Engrossments
Introduction	Posted on 02/21/2024
1st Engrossment	Posted on 04/02/2024
2nd Engrossment	Posted on 04/05/2024	compared with HF4077 1st Engrossment
3rd Engrossment	Posted on 05/18/2024

Unofficial Engrossments	Comparisons
1st Unofficial Engrossment		Posted on 04/16/2024

Conference Committee Reports	Comparisons
CCR-SF4097		Posted on 05/13/2024

Delete everything after the enacting clause and insert:

"ARTICLE 1

INSURANCE

Section 1.

Minnesota Statutes 2022, section 60A.201, is amended by adding a subdivision
to read:

new text begin Subd. 6.new text end

new text begin Coverage deemed unavailable.new text end

new text begin Coverage for a risk that was referred to a
surplus lines broker by a Minnesota licensed insurance producer who is not affiliated with
the surplus lines broker is deemed unavailable from a licensed insurer.
new text end

Sec. 2.

new text begin [60A.43] DISABILITY INCOME COVERAGE; DISCLOSURE.
new text end

new text begin (a) No contract or policy of long-term disability insurance that limits the duration of
coverage for mental health or substance use disorders shall be offered in this state without
a disclosure, provided at the time of application, that includes the following:
new text end

new text begin (1) a notification that the long-term disability coverage selected by the potential
policyholder or plan sponsor limits the duration of coverage for mental health or substance
use disorders; and
new text end

new text begin (2) that the potential policyholder or plan sponsor has the right to request more
information about the limitation and other coverage options that include an unlimited
duration, if available.
new text end

new text begin (b) Receipt of the disclosure described in paragraph (a) must be acknowledged by the
potential policyholder or plan sponsor and evidence of the disclosure and acknowledgment
must be retained by the insurance company offering the coverage for a period of no less
than two years.
new text end

new text begin EFFECTIVE DATE.new text end

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

Sec. 3.

new text begin [61A.012] ANNUAL NOTICE REQUIRED.
new text end

new text begin Subdivision 1.new text end

new text begin Annual notice required.new text end

new text begin For each policy of individual life insurance
issued or delivered in Minnesota, a life insurance company must provide a written notice
to the policyholder that contains the following information, as applicable:
new text end

new text begin (1) the policyholder;
new text end

new text begin (2) the policy number;
new text end

new text begin (3) the insured life; and
new text end

new text begin (4) the current contact information for the life insurance company.
new text end

new text begin Subd. 2.new text end

new text begin Notice requirements.new text end

new text begin The notice required under this section must be provided
by the life insurance company to the policyholder at least once per calendar year, sent via
United States mail to the policyholder's last known address or electronically to the
policyholder's last known email address.
new text end

new text begin Subd. 3.new text end

new text begin Compliance with other law.new text end

new text begin This section's annual notice requirement is satisfied
by an annual report provided by a life insurance company to a policyholder pursuant to and
in compliance with section 61A.735.
new text end

new text begin EFFECTIVE DATE.new text end

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

Sec. 4.

Minnesota Statutes 2023 Supplement, section 61A.031, is amended to read:

61A.031 SUICIDE PROVISIONS.

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

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

Sec. 5.

Minnesota Statutes 2023 Supplement, section 62Q.522, subdivision 1, is amended
to read:

Subdivision 1.

Definitions.

(a) The definitions in this subdivision apply to this section.

deleted text begin (b) "Closely held for-profit entity" means an entity that:
deleted text end

deleted text begin (1) is not a nonprofit entity;
deleted text end

deleted text begin (2) has more than 50 percent of the value of its ownership interest owned directly or
indirectly by five or fewer owners; and
deleted text end

deleted text begin (3) has no publicly traded ownership interest.
deleted text end

deleted text begin For purposes of this paragraph:
deleted text end

deleted text begin (i) ownership interests owned by a corporation, partnership, limited liability company,
estate, trust, or similar entity are considered owned by that entity's shareholders, partners,
members, or beneficiaries in proportion to their interest held in the corporation, partnership,
limited liability company, estate, trust, or similar entity;
deleted text end

deleted text begin (ii) ownership interests owned by a nonprofit entity are considered owned by a single
owner;
deleted text end

deleted text begin (iii) ownership interests owned by all individuals in a family are considered held by a
single owner. For purposes of this item, "family" means brothers and sisters, including
half-brothers and half-sisters, a spouse, ancestors, and lineal descendants; and
deleted text end

deleted text begin (iv) if an individual or entity holds an option, warrant, or similar right to purchase an
ownership interest, the individual or entity is considered to be the owner of those ownership
interests.
deleted text end

deleted text begin (c)deleted text end new text begin (b)new text end "Contraceptive method" means a drug, device, or other product approved by the
Food and Drug Administration to prevent unintended pregnancy.

deleted text begin (d)deleted text end new text begin (c)new text end "Contraceptive service" means consultation, examination, procedures, and medical
services related to the prevention of unintended pregnancy, excluding vasectomies. This
includes but is not limited to voluntary sterilization procedures, patient education, counseling
on contraceptives, and follow-up services related to contraceptive methods or services,
management of side effects, counseling for continued adherence, and device insertion or
removal.

deleted text begin (e) "Eligible organization" means an organization that opposes providing coverage for
some or all contraceptive methods or services on account of religious objections and that
is:
deleted text end

deleted text begin (1) organized as a nonprofit entity and holds itself out to be religious; or
deleted text end

deleted text begin (2) organized and operates as a closely held for-profit entity, and the organization's
owners or highest governing body has adopted, under the organization's applicable rules of
governance and consistent with state law, a resolution or similar action establishing that the
organization objects to covering some or all contraceptive methods or services on account
of the owners' sincerely held religious beliefs.
deleted text end

deleted text begin (f) "Exempt organization" means an organization that is organized and operates as a
nonprofit entity and meets the requirements of section 6033(a)(3)(A)(i) or (iii) of the Internal
Revenue Code of 1986, as amended.
deleted text end

deleted text begin (g)deleted text end new text begin (d)new text end "Medical necessity" includes but is not limited to considerations such as severity
of side effects, difference in permanence and reversibility of a contraceptive method or
service, and ability to adhere to the appropriate use of the contraceptive method or service,
as determined by the attending provider.

deleted text begin (h)deleted text end new text begin (e)new text end "Therapeutic equivalent version" means a drug, device, or product that can be
expected to have the same clinical effect and safety profile when administered to a patient
under the conditions specified in the labeling, and that:

(1) is approved as safe and effective;

(2) is a pharmaceutical equivalent: (i) containing identical amounts of the same active
drug ingredient in the same dosage form and route of administration; and (ii) meeting
compendial or other applicable standards of strength, quality, purity, and identity;

(3) is bioequivalent in that:

(i) the drug, device, or product does not present a known or potential bioequivalence
problem and meets an acceptable in vitro standard; or

(ii) if the drug, device, or product does present a known or potential bioequivalence
problem, it is shown to meet an appropriate bioequivalence standard;

(4) is adequately labeled; and

(5) is manufactured in compliance with current manufacturing practice regulations.

new text begin EFFECTIVE DATE.new text end

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

Sec. 6.

Minnesota Statutes 2023 Supplement, section 62Q.523, subdivision 1, is amended
to read:

Subdivision 1.

Scope of coverage.

Except as otherwise provided in section deleted text begin 62Q.522deleted text end new text begin
62Q.679new text end , subdivisions new text begin 2 and new text end 3 deleted text begin and 4deleted text end , all health plans that provide prescription coverage
must comply with the requirements of this section.

new text begin EFFECTIVE DATE.new text end

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

Sec. 7.

new text begin [62Q.585] GENDER-AFFIRMING CARE COVERAGE; MEDICALLY
NECESSARY CARE.
new text end

new text begin Subdivision 1.new text end

new text begin Requirement.new text end

new text begin No health plan that covers physical or mental health
services may be offered, sold, issued, or renewed in this state that:
new text end

new text begin (1) excludes coverage for medically necessary gender-affirming care; or
new text end

new text begin (2) requires gender-affirming treatments to satisfy a definition of "medically necessary
care," "medical necessity," or any similar term that is more restrictive than the definition
provided in subdivision 2.
new text end

new text begin Subd. 2.new text end

new text begin Minimum definition.new text end

new text begin "Medically necessary care" means health care services
appropriate in terms of type, frequency, level, setting, and duration to the enrollee's diagnosis
or condition and diagnostic testing and preventive services. Medically necessary care must
be consistent with generally accepted practice parameters as determined by health care
providers in the same or similar general specialty as typically manages the condition,
procedure, or treatment at issue and must:
new text end

new text begin (1) help restore or maintain the enrollee's health; or
new text end

new text begin (2) prevent deterioration of the enrollee's condition.
new text end

new text begin Subd. 3.new text end

new text begin Definitions.new text end

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

new text begin (b) " Gender-affirming care" means all medical, surgical, counseling, or referral services,
including telehealth services, that an individual may receive to support and affirm the
individual's gender identity or gender expression and that are legal under the laws of this
state.
new text end

new text begin (c) "Health plan" has the meaning given in section 62Q.01, subdivision 3, but includes
the coverages listed in section 62A.011, subdivision 3, clauses (7) and (10).
new text end

new text begin EFFECTIVE DATE.new text end

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

Sec. 8.

new text begin [62Q.679] RELIGIOUS OBJECTIONS.
new text end

new text begin Subdivision 1.new text end

new text begin Definitions.new text end

new text begin (a) The definitions in this subdivision apply to this section.
new text end

new text begin (b) "Closely held for-profit entity" means an entity that is not a nonprofit entity, has
more than 50 percent of the value of its ownership interest owned directly or indirectly by
five or fewer owners, and has no publicly traded ownership interest. For purposes of this
paragraph:
new text end

new text begin (1) ownership interests owned by a corporation, partnership, limited liability company,
estate, trust, or similar entity are considered owned by that entity's shareholders, partners,
members, or beneficiaries in proportion to their interest held in the corporation, partnership,
limited liability company, estate, trust, or similar entity;
new text end

new text begin (2) ownership interests owned by a nonprofit entity are considered owned by a single
owner;
new text end

new text begin (3) ownership interests owned by all individuals in a family are considered held by a
single owner. For purposes of this clause, "family" means brothers and sisters, including
half-brothers and half-sisters, a spouse, ancestors, and lineal descendants; and
new text end

new text begin (4) if an individual or entity holds an option, warrant, or similar right to purchase an
ownership interest, the individual or entity is considered to be the owner of those ownership
interests.
new text end

new text begin (c) "Eligible organization" means an organization that opposes covering some or all
health benefits under section 62Q.522 or 62Q.585 on account of religious objections and
that is:
new text end

new text begin (1) organized as a nonprofit entity and holds itself out to be religious; or
new text end

new text begin (2) organized and operates as a closely held for-profit entity, and the organization's
owners or highest governing body has adopted, under the organization's applicable rules of
governance and consistent with state law, a resolution or similar action establishing that the
organization objects to covering some or all health benefits under section 62Q.522 or
62Q.585 on account of the owners' sincerely held religious beliefs.
new text end

new text begin (d) "Exempt organization" means an organization that is organized and operates as a
nonprofit entity and meets the requirements of section 6033(a)(3)(A)(i) or (iii) of the Internal
Revenue Code of 1986, as amended.
new text end

new text begin Subd. 2.new text end

new text begin Exemption.new text end

new text begin (a) An exempt organization is not required to provide coverage
under section 62Q.522 or 62Q.585 if the exempt organization has religious objections to
the coverage. An exempt organization that chooses to not provide coverage pursuant to this
paragraph must notify employees as part of the hiring process and must notify all employees
at least 30 days before:
new text end

new text begin (1) an employee enrolls in the health plan; or
new text end

new text begin (2) the effective date of the health plan, whichever occurs first.
new text end

new text begin (b) If the exempt organization provides partial coverage under section 62Q.522 or
62Q.585, the notice required under paragraph (a) must provide a list of the portions of such
coverage which the organization refuses to cover.
new text end

new text begin Subd. 3.new text end

new text begin Accommodation for eligible organizations.new text end

new text begin (a) A health plan established or
maintained by an eligible organization complies with the coverage requirements of section
62Q.522 or 62Q.585, with respect to the health benefits identified in the notice under this
paragraph, if the eligible organization provides notice to any health plan company with
which the eligible organization contracts that it is an eligible organization and that the
eligible organization has a religious objection to coverage for all or a subset of the health
benefits under section 62Q.522 or 62Q.585.
new text end

new text begin (b) The notice from an eligible organization to a health plan company under paragraph
(a) must include: (1) the name of the eligible organization; (2) a statement that it objects to
coverage for some or all of the health benefits under section 62Q.522 or 62Q.585, including
a list of the health benefits to which the eligible organization objects, if applicable; and (3)
the health plan name. The notice must be executed by a person authorized to provide notice
on behalf of the eligible organization.
new text end

new text begin (c) An eligible organization must provide a copy of the notice under paragraph (a) to
prospective employees as part of the hiring process and to all employees at least 30 days
before:
new text end

new text begin (1) an employee enrolls in the health plan; or
new text end

new text begin (2) the effective date of the health plan, whichever occurs first.
new text end

new text begin (d) A health plan company that receives a copy of the notice under paragraph (a) with
respect to a health plan established or maintained by an eligible organization must, for all
future enrollments in the health plan:
new text end

new text begin (1) expressly exclude coverage for those health benefits identified in the notice under
paragraph (a) from the health plan; and
new text end

new text begin (2) provide separate payments for any health benefits required to be covered under
section 62Q.522 or 62Q.585 for enrollees as long as the enrollee remains enrolled in the
health plan.
new text end

new text begin (e) The health plan company must not impose any cost-sharing requirements, including
co-pays, deductibles, or coinsurance, or directly or indirectly impose any premium, fee, or
other charge for the health benefits under section 62Q.522 on the enrollee. The health plan
company must not directly or indirectly impose any premium, fee, or other charge for the
health benefits under section 62Q.522 or 62Q.585 on the eligible organization or health
plan.
new text end

new text begin (f) On January 1, 2024, and every year thereafter a health plan company must notify the
commissioner, in a manner determined by the commissioner, of the number of eligible
organizations granted an accommodation under this subdivision.
new text end

new text begin EFFECTIVE DATE.new text end

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

Sec. 9.

Minnesota Statutes 2022, section 65A.29, is amended by adding a subdivision to
read:

new text begin Subd. 8a.new text end

new text begin Losses resulting from lightning, wind, rain, or hail. new text end

new text begin (a) An insurer may
refuse to renew a policy of homeowner's insurance if the insured had three or more covered
losses each over $10,000 resulting from lightning, wind, rain, or hail during the five-year
period immediately preceding the refusal to renew.
new text end

new text begin (b) If an insurer elects to not renew a policy of homeowner's insurance under paragraph
(a), the insurer must provide the insured 60 days' advance notice of the insurer's intention
to make the election. The notice must specify the reason for the refusal to renew and must
inform the insured of the possibility of coverage through the Minnesota FAIR plan under
sections 65A.31 to 65A.42.
new text end

new text begin (c) An insurer writing homeowner's insurance for property located in Minnesota must
annually report to the commissioner the number of policies not renewed under paragraph
(a).
new text end

new text begin (d) An insurer may, at the end of a homeowner's insurance policy period, offer to reduce
the policy's coverage by revising the policy's deductible to a percentage-based deductible
solely for losses resulting from lightning, wind, rain, or hail without complying with the
nonrenewal rules in Minnesota Rules, chapter 2880, provided:
new text end

new text begin (1) the percentage-based deductible only obligates the insured to pay that percentage of
the cost, at the time any loss or damage occurs, to actually repair, rebuild, or replace the
insured property;
new text end

new text begin (2) the insurer provides the insured at least 60 days' advance notice of the insurer's offer
to revise the deductible in a manner consistent with this section;
new text end

new text begin (3) the 60 days' notice the insurer provides to the insured clearly and fully discloses in
plain language all details pertaining to the revised deductible, including an example of how
the deductible works in the event of an insured loss resulting from lightning, wind, rain, or
hail with the percentage the consumer is obligated to pay when applied to the cost of repair;
and
new text end

new text begin (4) the insurer offers the insured at least one reasonable flat-dollar deductible option
that does not exceed the highest percentage deductible policy in lieu of the percentage-based
deductible. The offer under this clause must be included in the 60 days' notice the insurer
provides to the insured. The 60 days' notice must also clearly and conspicuously disclose
that if the insured fails to elect the percentage-based deductible but renews the policy, the
policy's deductible is the flat-dollar deductible.
new text end

Sec. 10.

new text begin [65A.3025] CONDOMINIUM AND TOWNHOUSE POLICIES;
COORDINATION OF BENEFITS FOR LOSS ASSESSMENT.
new text end

new text begin Subdivision 1.new text end

new text begin Definitions.new text end

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

new text begin (b) "Assessable loss" means a covered loss under the terms of a policy governed by
subdivision 2, paragraph (a) or (b).
new text end

new text begin (c) "Association" has the meaning given in section 515B.1-103, clause (4).
new text end

new text begin (d) "Unit owner" has the meaning given in section 515B.1-103, clause (37).
new text end

new text begin Subd. 2.new text end

new text begin Loss assessment.new text end

new text begin (a) If a loss assessment is charged by an association to an
individual unit owner, the insurance policy in force at the time of the assessable loss must
pay the loss assessment, subject to the limits provided in the policy, notwithstanding any
policy provisions regarding when loss assessment coverage accrues, and subject to any
other terms, conditions, and exclusions in the policy, if the following conditions are met:
new text end

new text begin (1) the unit owner at the time of the assessable loss is the owner of the property listed
on the policy at the time the loss assessment is charged;
new text end

new text begin (2) the insurance policy in force at the time of the assessable loss provides loss assessment
coverage; and
new text end

new text begin (3) a loss assessment and the event or occurrence which triggers a loss assessment shall
be considered a single loss for underwriting and rating purposes.
new text end

new text begin (b) If a loss assessment is charged by an association to an individual unit owner, the
insurance policy in force at the time the loss assessment is charged must pay the assessment,
subject to the limits provided in the policy, notwithstanding any policy provisions regarding
when loss assessment coverage accrues, and subject to any other terms, conditions, and
exclusions in the policy, if the following conditions are met:
new text end

new text begin (1) the unit owner at the time of the loss assessment is charged is different than the unit
owner at the time of the assessable loss; and
new text end

new text begin (2) the insurance policy in force at the time the loss assessment is charged provides loss
assessment coverage.
new text end

new text begin (c) For a loss assessment under paragraph (b), an insurer may require evidence
documenting that the transfer of ownership occurred prior to the assessment before the
insurer affords coverage.
new text end

Sec. 11.

Minnesota Statutes 2022, section 67A.01, subdivision 2, is amended to read:

Subd. 2.

Authorized territory.

