SF 4427

as introduced - 92nd Legislature (2021 - 2022) Posted on 06/14/2022 09:32am

A bill for an act
relating to commerce; establishing a supplemental budget for Department of
Commerce needs; modifying financial institution fees; modifying the Minnesota
premium security plan; appropriating money; transferring money; amending
Minnesota Statutes 2020, sections 45.0135, subdivisions 2a, 2b; 46.131,
subdivisions 2, 4, 11; 48A.15, subdivision 1; 53.03, subdivisions 1, 5; 53C.02;
56.02; 62E.23, subdivisions 1, 3, by adding a subdivision; Laws 2017, chapter 13,
article 1, section 15, as amended.

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

ARTICLE 1

SUPPLEMENTAL APPROPRIATIONS

Section 1. new text begin APPROPRIATIONS. new text end

new text begin The sums shown in the columns marked "Appropriations" are appropriated to the agencies
and for the purposes specified in this article. The appropriations are from the general fund,
or another named fund, and are available for the fiscal years indicated for each purpose.
The figures "2022" and "2023" used in this article mean that the appropriations listed under
them are available for the fiscal year ending June 30, 2022, or June 30, 2023, respectively.
"The first year" is fiscal year 2022. "The second year" is fiscal year 2023. "The biennium"
is fiscal years 2022 and 2023. If an appropriation in this act is enacted more than once in
the 2022 legislative session, the appropriation must be given effect only once. Appropriations
for the fiscal year ending June 30, 2022, are effective the day following final enactment.
The appropriations made under this article supplement, and do not supersede or replace,
the appropriations made under Laws 2021, First Special Session chapter 4, article 1.
new text end

			new text begin APPROPRIATIONS new text end
			new text begin Available for the Year new text end
			new text begin Ending June 30 new text end
				new text begin 2022 new text end		new text begin 2023 new text end

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

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

new text begin $ new text end

new text begin 108,000 new text end

new text begin $ new text end

new text begin 1,326,000 new text end

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

new text begin Subd. 2. new text end new text begin Administrative Services new text end

new text begin -0- new text end

new text begin 127,000 new text end

new text begin $127,000 in fiscal year 2023 is for additional
staff in the senior fraud prevention program.
new text end

new text begin Subd. 3. new text end new text begin Insurance new text end

new text begin 108,000 new text end

new text begin 680,000 new text end

new text begin $180,000 in fiscal year 2023 is for additional
staff in the insurance division. The additional
staff must focus on property- and
casualty-related insurance products.
new text end

new text begin $500,000 in fiscal year 2023 is to conduct a
study on the feasibility of offering free primary
care to Minnesotans. This is a onetime
appropriation.
new text end

new text begin $108,000 in fiscal year 2022 is for activities
related to the state's reinsurance program. This
is a onetime appropriation.
new text end

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

new text begin -0- new text end

new text begin 519,000 new text end

new text begin $345,000 in fiscal year 2023 is for additional
staff in the enforcement division. The
additional staff must focus on insurance
market conduct examinations.
new text end

new text begin $174,000 in fiscal year 2023 is for an
additional peace officer in the Commerce
Fraud Bureau.
new text end

Sec. 3. new text begin REINSURANCE; TRANSFER.
new text end

new text begin (a) The commissioner of management and budget shall transfer $65,882,000 from the
premium security plan account in Minnesota Statutes, section 62E.25, to the health care
access fund in Minnesota Statutes, section 16A.724, by June 30, 2025. This is a onetime
transfer.
new text end

new text begin (b) The commissioner of commerce must transfer $2,100,000 in fiscal year 2023 from
the premium security plan account under Minnesota Statutes, section 62E.25, subdivision
1, to the board of directors of MNsure to pay for revenue loss related to the Minnesota
premium security plan. The base for the transfer under this paragraph is $4,288,000 in fiscal
year 2024, $4,561,000 in fiscal year 2025, $4,858,000 in fiscal year 2026, $5,200,000 in
fiscal year 2027, $2,658,000 in fiscal year 2028, and $0 in fiscal year 2029.
new text end

