1st Unofficial Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to commerce; providing powers and duties to 1.3 the commissioner; regulating securities; modifying the 1.4 real estate licensing exemption for closing agents; 1.5 regulating real property appraisers; regulating 1.6 residential building contractors and remodelers; 1.7 modifying licensing requirements for collection 1.8 agencies; regulating notaries public; making technical 1.9 changes; amending Minnesota Statutes 1996, sections 1.10 45.011, subdivision 1; 45.028, subdivision 1; 80A.04, 1.11 subdivisions 3, 4, and by adding a subdivision; 1.12 80A.05, subdivisions 4, 5, and by adding a 1.13 subdivision; 80A.06, subdivisions 1, 2, and 3; 80A.08; 1.14 80A.12, by adding a subdivision; 80A.14, subdivisions 1.15 3, 4, and by adding subdivisions; 80A.15, subdivisions 1.16 1 and 2; 80A.16; 80A.28, subdivisions 1 and 2; 82.19, 1.17 by adding a subdivision; 82.20, subdivision 15; 82.22, 1.18 subdivision 13; 82.24, subdivision 5; 82B.13, 1.19 subdivisions 1, 4, and 5; 82B.14; 82B.19, subdivision 1.20 1; 326.83, subdivisions 11 and 19; 326.84, subdivision 1.21 3; 326.85, by adding a subdivision; 326.921; 332.33, 1.22 subdivision 1, and by adding a subdivision; 332.34; 1.23 359.061; and 359.071; proposing coding for new law in 1.24 Minnesota Statutes, chapters 45; 60K; and 80A; 1.25 repealing Minnesota Statutes 1996, section 60K.07, 1.26 subdivision 1. 1.27 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.28 Section 1. Minnesota Statutes 1996, section 45.011, 1.29 subdivision 1, is amended to read: 1.30 Subdivision 1. [SCOPE.] As used in chapters 45 to 83, 1.31 155A, 309, 332, 345, and 359, and sections 326.83 to326.981.32 326.991, and 386.61 to 386.78, unless the context indicates 1.33 otherwise, the terms defined in this section have the meanings 1.34 given them. 1.35 Sec. 2. [45.0111] [TEMPORARY LICENSES.] 1.36 Subdivision 1. [AUTHORITY.] The commissioner may grant a 2.1 temporary license to an applicant who can demonstrate successful 2.2 completion of all requirements for a permanent license. The 2.3 temporary license will remain in effect until the earliest of: 2.4 (1) receipt by the applicant of the permanent license; 2.5 (2) the expiration of 45 days from the date on which the 2.6 temporary license was granted; or 2.7 (3) denial by the commissioner of the permanent license. 2.8 Subd. 2. [NONAPPLICATION.] A temporary license as 2.9 described in this section may not be issued to an applicant for 2.10 licensure as a: 2.11 (1) currency exchange regulated under chapter 53A; 2.12 (2) collection agency regulated under sections 332.31 to 2.13 332.45; 2.14 (3) credit service organization regulated under sections 2.15 332.52 to 332.60; or 2.16 (4) broker dealer, investment advisor, or agent regulated 2.17 under chapter 80A. 2.18 Sec. 3. [45.0112] [STREET ADDRESSES REQUIRED.] 2.19 Licensees or applicants for licenses issued by the 2.20 commissioner shall provide to the commissioner a street address 2.21 where the licensee actually resides and a street address were 2.22 the licensee's business is physically located. A post office 2.23 box address is not sufficient to satisfy this requirement. 2.24 Sec. 4. Minnesota Statutes 1996, section 45.028, 2.25 subdivision 1, is amended to read: 2.26 Subdivision 1. [REQUIREMENT.] (a) When a person, including 2.27 any nonresident of this state, engages in conduct prohibited or 2.28 made actionable by chapters 45 to 83, 155A, 309, and 332, and 2.29 section 326.83, or any rule or order under those chapters, and 2.30 the person has not filed a consent to service of process under 2.31 chapters 45 to 83, 155A, 309, and 332, and section 326.83, that 2.32 conduct is equivalent to an appointment of the commissioner as 2.33 the person's attorney to receive service of process in any 2.34 noncriminal suit, action, or proceeding against the person which 2.35 is based on that conduct and is brought under chapters 45 to 83, 2.36 155A, 309, and 332, and section 326.83, or any rule or order 3.1 under those chapters. 