(a) A township mutual fire insurance company may be
authorized to write business in up to nine adjoining counties in the aggregate at the same
time. If policyholder surplus is at least $500,000 as reported in the company's last annual
financial statement filed with the commissioner, the company may, if approval has been
granted by the commissioner, be authorized to write business in ten or more counties in the
aggregate at the same time, subject to a maximum of deleted text begin 20deleted text end new text begin 30new text end adjoining counties, in accordance
with the following schedule:

Number of Counties	Surplus Requirement
10	$500,000
11	600,000
12	700,000
13	800,000
14	900,000
15	1,000,000
16	1,100,000
17	1,200,000
18	1,300,000
19	1,400,000
20	1,500,000
new text begin 21 new text end	new text begin 1,600,000 new text end
new text begin 22 new text end	new text begin 1,700,000 new text end
new text begin 23 new text end	new text begin 1,800,000 new text end
new text begin 24 new text end	new text begin 1,900,000 new text end
new text begin 25 new text end	new text begin 2,000,000 new text end
new text begin 26 new text end	new text begin 2,100,000 new text end
new text begin 27 new text end	new text begin 2,200,000 new text end
new text begin 28 new text end	new text begin 2,300,000 new text end
new text begin 29 new text end	new text begin 2,400,000 new text end
new text begin 30 new text end	new text begin 2,500,000 new text end

(b) In the case of a merger of two or more companies having contiguous territories, the
surviving company in the merger may transact business in the entire territory of the merged
companies; however, the territory of the surviving company in the merger deleted text begin may not be larger
than 20deleted text end new text begin must be approved by the commissioner and may not be in excess of 30new text end countiesnew text begin ,
provided the company complies with the additional reporting requirements stipulated in
paragraph (g)new text end .

new text begin (c) Notwithstanding paragraph (b), a policy issued by a constituent company to the
merger may remain effective, without respect to the policy being issued in a county outside
the territory of the surviving company, until the policy:
new text end

new text begin (1) expires or is terminated by the policy's terms; or
new text end

new text begin (2) is terminated or annulled and canceled in accordance with section 67A.18.
new text end

new text begin The surviving company must not amend or renew a policy issued in a county outside the
surviving company's territory.
new text end

deleted text begin (c)deleted text end new text begin (d)new text end A township mutual fire insurance company may write new and renewal insurance
on property in cities within the company's authorized territory having a population less than
25,000. A township mutual fire insurance company may continue to write new and renewal
insurance once the population increases to 25,000 or greater provided that amended and
restated articles are filed with the commissioner along with a certification that such city's
population has increased to 25,000 or greater.

deleted text begin (d)deleted text end new text begin (e)new text end A township mutual fire insurance company may write new and renewal insurance
on property in cities within the company's authorized territory with a population of 25,000
or greater, but less than 150,000, if approval has been granted by the commissioner. No
township mutual fire insurance company shall insure any property in cities with a population
of 150,000 or greater.

deleted text begin (e)deleted text end new text begin (f)new text end If a township mutual fire insurance company provides evidence to the
commissioner that the company had insurance in force on December 31, 2007, in a city
within the company's authorized territory with a population of 25,000 or greater, but less
than 150,000, the company may write new and renewal insurance on property in that city
provided that the company files amended and restated articles by July 31, 2010, naming
that city.

new text begin (g) If a surviving company of a merger writes in more than 20 counties, that company
must report to the commissioner the following items on a quarterly basis:
new text end

new text begin (1) income statement;
new text end

new text begin (2) balance sheet;
new text end

new text begin (3) insurance in force; and
new text end

new text begin (4) number of policies.
new text end

Sec. 12.

Minnesota Statutes 2022, section 67A.14, subdivision 1, is amended to read:

Subdivision 1.

Kinds of property; property outside authorized territory.

(a) Township
mutual fire insurance companies may insure qualified property. Qualified property means
dwellings, household goods, appurtenant structures, farm buildings, farm personal property,
churches, church personal property, county fair buildings, community and township meeting
halls and their usual contents.

(b) Township mutual fire insurance companies may extend coverage to include an
insured's secondary property if the township mutual fire insurance company covers qualified
property belonging to the insured. Secondary property means any real or personal property
that is not considered qualified property for a township mutual fire insurance company to
cover under this chapter. The maximum amount of coverage that a township mutual fire
insurance company may write for secondary property is 25 percent of the total limit of
liability of the policy issued to an insured covering the qualified property.

(c) A township mutual fire insurance company may insure any real or personal property,
including qualified or secondary property, subject to the limitations in subdivision 1,
paragraph (b), located outside the limits of the territory in which the company is authorized
by its certificate or articles of incorporation to transact business, if the company is already
covering qualified property belonging to the insured, inside the limits of the company's
territory.new text begin For purposes of this paragraph, qualified property inside the limits of the company's
territory includes qualified property outside the territory of the surviving company to a
merger for the duration of the policy insuring the qualified property if the qualified property
was qualified property inside the territory of a constituent company to the merger.
new text end

(d) A township mutual fire insurance company may insure property temporarily outside
of the authorized territory of the township mutual fire insurance company.

Sec. 13.

Minnesota Statutes 2022, section 72A.20, subdivision 13, is amended to read:

Subd. 13.

Refusal to renew.

new text begin (a) new text end Refusing to renew, declining to offer or write, or charging
differential rates for an equivalent amount of homeowner's insurance coverage, as defined
by section 65A.27, for property located in a town or statutory or home rule charter city, in
which the insurer offers to sell or writes homeowner's insurance, solely because:

deleted text begin (a)deleted text end new text begin (1)new text end of the geographic area in which the property is located;

deleted text begin (b)deleted text end new text begin (2)new text end of the age of the primary structure sought to be insured;

deleted text begin (c)deleted text end new text begin (3)new text end the insured or prospective insured was denied coverage of the property by another
insurer, whether by cancellation, nonrenewal or declination to offer coverage, for a reason
other than those specified in section 65A.01, subdivision 3a, clauses (a) to (e);

deleted text begin (d)deleted text end new text begin (4)new text end the property of the insured or prospective insured has been insured under the
Minnesota FAIR Plan Act, shall constitute an unfair method of competition and an unfair
and deceptive act or practice; or

deleted text begin (e)deleted text end new text begin (5)new text end the insured has inquired about coverage for a hypothetical claim or has made an
inquiry to the insured's agent regarding a potential claim.

deleted text begin This subdivision prohibits an insurer from filing or charging different rates for different
zip code areas within the same town or statutory or home rule charter city.
deleted text end

new text begin (b) An insurer must not establish more than one geographical rating territory within the
same city of the first class or city of the second class that has 60,000 or more inhabitants.
For purposes of compliance with this paragraph: (1) the population of the cities subject to
this paragraph is determined by the preceding United States decennial census, as reported
by the Minnesota State Demographic Center; and (2) the territorial boundaries of the cities
subject to this paragraph are the boundaries as the boundaries exist on December 31 in years
ending in 0 or 5, whichever is more recent. Any revisions to the rating manual resulting
from a change in the territorial boundaries or population must be filed with the commissioner
within 120 days of the date the data are reported.
new text end

new text begin (c) new text end This subdivision shall not prohibit the insurer from applying underwriting or rating
standards which the insurer applies generally in all other locations in the state and which
are not specifically prohibited by clauses (a) to (e). Such underwriting or rating standards
shall specifically include but not be limited to standards based upon the proximity of the
insured property to an extraordinary hazard or based upon the quality or availability of fire
protection services or based upon the density or concentration of the insurer's risks. Clause
(b) shall not prohibit the use of rating standards based upon the age of the insured structure's
plumbing, electrical, heating or cooling system or other part of the structure, the age of
which affects the risk of loss. Any insurer's failure to comply with section 65A.29,
subdivisions 2 to 4, either (1) by failing to give an insured or applicant the required notice
or statement or (2) by failing to state specifically a bona fide underwriting or other reason
for the refusal to write shall create a presumption that the insurer has violated this subdivision.

Sec. 14.

Minnesota Statutes 2022, section 325E.66, subdivision 1, is amended to read:

Subdivision 1.

deleted text begin Payment or rebate of insurance deductibledeleted text end new text begin Residential contractor;
prohibited insurance practicesnew text end .

new text begin (a) new text end A residential contractor providing home repair or
improvement services to be paid by an insured from the proceeds of a property or casualty
insurance policy shall notdeleted text begin ,deleted text end new text begin :
new text end

new text begin (1)new text end as an inducement to the sale or provision of goods or services to an insured, advertise
or promise to pay, directly or indirectly, all or part of any applicable insurance deductible
or offer to compensate an insured for providing any service to the insured. new text begin The prohibition
under this clause includes but is not limited to offering compensation in exchange for:
new text end

new text begin (i) allowing the residential contractor to conduct an inspection of the covered property;
new text end

new text begin (ii) making an insurance claim for damage to the covered property; or
new text end

new text begin (iii) referring the residential contractor's services to others when insurance proceeds are
payable;
new text end

new text begin (2) provide an insured with an agreement authorizing repairs without also providing a
good faith estimate of the itemized and detailed cost of services and materials undertaken
pursuant to a property and casualty claim; or
new text end

new text begin (3) interpret policy provisions or advise an insured regarding coverages or duties under
the insured's policy, or adjust a property insurance claim on behalf of the insured, unless
the contractor has a license as a public adjuster under chapter 72B.
new text end

new text begin (b) new text end If a residential contractor violates this section, the insurer to whom the insured
tendered the claim shall not be obligated to consider the estimate prepared by the residential
contractor. The residential contractor must provide a written notification of the requirements
of this section with its initial estimate. The adjuster or insurer must provide a written
notification of the requirements of this section in the initial estimate relating to the claim.

new text begin (c) new text end For purposes of this section, "residential contractor" means a residential roofer, as
defined in section 326B.802, subdivision 14; a residential building contractor, as defined
in section 326B.802, subdivision 11; and a residential remodeler, as defined in section
326B.802, subdivision 12.

Sec. 15.

Minnesota Statutes 2022, section 471.6161, subdivision 8, is amended to read:

Subd. 8.

School districts; group health insurance coverage.

(a) Any entity providing
group health insurance coverage to a school district must provide the school district with
school district-specific nonidentifiable aggregate claims records for the most recent 24
months within 30 days of the request.

(b) School districts shall request proposals for group health insurance coverage as
provided in subdivision 2 from a minimum of three potential sources of coverage. One of
these requests must go to an administrator governed by chapter 43A. Entities referenced in
subdivision 1 must respond to requests for proposals received directly from a school district.
School districts that are self-insured must also follow these provisions, except as provided
in paragraph deleted text begin (f)deleted text end new text begin (g)new text end . School districts must make requests for proposals at least 150 days
prior to the expiration of the existing contract but not more frequently than once every 24
months. The request for proposals must include the most recently available 24 months of
nonidentifiable aggregate claims data. The request for proposals must be publicly released
at or prior to its release to potential sources of coverage.

(c) School district contracts for group health insurance must not be longer than two years
unless the exclusive representative of the largest employment group and the school district
agree otherwise.

new text begin (d) All proposals for group health insurance coverage, including coverage offered under
chapters 43A and 123A, must include the information described in this paragraph for each
separate health plan being proposed. The information must be on the first page of each
proposal in a summary section and in a separate tabular format. The information must use
a uniform set of assumptions, including but not limited to enrollment projections by plan,
enrollment projections by tier, and number of members. Proposals that do not include all
of the following information are not eligible to be selected by a school district. All proposals
must include the:
new text end

new text begin (1) structure of the health plan, designating either exclusive provider organization,
preferred provider organization, point of service, or health maintenance organization;
new text end

new text begin (2) health plan actuarial value, using the minimum value calculator described in Code
of Federal Regulations, title 45, section 156.145;
new text end

new text begin (3) type of provider network, designating either narrow network, broad network, narrow
tiered network, or broad tiered network;
new text end

new text begin (4) agent or broker commissions paid as part of the premium, as requested by the proposal,
displayed in dollars per member per month;
new text end

new text begin (5) total premium dollars in the first 12-month period of the quote, not including
commissions;
new text end

new text begin (6) total premium dollars, per member per month, not including commissions; and
new text end

new text begin (7) number of expected members used for the premium quote calculation.
new text end

deleted text begin (d)deleted text end new text begin (e)new text end All initial proposals shall be sealed upon receipt until they are all opened no less
than 90 days prior to the plan's renewal date in the presence of up to three representatives
selected by the exclusive representative of the largest group of employees. Section 13.591,
subdivision 3, paragraph (b), applies to data in the proposals. The representatives of the
exclusive representative must maintain the data according to this classification and are
subject to the remedies and penalties under sections 13.08 and 13.09 for a violation of this
requirement.

deleted text begin (e)deleted text end new text begin (f)new text end A school district, in consultation with the same representatives referenced in
paragraph deleted text begin (d)deleted text end new text begin (e)new text end , may continue to negotiate with any entity that submitted a proposal under
paragraph deleted text begin (d)deleted text end new text begin (e)new text end in order to reduce costs or improve services under the proposal. Following
the negotiations any entity that submitted an initial proposal may submit a final proposal
incorporating the negotiations, which is due no less than 75 days prior to the plan's renewal
date. All the final proposals submitted must be opened at the same time in the presence of
up to three representatives selected by the exclusive representative of the largest group of
employees. Notwithstanding section 13.591, subdivision 3, paragraph (b), following the
opening of the final proposals, all the proposals, including any made under paragraph deleted text begin (d)deleted text end new text begin
(e)new text end , and other data submitted in connection with the proposals are public data. The school
district may choose from any of the initial or final proposals without further negotiations
and in accordance with subdivision 5, but not sooner than 15 days after the proposals become
public data.

deleted text begin (f)deleted text end new text begin (g)new text end School districts that are self-insured shall follow all of the requirements of this
section, except that:

(1) their requests for proposals may be for third-party administrator services, where
applicable;

(2) these requests for proposals must be from a minimum of three different sources,
which may include both entities referenced in subdivision 1 and providers of third-party
administrator services;

(3) for purposes of fulfilling the requirement to request a proposal for group insurance
coverage from an administrator governed by chapter 43A, self-insured districts are not
required to include in the request for proposal the coverage to be provided;

(4) a district that is self-insured on or before the date of enactment, or that is self-insured
with more than 1,000 insured lives, or a district in which the school board adopted a motion
on or before May 14, 2014, to approve a self-insured health care plan to be effective July
1, 2014, may, but need not, request a proposal from an administrator governed by chapter
43A;

(5) requests for proposals must be sent to providers no less than 90 days prior to the
expiration of the existing contract; and

(6) proposals must be submitted at least 60 days prior to the plan's renewal date and all
proposals shall be opened at the same time and in the presence of the exclusive representative,
where applicable.

deleted text begin (g)deleted text end new text begin (h)new text end Nothing in this section shall restrict the authority granted to school district boards
of education by section 471.59, except that districts will not be considered self-insured for
purposes of this subdivision solely through participation in a joint powers arrangement.

deleted text begin (h)deleted text end new text begin (i)new text end An entity providing group health insurance to a school district under a multiyear
contract must give notice of any rate or plan design changes applicable under the contract
at least 90 days before the effective date of any change. The notice must be given to the
school district and to the exclusive representatives of employees.

Sec. 16.

Minnesota Statutes 2022, section 471.617, subdivision 2, is amended to read:

Subd. 2.

Jointly.

Any two or more statutory or home rule charter cities, counties, school
districts, or instrumentalities thereof which together have more than 100 employees may
jointly self-insure for any employee health benefits including long-term disability, but not
for employee life benefits, subject to the same requirements as an individual self-insurer
under subdivision 1. Self-insurance pools under this section are subject to section 62L.045.
A self-insurance pool established and operated by one or more service cooperatives governed
by section 123A.21 to provide coverage described in this subdivision qualifies under this
subdivision, but the individual school district members of such a pool shall not be considered
to be self-insured for purposes of section 471.6161, subdivision 8, paragraph deleted text begin (f)deleted text end new text begin (g)new text end . The
commissioner of commerce may adopt rules pursuant to chapter 14, providing standards or
guidelines for the operation and administration of self-insurance pools.

Sec. 17. new text begin REPEALER.
new text end

new text begin (a)new text end new text begin Minnesota Statutes 2022, section 332.3351,new text end new text begin is repealed.
new text end

new text begin (b)new text end new text begin Minnesota Statutes 2023 Supplement, section 62Q.522, subdivisions 3 and 4,new text end new text begin are
repealed.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin Paragraph (b) is effective January 1, 2025, and applies to health
plans offered, sold, issued, or renewed on or after that date.
new text end

ARTICLE 2

FINANCIAL INSTITUTIONS

Section 1.

new text begin [46A.01] DEFINITIONS.
new text end

new text begin Subdivision 1.new text end

new text begin Terms.new text end

new text begin For the purposes of this chapter, the terms defined in this section
have the meanings given them.
new text end

new text begin Subd. 2.new text end

new text begin Authorized user.new text end

new text begin "Authorized user" means any employee, contractor, agent,
or other person who: (1) participates in a financial institution's business operations; and (2)
is authorized to access and use any of the financial institution's information systems and
data.
new text end

new text begin Subd. 3.new text end

new text begin Commissioner.new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 4.new text end

new text begin Consumer.new text end

new text begin (a) "Consumer" means an individual who obtains or has obtained
from a financial institution a financial product or service that is used primarily for personal,
family, or household purposes, or is used by the individual's legal representative. Consumer
includes but is not limited to an individual who:
new text end

new text begin (1) applies to a financial institution for credit for personal, family, or household purposes,
regardless of whether the credit is extended;
new text end

new text begin (2) provides nonpublic personal information to a financial institution in order to obtain
a determination whether the individual qualifies for a loan used primarily for personal,
family, or household purposes, regardless of whether the loan is extended;
new text end

new text begin (3) provides nonpublic personal information to a financial institution in connection with
obtaining or seeking to obtain financial, investment, or economic advisory services, regardless
of whether the financial institution establishes a continuing advisory relationship with the
individual; or
new text end

new text begin (4) has a loan for personal, family, or household purposes in which the financial institution
has ownership or servicing rights, even if the financial institution or one or more other
institutions that hold ownership or servicing rights in conjunction with the financial institution
hires an agent to collect on the loan.
new text end

new text begin (b) Consumer does not include an individual who:
new text end

new text begin (1) is a consumer of another financial institution that uses a different financial institution
to act solely as an agent for, or provide processing or other services to, the consumer's
financial institution;
new text end

new text begin (2) designates a financial institution solely for the purposes to act as a trustee for a trust;
new text end

new text begin (3) is the beneficiary of a trust for which the financial institution serves as trustee; or
new text end

new text begin (4) is a participant or a beneficiary of an employee benefit plan that the financial
institution sponsors or for which the financial institution acts as a trustee or fiduciary.
new text end

new text begin Subd. 5.new text end

new text begin Continuing relationship.new text end

new text begin (a) "Continuing relationship" means a consumer:
new text end

new text begin (1) has a credit or investment account with a financial institution;
new text end

new text begin (2) obtains a loan from a financial institution;
new text end

new text begin (3) purchases an insurance product from a financial institution;
new text end

new text begin (4) holds an investment product through a financial institution, including but not limited
to when the financial institution acts as a custodian for securities or for assets in an individual
retirement arrangement;
new text end

new text begin (5) enters into an agreement or understanding with a financial institution whereby the
financial institution undertakes to arrange or broker a home mortgage loan, or credit to
purchase a vehicle, for the consumer;
new text end

new text begin (6) enters into a lease of personal property on a nonoperating basis with a financial
institution;
new text end

new text begin (7) obtains financial, investment, or economic advisory services from a financial
institution for a fee;
new text end

new text begin (8) becomes a financial institution's client to obtain tax preparation or credit counseling
services from the financial institution;
new text end

new text begin (9) obtains career counseling while: (i) seeking employment with a financial institution
or the finance, accounting, or audit department of any company; or (ii) employed by a
financial institution or department of any company;
new text end

new text begin (10) is obligated on an account that a financial institution purchases from another financial
institution, regardless of whether the account is in default when purchased, unless the
financial institution does not locate the consumer or attempt to collect any amount from the
consumer on the account;
new text end

new text begin (11) obtains real estate settlement services from a financial institution; or
new text end

new text begin (12) has a loan for which a financial institution owns the servicing rights.
new text end

new text begin (b) Continuing relationship does not include situations where:
new text end

new text begin (1) the consumer obtains a financial product or service from a financial institution only
in isolated transactions, including but not limited to: (i) using a financial institution's
automated teller machine to withdraw cash from an account at another financial institution;
(ii) purchasing a money order from a financial institution; (iii) cashing a check with a
financial institution; or (iv) making a wire transfer through a financial institution;
new text end

new text begin (2) a financial institution sells the consumer's loan and does not retain the rights to service
the loan;
new text end

new text begin (3) a financial institution sells the consumer airline tickets, travel insurance, or traveler's
checks in isolated transactions;
new text end

new text begin (4) the consumer obtains onetime personal or real property appraisal services from a
financial institution; or
new text end

