SF 3092

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to commerce; regulating certain disclosures; 
  1.3             specifying the license term and fees of a managing 
  1.4             general agent; regulating securities broker-dealers 
  1.5             and investment advisors; authorizing the commissioner 
  1.6             to withdraw certain inactive registration 
  1.7             applications; extending a real estate continuing 
  1.8             education pilot project; regulating the contractor 
  1.9             recovery fund; making collection agencies responsible 
  1.10            for the acts of collectors; providing standards of 
  1.11            conduct for notarial acts; amending Minnesota Statutes 
  1.12            1998, sections 45.027, subdivision 7a; 60H.03, by 
  1.13            adding a subdivision; 60K.03, subdivision 4; 80A.04, 
  1.14            subdivisions 2 and 3; 80A.07, subdivision 1; 80A.10, 
  1.15            subdivision 2; 80C.05, subdivision 4; 80C.07; 82.22, 
  1.16            subdivision 13; 82A.04, subdivision 4, and by adding a 
  1.17            subdivision; 82B.14; 83.23, by adding a subdivision; 
  1.18            and 326.975, subdivision 1; Minnesota Statutes 1999 
  1.19            Supplement, section 80A.15, subdivision 2; proposing 
  1.20            coding for new law in Minnesota Statutes, chapters 
  1.21            332; and 359. 
  1.22  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.23     Section 1.  Minnesota Statutes 1998, section 45.027, 
  1.24  subdivision 7a, is amended to read: 
  1.25     Subd. 7a.  [AUTHORIZED DISCLOSURES OF INFORMATION AND 
  1.26  DATA.] (a) The commissioner may release and disclose any active 
  1.27  or inactive investigative information and data on licensees to 
  1.28  any national securities exchange or national securities 
  1.29  association registered under the Securities Exchange Act of 1934 
  1.30  when necessary for the requesting agency in initiating, 
  1.31  furthering, or completing an investigation. 
  1.32     (b) The commissioner may release any active or inactive 
  1.33  investigative data relating to the conduct of the business of 
  2.1   insurance to the Office of the Comptroller of the Currency or 
  2.2   the Office of Thrift Supervision in order to facilitate the 
  2.3   initiation, furtherance, or completion of the investigation. 
  2.4      Sec. 2.  Minnesota Statutes 1998, section 60H.03, is 
  2.5   amended by adding a subdivision to read: 
  2.6      Subd. 4.  [TERM AND FEES.] The term of a managing general 
  2.7   agent license issued under this section and the license fees 
  2.8   imposed are the same as those applicable to a licensed insurance 
  2.9   agent under chapter 60K.  
  2.10     Sec. 3.  Minnesota Statutes 1998, section 60K.03, 
  2.11  subdivision 4, is amended to read: 
  2.12     Subd. 4.  [TERM.] All licenses issued pursuant to this 
  2.13  section remain in force until voluntarily terminated by the 
  2.14  licensee, not renewed as prescribed in section 60K.06, or until 
  2.15  suspended or revoked by the commissioner.  A voluntary 
  2.16  termination occurs when the license is surrendered to the 
  2.17  commissioner with the request that it be terminated or when the 
  2.18  licensee dies, or when the licensee is dissolved or its 
  2.19  existence is terminated.  In the case of a nonresident license, 
  2.20  a voluntary termination also occurs upon the happening of the 
  2.21  event described in subdivision 3, paragraph (c).  
  2.22     Every licensed agent shall notify the commissioner within 
  2.23  30 ten days of a change of name, address, or information 
  2.24  contained in the application. 
  2.25     Sec. 4.  Minnesota Statutes 1998, section 80A.04, 
  2.26  subdivision 2, is amended to read: 
  2.27     Subd. 2.  It is unlawful for any broker-dealer or issuer to 
  2.28  employ an agent as a representative in this state unless the 
  2.29  agent is licensed.  The licensing of an agent is not effective 
  2.30  during any period when the agent is not associated with a 
  2.31  specified broker-dealer licensed under this chapter or a 
  2.32  specified issuer.  No agent shall at any time represent more 
  2.33  than one broker-dealer or issuer, except that where 
  2.34  broker-dealers affiliated by direct common control are licensed 
  2.35  under this chapter, an agent may represent the broker-dealer.  
  2.36  When an agent begins or terminates employment with a 
  3.1   broker-dealer or issuer, or begins or terminates those 
  3.2   activities which make that person an agent, the agent as well as 
  3.3   the broker-dealer or issuer shall promptly notify the 
  3.4   commissioner or the commissioner's designated representative. 
  3.5      A broker-dealer or investment advisor is affiliated by 
  3.6   direct common control when 80 percent or more of the equity of 
  3.7   each broker-dealer or investment adviser is beneficially owned 
  3.8   by the same person or group of persons. 
  3.9      Sec. 5.  Minnesota Statutes 1998, section 80A.04, 
  3.10  subdivision 3, is amended to read: 
  3.11     Subd. 3.  It is unlawful for any person to transact 
  3.12  business in this state as an investment adviser unless that 
  3.13  person is so licensed or licensed as a broker-dealer under this 
  3.14  chapter as described in section 80A.14, subdivision 9, clause 
  3.15  (3), or unless:  (1) that person's only clients in this state 
  3.16  are investment companies as defined in the Investment Company 
  3.17  Act of 1940, other investment advisers, broker-dealers, banks, 
  3.18  trust companies, savings associations, federal covered advisers 
  3.19  insurance companies, corporations with a class of equity 
  3.20  securities registered under section 12(b) or 12(g) of the 
  3.21  Securities Exchange Act of 1934, small business investment 
  3.22  companies, and government agencies or instrumentalities, whether 
  3.23  acting for themselves or as trustees with investment control, or 
  3.24  other institutional buyers; or (2) that person has no place of 
  3.25  business in this state and during the preceding 12-month period 
  3.26  has had fewer than six clients who are residents of this state. 
