SF 2541

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to economic development; appropriating money 
  1.3             for economic development and related purposes; 
  1.4             creating the Minnesota film and television revolving 
  1.5             loan fund; providing residential mortgage originator 
  1.6             and servicer licensing requirements; making conforming 
  1.7             changes; providing license penalties for certain 
  1.8             violations; requiring reports; amending Minnesota 
  1.9             Statutes 1996, sections 47.206, subdivision 1; 82.17, 
  1.10            subdivision 4; 82.18; and 82.27, subdivision 1; 
  1.11            Minnesota Statutes 1997 Supplement, section 462A.05, 
  1.12            subdivision 39; Laws 1997, chapter 200, article 1, 
  1.13            sections 6; and 12, subdivision 2; proposing coding 
  1.14            for new law in Minnesota Statutes, chapter 116J; 
  1.15            proposing coding for new law as Minnesota Statutes, 
  1.16            chapter 58; repealing Minnesota Statutes 1996, section 
  1.17            82.175. 
  1.18  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.19                             ARTICLE 1 
  1.20                        ECONOMIC DEVELOPMENT 
  1.21  Section 1.  [ECONOMIC DEVELOPMENT APPROPRIATIONS.] 
  1.22     The sums in the columns marked "APPROPRIATIONS" are 
  1.23  appropriated from the general fund, or another named fund, to 
  1.24  the agencies and for the purposes specified in this article, to 
  1.25  be available for the fiscal years indicated for each purpose. 
  1.26                          SUMMARY BY FUND 
  1.27                                           1998           1999 
  1.28  General                              $   359,000    $21,336,000 
  1.29  TOTAL                                $   359,000    $21,336,000 
  1.30                                             APPROPRIATIONS 
  1.31                                         Available for the Year 
  1.32                                             Ending June 30 
  1.33                                            1998         1999 
  2.1   Sec. 2.  DEPARTMENT OF TRADE AND
  2.2   ECONOMIC DEVELOPMENT               $    -0-     $    7,450,000 
  2.3   (a) Crosby Community Development
  2.4          -0-            450,000 
  2.5   $450,000 is appropriated in 1999 for a 
  2.6   grant to the city of Crosby to purchase 
  2.7   a commercial industrial building.  This 
  2.8   is a one-time appropriation and must be 
  2.9   matched by at least $450,000 in 
  2.10  nonstate sources. 
  2.11  (b) East Grand Forks Flood Recovery
  2.12         -0-          1,000,000 
  2.13  $1,000,000 is appropriated in 1999 for 
  2.14  a grant to the city of East Grand Forks 
  2.15  to supplement flood recovery efforts.  
  2.16  This is a one-time appropriation. 
  2.17  (c) Tourism Advertising and Marketing
  2.18         -0-          1,000,000 
  2.19  This appropriation is for additional 
  2.20  tourism advertising and is added to the 
  2.21  appropriation for tourism provided in 
  2.22  Laws 1997, chapter 200, article 1, 
  2.23  section 2, subdivision 4. 
  2.24  (d) Minnesota Film Board     
  2.25         -0-          5,000,000 
  2.26  $5,000,000 is appropriated in 1999 for 
  2.27  transfer to the revolving loan fund 
  2.28  under Minnesota Statutes, section 
  2.29  116J.545.  Of this appropriation, the 
  2.30  film board may use up to $100,000 each 
  2.31  year for administration of the loan 
  2.32  fund. 
  2.33  (e) Minnesota Investment Fund Grant 
  2.34  The appropriation of $1,000,000 in 
  2.35  fiscal year 1998 for a special 
  2.36  Minnesota investment fund grant, as 
  2.37  provided in Laws 1997, chapter 200, 
  2.38  section 2, subdivision 2, is canceled 
  2.39  upon final enactment. 
  2.40  Sec. 3.  MINNESOTA WORLD TRADE CENTER
  2.41  CORPORATION                              155,000        -0-     
  2.42  $155,000 is appropriated in 1998 for 
  2.43  full and final payments of the 
  2.44  remaining 1988 debt of the Minnesota 
  2.45  World Trade Center Corporation which 
  2.46  was incurred for conference center 
  2.47  furniture, fixtures, and equipment.  
  2.48  This appropriation is available 
  2.49  immediately. 
  2.50  Sec. 4.  DEPARTMENT OF ECONOMIC
  2.51  SECURITY                                 -0-          3,460,000 
  2.52  (a) State Services for the Blind
  3.1          -0-          1,400,000 
  3.2   $1,400,000 is appropriated in 1999 to 
  3.3   the State Services for the Blind to 
  3.4   update radio talking book receivers and 
  3.5   create a digital infrastructure for the 
  3.6   communication center.  This is a 
  3.7   one-time appropriation and must be 
  3.8   matched dollar for dollar by a private 
  3.9   nonprofit organization for the same 
  3.10  purpose.  This appropriation is 
  3.11  available until June 30, 2000. 
  3.12  (b) Vocational Rehabilitation
  3.13         -0-          1,000,000 
  3.14  This appropriation is to the vocational 
  3.15  rehabilitation program and is added to 
  3.16  the appropriation for rehabilitation 
  3.17  services provided in Laws 1997, chapter 
  3.18  200, article 1, section 5, subdivision 
  3.19  2. 
  3.20  (c) Regional Job Market Analysis
  3.21         -0-            200,000 
  3.22  $200,000 is appropriated in 1999 to 
  3.23  retain the services of regional job 
  3.24  market analysts. 
  3.25  (d) Alien Labor Certification
  3.26         -0-            160,000 
  3.27  $160,000 is appropriated in 1999 to 
  3.28  administer the alien labor 
  3.29  certification program. 
  3.30  (e) Pine County Workforce Center
  3.31         -0-            700,000 
  3.32  $700,000 is appropriated in 1999 for 
  3.33  the construction of a workforce center 
  3.34  at the Pine County Technical College.  
  3.35  This is a one-time appropriation. 
  3.36  Sec. 5.  DEPARTMENT OF COMMERCE          -0-             22,000 
  3.37  This appropriation is for 
  3.38  implementation of the mortgage 
  3.39  originator and servicer regulation 
  3.40  program as provided in article 2 of 
  3.41  this act. 
  3.42  Sec. 6.  MINNESOTA HOUSING  
  3.43  FINANCE AGENCY                           -0-         10,000,000 
  3.44  This appropriation is for transfer to 
  3.45  the housing development fund for the 
  3.46  affordable rental investment fund 
  3.47  program under Minnesota Statutes, 
  3.48  section 462A.21, subdivision 8b, for 
  3.49  the purpose of financing the 
  3.50  acquisition, rehabilitation, debt 
  3.51  restructuring of federally assisted 
  3.52  rental property, and for making equity 
  3.53  take-out loans under Minnesota 
  3.54  Statutes, section 462A.05, subdivision 
  4.1   39.  In order to be eligible for 
  4.2   assistance from this appropriation, the 
  4.3   owner of a rental property must agree 
  4.4   to participate in the applicable 
  4.5   federally assisted housing program and 
  4.6   to extend any existing low-income 
  4.7   affordability restrictions on the 
  4.8   housing for the maximum term 
  4.9   permitted.  Priority must be given to 
  4.10  properties with the longest remaining 
  4.11  term under an agreement for federal 
  4.12  rental assistance.  Of this amount, up 
  4.13  to $1,500,000 is available for pilot 
  4.14  projects which combine housing finance 
  4.15  agency and department of human services 
  4.16  resources to retain affordable housing 
  4.17  for the frail elderly and to make 
  4.18  facility improvements to further extend 
  4.19  the residents' ability to remain in the 
  4.20  federally assisted housing.  The 
  4.21  housing finance agency and the 
  4.22  department of human services shall 
  4.23  jointly review proposals for pilot 
  4.24  projects. 
  4.25  Sec. 7.  MEDIATION SERVICES BUREAU       -0-             85,000 
  4.26  This is a one-time appropriation to 
  4.27  cover initial costs of providing 
  4.28  dispute resolution, mediation and 
  4.29  arbitration services related to 
  4.30  development and review of 
  4.31  community-based comprehensive plans 
  4.32  pursuant to Laws 1997, chapter 202, 
  4.33  articles 4, 5, and 6, and from 
  4.34  objections to annexations proposed 
  4.35  under Minnesota Statutes, chapter 414. 
  4.36  On or before January 15, 1999, the 
  4.37  commissioner must provide to the 
  4.38  governor; the chair of the senate 
  4.39  committee on jobs, energy, and 
  4.40  community development; and the chair of 
  4.41  the house committee on economic 
  4.42  development, infrastructure, and 
  4.43  regulation finance an update on the 
  4.44  bureau's initial experience in 
  4.45  providing dispute resolution services 
  4.46  related to community-based planning and 
  4.47  objections to annexations.  In 
  4.48  developing this information, the 
  4.49  commissioner should consider the 
  4.50  long-term service needs under this 
  4.51  activity, alternatives regarding its 
  4.52  future administration, and any ongoing 
  4.53  funding needs. 
  4.54  Sec. 8.  PUBLIC UTILITIES
  4.55  COMMISSION                               204,000        189,000 
  4.56  This appropriation is for costs 
  4.57  associated with the regulation of 
  4.58  utilities. 
  4.59  Sec. 9.  DEPARTMENT OF 
  4.60  PUBLIC SERVICE                           -0-            130,000 
  4.61  This appropriation is for planning and 
  4.62  analysis of the regulation of the 
  4.63  electrical industry. 
  5.1      Sec. 10.  [116J.544] [DEFINITIONS.] 
  5.2      Subdivision 1.  [TERMS.] For the purposes of sections 
  5.3   116J.544 to 116J.545, the following terms have the meanings 
  5.4   given them. 
  5.5      Subd. 2.  [BOARD.] "Board" means the Minnesota film board. 
  5.6      Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
  5.7   commissioner of trade and economic development. 
  5.8      Sec. 11.  [116J.5445] [DUTIES; REPORTS.] 
  5.9      The commissioner shall enter into a contract with the board 
  5.10  to implement the revolving loan fund.  The contract shall 
  5.11  include a description of the board's responsibilities in 
  5.12  reviewing, approving, and monitoring of projects funded by the 
  5.13  loan fund.  The commissioner shall submit an annual report to 
  5.14  the legislature by January 1 of each year describing each loan 
  5.15  made under section 116J.545, including information on the 
  5.16  production and distribution status of each project for which a 
  5.17  loan has been made, the repayment status of each loan, the 
  5.18  number of jobs created in Minnesota, the amount of expenditures 
  5.19  in Minnesota, and the amount and source of matching funds. 
  5.20     Sec. 12.  [116J.545] [MINNESOTA FILM AND TELEVISION 
  5.21  REVOLVING LOAN FUND.] 
  5.22     Subdivision 1.  [ELIGIBLE PROJECTS.] An eligible project is 
  5.23  a feature film, long form television project, or television 
  5.24  series.  At least one of the project's principals must be a 
  5.25  Minnesota resident.  The principals are defined as the project's 
  5.26  director, producer, or company chief executive officer. 
