CONTRACTS.

Subdivision 1.

Contents of contract.

Licensees that conduct licensed activities through authorized delegates shall authorize each delegate to operate under an express written contract that, for contracts entered into after August 1, 2001, provide the following:

(1) that the licensee appoint the person as its delegate with authority to engage in money transmission on behalf of the licensee;

(2) that neither a licensee nor an authorized delegate authorize subdelegates without the written consent of the commissioner; and

(3) that licensees are subject to supervision and regulation by the commissioner and that as a part of that supervision and regulation, the commissioner may require the licensee to cancel an authorized delegate contract as a result of a violation of section 53B.21.

Subd. 2.

Termination of authorized delegate contract.

Upon termination of any authorized delegate contract, the licensee must notify the commissioner within a reasonable amount of time of the termination.

Subd. 3.

Exempt entities.

For purposes of this section, "licensee" includes exempt entities.

53B.21 AUTHORIZED DELEGATE CONDUCT.

(a) An authorized delegate shall not make any fraudulent or false statement or misrepresentation to a licensee or to the commissioner.

(b) An authorized delegate shall conduct its money transmission activities in a safe and sound manner.

(c) An authorized delegate shall cooperate with an investigation conducted by the commissioner under this chapter by providing any relevant information in its possession that the commissioner cannot reasonably obtain from another source.

(d) An authorized delegate is under a duty to act only as authorized under the contract with the licensee and any authorized delegate who exceeds its authority is subject to cancellation of its contract.

(e) All funds, less fees, received by an authorized delegate of a licensee from the sale or delivery of a payment instrument issued by a licensee or received by an authorized delegate for transmission, constitute trust funds owned by and belonging to the licensee from the time the funds are received by the authorized delegate until the time when the funds or an equivalent amount are remitted by the authorized delegate to the licensee. If an authorized delegate commingles any funds with other funds or property owned or controlled by the authorized delegate, all commingled proceeds and other property must be impressed with a trust in favor of the licensee in an amount equal to the amount of the proceeds due the licensee.

(f) For purposes of this section, "licensee" includes exempt entities.

53B.22 LICENSEE LIABILITY.

A licensee's responsibility to any person for a money transmission conducted on that person's behalf by the licensee or the licensee's authorized delegate is limited to the amount of money tendered or the face amount of the payment instrument purchased.

53B.23 HEARINGS; PROCEDURES.

The provisions of the Minnesota Administrative Procedure Act, chapter 14, apply to any hearing under this chapter.

53B.24 ENFORCEMENT.

Section 45.027 applies to this chapter.

53B.25 RULE NOTICES.

At the time the commissioner files a notice of proposed adoption, amendment, or repeal of a rule adopted under this chapter, a copy of the notice must be sent by regular United States mail, postage prepaid, to all then-current licensees and applicants for licenses under this chapter.

53B.26 APPOINTMENT OF COMMISSIONER AS AGENT FOR SERVICE OF PROCESS.

Subdivision 1.

Consent and appointment.

Any licensee, authorized delegate, or other person who knowingly engages in business activities that are regulated under this chapter, with or without filing an application, is considered to have done both of the following:

(1) consented to the jurisdiction of the courts of this state for all actions arising under this chapter; and

(2) appointed the commissioner as the lawful agent for the purpose of accepting service of process in any action, suit, or proceeding that may arise under this chapter.

Subd. 2.

Service of process.

Service of process must be made in accordance with section 45.028, subdivision 2.

53B.27 MONEY TRANSMITTERS; COOPERATION REQUIRED IN COMBATTING FRAUD.

Subdivision 1.

Fraud prevention measures required.

Each money transmitter shall:

(1) provide a clear, concise, and conspicuous consumer fraud warning on all transmittal forms used by consumers to send money to an individual;

(2) provide consumer fraud prevention training for agents involved with transmittals;

(3) monitor agent activity relating to consumer transmittals; and

(4) establish a toll-free number for consumers to call to report fraud or suspected fraud.

Subd. 2.

Voluntary disqualification by customer.

A money transmitter that originates money transfers in this state must allow an individual to voluntarily disqualify the individual from sending or receiving money transfers. The disqualification lasts for one year, unless the individual requests that it be in effect for a period longer than one year. The individual may terminate the disqualification at any time upon written notice to the money transmitter.

Subd. 5.

High incidence of schemes to defraud.

The commissioner, after consulting with licensed money transmitters, may recommend a maximum transaction amount for money transmissions to countries associated with high incidence of schemes to defraud.