  3.27     Sec. 6.  Minnesota Statutes 1998, section 80A.07, 
  3.28  subdivision 1, is amended to read: 
  3.29     Subdivision 1.  [GENERAL GROUNDS.] The commissioner may by 
  3.30  order deny, suspend, or revoke any license or may censure the 
  3.31  licensee, if the commissioner finds (a) that the order is in the 
  3.32  public interest and (b) that the applicant or licensee or, in 
  3.33  the case of a broker-dealer or investment adviser, any partner, 
  3.34  officer, or director, any person occupying a similar status or 
  3.35  performing similar functions, or any person directly or 
  3.36  indirectly controlling the broker-dealer or investment adviser: 
  4.1      (1) has filed an application for license which as of its 
  4.2   effective date, or as of any date after filing in the case of an 
  4.3   order denying effectiveness, was incomplete in any material 
  4.4   respect or contained any statement which was, in light of the 
  4.5   circumstances under which it was made, false or misleading with 
  4.6   respect to any material fact; 
  4.7      (2) has willfully violated or failed to comply with any 
  4.8   provision of this chapter or a predecessor law or any provision 
  4.9   of the Securities Act of 1933, the Securities Exchange Act of 
  4.10  1934, the Investment Advisers Act of 1940, the Investment 
  4.11  Company Act of 1940, the Commodity Exchange Act, or any rule or 
  4.12  order under any of these statutes, of which that person has 
  4.13  notice and is subject; 
  4.14     (3) has been convicted, within the past ten years, of any 
  4.15  misdemeanor involving a security or any aspect of the securities 
  4.16  business, or any felony; 
  4.17     (4) is permanently or temporarily enjoined by any court of 
  4.18  competent jurisdiction from engaging in or continuing any 
  4.19  conduct or practice involving any aspect of the securities 
  4.20  business; 
  4.21     (5) is the subject of an order of the commissioner denying, 
  4.22  suspending, or revoking a license as a broker-dealer, agent or 
  4.23  investment adviser; 
  4.24     (6) is the subject of an order entered within the past five 
  4.25  years by the securities administrator of any other state or by 
  4.26  the securities and exchange commission, or any national 
  4.27  securities exchange or national securities association 
  4.28  registered under the Securities Exchange Act of 1934, denying or 
  4.29  revoking registration or license as a broker-dealer, agent, or 
  4.30  investment adviser, or is the subject of an order of the 
  4.31  securities and exchange commission or any national securities 
  4.32  exchange or national securities association registered under the 
  4.33  Securities Exchange Act of 1934, suspending, barring, or 
  4.34  expelling that person from a national securities exchange or 
  4.35  association registered under the Securities Exchange Act of 
  4.36  1934, or is the subject of a United States post office fraud 
  5.1   order.  The commissioner may not institute a revocation or 
  5.2   suspension proceeding under this clause more than one year from 
  5.3   the date of the order relied on, and may not enter an order 
  5.4   under this clause on the basis of an order under another state 
  5.5   law unless the order was based on facts which would currently 
  5.6   constitute a ground for an order under this section; 
  5.7      (7) has engaged in dishonest or fraudulent practices in the 
  5.8   securities business; 
  5.9      (8) has failed to maintain the minimum net capital or to 
  5.10  comply with the limitation on aggregate indebtedness which the 
  5.11  commissioner by rule prescribes; 
  5.12     (9) is not qualified on the basis of such factors as 
  5.13  training, experience, and knowledge of the securities business; 
  5.14     (10) has failed reasonably to supervise agents, investment 
  5.15  adviser representatives, or employees to assure their compliance 
  5.16  with this chapter; 
  5.17     (11) has failed to pay the proper filing fee, but the 
  5.18  commissioner shall vacate the order when the deficiency has been 
  5.19  corrected; 
  5.20     (12) has offered or sold securities in this state through 
  5.21  any unlicensed agent; 
  5.22     (13) has made any material misrepresentation to the 
  5.23  commissioner, or upon request reasonably made by the 
  5.24  commissioner, has withheld or concealed information from, or 
  5.25  refused to furnish information to, the commissioner; 
  5.26     (14) has failed to reasonably supervise agents, investment 
  5.27  adviser representatives, or employees if that person has assumed 
  5.28  or has been designated to carry out the supervisory procedures 
  5.29  of the broker-dealer or investment adviser; or 
  5.30     (15) has failed, within 20 business days after receiving 
  5.31  written instructions from a customer, to do any of the following:
  5.32     (a) transfer or deliver securities that have been 
  5.33  purchased; 
  5.34     (b) transfer or deliver any free credit balances reflecting 
  5.35  completed transactions; or 
  5.36     (c) transfer or deliver a customer's account securities 
  6.1   positions and balances to another broker-dealer. 
  6.2   This clause shall not serve as a basis for denial, suspension, 
  6.3   or revocation of a broker-dealer's or agent's license if:  (i) 
  6.4   the transfer or delivery is between broker-dealers and meets the 
  6.5   rules and requirements established by the New York Stock 
  6.6   Exchange with regard to the transfer or delivery; or (ii) the 
  6.7   delivery of securities to a customer cannot be accomplished 
  6.8   within 20 business days, and the broker-dealer or agent has 
  6.9   notified the customer in writing of the inability to deliver the 
  6.10  securities and the reasons for the nondelivery within 20 
  6.11  business days of receiving the customer's written instructions.  