new text begin (5) the consumer purchases checks for a personal checking account from a financial
institution.
new text end

new text begin Subd. 6.new text end

new text begin Customer.new text end

new text begin "Customer" means a consumer who has a customer relationship
with a financial institution.
new text end

new text begin Subd. 7.new text end

new text begin Customer information.new text end

new text begin "Customer information" means any record containing
nonpublic personal information about a financial institution's customer, whether the record
is in paper, electronic, or another form, that is handled or maintained by or on behalf of the
financial institution or the financial institution's affiliates.
new text end

new text begin Subd. 8.new text end

new text begin Customer relationship.new text end

new text begin "Customer relationship" means a continuing relationship
between a consumer and a financial institution under which the financial institution provides
to the consumer one or more financial products or services that are used primarily for
personal, family, or household purposes.
new text end

new text begin Subd. 9.new text end

new text begin Encryption.new text end

new text begin "Encryption" means the transformation of data into a format that
results in a low probability of assigning meaning without the use of a protective process or
key, consistent with current cryptographic standards and accompanied by appropriate
safeguards for cryptographic key material.
new text end

new text begin Subd. 10.new text end

new text begin Federally insured depository financial institution.new text end

new text begin "Federally insured
depository financial institution" means a bank, credit union, savings and loan association,
trust company, savings association, savings bank, industrial bank, or industrial loan company
organized under the laws of the United States or any state of the United States, when the
bank, credit union, savings and loan association, trust company, savings association, savings
bank, industrial bank, or industrial loan company has federally insured deposits.
new text end

new text begin Subd. 11.new text end

new text begin Financial product or service.new text end

new text begin "Financial product or service" means any
product or service that a financial holding company could offer by engaging in a financial
activity under section 4(k) of the Bank Holding Company Act of 1956, United States Code,
title 12, section 1843(k). Financial product or service includes a financial institution's
evaluation or brokerage of information that the financial institution collects in connection
with a request or an application from a consumer for a financial product or service.
new text end

new text begin Subd. 12.new text end

new text begin Financial institution.new text end

new text begin "Financial institution" means a consumer small loan
lender under section 47.60, a person owning or maintaining electronic financial terminals
under section 47.62, a trust company under chapter 48A, a loan and thrift company under
chapter 53, a currency exchange under chapter 53A, a money transmitter under chapter 53B,
a sales finance company under chapter 53C, a regulated loan lender under chapter 56, a
residential mortgage originator or servicer under chapter 58, a student loan servicer under
chapter 58B, a credit service organization under section 332.54, a debt management service
provider or person providing debt management services under chapter 332A, or a debt
settlement service provider or person providing debt settlement services under chapter 332B.
new text end

new text begin Subd. 13.new text end

new text begin Information security program.new text end

new text begin "Information security program" means the
administrative, technical, or physical safeguards a financial institution uses to access, collect,
distribute, process, protect, store, use, transmit, dispose of, or otherwise handle customer
information.
new text end

new text begin Subd. 14.new text end

new text begin Information system.new text end

new text begin "Information system" means a discrete set of electronic
information resources organized to collect, process, maintain, use, share, disseminate, or
dispose of electronic information, as well as any specialized system, including but not
limited to industrial process controls systems, telephone switching and private branch
exchange systems, and environmental controls systems, that contains customer information
or that is connected to a system that contains customer information.
new text end

new text begin Subd. 15.new text end

new text begin Multifactor authentication.new text end

new text begin "Multifactor authentication" means authentication
through verification of at least two of the following factors:
new text end

new text begin (1) knowledge factors, including but not limited to a password;
new text end

new text begin (2) possession factors, including but not limited to a token; or
new text end

new text begin (3) inherence factors, including but not limited to biometric characteristics.
new text end

new text begin Subd. 16.new text end

new text begin Nonpublic personal information.new text end

new text begin (a) "Nonpublic personal information"
means:
new text end

new text begin (1) personally identifiable financial information; or
new text end

new text begin (2) any list, description, or other grouping of consumers, including publicly available
information pertaining to the list, description, or other grouping of consumers, that is derived
using personally identifiable financial information that is not publicly available.
new text end

new text begin (b) Nonpublic personal information includes but is not limited to any list of individuals'
names and street addresses that is derived in whole or in part using personally identifiable
financial information that is not publicly available, including account numbers.
new text end

new text begin (c) Nonpublic personal information does not include:
new text end

new text begin (1) publicly available information, except as included on a list described in paragraph
(a), clause (2);
new text end

new text begin (2) any list, description, or other grouping of consumers, including publicly available
information pertaining to the list, description, or other grouping of consumers, that is derived
without using any personally identifiable financial information that is not publicly available;
or
new text end

new text begin (3) any list of individuals' names and addresses that contains only publicly available
information, is not derived in whole or in part using personally identifiable financial
information that is not publicly available, and is not disclosed in a manner that indicates
that any individual on the list is the financial institution's consumer.
new text end

new text begin Subd. 17.new text end

new text begin Notification event.new text end

new text begin "Notification event" means the acquisition of unencrypted
customer information without the authorization of the individual to which the information
pertains. Customer information is considered unencrypted for purposes of this subdivision
if the encryption key was accessed by an unauthorized person. Unauthorized acquisition is
presumed to include unauthorized access to unencrypted customer information unless the
financial institution has reliable evidence showing that there has not been, or could not
reasonably have been, unauthorized acquisition of customer information.
new text end

new text begin Subd. 18.new text end

new text begin Penetration testing.new text end

new text begin "Penetration testing" means a test methodology in which
assessors attempt to circumvent or defeat the security features of an information system by
attempting to penetrate databases or controls from outside or inside a financial institution's
information systems.
new text end

new text begin Subd. 19.new text end

new text begin Personally identifiable financial information.new text end

new text begin (a) "Personally identifiable
financial information" means any information:
new text end

new text begin (1) a consumer provides to a financial institution to obtain a financial product or service;
new text end

new text begin (2) about a consumer resulting from any transaction involving a financial product or
service between a financial institution and a consumer; or
new text end

new text begin (3) a financial institution otherwise obtains about a consumer in connection with providing
a financial product or service to the customer.
new text end

new text begin (b) Personally identifiable financial information includes:
new text end

new text begin (1) information a consumer provides to a financial institution on an application to obtain
a loan, credit card, or other financial product or service;
new text end

new text begin (2) account balance information, payment history, overdraft history, and credit or debit
card purchase information;
new text end

new text begin (3) the fact that an individual is or has been a financial institution's customer or has
obtained a financial product or service from the financial institution;
new text end

new text begin (4) any information about a financial institution's consumer, if the information is disclosed
in a manner that indicates that the individual is or has been the financial institution's
consumer;
new text end

new text begin (5) any information that a consumer provides to a financial institution or that a financial
institution or a financial institution's agent otherwise obtains in connection with collecting
on or servicing a credit account;
new text end

new text begin (6) any information a financial institution collects through an Internet information
collecting device from a web server; and
new text end

new text begin (7) information from a consumer report.
new text end

new text begin (c) Personally identifiable financial information does not include:
new text end

new text begin (1) a list of customer names and addresses for an entity that is not a financial institution;
and
new text end

new text begin (2) information that does not identify a consumer, including but not limited to aggregate
information or blind data that does not contain personal identifiers, including account
numbers, names, or addresses.
new text end

new text begin Subd. 20.new text end

new text begin Publicly available information.new text end

new text begin (a) "Publicly available information" means
any information that a financial institution has a reasonable basis to believe is lawfully made
available to the general public from:
new text end

new text begin (1) federal, state, or local government records;
new text end

new text begin (2) widely distributed media; or
new text end

new text begin (3) disclosures to the general public that are required under federal, state, or local law.
new text end

new text begin (b) Publicly available information includes but is not limited to:
new text end

new text begin (1) with respect to government records, information in government real estate records
and security interest filings; and
new text end

new text begin (2) with respect to widely distributed media, information from a telephone book, a
television or radio program, a newspaper, or a website that is available to the general public
on an unrestricted basis. A website is not restricted merely because an Internet service
provider or a site operator requires a fee or a password, provided that access is available to
the general public.
new text end

new text begin (c) For purposes of this subdivision, a financial institution has a reasonable basis to
believe that information is lawfully made available to the general public if the financial
institution has taken steps to determine: (1) that the information is of the type that is available
to the general public; and (2) whether an individual can direct that the information not be
made available to the general public and, if so, that the financial institution's consumer has
not directed that the information not be made available to the general public. A financial
institution has a reasonable basis to believe that mortgage information is lawfully made
available to the general public if the financial institution determines the information is of
the type included on the public record in the jurisdiction where the mortgage would be
recorded. A financial institution has a reasonable basis to believe that an individual's
telephone number is lawfully made available to the general public if the financial institution
has located the telephone number in the telephone book or the consumer has informed the
financial institution that the telephone number is not unlisted.
new text end

new text begin Subd. 21.new text end

new text begin Qualified individual.new text end

new text begin "Qualified individual" means the individual designated
by a financial institution to oversee, implement, and enforce the financial institution's
information security program.
new text end

new text begin Subd. 22.new text end

new text begin Security event.new text end

new text begin "Security event" means an event resulting in unauthorized
access to, or disruption or misuse of: (1) an information system or information stored on an
information system; or (2) customer information held in physical form.
new text end

new text begin Subd. 23.new text end

new text begin Service provider.new text end

new text begin "Service provider" means any person or entity that receives,
maintains, processes, or otherwise is permitted access to customer information through the
service provider's provision of services directly to a financial institution that is subject to
this chapter.
new text end

Sec. 2.

new text begin [46A.02] SAFEGUARDING CUSTOMER INFORMATION; STANDARDS.
new text end

new text begin Subdivision 1.new text end

new text begin Information security program.new text end

new text begin (a) A financial institution must develop,
implement, and maintain a comprehensive information security program.
new text end

new text begin (b) The information security program must: (1) be written in one or more readily
accessible parts; and (2) contain administrative, technical, and physical safeguards that are
appropriate to the financial institution's size and complexity, the nature and scope of the
financial institution's activities, and the sensitivity of any customer information at issue.
new text end

new text begin (c) The information security program must include the elements set forth in section
46A.03 and must be reasonably designed to achieve the objectives of this chapter, as
established under subdivision 2.
new text end

new text begin Subd. 2.new text end

new text begin Objectives.new text end

new text begin The objectives of this chapter are to:
new text end

new text begin (1) ensure the security and confidentiality of customer information;
new text end

new text begin (2) protect against any anticipated threats or hazards to the security or integrity of
customer information; and
new text end

new text begin (3) protect against unauthorized access to or use of customer information that might
result in substantial harm or inconvenience to a customer.
new text end

Sec. 3.

new text begin [46A.03] ELEMENTS.
new text end

new text begin Subdivision 1.new text end

new text begin Generally.new text end

new text begin In order to develop, implement, and maintain an information
security program, a financial institution must comply with this section.
new text end

new text begin Subd. 2.new text end

new text begin Qualified individual.new text end

new text begin (a) A financial institution must designate a qualified
individual responsible for overseeing, implementing, and enforcing the financial institution's
information security program. The qualified individual may be employed by the financial
institution, an affiliate, or a service provider.
new text end

new text begin (b) If a financial institution designates an individual employed by an affiliate or service
provider as the financial institution's qualified individual, the financial institution must:
new text end

new text begin (1) retain responsibility for complying with this chapter;
new text end

new text begin (2) designate a senior member of the financial institution's personnel to be responsible
for directing and overseeing the qualified individual's activities; and
new text end

new text begin (3) require the service provider or affiliate to maintain an information security program
that protects the financial institution in a manner that complies with the requirements of
this chapter.
new text end

new text begin Subd. 3.new text end

new text begin Security risk assessment.new text end

new text begin (a) A financial institution must base the financial
institution's information security program on a risk assessment that:
new text end

new text begin (1) identifies reasonably foreseeable internal and external risks to the security,
confidentiality, and integrity of customer information that might result in the unauthorized
disclosure, misuse, alteration, destruction, or other compromise of customer information;
and
new text end

new text begin (2) assesses the sufficiency of any safeguards in place to control the risks identified
under clause (1).
new text end

new text begin (b) The risk assessment must be made in writing and must include:
new text end

new text begin (1) criteria to evaluate and categorize identified security risks or threats the financial
institution faces;
new text end

new text begin (2) criteria to assess the confidentiality, integrity, and availability of the financial
institution's information systems and customer information, including the adequacy of
existing controls in the context of the identified risks or threats the financial institution
faces; and
new text end

new text begin (3) requirements describing how:
new text end

new text begin (i) identified risks are mitigated or accepted based on the risk assessment; and
new text end

new text begin (ii) the information security program addresses the risks.
new text end

new text begin (c) A financial institution must periodically perform additional risk assessments that:
new text end

new text begin (1) reexamine the reasonably foreseeable internal and external risks to the security,
confidentiality, and integrity of customer information that might result in the unauthorized
disclosure, misuse, alteration, destruction, or other compromise of customer information;
and
new text end

new text begin (2) reassess the sufficiency of any safeguards in place to control the risks identified
under clause (1).
new text end

new text begin Subd. 4.new text end

new text begin Risk control.new text end

new text begin A financial institution must design and implement safeguards to
control the risks the financial institution identifies through the risk assessment under
subdivision 3, including by:
new text end

new text begin (1) implementing and periodically reviewing access controls, including technical and,
as appropriate, physical controls to:
new text end

new text begin (i) authenticate and permit access only to authorized users to protect against the
unauthorized acquisition of customer information; and
new text end

new text begin (ii) limit an authorized user's access to only customer information that the authorized
user needs to perform the authorized user's duties and functions or, in the case of a customer,
to limit access to the customer's own information;
new text end

new text begin (2) identifying and managing the data, personnel, devices, systems, and facilities that
enable the financial institution to achieve business purposes in accordance with the business
purpose's relative importance to business objectives and the financial institution's risk
strategy;
new text end

new text begin (3) protecting by encryption all customer information held or transmitted by the financial
institution both in transit over external networks and at rest. To the extent a financial
institution determines that encryption of customer information either in transit over external
networks or at rest is infeasible, the financial institution may secure the customer information
using effective alternative compensating controls that have been reviewed and approved by
the financial institution's qualified individual;
new text end

new text begin (4) adopting: (i) secure development practices for in-house developed applications
utilized by the financial institution to transmit, access, or store customer information; and
(ii) procedures to evaluate, assess, or test the security of externally developed applications
the financial institution uses to transmit, access, or store customer information;
new text end

new text begin (5) implementing multifactor authentication for any individual that accesses any
information system, unless the financial institution's qualified individual has approved in
writing the use of a reasonably equivalent or more secure access control;
new text end

new text begin (6) developing, implementing, and maintaining procedures to securely dispose of
customer information in any format no later than two years after the last date the information
is used in connection with providing a product or service to the customer to whom the
information relates, unless: (i) the information is necessary for business operations or for
other legitimate business purposes; (ii) the information is otherwise required to be retained
by law or regulation; or (iii) targeted disposal of the information is not reasonably feasible
due to the manner in which the information is maintained;
new text end

new text begin (7) periodically reviewing the financial institution's data retention policy to minimize
the unnecessary retention of data;
new text end

new text begin (8) adopting procedures for change management; and
new text end

new text begin (9) implementing policies, procedures, and controls designed to: (i) monitor and log the
activity of authorized users; and (ii) detect unauthorized access to, use of, or tampering with
customer information by authorized users.
new text end

new text begin Subd. 5.new text end

new text begin Testing and monitoring.new text end

new text begin (a) A financial institution must regularly test or
otherwise monitor the effectiveness of the safeguards' key controls, systems, and procedures,
including the controls, systems, and procedures that detect actual and attempted attacks on,
or intrusions into, information systems.
new text end

new text begin (b) For information systems, monitoring and testing must include continuous monitoring
or periodic penetration testing and vulnerability assessments. Absent effective continuous
monitoring or other systems to detect on an ongoing basis any changes in information
systems that may create vulnerabilities, a financial institution must conduct:
new text end

new text begin (1) annual penetration testing of the financial institution's information systems, based
on relevant identified risks in accordance with the risk assessment; and
new text end

new text begin (2) vulnerability assessments, including systemic scans or information systems reviews
that are reasonably designed to identify publicly known security vulnerabilities in the
financial institution's information systems based on the risk assessment, at least every six
months, whenever a material change to the financial institution's operations or business
arrangements occurs, and whenever the financial institution knows or has reason to know
circumstances exist that may have a material impact on the financial institution's information
security program.
new text end

new text begin Subd. 6.new text end

new text begin Internal policies and procedures.new text end

new text begin A financial institution must implement
policies and procedures to ensure that the financial institution's personnel are able to enact
the financial institution's information security program by:
new text end

new text begin (1) providing the financial institution's personnel with security awareness training that
is updated as necessary to reflect risks identified by the risk assessment;
new text end

new text begin (2) utilizing qualified information security personnel employed by the financial institution,
an affiliate, or a service provider sufficient to manage the financial institution's information
security risks and to perform or oversee the information security program;
new text end

new text begin (3) providing information security personnel with security updates and training sufficient
to address relevant security risks; and
new text end

new text begin (4) verifying that key information security personnel take steps to maintain current
knowledge of changing information security threats and countermeasures.
new text end

new text begin Subd. 7.new text end

new text begin Provider oversight.new text end

new text begin A financial institution must oversee service providers by:
new text end

new text begin (1) taking reasonable steps to select and retain service providers that are capable of
maintaining appropriate safeguards for the customer information at issue;
new text end

new text begin (2) requiring by contract the financial institution's service providers to implement and
maintain appropriate safeguards; and
new text end

new text begin (3) periodically assessing the financial institution's service providers based on the risk
the service providers present and the continued adequacy of the service providers' safeguards.
new text end

new text begin Subd. 8.new text end

new text begin Information security program; evaluation; adjustment.new text end

new text begin A financial institution
must evaluate and adjust the financial institution's information security program to reflect:
(1) the results of the testing and monitoring required under subdivision 5; (2) any material
changes to the financial institution's operations or business arrangements; (3) the results of
risk assessments performed under subdivision 3, paragraph (c); or (4) any other circumstances
that the financial institution knows or has reason to know may have a material impact on
the financial institution's information security program.
new text end

new text begin Subd. 9.new text end

new text begin Incident response plan.new text end

new text begin A financial institution must establish a written incident
response plan designed to promptly respond to and recover from any security event materially
affecting the confidentiality, integrity, or availability of customer information the financial
institution controls. An incident response plan must address:
new text end

new text begin (1) the goals of the incident response plan;
new text end

new text begin (2) the internal processes to respond to a security event;
new text end

new text begin (3) clear roles, responsibilities, and levels of decision making authority;
new text end

new text begin (4) external and internal communications and information sharing;
new text end

new text begin (5) requirements to remediate any identified weaknesses in information systems and
associated controls;
new text end

new text begin (6) documentation and reporting regarding security events and related incident response
activities; and
new text end

new text begin (7) evaluation and revision of the incident response plan as necessary after a security
event.
new text end

new text begin Subd. 10.new text end

new text begin Annual report.new text end

new text begin (a) A financial institution must require the financial institution's
qualified individual to report at least annually in writing to the financial institution's board
of directors or equivalent governing body. If a board of directors or equivalent governing
body does not exist, the report under this subdivision must be timely presented to a senior
officer responsible for the financial institution's information security program.
new text end

new text begin (b) The report made under this subdivision must include the following information:
new text end

new text begin (1) the overall status of the financial institution's information security program, including
compliance with this chapter and associated administrative rules; and
new text end

new text begin (2) material matters related to the financial institution's information security program,
including but not limited to addressing issues pertaining to: (i) the risk assessment; (ii) risk
management and control decisions; (iii) service provider arrangements; (iv) testing results;
(v) security events or violations and management's responses to the security event or
violation; and (vi) recommendations for changes in the information security program.
new text end

new text begin Subd. 11.new text end

new text begin Business continuity; disaster recovery.new text end

new text begin A financial institution must establish
a written plan addressing business continuity and disaster recovery.
new text end