3.2 (b) Subdivision 2 applies in all other cases under chapters 3.3 45 to 83, 155A, 309, and 332, and section 326.83, or any rule or 3.4 order under those chapters, in which a person, including a 3.5 nonresident of this state, has filed a consent to service of 3.6 process. This paragraph supersedes any inconsistent provision 3.7 of law. 3.8 (c) Subdivision 2 applies in all cases in which service of 3.9 process is allowed to be made on the commissioner of commerce. 3.10 Sec. 5. [45.0292] [LICENSE RECIPROCITY.] 3.11 The commissioner may waive all or part of the requirements 3.12 of prelicense education, examination, and continuing education 3.13 for individuals of other jurisdictions if: 3.14 (1) a written reciprocal licensing agreement is in effect 3.15 between the commissioner and the licensing officials of that 3.16 jurisdiction; 3.17 (2) the individual is licensed in that jurisdiction; and 3.18 (3) the licensing requirements of that jurisdiction are 3.19 substantially similar to the corresponding licensing 3.20 requirements of the commerce department. 3.21 Sec. 6. [60K.20] [SOCIAL SECURITY NUMBERS OF LICENSED 3.22 AGENTS; COMMISSIONER'S AUTHORITY TO PROVIDE TO NAIC.] 3.23 The commissioner may provide the social security numbers of 3.24 licensed insurance agents to the National Association of 3.25 Insurance Commissioners. 3.26 Sec. 7. Minnesota Statutes 1996, section 80A.04, 3.27 subdivision 3, is amended to read: 3.28 Subd. 3. It is unlawful for any person to transact 3.29 business in this state as an investment adviser unless that 3.30 person is so licensed or licensed as a broker-dealer under this 3.31 chapter or unless: (1) that person's only clients in this state 3.32 are investment companies as defined in the Investment Company 3.33 Act of 1940, other investment advisers, broker-dealers, banks, 3.34 trust companies, savings associations, federal covered advisers 3.35 insurance companies,employee benefit plans,corporations with a 3.36 class of equity securities registered under section 12(b) or 4.1 12(g) of the Securities Exchange Act of 1934, small business 4.2 investment companies, and government agencies or 4.3 instrumentalities, whether acting for themselves or as trustees 4.4 with investment control, or other institutionalinvestors as are4.5designated by rule or order of the commissioner.buyers; or (2) 4.6 that person has no place of business in this state and during 4.7 the preceding 12-month period has had fewer than six clients who 4.8 are residents of this state. 4.9 Sec. 8. Minnesota Statutes 1996, section 80A.04, 4.10 subdivision 4, is amended to read: 4.11 Subd. 4. Every licenseshall expireor notice filing 4.12 expires on December 31 of each year unless an application for 4.13 renewal has been received by the commissioner by November 15. 4.14 Sec. 9. Minnesota Statutes 1996, section 80A.04, is 4.15 amended by adding a subdivision to read: 4.16 Subd. 5. Except with respect to advisers whose only 4.17 clients are those described in subdivision 3, clause (2), it is 4.18 unlawful for a federal covered adviser to conduct advisory 4.19 business in this state unless the person complies with section 4.20 80A.05, subdivision 1a. 4.21 Sec. 10. Minnesota Statutes 1996, section 80A.05, is 4.22 amended by adding a subdivision to read: 4.23 Subd. 1a. [FEDERAL COVERED ADVISERS.] Except with respect 4.24 to federal covered advisers whose only clients are those 4.25 described in section 80A.04, subdivision 3, clause (2), a 4.26 federal covered adviser shall file with the commissioner, before 4.27 acting as a federal covered adviser in this state, all documents 4.28 required by the commissioner that have been filed with the 4.29 Securities and Exchange Commission. 