  6.12     Sec. 7.  Minnesota Statutes 1998, section 80A.10, 
  6.13  subdivision 2, is amended to read: 
  6.14     Subd. 2.  A registration statement under this section shall 
  6.15  contain the following information and be accompanied by the 
  6.16  following documents in addition to the information specified in 
  6.17  section 80A.12 and the consent to service of process required by 
  6.18  section 80A.27, subdivision 7; 
  6.19     (a) Two copies One copy of the latest form of prospectus 
  6.20  filed under the Securities Act of 1933; 
  6.21     (b) If the commissioner by rule or otherwise requires, a 
  6.22  copy of the articles of incorporation and bylaws (or their 
  6.23  substantial equivalent) currently in effect, a copy of any 
  6.24  agreements with or among underwriters, a copy of any indenture 
  6.25  or other instrument governing the issuance of the security to be 
  6.26  registered, and a specimen or copy of the security; 
  6.27     (c) If the commissioner requests, any other information, or 
  6.28  copies of any other documents, filed under the Securities Act of 
  6.29  1933; and 
  6.30     (d) An undertaking to forward all amendments to the federal 
  6.31  prospectus, other than an amendment which merely delays the 
  6.32  effective date of the registration statement, not later than the 
  6.33  first business day after the day they are forwarded to or filed 
  6.34  with the securities and exchange commission or such longer 
  6.35  period as the commissioner permits.  
  6.36     Sec. 8.  Minnesota Statutes 1999 Supplement, section 
  7.1   80A.15, subdivision 2, is amended to read: 
  7.2      Subd. 2.  The following transactions are exempted from 
  7.3   sections 80A.08 and 80A.16: 
  7.4      (a) Any sales, whether or not effected through a 
  7.5   broker-dealer, provided that: 
  7.6      (1) no person shall make more than ten sales of 
  7.7   securities in Minnesota of the same issuer pursuant to this 
  7.8   exemption, exclusive of sales according to clause (2), during 
  7.9   any period of 12 consecutive months; provided further, that in 
  7.10  the case of sales by an issuer, except sales of securities 
  7.11  registered under the Securities Act of 1933 or exempted by 
  7.12  section 3(b) of that act, (i) the seller reasonably believes 
  7.13  that all buyers are purchasing for investment, and (ii) the 
  7.14  securities are not advertised for sale to the general public in 
  7.15  newspapers or other publications of general circulation or 
  7.16  otherwise, or by radio, television, electronic means or similar 
  7.17  communications media, or through a program of general 
  7.18  solicitation by means of mail or telephone; and or 
  7.19     (2) no issuer shall make more than 25 sales of its 
  7.20  securities in Minnesota according to this exemption, exclusive 
  7.21  of sales pursuant to clause (1), during any period of 12 
  7.22  consecutive months; provided further, that the issuer meets the 
  7.23  conditions in clause (1) and, in addition meets the following 
  7.24  additional conditions:  (i) files with the commissioner, ten 
  7.25  days before a sale according to this clause, a statement of 
  7.26  issuer on a form prescribed by the commissioner; and (ii) no 
  7.27  commission or other remuneration is paid or given directly or 
  7.28  indirectly for soliciting any prospective buyers in this state 
  7.29  in connection with a sale according to this clause except 
  7.30  reasonable and customary commissions paid by the issuer to a 
  7.31  broker-dealer licensed under this chapter. 
  7.32     (b) Any nonissuer distribution of an outstanding security 
  7.33  if (1) either Moody's, Fitch's, or Standard & Poor's Securities 
  7.34  Manuals, or other recognized manuals approved by the 
  7.35  commissioner contains the names of the issuer's officers and 
  7.36  directors, a balance sheet of the issuer as of a date not more 
  8.1   than 18 months prior to the date of the sale, and a profit and 
  8.2   loss statement for the fiscal year preceding the date of the 
  8.3   balance sheet, and (2) the issuer or its predecessor has been in 
  8.4   active, continuous business operation for the five-year period 
  8.5   next preceding the date of sale, and (3) if the security has a 
  8.6   fixed maturity or fixed interest or dividend provision, the 
  8.7   issuer has not, within the three preceding fiscal years, 
  8.8   defaulted in payment of principal, interest, or dividends on the 
  8.9   securities. 
  8.10     (c) The execution of any orders by a licensed broker-dealer 
  8.11  for the purchase or sale of any security, pursuant to an 
  8.12  unsolicited offer to purchase or sell; provided that the 
  8.13  broker-dealer acts as agent for the purchaser or seller, and has 
  8.14  no direct material interest in the sale or distribution of the 
  8.15  security, receives no commission, profit, or other compensation 
  8.16  from any source other than the purchaser and seller and delivers 
  8.17  to the purchaser and seller written confirmation of the 
  8.18  transaction which clearly itemizes the commission, or other 
  8.19  compensation. 
  8.20     (d) Any nonissuer sale of notes or bonds secured by a 
  8.21  mortgage lien if the entire mortgage, together with all notes or 
  8.22  bonds secured thereby, is sold to a single purchaser at a single 
  8.23  sale. 
  8.24     (e) Any judicial sale, exchange, or issuance of securities 
  8.25  made pursuant to an order of a court of competent jurisdiction. 
  8.26     (f) The sale, by a pledge holder, of a security pledged in 
  8.27  good faith as collateral for a bona fide debt. 