Sec. 4.

new text begin [46A.04] EXCEPTIONS AND EXEMPTIONS.
new text end

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

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

Sec. 5.

new text begin [46A.05] ALTERATION OF FEDERAL REGULATION.
new text end

new text begin (a) If an amendment to Code of Federal Regulations, title 16, part 314, results in a
complete lack of federal regulations in the area, the version of the state requirements in
effect at the time of the amendment remain in effect for two years from the date the
amendment becomes effective.
new text end

new text begin (b) During the time period under paragraph (a), the department must adopt replacement
administrative rules as necessary and appropriate.
new text end

Sec. 6.

new text begin [46A.06] NOTIFICATION EVENT.
new text end

new text begin Subdivision 1.new text end

new text begin Notification requirement.new text end

new text begin (a) Upon discovering a notification event as
described in subdivision 2, if the notification event involves the information of at least 500
consumers, a financial institution must notify the commissioner without undue delay, but
no later than 45 days after the date the event is discovered. The notice must be made (1) in
a format specified by the commissioner, and (2) electronically on a form located on the
department's website.
new text end

new text begin (b) The notice must include:
new text end

new text begin (1) the name and contact information of the reporting financial institution;
new text end

new text begin (2) a description of the types of information involved in the notification event;
new text end

new text begin (3) if possible to determine, the date or date range of the notification event;
new text end

new text begin (4) the number of consumers affected or potentially affected by the notification event;
new text end

new text begin (5) a general description of the notification event; and
new text end

new text begin (6) a statement (i) disclosing whether a law enforcement official has provided the financial
institution with a written determination indicating that providing notice to the public regarding
the breach would impede a criminal investigation or cause damage to national security, and
(ii) if a written determination described under item (i) was provided to the financial
institution, providing contact information that enables the commissioner to contact the law
enforcement official. A law enforcement official may request an initial delay of up to 45
days following the date that notice was provided to the commissioner. The delay may be
extended for an additional period of up to 60 days if the law enforcement official seeks an
extension in writing. An additional delay may be permitted only if the commissioner
determines that public disclosure of a security event continues to impede a criminal
investigation or cause damage to national security.
new text end

new text begin Subd. 2.new text end

new text begin Notification event treated as discovered.new text end

new text begin A notification event must be treated
as discovered on the first day when the event is known to a financial institution. A financial
institution is deemed to have knowledge of a notification event if the event is known to any
person, other than the person committing the breach, who is the financial institution's
employee, officer, or other agent.
new text end

Sec. 7.

new text begin [46A.07] COMMISSIONER'S POWERS.
new text end

new text begin (a) The commissioner has the power to examine and investigate the affairs of any covered
financial institution to determine whether the financial institution has been or is engaged in
any conduct that violates this chapter. This power is in addition to the powers granted to
the commissioner under section 46.01.
new text end

new text begin (b) If the commissioner has reason to believe that a financial institution has been or is
engaged in conduct in Minnesota that violates this chapter, the commissioner may take
action necessary or appropriate to enforce this chapter.
new text end

Sec. 8.

new text begin [46A.08] CONFIDENTIALITY.
new text end

new text begin Subdivision 1.new text end

new text begin Financial institution information.new text end

new text begin (a) Any documents, materials, or
other information in the control or possession of the department that are furnished by a
licensee or a licensee's employee or agent acting on behalf of a financial institution pursuant
to section 46A.06 or that are obtained by the commissioner in an investigation or examination
pursuant to section 46A.07: (1) are classified as confidential, protected nonpublic, or both;
(2) are not subject to subpoena; and (3) are not subject to discovery or admissible in evidence
in any private civil action.
new text end

new text begin (b) Notwithstanding paragraph (a), clauses (1) to (3), the commissioner is authorized to
use the documents, materials, or other information in the furtherance of any regulatory or
legal action brought as a part of the commissioner's duties.
new text end

new text begin Subd. 2.new text end

new text begin Certain testimony prohibited.new text end

new text begin Neither the commissioner nor any person who
received documents, materials, or other information while acting under the authority of the
commissioner is permitted or required to testify in a private civil action concerning
confidential documents, materials, or information subject to subdivision 1.
new text end

new text begin Subd. 3.new text end

new text begin Information sharing.new text end

new text begin In order to assist in the performance of the commissioner's
duties under sections 46A.01 to 46A.08, the commissioner may:
new text end

new text begin (1) share documents, materials, or other information, including the confidential and
privileged documents, materials, or information subject to subdivision 1, with other state,
federal, and international regulatory agencies, with the Conference of State Bank Supervisors,
the Conference of State Bank Supervisors' affiliates or subsidiaries, and with state, federal,
and international law enforcement authorities, provided that the recipient agrees in writing
to maintain the confidentiality and privileged status of the document, material, or other
information;
new text end

new text begin (2) receive documents, materials, or information, including otherwise confidential and
privileged documents, materials, or information, from the Conference of State Bank
Supervisors, the Conference of State Bank Supervisors' affiliates or subsidiaries, and from
regulatory and law enforcement officials of other foreign or domestic jurisdictions, and
must maintain as confidential or privileged any document, material, or information received
with notice or the understanding that the document, material, or information is confidential
or privileged under the laws of the jurisdiction that is the source of the document, material,
or information;
new text end

new text begin (3) share documents, materials, or other information subject to subdivision 1 with a
third-party consultant or vendor, provided the consultant agrees in writing to maintain the
confidentiality and privileged status of the document, material, or other information; and
new text end

new text begin (4) enter into agreements governing the sharing and use of information that are consistent
with this subdivision.
new text end

new text begin Subd. 4.new text end

new text begin No waiver of privilege or confidentiality; information retention.new text end

new text begin (a) The
disclosure of documents, materials, or information to the commissioner under this section
or as a result of sharing as authorized in subdivision 3 does not result in a waiver of any
applicable privilege or claim of confidentiality in the documents, materials, or information.
new text end

new text begin (b) A document, material, or information disclosed to the commissioner under this section
about a cybersecurity event must be retained and preserved by the financial institution for
five years.
new text end

new text begin Subd. 5.new text end

new text begin Certain actions public.new text end

new text begin Nothing in sections 46A.01 to 46A.08 prohibits the
commissioner from releasing final, adjudicated actions that are open to public inspection
pursuant to chapter 13 to a database or other clearinghouse service maintained by the
Conference of State Bank Supervisors, the Conference of State Bank Supervisors' affiliates,
or the Conference of State Bank Supervisors' subsidiaries.
new text end

new text begin Subd. 6.new text end

new text begin Classification, protection, and use of information by others.new text end

new text begin Documents,
materials, or other information in the possession or control of the Conference of State Bank
Supervisors or a third-party consultant pursuant to sections 46A.01 to 46A.08: (1) are
classified as confidential, protected nonpublic, and privileged; (2) are not subject to subpoena;
and (3) are not subject to discovery or admissible in evidence in a private civil action.
new text end

Sec. 9.

Minnesota Statutes 2022, section 47.20, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For the purposes of this section the terms defined in this subdivision
have the meanings given them:

(1) "Actual closing costs" mean reasonable charges for or sums paid for the following,
whether or not retained by the mortgagee or lender:

(a) Any insurance premiums including but not limited to premiums for title insurance,
fire and extended coverage insurance, flood insurance, and private mortgage insurance, but
excluding any charges or sums retained by the mortgagee or lender as self-insured retention.

(b) Abstracting, title examination and search, and examination of public records.

(c) The preparation and recording of any or all documents required by law or custom
for closing a conventional or cooperative apartment loan.

(d) Appraisal and survey of real property securing a conventional loan or real property
owned by a cooperative apartment corporation of which a share or shares of stock or a
membership certificate or certificates are to secure a cooperative apartment loan.

(e) A single service charge, which includes any consideration, not otherwise specified
herein as an "actual closing cost" paid by the borrower and received and retained by the
lender for or related to the acquisition, making, refinancing or modification of a conventional
or cooperative apartment loan, and also includes any consideration received by the lender
for making a borrower's interest rate commitment or for making a borrower's loan
commitment, whether or not an actual loan follows the commitment. The term service charge
does not include forward commitment fees. The service charge shall not exceed one percent
of the original bona fide principal amount of the conventional or cooperative apartment
loan, except that in the case of a construction loan, the service charge shall not exceed two
percent of the original bona fide principal amount of the loan. That portion of the service
charge imposed because the loan is a construction loan shall be itemized and a copy of the
itemization furnished the borrower. A lender shall not collect from a borrower the additional
one percent service charge permitted for a construction loan if it does not perform the service
for which the charge is imposed or if third parties perform and charge the borrower for the
service for which the lender has imposed the charge.

(f) Charges and fees necessary for or related to the transfer of real or personal property
securing a conventional or cooperative apartment loan or the closing of a conventional or
cooperative apartment loan paid by the borrower and received by any party other than the
lender.

(2) "Contract for deed" means an executory contract for the conveyance of real estate,
the original principal amount of which is less than $300,000. A commitment for a contract
for deed shall include an executed purchase agreement or earnest money contract wherein
the seller agrees to finance any part or all of the purchase price by a contract for deed.

(3) "Conventional loan" means a loan or advance of credit, other than a loan or advance
of credit made by a credit union or made pursuant to section 334.011, to a noncorporate
borrower in an original principal amount of less than deleted text begin $100,000deleted text end new text begin or equal to the conforming
loan limit established by the Federal Housing Finance Agency under the Housing and
Recovery Act of 2018, Public Law 110-289new text end , secured by a mortgage upon real property
containing one or more residential units or upon which at the time the loan is made it is
intended that one or more residential units are to be constructed, and which is not insured
or guaranteed by the secretary of housing and urban development, by the administrator of
veterans affairs, or by the administrator of the Farmers Home Administration, and which
is not made pursuant to the authority granted in subdivision 1, clause (3) or (4). The term
mortgage does not include contracts for deed or installment land contracts.

(4) "Cooperative apartment loan" means a loan or advance of credit, other than a loan
or advance of credit made by a credit union or made pursuant to section 334.011, to a
noncorporate borrower in an original principal amount of less than $100,000, secured by a
security interest on a share or shares of stock or a membership certificate or certificates
issued to a stockholder or member by a cooperative apartment corporation, which may be
accompanied by an assignment by way of security of the borrower's interest in the proprietary
lease or occupancy agreement in property issued by the cooperative apartment corporation
and which is not insured or guaranteed by the secretary of housing and urban development,
by the administrator of veterans affairs, or by the administrator of the Farmers Home
Administration.

(5) "Cooperative apartment corporation" means a corporation or cooperative organized
under chapter 308A or 317A, the shareholders or members of which are entitled, solely by
reason of their ownership of stock or membership certificates in the corporation or
association, to occupy one or more residential units in a building owned or leased by the
corporation or association.

(6) "Forward commitment fee" means a fee or other consideration paid to a lender for
the purpose of securing a binding forward commitment by or through the lender to make
conventional loans to two or more credit worthy purchasers, including future purchasers,
of residential units, or a fee or other consideration paid to a lender for the purpose of securing
a binding forward commitment by or through the lender to make conventional loans to two
or more credit worthy purchasers, including future purchasers, of units to be created out of
existing structures pursuant to chapter 515B, or a fee or other consideration paid to a lender
for the purpose of securing a binding forward commitment by or through the lender to make
cooperative apartment loans to two or more credit worthy purchasers, including future
purchasers, of a share or shares of stock or a membership certificate or certificates in a
cooperative apartment corporation; provided, that the forward commitment rate of interest
does not exceed the maximum lawful rate of interest effective as of the date the forward
commitment is issued by the lender.

(7) "Borrower's interest rate commitment" means a binding commitment made by a
lender to a borrower wherein the lender agrees that, if a conventional or cooperative
apartment loan is made following issuance of and pursuant to the commitment, the
conventional or cooperative apartment loan shall be made at a rate of interest not in excess
of the rate of interest agreed to in the commitment, provided that the rate of interest agreed
to in the commitment is not in excess of the maximum lawful rate of interest effective as
of the date the commitment is issued by the lender to the borrower.

(8) "Borrower's loan commitment" means a binding commitment made by a lender to a
borrower wherein the lender agrees to make a conventional or cooperative apartment loan
pursuant to the provisions, including the interest rate, of the commitment, provided that the
commitment rate of interest does not exceed the maximum lawful rate of interest effective
as of the date the commitment is issued and the commitment when issued and agreed to
shall constitute a legally binding obligation on the part of the mortgagee or lender to make
a conventional or cooperative apartment loan within a specified time period in the future at
a rate of interest not exceeding the maximum lawful rate of interest effective as of the date
the commitment is issued by the lender to the borrower; provided that a lender who issues
a borrower's loan commitment pursuant to the provisions of a forward commitment is
authorized to issue the borrower's loan commitment at a rate of interest not to exceed the
maximum lawful rate of interest effective as of the date the forward commitment is issued
by the lender.

(9) "Finance charge" means the total cost of a conventional or cooperative apartment
loan including extensions or grant of credit regardless of the characterization of the same
and includes interest, finders fees, and other charges levied by a lender directly or indirectly
against the person obtaining the conventional or cooperative apartment loan or against a
seller of real property securing a conventional loan or a seller of a share or shares of stock
or a membership certificate or certificates in a cooperative apartment corporation securing
a cooperative apartment loan, or any other party to the transaction except any actual closing
costs and any forward commitment fee. The finance charges plus the actual closing costs
and any forward commitment fee, charged by a lender shall include all charges made by a
lender other than the principal of the conventional or cooperative apartment loan. The finance
charge, with respect to wraparound mortgages, shall be computed based upon the face
amount of the wraparound mortgage note, which face amount shall consist of the aggregate
of those funds actually advanced by the wraparound lender and the total outstanding principal
balances of the prior note or notes which have been made a part of the wraparound mortgage
note.

(10) "Lender" means any person making a conventional or cooperative apartment loan,
or any person arranging financing for a conventional or cooperative apartment loan. The
term also includes the holder or assignee at any time of a conventional or cooperative
apartment loan.

(11) "Loan yield" means the annual rate of return obtained by a lender over the term of
a conventional or cooperative apartment loan and shall be computed as the annual percentage
rate as computed in accordance with sections 226.5 (b), (c), and (d) of Regulation Z, Code
of Federal Regulations, title 12, part 226, but using the definition of finance charge provided
for in this subdivision. For purposes of this section, with respect to wraparound mortgages,
the rate of interest or loan yield shall be based upon the principal balance set forth in the
wraparound note and mortgage and shall not include any interest differential or yield
differential between the stated interest rate on the wraparound mortgage and the stated
interest rate on the one or more prior mortgages included in the stated loan amount on a
wraparound note and mortgage.

(12) "Person" means an individual, corporation, business trust, partnership or association
or any other legal entity.

(13) "Residential unit" means any structure used principally for residential purposes or
any portion thereof, and includes a unit in a common interest community, a nonowner
occupied residence, and any other type of residence regardless of whether the unit is used
as a principal residence, secondary residence, vacation residence, or residence of some other
denomination.

(14) "Vendor" means any person or persons who agree to sell real estate and finance
any part or all of the purchase price by a contract for deed. The term also includes the holder
or assignee at any time of the vendor's interest in a contract for deed.

Sec. 10.

Minnesota Statutes 2022, section 47.54, subdivision 2, is amended to read:

Subd. 2.

Approval deleted text begin orderdeleted text end .

new text begin (a) new text end If no objection is received by the commissioner within
15 days after the publication of the notice, the commissioner deleted text begin shall issue an orderdeleted text end new text begin must
provide written consentnew text end approving the application without a hearing if deleted text begin it is founddeleted text end new text begin the
commissioner findsnew text end that deleted text begin (a)deleted text end new text begin : (1)new text end the applicant bank meets current industry standards of
capital adequacy, management quality, and asset conditiondeleted text begin , (b)deleted text end new text begin ; (2)new text end the establishment of the
proposed detached facility deleted text begin will improvedeleted text end new text begin improvesnew text end the quality or increase the availability of
banking services in the community to be serveddeleted text begin ,deleted text end new text begin ;new text end and deleted text begin (c)deleted text end new text begin (3)new text end the establishment of the proposed
detached facility deleted text begin willdeleted text end new text begin doesnew text end not have an undue adverse effect upon the solvency of existing
financial institutions in the community to be served.

deleted text begin Otherwise,deleted text end new text begin (b)new text end The commissioner deleted text begin shalldeleted text end new text begin mustnew text end deny deleted text begin thedeleted text end new text begin annew text end applicationnew text begin that does not meet
the criteria under paragraph (a), clauses (1) to (3)new text end .

new text begin (c) new text end Any proceedings for judicial review of deleted text begin an order ofdeleted text end new text begin written consent provided bynew text end the
commissioner deleted text begin issueddeleted text end under this subdivision without a contested case hearing shall be
conducted pursuant to the provisions of the Administrative Procedure Act relating to judicial
review of agency decisions, sections 14.63 to 14.69, and the scope of judicial review in
such proceedings shall be as provided therein. Nothing herein shall be construed as requiring
the commissioner to conduct a contested case hearing if no written objection is timely
received by the commissioner from a bank within three miles of the proposed location of
the detached facility.

Sec. 11.

Minnesota Statutes 2022, section 47.54, subdivision 6, is amended to read:

Subd. 6.

Expiration and extension of deleted text begin orderdeleted text end new text begin approvalnew text end .

If a facility is not activated
within 18 months from the date deleted text begin of the orderdeleted text end new text begin approval is granted under subdivision 2new text end , the
approval deleted text begin orderdeleted text end automatically expires. Upon new text begin a new text end request deleted text begin ofdeleted text end new text begin made bynew text end the applicant deleted text begin prior todeleted text end new text begin
beforenew text end the deleted text begin automatic expirationdeleted text end date deleted text begin ofdeleted text end the deleted text begin orderdeleted text end new text begin approval expiresnew text end , the commissioner may
grant reasonable extensions of time to the applicant to activate the facility as the
commissioner deems necessary. The extensions of time shall not exceed a total of an
additional 12 months. If the commissioner's deleted text begin orderdeleted text end new text begin approvalnew text end is the subject of an appeal in
accordance with chapter 14, the time period referred to in this section deleted text begin for activation ofdeleted text end new text begin to
activatenew text end the facility and any extensions deleted text begin shall begindeleted text end new text begin beginsnew text end when all appeals or rights of
appeal from the commissioner's deleted text begin orderdeleted text end new text begin approvalnew text end have concluded or expired.

Sec. 12.

Minnesota Statutes 2022, section 48.24, subdivision 2, is amended to read:

Subd. 2.

Loan liabilities.

Loans not exceeding 25 percent of such capital and surplus
made upon first mortgage security on improved real estate in any state in which the bank
or a deleted text begin branch established under section 49.411deleted text end new text begin detached facility of the banknew text end is located, or in
any state adjoining a state in which the bank or a deleted text begin branch established under section 49.411deleted text end new text begin
detached facility of the banknew text end is located, shall not constitute a liability of the maker of the
notes secured by such mortgages within the meaning of the foregoing provision limiting
liability, but shall be an actual liability of the maker. These mortgage loans shall be limited
to, and in no case exceed, 50 percent of the cash value of the security covered by the
mortgage, except mortgage loans guaranteed as provided by the Servicemen's Readjustment
Act of 1944, as now or hereafter amended, or for which there is a commitment to so guarantee
or for which a conditional guarantee has been issued, which loans shall in no case exceed
60 percent of the cash value of the security covered by such mortgage. For the purposes of
this subdivision, real estate is improved when substantial and permanent development or
construction has contributed substantially to its value, and agricultural land is improved
when farm crops are regularly raised on such land without further substantial improvements.

Sec. 13.

Minnesota Statutes 2023 Supplement, section 53B.28, subdivision 18, is amended
to read:

Subd. 18.

Money transmission.