  5.27     Subd. 2.  [REVOLVING LOAN FUND.] The commissioner shall 
  5.28  establish a revolving loan fund in the special revenue fund for 
  5.29  the purpose of making loans to finance eligible projects.  Loan 
  5.30  applications given preliminary approval by the board must be 
  5.31  forwarded to the commissioner for final approval.  Funds for the 
  5.32  loan will be disbursed by the commissioner to the board after 
  5.33  this approval. 
  5.34     Subd. 3.  [BUSINESS LOAN CRITERIA.] (a) The criteria in 
  5.35  this subdivision apply to loans made under the Minnesota film 
  5.36  and television revolving loan fund. 
  6.1      (b) Loans must only be made for projects that the board 
  6.2   determines would not be undertaken without assistance from the 
  6.3   loan fund. 
  6.4      (c) The minimum loan is $50,000 and the maximum loan is 
  6.5   $500,000.  The board will determine the interest rate, terms, 
  6.6   maturity, and collateral for each loan.  The interest rate must 
  6.7   be at least three percent. 
  6.8      (d) The amount of a loan may not exceed 50 percent of each 
  6.9   project. 
  6.10     (e) Funded projects will be required to spend 120 percent 
  6.11  of the amount of the loan in Minnesota.  These expenditures may 
  6.12  include direct production or postproduction costs as well as 
  6.13  talent, producer, or director fees. 
  6.14     (f) The commissioner shall adopt rules to implement this 
  6.15  section. 
  6.16     Subd. 4.  [REVOLVING LOAN FUND ADMINISTRATION.] (a) Loan 
  6.17  repayment amounts must be returned by the board to the 
  6.18  commissioner and deposited in a revolving loan fund for 
  6.19  additional loans to be made by the board. 
  6.20     (b) Administrative expenses of the board incurred to 
  6.21  operate the loan program, not to exceed $100,000 per year, may 
  6.22  be paid to the board from the revolving loan fund. 
  6.23     Subd. 5.  [REPORTING REQUIREMENTS.] The board shall: 
  6.24     (1) submit an annual report to the commissioner by 
  6.25  September 30 of each year that includes a description of 
  6.26  projects funded as of June 30 of the same year.  The report 
  6.27  shall include a description of projects supported by the 
  6.28  revolving loan fund, the production and distribution status of 
  6.29  each project for which a loan has been made, the terms of each 
  6.30  loan and the repayment status of each loan, the number of jobs 
  6.31  created in Minnesota and the amount of expenditures in 
  6.32  Minnesota, and the amount and source of matching funds.  A 
  6.33  description of the administrative expenses incurred by the board 
  6.34  shall also be included; and 
  6.35     (2) provide for an independent annual audit to be performed 
  6.36  in accordance with generally accepted accounting practices and 
  7.1   auditing standards and submit a copy of each annual audit report 
  7.2   to the commissioner. 
  7.3      Sec. 13.  Minnesota Statutes 1997 Supplement, section 
  7.4   462A.05, subdivision 39, is amended to read: 
  7.5      Subd. 39.  [EQUITY TAKE-OUT LOANS.] The agency may make 
  7.6   equity take-out loans to owners of section 8 project-based and 
  7.7   section 236 federally assisted rental property upon which the 
  7.8   agency holds a first mortgage.  The owner of a section 8 
  7.9   project-based federally assisted rental property must agree to 
  7.10  participate in the section 8 federal assistance program and 
  7.11  extend the low-income affordability restrictions on the housing 
  7.12  for the maximum term of the section 8 federal assistance 
  7.13  contract.  The owner of section 236 rental property must agree 
  7.14  to participate in the section 236 interest reduction payments 
  7.15  program, to extend any existing low-income affordability 
  7.16  restrictions on the housing, and to extend any rental assistance 
  7.17  payments for the maximum term permitted under the agreement for 
  7.18  rental assistance payments.  The equity take-out loan must be 
  7.19  secured by a subordinate loan on the property and may include 
  7.20  additional appropriate security determined necessary by the 
  7.21  agency. 
  7.22     Sec. 14.  Laws 1997, chapter 200, article 1, section 6, is 
  7.23  amended to read: 
  7.24  Sec. 6.  HOUSING FINANCE AGENCY       33,380,000     24,976,000
  7.25  The amounts that may be spent from this 
  7.26  appropriation for certain programs are 
  7.27  specified below. 
  7.28  This appropriation is for transfer to 
  7.29  the housing development fund for the 
  7.30  programs specified.  Except as 
  7.31  otherwise indicated, this transfer is 
  7.32  part of the agency's permanent budget 
  7.33  base. 
  7.34  Spending limit on cost of general 
  7.35  administration of agency programs:  
  7.36        1998                     1999
  7.37      11,017,000 11,684,000    11,678,000 13,278,000
  7.38  $1,550,000 the first year and 
  7.39  $1,550,000 the second year is for a 
  7.40  rental housing assistance program for 
  7.41  persons with a mental illness or 
  7.42  families with an adult member with a 
  8.1   mental illness under Minnesota 
  8.2   Statutes, section 462A.2097. 
  8.3   A biennial appropriation of $5,750,000 
  8.4   is made in the first year and is for 
  8.5   the family homeless prevention and 
  8.6   assistance program under Minnesota 
  8.7   Statutes, section 462A.204, and is 
  8.8   available until June 30, 1999. 
  8.9   Grants to organizations made under the 
  8.10  family homeless prevention and 
  8.11  assistance program may include grants 
  8.12  (1) to organizations providing case 
  8.13  management for persons that need 
  8.14  assistance to rehabilitate their rent 
  8.15  history and find rental housing, and 
  8.16  (2) to organizations that will provide, 
  8.17  and report on the success or failure 
  8.18  of, innovative approaches to housing 
  8.19  persons with poor rental histories, 
  8.20  including, but not limited to, 
  8.21  assisting tenants in correcting tenant 
  8.22  screening reports, developing a single 
  8.23  application fee and process acceptable 
  8.24  to participating landlords, developing 
  8.25  a certification of tenants program 
  8.26  acceptable to participating landlords, 
  8.27  expungement of unlawful detainer 
  8.28  records, and creating a bonding program 
  8.29  to encourage landlords to accept 
  8.30  high-risk tenants with poor rent 
  8.31  histories. 
  8.32  $583,000 the first year and $583,000 
  8.33  the second year is for the foreclosure 
  8.34  prevention and assistance program under 
  8.35  Minnesota Statutes, section 462A.207. 
  8.36  $2,750,000 the first year and 
  8.37  $2,750,000 the second year is for the 
  8.38  rent assistance for family 
  8.39  stabilization program under Minnesota 
  8.40  Statutes, section 462A.205.  Of this 
  8.41  amount, $750,000 each year is a 
  8.42  one-time appropriation and is not added 
  8.43  to the agency's permanent base. 
  8.44  $2,348,000 the first year and 
  8.45  $2,348,000 the second year is for the 
  8.46  housing trust fund to be deposited in 
  8.47  the housing trust fund account created 
  8.48  under Minnesota Statutes, section 
  8.49  462A.201, and used for the purposes 
  8.50  provided in that section.  Of this 
  8.51  amount, $550,000 each year must be used 
  8.52  for transitional housing. 
  8.53  $8,118,000 the first year and 
  8.54  $6,493,000 the second year is for the 
  8.55  affordable rental investment fund 
  8.56  program under Minnesota Statutes, 
  8.57  section 462A.21, subdivision 8b.  Of 
  8.58  this amount, $1,625,000 the first year 
  8.59  is a one-time appropriation and is not 
  8.60  added to the agency's permanent base.  
  8.61  Of the one-time appropriation, $125,000 
  8.62  the first year is for housing for 
  8.63  people with HIV or AIDS outside of the 
  8.64  Minneapolis-St. Paul metropolitan 
  8.65  statistical area.  
  9.1   To the extent practicable, this 
  9.2   appropriation shall be used so that an 
  9.3   approximately equal number of housing 
  9.4   units are financed in the metropolitan 
  9.5   area, as defined in Minnesota Statutes, 
  9.6   section 473.121, subdivision 2, and in 
  9.7   the nonmetropolitan area. 
  9.8   (a) In the area of the state outside 
  9.9   the metropolitan area, the agency must 
  9.10  work with groups in the funding regions 
  9.11  created under Minnesota Statutes, 
  9.12  section 116J.415, to assist the agency 
  9.13  in identifying the affordable housing 
  9.14  needed in each region in connection 
  9.15  with economic development and 
  9.16  redevelopment efforts and in 
  9.17  establishing priorities for uses of the 
  9.18  affordable rental investment fund.  The 
  9.19  groups must include the regional 
  9.20  development commissioners, the regional 
  9.21  organization selected under Minnesota 
  9.22  Statutes, section 116J.415, the private 
  9.23  industry councils, units of local 
  9.24  government, community action agencies, 
  9.25  the Minnesota housing partnership 
  9.26  network groups, local lenders, 
  9.27  for-profit and nonprofit developers, 
  9.28  and realtors.  In addition to 
  9.29  priorities developed by the group, the 
  9.30  agency must give a preference to 
  9.31  economically viable projects in which 
  9.32  units of local government, area 
  9.33  employers, and the private sector 
  9.34  contribute financial assistance.  
  9.35  (b) In the metropolitan area, the 
  9.36  commissioner shall collaborate with the 
  9.37  metropolitan council to identify the 
  9.38  priorities for use of the affordable 
  9.39  rental investment fund.  Funds 
  9.40  distributed in the metropolitan area 
  9.41  must be used consistent with the 
  9.42  objectives of the metropolitan 
  9.43  development guide, adopted under 
  9.44  Minnesota Statutes, section 473.145.  
  9.45  In addition to the priorities 
  9.46  identified in conjunction with the 
  9.47  metropolitan council, the agency shall 
  9.48  give preference to economically viable 
  9.49  projects that: 
  9.50  (1) include a contribution of financial 
  9.51  resources from units of local 
  9.52  government and area employers; 
  9.53  (2) take into account the availability 
  9.54  of transportation in the community; and 
  9.55  (3) take into account the job training 
  9.56  efforts in the community. 
  9.57  $187,000 the first year and $187,000 
  9.58  the second year is for the urban Indian 
  9.59  housing program under Minnesota 
  9.60  Statutes, section 462A.07, subdivision 
  9.61  15.  
  9.62  $1,683,000 the first year and 
  9.63  $1,683,000 the second year is for the 
  9.64  tribal Indian housing program under 
 10.1   Minnesota Statutes, section 462A.07, 
 10.2   subdivision 14.  
 10.3   $186,000 the first year and $186,000 
 10.4   the second year is for the Minnesota 
 10.5   rural and urban homesteading program 
 10.6   under Minnesota Statutes, section 
 10.7   462A.057.  