  8.28     (g) Any offer or sale to a bank, savings institution, trust 
  8.29  company, insurance company, investment company as defined in the 
  8.30  Investment Company Act of 1940, or other financial institution 
  8.31  or institutional buyer, or to a broker-dealer, whether the 
  8.32  purchaser is acting for itself or in some fiduciary capacity. 
  8.33     (h) An offer or sale of securities by an issuer made in 
  8.34  reliance on the exemptions provided by Rule 505 or 506 of 
  8.35  Regulation D promulgated by the Securities and Exchange 
  8.36  Commission, Code of Federal Regulations, title 17, sections 
  9.1   230.501 to 230.508, subject to the conditions and definitions 
  9.2   provided by Rules 501 to 503 of Regulation D, if the offer and 
  9.3   sale also satisfies the conditions and limitations in clauses 
  9.4   (1) to (10). 
  9.5      (1) The exemption under this paragraph is not available for 
  9.6   the securities of an issuer if any of the persons described in 
  9.7   Rule 252(c) to (f) of Regulation A promulgated by the Securities 
  9.8   and Exchange Commission, Code of Federal Regulations, title 17, 
  9.9   sections 230.251 to 230.263:  
  9.10     (i) has filed a registration statement that is the subject 
  9.11  of a currently effective order entered against the issuer, its 
  9.12  officers, directors, general partners, controlling persons, or 
  9.13  affiliates, according to any state's law within five years 
  9.14  before the filing of the notice required under clause (5), 
  9.15  denying effectiveness to, or suspending or revoking the 
  9.16  effectiveness of, the registration statement; 
  9.17     (ii) has been convicted, within five years before the 
  9.18  filing of the notice required under clause (5), of a felony or 
  9.19  misdemeanor in connection with the offer, sale, or purchase of a 
  9.20  security or franchise, or a felony involving fraud or deceit, 
  9.21  including but not limited to forgery, embezzlement, obtaining 
  9.22  money under false pretenses, larceny, or conspiracy to defraud; 
  9.23     (iii) is subject to an effective administrative order or 
  9.24  judgment entered by a state securities administrator within five 
  9.25  years before the filing of the notice required under clause (5), 
  9.26  that prohibits, denies, or revokes the use of an exemption from 
  9.27  securities registration, that prohibits the transaction of 
  9.28  business by the person as a broker-dealer or agent, or that is 
  9.29  based on fraud, deceit, an untrue statement of a material fact, 
  9.30  or an omission to state a material fact; or 
  9.31     (iv) is subject to an order, judgment, or decree of a court 
  9.32  entered within five years before the filing of the notice 
  9.33  required under clause (5), temporarily, preliminarily, or 
  9.34  permanently restraining or enjoining the person from engaging in 
  9.35  or continuing any conduct or practice in connection with the 
  9.36  offer, sale, or purchase of a security, or the making of a false 
 10.1   filing with a state. 
 10.2      A disqualification under paragraph (h) involving a 
 10.3   broker-dealer or agent is waived if the broker-dealer or agent 
 10.4   is or continues to be licensed in the state in which the 
 10.5   administrative order or judgment was entered against the person 
 10.6   or if the broker-dealer or agent is or continues to be licensed 
 10.7   in this state as a broker-dealer or agent after notifying the 
 10.8   commissioner of the act or event causing disqualification. 
 10.9      The commissioner may waive a disqualification under 
 10.10  paragraph (h) upon a showing of good cause that it is not 
 10.11  necessary under the circumstances that use of the exemption be 
 10.12  denied. 
 10.13     A disqualification under paragraph (h) may be waived if the 
 10.14  state securities administrator or agency of the state that 
 10.15  created the basis for disqualification has determined, upon a 
 10.16  showing of good cause, that it is not necessary under the 
 10.17  circumstances that an exemption from registration of securities 
 10.18  under the state's laws be denied. 
 10.19     It is a defense to a violation of paragraph (h) based upon 
 10.20  a disqualification if the issuer sustains the burden of proof to 
 10.21  establish that the issuer did not know, and in the exercise of 
 10.22  reasonable care could not have known, that a disqualification 
 10.23  under paragraph (h) existed. 
 10.24     (2) This exemption must not be available to an issuer with 
 10.25  respect to a transaction that, although in technical compliance 
 10.26  with this exemption, is part of a plan or scheme to evade 
 10.27  registration or the conditions or limitations explicitly stated 
 10.28  in paragraph (h). 
 10.29     (3) No commission, finder's fee, or other remuneration 
 10.30  shall be paid or given, directly or indirectly, for soliciting a 
 10.31  prospective purchaser, unless the recipient is appropriately 
 10.32  licensed, or exempt from licensure, in this state as a 
 10.33  broker-dealer. 
 10.34     (4) Nothing in this exemption is intended to or should be 
 10.35  in any way construed as relieving issuers or persons acting on 
 10.36  behalf of issuers from providing disclosure to prospective 
 11.1   investors adequate to satisfy the antifraud provisions of the 
 11.2   securities law of Minnesota.  
 11.3      (5) The issuer shall file with the commissioner a notice on 
 11.4   form D as adopted by the Securities and Exchange Commission 
 11.5   according to Regulation D, Code of Federal Regulations, title 
 11.6   17, section 230.502.  The notice must be filed not later than 15 
 11.7   days after the first sale in this state of securities in an 
 11.8   offering under this exemption.  Every notice on form D must be 
 11.9   manually signed by a person duly authorized by the issuer and 
 11.10  must be accompanied by a consent to service of process on a form 
 11.11  prescribed by the commissioner.  