(a) "Money transmission" means:

(1) selling or issuing payment instruments to a person located in this state;

(2) selling or issuing stored value to a person located in this state; or

(3) receiving money for transmission from a person located in this state.

(b) deleted text begin Money includes payroll processing services.deleted text end Money new text begin transmission new text end does not include
the provision solely of online or telecommunications services or network access.

Sec. 14.

Minnesota Statutes 2023 Supplement, section 53B.28, subdivision 25, is amended
to read:

Subd. 25.

Payroll processing services.

"Payroll processing services" means deleted text begin receiving
money for transmission pursuant to a contract with a person to deliverdeleted text end new text begin deliveringnew text end wages or
salaries, deleted text begin makedeleted text end new text begin makingnew text end payment of payroll taxes to state and federal agencies, deleted text begin makedeleted text end new text begin makingnew text end
payments relating to employee benefit plans, deleted text begin or makedeleted text end new text begin makingnew text end distributions of other authorized
deductions from wages or salariesnew text begin , or transmitting money on behalf of an employer in
connection with transactions related to employeesnew text end . The term payroll processing services
deleted text begin does not includedeleted text end new text begin includesnew text end an employer performing payroll processing services on the
employer's own behalf or on behalf of the employer's affiliatedeleted text begin , or adeleted text end new text begin andnew text end professional
employment deleted text begin organization subject to regulation under other applicable state lawdeleted text end new text begin organizationsnew text end .

Sec. 15.

Minnesota Statutes 2023 Supplement, section 53B.29, is amended to read:

53B.29 EXEMPTIONS.

This chapter does not apply to:

(1) an operator of a payment system, to the extent the operator of a payment system
provides processing, clearing, or settlement services between or among persons exempted
by this section or licensees in connection with wire transfers, credit card transactions, debit
card transactions, stored-value transactions, automated clearing house transfers, or similar
funds transfers;

(2) a person appointed as an agent of a payee to collect and process a payment from a
payor to the payee for goods or services, other than money transmission itself, provided to
the payor by the payee, provided that:

(i) there exists a written agreement between the payee and the agent directing the agent
to collect and process payments from payors on the payee's behalf;

(ii) the payee holds the agent out to the public as accepting payments for goods or services
on the payee's behalf; and

(iii) payment for the goods and services is treated as received by the payee upon receipt
by the agent so that the payor's obligation is extinguished and there is no risk of loss to the
payor if the agent fails to remit the funds to the payee;

(3) a person that acts as an intermediary by processing payments between an entity that
has directly incurred an outstanding money transmission obligation to a sender, and the
sender's designated recipient, provided that the entity:

(i) is properly licensed or exempt from licensing requirements under this chapter;

(ii) provides a receipt, electronic record, or other written confirmation to the sender
identifying the entity as the provider of money transmission in the transaction; and

(iii) bears sole responsibility to satisfy the outstanding money transmission obligation
to the sender, including the obligation to make the sender whole in connection with any
failure to transmit the funds to the sender's designated recipient;

(4) the United States; a department, agency, or instrumentality of the United States; or
an agent of the United States;

(5) money transmission by the United States Postal Service or by an agent of the United
States Postal Service;

(6) a state; county; city; any other governmental agency, governmental subdivision, or
instrumentality of a state; or the state's agent;

(7) a federally insured depository financial institution; bank holding company; office of
an international banking corporation; foreign bank that establishes a federal branch pursuant
to the International Bank Act, United States Code, title 12, section 3102, as amended or
recodified from time to time; corporation organized pursuant to the Bank Service Corporation
Act, United States Code, title 12, sections 1861 to 1867, as amended or recodified from
time to time; or corporation organized under the Edge Act, United States Code, title 12,
sections 611 to 633, as amended or recodified from time to time;

(8) electronic funds transfer of governmental benefits for a federal, state, county, or
governmental agency by a contractor on behalf of the United States or a department, agency,
or instrumentality thereof, or on behalf of a state or governmental subdivision, agency, or
instrumentality thereof;

(9) a board of trade designated as a contract market under the federal Commodity
Exchange Act, United States Code, title 7, sections 1 to 25, as amended or recodified from
time to time; or a person that in the ordinary course of business provides clearance and
settlement services for a board of trade to the extent of its operation as or for a board;

(10) a registered futures commission merchant under the federal commodities laws, to
the extent of the registered futures commission merchant's operation as a merchant;

(11) a person registered as a securities broker-dealer under federal or state securities
laws, to the extent of the person's operation as a securities broker-dealer;

(12) an individual employed by a licensee, authorized delegate, or any person exempted
from the licensing requirements under this chapter when acting within the scope of
employment and under the supervision of the licensee, authorized delegate, or exempted
person as an employee and not as an independent contractor;

(13) a person expressly appointed as a third-party service provider to or agent of an
entity exempt under clause (7), solely to the extent that:

(i) the service provider or agent is engaging in money transmission on behalf of and
pursuant to a written agreement with the exempt entity that sets forth the specific functions
that the service provider or agent is to perform; and

(ii) the exempt entity assumes all risk of loss and all legal responsibility for satisfying
the outstanding money transmission obligations owed to purchasers and holders of the
outstanding money transmission obligations upon receipt of the purchaser's or holder's
money or monetary value by the service provider or agent; deleted text begin or
deleted text end

new text begin (14) a payroll processing services provider; or
new text end

deleted text begin (14)deleted text end new text begin (15)new text end a person exempt by regulation or order if the commissioner finds that (i) the
exemption is in the public interest, and (ii) the regulation of the person is not necessary for
the purposes of this chapter.

Sec. 16.

Minnesota Statutes 2022, section 58.02, is amended by adding a subdivision to
read:

new text begin Subd. 15a.new text end

new text begin Nationwide Multistate Licensing System and Registry.new text end

new text begin "Nationwide
Multistate Licensing System and Registry" has the meaning given in section 58A.02,
subdivision 8.
new text end

Sec. 17.

Minnesota Statutes 2022, section 58.02, subdivision 18, is amended to read:

Subd. 18.

Residential mortgage loan.

"Residential mortgage loan" means a loan secured
primarily by either: (1) a mortgagenew text begin , deed of trust, or other equivalent security interestnew text end on
residential real deleted text begin propertydeleted text end new text begin estatenew text end ; or (2) certificates of stock or other evidence of ownership
interest in and proprietary lease from corporations, partnerships, or other forms of business
organizations formed for the purpose of cooperative ownership of residential real deleted text begin propertydeleted text end new text begin
estatenew text end .

Sec. 18.

Minnesota Statutes 2022, section 58.02, subdivision 21, is amended to read:

Subd. 21.

Residential real estate.

"Residential real estate" means real property located
in Minnesota upon which a dwellingnew text begin , as defined in United States Code, title 15, section
1602(w),new text end is constructed or is intended to be constructed, whether or not the owner occupies
the real property.

Sec. 19.

Minnesota Statutes 2022, section 58.04, subdivision 1, is amended to read:

Subdivision 1.

Residential mortgage originator licensing requirements.

(a) No person
shall act as a residential mortgage originator, or make residential mortgage loans without
first obtaining a license from the commissioner according to the licensing procedures
provided in this chapter.

(b) A licensee must be either a partnership, limited liability partnership, association,
limited liability company, corporation, or other form of business organization, and must
have and maintain a surety bond in the amounts prescribed under section 58.08.

(1) a person who is not in the business of making residential mortgage loans and who
makes no more than three such loans, with its own funds, during any 12-month period;

(2) a financial institution as defined in section 58.02, subdivision 10;

(3) an agency of the federal government, or of a state or municipal government;

(4) an employee or employer pension plan making loans only to its participants;

(5) a person acting in a fiduciary capacity, such as a trustee or receiver, as a result of a
specific order issued by a court of competent jurisdiction;

new text begin (6) a person who is a bona fide nonprofit organization that meets all the criteria required
by the federal Secure and Fair Enforcement Licensing Act in Regulation H, adopted pursuant
to Code of Federal Regulations, title 12, part 1008, subpart B, section 1008.103 (e)(7)(ii);
new text end

deleted text begin (6)deleted text end new text begin (7)new text end a person exempted by order of the commissioner; or

deleted text begin (7)deleted text end new text begin (8)new text end a manufactured home dealer, as defined in section 327B.01, subdivision 7 or 11b,
or a manufactured home salesperson, as defined in section 327B.01, subdivision 19, that:

(i) performs only clerical or support duties in connection with assisting a consumer in
filling out a residential mortgage loan application but does not in any way offer or negotiate
loan terms, or hold themselves out as a housing counselor;

(ii) does not receive any direct or indirect compensation or gain from any individual or
company for assisting consumers with a residential mortgage loan application, in excess of
the customary salary or commission from the employer in connection with the sales
transaction; and

(iii) discloses to the borrower in writing:

(A) if a corporate affiliation with a lender exists;

(B) if a corporate affiliation with a lender exists, that the lender cannot guarantee the
lowest or best terms available and the consumer has the right to choose their lender; and

(d) For the purposes of this subdivision, "housing counselor" means an individual who
provides assistance and guidance about residential mortgage loan terms including rates,
fees, or other costs.

(e) The disclosures required under paragraph (c), clause deleted text begin (7)deleted text end new text begin (8)new text end , item (iii), must be made
on a one-page form prescribed by the commissioner and developed in consultation with the
Manufactured and Modular Home Association. The form must be posted on the department's
website.

Sec. 20.

Minnesota Statutes 2022, section 58.04, subdivision 2, is amended to read:

Subd. 2.

Residential mortgage servicer licensing requirements.

(a) Beginning August
1, 1999, no person shall engage in activities or practices that fall within the definition of
"servicing a residential mortgage loan" under section 58.02, subdivision 22, without first
obtaining a license from the commissioner according to the licensing procedures provided
in this chapter.

(b) The following persons are exempt from the residential mortgage servicer licensing
requirements:

(1) a person licensed as a residential mortgage originator;

(2) an employee of one licensee or one person holding a certificate of exemption based
on an exemption under this subdivision;

(3) a person servicing loans made with its own funds, if no more than three such loans
are made in any 12-month period;

(4) a financial institution as defined in section 58.02, subdivision 10;

(5) an agency of the federal government, or of a state or municipal government;

(6) an employee or employer pension plan making loans only to its participants;

(7) a person acting in a fiduciary capacity, such as a trustee or receiver, as a result of a
specific order issued by a court of competent jurisdiction; deleted text begin or
deleted text end

new text begin (8) a person who is a bona fide nonprofit organization that meets all the criteria required
by the federal Secure and Fair Enforcement Licensing Act in Regulation H, Code of Federal
Regulations, title 12, part 1008, subpart B, section 1008.103 (e)(7)(ii); or
new text end

deleted text begin (8)deleted text end new text begin (9)new text end a person exempted by order of the commissioner.

Sec. 21.

Minnesota Statutes 2022, section 58.05, subdivision 1, is amended to read:

Subdivision 1.

Exempt person.

new text begin (a) new text end An exempt personnew text begin ,new text end as defined by section 58.04,
subdivision 1, paragraph (c), and subdivision 2, paragraph (b), is exempt from the licensing
requirements of this chapter, but is subject to all other provisions of this chapter.

new text begin (b) Paragraph (a) does not apply to an institution covered under section 58.04, subdivision
4, even if the institution is otherwise an exempt person.
new text end

Sec. 22.

Minnesota Statutes 2022, section 58.05, subdivision 3, is amended to read:

Subd. 3.

Certificate of exemption.

deleted text begin A persondeleted text end new text begin (a) The following personsnew text end must obtain a
certificate of exemption from the commissioner to qualify as an exempt person under section
58.04, subdivision 1, paragraph (c)deleted text begin , a financial institution under clause (2),deleted text end new text begin :
new text end

new text begin (1) a bona fide nonprofit organization under section 58.04, subdivision 1, paragraph (c),
clause (6);new text end or

new text begin (2) a person exemptednew text end by order of the commissioner under new text begin section 58.04, subdivision
1, paragraph (c), new text end clause deleted text begin (6); ordeleted text end new text begin (7).
new text end

new text begin (b) The following persons must obtain a certificate of exemption from the commissioner
to qualify as an exempt personnew text end under section 58.04, subdivision 2, paragraph (b)deleted text begin , as a
financial institution under clause (4),deleted text end new text begin :
new text end

new text begin (1) a bona fide nonprofit organization under section 58.04, subdivision 2, paragraph (b),
clause (8);new text end or

new text begin (2) a person exemptednew text end by order of the commissioner under new text begin section 58.04, subdivision
2, paragraph (b), new text end clause deleted text begin (8)deleted text end new text begin (9)new text end .

Sec. 23.

Minnesota Statutes 2022, section 58.06, is amended by adding a subdivision to
read:

new text begin Subd. 5.new text end

new text begin Background checks.new text end

new text begin In connection with an application for a residential mortgage
loan originator or servicer license, any person in control of an applicant must, at a minimum,
provide the Nationwide Multistate Licensing System and Registry information concerning
the person's identity, including:
new text end

new text begin (1) fingerprints for submission to the Federal Bureau of Investigation and a governmental
agency or entity authorized to receive the information for a state, national, and international
criminal history background check; and
new text end

new text begin (2) personal history and experience in a form prescribed by the Nationwide Multistate
Licensing System and Registry, including the submission of authorization for the Nationwide
Multistate Licensing System and Registry and the commissioner to obtain:
new text end

new text begin (i) an independent credit report obtained from a consumer reporting agency described
in United States Code, title 15, section 1681a(p); and
new text end

new text begin (ii) information related to administrative, civil, or criminal findings by a governmental
jurisdiction.
new text end

Sec. 24.

Minnesota Statutes 2022, section 58.06, is amended by adding a subdivision to
read:

new text begin Subd. 6.new text end

new text begin Requesting and distributing criminal information; agency.new text end

new text begin For the purposes
of this section and in order to reduce the points of contact the Federal Bureau of Investigation
may have to maintain for purposes of subdivision 5, clauses (1) and (2), the commissioner
may use the Nationwide Multistate Licensing System and Registry as a channeling agent
to request information from and distribute information to the United States Department of
Justice or any governmental agency.
new text end

Sec. 25.

Minnesota Statutes 2022, section 58.06, is amended by adding a subdivision to
read:

new text begin Subd. 7.new text end

new text begin Requesting and distributing noncriminal information; agency.new text end

new text begin For the
purposes of this section and in order to reduce the points of contact the commissioner may
have to maintain for purposes of subdivision 5, clause (2), the commissioner may use the
Nationwide Multistate Licensing System and Registry as a channeling agent to request and
distribute information from and to any source, as directed by the commissioner.
new text end

Sec. 26.

Minnesota Statutes 2022, section 58.08, subdivision 1a, is amended to read:

Subd. 1a.

Residential mortgage originators.

(a) An applicant for a residential mortgage
originator license must file with the department a surety bond in the amount of deleted text begin $100,000deleted text end new text begin
$125,000new text end , issued by an insurance company authorized to do so in this state. The bond must
cover all mortgage loan originators who are employees or independent agents of the applicant.
The bond must be available for the recovery of expenses, fines, and fees levied by the
commissioner under this chapter and for losses incurred by borrowers as a result of a
licensee's noncompliance with the requirements of this chapter, sections 325D.43 to 325D.48,
and 325F.67 to 325F.69, or breach of contract relating to activities regulated by this chapter.

(b) The bond must be submitted with the originator's license application and evidence
of continued coverage must be submitted with each renewal. Any change in the bond must
be submitted for approval by the commissioner, within ten days of its execution. The bond
or a substitute bond shall remain in effect during all periods of licensing.

(c) Upon filing of the mortgage call report as required by section deleted text begin 58A.17deleted text end new text begin 58.141new text end , a
licensee shall maintain or increase deleted text begin itsdeleted text end new text begin the licensee'snew text end surety bond to reflect the total dollar
amount of the closed residential mortgage loans originated in this state in the preceding
year according to the table in this paragraph. A licensee may decrease deleted text begin itsdeleted text end new text begin the licensee'snew text end
surety bond according to the table in this paragraph if the surety bond required is less than
the amount of the surety bond on file with the department.

Dollar Amount of Closed Residential Mortgage Loans	Surety Bond Required
$0 to deleted text begin $5,000,000deleted text end new text begin $10,000,000 new text end	deleted text begin $100,000deleted text end new text begin $125,000 new text end
deleted text begin $5,000,000.01deleted text end new text begin $10,000,000.01new text end to deleted text begin $10,000,000deleted text end new text begin $25,000,000 new text end	deleted text begin $125,000deleted text end new text begin $150,000 new text end
deleted text begin $10,000,000.01deleted text end new text begin $25,000,000.01new text end to deleted text begin $25,000,000deleted text end new text begin $100,000,000 new text end	deleted text begin $150,000deleted text end new text begin $200,000 new text end
Over deleted text begin $25,000,000deleted text end new text begin $100,000,000 new text end	deleted text begin $200,000deleted text end new text begin $300,000 new text end

For purposes of this subdivision, "mortgage loan originator" has the meaning given the
term in section 58A.02, subdivision 7.

Sec. 27.

Minnesota Statutes 2022, section 58.08, subdivision 2, is amended to read:

Subd. 2.

Residential mortgage servicers.

new text begin (a) new text end A residential mortgage servicer licensee
shall continuously maintain a surety bond or irrevocable letter of credit in an amount not
less than deleted text begin $100,000deleted text end new text begin $125,000new text end in a form approved by the commissioner, issued by an insurance
company or bank authorized to do so in this state. The bond or irrevocable letter of credit
must be available for the recovery of expenses, fines, and fees levied by the commissioner
under this chapter, and for losses or damages incurred by borrowers or other aggrieved
parties as the result of a licensee's noncompliance with the requirements of this chapter,
sections 325D.43 to 325D.48, and 325F.67 to 325F.69, or breach of contract relating to
activities regulated by this chapter.

new text begin (b) new text end The bond or irrevocable letter of credit must be submitted with the servicer's license
application and evidence of continued coverage must be submitted with each renewal. Any
change in the bond or letter of credit must be submitted for approval by the commissioner,
within ten days of its execution.new text begin The bond or a substitute bond must remain in effect during
all periods of a license.
new text end

new text begin (c) Upon filing the mortgage call report under section 58.141, a licensee must maintain
or increase the licensee's surety bond to reflect the total dollar amount of unpaid principal
balance for residential mortgage loans serviced in Minnesota during the preceding quarter
according to the table in this paragraph. A licensee may decrease the licensee's surety bond
according to the table in this paragraph if the surety bond required is less than the amount
of the surety bond on file with the department.
new text end

new text begin Dollar Amount of Unpaid Principal Balance for Serviced Residential Mortgage Loans new text end	new text begin Surety Bond Required new text end
new text begin $0 to $10,000,000 new text end	new text begin $125,000 new text end
new text begin $10,000,000.01 to $50,000,000 new text end	new text begin $200,000 new text end
new text begin Over $50,000,000 new text end	new text begin $300,000 new text end

Sec. 28.

Minnesota Statutes 2022, section 58.10, subdivision 3, is amended to read:

Subd. 3.

Consumer education account; money credited and appropriated.

(a) The
consumer education account is created in the special revenue fund. Money credited to this
account may be appropriated to the commissioner deleted text begin for the purpose of makingdeleted text end new text begin to: (1) makenew text end
grants to programs and campaigns designed to help consumers avoid being victimized by
unscrupulous lenders and mortgage brokersnew text begin ; and (2) pay for expenses the commissioner
incurs to provide outreach and education relatednew text end new text begin to affordable housing and home ownership
educationnew text end . new text begin The commissioner must give new text end preference deleted text begin shall be givendeleted text end new text begin for grantsnew text end to programs
and campaigns designed by coalitions of public sector, private sector, and nonprofit agencies,
institutions, companies, and organizations.

(b) A sum sufficient is appropriated annually from the consumer education account to
the commissioner to make the grants described in paragraph (a).

Sec. 29.