 10.8   $340,000 the first year and $240,000 
 10.9   the second year is for nonprofit 
 10.10  capacity building grants under 
 10.11  Minnesota Statutes, section 462A.21, 
 10.12  subdivision 3b.  Of this amount, 
 10.13  $80,000 is for a grant to the Minnesota 
 10.14  housing partnership.  Of this amount, 
 10.15  $150,000 is for equal grants to an 
 10.16  organization in each of the six regions 
 10.17  established under Minnesota Statutes, 
 10.18  section 116J.415, for capacity building 
 10.19  grants.  Of this amount, $50,000 is for 
 10.20  a grant in the metropolitan area, as 
 10.21  defined in Minnesota Statutes, section 
 10.22  473.121, subdivision 2.  Of this 
 10.23  amount, $100,000 the first year is to 
 10.24  develop projects under the neighborhood 
 10.25  land trust program under Minnesota 
 10.26  Statutes, sections 462A.30 and 462A.31, 
 10.27  and is available until June 30, 1999.  
 10.28  The appropriation in the first year for 
 10.29  the neighborhood land trust program is 
 10.30  a one-time appropriation and is not 
 10.31  added to the agency's permanent base.  
 10.32  $4,368,000 the first year and 
 10.33  $3,569,000 the second year is for the 
 10.34  community rehabilitation program under 
 10.35  Minnesota Statutes, section 462A.206.  
 10.36  Of this amount, $250,000 the first year 
 10.37  and $250,000 the second year is for 
 10.38  full-cycle home ownership and 
 10.39  purchase-rehabilitation lending 
 10.40  initiatives.  Of this amount, 
 10.41  $1,218,000 the first year and $419,000 
 10.42  the second year are one-time 
 10.43  appropriations and are not added to the 
 10.44  agency's permanent base. 
 10.45  Of the one-time appropriation for the 
 10.46  community rehabilitation program, 
 10.47  $375,000 the first year and $375,000 
 10.48  the second year is for grants to 
 10.49  acquire, demolish, and remove 
 10.50  substandard multiple-unit residential 
 10.51  rental property or acquire, 
 10.52  rehabilitate, and reconfigure 
 10.53  multiple-unit residential rental 
 10.54  property.  No more than one-half of 
 10.55  money available in a year shall be 
 10.56  given to a single project.  Priority 
 10.57  must be given to projects that result 
 10.58  in the creation of housing 
 10.59  opportunities that will diversify the 
 10.60  housing stock and promote the creation 
 10.61  of life-cycle housing opportunities 
 10.62  within the community.  For the purposes 
 10.63  of this paragraph, "substandard 
 10.64  multiple-unit residential rental 
 10.65  property" is property that meets the 
 10.66  definition of Minnesota Statutes 1996, 
 10.67  section 273.1316, subdivision 2.  
 11.1   Displaced residents must be provided 
 11.2   relocation assistance, as provided in 
 11.3   Minnesota Statutes, sections 117.50 to 
 11.4   117.56.  To the extent allowed by 
 11.5   federal law, a public agency 
 11.6   administering a federal rent subsidy 
 11.7   program shall give priority to persons 
 11.8   displaced by grants under this section. 
 11.9   Of the one-time appropriation for the 
 11.10  community rehabilitation program, 
 11.11  $250,000 the first year is for a grant 
 11.12  to provide funds to an organization or 
 11.13  consortium of organizations 
 11.14  participating in a project that is 
 11.15  awarded a grant from the metropolitan 
 11.16  livable communities demonstration 
 11.17  program to develop affordable and 
 11.18  life-cycle housing in St. Paul or 
 11.19  Minneapolis.  The project must be based 
 11.20  upon a comprehensive community planning 
 11.21  process that creates a long-term plan 
 11.22  to revitalize a neighborhood and must 
 11.23  include compact development with 
 11.24  linkages to employment, transit, and 
 11.25  affordable life-cycle housing. 
 11.26  Of the one-time appropriation for the 
 11.27  community rehabilitation program, up to 
 11.28  $550,000 the first year is for a grant 
 11.29  to the city of Landfall to purchase a 
 11.30  portion of real property in the city 
 11.31  owned by the Washington county housing 
 11.32  and redevelopment authority.  The 
 11.33  agency shall not make the grant until 
 11.34  the city of Landfall has secured the 
 11.35  balance of the funds necessary to 
 11.36  purchase the real property from the 
 11.37  Washington county housing and 
 11.38  redevelopment authority.  The agency 
 11.39  shall require that the land purchased 
 11.40  be restricted to use by current 
 11.41  residents or for affordable housing for 
 11.42  the term of the bonds issued by the 
 11.43  city to purchase the land.  "Affordable"
 11.44  is as defined by the metropolitan 
 11.45  council for the purposes of the 
 11.46  metropolitan livable communities 
 11.47  program.  
 11.48  A recipient of funds from the community 
 11.49  rehabilitation program for a project in 
 11.50  a historic preservation district in St. 
 11.51  Paul, must provide assurances to the 
 11.52  agency that the project will conform to 
 11.53  the written historic preservation 
 11.54  guidelines for the district and that 
 11.55  the funding recipient will not seek any 
 11.56  variance to the guidelines.  
 11.57  $4,287,000 the first year and 
 11.58  $4,287,000 the second year is for the 
 11.59  housing rehabilitation and 
 11.60  accessibility program under Minnesota 
 11.61  Statutes, section 462A.05, subdivisions 
 11.62  14a and 15a.  
 11.63  $1,075,000 the first year and 
 11.64  $1,075,000 the second year is for the 
 11.65  home ownership assistance fund under 
 11.66  Minnesota Statutes, section 462A.21, 
 12.1   subdivision 8.  Of this amount, 
 12.2   $175,000 each year is a one-time 
 12.3   appropriation and is not added to the 
 12.4   agency's permanent base. 
 12.5   $25,000 the first year and $25,000 the 
 12.6   second year is for home equity 
 12.7   conversion counseling grants under 
 12.8   Minnesota Statutes, section 462A.28.  
 12.9   The money must be used for a counseling 
 12.10  service which only counsels for home 
 12.11  equity conversions. 
 12.12  $50,000 is for the costs of the 
 12.13  advisory task force on lead hazard 
 12.14  reduction, established in article 4, 
 12.15  section 1.  This is a one-time 
 12.16  appropriation and is not added to the 
 12.17  agency's permanent base. 
 12.18  $80,000 is for the affordable 
 12.19  neighborhood design and development 
 12.20  initiative, in Laws 1995, chapter 224, 
 12.21  section 122.  This is a one-time 
 12.22  appropriation and is not added to the 
 12.23  agency's permanent base. 
 12.24     Sec. 15.  Laws 1997, chapter 200, article 1, section 12, 
 12.25  subdivision 2, is amended to read: 
 12.26  Subd. 2.  Workers' Compensation
 12.27      12,152,000 12,202,000     12,160,000 12,110,000
 12.28  This appropriation is from the workers' 
 12.29  compensation fund. 
 12.30  $125,000 the first year and $125,000 
 12.31  the second year is for grants to the 
 12.32  Vinland Center for rehabilitation 
 12.33  service. 
 12.34  Notwithstanding Minnesota Statutes, 
 12.35  section 79.253, the following 
 12.36  appropriations are made from the 
 12.37  assigned risk safety account in the 
 12.38  special compensation fund to the 
 12.39  commissioner of labor and industry: 
 12.40  (a) $77,000 the first year and $73,000 
 12.41  in the second year are for the purpose 
 12.42  of hiring one occupational safety and 
 12.43  health inspector.  The inspector shall 
 12.44  perform safety consultations for 
 12.45  employers through labor-management 
 12.46  committees as defined in Minnesota 
 12.47  Statutes, section 179.81, subdivision 
 12.48  2, under an interagency agreement 
 12.49  entered into between the commissioners 
 12.50  of labor and industry and mediation 
 12.51  services. 
 12.52  (b) $95,000 the first year and $75,000 
 12.53  the second year are for the purpose of 
 12.54  providing information to employers 
 12.55  regarding the prevention of violence in 
 12.56  the workplace. 
 12.57  (c) $25,000 the first year and $25,000 
 12.58  the second year are for the purpose of 
 13.1   safety training and other safety 
 13.2   programs for youth apprentices. 
 13.3                              ARTICLE 2
 13.4                   RESIDENTIAL MORTGAGE ORIGINATOR
 13.5                        AND SERVICER LICENSING
 13.6      Section 1.  [58.01] [CITATION.] 
 13.7      This chapter shall be cited as the "Minnesota Residential 
 13.8   Mortgage Originator and Servicer Licensing Act." 
 13.9      Sec. 2.  [58.02] [DEFINITIONS.] 
 13.10     Subdivision 1.  [SCOPE.] For purposes of this chapter, the 
 13.11  terms defined in this section have the meanings given to them. 
 13.12     Subd. 2.  [ACT.] "Act" means the Minnesota Residential 
 13.13  Mortgage Originator and Servicer Licensing Act. 
 13.14     Subd. 3.  [ADVANCE FEE.] "Advance fee" means a commission, 
 13.15  fee, charge, or compensation of any kind paid to a residential 
 13.16  mortgage originator before the closing of a loan, that is 
 13.17  intended in whole or in part as payment for the originator's 
 13.18  services in finding or attempting to find a loan for a 
 13.19  borrower.  Advance fee does not include pass-through fees or 
 13.20  commitment or extended lock fees or other fees as determined by 
 13.21  the commissioner. 
 13.22     Subd. 4.  [BORROWER.] "Borrower" means a person or persons 
 13.23  applying for a residential mortgage loan, a mortgagor, or the 
 13.24  person or persons on whose behalf the activities in subdivisions 
 13.25  12, 14, 21, and 22 are conducted. 
 13.26     Subd. 5.  [CLOSING.] "Closing" means either or both of the 
 13.27  following:  (1) the process whereby the real estate contract 
 13.28  between a buyer and a seller is consummated; or (2) the process 
 13.29  whereby the documents creating a security interest in real 
 13.30  property become effective between the borrower and the lender. 
 13.31     Subd. 6.  [COMMISSIONER.] "Commissioner" means the 
 13.32  commissioner of the department of commerce. 
 13.33     Subd. 7.  [EMPLOYEE.] "Employee" means an individual who is 
 13.34  treated as an employee by the residential mortgage originator or 
 13.35  servicer for purposes of compliance with federal income tax laws.
 13.36     Subd. 8.  [ESCROW ACCOUNT.] "Escrow account" means a trust 
 14.1   account that is established and maintained to hold funds 
 14.2   received from a borrower, such as real estate taxes and 
 14.3   insurance premiums, incurred in connection with the servicing of 
 14.4   the mortgage. 