 11.12     (6) A failure to comply with a term, condition, or 
 11.13  requirement of paragraph (h) will not result in loss of the 
 11.14  exemption for an offer or sale to a particular individual or 
 11.15  entity if the person relying on the exemption shows that:  (i) 
 11.16  the failure to comply did not pertain to a term, condition, or 
 11.17  requirement directly intended to protect that particular 
 11.18  individual or entity, and the failure to comply was 
 11.19  insignificant with respect to the offering as a whole; and (ii) 
 11.20  a good faith and reasonable attempt was made to comply with all 
 11.21  applicable terms, conditions, and requirements of paragraph (h), 
 11.22  except that, where an exemption is established only through 
 11.23  reliance upon this provision, the failure to comply shall 
 11.24  nonetheless constitute a violation of section 80A.08 and be 
 11.25  actionable by the commissioner.  
 11.26     (7) The issuer, upon request by the commissioner, shall, 
 11.27  within ten days of the request, furnish to the commissioner a 
 11.28  copy of any and all information, documents, or materials 
 11.29  furnished to investors or offerees in connection with the offer 
 11.30  and sale according to paragraph (h).  
 11.31     (8) Neither compliance nor attempted compliance with the 
 11.32  exemption provided by paragraph (h), nor the absence of an 
 11.33  objection or order by the commissioner with respect to an offer 
 11.34  or sale of securities undertaken according to this exemption, 
 11.35  shall be considered to be a waiver of a condition of the 
 11.36  exemption or considered to be a confirmation by the commissioner 
 12.1   of the availability of this exemption.  
 12.2      (9) The commissioner may, by rule or order, increase the 
 12.3   number of purchasers or waive any other condition of this 
 12.4   exemption.  
 12.5      (10) The determination whether offers and sales made in 
 12.6   reliance on the exemption set forth in paragraph (h) shall be 
 12.7   integrated with offers and sales according to other paragraphs 
 12.8   of this subdivision shall be made according to the integration 
 12.9   standard set forth in Rule 502 of Regulation D promulgated by 
 12.10  the Securities and Exchange Commission, Code of Federal 
 12.11  Regulations, title 17, section 230.502.  If not subject to 
 12.12  integration according to that rule, offers and sales according 
 12.13  to paragraph (h) shall not otherwise be integrated with offers 
 12.14  and sales according to other exemptions set forth in this 
 12.15  subdivision. 
 12.16     (i) Any offer (but not a sale) of a security for which a 
 12.17  registration statement has been filed under sections 80A.01 to 
 12.18  80A.31, if no stop order or refusal order is in effect and no 
 12.19  public proceeding or examination looking toward an order is 
 12.20  pending; and any offer of a security if the sale of the security 
 12.21  is or would be exempt under this section.  The commissioner may 
 12.22  by rule exempt offers (but not sales) of securities for which a 
 12.23  registration statement has been filed as the commissioner deems 
 12.24  appropriate, consistent with the purposes of sections 80A.01 to 
 12.25  80A.31. 
 12.26     (j) The offer and sale by a cooperative organized under 
 12.27  chapter 308A or under the laws of another state, of its 
 12.28  securities when the securities are offered and sold only to its 
 12.29  members, or when the purchase of the securities is necessary or 
 12.30  incidental to establishing membership in the cooperative, or 
 12.31  when such securities are issued as patronage dividends.  This 
 12.32  paragraph applies to a cooperative organized under the laws of 
 12.33  another state only if the cooperative has filed with the 
 12.34  commissioner a consent to service of process under section 
 12.35  80A.27, subdivision 7, and has, not less than ten days prior to 
 12.36  the issuance or delivery, furnished the commissioner with a 
 13.1   written general description of the transaction and any other 
 13.2   information that the commissioner requires by rule or otherwise. 
 13.3   This exemption only applies when the issuing cooperative is 
 13.4   seeking to raise up to $1,000,000. 
 13.5      (l) The issuance and delivery of any securities of one 
 13.6   corporation to another corporation or its security holders in 
 13.7   connection with a merger, exchange of shares, or transfer of 
 13.8   assets whereby the approval of stockholders of the other 
 13.9   corporation is required to be obtained, provided, that the 
 13.10  commissioner has been furnished with a general description of 
 13.11  the transaction and with other information as the commissioner 
 13.12  by rule prescribes not less than ten days prior to the issuance 
 13.13  and delivery. 
 13.14     (m) Any transaction between the issuer or other person on 
 13.15  whose behalf the offering is made and an underwriter or among 
 13.16  underwriters. 
 13.17     (n) The distribution by a corporation of its or other 
 13.18  securities to its own security holders as a stock dividend or as 
 13.19  a dividend from earnings or surplus or as a liquidating 
 13.20  distribution; or upon conversion of an outstanding convertible 
 13.21  security; or pursuant to a stock split or reverse stock split. 
 13.22     (o) Any offer or sale of securities by an affiliate of the 
 13.23  issuer thereof if:  (1) a registration statement is in effect 
 13.24  with respect to securities of the same class of the issuer and 
 13.25  (2) the offer or sale has been exempted from registration by 
 13.26  rule or order of the commissioner.  
 13.27     (p) Any transaction pursuant to an offer to existing 
 13.28  security holders of the issuer, including persons who at the 
 13.29  time of the transaction are holders of convertible securities, 
 13.30  nontransferable warrants, or transferable warrants exercisable 
 13.31  within not more than 90 days of their issuance, if:  (1) no 
 13.32  commission or other remuneration (other than a standby 
 13.33  commission) is paid or given directly or indirectly for 
 13.34  soliciting any security holder in this state; and (2) the 
 13.35  commissioner has been furnished with a general description of 
 13.36  the transaction and with other information as the commissioner 
 14.1   may by rule prescribe no less than ten days prior to the 
 14.2   transaction. 