4.30 Sec. 11. Minnesota Statutes 1996, section 80A.05, 4.31 subdivision 4, is amended to read: 4.32 Subd. 4. The commissioner may by rule require a minimum 4.33 capital for broker-dealers, subject to the limitations of 4.34 section 15 of the Securities Act of 1934, and establish minimum 4.35 financial requirements for investment advisersand establish4.36limitations on aggregate indebtedness of broker-dealers in5.1relation to net capital., subject to the limitations of section 5.2 222 of the Investment Advisers Act of 1940 which may include 5.3 different requirements for those investment advisers who 5.4 maintain custody of clients' funds or securities or who have 5.5 discretionary authority over the funds or securities and those 5.6 investment advisers who do not. 5.7 Sec. 12. Minnesota Statutes 1996, section 80A.05, 5.8 subdivision 5, is amended to read: 5.9 Subd. 5. The commissioner may by rule require licensed 5.10 broker-dealers, agents and investment advisers who have custody 5.11 of or discretionary authority over client funds or securities, 5.12 to post surety bonds in amountsup to $25,000,as the 5.13 commissioner may prescribe subject to the limitations of section 5.14 15 of the Securities Exchange Act of 1934 for broker-dealers and 5.15 section 222 of the Investment Advisers Act of 1940 for 5.16 investment advisers and may by rule or order determine their 5.17 conditions. Any appropriate deposit of cash or securities shall 5.18 be accepted in lieu of any bond so required. No bond may be 5.19 required of any broker-dealer whose net capital, which may be 5.20 defined by rule, exceeds$25,000the amounts required by the 5.21 commissioner. Every bond shall provide for suit thereon by any 5.22 person who has a cause of action under section 80A.23 and, if 5.23 the commissioner by rule or order requires, by any person who 5.24 has a cause of action not arising under sections 80A.01 to 5.25 80A.31. Every bond shall provide that no suit may be maintained 5.26 to enforce any liability on the bond unless brought within three 5.27 years after the sale or other act upon which it is based. 5.28 Sec. 13. Minnesota Statutes 1996, section 80A.06, 5.29 subdivision 1, is amended to read: 5.30 Subdivision 1. Every licensed broker-dealer and investment 5.31 adviser shall make and keep all accounts, correspondence, 5.32 memoranda, papers, books and other records which the 5.33 commissioner by rule prescribes by rule or order, except as 5.34 provided by section 15 of the Securities Act of 1934 in the case 5.35 of a broker-dealer and section 222 of the Investment Advisers 5.36 Act of 1940 in the case of an investment adviser. All records 6.1 required shall be preserved for three years unless the 6.2 commissioner by rule prescribes otherwise for particular types 6.3 of records. All required records shall be kept within the state 6.4 or shall, at the request of the commissioner, be made available 6.5 at any time for examination by the commissioner either in the 6.6 principal office of the licensee or by production of exact 6.7 copies thereof in this state. 6.8 Sec. 14. Minnesota Statutes 1996, section 80A.06, 6.9 subdivision 2, is amended to read: 6.10 Subd. 2. Every licensed broker-dealer and investment 6.11 adviser shall file such reports as the commissioner by rule or 6.12 order prescribes except as provided in section 15 of the 6.13 Securities Exchange Act of 1934 in the case of a broker-dealer 6.14 and section 222 of the Investment Advisers Act of 1940 in the 6.15 case of an investment adviser. 6.16 Sec. 15. Minnesota Statutes 1996, section 80A.06, 6.17 subdivision 3, is amended to read: 6.18 Subd. 3. If the information contained in any document 6.19 filed with the commissioner is or becomes inaccurate or 6.20 incomplete in any material respect, the licensee or federal 6.21 covered adviser shall within 30 days file a correcting amendment 6.22 unless notification of the correction has been given under 6.23 section 80A.04, subdivision 2. 6.24 Sec. 16. Minnesota Statutes 1996, section 80A.08, is 6.25 amended to read: 6.26 80A.08 [REGISTRATION REQUIREMENT.] 6.27 It is unlawful for any person to offer or sell any security 6.28 in this state unless (a) it is registered under sections 80A.01 6.29 to 80A.31 or (b) the security or transaction is exempted under 6.30 section 80A.15 or (c) it is a federal covered security. 