Minnesota Legislature
SF 1915
3rd Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
Current Version - 3rd Engrossment
1.1 A bill for an act 1.2 relating to commerce; changing the enforcement 1.3 authority of the commissioner; providing continuing 1.4 education and reporting requirements for certain 1.5 licenses; regulating inspections of cosmetology salons 1.6 and schools; regulating disclosures of information and 1.7 data; regulating securities registrations and 1.8 exemptions; regulating franchise registrations and 1.9 definitions; regulating cancellations of membership 1.10 camping contracts; modifying the bond or insurance 1.11 requirements for abstractors; regulating residential 1.12 building contractors; regulating certain real estate 1.13 disclosures; regulating unclaimed properties and 1.14 notaries public; removing a certain licensing 1.15 exception; repealing an obsolete provision; amending 1.16 Minnesota Statutes 1994, sections 45.011, subdivision 1.17 1; 45.027, subdivision 7, and by adding subdivisions; 1.18 47.206, subdivision 1; 53A.081, subdivision 1; 60K.19, 1.19 subdivisions 7, 8, and 10; 80A.05, subdivision 1; 1.20 80A.06, subdivision 3; 80A.09, by adding a 1.21 subdivision; 80A.10, subdivision 4; 80A.11, by adding 1.22 a subdivision; 80A.14, by adding subdivisions; 80A.15, 1.23 subdivisions 2 and 3; 80C.01, by adding a subdivision; 1.24 80C.05, by adding a subdivision; 82.19, subdivision 5; 1.25 82.195, subdivision 2; 82.196, subdivisions 1 and 2; 1.26 82.197, subdivisions 1, 2, 3, and 4; 82.22, 1.27 subdivision 13; 82A.11, by adding a subdivision; 1.28 82B.19, by adding a subdivision; 155A.08, subdivision 1.29 3; 155A.09, subdivision 7; 155A.095; 326.37, by adding 1.30 a subdivision; 326.87, by adding a subdivision; 1.31 326.91, by adding subdivisions; 326.991; 332.34; 1.32 345.41; 345.42; 345.43, by adding a subdivision; 1.33 345.515; 359.01, subdivisions 1 and 2; 359.02; and 1.34 359.061; Minnesota Statutes 1995 Supplement, sections 1.35 16A.6701, subdivision 1; 80A.15, subdivision 1; 82.20, 1.36 subdivision 15; 82.34, subdivision 7; 83.26, 1.37 subdivision 2; and 386.66; proposing coding for new 1.38 law in Minnesota Statutes, chapters 45; and 332; 1.39 repealing Minnesota Statutes 1994, sections 80A.14, 1.40 subdivision 8; 326.95, subdivision 4; 326.97, 1.41 subdivision 3; 326.99; and 345.43, subdivisions 1 and 1.42 2. 1.43 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.44 ARTICLE 1 2.1 GENERAL ENFORCEMENT 2.2 Section 1. Minnesota Statutes 1995 Supplement, section 2.3 16A.6701, subdivision 1, is amended to read: 2.4 Subdivision 1. [STATE LICENSE AND SERVICE FEES.] For 2.5 purposes of section 16A.665, subdivision 3, and this section, 2.6 the term "state license and service fees" means, and refers to, 2.7 all license fees, service fees, and charges imposed by law and 2.8 collected by any state officer, agency, or employee, which are 2.9 listed below or which are defined as departmental earnings under 2.10 section 16A.1285, subdivision 1, and the use of which is not 2.11 otherwise restricted by law, and which are not required to be 2.12 credited or transferred to a fund other than the general fund: 2.13 Minnesota Statutes 1994, sections 3.9221; 5.12; 5.14; 5.16; 2.14 5A.04; 6.58; 13.03, subdivision 10; 16A.155; 16A.48; 16A.54; 2.15 16A.72; 16B.59; 16B.70; 17A.04; 18.51, subdivision 2; 18.53; 2.16 18.54; 18C.551; 19.58; 19.64; 27.041, subdivision 2, clauses (d) 2.17 and (e); 27.07, subdivision 5; 28A.08; 32.071; 32.075; 32.392; 2.18 35.71; 35.824; 35.95; 41C.12; 45.027, subdivisions 3 and 6; 2.19 46.041, subdivision 1; 46.131, subdivisions 2, 7, 8, 9, and 10; 2.20 47.101, subdivision 2; 47.54, subdivisions 1 and 4; 47.62, 2.21 subdivision 4; 47.65; 48.475, subdivision 1; 48.61, subdivision 2.22 7; 48.93; 49.36, subdivision 1; 52.01; 52.203; 53.03, 2.23 subdivisions 1, 5, and 6; 53.09, subdivision 1; 53A.03; 53A.05, 2.24 subdivision 1; 53A.081, subdivision 3; 54.294, subdivision 1; 2.25 55.04, subdivision 2; 55.095; 56.02; 56.04; 56.10; 59A.03, 2.26 subdivision 2; 59A.06, subdivision 3; 60A.14, subdivisions 1 and 2.27 2; 60A.23, subdivision 8; 60K.19, subdivision 5; 65B.48, 2.28 subdivision 3; 70A.14, subdivision 4; 72B.04, subdivision 10; 2.29 79.251, subdivision 5; 80A.28, subdivisions 1, 2, 3, 4, 5, 6, 7, 2.30 7a, 8, and 9; 80C.04, subdivision 1; 80C.07; 80C.08, subdivision 2.31 1; 80C.16, subdivisions 2 and 3; 80C.18, subdivision 2; 82.20, 2.32 subdivision 8 and 9; 82A.04, subdivision 1; 82A.08, subdivision 2.33 2; 82A.16, subdivisions 2 and 6; 82B.09, subdivision 1; 83.23, 2.34 subdivisions 2, 3, and 4; 83.25, subdivisions 1 and 2; 83.26, 2.35 subdivision 2; 83.30, subdivision 2; 83.31, subdivision 2; 2.36 83.38, subdivision 2; 85.052; 85.053; 85.055; 88.79, subdivision 3.1 2; 89.035; 89.21; 115.073; 115.77, subdivisions 1 and 2; 116.41, 3.2 subdivision 2; 116C.69; 116C.712; 116J.9673; 125.08; 136C.04, 3.3 subdivision 9; 155A.045; 155A.16; 168.27, subdivision 11; 3.4 168.33, subdivisions 3 and 7; 168.54; 168.67; 168.705; 168A.152; 3.5 168A.29; 169.345; 171.06, subdivision 2a; 171.29, subdivision 2; 3.6 176.102; 176.1351; 176.181, subdivision 2a; 177.30; 181A.12; 3.7 183.545; 183.57; 184.28; 184.29; 184A.09; 201.091, subdivision 3.8 5; 204B.11; 207A.02; 214.06; 216C.261; 221.0355; 239.101; 3.9 240.06; 240.07; 240.08; 240.09; 240.10; 246.51; 270.69, 3.10 subdivision 2; 270A.07; 272.484; 296.06; 296.12; 296.17; 297.04; 3.11 297.33; 299C.46; 299C.62; 299K.09; 299K.095; 299L.07; 299M.04; 3.12 300.49; 318.02; 323.44, subdivision 3; 325D.415; 326.22; 3.13 326.3331; 326.47; 326.50; 326.92, subdivisions 1 and 3; 327.33; 3.14 331A.02; 332.15, subdivisions 2 and 3; 332.17; 332.22, 3.15 subdivision 1; 332.33, subdivisions 3 and 4; 332.54, subdivision 3.16 7; 333.055; 333.20; 333.23; 336.9-413; 336A.04; 336A.05; 3.17 336A.09; 345.35; 345.43, subdivision12a; 345.44; 345.55, 3.18 subdivision 3; 347.33; 349.151; 349.161; 349.162; 349.163; 3.19 349.164; 349.165; 349.166; 349.167; 357.08; 359.01, subdivision 3.20 3; 360.018; 360.63; 386.68; and 414.01, subdivision 11; 3.21 Minnesota Statutes 1994, chapters 154; 216B; 237; 302A; 303; 3.22 308A; 317A; 322A; and 322B; Laws 1990, chapter 593; Laws 1993, 3.23 chapter 254, section 7; and Laws 1994, chapter 573, section 4; 3.24 Minnesota Rules, parts 1800.0500; 1950.1070; 2100.9300; 3.25 7515.0210; and 9545.2000 to 9545.2040. 3.26 Sec. 2. Minnesota Statutes 1994, section 45.011, 3.27 subdivision 1, is amended to read: 3.28 Subdivision 1. [SCOPE.] As used in chapters 45 to 83, 3.29 155A, 309, 332, 345, and 359, and sections 326.83 to 326.98, and 3.30 386.61 to 386.78, unless the context indicates otherwise, the 3.31 terms defined in this section have the meanings given them. 3.32 Sec. 3. [45.016] [SERVICE OF ORDERS OR OTHER PAPERS.] 3.33 Service of orders or other papers required or permitted to 3.34 be issued by the commissioner related to the duties and 3.35 responsibilities entrusted to the commissioner may be by any of 3.36 the following methods: 4.1 (1) personal service consistent with requirements for 4.2 service of a summons or process under section 303.13 or 543.19, 4.3 or under rule 4.03 of the Minnesota Rules of Civil Procedure; 4.4 (2) first class United States mail, including certified 4.5 United States mail, or overnight express mail service, postage 4.6 prepaid and addressed to the party at the party's last known 4.7 address. Service by United States mail, including certified 4.8 mail, is complete upon placing the order or other paper in the 4.9 mail or otherwise delivering the order or other paper to the 4.10 United States mail service. Service by overnight express mail 4.11 service is complete upon delivering the order or other document 4.12 to an authorized agent of the express mail service; or 4.13 (3) any other method of service provided under the laws 4.14 relating to duties and responsibilities entrusted to the 4.15 commissioner. 4.16 Sec. 4. Minnesota Statutes 1994, section 45.027, 4.17 subdivision 7, is amended to read: 4.18 Subd. 7. [ACTIONS AGAINST LICENSEES.] In addition to any 4.19 other actions authorized by this section, the commissioner may, 4.20 by order, deny, suspend, or revoke the authority or license of a 4.21 person subject to the duties and responsibilities entrusted to 4.22 the commissioner, as described under section 45.011, subdivision 4.23 4, or censure that person if the commissioner finds that: 4.24 (1) the order is in the public interest; and 4.25 (2) the person has violated any law, rule, or order related 4.26 to the duties and responsibilities entrusted to the 4.27 commissioner; or 4.28 (3) the person has provided false, misleading, or 4.29 incomplete information to the commissioner or has refused to 4.30 allow a reasonable inspection of records or premises; or 4.31 (4) the person has engaged in an act or practice, whether 4.32 or not the act or practice directly involves the business for 4.33 which the person is licensed or authorized, which demonstrates 4.34 that the applicant or licensee is untrustworthy, financially 4.35 irresponsible, or otherwise incompetent or unqualified to act 4.36 under the authority or license granted by the commissioner. 5.1 Except for information classified as confidential under 5.2 sections 60A.03, subdivision 9; 60A.031; 60A.93; and 60D.22, the 5.3 commissioner may make any data otherwise classified as private 5.4 or confidential pursuant to this section accessible to an 5.5 appropriate person or agency if the commissioner determines that 5.6 the access will aid the law enforcement process, promote public 5.7 health or safety, or dispel widespread rumor or unrest. If the 5.8 commissioner determines that private or confidential information 5.9 should be disclosed, the commissioner shall notify the attorney 5.10 general as to the information to be disclosed, the purpose of 5.11 the disclosure, and the need for the disclosure. The attorney 5.12 general shall review the commissioner's determination. If the 5.13 attorney general believes that the commissioner's determination 5.14 does not satisfy the purpose and intent of this provision, the 5.15 attorney general shall advise the commissioner in writing that 5.16 the information may not be disclosed. If the attorney general 5.17 believes the commissioner's determination satisfies the purpose 5.18 and intent of this provision, the attorney general shall advise 5.19 the commissioner in writing, accordingly. 5.20 After disclosing information pursuant to this provision, 5.21 the commissioner shall advise the chairs of the senate and house 5.22 of representatives judiciary committees of the disclosure and 5.23 the basis for it. 5.24 Sec. 5. Minnesota Statutes 1994, section 45.027, is 5.25 amended by adding a subdivision to read: 5.26 Subd. 12. [CONDITIONS OF RELICENSURE.] A revocation of a 5.27 license prohibits the licensee from making a new application for 5.28 a license for at least two years from the effective date of the 5.29 revocation. The commissioner may, as a condition of 5.30 reapplication, require the applicant to obtain a bond or comply 5.31 with additional reasonable conditions of licensure the 5.32 commissioner considers necessary to protect the public. 5.33 Sec. 6. Minnesota Statutes 1994, section 53A.081, 5.34 subdivision 1, is amended to read: 5.35 Subdivision 1. [ANNUAL REPORT.] On or beforeMarch 1April 5.36 30, a licensee shall file an annual report with the commissioner 6.1 for the previous calendar year. The report must contain 6.2 information that the commissioner may reasonably require 6.3 concerning, and for the purpose of examining, the business and 6.4 operations of each licensed currency exchange. 6.5 Sec. 7. Minnesota Statutes 1994, section 60K.19, 6.6 subdivision 7, is amended to read: 6.7 Subd. 7. [CRITERIA FOR COURSE ACCREDITATION.] (a) The 6.8 commissioner may accredit a course only to the extent it is 6.9 designed to impart substantive and procedural knowledge of the 6.10 insurance field. The burden of demonstrating that the course 6.11 satisfies this requirement is on the individual or organization 6.12 seeking accreditation. The commissioner shall approve any 6.13 educational program approved by Minnesota Continuing Legal 6.14 Education relating to the insurance field. The commissioner is 6.15 authorized to establish a procedure for renewal of course 6.16 accreditation. 6.17 (b) The commissioner shall approve or disapprove 6.18 professional designation examinations that are recommended for 6.19 approval by the advisory task force. In order for an agent to 6.20 receive full continuing education credit for a professional 6.21 designation examination, the agent must pass the examination. 6.22 An agent may not receive credit for classroom instruction 6.23 preparing for the professional designation examination and also 6.24 receive continuing education credit for passing the professional 6.25 designation examination. 6.26 (c) The commissioner may not accredit a course: 6.27 (1) that is designed to prepare students for a license 6.28 examination; 6.29 (2) in mechanical office or business skills, including 6.30 typing, speedreading, use of calculators, or other machines or 6.31 equipment; 6.32 (3) in sales promotion, including meetings held in 6.33 conjunction with the general business of the licensed agent; 6.34 (4) in motivation, the art of selling, psychology, or time 6.35 management; or 6.36 (5) which can be completed by the student at home or 7.1 outside the classroom without the supervision of an instructor 7.2 approved by the department of commerce, except that home-study 7.3 courses may be accredited by the commissioner if the student is 7.4 a nonresident agent residing in a state which is not contiguous 7.5 to Minnesota. 7.6 Sec. 8. Minnesota Statutes 1994, section 60K.19, 7.7 subdivision 8, is amended to read: 7.8 Subd. 8. [MINIMUM EDUCATION REQUIREMENT.] Each person 7.9 subject to this section shall complete a minimum of 30 credit 7.10 hours of courses accredited by the commissioner during each 7.11 24-month licensing period after the expiration of his or her 7.12 initial licensing period. At least 15 of the 30 credit hours 7.13 must be completed during the first 12 months of the 24-month 7.14 licensing period. Any person whose initial licensing period 7.15 extends more than six months shall complete 15 hours of courses 7.16 accredited by the commissioner during the initial license 7.17 period. Any person teaching or lecturing at an accredited 7.18 course qualifies for 1-1/2 times the number of credit hours that 7.19 would be granted to a person completing the accredited course. 7.20 No more than 15 credit hours per licensing period may be 7.21 credited to a person for courses sponsored by, offered by, or 7.22 affiliated with an insurance company or its agents.Continuing7.23education must be earned no later than September 30 of the7.24renewal year.Courses sponsored by, offered by, or affiliated 7.25 with an insurance company or agent may restrict its students to 7.26 agents of the company or agency. 7.27 Sec. 9. Minnesota Statutes 1994, section 60K.19, 7.28 subdivision 10, is amended to read: 7.29 Subd. 10. [REPORTING.] (a) After completing the minimum 7.30 education requirement, each person subject to this section shall 7.31 file or cause to be filed a compliance report in accordance with 7.32 the procedures adopted by the commissioner. The compliance 7.33 report must not claim credit for continuing education not 7.34 actually completed at the date of filing the report. 7.35 (b) An institution offering an accredited course shall 7.36 comply with the procedure for reporting compliance adopted by 8.1 the commissioner. 