 14.3      (q) Any nonissuer sales of any security, including a 
 14.4   revenue obligation, issued by the state of Minnesota or any of 
 14.5   its political or governmental subdivisions, municipalities, 
 14.6   governmental agencies, or instrumentalities. 
 14.7      (r) Any transaction as to which the commissioner by rule or 
 14.8   order finds that registration is not necessary in the public 
 14.9   interest and for the protection of investors. 
 14.10     (s) An offer or sale of a security issued in connection 
 14.11  with an employee's stock purchase, savings, option, profit 
 14.12  sharing, pension, or similar employee benefit plan, if the 
 14.13  following conditions are met:  
 14.14     (1) the issuer, its parent corporation or any of its 
 14.15  majority-owned subsidiaries offers or sells the security 
 14.16  according to a written benefit plan or written contract relating 
 14.17  to the compensation of the purchaser; and 
 14.18     (2) the class of securities offered according to the plan 
 14.19  or contract, or if an option or right to purchase a security, 
 14.20  the class of securities to be issued upon the exercise of the 
 14.21  option or right, is registered under section 12 of the 
 14.22  Securities Exchange Act of 1934, or is a class of securities 
 14.23  with respect to which the issuer files reports according to 
 14.24  section 15(d) of the Securities Exchange Act of 1934; or 
 14.25     (3) the issuer fully complies with the provisions of Rule 
 14.26  701 as adopted by the Securities and Exchange Commission, Code 
 14.27  of Federal Regulations, title 12, section 230.701. 
 14.28     The issuer shall file not less than ten days before the 
 14.29  transaction, a general description of the transaction and any 
 14.30  other information that the commissioner requires by rule or 
 14.31  otherwise or, if applicable, a Securities and Exchange Form S-8. 
 14.32  Annually, within 90 days after the end of the issuer's fiscal 
 14.33  year, the issuer shall file a notice as provided with the 
 14.34  commissioner. 
 14.35     (t) Any sale of a security of an issuer that is a pooled 
 14.36  income fund, a charitable remainder trust, or a charitable lead 
 15.1   trust that has a qualified charity as the only charitable 
 15.2   beneficiary. 
 15.3      (u) Any sale by a qualified charity of a security that is a 
 15.4   charitable gift annuity if the issuer has a net worth, otherwise 
 15.5   defined as unrestricted fund balance, of not less than $300,000 
 15.6   and either:  (1) has been in continuous operation for not less 
 15.7   than three years; or (2) is a successor or affiliate of a 
 15.8   qualified charity that has been in continuous operation for not 
 15.9   less than three years. 
 15.10     Sec. 9.  Minnesota Statutes 1998, section 80C.05, 
 15.11  subdivision 4, is amended to read: 
 15.12     Subd. 4.  An application for registration that has not 
 15.13  become effective will be considered withdrawn If no activity 
 15.14  occurs with respect to the an application for registration for a 
 15.15  period of 120 days, the commissioner may by order declare the 
 15.16  application withdrawn. 
 15.17     Sec. 10.  Minnesota Statutes 1998, section 80C.07, is 
 15.18  amended to read: 
 15.19     80C.07 [AMENDMENT OF REGISTRATION.] 
 15.20     A person with a registration in effect shall, within 30 
 15.21  days after the occurrence of any material change in the 
 15.22  information on file with the commissioner, notify the 
 15.23  commissioner in writing of the change by an application to amend 
 15.24  the registration accompanied by a fee of $100.  The commissioner 
 15.25  may by rule define what shall be considered a material change 
 15.26  for such purposes, and may determine the circumstances under 
 15.27  which a revised public offering statement must accompany the 
 15.28  application.  If the amendment is approved by the commissioner, 
 15.29  it shall become effective upon the issuance by the commissioner 
 15.30  of an order amending the registration.  
 15.31     The commissioner may withdraw an amendment application that 
 15.32  has not become effective.  If no activity occurs with respect to 
 15.33  the application for a period of 120 days, the commissioner may 
 15.34  by order declare the application withdrawn. 
 15.35     Sec. 11.  Minnesota Statutes 1998, section 82.22, 
 15.36  subdivision 13, is amended to read: 
 16.1      Subd. 13.  [CONTINUING EDUCATION.] (a) After their first 
 16.2   renewal date, all real estate salespersons and all real estate 
 16.3   brokers shall be required to successfully complete 30 hours of 
 16.4   real estate continuing education, either as a student or a 
 16.5   lecturer, in courses of study approved by the commissioner, 
 16.6   during each 24-month license period.  At least 15 of the 30 
 16.7   credit hours must be completed during the first 12 months of the 
 16.8   24-month licensing period.  Salespersons and brokers whose 
 16.9   initial license period extends more than 12 months are required 
 16.10  to complete 15 hours of real estate continuing education during 
 16.11  the initial license period.  Those licensees who will receive a 
 16.12  12-month license on July 1, 1995, because of the staggered 
 16.13  implementation schedule must complete 15 hours of real estate 
 16.14  continuing education as a requirement for renewal on July 1, 
 16.15  1996.  Licensees may not claim credit for continuing education 
 16.16  not actually completed as of the date their report of continuing 
 16.17  education compliance is filed. 
 16.18     (b) The commissioner shall adopt rules defining the 
 16.19  standards for course and instructor approval, and may adopt 
 16.20  rules for the proper administration of this subdivision.  The 
 16.21  commissioner may not approve a course which can be completed by 
 16.22  the student at home or outside the classroom without the 
 16.23  supervision of an instructor approved by the department of 
 16.24  commerce.  The commissioner has discretion to establish a pilot 
 16.25  program to explore delivery of accredited courses using new 
 16.26  delivery technology, including interactive technology.  This 
 16.27  pilot program expires on August 1, 2000 2001. 