 14.5      Subd. 9.  [EXEMPT PERSON.] "Exempt person" means the 
 14.6   following: 
 14.7      (1) an employee of one licensee or one person holding a 
 14.8   certificate of exemption; 
 14.9      (2) a person engaged solely in commercial mortgage 
 14.10  activities; 
 14.11     (3) a person licensed as a real estate broker under chapter 
 14.12  82, and an individual licensee who is licensed to the broker, if:
 14.13     (i) the individual licensee acts only under the name, 
 14.14  authority, and supervision of the broker to whom the licensee is 
 14.15  licensed; 
 14.16     (ii) the broker obtains a certificate of exemption pursuant 
 14.17  to section 58.05, subdivision 2; 
 14.18     (iii) the broker does not collect an advance fee for its 
 14.19  residential mortgage loan-related activities; and 
 14.20     (iv) the residential mortgage origination activities relate 
 14.21  to an underlying real estate transaction in which the real 
 14.22  estate broker is assisting the seller, buyer, owner, lessee, or 
 14.23  lessor; 
 14.24     (4) a person making no more than five residential mortgage 
 14.25  loans with its own funds, during any 12-month period; 
 14.26     (5) a financial institution as defined in subdivision 10; 
 14.27     (6) an agency of the federal government, or of a state or 
 14.28  municipal government; 
 14.29     (7) an employee or employer pension plan making loans only 
 14.30  to its participants; 
 14.31     (8) a person acting in a fiduciary capacity, such as a 
 14.32  trustee or receiver, as a result of a specific order issued by a 
 14.33  court of competent jurisdiction; or 
 14.34     (9) a person exempted by rule or order of the commissioner. 
 14.35     Subd. 10.  [FINANCIAL INSTITUTION.] "Financial institution" 
 14.36  means a bank, bank and trust, trust company with banking powers, 
 15.1   savings bank, savings institution, or credit union, organized 
 15.2   under the laws of this state or the United States; a Minnesota 
 15.3   host state branch of an out-of-state bank as provided for in 
 15.4   section 49.411; an industrial loan and thrift under chapter 53; 
 15.5   or a regulated lender under chapter 56. 
 15.6      Subd. 11.  [LENDER.] "Lender" means a person who makes 
 15.7   residential mortgage loans including a person who provides table 
 15.8   funding. 
 15.9      Subd. 12.  [MAKING A RESIDENTIAL MORTGAGE LOAN.] "Making a 
 15.10  residential mortgage loan" means for compensation or gain, or 
 15.11  the expectation of compensation or gain, to advance funds or 
 15.12  make a commitment to advance funds in connection with a 
 15.13  residential mortgage. 
 15.14     Subd. 13.  [MORTGAGE BROKER; BROKER.] "Mortgage broker" or 
 15.15  "broker" means a person who performs the activities described in 
 15.16  subdivisions 14 and 22. 
 15.17     Subd. 14.  [MORTGAGE BROKERING; BROKERING.] "Mortgage 
 15.18  brokering" or "brokering" means helping to obtain from another 
 15.19  person, for a borrower, a residential mortgage or assisting a 
 15.20  borrower in obtaining a residential mortgage loan in return for 
 15.21  consideration to be paid by the borrower or lender or both.  
 15.22  Mortgage brokering or brokering includes, but is not limited to, 
 15.23  soliciting, placing, or negotiating a residential mortgage loan. 
 15.24     Subd. 15.  [NET WORTH.] "Net worth" has the meaning given 
 15.25  it in section 58.07. 
 15.26     Subd. 16.  [PERSON.] "Person" means a natural person, firm, 
 15.27  partnership, limited liability partnership, corporation, 
 15.28  association, limited liability company, or other form of 
 15.29  business organization and the officers, directors, employees, or 
 15.30  agents of that person. 
 15.31     Subd. 17.  [PERSON IN CONTROL.] "Person in control" means 
 15.32  senior management and persons who possess, directly or 
 15.33  indirectly, the power to direct or cause the direction of the 
 15.34  management policies of an applicant or licensee under this 
 15.35  chapter, regardless of whether the person has any ownership 
 15.36  interest in the applicant or licensee.  Control is presumed to 
 16.1   exist if a person, directly or indirectly, owns, controls, or 
 16.2   holds with power to vote ten percent or more of the voting stock 
 16.3   of an applicant or licensee or of a person who owns, controls, 
 16.4   or holds with power to vote ten percent or more of the voting 
 16.5   stock of an applicant or licensee. 
 16.6      Subd. 18.  [RESIDENTIAL MORTGAGE LOAN.] "Residential 
 16.7   mortgage loan" means a loan made primarily for personal, family, 
 16.8   or household use, primarily secured by either a:  (1) mortgage 
 16.9   on residential real property; or (2) certificates of stock or 
 16.10  other evidence of ownership interest in and proprietary lease 
 16.11  from corporations, partnerships, or other forms of business 
 16.12  organizations formed for the purpose of cooperative ownership of 
 16.13  residential real property. 
 16.14     Subd. 19.  [RESIDENTIAL MORTGAGE ORIGINATOR.] "Residential 
 16.15  mortgage originator" means a person who, directly or indirectly, 
 16.16  for compensation or gain or in expectation of compensation or 
 16.17  gain, solicits or offers to solicit, or accepts or offers to 
 16.18  accept an application for a residential mortgage loan through 
 16.19  any medium or mode of communication from a borrower, or makes a 
 16.20  residential mortgage loan.  "Residential mortgage originator" 
 16.21  includes a lender as defined in subdivision 11 and a broker as 
 16.22  defined in subdivision 13. 
 16.23     Subd. 20.  [RESIDENTIAL REAL PROPERTY; RESIDENTIAL REAL 
 16.24  ESTATE.] "Residential real property" or "residential real 
 16.25  estate" means real property improved or intended to be improved 
 16.26  by a one-to-four family dwelling used as the primary home or 
 16.27  residence of one or more persons. 
 16.28     Subd. 21.  [SERVICING; SERVICING A RESIDENTIAL MORTGAGE.] 
 16.29  "Servicing" or "servicing a residential mortgage loan" means 
 16.30  through any medium or mode of communication the collection or 
 16.31  remittance for, or the right or obligation to collect or remit 
 16.32  for a lender, mortgagee, note owner, noteholder, or for a 
 16.33  person's own account, of payments, interest, principal, and 
 16.34  escrow items such as insurance and taxes for property subject to 
 16.35  a residential mortgage loan. 
 16.36     Subd. 22.  [SOLICITING, PLACING, OR NEGOTIATING A 
 17.1   RESIDENTIAL MORTGAGE LOAN.] "Soliciting, placing, or negotiating 
 17.2   a residential mortgage loan" means for compensation or gain or 
 17.3   expectation of compensation or gain, whether directly or 
 17.4   indirectly, accepting or offering to accept an application for a 
 17.5   residential mortgage loan, assisting, or offering to assist a 
 17.6   borrower in applying for a residential mortgage loan, or 
 17.7   negotiating or offering to negotiate the terms or conditions of 
 17.8   a residential mortgage loan with a lender on behalf of a 
 17.9   borrower. 
 17.10     Subd. 23.  [TABLE FUNDING.] "Table funding" means a closing 
 17.11  or settlement at which a residential mortgage loan is funded by 
 17.12  a lender by way of a contemporaneous advance of residential 
 17.13  mortgage loan funds and an assignment of the residential 
 17.14  mortgage loan to the lender advancing the funds. 
 17.15     Subd. 24.  [TRUST ACCOUNT.] "Trust account" means a 
 17.16  negotiable order of withdrawal account, demand deposit, or 
 17.17  checking account maintained for the purpose of segregating trust 
 17.18  funds from other funds.  A "trust account" must not allow the 
 17.19  financial institution a right of set-off against the money owed 
 17.20  it by the account holder. 
 17.21     Subd. 25.  [TRUST FUNDS.] "Trust funds" means funds 
 17.22  received by a residential mortgage originator or servicer in a 
 17.23  fiduciary capacity for later distribution, such as appraisal or 
 17.24  credit report fees, taxes, or insurance premiums.  "Trust funds" 
 17.25  includes advance fees. 
 17.26     Sec. 3.  [58.03] [CLASSES OF LICENSE.] 
 17.27     The commissioner may issue the following classes of license 
 17.28  under this chapter: 
 17.29     (1) a residential mortgage originator license; and 
 17.30     (2) a residential mortgage servicer license. 
 17.31     Sec. 4.  [58.04] [LICENSING REQUIREMENT.] 
 17.32     Subdivision 1.  [RESIDENTIAL MORTGAGE ORIGINATOR LICENSING 
 17.33  REQUIREMENTS.] Beginning August 1, 1999, no person, except an 
 17.34  exempt person as defined in section 58.02, subdivision 9, shall 
 17.35  act as a residential mortgage originator, or make residential 
 17.36  mortgage loans without first obtaining a license from the 
 18.1   commissioner according to the licensing procedures provided in 
 18.2   this chapter and rules adopted by the commissioner. 
 18.3      Subd. 2.  [PERSONS REQUIRED TO BE LICENSED AS RESIDENTIAL 
 18.4   MORTGAGE SERVICERS.] Beginning August 1, 1999, a nonexempt 
 18.5   person that engages in activities or practices that fall within 
 18.6   the definition of "servicing a residential mortgage loan" under 
 18.7   section 58.02, subdivision 21, and who is not licensed as a 
 18.8   residential mortgage originator must first obtain a residential 
 18.9   mortgage servicers license.  
 18.10     Subd. 3.  [CONDUCTING BUSINESS UNDER LICENSE.] No person 
 18.11  required to be licensed under this chapter may, without a 
 18.12  license, do business under a name or title or circulate or use 
 18.13  advertising or make representations or give information to a 
 18.14  person, that indicates or reasonably implies activity within the 
 18.15  scope of this chapter. 
 18.16     Sec. 5.  [58.05] [EXEMPTIONS FROM LICENSE.] 
 18.17     Subdivision 1.  [EXEMPTION FROM LICENSURE.] An exempt 
 18.18  person as defined by section 58.02, subdivision 9, is exempt 
 18.19  from the licensing requirements of this chapter, but is subject 
 18.20  to all other provisions of this chapter. 
 18.21     Subd. 2.  [ELIGIBILITY FOR EXEMPTION.] To qualify as an 
 18.22  exempt person, a person, except an employee exempt under section 
 18.23  58.02, subdivision 9, clause (1), or an individual real estate 
 18.24  licensee exempt under section 58.02, subdivision 9, clause (3), 
 18.25  must obtain a certificate of exemption from the commissioner.  A 
 18.26  certificate of exemption will be issued upon the person's 
 18.27  filing, on a form provided by the commissioner, a statement 
 18.28  indicating the basis on which the exemption is claimed and, if 
 18.29  applicable, the name and address of the state or federal 
 18.30  regulatory agency or body to which complaints regarding the 
 18.31  person's residential mortgage originating or servicing 
 18.32  activities may be directed. 
 18.33     Sec. 6.  [58.06] [APPLICATION REQUIREMENTS FOR RESIDENTIAL 
 18.34  MORTGAGE ORIGINATORS AND SERVICERS.] 
 18.35     Subdivision 1.  [LICENSE APPLICATION FORM.] Application for 
 18.36  a residential mortgage originator or a residential mortgage 
 19.1   servicer license must be in writing, under oath, and on a form 
 19.2   obtained from and prescribed by the commissioner. 