8.2 (c) If a person subject to this section completes a 8.3 nonaccredited course, that person may submit a written report to 8.4 the advisory committee accompanied by a fee of not more than $10 8.5 payable to the state of Minnesota for deposit in the general 8.6 fund. This report must be accompanied by proof satisfactory to 8.7 the commissioner that the person has completed the minimum 8.8 education requirement for the annual period during which the 8.9 nonaccredited course was completed. Upon the recommendation of 8.10 the advisory committee that the course satisfies the criteria 8.11 for course accreditation, the commissioner may approve the 8.12 nonaccredited course and shall so inform the person. If the 8.13 nonaccredited course is approved by the commissioner, it may be 8.14 used to satisfy the minimum education requirement for the 8.15 person's next annual compliance period. 8.16 Sec. 10. Minnesota Statutes 1995 Supplement, section 8.17 82.20, subdivision 15, is amended to read: 8.18 Subd. 15. [EXEMPTION.] The following persons, when acting 8.19 as closing agents, are exempt from the requirements of sections 8.20 82.19 and 82.24 unless otherwise required in this section or 8.21 chapter: 8.22 (1) a direct employee of a title insurance company 8.23 authorized to do business in this state, or a direct employee of 8.24 a title company, or a person who has an agency agreement with 8.25 a title insurance company or a title company in which the agent 8.26 agrees to perform closing services on the title insurance 8.27 company's or title company's behalf and the title insurance 8.28 company or title company assumes responsibility for the actions 8.29 of the agent as if the agent were a direct employee of the title 8.30 insurance company or title company; 8.31 (2) a licensed attorney or a direct employee of a licensed 8.32 attorney; 8.33 (3) a licensed real estate broker or salesperson; 8.34 (4) a direct employee of a licensed real estate broker if 8.35 the broker maintains all funds received in connection with the 8.36 closing services in the broker's trust account;and9.1 (5) any bank, trust company, savings association, credit 9.2 union, industrial loan and thrift company, regulated lender 9.3 under chapter 56, public utility, or land mortgage or farm loan 9.4 association organized under the laws of this state or the United 9.5 States, when engaged in the transaction of businesses within the 9.6 scope of its corporate powers as provided by law; and 9.7 (6) a title insurance company authorized to do business in 9.8 this state or a title company which is the appointed agent of a 9.9 title insurance company authorized to do business in this state. 9.10 Sec. 11. Minnesota Statutes 1995 Supplement, section 9.11 82.34, subdivision 7, is amended to read: 9.12 Subd. 7. When any aggrieved person obtains a final 9.13 judgment in any court of competent jurisdiction regardless of 9.14 whether the judgment has been discharged by a bankruptcy court 9.15 against an individual licensed under this chapter, on grounds of 9.16 fraudulent, deceptive, or dishonest practices, or conversion of 9.17 trust funds arising directly out of any transaction when the 9.18 judgment debtor was licensed and performed acts for which a 9.19 license is required under this chapter, or performed acts 9.20 permitted by section 327B.04, subdivision 5, the aggrieved 9.21 person may, upon the judgment becoming final, and upon 9.22 termination of all proceedings, including reviews and appeals, 9.23 file a verified application in the court in which the judgment 9.24 was entered. The application shall state with specificity the 9.25 grounds upon which the application seeks to recover from the 9.26 fund, and request an order directing payment out of the fund of 9.27 the amount of actual and direct out of pocket loss in the 9.28 transaction, but excluding any attorney's fees, interest on the 9.29 loss and on any judgment obtained as a result of the loss, up to 9.30 the sum of $150,000 of the amount unpaid upon the judgment, 9.31 provided that nothing in this chapter shall be construed to 9.32 obligate the fund for more than $150,000 per claimant, per 9.33 transaction, subject to the limitations set forth in subdivision 9.34 14, regardless of the number of persons aggrieved or parcels of 9.35 real estate involved in the transaction, provided that 9.36 regardless of the number of claims against a licensee, nothing 10.1 in this chapter may obligate the fund for more than $250,000 per 10.2 licensee. An aggrieved person who has a cause of action under 10.3 section 80A.23 shall first seek recovery as provided in section 10.4 80A.05, subdivision 5, before the commissioner may order payment 10.5 from the recovery fund. For purposes of this section, persons 10.6 who are joint tenants or tenants in common are deemed to be a 10.7 single claimant. A copy of the verified application shall be 10.8 served upon the commissioner and upon the judgment debtor, and a 10.9 certificate or affidavit of service filed with the court. For 10.10 the purpose of this section, "aggrieved person"shalldoes not 10.11 include a government agency, financial institution, or other 10.12 entity that purchases, guarantees, or insures a loan secured by 10.13 real estate, and does not include a licensee unless (1) the 10.14 licensee is acting in the capacity of principal in the sale of 10.15 interests in real property owned by the licensee; or (2) the 10.16 licensee is acting in the capacity of principal in the purchase 10.17 of interests in real property to be owned by the licensee. 10.18 Under no circumstances shall a licensee be entitled to payment 10.19 under this section for the loss of a commission or similar fee. 10.20 For the purposes of this section, recovery is limited to 10.21 transactions where the property involved is intended for the 10.22 direct personal habitation or commercial use of the buyer. 10.23 Except for securities permitted to be sold by a licensee 10.24 pursuant to section 82.19, subdivision 7, for any action 10.25 commenced after July 1, 1993, recovery under this section is not 10.26 available where the buyer's participation is for investment 10.27 purposes only, and is limited to providing capital to fund the 10.28 transaction. 10.29 Sec. 12. Minnesota Statutes 1995 Supplement, section 10.30 83.26, subdivision 2, is amended to read: 10.31 Subd. 2. [GENERALLY; TRANSACTIONS.] Unless the method of 10.32 offer or sale is adopted for the purpose of evasion of sections 10.33 83.20 to 83.42, 83.43 and 83.44, the following transactions are 10.34 exempt from sections 83.23, 83.24, 83.25, 83.28, 83.29, and 10.35 83.30: 10.36 (a) the offer or sale of an interest in subdivided land by 11.1 an owner, other than the subdivider, acting as principal in a 11.2 single or isolated transaction; 11.3 (b) the offer or sale of all of the subdivided lands within 11.4 a subdivision in a single transaction to any person; 11.5 (c) the offer or sale of subdivided land pursuant to an 11.6 order of competent jurisdiction, other than a court of 11.7 bankruptcy; 11.8 (d) the offer or sale of subdivided land consisting of not 11.9 more than ten separate lots, units, parcels, or interests in the 11.10 aggregate, provided that no subdivider may make an offer or sale 11.11 of subdivided land pursuant to this exemption more than once 11.12 during any period of 12 consecutive months; 11.13 (e) the offer or sale of subdivided lands which have been 11.14 registered under section 83.23, subdivision 2, if there are no 11.15 more than ten separate lots, units, parcels, or interests 11.16 remaining to be sold and no material change has occurred in the 11.17 information on file with the commissioner; 11.18 (f) the offer and sale of subdivided land located within 11.19 the corporate limits of a municipality as defined in section 11.20 462.352, subdivision 2, which municipality has adopted 11.21 subdivision regulations as defined in section 462.352, except 11.22 those lands described in section 83.20, subdivision 13; 11.23 (g) the offer and sale of apartments or condominium units 11.24 as defined in chapters 515 and 515A, and units in common 11.25 interest communities as defined in chapter 515B; 11.26 (h) the offer and sale of subdivided lands used primarily 11.27 for agricultural purposes provided each parcel is at least ten 11.28 acres in size; 11.29 (i) the offer or sale of improved lots if: 11.30 (1) the subdivider has filed with the commissioner, no 11.31 later than ten business days prior to the date of the first 11.32 sale, a written notice of its intention to offer or sell 11.33 improved lots, which notice shall be accompanied by a fee of 11.34 $50, together with a copy of the public offering statement 11.35 accepted by the situs state and the standard purchase agreement 11.36 which documents are required to be supplied by the subdivider to 12.1 the purchaser; and 12.2 (2) the subdivider deposits all downpayments in an escrow 12.3 account until all obligations of the subdivider to the 12.4 purchaser, which are pursuant to the terms of the purchase 12.5 agreement to be performed prior to the closing, have been 12.6 performed. The subdivider shall provide the purchaser with a 12.7 purchase receipt for the downpayment paid, a copy of the escrow 12.8 agreement and the name, address, and telephone number of the 12.9 escrow agent. The escrow agent shall be a bank located in 12.10 Minnesota. All downpayments shall be deposited in the escrow 12.11 account within two business days after receipt; and 12.12 (j) the offer of sale of subdivided lands by a subdivider 12.13 that has been granted an exemption from registration by the 12.14 federal Department of Housing and Urban Development under the 12.15 multiple site subdivision exemption, if the subdivider provides 12.16 a written notice of the offer of sale to the commissioner before 12.17 any offers or sale commence. 12.18 The written notice must include the name of the 12.19 subdivision, the county and state in which the subdivision is 12.20 located, and the number of lots in the subdivision, and a 12.21 notarized affidavit that all proposed improvements have been 12.22 completed and the costs of all the improvements have been fully 12.23 paid, or that the cost of any uncompleted road construction or 12.24 survey expenses are covered by a bond or escrow account payable 12.25 to the entities responsible for providing or completing the 12.26 roads or surveys. The escrow account must be with an 12.27 independent escrow agent. 12.28 The subdivider must also provide to the commissioner a copy 12.29 of the federal Housing and Urban Development exemption order and 12.30 the most recent annual confirmation letter which indicates that 12.31 the order is still in effect. 12.32 If the closing services are provided by the subdivider or 12.33 an affiliate of the subdivider, purchasers must manually initial 12.34 in the Housing and Urban Development Lot Information Statement 12.35 both the disclosure on all the liens, reservations, taxes, 12.36 assessments, easements, and restrictions applicable to the lot 13.1 purchased and the disclosure on the risks of not obtaining clear 13.2 title. 13.3 The commissioner may, by rule or order, suspend, revoke, or 13.4 further condition the exemptions contained in clauses (f), (g), 13.5 (h), (i), and (j), or may require such further information as 13.6 may be necessary for the protection of purchasers. 13.7 The commissioner may by rule or order suspend, revoke, or 13.8 further condition the exemptions contained in clauses (f), (g), 13.9 (h), and (i) or may require such further information as may be 13.10 necessary for the protection of purchasers. 13.11 The rulemaking authority in this subdivision does not 13.12 include emergency rulemaking authority pursuant to chapter 14. 13.13 Sec. 13. Minnesota Statutes 1994, section 155A.08, 13.14 subdivision 3, is amended to read: 13.15 Subd. 3. [HEALTH AND SANITARY STANDARDS.] Minimum health 13.16 and sanitary standards for the operation of a salon shall be 13.17 established by rule. A salon shall not be located in a room 13.18 used for residential purposes. If a salon is in the residence 13.19 of a person practicing cosmetology, the rooms used for the 13.20 practice of cosmetology shall be completely partitioned off from 13.21 the living quarters.There shall be an inspection at least13.22annuallyThe salon may be inspected as often as the commissioner 13.23 considers necessary to affirm compliance. 13.24 Sec. 14. Minnesota Statutes 1994, section 155A.09, 13.25 subdivision 7, is amended to read: 13.26 Subd. 7. [INSPECTIONS.] All schoolsshallmay be inspected 13.27at least once a yearas often as the commissioner considers 13.28 necessary to affirm compliance. The commissioner shall have the 13.29 authority to assess the cost of the inspection to the school. 13.30 Sec. 15. Minnesota Statutes 1994, section 155A.095, is 13.31 amended to read: 13.32 155A.095 [INSPECTIONS.] 13.33 The commissioner is responsible for inspecting salons and 13.34 schools licensed pursuant to this chapter to assure compliance 13.35 with the requirements of this chapter. The commissioner shall 13.36 direct department resources first to the inspection of those 14.1 licensees who fail to meet the requirements of law, have 14.2 indicated that they present a greater risk to the public, or 14.3 have otherwise, in the opinion of the commissioner, demonstrated 14.4 that they require a greater degree of regulatory attention.In14.5no event shall a salon or school be inspected less often than14.6once each year.14.7 Sec. 16. Minnesota Statutes 1994, section 332.34, is 14.8 amended to read: 14.9 332.34 [BOND.] 14.10 The commissioner of commerce shall require each collection 14.11 agency licensee to annually file and maintain in force a 14.12 corporate surety bond, in a form to be prescribed by, and 14.13 acceptable to, the commissioner, and in the sum of $20,000. An 14.14 applicant for a new or renewal license may request that the 14.15 amount of the bond be reduced to an amount not less than 14.16 $5,000. This request may be granted upon a showing that the 14.17 total dollar amount received from debtors by the collection 14.18 agency in the preceding fiscal year did not exceed $30,000. A 14.19 collection agency may deposit cash in and with a depository 14.20 acceptable to the commissioner in an amount and in the manner 14.21 prescribed and approved by the commissioner in lieu of a bond. 14.22 Sec. 17. [332.395] [COMMISSIONER'S POWER OVER INEFFECTIVE 14.23 LICENSES.] 14.24 If a license lapses, is surrendered, withdrawn, terminated, 14.25 or otherwise becomes ineffective, the commissioner of commerce 14.26 may do either or both of the following: (1) institute a 14.27 proceeding under section 45.027 within two years after the 14.28 license was last effective and enter a revocation or suspension 14.29 order as of the last date on which the license was in effect; 14.30 (2) impose a civil penalty as provided for in section 45.027, 14.31 subdivision 6. 14.32 Sec. 18. Minnesota Statutes 1994, section 345.41, is 14.33 amended to read: 14.34 345.41 [REPORT OF ABANDONED PROPERTY.] 14.35 (a) Every person holding funds or other property, tangible 14.36 or intangible, presumed abandoned under sections 345.31 to 15.1 345.60 shall report annually to the commissioner with respect to 15.2 the property as hereinafter provided. 15.3 (b) The report shall be verified and shall include: 15.4 (1) except with respect to traveler's checks and money 15.5 orders, the name, if known, and last known address, if any, of 15.6 each person appearing from the records of the holder to be the 15.7 owner of any property of the value of $100 or more presumed 15.8 abandoned under sections 345.31 to 345.60; 15.9 (2) in case of unclaimed funds of life insurance 15.10 corporations, the full name of the policyholder, insured or 15.11 annuitant and that person's last known address according to the 15.12 life insurance corporation's records; 15.13 (3) the nature and identifying number, if any, or 15.14 description of the property and the amount appearing from the 15.15 records to be due, except that items of value under $100 each 15.16 may be reported in aggregate; 15.17 (4) the date when the property became payable, demandable 15.18 or returnable, and the date of the last transaction with the 15.19 owner with respect to the property; and 15.20 (5) other information which the commissioner prescribes by 15.21 rule as necessary for the administration of sections 345.31 to 15.22 345.60. 