Minnesota Statutes 2022, section 58.115, is amended to read:

58.115 EXAMINATIONS.

The commissioner has under this chapter the same powers with respect to examinations
that the commissioner has under section 46.04.new text begin In addition to the powers under section
46.04, the commissioner may accept examination reports prepared by a state agency that
has comparable supervisory powers and examination procedures. The authority under section
49.411, subdivision 7, applies to examinations of institutions under this chapter.
new text end

Sec. 30.

Minnesota Statutes 2022, section 58.13, subdivision 1, is amended to read:

Subdivision 1.

Generally.

(a) No person acting as a residential mortgage originator or
servicer, including a person required to be licensed under this chapter, and no person exempt
from the licensing requirements of this chapter under section 58.04, except as otherwise
provided in paragraph (b), shall:

(1) fail to maintain a trust account to hold trust funds received in connection with a
residential mortgage loan;

(2) fail to deposit all trust funds into a trust account within three business days of receipt;
commingle trust funds with funds belonging to the licensee or exempt person; or use trust
account funds for any purpose other than that for which they are received;

(3) unreasonably delay the processing of a residential mortgage loan application, or the
closing of a residential mortgage loan. For purposes of this clause, evidence of unreasonable
delay includes but is not limited to those factors identified in section 47.206, subdivision
7, paragraph (d);

(4) fail to disburse funds according to its contractual or statutory obligations;

(5) fail to perform in conformance with its written agreements with borrowers, investors,
other licensees, or exempt persons;

(6) charge a fee for a product or service where the product or service is not actually
provided, or misrepresent the amount charged by or paid to a third party for a product or
service;

(7) fail to comply with sections 345.31 to 345.60, the Minnesota unclaimed property
law;

(8) violate any provision of any other applicable state or federal law regulating residential
mortgage loans including, without limitation, sections 47.20 to 47.208 and 47.58;

(9) make or cause to be made, directly or indirectly, any false, deceptive, or misleading
statement or representation in connection with a residential loan transaction including,
without limitation, a false, deceptive, or misleading statement or representation regarding
the borrower's ability to qualify for any mortgage product;

(10) conduct residential mortgage loan business under any name other than that under
which the license or certificate of exemption was issued;

(11) compensate, whether directly or indirectly, coerce or intimidate an appraiser for
the purpose of influencing the independent judgment of the appraiser with respect to the
value of real estate that is to be covered by a residential mortgage or is being offered as
security according to an application for a residential mortgage loan;

(12) issue any document indicating conditional qualification or conditional approval for
a residential mortgage loan, unless the document also clearly indicates that final qualification
or approval is not guaranteed, and may be subject to additional review;

(13) make or assist in making any residential mortgage loan with the intent that the loan
will not be repaid and that the residential mortgage originator will obtain title to the property
through foreclosure;

(14) provide or offer to provide for a borrower, any brokering or lending services under
an arrangement with a person other than a licensee or exempt person, provided that a person
may rely upon a written representation by the residential mortgage originator that it is in
compliance with the licensing requirements of this chapter;

(15) claim to represent a licensee or exempt person, unless the person is an employee
of the licensee or exempt person or unless the person has entered into a written agency
agreement with the licensee or exempt person;

(16) fail to comply with the record keeping and notification requirements identified in
section 58.14 or fail to abide by the affirmations made on the application for licensure;

(17) represent that the licensee or exempt person is acting as the borrower's agent after
providing the nonagency disclosure required by section 58.15, unless the disclosure is
retracted and the licensee or exempt person complies with all of the requirements of section
58.16;

(18) make, provide, or arrange for a residential mortgage loan that is of a lower investment
grade if the borrower's credit score or, if the originator does not utilize credit scoring or if
a credit score is unavailable, then comparable underwriting data, indicates that the borrower
may qualify for a residential mortgage loan, available from or through the originator, that
is of a higher investment grade, unless the borrower is informed that the borrower may
qualify for a higher investment grade loan with a lower interest rate and/or lower discount
points, and consents in writing to receipt of the lower investment grade loan;

For purposes of this section, "investment grade" refers to a system of categorizing
residential mortgage loans in which the loans are distinguished by interest rate or discount
points or both charged to the borrower, which vary according to the degree of perceived
risk of default based on factors such as the borrower's credit, including credit score and
credit patterns, income and employment history, debt ratio, loan-to-value ratio, and prior
bankruptcy or foreclosure;

(19) make, publish, disseminate, circulate, place before the public, or cause to be made,
directly or indirectly, any advertisement or marketing materials of any type, or any statement
or representation relating to the business of residential mortgage loans that is false, deceptive,
or misleading;

(20) advertise loan types or terms that are not available from or through the licensee or
exempt person on the date advertised, or on the date specified in the advertisement. For
purposes of this clause, advertisement includes, but is not limited to, a list of sample mortgage
terms, including interest rates, discount points, and closing costs provided by licensees or
exempt persons to a print or electronic medium that presents the information to the public;

(21) use or employ phrases, pictures, return addresses, geographic designations, or other
means that create the impression, directly or indirectly, that a licensee or other person is a
governmental agency, or is associated with, sponsored by, or in any manner connected to,
related to, or endorsed by a governmental agency, if that is not the case;

(22) violate section 82.77, relating to table funding;

(23) make, provide, or arrange for a residential mortgage loan all or a portion of the
proceeds of which are used to fully or partially pay off a "special mortgage" unless the
borrower has obtained a written certification from an authorized independent loan counselor
that the borrower has received counseling on the advisability of the loan transaction. For
purposes of this section, "special mortgage" means a residential mortgage loan originated,
subsidized, or guaranteed by or through a state, tribal, or local government, or nonprofit
organization, that bears one or more of the following nonstandard payment terms which
substantially benefit the borrower: (i) payments vary with income; (ii) payments of principal
or interest are not required or can be deferred under specified conditions; (iii) principal or
interest is forgivable under specified conditions; or (iv) where no interest or an annual
interest rate of two percent or less is charged in connection with the loan. For purposes of
this section, "authorized independent loan counselor" means a nonprofit, third-party
individual or organization providing home buyer education programs, foreclosure prevention
services, mortgage loan counseling, or credit counseling certified by the United States
Department of Housing and Urban Development, the Minnesota Home Ownership Center,
the Minnesota Mortgage Foreclosure Prevention Association, AARP, or NeighborWorks
America;

(24) make, provide, or arrange for a residential mortgage loan without verifying the
borrower's reasonable ability to pay the scheduled payments of the following, as applicable:
principal; interest; real estate taxes; homeowner's insurance, assessments, and mortgage
insurance premiums. For loans in which the interest rate may vary, the reasonable ability
to pay shall be determined based on a fully indexed rate and a repayment schedule which
achieves full amortization over the life of the loan. For all residential mortgage loans, the
borrower's income and financial resources must be verified by tax returns, payroll receipts,
bank records, or other similarly reliable documents.

Nothing in this section shall be construed to limit a mortgage originator's or exempt
person's ability to rely on criteria other than the borrower's income and financial resources
to establish the borrower's reasonable ability to repay the residential mortgage loan, including
criteria established by the United States Department of Veterans Affairs or the United States
Department of Housing and Urban Development for interest rate reduction refinancing loans
or streamline loans, or criteria authorized or promulgated by the Federal National Mortgage
Association or Federal Home Loan Mortgage Corporation; however, such other criteria
must be verified through reasonably reliable methods and documentation. The mortgage
originator's analysis of the borrower's reasonable ability to repay may include, but is not
limited to, consideration of the following items, if verified: (1) the borrower's current and
expected income; (2) current and expected cash flow; (3) net worth and other financial
resources other than the consumer's equity in the dwelling that secures the loan; (4) current
financial obligations; (5) property taxes and insurance; (6) assessments on the property; (7)
employment status; (8) credit history; (9) debt-to-income ratio; (10) credit scores; (11) tax
returns; (12) pension statements; and (13) employment payment records, provided that no
mortgage originator shall disregard facts and circumstances that indicate that the financial
or other information submitted by the consumer is inaccurate or incomplete. A statement
by the borrower to the residential mortgage originator or exempt person of the borrower's
income and resources or sole reliance on any single item listed above is not sufficient to
establish the existence of the income or resources when verifying the reasonable ability to
pay;

(25) engage in "churning." As used in this section, "churning" means knowingly or
intentionally making, providing, or arranging for a residential mortgage loan when the new
residential mortgage loan does not provide a reasonable, tangible net benefit to the borrower
considering all of the circumstancesnew text begin ,new text end including the terms of both the new and refinanced
loans, the cost of the new loan, and the borrower's circumstancesdeleted text begin ;deleted text end new text begin . In order to demonstrate
a reasonable, tangible net benefit to the borrower, the circumstances at the time of the
application must be documented in writing and must be signed by the borrower prior to the
closing date;
new text end

(26) the first time a residential mortgage originator orally informs a borrower of the
anticipated or actual periodic payment amount for a first-lien residential mortgage loan
which does not include an amount for payment of property taxes and hazard insurance, the
residential mortgage originator must inform the borrower that an additional amount will be
due for taxes and insurance and, if known, disclose to the borrower the amount of the
anticipated or actual periodic payments for property taxes and hazard insurance. This same
oral disclosure must be made each time the residential mortgage originator orally informs
the borrower of a different anticipated or actual periodic payment amount change from the
amount previously disclosed. A residential mortgage originator need not make this disclosure
concerning a refinancing loan if the residential mortgage originator knows that the borrower's
existing loan that is anticipated to be refinanced does not have an escrow account; or

(27) make, provide, or arrange for a residential mortgage loan, other than a reverse
mortgage pursuant to United States Code, title 15, chapter 41, if the borrower's compliance
with any repayment option offered pursuant to the terms of the loan will result in negative
amortization during any six-month period.

(b) Paragraph (a), clauses (24) through (27), do not apply to a state or federally chartered
bank, savings bank, or credit union, an institution chartered by Congress under the Farm
Credit Act, or to a person making, providing, or arranging a residential mortgage loan
originated or purchased by a state agency or a tribal or local unit of government. This
paragraph supersedes any inconsistent provision of this chapter.

Sec. 31.

new text begin [58.141] REPORTS AND UNIQUE IDENTIFIER.
new text end

new text begin Subdivision 1.new text end

new text begin Mortgage call reports.new text end

new text begin A residential mortgage originator or servicer
must submit reports of condition to the Nationwide Multistate Licensing System and Registry.
Reports submitted under this subdivision must be in the form and contain the information
required by the Nationwide Multistate Licensing System and Registry.
new text end

new text begin Subd. 2.new text end

new text begin Report to Nationwide Multistate Licensing System and Registry.new text end

new text begin Subject
to section 58A.14, the commissioner must regularly report violations of this chapter, as well
as enforcement actions and other relevant information, to the Nationwide Multistate Licensing
System and Registry.
new text end

new text begin Subd. 3.new text end

new text begin Unique identifier; display.new text end

new text begin The unique identifier of any person originating a
residential mortgage loan must be clearly displayed on all residential mortgage loan
application forms, solicitations, or advertisements, including business cards or websites,
and any other documents the commissioner establishes by rule or order.
new text end

Sec. 32.

new text begin [60M.01] DEFINITIONS.
new text end

new text begin Subdivision 1.new text end

new text begin Terms.new text end

new text begin For the purposes of this chapter, the terms defined in this section
have the meanings given.
new text end

new text begin Subd. 2.new text end

new text begin Bail bond.new text end

new text begin "Bail bond" means a three-party contract between the state, the
accused, and the surety whereby an individual is released to the custody of the surety, and
the surety guarantees to the state the appearance of the individual at all criminal proceedings
for which the surety bond is posted.
new text end

new text begin Subd. 3.new text end

new text begin Bail bond agency.new text end

new text begin "Bail bond agency" means an agency contracted by a surety
to supervise or otherwise manage the bail bond business written in Minnesota by producers
appointed by the surety.
new text end

new text begin Subd. 4.new text end

new text begin Commissioner.new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 5.new text end

new text begin Department.new text end

new text begin "Department" means the Department of Commerce.
new text end

new text begin Subd. 6.new text end

new text begin Depositor.new text end

new text begin "Depositor" means:
new text end

new text begin (1) an individual that has paid money to a surety, bail bond agency, or producer as
premium or premium toward a bail bond product transaction, as defined in section 60M.02;
or
new text end

new text begin (2) an individual that deposited money, property, or assets with a surety, bail bond
agency, or producer to be held as collateral or used toward the liability of a bail bond product
transaction, as defined in section 60M.03.
new text end

new text begin Subd. 7.new text end

new text begin Negotiate.new text end

new text begin "Negotiate" means the act of conferring directly with or offering
advice directly to a purchaser or prospective purchaser of a particular insurance contract
concerning any of the substantive benefits, terms, or conditions of the contract, if the person
engaged in the act either sells insurance or obtains insurance from insurers for purchasers.
new text end

new text begin Subd. 8.new text end

new text begin Net premium.new text end

new text begin "Net premium" means a bond's premium, less any commission
agreed to in advance and in writing between a producer and the surety or bail bond agency.
new text end

new text begin Subd. 9.new text end

new text begin Personal information.new text end

new text begin "Personal information" has the meaning given in section
72A.491, subdivision 17.
new text end

new text begin Subd. 10.new text end

new text begin Principal.new text end

new text begin "Principal" is an individual who has engaged with a bail bond
agency or producer to arrange for the individual's bail bond to be posted on the individual's
behalf, securing the individual's release pretrial on a bail bond.
new text end

new text begin Subd. 11.new text end

new text begin Privileged information.new text end

new text begin "Privileged information" has the meaning given in
section 72A.491, subdivision 19.
new text end

new text begin Subd. 12.new text end

new text begin Producer.new text end

new text begin "Producer" means a person that is licensed to write bail bonds, has
been approved by the state court administrator's office, is a contractor or employee for a
bail bond agency, and is appointed by a surety to execute or countersign bail bonds for the
surety in connection with judicial proceedings.
new text end

new text begin Subd. 13.new text end

new text begin Sell.new text end

new text begin "Sell" means to exchange a bail bond product for money on behalf of a
surety company.
new text end

new text begin Subd. 14.new text end

new text begin Surety.new text end

new text begin "Surety" means a domestic, foreign, or alien insurance company that
is licensed to transact surety business in Minnesota under section 60A.06.
new text end

Sec. 33.

new text begin [60M.02] PREMIUMS.
new text end

new text begin Subdivision 1.new text end

new text begin Premiums; generally.new text end

new text begin (a) Regardless of whether a producer is an
employee or an independent contractor, a producer must charge the approved, filed rate of
the surety being used to post a bail bond. Except as provided in subdivision 2 or in a situation
where cash bail is set by the court under subdivision 5, the rate charged must not be less
than the surety's filed rate.
new text end

new text begin (b) A producer is prohibited from providing a premium rebate.
new text end

new text begin (c) A producer may charge travel or other related fees, provided the producer complies
with section 60K.46, subdivision 2.
new text end

new text begin Subd. 2.new text end

new text begin Minimum premium.new text end

new text begin A producer must charge a minimum premium of $100.
Any premium amount must be included in the surety's rate filing with the commissioner.
new text end

new text begin Subd. 3.new text end

new text begin Bail bonds less than $10,000.new text end

new text begin (a) A producer is prohibited from posting a bail
bond with a penal sum of $10,000 or less unless the producer has:
new text end

new text begin (1) received at least 50 percent of the total premium owed under the surety's rate filing;
new text end

new text begin (2) provided the depositor with a receipt that indicates the premium paid; and
new text end

new text begin (3) if the full premium is not collected before posting the bond, a signed promissory
note must be obtained requiring the unpaid premium in full within four months of the date
the bond is posted.
new text end

new text begin (b) A promissory note issued under paragraph (a), clause (3), must be made on a surety
or bail bond agency form as approved by the commissioner. The maximum annual interest
rate allowed on a promissory note under this subdivision is six percent. A promissory note
may authorize collection of the actual costs incurred to collect the premium, including
reasonable attorney fees, in the event of a default.
new text end

new text begin Subd. 4.new text end

new text begin Bail bonds greater than $10,000.new text end

new text begin (a) A producer is prohibited from posting
a bail bond with a penal sum greater than $10,000 unless the producer has:
new text end

new text begin (1) received at least 30 percent of the total premium owed under the surety's rate filing;
new text end

new text begin (2) provided the depositor with a receipt that indicates the premium paid; and
new text end

new text begin (3) if the full premium is not collected before posting the bond, a signed promissory
note must be obtained requiring the unpaid premium in full within 12 months of the date
the bond is posted.
new text end

new text begin Subd. 5.new text end

new text begin Alternative premium structure.new text end

new text begin (a) A bail bond agency or producer may
include an alternative premium structure as part of the bail bond agency or producer's surety
rate filing submitted to the commissioner.
new text end

new text begin (b) If a court sets cash bail at 15 percent or less of the bond's penal amount, a surety,
bail bond agency, or producer may charge an alternative premium that is as low as one-half
of the cash bail amount set by the court. An alternative premium charged under this
subdivision is subject to the minimum premium requirement under subdivision 2.
new text end

new text begin (c) A bail bond agency or producer is required to obtain from the court documentation
indicating the cash bail amount set by the court and must maintain the documentation in
the bond file.
new text end

new text begin (d) A bail bond agency and producer must maintain a log of all bonds where an alternative
premium was charged under this subdivision.
new text end

new text begin (e) Subdivisions 3 and 4 apply to the payment of an alternative premium structure under
this subdivision.
new text end

new text begin Subd. 6.new text end

new text begin Late payments.new text end

new text begin If a payment, including a minimum monthly payment, that is
required under a promissory note executed pursuant to subdivision 3 or 4 is more than 90
days late, the bail bond agency or producer must, within 20 days of the date a payment
becomes 90 days late:
new text end

new text begin (1) for amounts owed that are $2,500 or less, assign the debt to a Minnesota-licensed
debt collector; or
new text end

new text begin (2) for amounts owed that are greater than $2,500:
new text end

new text begin (i) file a civil action against the delinquent premium payer; and
new text end

new text begin (ii) make all reasonable efforts to:
new text end

new text begin (A) serve a summons and complaint;
new text end

new text begin (B) enter judgment, unless the matter is settled while the action is pending; and
new text end

new text begin (C) enforce the judgment, which may be satisfied by assigning the debt to a licensed
debt collector.
new text end

new text begin Subd. 7.new text end

new text begin Form of payment.new text end

new text begin A surety, bail bond agency, or producer may only accept
cash, money orders, checks, wire transfers, electronic funds transfers, debit cards, prepaid
cash cards, or credit cards as a premium payment method. Any balance owed must be
evidenced by a promissory note, as provided under subdivision 3 or 4.
new text end

new text begin Subd. 8.new text end

new text begin Premium trust account.new text end

new text begin (a) A payment made to or received by the producer,
bail bond agency, or surety must be deposited into a premium trust account that is maintained
by the producer, bail bond agency, or surety within seven business days.
new text end

new text begin (b) A premium trust account must be used only for premium payments and travel or
other related fees authorized under subdivision 1, paragraph (c). A producer, bail bond
agency, or surety is prohibited from depositing any other money into a premium trust
account.
new text end

new text begin (c) A deposit into a premium trust account must be accompanied by a deposit slip that:
new text end

new text begin (1) separately designates the principal; and
new text end

new text begin (2) lists the power of attorney number of the bond for which the payment is being
collected.
new text end

new text begin (d) Money may be withdrawn from a premium trust account only to:
new text end

new text begin (1) pay the net premium to the surety or bail bond agency;
new text end

new text begin (2) pay a surety or bail bond agency any build-up fund or escrow account required by
a contract executed by the producer and the surety or bail bond agency;
new text end

new text begin (3) pay or reimburse travel or other related fees authorized under subdivision 1, paragraph
(c);
new text end

new text begin (4) pay or reimburse the producer any fees or charges deducted electronically by credit
card processing vendors, provided the fees and charges comply with section 60K.46,
subdivision 2; and
new text end

new text begin (5) distribute any excess amounts to the operating account.
new text end