Subd. 6.

Notification of attempted receipt of money transfer at unexpected location.

Upon request of a sender of a money transmission, a money transmitter shall promptly notify the sender if the money transmitter receives notice that a person has attempted to receive the transfer at a physical location in a state or country other than the state or country specified by the sender. The money transmitter shall not authorize receipt of the transfer at any physical location not specified in writing by the sender at the time of the transmission unless the money transmitter has received authorization from the sender.

Subd. 7.

Verification of name and location of receipt of money transfer.

Upon request of a sender or the authorized delegate of a money transmission, a money transmitter shall provide the sender verification of the location where the transfer was received and the name of the person receiving the transfer. This subdivision only applies to transmissions received at a physical location.

62A.31 MEDICARE SUPPLEMENT BENEFITS; MINIMUM STANDARDS.

Subd. 1b.

Preexisting condition coverage.

The policy must cover preexisting conditions during the first six months of coverage if the insured was not diagnosed or treated for the particular condition during the 90 days immediately preceding the effective date of coverage.

Subd. 1i.

Replacement coverage.

If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate, the issuer of the replacing policy or certificate shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods in the new Medicare supplement policy or certificate for benefits to the extent the time was spent under the original policy or certificate. For purposes of this subdivision, "Medicare supplement policy or certificate" means all coverage described in section 62A.011, subdivision 3, clause (10).

325D.71 UNLAWFUL GASOLINE SALES.

Any offer for sale of gasoline by a retailer by way of posted price or indicating meter that is below cost, as defined by section 325D.01, subdivision 5, clause (3), is a violation of section 325D.04, except that the criminal penalties in section 325D.071 do not apply. In addition to the penalties for violations and the remedies provided for injured parties set forth elsewhere in this chapter, the commissioner of commerce may use the authority under section 45.027 for the purpose of preventing violations of this section. A retailer who sells gasoline at the same or higher legally posted price of a competitor in the same market area, on the same day, is not in violation of this section.

A retailer who offers gasoline for sale at a price below cost as part of a promotion at an individual location for no more than three days in any calendar quarter is not in violation of this section.

327C.04 UTILITY CHARGES.

Subd. 4.

Electricity.

If a park owner provides electricity to residents by reselling electricity purchased from a public or municipal utility or electrical cooperative, and compliance with subdivision 3 would cause the park owner to lose money on the sale of electricity, the park owner may bill residents at a rate calculated to allow the park owner to avoid losing money on the sale of electricity. In calculating the cost of providing electricity, the park owner may consider only the actual amount billed by the public utility or electrical cooperative to the park owner for electricity furnished to residents. The park owner may not consider administrative, capital or other expenses.

Repealed Minnesota Rule: H2680-1

2675.2610 ANNUAL EXAMINATION REPORT.

Subpart 1.

Contents.

An annual examination report made under the direction of the board of directors pursuant to Minnesota Statutes, section 48.10, must at a minimum:

A.

determine that an internal control system is in place as required by part 2675.2600 and that control procedures are being followed (describe process and findings);

B.

determine when the board last reviewed loan, investment, audit, and asset/liability policies;

C.

confirm securities held at the bank, in safekeeping elsewhere, or in book entry form;

D.

confirm loans and deposits through a sample positive or negative verification (define and describe process);

E.

determine if the board has reviewed fixed assets, other real estate, and equity accounts since the last examination;

F.

examine income, expense, and related accrual accounts since the last examination (describe process and findings);

G.

determine that general ledger supporting accounts are promptly reconciled and appropriateness of reconciling items, and account makeup (describe process and findings);

H.

determine that the board is reviewing delinquent loans and collection action taking place (show frequency of review);

I.

determine when the board last reviewed the allowance for loan loss account and the basis on which the funding determination was made;

J.

determine that the board has approved charge off loans, that charge off notes and files are secure, and that IRS Forms 1099C have been prepared where appropriate;

K.

sample loan files for documentation and approvals required by loan policy (describe sample methodology and findings);

L.

determine that an internal audit function exists regarding the electronic data processing system or computer applications and that procedures are in place for authorizing input data and master file changes and consider the effect of a service organization on the bank's internal control system and, if applicable, obtain an auditor's report on the policies and procedures in operation at the service organization;

M.

examine significant activity in employee and officer accounts (depository and loan) for propriety and compliance with bank policies and regulations (describe process and findings); and

N.

determine that off-balance sheet items have been authorized and detail items that may have a material impact on the condition of the financial institution.