new text begin (c) $216,000 in fiscal year 2023 is transferred from the premium security plan account
under Minnesota Statutes, section 62E.25, subdivision 1, to the commissioner of commerce
to pay for administrative costs incurred to secure a state innovation waiver and perform
reporting functions. The base for the transfer under this paragraph is $216,000 in fiscal
years 2024, 2025, 2026, 2027, and 2028. The base for the transfer under this paragraph is
$0 in fiscal year 2029.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon federal approval of the continuation
of the state innovation waiver submitted under Laws 2021, First Special Session chapter 7,
article 15, section 4, that maintains federal funding for the MinnesotaCare program under
Minnesota Statutes, chapter 256L, through the Basic Health Plan formula at levels that
would have been received if reinsurance was not implemented. The commissioner of
commerce must notify (1) the chairs and ranking minority members of the legislative
committees that have jurisdiction over commerce and health and human services finance,
and (2) the revisor of statutes when federal approval is obtained.
new text end

ARTICLE 2

COMMERCE POLICY

Section 1.

Minnesota Statutes 2020, section 45.0135, subdivision 2a, is amended to read:

Subd. 2a.

Authorization.

new text begin (a) new text end The commissioner may appoint peace officers, as defined
in section 626.84, subdivision 1, paragraph (c), and establish a law enforcement agency, as
defined in section 626.84, subdivision 1, paragraph (f), known as the Commerce Fraud
Bureau, to conduct investigations, and to make arrests under sections 629.30 and 629.34.
The new text begin primary new text end jurisdiction of the law enforcement agency is limited to offenses deleted text begin related to
insurance deleted text end new text begin with a nexus to insurance-related crimes or investment new text end fraud.

new text begin (b) Upon request and at the commissioner's discretion, the Commerce Fraud Bureau
may respond to a law enforcement agency's request to exercise law enforcement duties in
cooperation with the law enforcement agency that has jurisdiction over the particular matter.
new text end

Sec. 2.

Minnesota Statutes 2020, section 45.0135, subdivision 2b, is amended to read:

Subd. 2b.

Duties.

The Commerce Fraud Bureau shall:

(1) review notices and reports deleted text begin of insurance fraud deleted text end new text begin within the Commerce Fraud Bureau's
primary jurisdiction new text end submitted by authorized insurers, their employees, and agents or
producers;

(2) respond to notifications or complaints deleted text begin of suspected insurance fraud deleted text end new text begin new text end new text begin within the
Commerce Fraud Bureau's primary jurisdiction new text end generated by other law enforcement agencies,
state or federal governmental units, or any other person;

(3) initiate inquiries and conduct investigations when the bureau has reason to believe
that deleted text begin insurance fraud deleted text end new text begin an offense within the Commerce Fraud Bureau's primary jurisdiction new text end
has been or is being committed; and

(4) report deleted text begin incidents of alleged insurance fraud deleted text end new text begin crime new text end new text begin s new text end disclosed by deleted text begin its deleted text end new text begin the Commerce
Fraud Bureau's new text end investigations to appropriate law enforcement agencies, including, but not
limited to, the attorney general, county attorneys, or any other appropriate law enforcement
or regulatory agency, and shall assemble evidence, prepare charges, and otherwise assist
any law enforcement authority having jurisdiction.

Sec. 3.

Minnesota Statutes 2020, section 46.131, subdivision 2, is amended to read:

Subd. 2.

Assessment authority.

Each deleted text begin bank, trust company, savings bank, savings
association, regulated lender, industrial loan and thrift company, credit union, motor vehicle
sales finance company, debt management services provider, debt settlement services provider,
insurance premium finance company, and residential PACE administrator, as defined in
section 216C.435, subdivision 10a, deleted text end new text begin financial institution governed by chapters 46 to 59A,
216C, and 332 to 332B that is new text end organized under the laws of this state or required to be
administered by the commissioner of commerce shall pay into the state treasury its
proportionate share of the cost of maintaining the Department of Commerce. new text begin This subdivision
does not apply to student loan servicers or collection agencies.
new text end

Sec. 4.

Minnesota Statutes 2020, section 46.131, subdivision 4, is amended to read:

Subd. 4.