Sec. 34.

new text begin [60M.03] COLLATERAL.
new text end

new text begin Subdivision 1.new text end

new text begin Collateral generally.new text end

new text begin When collateral is accepted, the producer, surety,
or bail bond agency must provide a written and numbered receipt to the depositor. The
receipt must:
new text end

new text begin (1) contain the date; depositor's name and address; bail bond agency's name and address;
surety's name and address; defendant's name; bond amount; and cash amount or a detailed
description of the collateral, if the collateral is not cash; and
new text end

new text begin (2) be signed by:
new text end

new text begin (i) the producer, surety, or bail bond agency; and
new text end

new text begin (ii) the depositor.
new text end

new text begin Subd. 2.new text end

new text begin Collateral received; transfer; control.new text end

new text begin (a) Except as otherwise provided under
paragraph (b), a producer or bail bond agency must transfer all cash and noncash collateral
that the producer or bail bond agency receives to the surety.
new text end

new text begin (b) A surety may, at the surety's discretion, permit: (1) a producer to transfer all cash
and noncash collateral that the producer receives to the bail bond agency; and (2) the bail
bond agency to retain possession and control over the cash and noncash collateral without
transferring the cash and noncash collateral to the surety. If a surety exercises the surety's
discretion under this paragraph, the bail bond agency assumes the surety's responsibilities
and responsibilities under this section. A producer is prohibited from retaining possession
or control of cash or noncash collateral beyond the time periods established in this section.
new text end

new text begin Subd. 3.new text end

new text begin Cash collateral trust account.new text end

new text begin (a) All cash collateral must be deposited into
a cash collateral account maintained by a surety or bail bond agency as provided in
subdivision 2, paragraph (b), within seven business days of the date the cash collateral is
received.
new text end

new text begin (b) All checks, money orders, wire transfers, or similar money transfer for collateral
must be made payable to the bail bond agency and deposited into the surety's or bail bond
agency's collateral account within ten business days of the date the payment was received.
new text end

new text begin (c) When required by law, a bail bond agency or producer must: (1) file an IRS Form
8300 and informational notice; and (2) retain a copy of the filed IRS Form 8300 and
informational notice in the bail bond agency's or producer's files.
new text end

new text begin Subd. 4.new text end

new text begin Separate cash collateral account.new text end

new text begin At the surety's discretion, the surety or a
bail bond agency may maintain a separate cash collateral trust account. A cash collateral
trust account may be an interest-bearing account or a noninterest-bearing account. If the
separate cash collateral trust account is an interest-bearing account, the interest earned is
for the benefit of the depositor.
new text end

new text begin Subd. 5.new text end

new text begin Surety liable.new text end

new text begin The surety is liable to return any cash or noncash collateral that
a producer or bail bond agency collects, less any amounts owed under subdivision 9,
paragraph (b), even if the collected collateral is not transferred to the surety.
new text end

new text begin Subd. 6.new text end

new text begin Prohibitions.new text end

new text begin (a) A surety, bail bond agency, or producer is prohibited from
collecting cash collateral in excess of the bond's penal sum.
new text end

new text begin (b) A surety, bail bond agency, or producer is prohibited from using collateral for personal
benefit or gain.
new text end

new text begin (c) A surety, bail bond agency, or producer is prohibited from taking a quitclaim deed
on real property as collateral for a bond.
new text end

new text begin Subd. 7.new text end

new text begin Collateral log.new text end

new text begin (a) A bail bond agency or producer must maintain a collateral
log that includes:
new text end

new text begin (1) the power of attorney number;
new text end

new text begin (2) the principal's name;
new text end

new text begin (3) the depositor's name;
new text end

new text begin (4) the cash collateral amount, including whether the cash collateral is being held in an
interest-bearing account;
new text end

new text begin (5) if the collateral is noncash collateral, a detailed description of the collateral;
new text end

new text begin (6) the date the collateral was taken; and
new text end

new text begin (7) the dates the collateral was sent to the surety, returned to the depositor, liquidated,
or applied to a loss or cost incurred by the producer, bail bond agency, or surety.
new text end

new text begin (b) For purposes of paragraph (a), an indemnity agreement does not constitute collateral
and is not required to be included in the collateral log. For purposes of paragraph (a), clause
(7), the amount of a loss incurred must be listed separately from other costs in the collateral
log.
new text end

new text begin Subd. 8.new text end

new text begin Mortgages and deeds of trust.new text end

new text begin (a) A mortgage or deed of trust taken as
collateral for a bond must name the surety as a mortgagee. At the discretion of the surety,
a bail bond agency may be named as the mortgagee in lieu of the surety being named as the
mortgagee.
new text end

new text begin (b) A producer is prohibited from being named as a mortgagee for a mortgage or deed
of trust taken as collateral for a bond.
new text end

new text begin Subd. 9.new text end

new text begin Return of collateral.new text end

new text begin (a) A surety or bail bond agency that controls the collateral
must return cash and noncash collateral to the depositor named in the collateral receipt
within 21 days of the date the depositor provides the surety or bail bond agency with written
proof that the bond has been discharged.
new text end

new text begin (b) If the depositor owes the surety, bail bond agency, or producer a premium; is liable
for a loss or expense related to a breach of the bond; or is liable pursuant to the terms of an
indemnity or other agreement, the surety or bail bond agency may retain from the collateral
all money required to satisfy the depositor's debts.
new text end

new text begin (c) If all of the depositor's debts secured by collateral are satisfied, the surety or bail
bond agency must provide documentation to release any liens, security interests, mortgages,
or other security interests that were filed or obtained in relation to the collateral. The
documentation must be provided within 21 days of the date the depositor provides the surety
or bail bond agency with written proof that the bond has been discharged.
new text end

new text begin Subd. 10.new text end

new text begin Bond or indemnity agreement; breach.new text end

new text begin If a bond or indemnity agreement
is breached and the surety, bail bond agency, or producer suffers a loss, the surety or bail
bond agency that controls the collateral must send to the depositor written notice that notifies
the depositor that the surety or bail bond agency intends to liquidate noncash collateral. The
written notice must be sent by certified mail to the depositor's last known address at least
30 days before the date the surety or bail bond agency liquidates the noncash collateral.
new text end

new text begin Subd. 11.new text end

new text begin Compliance with Minnesota law.new text end

new text begin Any action taken to enforce or foreclose
on cash or noncash collateral must comply with Minnesota law.
new text end

new text begin Subd. 12.new text end

new text begin Collateral documentation; audit and inspection.new text end

new text begin (a) All collateral and related
documentation held in trust by the surety or bail bond agency must be made available for
immediate audit and inspection by the department.
new text end

new text begin (b) All collateral and related documentation held in trust by the bail bond agency must
be made available for immediate audit and inspection by the surety.
new text end

Sec. 35.

new text begin [60M.04] PRODUCER AUDITS.
new text end

new text begin Subdivision 1.new text end

new text begin Premium audits.new text end

new text begin (a) By April 30 each year, a surety must audit each
licensed bail bond producer's bonds written during the previous calendar year to ensure the
licensed bail bond producer has complied with this subdivision.
new text end

new text begin (b) The premium audits must include a review of an adequate sample of bonds written
by each bail bond producer. A review sample is adequate if it consists of the lesser of: (1)
20 percent of the bonds written by the bail bond producer; (2) 24 bonds; or (3) all of the
bonds written by the bail bond producer, if the bail bond producer wrote fewer than 12
bonds during the previous calendar year. The audit sample must include the four largest
bonds written by the bail bond producer and four bonds that charged an alternative premium
under section 60M.02, subdivision 5, if applicable. Of the remaining bonds audited and to
the extent the quantity of bonds supports the percentages, 50 percent must be randomly
selected bonds with a penal sum that is $10,000 or less, and 50 percent must be randomly
selected bonds with a penal sum that is greater than $10,000.
new text end

new text begin (c) The premium audit must be conducted at the producer's office or the bail bond
agency's office, depending on which entity maintains the physical records. The surety must
not disclose to the producer or bail bond agency, or anyone affiliated with the surety or bail
bond agency, which files the surety intends to audit until the surety's on-site audit of the
producer begins.
new text end

new text begin (d) For each bond audited, the surety must confirm that:
new text end

new text begin (1) the proper premium was charged and collected, including a review of the premium
account statements and deposit slips;
new text end

new text begin (2) a proper premium receipt is in the producer's file;
new text end

new text begin (3) if the full premium was not paid before the bond was posted, a proper promissory
note was executed; and
new text end

new text begin (4) if the premium was not paid as required, the producer complied with section 60M.02,
subdivision 6.
new text end

new text begin (e) An annual premium audit under this section must also include a follow-up review
of each bond audited the previous year for which full premium had not yet been collected
at the time the audit occurred. For each bond subject to a follow-up review, the surety must:
new text end

new text begin (1) review the premium account and deposit slips to confirm that the full premium was
collected; or
new text end

new text begin (2) if full payment of the premium was not received, confirm that the producer complied
with section 60M.02, subdivision 6.
new text end

new text begin (f) A bail bond agency or producer is prohibited from acting on behalf of the surety to
conduct the bail bond agency's or producer's own bail bond agency or producer audits.
new text end

new text begin Subd. 2.new text end

new text begin Collateral audits.new text end

new text begin (a) By April 30 each year, a surety must audit each licensed
bail bond producer's bonds written during the previous calendar year to ensure the licensed
bail bond producer has complied with this subdivision.
new text end

new text begin (b) A collateral audit under this subdivision must include confirmation that:
new text end

new text begin (1) a collateral log was maintained;
new text end

new text begin (2) a cash collateral account exists;
new text end

new text begin (3) the balance of the cash collateral indicated on the collateral log is identical to the
amount held in the collateral trust account; and
new text end

new text begin (4) a collateral receipt exists for collateral collected, as represented by a sampling of the
lesser of: (i) 20 percent of all bonds secured by collateral; or (ii) 12 bonds that were secured
by collateral.
new text end

new text begin Subd. 3.new text end

new text begin Audits report.new text end

new text begin (a) By May 31 each year, a surety must prepare a report of the
audits conducted under this section during that year. The report must include:
new text end

new text begin (1) a list of the bonds audited under subdivision 1 for each producer, including the power
of attorney number used for each audited bond and whether full premium payment was
made by the date the audit occurred;
new text end

new text begin (2) a list of the bonds included in a follow-up review of the previous year's audit,
including whether full premium payment was collected by the date the audit occurred;
new text end

new text begin (3) the compliance certifications required under section 60M.07, subdivision 4; and
new text end

new text begin (4) details regarding any violations discovered during the audit or a statement that no
violations were discovered, as applicable.
new text end

new text begin (b) The annual report under this subdivision must be maintained for a period of at least
36 months from the date the report is complete. Annual reports must be submitted to the
commissioner by June 30 each year.
new text end

Sec. 36.

new text begin [60M.05] SOLICITATION.
new text end

new text begin Subdivision 1.new text end

new text begin Solicitation generally.new text end

new text begin (a) A producer is prohibited from, in or on the
grounds of a jail, prison, or other location where an incarcerated person is confined, or in
or on the grounds of a court unless requested by the principal, a potential indemnitor, or the
legal counsel of a principal:
new text end

new text begin (1) approaching, enticing, inviting, or soliciting a person to use a bail bond agency's
services;
new text end

new text begin (2) distributing, displaying, or wearing an item that advertises a bail bond agency's
services;
new text end

new text begin (3) no producer or bail bond agency is permitted to solicit by calling or leaving messages
for principals on jail phones or any other messaging devices available to principals, while
in custody; or
new text end

new text begin (4) no producer or bail bond agency is permitted to place money on the canteen or books
of any individual held in custody.
new text end

new text begin (b) Notwithstanding paragraph (a), clause (3), permissible print advertising in a jail is
limited to:
new text end

new text begin (1) a listing in a telephone directory; and
new text end

new text begin (2) posting the producer's or bail bond agency's name, address, and telephone number
in a designated location within the jail, as approved by the jail.
new text end

new text begin Subd. 2.new text end

new text begin Identification; marketing material.new text end

new text begin A producer is prohibited from wearing
or displaying any information, other than identification approved by the surety or bail bond
agency, which constitutes marketing material that a surety or bail bond agency must approve
and maintain under Minnesota Rules, chapter 2790. A producer is prohibited from displaying
any information constituting marketing material in or on the property or grounds of: (1) a
jail, prison, or other location where incarcerated people are confined; or (2) a court.
new text end

new text begin Subd. 3.new text end

new text begin Other prohibited conduct.new text end

new text begin (a) A producer is prohibited from loitering in or
about the courthouse, jail, or any other place where individuals are held in custody.
new text end

new text begin (b) A producer is prohibited from making unauthorized and unsolicited cold calls without
having first spoken with the principal.
new text end

new text begin (c) A producer is prohibited from soliciting a bond to a person by recorded or electronic
communication, or by live telephone contact, unless the producer otherwise complies with
applicable state and federal law, including but not limited to:
new text end

new text begin (1) the National Do Not Call Registry under Code of Federal Regulations, title 16, part
310; and
new text end

new text begin (2) the Telephone Consumer Protection Act of 1991, Code of Federal Regulations, title
47, part 64.1200.
new text end

new text begin (d) A surety, bail bond agency, or producer is prohibited from obtaining a credit check
on a person unless the person has authorized the surety, bail bond agency, or producer to
do so in writing. The surety, bail bond agency, or producer must retain the written
authorization provided by the person subject to the credit check.
new text end

new text begin Subd. 4.new text end

new text begin Compliance with other law.new text end

new text begin (a) A surety, bail bond agency, and producer
must comply with all federal and state privacy laws related to information provided to a
producer during the application process and during bond underwriting by a bond principal,
indemnitor, or other person.
new text end

new text begin (b) A surety, bail bond agency, and producer must comply with sections 60K.46,
subdivision 6; 72A.494; 72A.496, subdivision 1; 72A.501; and 72A.502, subdivision 1.
new text end

new text begin (c) A surety, bail bond agency, and producer must receive preauthorization before
collecting and disclosing personal or privileged information about an applicant or proposed
insured, and must provide all notices otherwise required by Minnesota law.
new text end

new text begin (d) A surety, bail bond agency, and producer must otherwise comply with all applicable
Minnesota law.
new text end

new text begin Subd. 5.new text end

new text begin Insurance transaction.new text end

new text begin The act of soliciting, underwriting, negotiating, or
selling a bail bond constitutes an insurance transaction.
new text end

Sec. 37.

new text begin [60M.06] UNLICENSED INDIVIDUALS; NO REBATES OR PAYMENT.
new text end

new text begin (a) With the exception of a contracted bail enforcement agent offering a reward for
information that assists in the location and apprehension of a principal under section 629.63,
a surety, bail bond agency, or producer is prohibited from paying a fee or commission, or
otherwise giving or promising anything of value, to: (1) a jailer, police officer, peace officer,
or any other person who has the power to arrest or hold an individual in custody; or (2) a
judge, public official, or public employee.
new text end

new text begin (b) A surety, bail bond agency, or producer is prohibited from paying a fee or rebate, or
otherwise giving or promising anything of value, to the individual seeking the producer's
services or the individual seeking the producer's services on another individual's behalf.
new text end

new text begin (c) A surety, bail bond agency, or producer is prohibited from paying a fee or commission,
or otherwise giving or promising anything of value, to a person for selling, soliciting, or
negotiating a bail bond if the person is not properly licensed as a producer.
new text end

new text begin (d) A surety, bail bond agency, or producer is prohibited from paying a fee, rebate, or
commission, or otherwise giving or promising anything of value, to an inmate for referring
business or for any other reason related to soliciting, negotiating, or selling a bail bond.
new text end

Sec. 38.

new text begin [60M.07] OTHER PROVISIONS.
new text end

new text begin Subdivision 1.new text end

new text begin Compliance with standards of conduct.new text end

new text begin A producer must comply with
the Minnesota Court Administrator's Office's bail bond procedures and standards of conduct,
including but not limited to while in or on the property of courts, jails, or other detention
facilities in Minnesota. A surety or bail bond agency must require the surety or bail bond
agency's producers to affirm that the producer complies with any changes to the bail bond
procedures and standards of conduct as the changes are posted to the Minnesota state court
website or the Minnesota Court Administrator's Office's website.
new text end

new text begin Subd. 2.new text end

new text begin No waiver.new text end

new text begin A producer is prohibited from soliciting or accepting a waiver of
any requirement under this chapter.
new text end

new text begin Subd. 3.new text end

new text begin Record maintenance.new text end

new text begin (a) A bail bond agency and producer must maintain the
following records on each bond for at least seven years after the date the bond is terminated:
new text end

new text begin (1) power of attorney;
new text end

new text begin (2) premium receipts;
new text end

new text begin (3) the promissory note for unpaid premium, if any;
new text end

new text begin (4) the cash bond amount set by the court, if an amount less than the filed rate is accepted
for the premium;
new text end

new text begin (5) all documents related to any lawsuit filed to collect the premium;
new text end

new text begin (6) indemnity agreements;
new text end

new text begin (7) collateral receipts, if any;
new text end

new text begin (8) proof that collateral was returned, if any;
new text end

new text begin (9) proof of bond exoneration or forfeiture payment;
new text end

new text begin (10) all records relating to liquidating and converting collateral, including fees or costs;
and
new text end

new text begin (11) proof of any expenses incurred or losses paid by the surety, bail bond agency, or
producer.
new text end

new text begin (b) A bail bond agency and producer must maintain all premium account, collateral
account, and operating account bank records, including deposit slips, for at least seven years
after the records are made available.
new text end

new text begin (c) All records that a bail bond agency or producer maintain under this chapter must be
kept in the bail bond agency or producer's office or storage location, as applicable. If a bail
bond agency or producer's relationship with a surety is terminated, the information and
documentation must be immediately transferred to:
new text end

new text begin (1) the bail bond agency, if the producer is terminated; or
new text end

new text begin (2) the surety, if the bail bond agency is terminated.
new text end

new text begin (d) A bail bond agency and producer's records must be available for the commissioner
or the surety to inspect, with or without notice.
new text end

new text begin Subd. 4.new text end

new text begin Compliance certificationnew text end new text begin .new text end

new text begin (a) During the surety's annual audit of a producer,
the producer must sign a compliance certification form that attests to the producer's
compliance with this chapter during the previous calendar year.
new text end

new text begin (b) Before a producer is appointed by a surety and at each license renewal thereafter, a
producer must sign an affidavit of compliance form in which the producer acknowledges
the producer is familiar and continually complies with the requirements under this chapter.
The surety must retain completed affidavits and send requested affidavits to the commissioner
within ten days of the date an affidavit is requested.
new text end

new text begin (c) The commissioner must establish the compliance certification and affidavit of
compliance forms for use under this subdivision.
new text end

new text begin Subd. 5.new text end

new text begin Producer termination; notice.new text end

new text begin (a) If a producer's relationship with a surety is
voluntarily or involuntarily terminated due to a violation of this chapter or because the
surety determined the producer violated this chapter during an annual audit, the surety must,
within 30 days of the date the producer is terminated, provide the commissioner with the
terminated producer's name and the reason the producer was terminated.
new text end

new text begin (b) Another surety is prohibited from appointing a producer subject to a termination
under paragraph (a) unless the department approves the appointment.
new text end

new text begin Subd. 6.new text end

new text begin Access to information.new text end

new text begin A surety, bail bonds agency, and producer are considered
a government associated entity and are allowed to apply and be granted access to the
Minnesota Government Access system under the Court Access Rules.
new text end

new text begin Subd. 7.new text end

new text begin Surrender of a principal for bail revocation.new text end

new text begin The courts, jails, and sheriff
offices in Minnesota must comply with section 629.63, allowing for a principal to be
surrendered and received by the jail of the county that the bail bond was originated from
and to be held in custody until the principal can have a court hearing where the surety, bail
bond agency, or producer can give evidence and make motion for the revocation and
discharge of the bail bond.
new text end

new text begin Subd. 8.new text end

new text begin Forfeiture timing requirement.new text end

new text begin The court must order a bail bond forfeited
and send notice to the surety, bail bond agency, or producer no later than 30 days from the
date of a principal failing to appear at a scheduled hearing. If a court fails to forfeit a bail
bond within 30 days of a principal failing to appear or fail to send notice within seven days
of the forfeiture to the surety, bail bond agency, or producer, the court must allow for a
reinstatement and discharge of the bail bond without penalty. If a court fails to take action
against the bail bond within 30 days of a principal failing to appear at a hearing, the court
must allow for revocation and discharge without penalty.
new text end

Sec. 39.