Subp. 3.

Preparation.

A written report of the annual examination must be prepared and must include the scope of the examination including the size of the samplings taken. The report must summarize the findings and make recommendations for improving conditions, where appropriate.

Subp. 4.

Transmittal.

The written report shall be transmitted to the board of directors within 30 days of completion of the annual examination.

2675.2620 QUALIFICATIONS OF EXAMINING AUTHORITY.

Subpart 1.

Board to specify examining authority.

The board shall have the discretion to determine the method of examination used to meet the requirements of this part provided the examination is accomplished through one of the methods in subparts 2 to 5.

Subp. 2.

Examining committee.

If the requirements of this part are to be accomplished in whole or in part by an examining committee appointed by the board, the annual examination must be completed by qualified directors or their appointees who are in fact reasonably independent. A director or appointee serving as a member of the examining committee will not be considered independent if:

A.

the person is closely related to active officers or employees of the bank;

B.

the person has outstanding loans with the bank subject to criticism by state or federal supervisory agencies; or

C.

the person has other unusual relationships or affiliations with the bank that raise the question of independence.

Subp. 3.

Internal auditor.

If the requirements of this part are to be accomplished in whole or in part by an internal auditor, the examination must be completed by a qualified internal auditor who is in fact reasonably independent. An internal auditor will not be considered independent if:

A.

the person is employed or accountable to anyone other than the board of directors, and salary and annual bonus are not set by the board, unless the person is employed by the institution's holding company;

B.

the person's duties within the bank are not confined entirely to bank auditing;

C.

the person has any proprietary interest in any partnership, firm, or corporation which controls the bank, directly or indirectly;

D.

the person has outstanding loans subject to criticism by state or federal supervisory agencies;

E.

the person is a member of the immediate family of an officer, director, attorney, or employee for the bank; or

F.

the person has other unusual relationships or affiliations with the bank that raise the question of independence.

In banks of less than $50,000,000 in total assets as of the immediately preceding calendar year end, where duties of the internal auditor cannot be confined entirely to bank auditing, the internal auditor will be considered reasonably independent only if someone else audits the areas for which the internal auditor has operational responsibilities. The board is responsible for determining that this degree of internal audit dependence is maintained.

Subp. 4.

Certified public accountants or licensed public accountants.

If the requirements of this part are to be accomplished in whole or in part by a certified public accountant or licensed public accountant, the examination must be completed by a qualified certified public accountant or a qualified licensed public accountant who is in fact independent. A certified public accountant or licensed public accountant will not be considered independent if:

A.

The certified public accountant, licensed public accountant, or any member of a firm performing the examination is connected with the bank as an officer, director, attorney, or employee or is a member of the immediate family of an officer, director, bank attorney, or employee.

B.

He or she is the beneficial owner, directly or indirectly, of any of the shares of stock of the bank.

C.

He or she has any proprietary interest in any partnership, firm, or corporation which controls the banks, directly or indirectly.

D.

The bank under examination has outstanding loans to the certified public accountant, licensed public accountant, partners, principals of the firm, or employees of such a firm who are directly involved in the examination, unless the loans are adequately disclosed in the examination report to the board of directors of the bank. Adequate disclosure includes the name of the borrower, the amount of the loan, the security pledged, and the appraisal or market value of the security at the time of the engagement.

E.

He or she makes entries or postings on the books of account or performs any other operating functions for the bank, except functions for which prior approval was requested and obtained in writing from the commissioner of commerce.

F.

He or she has other unusual relationships or affiliations with the bank that raise the question of independence.

In circumstances where directors, appointees, or the internal auditor are considered not independent or qualified to perform the annual examination, the board should engage a certified public accountant or licensed public accountant.

Subp. 5.

Board of directors.

If the requirements of this part are to be accomplished by the board of directors as provided in Minnesota Statutes, section 48.10, the board must number at least five and include at a minimum one outside director.

2675.2630 OPINION AUDIT.

Subp. 3.

Satisfaction of annual examination report requirement.

An unqualified opinion audit on the financial statement of the institution or a consolidated opinion audit on the institution taken as a whole will satisfy the annual examination report requirements of part 2675.2610, subpart 1. However, documentation of internal audit procedures performed in testing the internal control system, part 2675.2600, must be maintained by the bank for inspection by the supervisory examiners and external auditors.