General assessment basis.

(a) Assessments shall be made by the commissioner
against each institution within the industry on an equitable basis, according to the total assets new text begin
or business volume new text end of each institution as of the end of the previous calendar year.

(b) Assessments against residential PACE administrators, as defined in section 216C.435,
subdivision 10a, must be made by the commissioner according to the total business volume
as of the end of the previous calendar year.

Sec. 5.

Minnesota Statutes 2020, section 46.131, subdivision 11, is amended to read:

Subd. 11.

Financial institutions account; appropriation.

(a) The financial institutions
account is created as a separate account in the special revenue fund. Earnings, including
interest, dividends, and any other earnings arising from account assets, must be credited to
the account.

(b) The account consists of funds received from assessments under subdivision 7,
examination fees under subdivision 8, and funds received pursuant to subdivision 10 and
the following provisions: sections new text begin 46.04; 46.041; 46.048, subdivision 1; 47.101; 47.54,
subdivision 1; 47.60, subdivision 3; 47.62, subdivision 4; new text end new text begin 48.61, subdivision 7, paragraph
(b); 49.36, subdivision 1; 52.203; new text end 53B.09; 53B.11, subdivision 1; new text begin 53C.02; 56.02; 58.10; new text end
58A.045, subdivision 2; deleted text begin and deleted text end new text begin 59A.03; new text end 216C.437, subdivision 12 new text begin ; 332A.04; and 332B.04 new text end .

(c) Funds in the account are annually appropriated to the commissioner of commerce
for activities under this section.

Sec. 6.

Minnesota Statutes 2020, section 48A.15, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

new text begin (a) new text end A trust company organized under the laws of this
state or a state bank and trust may, after completing the notification procedure required by
this subdivision, establish and maintain a trust service office at any office in this state or of
any other state or national bank. A state bank may, after completing the notification procedure
required by this subdivision, permit a trust company organized under the laws of this state
or a state bank and trust or a national bank in this state that is authorized to exercise trust
powers to establish and maintain a trust service office at any of its banking offices.

new text begin (b) new text end The trust company or state bank and trust and a state bank at which a trust service
office is to be established according to this section shall jointly file, on forms provided by
the commissioner, a notification of intent to establish a trust service office. The notification
must be accompanied by a filing fee of $100 payable to the commissioner, to be deposited
in the deleted text begin general fund of the state deleted text end new text begin financial institutions account under section 46.131, subdivision
11 new text end . No trust service office shall be established according to this section if disallowed by
order of the commissioner within 30 days of the filing of a complete and acceptable
notification of intent to establish a trust service office. An order of the commissioner to
disallow the establishment of a trust service office under this section is subject to judicial
review under sections 14.63 to 14.69.

Sec. 7.

Minnesota Statutes 2020, section 53.03, subdivision 1, is amended to read:

Subdivision 1.

Application, fee, notice.

Any corporation hereafter organized as an
industrial loan and thrift company, shall, after compliance with the requirements set forth
in sections 53.01 and 53.02, file a written application with the Department of Commerce
for a certificate of authorization. A corporation that will not sell or issue thrift certificates
for investment as permitted by this chapter need not comply with subdivision 2b. The
application must be in the form prescribed by the Department of Commerce. The application
must be made in the name of the corporation, executed and acknowledged by an officer
designated by the board of directors of the corporation, requesting a certificate authorizing
the corporation to transact business as an industrial loan and thrift company, at the place
and in the name stated in the application. At the time of filing the application the applicant
shall pay $1,500 filing fee if the corporation will not sell or issue thrift certificates for
investment, and a filing fee of $8,000 if the corporation will sell or issue thrift certificates
for investment. The fees must be deleted text begin turned over by the commissioner to the commissioner of
management and budget and credited to the general fund deleted text end new text begin collected by the commissioner
and deposited in the financial institutions account under section 46.131, subdivision 11 new text end .
The applicant shall also submit a copy of the bylaws of the corporation, its articles of
incorporation and all amendments thereto at that time. An application for powers under
subdivision 2b must also require that a notice of the filing of the application must be
published once within 30 days of the receipt of the form prescribed by the Department of
Commerce, at the expense of the applicant, in a qualified newspaper published in the
municipality in which the proposed industrial loan and thrift company is to be located, or,
if there be none, in a qualified newspaper likely to give notice in the municipality in which
the company is proposed to be located. If the Department of Commerce receives a written
objection to the application from any person within 15 days of the notice having been fully
published, the commissioner shall proceed in the same manner as required under section
46.041, subdivisions 3 and 4, relating to state banks.