15.23 (c) If the person holding property presumed abandoned is a 15.24 successor to other persons who previously held the property for 15.25 the owner, or if the holder has changed a name while holding the 15.26 property, the holder shall file with the report all prior known 15.27 names and addresses of each holder of the property. 15.28 (d) The report shall be filed before November 1 of each 15.29 year as of June 30 next preceding, but the report of life 15.30 insurance corporations shall be filed before October 1 of each 15.31 year as of December 31 next preceding. The commissioner may 15.32 postpone the reporting date upon written request by any person 15.33 required to file a report. 15.34 (e)If the holder of property presumed abandoned under15.35sections 345.31 to 345.60 knows the whereabouts of the owner and15.36if the owner's claim has not been barred by the statute of16.1limitations, the holder shall, before filing the annual report,16.2inform the owner of the steps necessary to prevent abandonment16.3from being presumed.Not more than 120 days before filing the 16.4 report required by this section, the holder in possession of 16.5 property abandoned and subject to custody as unclaimed property 16.6 under this chapter shall send written notice to the presumed 16.7 owner at that owner's last known address informing the owner 16.8 that the holder is in possession of property subject to this 16.9 chapter and advising the owner of the steps necessary to prevent 16.10 abandonment if: 16.11 (1) the holder has in its records an address for the 16.12 presumed owner that the holder's records do not disclose to be 16.13 inaccurate; 16.14 (2) the claim of the apparent owner is not barred by the 16.15 statute of limitations; and 16.16 (3) the property has a value of $100 or more. 16.17 (f) Verification, if made by a partnership, shall be 16.18 executed by a partner; if made by an unincorporated association 16.19 or private corporation, by an officer, and if made by a public 16.20 corporation, by its chief fiscal officer. 16.21 (g) Holders of property described in section 345.32 shall 16.22 not impose any charges against property which is described in 16.23 section 345.32, clause (a), (b) or (c). 16.24 (h) Any person who has possession of property which the 16.25 person has reason to believe will be reportable in the future as 16.26 unclaimed property may, with the permission of the commissioner, 16.27 report and deliver such property prior to the date required for 16.28 reporting in accordance with this section. 16.29 Sec. 19. Minnesota Statutes 1994, section 345.42, is 16.30 amended to read: 16.31 345.42 [NOTICE AND PUBLICATION OF LISTS OF ABANDONED 16.32 PROPERTY.] 16.33 Subdivision 1.On or before April 1 of each yearWithin 16.34 the calendar year next following the year in which abandoned 16.35 property has been paid or delivered to the commissioner, the 16.36 commissioner shall cause notice to be published at least once 17.1 but not more than twice in an English language newspaper of 17.2 general circulation in the county in this state in which is 17.3 located the last known address of any person to be named in the 17.4 notice. If no address is listed or if the address is outside 17.5 this state, the notice shall be published in the county in which 17.6 the holder of the abandoned property has a principal place of 17.7 business within this state. 17.8 Subd. 2. The published notice shall be entitled "notice of 17.9 names of persons appearing to be owners of abandoned property," 17.10 and shall contain: 17.11 (a) the names in alphabetical order and last known 17.12 addresses, if any, of persons listed in the report and entitled 17.13 to notice within the county as hereinbefore specified; 17.14 (b) a statementthat information concerning the amount or17.15description of the property and the name and address of the17.16holder may be obtained by any persons possessing an interest in17.17the property by addressing an inquiry to the17.18commissionerexplaining that property of the owner has been 17.19 presumed to be abandoned and has been taken into the protective 17.20 custody of the commissioner; and 17.21 (c) a statement thatif proof of claim is not presented by17.22the owner to the holder and if the owner's right to receive the17.23property is not established to the holder's satisfaction within17.2465 days from the date of the second published notice, the17.25abandoned property will be placed not later than 85 days after17.26such publication date in the custody of the commissioner to whom17.27all further claims must thereafter be directedinformation about 17.28 the abandoned property and its return to the apparent owner may 17.29 be obtained at any time by a person having a legal or beneficial 17.30 interest in that property by making an inquiry to the 17.31 commissioner. 17.32 The commissioner is not required to publish in such notice 17.33 any item of less than $100 unless the commissioner deems such 17.34 publication to be in the public interest. 17.35 Subd. 3.On or before April 1 of each yearWithin the 17.36 calendar year next following the year in which abandoned 18.1 property has been paid or delivered to the commissioner, the 18.2 commissioner may mail a notice to each person having an address 18.3 listed therein who appears to be entitled to property of the 18.4 value of $100 or more presumed abandoned under sections 345.31 18.5 to 345.60. Said notice shall contain: 18.6 (a) a statement that, according to a report filed with the 18.7 commissioner, property is being held to which the addressee 18.8 appears entitled; 18.9 (b)the name and address of the person holding the property18.10and any necessary information regarding changes of name and18.11address of the holdera statement explaining that property of 18.12 the owner has been presumed to be abandoned and has been taken 18.13 into the protective custody of the commissioner; and 18.14 (c) a statement that, if satisfactory proof of claim is not18.15presented by the owner to the holder by the date specified in18.16the published notice, the property will be placed in the custody18.17of the commissioner to whom all further claims must be directed18.18 information about the abandoned property and its return to the 18.19 apparent owner may be obtained at any time by a person having a 18.20 legal or beneficial interest in that property by making an 18.21 inquiry to the commissioner. 18.22 Subd. 4. This section is not applicable to sums payable on 18.23 traveler's checks or money orders presumed abandoned under 18.24 section 345.32. 18.25 Sec. 20. Minnesota Statutes 1994, section 345.43, is 18.26 amended by adding a subdivision to read: 18.27 Subd. 2a. [HOLDER'S OBLIGATIONS.] At the time of the 18.28 filing of the report required under section 345.41 and with that 18.29 report, the holder reporting property presumed abandoned and 18.30 subject to custody as unclaimed property shall pay or deliver to 18.31 the commissioner all of the property shown on the report and 18.32 remaining unclaimed by the apparent owner. 18.33 Upon written request showing good cause, the commissioner 18.34 may postpone the payment or delivery upon the terms or 18.35 conditions the commissioner considers necessary and appropriate. 18.36 The property paid or delivered to the commissioner shall 19.1 include all interest, dividends, increments, and accretions due, 19.2 payable, or distributable on the property on November 1, or 19.3 October 1 for a life insurance company. If payment or delivery 19.4 is postponed, the property paid or delivered to the commissioner 19.5 shall include accretions due, payable, or distributable on the 19.6 day that the property is paid or delivered to the commissioner. 19.7 Sec. 21. Minnesota Statutes 1994, section 345.515, is 19.8 amended to read: 19.9 345.515 [AGREEMENTS TO LOCATE REPORTED PROPERTY.] 19.10 It is unlawful for a person to seek or receive from another 19.11 person or contract with a person for a fee or compensation for 19.12 locating property knowing it to have been reported or paid or 19.13 delivered to the commissioner pursuant to chapter 345 prior to 19.14 seven months after the date ofdelivery of the property by the19.15holder topublished notice by the commissioner as required by 19.16 section345.43345.42. 19.17 No agreement entered into after seven months from the date 19.18 ofdelivery of the property by the holder topublished notice by 19.19 the commissioner is valid if a person thereby undertakes to 19.20 locate property included in a report for a fee or other 19.21 compensation exceeding ten percent of the value of the 19.22 recoverable property unless the agreement is in writing and 19.23 signed by the owner and discloses the nature and value of the 19.24 property and the name and address of the holder thereof as such 19.25 facts have been reported. Nothing in this section shall be 19.26 construed to prevent an owner from asserting at any time that an 19.27 agreement to locate property is based upon an excessive or 19.28 unjust consideration. 19.29 Sec. 22. Minnesota Statutes 1994, section 359.01, 19.30 subdivision 1, is amended to read: 19.31 Subdivision 1. [RESIDENT NOTARIES.] The governor may 19.32 appoint and commission as notaries public, by and with the 19.33 advice and consent of the senate, as many citizens of this state 19.34 or resident aliens, over the age of 18 years, as the governor 19.35 considers necessary. The commissioner of commerce shall perform 19.36 all duties necessary to appoint and commission notaries public 20.1 under this section on the governor's behalf. 20.2 Sec. 23. Minnesota Statutes 1994, section 359.01, 20.3 subdivision 2, is amended to read: 20.4 Subd. 2. [NONRESIDENT NOTARIES.]Notwithstanding the20.5provisions of subdivision 1,The governormay appoint as notary20.6publicor the commissioner of commerce, acting on the governor's 20.7 behalf, by and with the advice and consent of the senate, may 20.8 appoint as notary public a person who is not a resident of this 20.9 state if: 20.10 (1) the person is a resident of Wisconsin, Iowa, North 20.11 Dakota, or South Dakota, and of a county that shares a boundary 20.12 with this state; 20.13 (2) the person designates the commissioner as agent for the 20.14 service of process for all purposes relating to notarial acts 20.15 and for receipt of all correspondence relating to notarial acts. 20.16 Sec. 24. Minnesota Statutes 1994, section 359.02, is 20.17 amended to read: 20.18 359.02 [TERM.] 20.19 A notary commissioned under section 359.01 holds office for 20.20 five years, unless sooner removed by the governor or the 20.21 district court, or by action of the commissioner. Within 30 20.22 days before the expiration of the commission a notary may be 20.23 reappointed for a new term to commence and to be designated in 20.24 the new commission as beginning upon the day immediately 20.25 following the date of the expiration. The reappointment takes 20.26 effect and is valid although the appointing governor may not be 20.27 in the office of governor on the effective day. 20.28 (a) All notary commissions issued before January 31, 1995, 20.29 will expire on January 31, 1995. 20.30 (b) All notary commissions issued after January 31, 1995, 20.31 will expire at the end of the licensing period, which will end 20.32 every fifth year following January 31, 1995. 20.33 (c) All notary commissions issued during a licensing period 20.34 expire at the end of that period as set forth in this section. 20.35 Sec. 25. Minnesota Statutes 1994, section 359.061, is 20.36 amended to read: 21.1 359.061 [RECORD OF COMMISSION; CERTIFICATE.] 21.2 The commission of every notary shall be recorded in the 21.3 office of the court administrator of the district court of the 21.4 notary's county ofappointmentresidence, in a record kept for 21.5 that purpose. The court administrator, when requested, shall 21.6 certify to official acts in the manner and for the fees 21.7 prescribed by statute or court rule. 21.8 Sec. 26. [UNCLAIMED PROPERTY STUDY.] 21.9 The attorney general, in consultation with the department 21.10 of commerce, shall study unclaimed property laws and make 21.11 recommendations to the legislature by December 1, 1996, with 21.12 respect to legal strategies and improved enforcement tools that 21.13 the program could implement as a means to maximize the program's 21.14 ability to collect and return unclaimed property to its proper 21.15 owners in Minnesota. 21.16 Sec. 27. [REPEALER.] 21.17 Minnesota Statutes 1994, section 345.43, subdivisions 1 and 21.18 2, are repealed. 21.19 Sec. 28. [EFFECTIVE DATES.] 21.20 Sections 7, 10 to 12, and 26 are effective the day 21.21 following final enactment. 21.22 ARTICLE 2 21.23 SECURITIES 21.24 Section 1. Minnesota Statutes 1994, section 45.027, is 21.25 amended by adding a subdivision to read: 21.26 Subd. 7a. [AUTHORIZED DISCLOSURES OF INFORMATION AND 21.27 DATA.] The commissioner may release and disclose any active or 21.28 inactive investigative information and data on licensees to any 21.29 national securities exchange or national securities association 21.30 registered under the Securities Exchange Act of 1934 when 21.31 necessary for the requesting agency in initiating, furthering, 21.32 or completing an investigation. 21.33 Sec. 2. Minnesota Statutes 1994, section 80A.05, 21.34 subdivision 1, is amended to read: 21.35 Subdivision 1. A broker-dealer, agent or investment 21.36 adviser may obtain an initial or renewal license by filing with 22.1 the commissioner or a designee an application together with a 22.2 consent to service of process pursuant to section 80A.27, 22.3 subdivision 7. The application shall be on a form prescribed by 22.4 the commissioner and shall contain whatever information the 22.5 commissioner requires concerning such matters as the applicant's 22.6 form and place of organization, proposed method of doing 22.7 business and financial condition, the qualifications and 22.8 experience of the applicant, including, in the case of a 22.9 broker-dealer or investment adviser, the qualifications and 22.10 experience of any partner, officer, director or controlling 22.11 person, any injunction or administrative order or conviction of 22.12 a misdemeanor involving securities and any conviction of a 22.13 felony. The commissioner may by order, with respect to any 22.14 particular application, require the submission of information 22.15 concerning any other matters which the commissioner determines 22.16 are relevant to the application. The commissioner may by rule 22.17 or order require an applicant for an initial license to publish 22.18 an announcement of the application in one or more specified 22.19 newspapers published in this state. 22.20 If no denial order is in effect, no proceeding is pending 22.21 under section 80A.07, and all of the requirements of this 22.22 subdivision and subdivision 3 have been complied with, the 22.23 licensing becomes effective 30 days after an application is 22.24 filed. The commissioner may by rule or order specify an earlier 22.25 effective date, and may by order defer the effective date until 22.26 30 days after the filing of any amendment. 22.27 An application that is incomplete will be considered 22.28 withdrawn if no activity occurs with respect to the application 22.29 for a period of 120 days. Notwithstanding section 80A.28, 22.30 subdivision 1, paragraph (c), no part of the filing fee shall be 22.31 returned if a registration statement is withdrawn according to 22.32 this subdivision. 22.33 Sec. 3. Minnesota Statutes 1994, section 80A.06, 22.34 subdivision 3, is amended to read: 22.35 Subd. 3. If the information contained in any document 22.36 filed with the commissioner is or becomes inaccurate or 23.1 incomplete in any material respect, the licensee shall 23.2promptlywithin 30 days file a correcting amendment unless 23.3 notification of the correction has been given under section 23.4 80A.04, subdivision 2. 