 19.3      Subd. 2.  [APPLICATION CONTENTS.] The application must 
 19.4   contain the name and complete business address or addresses of 
 19.5   the license applicant.  If the license applicant is a 
 19.6   partnership, limited liability partnership, association, limited 
 19.7   liability company, corporation, or other form of business 
 19.8   organization, the application must contain the names and 
 19.9   complete business addresses of each partner, member, director, 
 19.10  and principal officer.  The application must also include a 
 19.11  description of the activities of the license applicant, in the 
 19.12  detail and for the periods the commissioner may require.  The 
 19.13  application must also include all of the following: 
 19.14     (a) an affirmation under oath that the applicant: 
 19.15     (1) will maintain competent staff and adequate staffing 
 19.16  levels, through direct employees or otherwise, to meet the 
 19.17  requirements of this chapter; 
 19.18     (2) will advise the commissioner of any material changes to 
 19.19  the information submitted in the most recent application within 
 19.20  ten days of the change; 
 19.21     (3) will advise the commissioner in writing immediately of 
 19.22  any bankruptcy petitions filed against or by the applicant or 
 19.23  licensee; 
 19.24     (4) is financially solvent and in compliance with net worth 
 19.25  requirements; 
 19.26     (5) complies with federal and state tax laws; 
 19.27     (6) complies with sections 345.31 to 345.60, the Minnesota 
 19.28  unclaimed property law; and 
 19.29     (7) is, or that a person in control of the license 
 19.30  applicant is, at least 18 years of age; 
 19.31     (b) information as to the mortgage lending, servicing, or 
 19.32  brokering experience of the applicant and persons in control of 
 19.33  the applicant; 
 19.34     (c) information as to criminal convictions, excluding 
 19.35  traffic violations, of persons in control of the license 
 19.36  applicant; 
 20.1      (d) whether a court of competent jurisdiction has found 
 20.2   that the applicant or persons in control of the applicant have 
 20.3   engaged in conduct evidencing gross negligence, fraud, 
 20.4   misrepresentation, or deceit in performing an act for which a 
 20.5   license is required under this chapter; 
 20.6      (e) whether the applicant or persons in control of the 
 20.7   applicant have been the subject of:  an order of suspension or 
 20.8   revocation, cease and desist order, or injunctive order, or 
 20.9   order barring involvement in an industry or profession issued by 
 20.10  this or another state or federal regulatory agency or by the 
 20.11  Secretary of Housing and Urban Development within the ten-year 
 20.12  period immediately preceding submission of the application; and 
 20.13     (f) other information required by the commissioner. 
 20.14     Sec. 7.  [58.07] [NET WORTH FOR ORIGINATORS AND SERVICERS.] 
 20.15     Subdivision 1.  [REQUIREMENT.] A licensee who is issued a 
 20.16  residential mortgage originator license shall maintain a minimum 
 20.17  net worth of $25,000.  A licensee who is issued a residential 
 20.18  mortgage servicer's license shall maintain a minimum net worth 
 20.19  of $250,000. 
 20.20     Subd. 2.  [COMPUTATION.] Net worth must be computed 
 20.21  according to generally accepted accounting principles and must 
 20.22  reflect any adjustment to net worth required by the Governmental 
 20.23  National Mortgage Association. 
 20.24     Subd. 3.  [CERTIFIED FINANCIALS.] The commissioner may 
 20.25  require the submission of financial data audited by an 
 20.26  independent certified accountant when it is considered necessary 
 20.27  for an investigation or examination. 
 20.28     Sec. 8.  [58.08] [BONDS; LETTERS OF CREDIT.] 
 20.29     Subdivision 1.  [REQUIREMENT OF RESIDENTIAL MORTGAGE 
 20.30  ORIGINATORS.] A residential mortgage originator licensee shall 
 20.31  maintain a bond or irrevocable letter of credit according to 
 20.32  this subdivision.  The bond or letter of credit must be in a 
 20.33  form approved by the commissioner and must be submitted with the 
 20.34  originator's license application.  The bond or letter of credit 
 20.35  must be available for the recovery of expenses, fines, and fees 
 20.36  levied by the commissioner under this chapter and for losses or 
 21.1   damages incurred by borrowers or customers as the result of a 
 21.2   licensee's noncompliance with the requirements of this chapter, 
 21.3   sections 325D.43 to 325D.48 and 325F.67 to 325F.69, or breach of 
 21.4   its contract with the borrowers or customers.  The bond or 
 21.5   letter of credit must be payable when the licensee fails to 
 21.6   comply with any provision of the chapter and must be either in 
 21.7   the form of a surety bond or irrevocable letter of credit in the 
 21.8   amount of $50,000.  The bond or letter of credit must be payable 
 21.9   to the commissioner or borrower or customer and shall be issued 
 21.10  by an insurance company or bank authorized to do so in this 
 21.11  state.  A copy of the bond or letter of credit including all 
 21.12  riders and endorsements executed after the effective date of the 
 21.13  bond or letter of credit must be filed with the commissioner 
 21.14  within ten days of its execution. 
 21.15     Subd. 2.  [REQUIREMENT OF RESIDENTIAL MORTGAGE SERVICERS.] 
 21.16  A residential mortgage servicer licensee shall maintain a bond 
 21.17  or irrevocable letter of credit according to this subdivision.  
 21.18  The bond or letter of credit must be in a form approved by the 
 21.19  commissioner.  The bond or letter of credit must be available 
 21.20  for the recovery of expenses, fines, and fees levied by the 
 21.21  commissioner under this chapter and for losses or damages 
 21.22  incurred by borrowers or customers as the result of a licensee's 
 21.23  noncompliance with the requirements of this chapter, sections 
 21.24  325D.43 to 325D.48 and 325F.67 to 325F.69, or breach of its 
 21.25  contract with the borrowers or customers.  The bond or letter of 
 21.26  credit must be payable when the licensee fails to comply with 
 21.27  any provision of the chapter and must be either in the form of a 
 21.28  surety bond or irrevocable letter of credit in an amount of not 
 21.29  less than $100,000.  The bond or letter of credit must be 
 21.30  payable to the commissioner or any other aggrieved party and 
 21.31  shall be issued by an insurance company or bank authorized to do 
 21.32  so in this state.  A copy of the bond or letter of credit 
 21.33  including any and all riders and endorsements executed 
 21.34  subsequent to the effective date of the bond or letter of credit 
 21.35  shall be filed with the commissioner within ten days of its 
 21.36  execution. 
 22.1      Subd. 3.  [EXEMPTION.] Subdivisions 1 and 2 do not apply to 
 22.2   mortgage originators or mortgage servicers who are approved as 
 22.3   seller/servicers by the Federal National Mortgage Association or 
 22.4   the Federal Home Loan Mortgage Corporation. 
 22.5      Sec. 9.  [58.09] [TERM OF LICENSE.] 
 22.6      Initial licenses for residential mortgage originators and 
 22.7   residential mortgage servicers issued under this chapter expire 
 22.8   on July 31, 2001, and are renewable on August 1, 2001, and on 
 22.9   August 1 of each odd-numbered year after that date.  A new 
 22.10  licensee whose license expires less than 12 months from the date 
 22.11  of issuance shall pay a fee equal to one-half the applicable 
 22.12  initial license fee set forth in section 58.10, subdivision 1, 
 22.13  clause (1) or (3). 
 22.14     Sec. 10.  [58.10] [FEES.] 
 22.15     Subdivision 1.  [AMOUNTS.] The following fees must be paid 
 22.16  to the commissioner: 
 22.17     (1) for an initial residential mortgage originator license, 
 22.18  $800; 
 22.19     (2) for a renewal license, $400; 
 22.20     (3) for an initial residential mortgage servicer's license, 
 22.21  $1,000; 
 22.22     (4) for a renewal license, $500; 
 22.23     (5) license service fees as set forth in chapter 45; and 
 22.24     (6) for a certificate of exemption, $100. 
 22.25     Subd. 2.  [FORFEITURE.] All fees are nonrefundable except 
 22.26  that an overpayment of a fee must be refunded upon proper 
 22.27  application. 
 22.28     Sec. 11.  [58.11] [LICENSE RENEWAL.] 
 22.29     Subdivision 1.  [TERM.] Licenses are renewable on August 1, 
 22.30  2001, and on August 1 of each odd-numbered year after that date. 
 22.31     Subd. 2.  [TIMELY RENEWAL.] (a) A person whose application 
 22.32  is properly and timely filed who has not received notice of 
 22.33  denial of renewal is considered approved for renewal and the 
 22.34  person may continue to transact business as a residential 
 22.35  mortgage originator or servicer whether or not the renewed 
 22.36  license has been received on or before August 1 of the renewal 
 23.1   year.  Application for renewal of a license is considered timely 
 23.2   filed if received by the commissioner by, or mailed with proper 
 23.3   postage and postmarked by, July 15 of the renewal year.  An 
 23.4   application for renewal is considered properly filed if made 
 23.5   upon forms duly executed and sworn to, accompanied by fees 
 23.6   prescribed by this chapter, and contain any information that the 
 23.7   commissioner requires. 
 23.8      (b) A person who fails to make a timely application for 
 23.9   renewal of a license and who has not received the renewal 
 23.10  license as of August 1 of the renewal year is unlicensed until 
 23.11  the renewal license has been issued by the commissioner and is 
 23.12  received by the person. 
 23.13     Subd. 3.  [CONTENTS OF RENEWAL APPLICATION.] Application 
 23.14  for the renewal of an existing license must contain the 
 23.15  information specified in section 58.06, subdivision 2; however, 
 23.16  only the requested information having changed from the most 
 23.17  recent prior application need be submitted. 
 23.18     Subd. 4.  [CANCELLATION.] A licensee ceasing an activity or 
 23.19  activities regulated by this chapter and desiring to no longer 
 23.20  be licensed shall so inform the commissioner in writing and, at 
 23.21  the same time, surrender the license and all other symbols or 
 23.22  indicia of licensure.  The licensee shall include a plan for the 
 23.23  withdrawal from regulated business, including a timetable for 
 23.24  the disposition of the business.  
 23.25     Sec. 12.  [58.12] [DENIAL, SUSPENSION, REVOCATION OF 
 23.26  LICENSES.] 
 23.27     Subdivision 1.  [POWERS OF COMMISSIONER.] (a) The 
 23.28  commissioner may by order take any or all of the following 
 23.29  actions: 
 23.30     (1) bar a person, whether exempt or not, from engaging in 
 23.31  residential mortgage origination or servicing; 
 23.32     (2) deny, suspend, or revoke a residential mortgage 
 23.33  originator or a servicer license; 
 23.34     (3) censure a licensee; 
 23.35     (4) impose a civil penalty as provided for in section 
 23.36  45.027, subdivision 6; or 
 24.1      (5) revoke an exemption or certificate of exemption.  