Sec. 8.

Minnesota Statutes 2020, section 53.03, subdivision 5, is amended to read:

Subd. 5.

Place of business.

Not more than one place of business may be maintained
under any certificate of authorization issued subsequent to the enactment of Laws 1943,
chapter 67, pursuant to the provisions of this chapter, but the Department of Commerce
may issue more than one certificate of authorization to the same corporation upon compliance
with all the provisions of this chapter governing an original issuance of a certificate of
authorization. To the extent that previously filed applicable information remains unchanged,
the applicant need not refile this information, unless requested. The filing fee for a branch
application shall be $500 and the investigation fee $250. An industrial loan and thrift
corporation with deposit liabilities may change one or more of its locations upon the written
approval of the commissioner of commerce. A fee of $100 must accompany each application
to the commissioner for approval to change the location of an established office. An industrial
loan and thrift corporation that does not sell and issue thrift certificates for investment may
change one or more locations by giving 30 days' written notice to the Department of
Commerce which shall promptly amend the certificate of authorization accordingly. No
change in place of business of a company to a location outside of its current trade area or
more than 25 miles from its present location, whichever distance is greater, shall be permitted
under the same certificate unless all of the applicable requirements of this section have been
met. new text begin All money collected by the commissioner under this chapter must be deposited into
the financial institutions account under section 46.131, subdivision 11.
new text end

Sec. 9.

Minnesota Statutes 2020, section 53C.02, is amended to read:

53C.02 SALES FINANCE COMPANY; LICENSE, FEES, REFUND.

(a) No person shall engage in the business of a sales finance company in this state without
a license therefor as provided in sections 53C.01 to 53C.14 provided, however, that no bank,
trust company, savings bank, savings association, or credit union, whether state or federally
chartered, industrial loan and thrift company, or licensee under the Minnesota Regulated
Loan Act authorized to do business in this state shall be required to obtain a license under
sections 53C.01 to 53C.14.

(b) The application for a license shall be in writing, under oath and in the form prescribed
by the commissioner. The application shall contain the name of the applicant; date of
incorporation, if incorporated; the address where the business is or is to be conducted and
similar information as to any branch office of the applicant; the name and resident address
of the owner or partners, or, if a corporation or association, of the directors, trustees and
principal officers, and other pertinent information the commissioner requires.

(c) The licensee fee for the fiscal year beginning July 1 and ending June 30 of the
following year, or any part thereof shall be the sum of $250 for the principal place of business
of the licensee, and the sum of $125 for each branch of the licensee. Any licensee who
proves to the satisfaction of the commissioner, by affidavit or other proof satisfactory to
the commissioner, that during the 12 calendar months of the immediately preceding fiscal
year, for which the license has been paid that the licensee has not held retail installment
contracts exceeding $15,000 in amount, shall be entitled to a refund of that portion of each
license fee paid in excess of $25. The commissioner shall certify deleted text begin to the commissioner of
management and budget deleted text end that the licensee is entitled to a refund, and payment deleted text begin thereof deleted text end new text begin of the
refund new text end shall be made by the commissioner deleted text begin of management and budget deleted text end . The amount necessary
to pay for the refundment of the license fee is appropriated deleted text begin out of the general fund deleted text end new text begin from the
financial institutions account under section 46.131, subdivision 11 new text end . All license fees received
by the commissioner under sections 53C.01 to 53C.14 shall be deposited with the
commissioner of management and budget.

(d) Each license shall specify the location of the office or branch and must be
conspicuously displayed there. In case the location be changed, the commissioner shall
endorse the change of location on the license.