23.5 Sec. 4. Minnesota Statutes 1994, section 80A.09, is 23.6 amended by adding a subdivision to read: 23.7 Subd. 5. [WITHDRAWAL.] A registration statement that is 23.8 incomplete will be considered withdrawn if no activity occurs 23.9 with respect to the application for a period of 120 days. 23.10 Notwithstanding section 80A.28, subdivision 1, paragraph (c), no 23.11 part of the filing fee shall be returned if a registration 23.12 statement is withdrawn according to this subdivision. 23.13 Sec. 5. Minnesota Statutes 1994, section 80A.10, 23.14 subdivision 4, is amended to read: 23.15 Subd. 4. [WITHDRAWAL.] A registration statement thathas23.16been on file with the commissioner for a period of nine months23.17and has not become effective is considered to have been23.18withdrawn. If the registration statement has been amended, the23.19nine-month period must be computed from the date of the latest23.20amendment.is pending effectiveness will be considered withdrawn 23.21 if no activity occurs with respect to the application for a 23.22 period of 120 days. Notwithstandingthe provisions ofsection 23.23 80A.28, subdivision 1, paragraph (c), no part of the filing fee 23.24 shall be returned if a registration statement is 23.25 withdrawnpursuantaccording to this subdivision. 23.26 Sec. 6. Minnesota Statutes 1994, section 80A.11, is 23.27 amended by adding a subdivision to read: 23.28 Subd. 5. [WITHDRAWAL.] A registration statement that is 23.29 pending effectiveness will be considered withdrawn if no 23.30 activity occurs with respect to the application for a period of 23.31 120 days. Notwithstanding section 80A.28, subdivision 1, 23.32 paragraph (c), no part of the filing fee shall be returned if a 23.33 registration statement is withdrawn according to this 23.34 subdivision. 23.35 Sec. 7. Minnesota Statutes 1994, section 80A.14, is 23.36 amended by adding a subdivision to read: 24.1 Subd. 20. [QUALIFIED CHARITY.] "Qualified charity" means 24.2 an organization that is described in section 501(c)(3) of the 24.3 Internal Revenue Code and that is not a private foundation as 24.4 described in section 509 of the Internal Revenue Code. 24.5 Sec. 8. Minnesota Statutes 1994, section 80A.14, is 24.6 amended by adding a subdivision to read: 24.7 Subd. 21. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 24.8 means the Internal Revenue Code of 1986, as amended, United 24.9 States Code, title 26, section 1 et seq. 24.10 Sec. 9. Minnesota Statutes 1994, section 80A.14, is 24.11 amended by adding a subdivision to read: 24.12 Subd. 22. [POOLED INCOME FUND.] "Pooled income fund" means 24.13 a trust that meets the requirements of a pooled income fund as 24.14 defined in section 642(C)(5) of the Internal Revenue Code, 24.15 provided that the remainder beneficiary is a qualified charity. 24.16 Sec. 10. Minnesota Statutes 1994, section 80A.14, is 24.17 amended by adding a subdivision to read: 24.18 Subd. 23. [CHARITABLE REMAINDER TRUST.] "Charitable 24.19 remainder trust" means a trust that meets the requirements of 24.20 either a charitable remainder annuity trust or a charitable 24.21 remainder unitrust as defined in section 664 of the Internal 24.22 Revenue Code, provided that the remainder beneficiary is a 24.23 qualified charity. 24.24 Sec. 11. Minnesota Statutes 1994, section 80A.14, is 24.25 amended by adding a subdivision to read: 24.26 Subd. 24. [CHARITABLE LEAD TRUST.] "Charitable lead trust" 24.27 means a trust that meets the requirements of a charitable lead 24.28 trust as described in section 170(F)(2) of the Internal Revenue 24.29 Code, provided that the lead beneficiary is a qualified charity. 24.30 Sec. 12. Minnesota Statutes 1994, section 80A.14, is 24.31 amended by adding a subdivision to read: 24.32 Subd. 25. [CHARITABLE GIFT ANNUITY.] "Charitable gift 24.33 annuity" means an annuity that meets the requirements of a 24.34 charitable gift annuity as defined in section 501(m)(5) of the 24.35 Internal Revenue Code. 24.36 Sec. 13. Minnesota Statutes 1995 Supplement, section 25.1 80A.15, subdivision 1, is amended to read: 25.2 Subdivision 1. The following securities are exempted from 25.3 sections 80A.08 and 80A.16: 25.4 (a) Any security, including a revenue obligation, 25.5 guaranteed by the United States, any state, any political 25.6 subdivision of a state or any corporate or other instrumentality 25.7 of one or more of the foregoing; but this exemption shall not25.8include any industrial revenue bond. Pursuant to section 106(c) 25.9 of the Secondary Mortgage Market Enhancement Act of 1984, Public 25.10 Law Number 98-440, this exemption does not apply to a security 25.11 that is offered or sold pursuant to section 106(a)(1) or (2) of 25.12 that act. 25.13 (b) Any security issued or guaranteed by Canada, any 25.14 Canadian province, any political subdivision of any province, 25.15 any agency or corporate or other instrumentality of one or more 25.16 of the foregoing, if the security is recognized as a valid 25.17 obligation by the issuer or guarantor; but this exemption shall 25.18 not include any revenue obligation payable solely from payments 25.19 to be made in respect of property or money used under a lease, 25.20 sale or loan arrangement by or for a nongovernmental industrial 25.21 or commercial enterprise. 25.22 (c) Any security issued by and representing an interest in 25.23 or a debt of, or guaranteed by, any bank organized under the 25.24 laws of the United States, or any bank, savings institution or 25.25 trust company organized under the laws of any state and subject 25.26 to regulation in respect of the issuance or guarantee of its 25.27 securities by a governmental authority of that state. 25.28 (d) Any security issued by and representing an interest in 25.29 or a debt of, or guaranteed by, any federal savings association, 25.30 or any savings association or similar association organized 25.31 under the laws of any state and authorized to do business in 25.32 this state. 25.33 (e) Any security issued or guaranteed by any federal credit 25.34 union or any credit union, or similar association organized and 25.35 supervised under the laws of this state. 25.36 (f) Any security listed or approved for listing upon notice 26.1 of issuance on the New York Stock Exchange, the American Stock 26.2 Exchange, the Midwest Stock Exchange, the Pacific Stock 26.3 Exchange, or the Chicago Board Options Exchange; any other 26.4 security of the same issuer which is of senior or substantially 26.5 equal rank; any security called for by subscription rights or 26.6 warrants so listed or approved; or any warrant or right to 26.7 purchase or subscribe to any of the foregoing. This exemption 26.8 does not apply to second tier listings on any of the exchanges 26.9 in this paragraph. 26.10 (g) Any commercial paper which arises out of a current 26.11 transaction or the proceeds of which have been or are to be used 26.12 for current transactions, and which evidences an obligation to 26.13 pay cash within nine months of the date of issuance, exclusive 26.14 of days of grace, or any renewal of the paper which is likewise 26.15 limited, or any guarantee of the paper or of any renewal which 26.16 are not advertised for sale to the general public in newspapers 26.17 or other publications of general circulation or otherwise, or by 26.18 radio, television or direct mailing. 26.19 (h) Any interest in any employee's savings, stock purchase, 26.20 pension, profit sharing or similar benefit plan, or a 26.21 self-employed person's retirement plan. 26.22 (i) Any security issued or guaranteed by any railroad, 26.23 other common carrier or public utility which is subject to 26.24 regulation in respect to the issuance or guarantee of its 26.25 securities by a governmental authority of the United States. 26.26 (j) Any interest in a common trust fund or similar fund 26.27 maintained by a state bank or trust company organized and 26.28 operating under the laws of Minnesota, or a national bank 26.29 wherever located, for the collective investment and reinvestment 26.30 of funds contributed thereto by the bank or trust company in its 26.31 capacity as trustee, executor, administrator, or guardian; and 26.32 any interest in a collective investment fund or similar fund 26.33 maintained by the bank or trust company, or in a separate 26.34 account maintained by an insurance company, for the collective 26.35 investment and reinvestment of funds contributed thereto by the 26.36 bank, trust company or insurance company in its capacity as 27.1 trustee or agent, which interest is issued in connection with an 27.2 employee's savings, pension, profit sharing or similar benefit 27.3 plan, or a self-employed person's retirement plan. 27.4 (k) Any security which meets all of the following 27.5 conditions: 27.6 (1) If the issuer is not organized under the laws of the 27.7 United States or a state, it has appointed a duly authorized 27.8 agent in the United States for service of process and has set 27.9 forth the name and address of the agent in its prospectus; 27.10 (2) A class of the issuer's securities is required to be 27.11 and is registered under section 12 of the Securities Exchange 27.12 Act of 1934, and has been so registered for the three years 27.13 immediately preceding the offering date; 27.14 (3) Neither the issuer nor a significant subsidiary has had 27.15 a material default during the last seven years, or for the 27.16 period of the issuer's existence if less than seven years, in 27.17 the payment of (i) principal, interest, dividend, or sinking 27.18 fund installment on preferred stock or indebtedness for borrowed 27.19 money, or (ii) rentals under leases with terms of three years or 27.20 more; 27.21 (4) The issuer has had consolidated net income, before 27.22 extraordinary items and the cumulative effect of accounting 27.23 changes, of at least $1,000,000 in four of its last five fiscal 27.24 years including its last fiscal year; and if the offering is of 27.25 interest bearing securities, has had for its last fiscal year, 27.26 net income, before deduction for income taxes and depreciation, 27.27 of at least 1-1/2 times the issuer's annual interest expense, 27.28 giving effect to the proposed offering and the intended use of 27.29 the proceeds. For the purposes of this clause "last fiscal 27.30 year" means the most recent year for which audited financial 27.31 statements are available, provided that such statements cover a 27.32 fiscal period ended not more than 15 months from the 27.33 commencement of the offering; 27.34 (5) If the offering is of stock or shares other than 27.35 preferred stock or shares, the securities have voting rights and 27.36 the rights include (i) the right to have at least as many votes 28.1 per share, and (ii) the right to vote on at least as many 28.2 general corporate decisions, as each of the issuer's outstanding 28.3 classes of stock or shares, except as otherwise required by law; 28.4 and 28.5 (6) If the offering is of stock or shares, other than 28.6 preferred stock or shares, the securities are owned beneficially 28.7 or of record, on any date within six months prior to the 28.8 commencement of the offering, by at least 1,200 persons, and on 28.9 that date there are at least 750,000 such shares outstanding 28.10 with an aggregate market value, based on the average bid price 28.11 for that day, of at least $3,750,000. In connection with the 28.12 determination of the number of persons who are beneficial owners 28.13 of the stock or shares of an issuer, the issuer or broker-dealer 28.14 may rely in good faith for the purposes of this clause upon 28.15 written information furnished by the record owners. 28.16 (l) Any certificate of indebtedness sold or issued for 28.17 investment, other than a certificate of indebtedness pledged as 28.18 a security for a loan made contemporaneously therewith, and any 28.19 savings account or savings deposit issued, by an industrial loan 28.20 and thrift company. 28.21 (m) Any security designated or approved for designation 28.22 upon notice of issuance on the NASDAQ/National Market System; 28.23 any other security of the same issuer that is of senior or 28.24 substantially equal rank; any security called for by 28.25 subscription rights or warrants so designated or approved; or 28.26 any warrant or right to purchase or subscribe to any of the 28.27 securities referred to in this paragraph; provided that the 28.28 National Market System provides the commissioner with notice of 28.29 any material change in its designation requirements. The 28.30 commissioner may revoke this exemption if the commissioner 28.31 determines that the designation requirements are not enforced or 28.32 are amended in a manner that lessens protection to investors. 28.33 Sec. 14. Minnesota Statutes 1994, section 80A.15, 28.34 subdivision 2, is amended to read: 28.35 Subd. 2. The following transactions are exempted from 28.36 sections 80A.08 and 80A.16: 29.1 (a) Any sales, whether or not effected through a 29.2 broker-dealer, provided that: 29.3 (1) no person shall make more than ten sales of securities 29.4 of the same issuer pursuant to this exemption, exclusive of 29.5 sales according to clause (2), during any period of 12 29.6 consecutive months; provided further, that in the case of sales 29.7 by an issuer, except sales of securities registered under the 29.8 Securities Act of 1933 or exempted by section 3(b) of that 29.9 act,(1)(i) the seller reasonably believes that all buyers are 29.10 purchasing for investment, and(2)(ii) the securities are not 29.11 advertised for sale to the general public in newspapers or other 29.12 publications of general circulation or otherwise, or by radio, 29.13 television, electronic means or similar communications media, or 29.14 through a program of general solicitation by means of mail or 29.15 telephone.; and 29.16 (2) no issuer shall make more than 25 sales of its 29.17 securities according to this exemption, exclusive of sales 29.18 pursuant to clause (1), during any period of 12 consecutive 29.19 months; provided further, that the issuer meets the conditions 29.20 in clause (1) and, in addition meets the following additional 29.21 conditions: (i) files with the commissioner, ten days before a 29.22 sale according to this clause, a statement of issuer on a form 29.23 prescribed by the commissioner; and (ii) no commission or other 29.24 remuneration is paid or given directly or indirectly for 29.25 soliciting any prospective buyers in this state in connection 29.26 with a sale according to this clause except reasonable and 29.27 customary commissions paid by the issuer to a broker-dealer 29.28 licensed under this chapter. 29.29 (b) Any nonissuer distribution of an outstanding security 29.30 if (1) either Moody's, Fitch's, or Standard & Poor's Securities 29.31 Manuals, or other recognized manuals approved by the 29.32 commissioner contains the names of the issuer's officers and 29.33 directors, a balance sheet of the issuer as of a date not more 29.34 than 18 months prior to the date of the sale, and a profit and 29.35 loss statement for the fiscal year preceding the date of the 29.36 balance sheet, and (2) the issuer or its predecessor has been in 30.1 active, continuous business operation for the five-year period 30.2 next preceding the date of sale, and (3) if the security has a 30.3 fixed maturity or fixed interest or dividend provision, the 30.4 issuer has not, within the three preceding fiscal years, 30.5 defaulted in payment of principal, interest, or dividends on the 30.6 securities. 30.7 (c) The execution of any orders by a licensed broker-dealer 30.8 for the purchase or sale of any security, pursuant to an 30.9 unsolicited offer to purchase or sell; provided that the 30.10 broker-dealer acts as agent for the purchaser or seller, and has 30.11 no direct material interest in the sale or distribution of the 30.12 security, receives no commission, profit, or other compensation 30.13 from any source other than the purchaser and seller and delivers 30.14 to the purchaser and seller written confirmation of the 30.15 transaction which clearly itemizes the commission, or other 30.16 compensation. 