 24.2      (b) In order to take the action in paragraph (a), the 
 24.3   commissioner must find:  
 24.4      (1) that the order is in the public interest; and 
 24.5      (2) that the exempt person, applicant, or licensee, an 
 24.6   officer, director, partner, employee, or agent or any person 
 24.7   occupying a similar status or performing similar functions, or a 
 24.8   person in control of the licensee, exempt person, or applicant 
 24.9   has: 
 24.10     (i) violated any provision of this chapter; 
 24.11     (ii) filed an application for a license that is incomplete 
 24.12  in any material respect or contains a statement that, in light 
 24.13  of the circumstances under which it is made, is false or 
 24.14  misleading with respect to a material fact; 
 24.15     (iii) failed to maintain compliance with the affirmations 
 24.16  made under section 58.06, subdivision 2; 
 24.17     (iv) violated a standard of conduct or engaged in a 
 24.18  fraudulent, coercive, deceptive, or dishonest act or practice, 
 24.19  whether or not the act or practice involves the residential 
 24.20  mortgage lending business; 
 24.21     (v) engaged in an act or practice, whether or not the act 
 24.22  or practice involves the business of making a residential 
 24.23  mortgage loan, that demonstrates untrustworthiness, financial 
 24.24  irresponsibility, or incompetence; 
 24.25     (vi) pled guilty, with or without explicitly admitting 
 24.26  guilt, pled nolo contendere, or been convicted of a felony, 
 24.27  gross misdemeanor, or a misdemeanor involving moral turpitude; 
 24.28     (vii) been the subject of disciplinary action by the 
 24.29  commissioner, or an order of suspension or revocation, cease and 
 24.30  desist order or injunction order or order barring involvement in 
 24.31  an industry or profession issued by this or any other state or 
 24.32  federal regulatory agency or by the Secretary of Housing and 
 24.33  Urban Development; 
 24.34     (viii) been found by a court of competent jurisdiction to 
 24.35  have engaged in conduct evidencing gross negligence, fraud, 
 24.36  misrepresentation, or deceit; 
 25.1      (ix) refused to cooperate with an investigation or 
 25.2   examination by the commissioner; 
 25.3      (x) failed to pay any fee or assessment imposed by the 
 25.4   commissioner; or 
 25.5      (xi) failed to comply with state and federal tax 
 25.6   obligations. 
 25.7      Subd. 2.  [ORDERS OF THE COMMISSIONER.] The commissioner 
 25.8   shall issue an order requiring a licensee or applicant for a 
 25.9   license or exempt person to show cause why the license should 
 25.10  not be revoked or suspended, or the licensee censured, or fined, 
 25.11  or the application denied, or why an exempt person should not be 
 25.12  fined or have its exemption revoked or why it should not be 
 25.13  barred from any involvement in the residential mortgage loan 
 25.14  business.  The order must be calculated to give reasonable 
 25.15  notice of the time and place for the hearing, and must state the 
 25.16  reasons for the entry of the order.  The commissioner may by 
 25.17  order summarily suspend a license or exemption or summarily bar 
 25.18  an exempt person, pending a final determination of an order to 
 25.19  show cause.  If a license is summarily suspended or an exempt 
 25.20  person's exemption is summarily suspended or if an exempt person 
 25.21  is summarily barred from any involvement in the residential 
 25.22  mortgage loan business, pending final determination of an order 
 25.23  to show cause, a hearing on the merits must be held within 30 
 25.24  days of the issuance of the order of summary suspension or bar.  
 25.25  All hearings must be conducted under chapter 14.  After the 
 25.26  hearing, the commissioner shall enter an order disposing of the 
 25.27  matter as the facts require.  If the licensee or applicant or 
 25.28  exempt person fails to appear at a hearing after having been 
 25.29  duly notified of it, the person is considered in default, and 
 25.30  the proceeding may be determined against the licensee, 
 25.31  applicant, or exempt person upon consideration of the order to 
 25.32  show cause, the allegations of which may be considered to be 
 25.33  true. 
 25.34     Subd. 3.  [ACTIONS AGAINST LAPSED LICENSE.] If a license 
 25.35  lapses, is surrendered, withdrawn, terminated, or otherwise 
 25.36  becomes ineffective, the commissioner may institute a proceeding 
 26.1   under this subdivision within two years after the license was 
 26.2   last effective and enter a revocation or suspension order as of 
 26.3   the last date on which the license was in effect, or impose a 
 26.4   civil penalty as provided for in this section or section 45.027, 
 26.5   subdivision 6. 
 26.6      Sec. 13.  [58.13] [STANDARDS OF CONDUCT.] 
 26.7      Subdivision 1.  [GENERALLY.] No person acting as a 
 26.8   residential mortgage originator or servicer, including a person 
 26.9   required to be licensed under this chapter, and no person exempt 
 26.10  from the licensing requirements of this chapter under section 
 26.11  58.04, shall: 
 26.12     (1) fail to maintain a trust account to hold trust funds 
 26.13  received in connection with a residential mortgage loan; 
 26.14     (2) fail to deposit all trust funds into a trust account 
 26.15  within three business days of receipt; commingle trust funds 
 26.16  with funds belonging to the licensee or exempt person; or use 
 26.17  trust account funds for any purpose other than that for which 
 26.18  they are received; 
 26.19     (3) fail to make a good-faith effort to effect closings in 
 26.20  a timely manner; or delay closing of a residential mortgage loan 
 26.21  for the purpose of increasing interest, costs, fees, or charges 
 26.22  payable by the borrower; 
 26.23     (4) fail to disburse funds according to its contractual or 
 26.24  statutory obligations; 
 26.25     (5) fail to perform in conformance with written agreements 
 26.26  with borrowers, investors, other licensees, or exempt persons; 
 26.27     (6) charge a fee for a product or service where the product 
 26.28  or service is not actually provided, or misrepresent the amount 
 26.29  charged by or paid to a third party for a product or service; 
 26.30     (7) violate a rule or order under this chapter; 
 26.31     (8) fail to comply with sections 345.31 to 345.60, the 
 26.32  Minnesota unclaimed property law; 
 26.33     (9) violate any provision of any other state or federal law 
 26.34  regulating residential mortgage loans; 
 26.35     (10) make or cause to be made, directly or indirectly, any 
 26.36  false, deceptive, or misleading statement or representation in 
 27.1   connection with a residential loan transaction; 
 27.2      (11) conduct residential mortgage loan business under any 
 27.3   name other than that under which the person is licensed or under 
 27.4   which its certificate of exemption was issued; 
 27.5      (12) compensate, whether directly or indirectly, coerce or 
 27.6   intimidate an appraiser for the purpose of influencing the 
 27.7   independent judgment of the appraiser with respect to the value 
 27.8   of real estate that is to be covered by a residential mortgage 
 27.9   or is being offered as security according to an application for 
 27.10  a residential mortgage loan; 
 27.11     (13) issue any document indicating conditional 
 27.12  qualification or conditional approval for a residential mortgage 
 27.13  loan, unless the document also clearly indicates that final 
 27.14  qualification or approval is not guaranteed, and may be subject 
 27.15  to additional review; 
 27.16     (14) make, directly or indirectly, any residential mortgage 
 27.17  loan with the intent that the loan will not be repaid and that 
 27.18  the residential mortgage originator will obtain title to the 
 27.19  property through foreclosure.  For purposes of this clause, 
 27.20  there is a presumption that a person has made a residential 
 27.21  mortgage loan with the intent that the loan will not be repaid 
 27.22  and to obtain title to the borrower's property through 
 27.23  foreclosure if the following circumstances can be demonstrated: 
 27.24     (i) lack of substantial benefit to the borrower; 
 27.25     (ii) lack of probability of full payment of the loan by the 
 27.26  borrower; and 
 27.27     (iii) a significant proportion of similarly foreclosed 
 27.28  loans by the person; 
 27.29     (15) provide or offer to provide for a borrower, any 
 27.30  brokering or lending services under an arrangement with a person 
 27.31  other than a licensee or exempt person; 
 27.32     (16) represent itself as the agent of a licensee or exempt 
 27.33  person, unless it has entered into a written agreement with the 
 27.34  licensee or exempt person; 
 27.35     (17) fail to comply with the recordkeeping and notification 
 27.36  requirements identified in section 58.14 or fail to abide by the 
 28.1   affirmations made on the application for licensure; 
 28.2      (18) represent to a borrower that the licensee or exempt 
 28.3   person is acting as its agent after providing the agency 
 28.4   disclosure required by section 58.15, unless the disclosure is 
 28.5   retracted and the licensee or exempt person complies with all of 
 28.6   the requirements of section 58.16; 
 28.7      (19) make, provide, or arrange for a residential mortgage 
 28.8   loan that the licensee or exempt person knows is of a lower 
 28.9   investment grade than the borrower actually qualifies for, 
 28.10  unless the borrower is informed that the borrower qualifies for 
 28.11  a higher investment grade loan and consents in writing to 
 28.12  receipt of the lower investment grade loan; 
 28.13     (20) make, publish, disseminate, circulate, place before 
 28.14  the public, or cause to be made, directly or indirectly, any 
 28.15  advertisement or marketing materials of any type, or any 
 28.16  statement or representation relating to the business of 
 28.17  residential mortgage loans that is false, deceptive, or 
 28.18  misleading; 
 28.19     (21) advertise loan types or terms that are not available 
 28.20  from the licensee or exempt person on the date advertised, or on 
 28.21  the date specified in the advertisement.  For purposes of this 
 28.22  clause, advertisement includes, but is not limited to, a list of 
 28.23  sample mortgage terms, including interest rates, discount 
 28.24  points, and closing costs provided by licensees or exempt 
 28.25  persons to a print or electronic medium that presents the 
 28.26  information to the public; and 
 28.27     (22) use or employ phrases, pictures, return addresses, 
 28.28  geographic designations, or other means that create the 
 28.29  impression, directly or indirectly, that a licensee or other 
 28.30  person is a governmental agency, or is associated with, 
 28.31  sponsored by, or in any manner connected to, related to, or 
 28.32  endorsed by a governmental agency, if that is not the case. 
 28.33     Subd. 2.  [STATEMENTS, REPRESENTATIONS, OR ADVERTISING.] A 
 28.34  statement, representation, or advertisement is deceptive or 
 28.35  misleading if it has the capacity or tendency to deceive or 
 28.36  mislead a borrower or potential borrower.  The commissioner 
 29.1   shall consider the following factors in deciding whether a 
 29.2   statement, representation, or advertisement is deceptive or 
 29.3   misleading:  the overall impression that the statement, 
 29.4   representation, or advertisement reasonably creates; the 
 29.5   particular type of audience to which it is directed; and whether 
 29.6   it may be reasonably comprehended by the segment of the public 
 29.7   to which it is directed.  
 29.8      Sec. 14.  [58.14] [RECORDKEEPING AND NOTIFICATION 
 29.9   REQUIREMENTS.] 
 29.10     Subdivision 1.  [CHANGE IN LICENSING DATA.] A licensee must 
 29.11  advise the commissioner of any material changes to the 
 29.12  information submitted in the most recent license application 
 29.13  within ten days of the change. 
 29.14     Subd. 2.  [NOTICE OF BANKRUPTCY PETITIONS.] A licensee or 
 29.15  person who has been issued a certificate of exemption must 
 29.16  advise the commissioner in writing immediately of any bankruptcy 
 29.17  petitions filed against or by the licensee. 
 29.18     Subd. 3.  [DOCUMENTATION AND RESOLUTION OF COMPLAINTS.] A 
 29.19  licensee or exempt person must investigate and attempt to 
 29.20  resolve complaints made regarding acts or practices subject to 
 29.21  the provisions of this chapter.  If a complaint is received in 
 29.22  writing, the licensee or exempt person must maintain a file 
 29.23  containing all materials relating to the complaint and 
 29.24  subsequent investigation for a period of 26 months. 