 16.28     (c) Any program approved by Minnesota continuing legal 
 16.29  education shall be approved by the commissioner of commerce for 
 16.30  continuing education for real estate brokers and salespeople if 
 16.31  the program or any part thereof relates to real estate.  
 16.32     (d) As part of the continuing education requirements of 
 16.33  this section, the commissioner shall require that all real 
 16.34  estate brokers and salespersons receive: 
 16.35     (1) at least two hours of training during each license 
 16.36  period in courses in laws or regulations on agency 
 17.1   representation and disclosure; and 
 17.2      (2) at least two hours of training during each license 
 17.3   period in courses in state and federal fair housing laws, 
 17.4   regulations, and rules, or other antidiscrimination laws. 
 17.5      Clause (1) does not apply to real estate salespersons and 
 17.6   real estate brokers engaged solely in the commercial real estate 
 17.7   business who file with the commissioner a verification of this 
 17.8   status along with the continuing education report required under 
 17.9   paragraph (a). 
 17.10     (e) The commissioner is authorized to establish a procedure 
 17.11  for renewal of course accreditation. 
 17.12     Sec. 12.  Minnesota Statutes 1998, section 82A.04, 
 17.13  subdivision 4, is amended to read: 
 17.14     Subd. 4.  [EFFECTIVE DATE.] Unless an order denying 
 17.15  registration under section 82A.12 is in effect, or unless 
 17.16  declared effective by order of the commissioner prior thereto, 
 17.17  the application for registration shall automatically become 
 17.18  effective upon the expiration of 15 business days following 
 17.19  filing with the commissioner, but an applicant may consent in 
 17.20  writing to the delay of registration until the time the 
 17.21  commissioner may issue an order of registration.  If the 
 17.22  commissioner requests additional information with respect to the 
 17.23  application, the application shall become effective upon the 
 17.24  expiration of 15 business days following the filing with the 
 17.25  commissioner of the additional information unless an order 
 17.26  denying registration under section 82A.12 is in effect or unless 
 17.27  declared effective by order of the commissioner prior thereto. 
 17.28  The registration is effective on the date the commissioner 
 17.29  declares by order. 
 17.30     Sec. 13.  Minnesota Statutes 1998, section 82A.04, is 
 17.31  amended by adding a subdivision to read: 
 17.32     Subd. 5.  [WITHDRAWAL OF APPLICATION.] If no activity 
 17.33  occurs with respect to an application for a period of 120 days, 
 17.34  the commissioner may by order declare the application 
 17.35  withdrawn.  No part of the filing fee will be returned by the 
 17.36  commissioner if a registration application is withdrawn 
 18.1   according to this subdivision. 
 18.2      Sec. 14.  Minnesota Statutes 1998, section 82B.14, is 
 18.3   amended to read: 
 18.4      82B.14 [EXPERIENCE REQUIREMENT.] 
 18.5      (a) As a prerequisite for licensing as a registered real 
 18.6   property appraiser or licensed real property appraiser, an 
 18.7   applicant must present evidence satisfactory to the commissioner 
 18.8   that the person has obtained 2,000 hours of experience in real 
 18.9   property appraisal. 
 18.10     As a prerequisite for licensing as a certified residential 
 18.11  real property appraiser, an applicant must present evidence 
 18.12  satisfactory to the commissioner that the person has obtained 
 18.13  2,500 hours of experience in real property appraisal. 
 18.14     As a prerequisite for licensing as a certified general real 
 18.15  property appraiser, an applicant must present evidence 
 18.16  satisfactory to the commissioner that the person has obtained 
 18.17  3,000 hours of experience in real property appraisal.  At least 
 18.18  50 percent, or 1,500 hours, must be in nonresidential appraisal 
 18.19  work. 
 18.20     (b) Each applicant for license under section 82B.11, 
 18.21  subdivision 3, 4, or 5, shall give under oath a detailed listing 
 18.22  of the real estate appraisal reports or file memoranda for which 
 18.23  experience is claimed by the applicant.  Upon request, the 
 18.24  applicant shall make available to the commissioner for 
 18.25  examination, a sample of appraisal reports that the applicant 
 18.26  has prepared in the course of appraisal practice. 
 18.27     (c) Applicants may not receive credit for experience 
 18.28  accumulated while unlicensed, if the experience is based on 
 18.29  activities which required a license under this section. 
 18.30     Sec. 15.  Minnesota Statutes 1998, section 83.23, is 
 18.31  amended by adding a subdivision to read: 
 18.32     Subd. 5.  [WITHDRAWAL OF APPLICATION.] If no activity 
 18.33  occurs with respect to an application for a period of 120 days, 
 18.34  the commissioner may by order declare the application 
 18.35  withdrawn.  No part of the filing fee will be returned by the 
 18.36  commissioner if a registration application is withdrawn 
 19.1   according to this subdivision. 