30.17 (d) Any nonissuer sale of notes or bonds secured by a 30.18 mortgage lien if the entire mortgage, together with all notes or 30.19 bonds secured thereby, is sold to a single purchaser at a single 30.20 sale. 30.21 (e) Any judicial sale, exchange, or issuance of securities 30.22 made pursuant to an order of a court of competent jurisdiction. 30.23 (f) The sale, by a pledge holder, of a security pledged in 30.24 good faith as collateral for a bona fide debt. 30.25 (g) Any offer or sale to a bank, savings institution, trust 30.26 company, insurance company, investment company as defined in the 30.27 Investment Company Act of 1940, pension or profit sharing trust, 30.28 or other financial institution or institutional buyer, or to a 30.29 broker-dealer, whether the purchaser is acting for itself or in 30.30 some fiduciary capacity. 30.31 (h)Any sales by an issuer to the number of persons that30.32shall not exceed 25 persons in this state, or 35 persons if the30.33sales are made in compliance with Regulation D promulgated by30.34the Securities and Exchange Commission, Code of Federal30.35Regulations, title 17, sections 230.501 to 230.506, (other than30.36those designated in paragraph (a) or (g)), whether or not any of31.1the purchasers is then present in this state, if (1) the issuer31.2reasonably believes that all of the buyers in this state (other31.3than those designated in clause (g)) are purchasing for31.4investment, and (2) no commission or other remuneration is paid31.5or given directly or indirectly for soliciting any prospective31.6buyer in this state (other than those designated in clause (g)),31.7except reasonable and customary commissions paid by the issuer31.8to a broker-dealer licensed under this chapter, and (3) the31.9issuer has, ten days prior to any sale pursuant to this31.10paragraph, supplied the commissioner with a statement of issuer31.11on forms prescribed by the commissioner, containing the31.12following information: (i) the name and address of the issuer,31.13and the date and state of its organization; (ii) the number of31.14units, price per unit, and a description of the securities to be31.15sold; (iii) the amount of commissions to be paid and the persons31.16to whom they will be paid; (iv) the names of all officers,31.17directors and persons owning five percent or more of the equity31.18of the issuer; (v) a brief description of the intended use of31.19proceeds; (vi) a description of all sales of securities made by31.20the issuer within the six-month period next preceding the date31.21of filing; and (vii) a copy of the investment letter, if any,31.22intended to be used in connection with any sale. Sales that are31.23made more than six months before the start of an offering made31.24pursuant to this exemption or are made more than six months31.25after completion of an offering made pursuant to this exemption31.26will not be considered part of the offering, so long as during31.27those six-month periods there are no sales of unregistered31.28securities (other than those made pursuant to paragraph (a) or31.29(g)) by or for the issuer that are of the same or similar class31.30as those sold under this exemption. The commissioner may by31.31rule or order as to any security or transaction or any type of31.32security or transaction, withdraw or further condition this31.33exemption, or increase the number of offers and sales permitted,31.34or waive the conditions in clause (1), (2), or (3) with or31.35without the substitution of a limitation or remuneration.An 31.36 offer or sale of securities by an issuer made in reliance on the 32.1 exemptions provided by Rule 505 or 506 of Regulation D 32.2 promulgated by the Securities and Exchange Commission, Code of 32.3 Federal Regulations, title 17, sections 230.501 to 230.508, 32.4 subject to the conditions and definitions provided by Rules 501 32.5 to 503 of Regulation D, if the offer and sale also satisfies the 32.6 conditions and limitations in clauses (1) to (10). 32.7 (1) The exemption under this paragraph is not available for 32.8 the securities of an issuer if any of the persons described in 32.9 Rule 252(c) to (f) of Regulation A promulgated by the Securities 32.10 and Exchange Commission, Code of Federal Regulations, title 17, 32.11 sections 230.251 to 230.263: 32.12 (i) has filed a registration statement that is the subject 32.13 of a currently effective order entered against the issuer, its 32.14 officers, directors, general partners, controlling persons, or 32.15 affiliates, according to any state's law within five years 32.16 before the filing of the notice required under clause (5), 32.17 denying effectiveness to, or suspending or revoking the 32.18 effectiveness of, the registration statement; 32.19 (ii) has been convicted, within five years before the 32.20 filing of the notice required under clause (5), of a felony or 32.21 misdemeanor in connection with the offer, sale, or purchase of a 32.22 security or franchise, or a felony involving fraud or deceit, 32.23 including but not limited to forgery, embezzlement, obtaining 32.24 money under false pretenses, larceny, or conspiracy to defraud; 32.25 (iii) is subject to an effective administrative order or 32.26 judgment entered by a state securities administrator within five 32.27 years before the filing of the notice required under clause (5), 32.28 that prohibits, denies, or revokes the use of an exemption from 32.29 securities registration, that prohibits the transaction of 32.30 business by the person as a broker-dealer or agent, or that is 32.31 based on fraud, deceit, an untrue statement of a material fact, 32.32 or an omission to state a material fact; or 32.33 (iv) is subject to an order, judgment, or decree of a court 32.34 entered within five years before the filing of the notice 32.35 required under clause (5), temporarily, preliminarily, or 32.36 permanently restraining or enjoining the person from engaging in 33.1 or continuing any conduct or practice in connection with the 33.2 offer, sale, or purchase of a security, or the making of a false 33.3 filing with a state. 33.4 A disqualification under paragraph (h) involving a 33.5 broker-dealer or agent is waived if the broker-dealer or agent 33.6 is or continues to be licensed in the state in which the 33.7 administrative order or judgment was entered against the person 33.8 or if the broker-dealer or agent is or continues to be licensed 33.9 in this state as a broker-dealer or agent after notifying the 33.10 commissioner of the act or event causing disqualification. 33.11 The commissioner may waive a disqualification under 33.12 paragraph (h) upon a showing of good cause that it is not 33.13 necessary under the circumstances that use of the exemption be 33.14 denied. 33.15 A disqualification under paragraph (h) may be waived if the 33.16 state securities administrator or agency of the state that 33.17 created the basis for disqualification has determined, upon a 33.18 showing of good cause, that it is not necessary under the 33.19 circumstances that an exemption from registration of securities 33.20 under the state's laws be denied. 33.21 It is a defense to a violation of paragraph (h) based upon 33.22 a disqualification if the issuer sustains the burden of proof to 33.23 establish that the issuer did not know, and in the exercise of 33.24 reasonable care could not have known, that a disqualification 33.25 under paragraph (h) existed. 33.26 (2) This exemption must not be available to an issuer with 33.27 respect to a transaction that, although in technical compliance 33.28 with this exemption, is part of a plan or scheme to evade 33.29 registration or the conditions or limitations explicitly stated 33.30 in paragraph (h). 33.31 (3) No commission, finder's fee, or other remuneration 33.32 shall be paid or given, directly or indirectly, for soliciting a 33.33 prospective purchaser, unless the recipient is appropriately 33.34 registered, or exempt from registration, in this state as a 33.35 broker-dealer. 33.36 (4) Nothing in this exemption is intended to or should be 34.1 in any way construed as relieving issuers or persons acting on 34.2 behalf of issuers from providing disclosure to prospective 34.3 investors adequate to satisfy the antifraud provisions of the 34.4 securities law of Minnesota. 34.5 (5) The issuer shall file with commissioner a notice on 34.6 form D as adopted by the Securities and Exchange Commission 34.7 according to Regulation D, Code of Federal Regulations, title 34.8 17, section 230.502. The notice must be filed not later than 15 34.9 days after the first sale in this state of securities in an 34.10 offering under this exemption. Every notice on form D must be 34.11 manually signed by a person duly authorized by the issuer and 34.12 must be accompanied by a consent to service of process on a form 34.13 prescribed by the commissioner. 34.14 (6) A failure to comply with a term, condition, or 34.15 requirement of paragraph (h) will not result in loss of the 34.16 exemption for an offer or sale to a particular individual or 34.17 entity if the person relying on the exemption shows that: (i) 34.18 the failure to comply did not pertain to a term, condition, or 34.19 requirement directly intended to protect that particular 34.20 individual or entity, and the failure to comply was 34.21 insignificant with respect to the offering as a whole; and (ii) 34.22 a good faith and reasonable attempt was made to comply with all 34.23 applicable terms, conditions, and requirements of paragraph (h), 34.24 except that, where an exemption is established only through 34.25 reliance upon this provision, the failure to comply shall 34.26 nonetheless constitute a violation of section 80A.08 and be 34.27 actionable by the commissioner. 34.28 (7) The issuer, upon request by the commissioner, shall, 34.29 within ten days of the request, furnish to the commissioner a 34.30 copy of any and all information, documents, or materials 34.31 furnished to investors or offerees in connection with the offer 34.32 and sale according to paragraph (h). 34.33 (8) Neither compliance nor attempted compliance with the 34.34 exemption provided by paragraph (h), nor the absence of an 34.35 objection or order by the commissioner with respect to an offer 34.36 or sale of securities undertaken according to this exemption, 35.1 shall be considered to be a waiver of a condition of the 35.2 exemption or considered to be a confirmation by the commissioner 35.3 of the availability of this exemption. 35.4 (9) The commissioner may, by rule or order, increase the 35.5 number of purchasers or waive any other condition of this 35.6 exemption. 35.7 (10) The determination whether offers and sales made in 35.8 reliance on the exemption set forth in paragraph (h) shall be 35.9 integrated with offers and sales according to other paragraphs 35.10 of this subdivision shall be made according to the integration 35.11 standard set forth in Rule 502 of Regulation D promulgated by 35.12 the Securities and Exchange Commission, Code of Federal 35.13 Regulations, title 17, section 230.502. If not subject to 35.14 integration according to that rule, offers and sales according 35.15 to paragraph (h) shall not otherwise be integrated with offers 35.16 and sales according to other exemptions set forth in this 35.17 subdivision. 35.18 (i) Any offer (but not a sale) of a security for which a 35.19 registration statement has been filed under sections 80A.01 to 35.20 80A.31, if no stop order or refusal order is in effect and no 35.21 public proceeding or examination looking toward an order is 35.22 pending; and any offer of a security if the sale of the security 35.23 is or would be exempt under this section. The commissioner may 35.24 by rule exempt offers (but not sales) of securities for which a 35.25 registration statement has been filed as the commissioner deems 35.26 appropriate, consistent with the purposes of sections 80A.01 to 35.27 80A.31. 35.28 (j) The offer and sale by a cooperative organized under 35.29 chapter 308A or under the laws of another state, of its 35.30 securities when the securities are offered and sold only to its 35.31 members, or when the purchase of the securities is necessary or 35.32 incidental to establishing membership in the cooperative, or 35.33 when such securities are issued as patronage dividends. This 35.34 paragraph applies to a cooperative organized under the laws of 35.35 another state only if the cooperative has filed with the 35.36 commissioner a consent to service of process under section 36.1 80A.27, subdivision 7, and has, not less than ten days prior to 36.2 the issuance or delivery, furnished the commissioner with a 36.3 written general description of the transaction and any other 36.4 information that the commissioner requires by rule or otherwise. 36.5 (l) The issuance and delivery of any securities of one 36.6 corporation to another corporation or its security holders in 36.7 connection with a merger, exchange of shares, or transfer of 36.8 assets whereby the approval of stockholders of the other 36.9 corporation is required to be obtained, provided, that the 36.10 commissioner has been furnished with a general description of 36.11 the transaction and with other information as the commissioner 36.12 by rule prescribes not less than ten days prior to the issuance 36.13 and delivery. 36.14 (m) Any transaction between the issuer or other person on 36.15 whose behalf the offering is made and an underwriter or among 36.16 underwriters. 36.17 (n) The distribution by a corporation of its or other 36.18 securities to its own security holders as a stock dividend or as 36.19 a dividend from earnings or surplus or as a liquidating 36.20 distribution; or upon conversion of an outstanding convertible 36.21 security; or pursuant to a stock split or reverse stock split. 36.22 (o) Any offer or sale of securities by an affiliate of the 36.23 issuer thereof if: (1) a registration statement is in effect 36.24 with respect to securities of the same class of the issuer and 36.25 (2) the offer or sale has been exempted from registration by 36.26 rule or order of the commissioner. 36.27 (p) Any transaction pursuant to an offer to existing 36.28 security holders of the issuer, including persons who at the 36.29 time of the transaction are holders of convertible securities, 36.30 nontransferable warrants, or transferable warrants exercisable 36.31 within not more than 90 days of their issuance, if: (1) no 36.32 commission or other remuneration (other than a standby 36.33 commission) is paid or given directly or indirectly for 36.34 soliciting any security holder in this state; and (2) the 36.35 commissioner has been furnished with a general description of 36.36 the transaction and with other information as the commissioner 37.1 may by rule prescribe no less than ten days prior to the 37.2 transaction. 37.3 (q) Any nonissuer sales of any security, including a 37.4 revenue obligation, issued by the state of Minnesota or any of 37.5 its political or governmental subdivisions, municipalities, 37.6 governmental agencies, or instrumentalities. 37.7 (r) Any transaction as to which the commissioner by rule or 37.8 order finds that registration is not necessary in the public 37.9 interest and for the protection of investors. 