 29.25     Subd. 4.  [RECORD RETENTION.] A licensee or exempt person 
 29.26  must keep and maintain for 26 months the business records 
 29.27  regarding residential mortgage loans applied for, originated, or 
 29.28  serviced in the course of its business. 
 29.29     Sec. 15.  [58.15] [DISCLOSURE REQUIREMENTS FOR RESIDENTIAL 
 29.30  MORTGAGE ORIGINATORS.] 
 29.31     Subdivision 1.  [AGENCY DISCLOSURE.] If a residential 
 29.32  mortgage originator or exempt person does not contract or offer 
 29.33  to contract to act as an agent of a borrower, or accept an 
 29.34  advance fee, it must, before accepting an application for a 
 29.35  residential mortgage loan, provide the borrower with a written 
 29.36  disclosure as provided in subdivision 2. 
 30.1      Subd. 2.  [FORM AND CONTENT REQUIREMENTS.] The disclosure 
 30.2   must be a separate document, 8-1/2 inches by 11 inches, must be 
 30.3   signed by the borrower and must contain the following statement 
 30.4   in 14-point boldface print: 
 30.5      [ORIGINATOR] IS NOT ACTING AS YOUR AGENT IN CONNECTION WITH 
 30.6      OBTAINING A RESIDENTIAL MORTGAGE LOAN.  WHILE WE SEEK TO 
 30.7      ASSIST YOU IN MEETING YOUR FINANCIAL NEEDS, WE CANNOT 
 30.8      GUARANTEE THE LOWEST OR BEST TERMS AVAILABLE IN THE MARKET. 
 30.9      Subd. 3.  [ELECTRONIC APPLICATION DISCLOSURE REQUIREMENT.] 
 30.10  In case of an electronic residential mortgage application, the 
 30.11  disclosure requirements of this section may be satisfied by 
 30.12  providing the disclosure statement as a separate screen if the 
 30.13  disclosure must be acknowledged by the borrower before an 
 30.14  application is accepted.  
 30.15     Subd. 4.  [EXEMPTION FROM DISCLOSURE REQUIREMENT.] If the 
 30.16  Department of Housing and Urban Development adopts and 
 30.17  implements a disclosure requirement for persons offering 
 30.18  mortgage origination services that the commissioner determines 
 30.19  to be substantially similar to the disclosure required in 
 30.20  subdivision 2, licensees and exempt persons complying with the 
 30.21  HUD disclosure shall be considered to have complied with the 
 30.22  requirements of subdivisions 1 and 2. 
 30.23     Sec. 16.  [58.16] [RESIDENTIAL MORTGAGE ORIGINATORS; 
 30.24  STANDARDS OF CONDUCT FOR AGENCY OR ADVANCE FEE TRANSACTIONS.] 
 30.25     Subdivision 1.  [COMPLIANCE.] Residential mortgage 
 30.26  originators who solicit or receive an advance fee in exchange 
 30.27  for assisting a borrower located in this state in obtaining a 
 30.28  loan secured by a lien on residential real estate, or who offer 
 30.29  to act as an agent of the borrower located in this state in 
 30.30  obtaining a loan secured by a lien on residential real estate 
 30.31  shall be considered to have created a fiduciary relationship 
 30.32  with the borrower and shall comply with the requirements of 
 30.33  subdivisions 2 to 7. 
 30.34     Subd. 2.  [CONTRACT PROVISIONS.] (a) A residential mortgage 
 30.35  originator who engages in the activities described in 
 30.36  subdivision 1 shall enter into a written contract with each 
 31.1   borrower and shall provide a copy of the written contract to 
 31.2   each borrower at or before the time of receipt of any fee or 
 31.3   valuable consideration paid for mortgage origination services.  
 31.4      (b) At the time mortgage origination services are provided 
 31.5   or before accepting a fee or valuable consideration paid for 
 31.6   residential mortgage origination services, the written contract 
 31.7   must: 
 31.8      (1) specifically describe the services to be provided by 
 31.9   the residential mortgage originator and if the originator 
 31.10  collects an advance fee, the dates by which the services will be 
 31.11  performed; 
 31.12     (2) specifically identify whether the residential mortgage 
 31.13  originator may receive compensation from sources other than the 
 31.14  borrower in connection with the loan transaction; 
 31.15     (3) state the total amount of commission or compensation 
 31.16  that the borrower agrees to pay for the residential mortgage 
 31.17  originator's services, or the basis on which the compensation 
 31.18  will be computed; 
 31.19     (4) state the maximum rate of interest to be charged on any 
 31.20  residential mortgage loan obtained; 
 31.21     (5) contain a statement that notifies the borrower of the 
 31.22  right to cancel the contract according to subdivision 3; and 
 31.23     (6) disclose, with respect to the 12-month period ending 
 31.24  ten business days before the date of the contract in question, 
 31.25  the percentage of the mortgage originator's customers for whom 
 31.26  loans have actually been funded as a result of the residential 
 31.27  mortgage originator's services.  
 31.28     (c) If an advance fee is solicited or received the contract 
 31.29  must also: 
 31.30     (1) identify the trust account into which the fees or 
 31.31  consideration will be deposited; 
 31.32     (2) set forth the circumstances under which the residential 
 31.33  mortgage originator will be entitled to disbursement from the 
 31.34  trust account; and 
 31.35     (3) set forth the circumstances under which the borrower 
 31.36  will be entitled to a refund of all or part of the fee. 
 32.1      Subd. 3.  [CANCELLATION.] A borrower who pays an advance 
 32.2   fee, or who enters into a contract for residential mortgage 
 32.3   services as set forth in subdivisions 1 and 2, has an 
 32.4   unconditional right to rescind the contract for residential 
 32.5   mortgage origination services at any time until midnight of the 
 32.6   third business day after the day on which the contract is 
 32.7   signed.  Cancellation is evidenced by the borrower giving 
 32.8   written notice of cancellation to the residential mortgage 
 32.9   originator at the address stated in the contract.  Notice of 
 32.10  cancellation, if given by mail, is effective upon deposit in a 
 32.11  mailbox properly addressed to the originator with postage 
 32.12  prepaid.  Notice of cancellation need not take a particular form 
 32.13  and is sufficient if it indicates by any form of written 
 32.14  expression the intention of the borrower not be bound by the 
 32.15  contract.  No act of a borrower or a residential mortgage 
 32.16  originator is effective to waive the right to rescind as 
 32.17  provided in this subdivision. 
 32.18     Subd. 4.  [TRUST ACCOUNT.] The residential mortgage 
 32.19  originator shall deposit in a trust account within 48 hours all 
 32.20  fees received before the time a loan is actually funded.  The 
 32.21  trust account must be in a financial institution located within 
 32.22  the state of Minnesota. 
 32.23     Subd. 5.  [RECORDS.] The residential mortgage originator 
 32.24  shall maintain a separate record of all fees received for 
 32.25  services performed or to be performed as a residential mortgage 
 32.26  originator.  Each record must set forth the date the funds are 
 32.27  received; the person from whom the funds are received; the 
 32.28  amount received; the date of deposit in the escrow account, the 
 32.29  account number, the date the funds are disbursed and the check 
 32.30  number of the disbursement, and a description of each 
 32.31  disbursement and the justification for the disbursement. 
 32.32     Subd. 6.  [MONTHLY STATEMENT.] The residential mortgage 
 32.33  originator shall provide to each borrower at least monthly a 
 32.34  detailed written accounting of all disbursements of the 
 32.35  borrower's funds from the trust account. 
 32.36     Subd. 7.  [DISCLOSURE OF LENDERS.] The residential mortgage 
 33.1   originator shall provide to each borrower at the expiration of 
 33.2   the contract a list of the lenders or loan sources to whom loan 
 33.3   applications were submitted on behalf of the borrower. 
 33.4      Sec. 17.  [58.17] [SCOPE OF CHAPTER.] 
 33.5      Subdivision 1.  [RESIDENTIAL MORTGAGE ORIGINATOR SERVICES.] 
 33.6   This chapter applies when an offer of residential mortgage 
 33.7   origination services is made to a borrower in this state or when 
 33.8   the residential mortgage originator is located in this state. 
 33.9      Subd. 2.  [RESIDENTIAL MORTGAGE SERVICING.] The provisions 
 33.10  of this chapter regarding residential mortgage servicing apply 
 33.11  when the borrower is a resident of this state. 
 33.12     Sec. 18.  [REPEALER.] 
 33.13     Minnesota Statutes 1996, section 82.175, is repealed. 
 33.14                             ARTICLE 3 
 33.15                         CONFORMING CHANGES 
 33.16     Section 1.  Minnesota Statutes 1996, section 47.206, 
 33.17  subdivision 1, is amended to read: 
 33.18     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 33.19  section, the terms defined in this subdivision have the meanings 
 33.20  given them. 
 33.21     (a) "Lender" means a person or entity referred to in 
 33.22  section 47.20, subdivision 1, a credit union, or a person making 
 33.23  a conventional loan as defined under section 47.20, subdivision 
 33.24  2, clause (3), or cooperative apartment loan as defined under 
 33.25  section 47.20, subdivision 2, clause (4), except that 
 33.26  conventional loans or cooperative apartment loans include any 
 33.27  loan or advance of credit in an original principal balance of 
 33.28  less than $200,000.  "Lender" also means a mortgage broker as 
 33.29  defined in paragraph (e). 
 33.30     (b) "Loan" means loans and advances of credit authorized 
 33.31  under section 47.20, subdivision 1, clauses (1) to (4), and 
 33.32  conventional loans as defined under section 47.20, subdivision 
 33.33  2, clause (3), or cooperative apartment loans as defined under 
 33.34  section 47.20, subdivision 2, clause (4), except that 
 33.35  conventional loans or cooperative apartment loans also include 
 33.36  all loans and advances of credit in an original principal 
 34.1   balance of less than $200,000.  "Loan" does not include a loan 
 34.2   or advance of credit secured by a mortgage upon real property 
 34.3   containing more than one residential unit or secured by a 
 34.4   security interest in shares of more than one residential unit in 
 34.5   a building owned or leased by a cooperative apartment 
 34.6   corporation. 
 34.7      (c) "Borrower" means a natural person who has submitted an 
 34.8   application for a loan to a lender. 
 34.9      (d) "Interest rate or discount point agreement" or 
 34.10  "agreement" means a contract between a lender and a borrower 
 34.11  under which the lender agrees, subject to the lender's 
 34.12  underwriting and approval requirements, to make a loan at a 
 34.13  specified interest rate or number of discount points, or both, 
 34.14  and the borrower agrees to make a loan on those terms.  The term 
 34.15  also includes an offer by a lender that is accepted by a 
 34.16  borrower under which the lender promises to guarantee or lock in 
 34.17  an interest rate or number of discount points, or both, for a 
 34.18  specific period of time. 