(e) Upon the filing of such application, and the payment of the fee, the commissioner
shall issue a license to the applicant to engage in the business of a sales finance company
under and in accordance with the provisions of sections 53C.01 to 53C.14 for a period which
shall expire the last day of June next following the date of its issuance. The license shall
not be transferable or assignable. No licensee shall transact any business provided for by
sections 53C.01 to 53C.14 under any other name.

(f) Section 58A.04, subdivisions 2 and 3, apply to this section.

Sec. 10.

Minnesota Statutes 2020, section 56.02, is amended to read:

56.02 APPLICATION FEE.

(a) Application for license shall be in writing, under oath, and in the form prescribed by
the commissioner, and contain the name and the address, both of the residence and place
of business, of the applicant and, if the applicant is a copartnership or association, of every
member thereof, and if a corporation, of each officer and director thereof; also the county
and municipality, with street and number, if any, where the business is to be conducted, and
such further information as the commissioner may require. The applicant at the time of
making application, shall pay to the commissioner the sum of $500 as a fee for investigating
the application, and the additional sum of $250 as an annual license fee for a period
terminating on the last day of the current calendar year. In addition to the annual license
fee, every licensee hereunder shall pay to the commissioner the actual costs of each
examination, as provided for in section 56.10. All deleted text begin moneys deleted text end new text begin money new text end collected by the
commissioner under this chapter shall be deleted text begin turned over to the commissioner of management
and budget and credited by the commissioner of management and budget to the general
fund of the state deleted text end new text begin deposited in the financial institutions account under section 46.131,
subdivision 11 new text end .

(b) Every applicant shall also prove, in form satisfactory to the commissioner, that the
applicant has available for the operation of the business at the location specified in the
application, liquid assets of at least $50,000.

(c) Section 58A.04, subdivisions 2 and 3, apply to this section.

ARTICLE 3

REINSURANCE

Section 1.

Minnesota Statutes 2020, section 62E.23, subdivision 1, is amended to read:

Subdivision 1.

Administration of plan.

(a) The association is Minnesota's reinsurance
entity to administer the state-based reinsurance program referred to as the Minnesota premium
security plan.

(b) The association may apply for any available federal funding for the plan. All deleted text begin funds
received by or appropriated to the association shall be deposited in the premium security
plan account in section 62E.25, subdivision 1. deleted text end new text begin federal funding received pursuant to a 1332
state innovation waiver under United States Code, title 42, section 18052, for plan year
2023 and beyond is appropriated to the commissioner. The commissioner must transfer the
federal funding appropriated under this paragraph to the association to operate and administer
the Minnesota premium security plan under this section. new text end The association shall notify the
chairs and ranking minority members of the legislative committees with jurisdiction over
health and human services and insurance within ten days of receiving any federal funds.

(c) The association must collect or access data from an eligible health carrier that are
necessary to determine reinsurance payments, according to the data requirements under
subdivision 5, paragraph (c).

(d) The board must not use any funds allocated to the plan for staff retreats, promotional
giveaways, excessive executive compensation, or promotion of federal or state legislative
or regulatory changes.

(e) For each applicable benefit year, the association must notify eligible health carriers
of reinsurance payments to be made for the applicable benefit year no later than June 30 of
the year following the applicable benefit year.

(f) On a quarterly basis during the applicable benefit year, the association must provide
each eligible health carrier with the calculation of total reinsurance payment requests.

(g) By August 15 of the year following the applicable benefit year, the association must
disburse all applicable reinsurance payments to an eligible health carrier.

Sec. 2.

Minnesota Statutes 2020, section 62E.23, subdivision 3, is amended to read:

Subd. 3.

Operation.

(a) The board shall propose to the commissioner the payment
parameters for the next benefit year by January 15 of the year before the applicable benefit
year. The commissioner shall approve or reject the payment parameters no later than 14
days following the board's proposal. If the commissioner fails to approve or reject the
payment parameters within 14 days following the board's proposal, the proposed payment
parameters are final and effective.