37.10 (s) An offer or sale of a security issued in connection 37.11 with an employee's stock purchase, savings, option, profit 37.12 sharing, pension, or similar employee benefit plan, if the 37.13 following conditions are met: 37.14 (1) the issuer, its parent corporation or any of its 37.15 majority-owned subsidiaries offers or sells the security 37.16 according to a written benefit plan or written contract relating 37.17 to the compensation of the purchaser; and 37.18 (2) the class of securities offered according to the plan 37.19 or contract, or if an option or right to purchase a security, 37.20 the class of securities to be issued upon the exercise of the 37.21 option or right, is registered under section 12 of the 37.22 Securities Exchange Act of 1934, or is a class of securities 37.23 with respect to which the issuer files reports according to 37.24 section 15(d) of the Securities Exchange Act of 1934; or 37.25 (3) the issuer fully complies with the provisions of Rule 37.26 701 as adopted by the Securities and Exchange Commission, Code 37.27 of Federal Regulations, title 12, section 230.701. 37.28 The issuer shall file not less than ten days before the 37.29 transaction, a general description of the transaction and any 37.30 other information that the commissioner requires by rule or 37.31 otherwise or, if applicable, a Securities and Exchange Form S-8. 37.32 Annually, within 90 days after the end of the issuer's fiscal 37.33 year, the issuer shall file a notice as provided with the 37.34 commissioner. 37.35 (t) Any sale of a security of an issuer that is a pooled 37.36 income fund, a charitable remainder trust, or a charitable lead 38.1 trust that has a qualified charity as the only charitable 38.2 beneficiary. 38.3 (u) Any sale by a qualified charity of a security that is a 38.4 charitable gift annuity if the issuer has a net worth, otherwise 38.5 defined as unrestricted fund balance, of not less than $300,000 38.6 and either: (1) has been in continuous operation for not less 38.7 than three years; or (2) is a successor or affiliate of a 38.8 qualified charity that has been in continuous operation for not 38.9 less than three years. 38.10 Sec. 15. Minnesota Statutes 1994, section 80A.15, 38.11 subdivision 3, is amended to read: 38.12 Subd. 3. The commissioner may issue an order requiring any 38.13 person who claims the benefit of an exemption with respect to a 38.14 specific security or transaction, to show cause why the 38.15 exemption should not be revoked. The order shall be calculated 38.16 to give reasonable notice of the time and place for hearing 38.17 thereon, and shall state the reasons for the entry of the 38.18 order. The commissioner may by order summarily suspend an 38.19 exemption pending final determination of any order to show 38.20 cause. If an exemption is suspended pending final determination 38.21 of an order to show cause, a hearing on the merits shall be held 38.22 within 30 days of the issuance of the order of suspension. All 38.23 hearings shall be conducted in accordance with the provisions of 38.24 chapter 14. After the hearing, the commissioner shall enter an 38.25 order making such disposition of the matter as the facts 38.26 require. If the person claiming the benefit of the exemption 38.27 fails to appear at a hearing of which the person has been duly 38.28 notified, such person shall be deemed in default, and the 38.29 proceeding may be determined against the person upon 38.30 consideration of the order to show cause, the allegations of 38.31 which may be deemed to be true. The commissioner may adopt 38.32 rules of procedure concerning all proceedings conducted pursuant 38.33 to this subdivision. 38.34 A notice filing that is incomplete is considered withdrawn 38.35 if no activity occurs with respect to the notice filing for a 38.36 period of 120 days. 39.1 Sec. 16. Minnesota Statutes 1994, section 80C.01, is 39.2 amended by adding a subdivision to read: 39.3 Subd. 19. [ASSIST THE PURCHASER IN FINDING 39.4 LOCATIONS.] "Assist the purchaser in finding locations" means to 39.5 directly assist the purchaser in finding locations, or to refer 39.6 the purchaser to any resource which assists in finding locations 39.7 and is affiliated with the seller through common ownership, 39.8 common control, a referral fee arrangement, or any other 39.9 business relationship. "Assist the purchaser in finding 39.10 locations" does not include providing to the purchaser a written 39.11 list of resources which assist in finding locations, provided 39.12 that none of the resources on the list are affiliated with the 39.13 seller in any way. 39.14 Sec. 17. Minnesota Statutes 1994, section 80C.05, is 39.15 amended by adding a subdivision to read: 39.16 Subd. 4. An application for registration that has not 39.17 become effective will be considered withdrawn if no activity 39.18 occurs with respect to the application for a period of 120 days. 39.19 Sec. 18. [REPEALER.] 39.20 Minnesota Statutes 1994, section 80A.14, subdivision 8, is 39.21 repealed. 39.22 ARTICLE 3 39.23 REAL ESTATE 39.24 Section 1. Minnesota Statutes 1994, section 82.19, 39.25 subdivision 5, is amended to read: 39.26 Subd. 5. [DISCLOSURE REGARDING REPRESENTATION OF PARTIES.] 39.27 (a) No person licensed pursuant to this chapter or who otherwise 39.28 acts as a real estate broker or salesperson shallrepresent any39.29party to a real estate transaction or otherwise act as a real39.30estate broker or salesperson unless that person makes an39.31affirmative written disclosure as to which party that person39.32represents in the transaction. In a residential real property39.33transaction, the disclosure must be made at the first39.34substantive contact between the licensee and the party or39.35potential party to the transaction. The disclosure shall be39.36printed as a separate document, and acknowledged by the40.1signature of the buyer, seller, or customer.40.2(b) The disclosure required by this subdivision must be40.3made by the licensee with respect to any residential property40.4transaction:40.5(1) when representing the seller, at the signing of a40.6listing agreement;40.7(2) when representing the buyer, at the signing of a40.8buyer's broker agreement;40.9(3) as to all other parties (potential buyers or sellers)40.10who are not represented by the licensee, before discussion of40.11financial information or the commencement of negotiations, which40.12could affect that party's bargaining position in the transaction.40.13A change in the licensee's representation, including dual40.14agency, that makes the initial disclosure required by this40.15paragraph incomplete, misleading, or inaccurate requires that a40.16new disclosure be made at oncefail to provide at the first 40.17 substantive contact with a consumer in a residential real 40.18 property transaction an agency disclosure form as set forth in 40.19 section 82.197. 40.20(c)(b) The seller may, in the listing agreement, authorize 40.21 the seller's broker to disburse part of the broker's 40.22 compensation to other brokers, including the buyer's brokers 40.23 solely representing the buyer. A broker representing a buyer 40.24 shall make known to the seller or the seller's agent the fact of 40.25 the agency relationship before any showing or negotiations are 40.26 initiated. 40.27 Sec. 2. Minnesota Statutes 1994, section 82.195, 40.28 subdivision 2, is amended to read: 40.29 Subd. 2. [CONTENTS.] All listing agreements must be in 40.30 writing and must include: 40.31 (1) a definite expiration date; 40.32 (2) a description of the real property involved; 40.33 (3) the list price and any terms required by the seller; 40.34 (4) the amount of any compensation or commission or the 40.35 basis for computing the commission; 40.36 (5) a clear statement explaining the events or conditions 41.1 that will entitle a broker to a commission; 41.2 (6) information regarding an override clause, if 41.3 applicable, including a statement to the effect that the 41.4 override clause will not be effective unless the licensee 41.5 supplies the seller with a protective list within 72 hours after 41.6 the expiration of the listing agreement; 41.7 (7) the following notice in not less than ten point 41.8 boldface type immediately preceding any provision of the listing 41.9 agreement relating to compensation of the licensee: 41.10 "NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL, 41.11 OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH 41.12 INDIVIDUAL BROKER AND ITS CLIENT."; 41.13 (8)if the broker chooses to represent both buyers and41.14sellers in connection with residential property transactions, a41.15 for residential property listings, the following "dual agency" 41.16 disclosure statement: 41.17 If a buyer represented by broker wishes to buy your 41.18 property, a dual agency will be created. This means that broker 41.19 will represent both you and the buyer(s), and owe the same 41.20 duties to the buyer(s) that broker owes to you. This conflict 41.21 of interest will prohibit broker from advocating exclusively on 41.22 your behalf. Dual agency will limit the level of representation 41.23 broker can provide. If a dual agency should arise, you will 41.24 need to agree that confidential information about price, terms, 41.25 and motivation will still be kept confidential unless you 41.26 instruct broker in writing to disclose specific information 41.27 about you. All other information will be shared. Broker cannot 41.28 act as a dual agent unless both you and the buyer(s) agree to 41.29 it. By agreeing to a possible dual agency, you will be giving 41.30 up the right to exclusive representation in an in-house 41.31 transaction. However, if you should decide not to agree to a 41.32 possible dual agency, and you want broker to represent you, you 41.33 may give up the opportunity to sell your property to buyers 41.34 represented by broker. 41.35 Seller's Instructions to Broker 41.36 42.1 Having read and understood this information about dual 42.2 agency, seller(s) now instructs broker as follows: 42.3 ....... Seller(s) will agree to a dual agency 42.4 representation and will consider offers made 42.5 by buyers represented by broker. 42.6 42.7 ....... Seller will not agree to a dual agency 42.8 representation and will not consider offers 42.9 made by buyers represented by broker. 42.10 42.11 42.12 ......................... ......................... 42.13 Seller Broker 42.14 42.15 42.16 ......................... By: .................... 42.17 Seller Salesperson 42.18 42.19 Date: ..................; 42.20 (9) a notice requiring the seller to indicate in writing 42.21 whether it is acceptable to the seller to have the licensee 42.22 arrange for closing services or whether the seller wishes to 42.23 arrange for others to conduct the closing. The notice must also 42.24 include the disclosure of any controlled business arrangement, 42.25 as the term is defined in United States Code, title 12, section 42.26 2602, between the licensee and the real estate closing agent 42.27 through which the licensee proposes to arrange closing services; 42.28 and 42.29 (10) for residential listings, a notice stating that after 42.30 the expiration of the listing agreement, the seller will not be 42.31 obligated to pay the licensee a fee or commission if the seller 42.32 has executed another valid listing agreement pursuant to which 42.33 the seller is obligated to pay a fee or commission to another 42.34 licensee for the sale, lease, or exchange of the real property 42.35 in question. This notice may be used in the listing agreement 42.36 for any other type of real estate. 43.1 Sec. 3. Minnesota Statutes 1994, section 82.196, 43.2 subdivision 1, is amended to read: 43.3 Subdivision 1. [REQUIREMENTS.] Licensees shall obtain a 43.4 signed buyer's broker agreement from a buyer before performing 43.5 any acts as a buyer's representative and before a purchase 43.6 agreement is signed. 43.7 Sec. 4. Minnesota Statutes 1994, section 82.196, 43.8 subdivision 2, is amended to read: 43.9 Subd. 2. [CONTENTS.] All buyer's broker agreements must be 43.10 in writing and must include: 43.11 (1) a definite expiration date; 43.12 (2) the amount of any compensation or commission, or the 43.13 basis for computing the commission; 43.14 (3) a clear statement explaining the services to be 43.15 provided to the buyer by the broker, and the events or 43.16 conditions that will entitle a broker to a commission or other 43.17 compensation; 43.18 (4) a provision for cancellation of the agreement by either 43.19 party upon terms agreed upon by the parties; 43.20 (5) information regarding an override clause, if 43.21 applicable, including a statement to the effect that the 43.22 override clause will not be effective unless the licensee 43.23 supplies the buyer with a protective list within 72 hours after 43.24 the expiration of the buyer's broker agreement; 43.25 (6) the following notice in not less than ten point bold 43.26 face type immediately preceding any provision of the buyer's 43.27 broker agreement relating to compensation of the licensee: 43.28 "NOTICE: THE COMMISSION RATE FOR THE PURCHASE, LEASE, 43.29 RENTAL, OR MANAGEMENT OF REAL PROPERTY IS NEGOTIABLE AND SHALL 43.30 BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND ITS CLIENT."; 43.31 (7)if the broker chooses to represent both buyers and43.32sellers, athe following "dual agency" disclosure statement: 43.33 If you choose to purchase a property listed by broker, a 43.34 dual agency will be created. This means that broker will 43.35 represent both you and the seller(s), and owe the same duties to 43.36 the seller(s) that broker owes to you. This conflict of 44.1 interest will prohibit broker from advocating exclusively on 44.2 your behalf. Dual agency will limit the level of representation 44.3 broker can provide. If a dual agency should arise, you will 44.4 need to agree that confidential information about price, terms, 44.5 and motivation will still be kept confidential unless you 44.6 instruct broker in writing to disclose specific information 44.7 about you. All other information will be shared. Broker cannot 44.8 act as a dual agent unless both you and the seller(s) agree to 44.9 it. By agreeing to a possible dual agency, you will be giving 44.10 up the right to exclusive representation in an in-house 44.11 transaction. However, if you should decide not to agree to a 44.12 possible dual agency, and you want broker to represent you, you 44.13 may give up the opportunity to purchase the properties listed by 44.14 broker. 44.15 Buyer's Instructions to Broker 44.16 44.17 ....... Buyer(s) will agree to a dual agency representation 44.18 and will consider properties listed by broker. 44.19 44.20 ....... Buyer will not agree to a dual agency 44.21 representation and will not consider 44.22 properties listed by broker. 44.23 44.24 44.25 ......................... ......................... 44.26 Buyer Broker 44.27 44.28 ......................... By: .................... 44.29 Buyer Salesperson 44.30 44.31 Date: ...................; and 44.32 (8) for buyer's broker agreements which involve residential 44.33 real property, a notice stating that after the expiration of the 44.34 buyer's broker agreement, the buyer will not be obligated to pay 44.35 the licensee a fee or commission if the buyer has executed 44.36 another valid buyer's broker agreement pursuant to which the 45.1 buyer is obligated to pay a fee or commission to another 45.2 licensee for the purchase, lease, or exchange of real property. 45.3 Sec. 5. Minnesota Statutes 1994, section 82.197, 45.4 subdivision 1, is amended to read: 45.5 Subdivision 1. [AGENCY DISCLOSURE.]The listing agreement45.6or a buyer's broker agreement must include a clear and complete45.7explanation of how the broker will represent the interests of45.8the seller or buyer, and, if the broker represents both sellers45.9and buyers, state how that representation would be altered in a45.10dual agency situation, and require the seller or buyer to choose45.11whether to authorize the broker to initiate any transaction45.12which would give rise to dual agency. Disclosure to a customer45.13of a licensee's agency relationship with other parties must be45.14made at a time and in a manner sufficient to protect the45.15customer's bargaining positionA real estate broker or 45.16 salesperson shall provide to a consumer in a residential real 45.17 property transaction at the first substantive contact with the 45.18 consumer an agency disclosure form in substantially the form set 45.19 forth in subdivision 4. The agency disclosure form shall be 45.20 intended to provide a description of available options for 45.21 agency and nonagency relationships, and a description of the 45.22 role of a licensee under each option. The agency disclosure 45.23 form shall provide a signature line for acknowledgment of 45.24 receipt by the consumer. 