 34.19     (e) "Mortgage broker" includes: 
 34.20     (1) a person who negotiates mortgage loans as described in 
 34.21  section 82.17, subdivision 4, clause (b), if the person does not 
 34.22  qualify for the exception set forth in section 82.18, clause 
 34.23  (o); performs or offers to perform the activities of "mortgage 
 34.24  brokering" or "soliciting, placing, or negotiating a residential 
 34.25  mortgage loan" as defined by chapter 58; or 
 34.26     (2) the employees of the a person; or 
 34.27     (3) any person or firm which holds itself out to the public 
 34.28  as a mortgage broker, regardless of whether the person or firm 
 34.29  holds a limited broker's license pursuant to section 82.20, 
 34.30  subdivision 13 described in clause (1). 
 34.31     Sec. 2.  Minnesota Statutes 1996, section 82.17, 
 34.32  subdivision 4, is amended to read: 
 34.33     Subd. 4.  "Real estate broker" or "broker" means any person 
 34.34  who: 
 34.35     (a) for another and for commission, fee, or other valuable 
 34.36  consideration or with the intention or expectation of receiving 
 35.1   the same directly or indirectly lists, sells, exchanges, buys or 
 35.2   rents, manages, or offers or attempts to negotiate a sale, 
 35.3   option, exchange, purchase or rental of an interest or estate in 
 35.4   real estate, or advertises or holds out as engaged in these 
 35.5   activities; 
 35.6      (b) for another and for commission, fee, or other valuable 
 35.7   consideration or with the intention or expectation of receiving 
 35.8   the same directly or indirectly negotiates or offers or attempts 
 35.9   to negotiate a loan, secured or to be secured by a mortgage or 
 35.10  other encumbrance on real estate, which is not a residential 
 35.11  mortgage loan as defined by section 58.02, subdivision 18; 
 35.12     (c) for another and for commission, fee, or other valuable 
 35.13  consideration or with the intention or expectation of receiving 
 35.14  the same directly or indirectly lists, sells, exchanges, buys, 
 35.15  rents, manages, offers or attempts to negotiate a sale, option, 
 35.16  exchange, purchase or rental of any business opportunity or 
 35.17  business, or its good will, inventory, or fixtures, or any 
 35.18  interest therein; 
 35.19     (d) for another and for commission, fee, or other valuable 
 35.20  consideration or with the intention or expectation of receiving 
 35.21  the same directly or indirectly offers, sells or attempts to 
 35.22  negotiate the sale of property that is subject to the 
 35.23  registration requirements of chapter 83, concerning subdivided 
 35.24  land; 
 35.25     (e) for another and for commission, fee, or other valuable 
 35.26  consideration or with the intention or expectation of receiving 
 35.27  the same, promotes the sale of real estate by advertising it in 
 35.28  a publication issued primarily for this purpose, if the person:  
 35.29     (1) negotiates on behalf of any party to a transaction; 
 35.30     (2) disseminates any information regarding the property to 
 35.31  any party or potential party to a transaction subsequent to the 
 35.32  publication of the advertisement, except that in response to an 
 35.33  initial inquiry from a potential purchaser, the person may 
 35.34  forward additional written information regarding the property 
 35.35  which has been prepared prior to the publication by the seller 
 35.36  or broker or a representative of either; 
 36.1      (3) counsels, advises, or offers suggestions to the seller 
 36.2   or a representative of the seller with regard to the marketing, 
 36.3   offer, sale, or lease of the real estate, whether prior to or 
 36.4   subsequent to the publication of the advertisement; 
 36.5      (4) counsels, advises, or offers suggestions to a potential 
 36.6   buyer or a representative of the seller with regard to the 
 36.7   purchase or rental of any advertised real estate; or 
 36.8      (5) engages in any other activity otherwise subject to 
 36.9   licensure under this chapter; 
 36.10     (f) engages wholly or in part in the business of selling 
 36.11  real estate to the extent that a pattern of real estate sales is 
 36.12  established, whether or not the real estate is owned by the 
 36.13  person.  A person shall be presumed to be engaged in the 
 36.14  business of selling real estate if the person engages as 
 36.15  principal in five or more transactions during any 12-month 
 36.16  period, unless the person is represented by a licensed real 
 36.17  estate broker or salesperson;. 
 36.18     (g) offers or makes more than five loans secured by real 
 36.19  estate during any 12-month period and who is not a bank, savings 
 36.20  bank, mutual savings bank, or savings association organized 
 36.21  under the laws of this state or the United States, trust 
 36.22  company, trust company acting as a fiduciary, or other financial 
 36.23  institution subject to the supervision of the commissioner of 
 36.24  commerce, or mortgagee or lender approved or certified by the 
 36.25  secretary of housing and urban development or approved or 
 36.26  certified by the administrator of veterans affairs, or approved 
 36.27  or certified by the administrator of the Farmers Home 
 36.28  Administration, or approved or certified by the Federal Home 
 36.29  Loan Mortgage Corporation, or approved or certified by the 
 36.30  Federal National Mortgage Association. 
 36.31     Sec. 3.  Minnesota Statutes 1996, section 82.18, is amended 
 36.32  to read: 
 36.33     82.18 [EXCEPTIONS.] 
 36.34     Unless a person is licensed or otherwise required to be 
 36.35  licensed under this chapter, the term real estate broker does 
 36.36  not include: 
 37.1      (a) a licensed practicing attorney if the attorney complies 
 37.2   in all respects with the trust account provisions of this 
 37.3   chapter; 
 37.4      (b) a receiver, trustee, administrator, guardian, executor, 
 37.5   or other person appointed by or acting under the judgment or 
 37.6   order of any court; 
 37.7      (c) any person owning and operating a cemetery and selling 
 37.8   lots therein solely for use as burial plots; 
 37.9      (d) any custodian, janitor, or employee of the owner or 
 37.10  manager of a residential building who leases residential units 
 37.11  in the building; 
 37.12     (e) any bank, trust company, savings association, 
 37.13  industrial loan and thrift company, regulated lender under 
 37.14  chapter 56, public utility, or land mortgage or farm loan 
 37.15  association organized under the laws of this state or the United 
 37.16  States, when engaged in the transaction of business within the 
 37.17  scope of its corporate powers as provided by law; 
 37.18     (f) public officers while performing their official duties; 
 37.19     (g) employees of persons enumerated in clauses (b), (e), 
 37.20  and (f), when engaged in the specific performance of their 
 37.21  duties; 
 37.22     (h) any person who acts as an auctioneer bonded in 
 37.23  conformity with section 330.02, when that person is engaged in 
 37.24  the specific performance of duties as an auctioneer, and when 
 37.25  that person has been employed to auction real estate by a person 
 37.26  licensed under this chapter or when the auctioneer has engaged a 
 37.27  licensed attorney to supervise the real estate transaction; 
 37.28     (i) any person who acquires real estate for the purpose of 
 37.29  engaging in and does engage in, or who is engaged in the 
 37.30  business of constructing residential, commercial or industrial 
 37.31  buildings for the purpose of resale if no more than 25 such 
 37.32  transactions occur in any 12-month period and the person 
 37.33  complies with section 82.24; 
 37.34     (j) any person who is licensed as a securities 
 37.35  broker-dealer or is licensed as a securities agent representing 
 37.36  a broker-dealer pursuant to chapter 80A and who offers to sell 
 38.1   or sells an interest or estate in real estate which is a 
 38.2   security as defined in section 80A.14, subdivision 18, and is 
 38.3   registered or exempt from registration or part of a transaction 
 38.4   exempt from registration pursuant to chapter 80A, when acting 
 38.5   solely as an incident to the sale of these securities; 
 38.6      (k) any person who offers to sell or sells a business 
 38.7   opportunity which is a franchise registered pursuant to chapter 
 38.8   80C, when acting solely to sell the franchise; 
 38.9      (l) any person who contracts with or solicits on behalf of 
 38.10  a provider a contract with a resident or prospective resident to 
 38.11  provide continuing care in a facility, pursuant to the 
 38.12  Continuing Care Facility Disclosure and Rehabilitation Act 
 38.13  (chapter 80D), when acting solely as incident to the contract; 
 38.14     (m) any broker-dealer or agent of a broker-dealer when 
 38.15  participating in a transaction in which all or part of a 
 38.16  business opportunity or business, including any interest 
 38.17  therein, is conveyed or acquired pursuant to an asset purchase, 
 38.18  merger, exchange of securities, or other business combination, 
 38.19  if the agent or broker-dealer is licensed pursuant to chapter 
 38.20  80A; 
 38.21     (n) an accountant acting incident to the practice of the 
 38.22  accounting profession if the accountant complies in all respects 
 38.23  with the trust account provisions of this chapter;. 
 38.24     (o) a person who negotiates mortgage loans as described in 
 38.25  section 82.17, subdivision 4, clause (b), if the person is the 
 38.26  actual lender on at least 80 percent of all mortgage lending and 
 38.27  brokering transactions conducted by the person and if the person 
 38.28  is also a lender:  (1) approved or certified by the secretary of 
 38.29  housing and urban development; (2) approved or certified by the 
 38.30  administrator of Veterans Affairs; (3) approved or certified by 
 38.31  the Administrator of the Farmers Home Administration; (4) 
 38.32  approved or certified by the Federal Home Loan Mortgage 
 38.33  Corporation; or (5) approved or certified by the Federal 
 38.34  National Mortgage Association. 
 38.35     Sec. 4.  Minnesota Statutes 1996, section 82.27, 
 38.36  subdivision 1, is amended to read: 
 39.1      Subdivision 1.  The commissioner may by order deny, suspend 
 39.2   or revoke any license or may censure a licensee if the 
 39.3   commissioner finds (1) that the order is in the public interest, 
 39.4   and (2) that the applicant or licensee or, in the case of a 
 39.5   broker, any officer, director, partner, employee or agent or any 
 39.6   person occupying a similar status or performing similar 
 39.7   functions, or any person directly or indirectly controlling the 
 39.8   broker or closing agent or controlled by the broker or closing 
 39.9   agent: 
 39.10     (a) has filed an application for a license which is 
 39.11  incomplete in any material respect or contains any statement 
 39.12  which, in light of the circumstances under which it is made, is 
 39.13  false or misleading with respect to any material fact; 
 39.14     (b) has engaged in a fraudulent, deceptive, or dishonest 
 39.15  practice; 
 39.16     (c) is permanently or temporarily enjoined by any court of 
 39.17  competent jurisdiction from engaging in or continuing any 
 39.18  conduct or practice involving any aspect of the real estate 
 39.19  business; 
 39.20     (d) has failed to reasonably supervise brokers, 
 39.21  salespersons, or closing agents so as to cause injury or harm to 
 39.22  the public; 
 39.23     (e) has violated or failed to comply with any provision of 
 39.24  this chapter or any rule or order under this chapter; 
 39.25     (f) has, in the conduct of the licensee's affairs under the 
 39.26  license, been shown to be incompetent, untrustworthy, or 
 39.27  financially irresponsible; or 
 39.28     (g) has acted on behalf of any party to a transaction, 
 39.29  where the licensee has a conflict of interest that may affect 
 39.30  the licensee's ability to represent that party, without the 
 39.31  knowledge and consent of the party; or 
 39.32     (h) has, while performing residential mortgage activities 
 39.33  regulated under chapter 58 violated any provision of chapter 58.