(b) If the amount in the premium security plan account in section 62E.25, subdivision
1, is not anticipated to be adequate to fully fund the approved payment parameters as of
July 1 of the year before the applicable benefit year, the board, in consultation with the
commissioner and the commissioner of management and budget, shall propose payment
parameters within the available appropriations. The commissioner must permit an eligible
health carrier to revise an applicable rate filing based on the final payment parameters for
the next benefit year.

(c) Notwithstanding paragraph (a), the payment parameters for benefit year deleted text begin 2020 deleted text end new text begin 2023 new text end
are:

(1) an attachment point of $50,000;

(2) a coinsurance rate of 80 percent; and

(3) a reinsurance cap of $250,000.

Sec. 3.

Minnesota Statutes 2020, section 62E.23, is amended by adding a subdivision to
read:

new text begin Subd. 5a. new text end

new text begin Member assessments. new text end

new text begin (a) Beginning in plan year 2023, the association must
annually assess and collect from members an amount necessary to pay the state share for
the Minnesota premium security plan under this section. Each year the association must
determine each contributing member's liability, if any. If necessary, the association may
make an annual fiscal year end assessment.
new text end

new text begin (b) Subject to approval by the commissioner, the association may also provide for interim
assessments against the contributing members whose aggregate assessments comprised a
minimum of 90 percent of the most recent prior annual assessment, if the association deems
the methodology is the most administratively efficient and cost-effective means to assess
the contributing member, and as may be necessary to ensure the association has the financial
capability to meet the incurred or estimated state share and the association's operating and
administrative expenses until the association's next annual fiscal year end assessment.
new text end

new text begin (c) A contributing member must pay an assessment under this subdivision within 30
days of the date the contributing member receives written notice of a fiscal year end
assessment or an interim assessment from the association.
new text end

new text begin (d) If a contributing member fails to tender the assessment to the association within 30
days, the contributing member's association membership may be terminated. A contributing
member that ceases to do accident and health insurance business in Minnesota remains
liable for assessments through the calendar year during which accident and health insurance
business ceased.
new text end

new text begin (e) The association may decline to levy an assessment against a contributing member if
the assessment determined under this subdivision is less than $5,000.
new text end

Sec. 4.

Laws 2017, chapter 13, article 1, section 15, as amended by Laws 2017, First
Special Session chapter 6, article 5, section 10, Laws 2019, First Special Session chapter
9, article 8, section 19, and Laws 2021, First Special Session chapter 7, article 15, section
1, is amended to read:

Sec. 15. MINNESOTA PREMIUM SECURITY PLAN FUNDING.

(a) The Minnesota Comprehensive Health Association shall fund the operational and
administrative costs and reinsurance payments of the Minnesota security plan and association
using the following amounts deposited in the premium security plan account in Minnesota
Statutes, section 62E.25, subdivision 1, in the following order:

(1) any federal funding available;

(2) funds deposited under article 1, sections 12 and 13;

(3) any state funds from the health care access fund; and

(4) any state funds from the general fund.

(b) The association shall transfer from the premium security plan account any remaining
state funds not used for the Minnesota premium security plan by June 30, deleted text begin 2024 deleted text end new text begin 2029 new text end , to the
commissioner of commerce. Any amount transferred to the commissioner of commerce
shall be deposited in the health care access fund in Minnesota Statutes, section 16A.724. new text begin
Any money collected via member assessments under Minnesota Statutes, section 62E.23,
subdivision 5a, are not subject to the transfer under this paragraph.
new text end

(c) The Minnesota Comprehensive Health Association may not spend more than
$271,000,000 for benefit year 2018 and not more than $271,000,000 for benefit year 2019
for the operational and administrative costs of, and reinsurance payments under, the
Minnesota premium security plan.

Sec. 5. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 4 are effective upon federal approval of the continuation of the state
innovation waiver submitted under Laws 2021, First Special Session chapter 7, article 15,
section 4, that maintains federal funding for the MinnesotaCare program under Minnesota
Statutes, chapter 256L, through the basic health plan formula at levels that would have been
received if reinsurance was not implemented. The commissioner of commerce must notify
(1) the chairs and ranking minority members of the legislative committees that have
jurisdiction over commerce and health and human services finance, and (2) the revisor of
statutes when federal approval is obtained.
new text end