Minnesota Statutes 2023 Supplement, section 80A.50, is amended to read:

80A.50 SECTION 302; FEDERAL COVERED SECURITIES; SMALL
CORPORATE OFFERING REGISTRATION.

(a) Federal covered securities.

(1) Required filing of records. With respect to a federal covered security, as defined
in Section 18(b)(2) of the Securities Act of 1933 (15 U.S.C. Section 77r(b)(2)), that is not
otherwise exempt under sections 80A.45 through 80A.47, a rule adopted or order issued
under this chapter may require the filing of any or all of the following records:

(A) before the initial offer of a federal covered security in this state, all records that are
part of a federal registration statement filed with the Securities and Exchange Commission
under the Securities Act of 1933 and a consent to service of process complying with section
80A.88 signed by the issuer;

(B) after the initial offer of the federal covered security in this state, all records that are
part of an amendment to a federal registration statement filed with the Securities and
Exchange Commission under the Securities Act of 1933; and

(C) to the extent necessary or appropriate to compute fees, a report of the value of the
federal covered securities sold or offered to persons present in this state, if the sales data
are not included in records filed with the Securities and Exchange Commission.

(2) Notice filing effectiveness and renewal. A notice filing under subsection (a) is
effective for one year commencing on the later of the notice filing or the effectiveness of
the offering filed with the Securities and Exchange Commission. On or before expiration,
the issuer may renew a notice filing by filing a copy of those records filed by the issuer with
the Securities and Exchange Commission that are required by rule or order under this chapter
to be filed. A previously filed consent to service of process complying with section 80A.88
may be incorporated by reference in a renewal. A renewed notice filing becomes effective
upon the expiration of the filing being renewed.

(3) Notice filings for federal covered securities under section 18(b)(4)(D). With
respect to a security that is a federal covered security under Section 18(b)(4)(D) of the
Securities Act of 1933 (15 U.S.C. Section 77r(b)(4)(D)), a rule under this chapter may
require a notice filing by or on behalf of an issuer to include a copy of Form D, including
the Appendix, as promulgated by the Securities and Exchange Commission, and a consent
to service of process complying with section 80A.88 signed by the issuer not later than 15
days after the first sale of the federal covered security in this state.

(4) Stop orders. Except with respect to a federal security under Section 18(b)(1) of the
Securities Act of 1933 (15 U.S.C. Section 77r(b)(1)), if the administrator finds that there is
a failure to comply with a notice or fee requirement of this section, the administrator may
issue a stop order suspending the offer and sale of a federal covered security in this state.
If the deficiency is corrected, the stop order is void as of the time of its issuance and no
penalty may be imposed by the administrator.

(b) Small corporation offering registration.

(1) Registration required. A security meeting the conditions set forth in this section
may be registered as set forth in this section.

(2) Availability. Registration under this section is available only to the issuer of securities
and not to an affiliate of the issuer or to any other person for resale of the issuer's securities.
The issuer must be organized under the laws of one of the states or possessions of the United
States. The securities offered must be exempt from registration under the Securities Act of
1933 pursuant to Rule 504 of Regulation D (15 U.S.C. Section 77c).

(3) Disqualification. Registration under this section is not available to any of the
following issuers:

(A) an issuer subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934;

(B) an investment company;

(C) a development stage company that either has no specific business plan or purpose
or has indicated that its business plan is to engage in a merger or acquisition with an
unidentified company or companies or other entity or person;

(D) an issuer if the issuer or any of its predecessors, officers, directors, governors,
partners, ten percent stock or equity holders, promoters, or any selling agents of the securities
to be offered, or any officer, director, governor, or partner of the selling agent:

(i) has filed a registration statement that is the subject of a currently effective registration
stop order entered under a federal or state securities law within five years before the filing
of the small corporate offering registration application;

(ii) has been convicted within five years before the filing of the small corporate offering
registration application of a felony or misdemeanor in connection with the offer, purchase,
or sale of a security or a felony involving fraud or deceit, including, but not limited to,
forgery, embezzlement, obtaining money under false pretenses, larceny, or conspiracy to
defraud;

(iii) is currently subject to a state administrative enforcement order or judgment entered
by a state securities administrator or the Securities and Exchange Commission within five
years before the filing of the small corporate offering registration application, or is subject
to a federal or state administrative enforcement order or judgment in which fraud or deceit,
including, but not limited to, making untrue statements of material facts or omitting to state
material facts, was found and the order or judgment was entered within five years before
the filing of the small corporate offering registration application;

(iv) is currently subject to an order, judgment, or decree of a court of competent
jurisdiction temporarily restraining or enjoining, or is subject to an order, judgment, or
decree of a court of competent jurisdiction permanently restraining or enjoining the party
from engaging in or continuing any conduct or practice in connection with the purchase or
sale of any security or involving the making of a false filing with a state or with the Securities
and Exchange Commission entered within five years before the filing of the small corporate
offering registration application; or

(v) is subject to a state's administrative enforcement order, or judgment that prohibits,
denies, or revokes the use of an exemption for registration in connection with the offer,
purchase, or sale of securities,

(I) except that clauses (i) to (iv) do not apply if the person subject to the disqualification
is duly licensed or registered to conduct securities-related business in the state in which the
administrative order or judgment was entered against the person or if the dealer employing
the party is licensed or registered in this state and the form BD filed in this state discloses
the order, conviction, judgment, or decree relating to the person, and

(II) except that the disqualification under this subdivision is automatically waived if the
state securities administrator or federal agency that created the basis for disqualification
determines upon a showing of good cause that it is not necessary under the circumstances
to deny the registration.

(4) Filing and effectiveness of registration statement. A small corporate offering
registration statement must be filed with the administrator. If no stop order is in effect and
no proceeding is pending under section 80A.54, such registration statement shall become
effective automatically at the close of business on the 20th day after filing of the registration
statement or the last amendment of the registration statement or at such earlier time as the
administrator may designate by rule or order. For the purposes of a nonissuer transaction,
other than by an affiliate of the issuer, all outstanding securities of the same class identified
in the small corporate offering registration statement as a security registered under this
chapter are considered to be registered while the small corporate offering registration
statement is effective. A small corporate offering registration statement is effective for one
year after its effective date or for any longer period designated in an order under this chapter.
A small corporate offering registration statement may be withdrawn only with the approval
of the administrator.

(5) Contents of registration statement. A small corporate offering registration statement
under this section shall be on Form U-7, including exhibits required by the instructions
thereto, as adopted by the North American Securities Administrators Association, or such
alternative form as may be designated by the administrator by rule or order and must include:

(A) a consent to service of process complying with section 80A.88;

(B) a statement of the type and amount of securities to be offered and the amount of
securities to be offered in this state;

(C) a specimen or copy of the security being registered, unless the security is
uncertificated, a copy of the issuer's articles of incorporation and bylaws or their substantial
equivalents in effect, and a copy of any indenture or other instrument covering the security
to be registered;

(D) a signed or conformed copy of an opinion of counsel concerning the legality of the
securities being registered which states whether the securities, when sold, will be validly
issued, fully paid, and nonassessable and, if debt securities, binding obligations of the issuer;

(E) the states (i) in which the securities are proposed to be offered; (ii) in which a
registration statement or similar filing has been made in connection with the offering
including information as to effectiveness of each such filing; and (iii) in which a stop order
or similar proceeding has been entered or in which proceedings or actions seeking such an
order are pending;

(F) a copy of the offering document proposed to be delivered to offerees; and

(G) a copy of any other pamphlet, circular, form letter, advertisement, or other sales
literature intended as of the effective date to be used in connection with the offering and
any solicitation of interest used in compliance with section 80A.46(17)(B).

(6) Copy to purchaser. A copy of the offering document as filed with the administrator
must be delivered to each person purchasing the securities prior to sale of the securities to
such person.

(c) Offering limit. Offers and sales of securities under a small corporate offering
registration as set forth in this section are allowed up to the limit prescribed by Code of
Federal Regulations, title 17, part 230.504 (b)(2), as amended.

new text begin (d) Regulation A - Tier 2 filing requirements.
new text end

new text begin (1) Initial filing. An issuer planning to offer and sell securities in Minnesota in an
offering exempt under Tier 2 of federal Regulation A must, at least 21 calendar days before
the date of the initial sale of securities in Minnesota, submit to the administrator:
new text end

new text begin (A) a completed Regulation A - Tier 2 offering notice filing form or copies of all the
documents filed with the Securities Exchange Commission; and
new text end

new text begin (B) a consent to service of process on Form U-2, if consent to service of process is not
provided in the Regulation A - Tier 2 offering notice filing form.
new text end

new text begin The initial notice filing made in Minnesota is effective for 12 months after the date the
filing is made.
new text end

new text begin (2) Renewal. For each additional 12-month period in which the same offering is
continued, an issuer conducting a Tier 2 offering under federal Regulation A may renew
the notice filing by filing (i) the Regulation A - Tier 2 offering notice filing form marked
"renewal," or (ii) a cover letter or other document requesting renewal. The renewal filing
must be made on or before the date notice filing expires.
new text end

new text begin (3) Amendment. An issuer may increase the amount of securities offered in Minnesota
by submitting a Regulation A - Tier 2 offering notice filing form or other document
describing the transaction.
new text end

Sec. 40.

Minnesota Statutes 2022, section 80A.61, is amended to read:

80A.61 SECTION 406; REGISTRATION BY BROKER-DEALER, AGENT,
FUNDING PORTAL, INVESTMENT ADVISER, AND INVESTMENT ADVISER
REPRESENTATIVE.

(a) Application for initial registration by broker-dealer, agent, investment adviser,
or investment adviser representative. A person shall register as a broker-dealer, agent,
investment adviser, or investment adviser representative by filing an application and a
consent to service of process complying with section 80A.88, and paying the fee specified
in section 80A.65 and any reasonable fees charged by the designee of the administrator for
processing the filing. The application must contain:

(1) the information or record required for the filing of a uniform application; and

(2) upon request by the administrator, any other financial or other information or record
that the administrator determines is appropriate.

(b) Amendment. If the information or record contained in an application filed under
subsection (a) is or becomes inaccurate or incomplete in a material respect, the registrant
shall promptly file a correcting amendment.

(c) Effectiveness of registration. If an order is not in effect and a proceeding is not
pending under section 80A.67, registration becomes effective at noon on the 45th day after
a completed application is filed, unless the registration is denied. A rule adopted or order
issued under this chapter may set an earlier effective date or may defer the effective date
until noon on the 45th day after the filing of any amendment completing the application.

(d) Registration renewal. A registration is effective until midnight on December 31 of
the year for which the application for registration is filed. Unless an order is in effect under
section 80A.67, a registration may be automatically renewed each year by filing such records
as are required by rule adopted or order issued under this chapter, by paying the fee specified
in section 80A.65, and by paying costs charged by the designee of the administrator for
processing the filings.

(e) Additional conditions or waivers. A rule adopted or order issued under this chapter
may impose such other conditions, not inconsistent with the National Securities Markets
Improvement Act of 1996. An order issued under this chapter may waive, in whole or in
part, specific requirements in connection with registration as are in the public interest and
for the protection of investors.

(f) Funding portal registration. A funding portal that has its principal place of business
in the state of Minnesota shall register with the state of Minnesota by filing with the
administrator a copy of the information or record required for the filing of an application
for registration as a funding portal in the manner established by the Securities and Exchange
Commission and/or the Financial Institutions Regulatory Authority (FINRA), along with
any rule adopted or order issued, and any amendments thereto.

(g) Application for investment adviser representative registration.

(1) The application for initial registration as an investment adviser representative pursuant
to section 80A.58 is made by completing Form U-4 (Uniform Application for Securities
Industry Registration or Transfer) in accordance with the form instructions and by filing
the form U-4 with the IARD. The application for initial registration must also include the
following:

(i) proof of compliance by the investment adviser representative with the examination
requirements of:

(A) the Uniform Investment Adviser Law Examination (Series 65); or

(B) new text begin the General Securities Representative Examination (Series 7) and new text end the Uniform
Combined State Law Examination (Series 66);

(ii) any other information the administrator may reasonably require.

(2) The application for the annual renewal registration as an investment adviser
representative shall be filed with the IARD.

(3)(i) The investment adviser representative is under a continuing obligation to update
information required by Form U-4 as changes occur;

(ii) An investment adviser representative and the investment adviser must file promptly
with the IARD any amendments to the representative's Form U-4; and

(iii) An amendment will be considered to be filed promptly if the amendment is filed
within 30 days of the event that requires the filing of the amendment.

(4) An application for initial or renewal of registration is not considered filed for purposes
of section 80A.58 until the required fee and all required submissions have been received
by the administrator.

(5) The application for withdrawal of registration as an investment adviser representative
pursuant to section 80A.58 shall be completed by following the instructions on Form U-5
(Uniform Termination Notice for Securities Industry Registration) and filed upon Form U-5
with the IARD.

new text begin EFFECTIVE DATE.new text end

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

Sec. 41.

Minnesota Statutes 2022, section 80A.66, is amended to read:

80A.66 SECTION 411; POSTREGISTRATION REQUIREMENTS.

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

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

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

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

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

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

(d) Records and reports of private funds.

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

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

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

(A) the amount of assets under management;

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

(D) trading and investment positions;

(E) valuation policies and practices of the fund;

(F) types of assets held;

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

(H) trading practices; and

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE.new text end

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

Sec. 42.

Minnesota Statutes 2022, section 80C.05, subdivision 3, is amended to read:

Subd. 3.

Escrow or impoundment of fees and other funds by commissioner.

If the
commissioner finds that the applicant has failed to demonstrate that adequate financial
arrangements have been made to fulfill obligations to provide real estate, improvements,
equipment, inventory, training or other items included in the offering, the commissioner
may by rule or order require the escrow deleted text begin ordeleted text end new text begin ,new text end impoundmentnew text begin , or deferralnew text end of franchise fees and
other funds paid by the franchisee or subfranchisor until no later than the time of opening
of the franchise business.

Sec. 43.

Minnesota Statutes 2022, section 82B.021, subdivision 26, is amended to read:

Subd. 26.

Standards of professional practice.

"Standards of professional practice"
meansnew text begin the version ofnew text end the uniform standards of professional appraisal practice of the
deleted text begin Appraisersdeleted text end new text begin Appraisalnew text end Standards Board of the Appraisal Foundation in effect deleted text begin as of January
1, 1991, or other version of these standards the commissioner may by order designatedeleted text end new text begin on
the date the appraiser signs the appraisal reportnew text end .

Sec. 44.

Minnesota Statutes 2022, section 82B.095, subdivision 3, is amended to read:

Subd. 3.

Conformance to Appraisal Qualifications Board criteria.

(a) The
requirements to obtainnew text begin and maintainnew text end a trainee real property appraiser, licensed real property
appraiser, certified residential real property appraiser, or certified general real property
appraiser license are the education, examination, and experience requirements established
by the Appraiser Qualifications Board of the Appraisal Foundation and published in the
most recent version of the Real Property Appraiser Qualification Criteria.

(b) An applicant must complete the applicable education and experience requirements
before taking the required examination.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective January 1, 2026.
new text end

Sec. 45.

Minnesota Statutes 2022, section 82B.19, subdivision 1, is amended to read:

Subdivision 1.

License renewals.

deleted text begin (a)deleted text end The commissioner must determine that a licensed
real estate appraiser has met the continuing education requirements of this chapter before
the commissioner renews a license. This determination must be based on, for a resident
appraiser, course completion records uploaded electronically in a manner prescribed by the
commissioner and, for a nonresident appraiser, course completion records presented by
electronic transmission or uploaded electronically in a manner prescribed by the
commissioner.

deleted text begin The basic continuing education requirement for renewal of a license is the completion
by the applicant either as a student or as an instructor, during the immediately preceding
term of licensing, of at least 30 classroom hours of instruction in courses or seminars that
have received the approval of the commissioner. Classroom hour credit must not be accepted
for courses of less than two hours. As part of the continuing education requirements of this
section, the commissioner must require that all real estate appraisers successfully complete
the seven-hour national USPAP update course every two years. If the applicant's immediately
preceding term of licensing consisted of six or more months, but fewer than 24 months, the
applicant must provide evidence of completion of 15 hours of instruction during the license
period. The credit hours required under this section may be credited to a person for distance
education courses that meet Appraiser Qualifications Board criteria. An approved prelicense
education course may be taken for continuing education credit.
deleted text end

deleted text begin (b) The 15-hour USPAP course cannot be used to satisfy the requirement to complete
the seven-hour national USPAP update course every two years.
deleted text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective January 1, 2026.
new text end

Sec. 46.

Minnesota Statutes 2022, section 115C.08, subdivision 2, is amended to read:

Subd. 2.

Imposing fee.

The board shall notify the commissioner of revenue if the
unencumbered balance of the fund falls below $4,000,000, and within deleted text begin 60deleted text end new text begin 90new text end days after
receiving notice from the board, the commissioner of revenue shall impose the fee established
in subdivision 3 on the use of a tank for four calendar months, with payment to be submitted
with each monthly distributor tax return.

Sec. 47. new text begin RULEMAKING.
new text end

new text begin (a) The commissioner of commerce must adopt rules to conform with the changes made
to Minnesota Statutes, sections 80A.66 and 80C.05, subdivision 3, in this article with respect
to investment adviser registration continuing education and franchise fees deferral,
respectively. The commissioner of commerce may use the good cause exemption under
Minnesota Statutes, section 14.388, subdivision 1, clause (3), to amend the rule under this
section, and Minnesota Statutes, section 14.386, does not apply except as provided under
Minnesota Statutes, section 14.388.
new text end

new text begin (b) The commissioner of commerce must amend Minnesota Rules, part 2675.2170, to
comply with the changes made and added in this article to Minnesota Statutes, sections
47.20, subdivision 2; 47.54, subdivisions 2 and 6; 48.24, subdivision 2; 58.02, subdivisions
15a, 18, and 21; 58.04, subdivisions 1 and 2; 58.05, subdivisions 1 and 3; 58.06, subdivisions
5, 6, and 7; 58.08, subdivisions 1a, 2, and 3; 58.10, subdivision 3; 58.115; 58.13, subdivision
1; and 58.141. The commissioner of commerce may use the good cause exemption under
Minnesota Statutes, section 14.388, subdivision 1, clause (3), to amend the rule under this
section. Minnesota Statutes, section 14.386, does not apply, except as provided under
Minnesota Statutes, section 14.388.
new text end

Sec. 48. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 58.08, subdivision 3,new text end new text begin is repealed.
new text end

ARTICLE 3

COMMERCIAL REGULATION AND CONSUMER PROTECTION

Section 1.

Minnesota Statutes 2022, section 45.011, subdivision 1, is amended to read:

Subdivision 1.

Scope.

As used in chapters 45 to 80C, 80E to 83, 155A, 216C, 332, 332A,
332B, 345, and 359, and sections 81A.22 to 81A.37; 123A.21, subdivision 7, paragraph
(a), clause (23); 123A.25; 325D.30 to 325D.42; 326B.802 to 326B.885; 386.62 to 386.78;
471.617; deleted text begin anddeleted text end 471.982deleted text begin ,deleted text end new text begin ; and 513.80,new text end unless the context indicates otherwise, the terms defined
in this section have the meanings given them.