 19.2      Sec. 16.  Minnesota Statutes 1998, section 326.975, 
 19.3   subdivision 1, is amended to read: 
 19.4      Subdivision 1.  [GENERALLY.] (a) In addition to any other 
 19.5   fees, each applicant for a license under sections 326.83 to 
 19.6   326.98 shall pay a fee to the contractor's recovery fund.  The 
 19.7   contractor's recovery fund is created in the state treasury and 
 19.8   must be administered by the commissioner in the manner and 
 19.9   subject to all the requirements and limitations provided by 
 19.10  section 82.34 with the following exceptions: 
 19.11     (1) each licensee who renews a license shall pay in 
 19.12  addition to the appropriate renewal fee an additional fee which 
 19.13  shall be credited to the contractor's recovery fund.  The amount 
 19.14  of the fee shall be based on the licensee's gross annual 
 19.15  receipts for the licensee's most recent fiscal year preceding 
 19.16  the renewal, on the following scale: 
 19.17            Fee           Gross Receipts
 19.18            $100          under $1,000,000
 19.19            $150          $1,000,000 to $5,000,000
 19.20            $200          over $5,000,000
 19.21  Any person who receives a new license shall pay a fee based on 
 19.22  the same scale; 
 19.23     (2) the sole purpose of this fund is to compensate any 
 19.24  aggrieved owner or lessee of residential property located within 
 19.25  this state who obtains a final judgment in any court of 
 19.26  competent jurisdiction against a licensee licensed under section 
 19.27  326.84, on grounds of fraudulent, deceptive, or dishonest 
 19.28  practices, conversion of funds, or failure of performance 
 19.29  arising directly out of any transaction when the judgment debtor 
 19.30  was licensed and performed any of the activities enumerated 
 19.31  under section 326.83, subdivision 19, on the owner's residential 
 19.32  property or on residential property rented by the lessee, or on 
 19.33  new residential construction which was never occupied prior to 
 19.34  purchase by the owner, or which was occupied by the licensee for 
 19.35  less than one year prior to purchase by the owner, and which 
 19.36  cause of action arose on or after April 1, 1994; 
 20.1      (3) nothing may obligate the fund for more than $50,000 per 
 20.2   claimant, nor more than $50,000 per licensee; and 
 20.3      (4) nothing may obligate the fund for claims based on a 
 20.4   cause of action that arose before the licensee paid the recovery 
 20.5   fund fee set in clause (1), or as provided in section 326.945, 
 20.6   subdivision 3.  
 20.7      (b) Should the commissioner pay from the contractor's 
 20.8   recovery fund any amount in settlement of a claim or toward 
 20.9   satisfaction of a judgment against a licensee, the license shall 
 20.10  be automatically suspended upon the effective date of an order 
 20.11  by the court authorizing payment from the fund.  No licensee 
 20.12  shall be granted reinstatement until the licensee has repaid in 
 20.13  full, plus interest at the rate of 12 percent a year, twice the 
 20.14  amount paid from the fund on the licensee's account, and has 
 20.15  obtained a surety bond issued by an insurer authorized to 
 20.16  transact business in this state in the amount of at least 
 20.17  $40,000.  
 20.18     Sec. 17.  [332.355] [AGENCY RESPONSIBILITY FOR COLLECTORS.] 
 20.19     The commissioner may take action against a collection 
 20.20  agency for any violations of debt collection laws by its debt 
 20.21  collectors.  The commissioner may also take action against the 
 20.22  debt collectors themselves for these same violations. 
 20.23     Sec. 18.  [359.085] [STANDARDS OF CONDUCT FOR NOTARIAL 
 20.24  ACTS.] 
 20.25     Subdivision 1.  [ACKNOWLEDGMENTS.] In taking an 
 20.26  acknowledgment, the notarial officer must determine, either from 
 20.27  personal knowledge or from satisfactory evidence, that the 
 20.28  person appearing before the officer and making the 
 20.29  acknowledgment is the person whose true signature is on the 
 20.30  instrument. 
 20.31     Subd. 2.  [VERIFICATIONS.] In taking a verification upon 
 20.32  oath or affirmation, the notarial officer must determine, either 
 20.33  from personal knowledge or from satisfactory evidence, that the 
 20.34  person appearing before the officer and making the verification 
 20.35  is the person whose true signature is on the statement verified. 
 20.36     Subd. 3.  [WITNESSING OR ATTESTING SIGNATURES.] In 
 21.1   witnessing or attesting a signature the notarial officer must 
 21.2   determine, either from personal knowledge or from satisfactory 
 21.3   evidence, that the signature is that of the person appearing 
 21.4   before the officer and named in the document. 
 21.5      Subd. 4.  [CERTIFYING OR ATTESTING DOCUMENTS.] In 
 21.6   certifying or attesting a copy of a document or other item, the 
 21.7   notarial officer must determine that the proffered copy is a 
 21.8   full, true, and accurate transcription or reproduction of that 
 21.9   which was copied. 
 21.10     Subd. 5.  [MAKING OR NOTING PROTESTS OF NEGOTIABLE 
 21.11  INSTRUMENTS.] In making or noting a protest of a negotiable 
 21.12  instrument the notarial officer must determine the matters set 
 21.13  forth in section 336.3-505. 
 21.14     Subd. 6.  [SATISFACTORY EVIDENCE.] A notarial officer has 
 21.15  satisfactory evidence that a person is the person whose true 
 21.16  signature is on a document if that person (i) is personally 
 21.17  known to the notarial officer, (ii) is identified upon the oath 
 21.18  or affirmation of a credible witness personally known to the 
 21.19  notarial officer, or (iii) is identified on the basis of 
 21.20  identification documents. 
 21.21     Subd. 7.  [PROHIBITED ACTS.] A notarial officer may not 
 21.22  acknowledge, witness or attest to the officer's own signature, 
 21.23  or take a verification of the officer's own oath or affirmation. 
 21.24     Sec. 19.  [EFFECTIVE DATE.] 
 21.25     Sections 1 to 5, 7 to 10, 11, 14, and 16 to 18 are 
 21.26  effective the day following enactment.