45.25 Sec. 6. Minnesota Statutes 1994, section 82.197, 45.26 subdivision 2, is amended to read: 45.27 Subd. 2. [CREATION OF DUAL AGENCY.] If circumstances 45.28 create a dual agency situation, the broker must make full 45.29 disclosure to all parties to the transaction as to the change in 45.30 relationship of the parties to the broker due to dual agency. A 45.31 broker, having made full disclosure, must obtain the consent of 45.32 all parties to these circumstancesbefore accepting the dual45.33agency.in residential real property transactions in the 45.34 purchase agreement in the form set forth below which shall be 45.35 set off in a boxed format to draw attention to it: 45.36 46.1 Broker represents both the seller(s) and the buyer(s) of 46.2 the property involved in this transaction, which creates a dual 46.3 agency. This means that broker and its salespersons owe 46.4 fiduciary duties to both seller(s) and buyer(s). Because the 46.5 parties may have conflicting interests, broker and its 46.6 salespersons are prohibited from advocating exclusively for 46.7 either party. Broker cannot act as a dual agent in this 46.8 transaction without the consent of both seller(s) and buyer(s). 46.9 Seller(s) and buyer(s) acknowledge that: 46.10 (1) confidential information communicated to broker which 46.11 regards price, terms, or motivation to buy or sell will remain 46.12 confidential unless seller(s) or buyer(s) instructs broker in 46.13 writing to disclose this information. Other information will be 46.14 shared; 46.15 (2) broker and its salespersons will not represent the 46.16 interests of either party to the detriment of the other; and 46.17 (3) within the limits of dual agency, broker and its 46.18 salespersons will work diligently to facilitate the mechanics of 46.19 the sale. 46.20 With the knowledge and understanding of the explanation 46.21 above, seller(s) and buyer(s) authorize and instruct broker and 46.22 its salespersons to act as dual agents in this transaction. 46.23 46.24 46.25 ........................... ........................... 46.26 Seller Buyer 46.27 46.28 ........................... ........................... 46.29 Seller Buyer 46.30 46.31 ........................... ........................... 46.32 Date Date 46.33 Sec. 7. Minnesota Statutes 1994, section 82.197, 46.34 subdivision 3, is amended to read: 46.35 Subd. 3. [SCOPE AND EFFECT.] Disclosures made in 46.36 accordance with the requirements for disclosure of agency 47.1 relationships set forth in this chapter are sufficient to 47.2 satisfy common law disclosure requirements. In addition, when a 47.3 principal in the transaction is a licensee or a relative or 47.4 business associate of the licensee, that fact must be disclosed 47.5 in writing in addition to any other required disclosures.The47.6commissioner, in consultation with representatives of the real47.7estate industry, consumer groups, the attorney general's office,47.8and any other group deemed appropriate by the commissioner,47.9shall study current required disclosure forms and recommend any47.10additions that may be necessary to ensure that consumers are47.11informed of the various agency relations and how they affect the47.12consumer. The commissioner shall prepare legislation for the47.131995 session which incorporates those recommendations.47.14 Sec. 8. Minnesota Statutes 1994, section 82.197, 47.15 subdivision 4, is amended to read: 47.16 Subd. 4. [AGENCY DISCLOSUREFORMSFORM.](a) Disclosures47.17of agency relationshipsThe agency disclosure form shall bemade47.18 in substantially the form set forthin paragraphs (b) to47.19(e)below: 47.20(b) ADDENDUM TO LISTING AGREEMENT47.21....(Broker).... will be representing you as your broker in47.22the sale of your property located at ......................47.23This relationship is called an agency. As your agent,47.24....(Broker).... owes you the duties of loyalty, obedience,47.25disclosure, confidentiality, reasonable care and diligence, and47.26full accounting. However, ....(Broker).... also represents47.27buyers looking for properties. If a buyer represented by47.28....(Broker).... becomes interested in your property, a dual47.29agency will be created. This means that ....(Broker).... will47.30owe the same duties to the buyer that we owe to you. This47.31conflict of interest will prohibit ....(Broker).... from47.32advocating exclusively on your behalf when attempting to effect47.33the sale of your property. Dual agency will limit the level of47.34representation which ....(Broker).... can provide.47.35If a dual agency should arise, you will need to agree that47.36confidential information about price, terms, and motivation will48.1still be kept confidential unless you instruct ....(Broker)....48.2in writing to disclose specific information about you or your48.3property. All other information will be shared. Regardless of48.4whether a dual agency occurs, ....(Broker).... must disclose to48.5the buyer any material facts of which ....(Broker).... is aware48.6that may adversely and significantly affect the buyer's use or48.7enjoyment of the property. In addition, ....(Broker).... must48.8disclose to both parties any information of which48.9....(Broker).... is aware that a party will not perform in48.10accordance with the terms of the purchase agreement or similar48.11written agreement to convey real estate.48.12....(Broker).... cannot act as a dual agent unless both you48.13and the buyer agree to the dual agency after it is disclosed to48.14you. By agreeing to a possible dual agency, you will be giving48.15up the right to exclusive representation in an in-house48.16transaction. However, if you should decide not to agree to a48.17possible dual agency, and you want ....(Broker).... to represent48.18you, you may give up the opportunity to sell your property to48.19buyers represented by ....(Broker).....48.20SELLER'S INSTRUCTIONS TO BROKER48.21Having read and understood this information about dual48.22agency, you now instruct ....(Broker).... as follows:48.23.... Seller agrees to dual agency representation and will48.24consider offers made by buyers represented by ....(Broker).....48.25.... Seller does not agree to dual agency representation48.26and will not consider offers made by buyers represented by48.27....(Broker).....48.28.......................... ........................48.29Seller (Broker)48.30.......................... BY: ........................48.31Seller Salesperson48.32Dated: ..................48.33(c) ADDENDUM TO BUYER REPRESENTATION AGREEMENT48.34....(Broker).... will be representing you as your broker to48.35assist you in finding and purchasing a property. This48.36relationship is called an agency. As your agent,49.1....(Broker).... owes you the duties of loyalty, obedience,49.2disclosure, confidentiality, reasonable care and diligence, and49.3full accounting. However, ....(Broker).... also represents49.4sellers by listing their property for sale. If you become49.5interested in a property listed by ....(Broker)...., a dual49.6agency will be created. This means that ....(Broker).... will49.7owe the same duties to the seller that ....(Broker).... owes to49.8you. This conflict of interest will prohibit ....(Broker)....49.9from advocating exclusively on your behalf when attempting to49.10effect the purchase of the property. Dual agency will limit the49.11level of representation ....(Broker).... can provide.49.12If a dual agency should arise, you will need to agree that49.13confidential information about price, terms, and motivation will49.14still be kept confidential unless you instruct ....(Broker)....49.15in writing to disclose specific information about you. All49.16other information will be shared. Regardless of whether a dual49.17agency occurs, ....(Broker).... must disclose to the buyer any49.18material facts of which ....(Broker).... is aware that may49.19adversely and significantly affect the buyer's use or enjoyment49.20of the property. In addition, ....(Broker).... must disclose to49.21both parties any information of which ....(Broker).... is aware49.22that a party will not perform in accordance with the terms of49.23the purchase agreement or similar written agreement to convey49.24real estate.49.25....(Broker).... cannot act as a dual agent unless both you49.26and the seller agree to the dual agency after it is disclosed to49.27you. By agreeing to a possible dual agency, you will be giving49.28up the right to exclusive representation in an in-house49.29transaction. However, if you should decide not to agree to a49.30possible dual agency, and you want ....(Broker).... to represent49.31you, you may give up the opportunity to purchase the properties49.32listed by ....(Broker).....49.33BUYER'S INSTRUCTIONS TO BROKER49.34Having read and understood this information about dual49.35agency, you now instruct ....(Broker).... as follows:49.36.... Buyer will agree to a dual agency representation and50.1will consider properties listed by ....(Broker).....50.2.... Buyer will not agree to a dual agency representation50.3and will not consider properties listed by ....(Broker).....50.4.......................... ........................50.5Buyer (Broker)50.6.......................... BY: ........................50.7Buyer Salesperson50.8Dated: ..................50.9(d) DISCLOSURE TO CUSTOMER50.10Before ....(Broker).... begins to assist you in finding and50.11purchasing a property, we must disclose to you that50.12....(Broker).... will be representing the seller in the50.13transaction.50.14....(Broker).... will disclose to you all material facts50.15about the property of which ....(Broker).... is aware, that50.16could adversely and significantly affect your use or enjoyment50.17of the property. ....(Broker).... will also assist you with the50.18mechanics of the transaction.50.19When it comes to the price and terms of an offer,50.20....(Broker).... will ask you to make the decision as to how50.21much to offer for any property and upon what terms and50.22conditions. ....(Broker).... can explain your options to you,50.23but the ultimate decision is yours. ....(Broker).... will50.24attempt to show you properties in the price range and category50.25you desire so that you will have information on which to base50.26your decision.50.27....(Broker).... will present to the seller any written50.28offer that you ask ....(Broker).... to present.50.29....(Broker).... asks you to keep to yourself any information50.30about the price or terms of your offer, or your motivation for50.31making an offer, that you do not want the seller to know.50.32....(Broker).... would be required, as the seller's agent, to50.33disclose this information to the seller. You should carefully50.34consider sharing any information with ....(Broker).... that you50.35do not want disclosed to the seller.50.36.......................... ........................51.1Customer (Broker)51.2.......................... BY: ........................51.3Customer Salesperson51.4Dated: ..................51.5(e) DISCLOSURE TO BUYER AND SELLER AT TIME51.6OF OFFER TO PURCHASE51.7....(Broker).... represents the seller at the property51.8located at51.9.................................................................51.10....(Broker).... also represents a buyer who offered to51.11purchase the seller's property.51.12When ....(Broker).... represents both the buyer and the51.13seller in a transaction, a dual agency is created. This means51.14that ....(Broker).... and its agents owe a fiduciary duty to51.15both buyer and seller. Because buyer and seller may have51.16conflicting interests, ....(Broker).... and its agents are51.17prohibited from advocating exclusively for either party.51.18....(Broker).... cannot represent both the buyer and seller51.19in this transaction unless both the buyer and seller agree to51.20this dual agency.51.21Buyer and seller acknowledge and agree that:51.221. Confidential information communicated to51.23....(Broker).... which regards price, terms, or motivation to51.24buy or sell will remain confidential unless buyer or seller51.25instructs ....(Broker).... in writing to disclose this51.26information about the buyer or seller. Other information will51.27be shared.51.282. ....(Broker).... and its salespersons will disclose to51.29buyer all material facts of which they are aware which could51.30adversely and significantly affect the buyer's use or enjoyment51.31of the property or any intended use of the property of which51.32....(Broker).... or its salespersons are aware (this disclosure51.33is required by law whether or not a dual agency is involved).51.343. ....(Broker).... and its salespersons will disclose to51.35both parties all information of which they are aware that either51.36party will not perform in accordance with the terms of the52.1purchase agreement or other written agreement to convey real52.2estate (this disclosure is required by law whether or not a dual52.3agency is involved).52.44. ....(Broker).... and its salespersons will not52.5represent the interests of either party to the detriment of the52.6other.52.75. Within the limits of dual agency, ....(Broker).... and52.8its salespersons will work diligently to facilitate the52.9mechanics of the sale.52.10With the knowledge and understanding of the explanation52.11above, buyer and seller authorize and instruct ....(Broker)....52.12and its salespersons to act as dual agents in this transaction.52.13.......................... ........................52.14Buyer Seller52.15.......................... ........................52.16Buyer Seller52.17Date: ................... Date: .................52.18AGENCY RELATIONSHIPS IN REAL ESTATE TRANSACTIONS 52.19Minnesota law requires that early in any relationship, real 52.20 estate brokers or salespersons discuss with consumers what type 52.21 of agency representation or relationship they desire.(1) The 52.22 available options are listed below. This isnot a contract. 52.23This is an agency disclosure form only. If you desire 52.24representation, you must enter into a written contract according 52.25to state law (a listing contract or a buyer representation 52.26 contract). Until such time as you choose to enter into a 52.27 written contract for representation or assistance, you will be 52.28 treated as a customer of the broker or salesperson and not 52.29 represented by the brokerage. The broker or salesperson would 52.30 then be acting as a Seller's broker (see paragraph I below), or 52.31 as a nonagent (see paragraph IV below). 52.32 I. 52.33Seller's Broker: A broker who lists a property, or a 52.34 salesperson who is licensed to the listing broker, 52.35 represents the Seller and acts on behalf of the Seller. A 52.36 broker or salesperson working with a Buyer may also act as 53.1 a subagent of the Seller, in which case the Buyer is the 53.2 broker's customer and is not represented by that broker. A 53.3 Seller's broker owes to the Seller the fiduciary duties 53.4 described below.(2) The broker must also disclose to the 53.5 Buyer any material facts of which the broker is aware that 53.6 could adversely and significantly affect the Buyer's use or 53.7 enjoyment of the property. If a broker or salesperson 53.8 working with a Buyer as a customer is representing the 53.9 Seller, he or she must act in the Seller(s)' interests and 53.10 must tell the Seller(s) any information disclosed to 53.11 him/her. In that case, the Buyer will not be represented 53.12 and will not receive advice and counsel from the broker or 53.13 salesperson. 53.14 II. 53.15Buyer's Broker: A Buyer may enter into an agreement for 53.16 the broker or salesperson to represent and act on behalf of 53.17 the Buyer. The broker may represent the Buyer only, and 53.18 not the Seller, even if s/he is being paid in whole or in 53.19 part by the Seller. A Buyer's broker owes to the Buyer the 53.20 fiduciary duties described below.(2) The broker must 53.21 disclose to the Buyer any material facts of which the 53.22 broker is aware that could adversely and significantly 53.23 affect the Buyer's use or enjoyment of the property. 53.24 III. 53.25Dual Agency-Broker Representing both Seller and Buyer: 53.26 Dual agency occurs when one broker or salesperson 53.27 represents both parties to a transaction, or when two 53.28 salespersons licensed to the same broker each represent a 53.29 party to the transaction. Dual agency requires the 53.30 informed consent of all parties, and means that the broker 53.31 and salesperson owe the same duties to the Seller and the 53.32 Buyer. This role limits the level of representation the 53.33 broker and salespersons can provide, and prohibits them 53.34 from acting exclusively for either party. In a dual 53.35 agency, confidential information about price, terms, and 53.36 motivation for pursuing a transaction will be kept 54.1 confidential unless one party instructs the broker or 54.2 salesperson in writing to disclose specific information 54.3 about him or her. Other information will be shared. Dual 54.4 agents may not advocate for one party to the detriment of 54.5 the other.(3) 54.6 Within the limitations described above, dual agents owe to 54.7 both Seller and Buyer the fiduciary duties described 54.8 below.(2) Dual agents must disclose to Buyers any material 54.9 facts of which the broker is aware that could adversely and 54.10 significantly affect the Buyer's use or enjoyment of the 54.11 property. 54.12 IV. 54.13Nonagent: A broker or salesperson may perform services for 54.14 either party as a nonagent, if that party signs a nonagency 54.15 services agreement. As a nonagent the broker or 54.16 salesperson facilitates the transaction, but does not act 54.17 on behalf of either party.THE NONAGENT BROKER OR 54.18SALESPERSON DOES NOT OWE ANY PARTY ANY OF THE FIDUCIARY 54.19DUTIES LISTED BELOW, UNLESS THOSE DUTIES ARE INCLUDED IN 54.20THE WRITTEN NONAGENCY SERVICES AGREEMENT. The nonagent 54.21 broker or salesperson owes only those duties required by 54.22 law or contained in the written nonagency services 54.23 agreement. 54.24ACKNOWLEDGMENT: I/We acknowledge that I/We have been presented 54.25with the above-described options. I/We understand that Buyers 54.26who have not signed a Buyer representation contract or nonagency 54.27services agreement are not represented by the broker/salesperson 54.28and information given to the broker/salesperson will be 54.29disclosed to the Seller. I/We understand that written consent 54.30is required for a dual agency relationship. This is a 54.31disclosure only, NOT a contract for representation. 54.32......................... ........................ 54.33Seller Date Buyer Date 54.35......................... ........................ 54.36Seller Date Buyer Date 55.4 **************************************************************** 55.5 (1) This disclosure is required by law in any transaction 55.6 involving property occupied or intended to be occupied by one to 55.7 four families as their residence. 55.8 (2) The fiduciary duties mentioned above are listed below 55.9 and have the following meanings: 55.10 Loyalty-broker/salesperson will act only in client(s)' best 55.11 interest. 55.12 Obedience-broker/salesperson will carry out all client(s)' 55.13 lawful instructions. 55.14 Disclosure-broker/salesperson will disclose to client(s) 55.15 all material facts of which broker/salesperson has knowledge 55.16 which might reasonably affect the client's rights and interests. 55.17 Confidentiality-broker/salesperson will keep client(s)' 55.18 confidences unless required by law to disclose specific 55.19 information (such as disclosure of material facts to Buyers). 55.20 Reasonable Care-broker/salesperson will use reasonable care 55.21 in performing duties as an agent. 55.22 Accounting-broker/salesperson will account to client(s) for 55.23 all client(s)' money and property received as agent. 55.24 (3) If Seller(s) decides not to agree to a dual agency 55.25 relationship, Seller(s) may give up the opportunity to sell the 55.26 property to Buyers represented by the broker/salesperson. If 55.27 Buyer(s) decides not to agree to a dual agency relationship, 55.28 Buyer(s) may give up the opportunity to purchase properties 55.29 listed by the broker. 55.30 Sec. 9. Minnesota Statutes 1994, section 82.22, 55.31 subdivision 13, is amended to read: 55.32 Subd. 13. [CONTINUING EDUCATION.] (a) After their first 55.33 renewal date, all real estate salespersons and all real estate 55.34 brokers shall be required to successfully complete 30 hours of 55.35 real estate continuing education, either as a student or a 55.36 lecturer, in courses of study approved by the commissioner, 56.1 during each 24-month license period. At least 15 of the 30 56.2 credit hours must be completed during the first 12 months of the 56.3 24-month licensing period. Salespersons and brokers whose 56.4 initial license period extends more than 12 months are required 56.5 to complete 15 hours of real estate continuing education during 56.6 the initial license period.All continuing education must be56.7earned no later than May 31 of the renewal year.Those 56.8 licensees who will receive a 12-month license on July 1, 1995, 56.9 because of the staggered implementation schedule must complete 56.10 15 hours of real estate continuing education as a requirement 56.11 for renewal on July 1, 1996. Licensees may not claim credit for 56.12 continuing education not actually completed as of the date their 56.13 report of continuing education compliance is filed. 56.14 (b) The commissioner shall adopt rules defining the 56.15 standards for course and instructor approval, and may adopt 56.16 rules for the proper administration of this subdivision. 56.17 (c) Any program approved by Minnesota continuing legal 56.18 education shall be approved by the commissioner of commerce for 56.19 continuing education for real estate brokers and salespeople if 56.20 the program or any part thereof relates to real estate. 56.21 (d) As part of the continuing education requirements of 56.22 this section, the commissioner shall require that all real 56.23 estate brokers and salespersons receive: 56.24 (1) at least two hours of training during each license 56.25 period in courses in laws or regulations on agency 56.26 representation and disclosure; and 56.27 (2) at least two hours of training during each license 56.28 period in courses in state and federal fair housing laws, 56.29 regulations, and rules, or other antidiscrimination laws. 56.30 Clause (1) does not apply to real estate salespersons and 56.31 real estate brokers engaged solely in the commercial real estate 56.32 business who file with the commissioner a verification of this 56.33 status along with the continuing education report required under 56.34 paragraph (a). 56.35 (e) The commissioner is authorized to establish a procedure 56.36 for renewal of course accreditation. 57.1 Sec. 10. Minnesota Statutes 1994, section 82A.11, is 57.2 amended by adding a subdivision to read: 57.3 Subd. 8. [CANCELLATION BY HEIR.] A membership camping 57.4 contract that may be transferred by descent or devise must 57.5 provide that the heir or devisee may cancel the contract. 57.6 Cancellation of the contract relieves the heir or devisee of any 57.7 further obligations under the contract. 57.8 Sec. 11. Minnesota Statutes 1994, section 82B.19, is 57.9 amended by adding a subdivision to read: 57.10 Subd. 4. [RENEWAL OF ACCREDITATION.] The commissioner is 57.11 authorized to establish a procedure for renewal of course 57.12 accreditation. 57.13 Sec. 12. Minnesota Statutes 1995 Supplement, section 57.14 386.66, is amended to read: 57.15 386.66 [BOND OR ABSTRACTER'S LIABILITY INSURANCE POLICY.] 57.16 Before a license shall be issued, the applicant shall file 57.17 with the commissioneraan annual bond or abstracter's liability 57.18 insurance policy for each license year, to be approved by the 57.19 commissioner, running to the state of Minnesota in the penal sum 57.20 of at least $100,000 conditioned for the payment by such 57.21 abstracter of any damages that may be sustained by or accrue to 57.22 any person by reason of or on account of any error, deficiency 57.23 or mistake arising wrongfully or negligently in any abstract, or 57.24 continuation thereof, or in any certificate showing ownership 57.25 of, or interest in, or liens upon any lands in the state of 57.26 Minnesota, whether registered or not, made by and issued by such 57.27 abstracter, provided however, that the aggregate liability of 57.28 the surety to all persons under such bond shall in no event 57.29 exceed the amount of such bond. If the applicant intends to 57.30 engage in the business of abstracting in any county having more 57.31 than 200,000 inhabitants, the bond or insurance policy required 57.32 herein shall be in the penal sum of at least $250,000. 57.33 Applicants that are title insurance companies regulated by 57.34 chapter 68A and licensed pursuant to sections 60A.02 and 60A.06, 57.35 subdivision 1, clause (7), and their employees or those having 57.36 cash or securities on deposit with the state of Minnesota in an 58.1 amount equal to the said bond or insurance policy shall be 58.2 exempt from furnishing the bond or an insurance policy herein 58.3 required but shall be liable to the same extent as if a bond or 58.4 insurance policy has been given and filed. The bond or 58.5 insurance policy required hereunder shall be written by some 58.6 surety or other company authorized to do business in this state 58.7 issuing bonds or abstracter's liability insurance policies and 58.8 shall be issued for a period of one or more years, and renewed 58.9 for oneor more yearsyear at the date of expiration as 58.10 principal continues in business.The aggregate liability of58.11such surety on such bond or insurance policy for all damages58.12shall, in no event, exceed the sum of said bond or insurance58.13policy.58.14 Sec. 13. [EFFECTIVE DATES.] 58.15 Sections 1 to 8 are effective October 1, 1996. Sections 9 58.16 and 11 are effective the day following final enactment. 58.17 ARTICLE 4 58.18 BUILDING CONTRACTORS 58.19 Section 1. Minnesota Statutes 1994, section 326.37, is 58.20 amended by adding a subdivision to read: 58.21 Subd. 3. [EXEMPTION.] No license authorized by this 58.22 section shall be required of any contractor or employee engaged 58.23 in the work or business of pipe laying outside of buildings if 58.24 such person is engaged in a business or trade which has 58.25 traditionally performed such work within the state prior to 58.26 January 1, 1994. 58.27 Sec. 2. Minnesota Statutes 1994, section 326.87, is 58.28 amended by adding a subdivision to read: 58.29 Subd. 4. [RENEWAL OF ACCREDITATION.] The commissioner is 58.30 authorized to establish a procedure for renewal of course 58.31 accreditation. 58.32 Sec. 3. Minnesota Statutes 1994, section 326.91, is 58.33 amended by adding a subdivision to read: 58.34 Subd. 3. [CERTIFICATE OF EXEMPTION HOLDERS.] For cause 58.35 shown under subdivision 1 or 2, the commissioner may deny, 58.36 suspend, or revoke a certificate of exemption issued under 59.1 section 326.84, subdivision 3, clause (5), in the same manner as 59.2 a license. 59.3 Sec. 4. Minnesota Statutes 1994, section 326.91, is 59.4 amended by adding a subdivision to read: 59.5 Subd. 4. [ACTION AGAINST UNLICENSED PERSONS.] Nothing in 59.6 this section prevents the commissioner from taking actions, 59.7 including cease and desist actions, against persons required to 59.8 be licensed under sections 326.83 to 326.991, based on conduct 59.9 that would provide grounds for administrative action against a 59.10 licensee under this section. 59.11 Sec. 5. Minnesota Statutes 1994, section 326.991, is 59.12 amended to read: 59.13 326.991 [EXCEPTION.] 59.14 Subdivision 1. The license requirement under section 59.15 326.84 does not apply to a residential building contractor, 59.16 residential remodeler, or specialty contractor licensed by the 59.17city of St. Paul or thecity of Minneapolis and who is 59.18 performing work within the legal boundaries ofone of those59.19municipalitiesthat municipality. 59.20 This subdivision expires March 31, 2000. 59.21 Subd. 2. The commissioner may contract with the city of 59.22 Minneapolisand the city of St. Paulto administer this 59.23 licensing program. 59.24 Sec. 6. [REPEALER.] 59.25 Minnesota Statutes 1994, sections 326.95, subdivision 4; 59.26 326.97, subdivision 3; and 326.99, are repealed. 59.27 Sec. 7. [EFFECTIVE DATES.] 59.28 Sections 1 to 4 and 6 are effective the day following final 59.29 enactment. 59.30 Section 5 is effective April 1, 1996. 59.31 ARTICLE 5 59.32 MISCELLANEOUS 59.33 Section 1. Minnesota Statutes 1994, section 47.206, 59.34 subdivision 1, is amended to read: 59.35 47.206 [INTEREST RATE OR DISCOUNT POINT AGREEMENTS.] 59.36 Subdivision 1. [DEFINITIONS.] For the purposes of this 60.1 section, the terms defined in this subdivision have the meanings 60.2 given them. 60.3 (a) "Lender" means a person or entity referred to in 60.4 section 47.20, subdivision 1, a credit union, or a person making 60.5 a conventional loan as defined under section 47.20, subdivision 60.6 2, clause (3), or cooperative apartment loan as defined under 60.7 section 47.20, subdivision 2, clause (4), except that 60.8 conventional loans or cooperative apartment loans include any 60.9 loan or advance of credit in an original principal balance of 60.10 less than $200,000. "Lender" also means a mortgage broker as 60.11 defined in paragraph (e). 60.12 (b) "Loan" means loans and advances of credit authorized 60.13 under section 47.20, subdivision 1, clauses (1) to (4), and 60.14 conventional loans as defined under section 47.20, subdivision 60.15 2, clause (3), or cooperative apartment loans as defined under 60.16 section 47.20, subdivision 2, clause (4), except that 60.17 conventional loans or cooperative apartment loans also include 60.18 all loans and advances of credit in an original principal 60.19 balance of less than $200,000. "Loan" does not include a loan 60.20 or advance of credit secured by a mortgage upon real property 60.21 containing more than one residential unit or secured by a 60.22 security interest in shares of more than one residential unit in 60.23 a building owned or leased by a cooperative apartment 60.24 corporation. 60.25 (c) "Borrower" means a natural person who has submitted an 60.26 application for a loan to a lender. 60.27 (d) "Interest rate or discount point agreement" or 60.28 "agreement" means a contract between a lender and a borrower 60.29 under which the lender agrees, subject to the lender's 60.30 underwriting and approval requirements, to make a loan at a 60.31 specified interest rate or number of discount points, or both, 60.32 and the borrower agrees to make a loan on those terms. The term 60.33 also includes an offer by a lender that is accepted by a 60.34 borrower under which the lender promises to guarantee or lock in 60.35 an interest rate or number of discount points, or both, for a 60.36 specific period of time. 61.1 (e) "Mortgage broker" includes: 61.2 (1) a person who negotiates mortgage loans as described in 61.3 section 82.17, subdivision 4, clause (b), if the person does not 61.4 qualify for the exception set forth in section 82.18, clause 61.5 (o); 61.6 (2) the employees of the person; or 61.7 (3) any person or firm which holds itself out to the public 61.8 as a mortgage broker, regardless of whether the person or firm 61.9 holds a limited broker's license pursuant to section 82.20, 61.10 subdivision 13. 61.11 Sec. 2. [EFFECTIVE DATE.] 61.12 Section 1 is effective on the day following final enactment.