6.31 Sec. 17. Minnesota Statutes 1996, section 80A.12, is 6.32 amended by adding a subdivision to read: 6.33 Subd. 12. [COORDINATED REGISTRATION.] The commissioner may 6.34 enter into cooperative and reciprocal agreements with members of 6.35 a national securities regulatory organization composed of 6.36 securities administrators of this and other states to 7.1 participate in a coordinated review of securities offerings in 7.2 lieu of conducting the commissioner's own review. 7.3 Sec. 18. [80A.122] [FEDERAL COVERED SECURITIES.] 7.4 Subdivision 1. [18(b)(2) FILINGS.] The commissioner may, 7.5 by rule or otherwise, require the filing of any or all of the 7.6 following documents with respect to a federal covered security 7.7 under section 18(b)(2) of the Securities Act of 1933: 7.8 (1) prior to the initial offer of a federal covered 7.9 security in this state, all documents that are part of a current 7.10 federal registration statement filed with the Securities and 7.11 Exchange Commission under the Securities Act of 1933, together 7.12 with a fee and a consent to service of process; 7.13 (2) after the initial offer of a federal covered security 7.14 in this state, all documents that are part of an amendment to a 7.15 current federal registration statement filed with the Securities 7.16 and Exchange Commission under the Securities Act of 1933, which 7.17 must be filed concurrently with the commissioner; 7.18 (3) notices that increase the aggregate amount of 7.19 securities offered or sold in this state, together with the fee. 7.20 Subd. 2. [18(b)(4)(D) FILINGS.] With respect to a security 7.21 that is a federal covered security under section 18(b)(4)(D) of 7.22 the Securities Act of 1933, the commissioner, by rule or 7.23 otherwise, may require the issuer to file a notice on form D of 7.24 the Securities and Exchange Commission, together with a fee and 7.25 a consent to service of process no later than 15 days after the 7.26 first sale of the covered security in this state. 7.27 Subd. 3. [18(b)(3) or (4) FILINGS.] The commissioner, by 7.28 rule or otherwise, may require the filing of any document filed 7.29 with the Securities and Exchange Commission under the Securities 7.30 Act of 1933 with respect to a federal covered security under 7.31 section 18(b)(3) or (4) of the Securities Act of 1933 together 7.32 with the fee. 7.33 Subd. 4. [STOP ORDERS.] The commissioner may issue a stop 7.34 order suspending the offer and sale of a federal covered 7.35 security, except a federal covered security under section 7.36 18(b)(1) of the Securities Act of 1933, if the commissioner 8.1 finds that: (1) the order is in the public interest; and (2) 8.2 there is a failure to comply with any condition established 8.3 under this section. 8.4 Subd. 5. [COMMISSIONER'S WAIVER.] The commissioner may, by 8.5 rule or otherwise, waive any or all of the provisions of this 8.6 section. 8.7 Sec. 19. Minnesota Statutes 1996, section 80A.14, 8.8 subdivision 3, is amended to read: 8.9 Subd. 3. [AGENT.] "Agent" means any individual other than 8.10 a broker-dealer who represents a broker-dealer or issuer in 8.11 effecting or attempting to effect purchases or sales of 8.12 securities. "Agent" does not include: 8.13 (a) an individual who represents an issuer in: 8.14 (1) effecting transactions in a security exempted by 8.15 section 80A.15, subdivision 1; 8.16 (2) effecting transactions exempted by section 80A.15, 8.17 subdivision 2; 8.18 (3) effecting transactions with existing employees, 8.19 partners or directors of the issuer if no commission or other 8.20 remuneration is paid or given directly or indirectly for 8.21 soliciting any person in this state; 8.22 (4) effecting other transactions, if the individual is an 8.23 officer or director of the issuer, no commission or other 8.24 remuneration is paid or given directly or indirectly for 8.25 soliciting any person in this state, and, upon application, the 8.26 individual is specifically authorized by name in an order issued 8.27 by the commissioner;or8.28 (5) effecting transactions in securities registered by 8.29 notification under section 80A.09 if no commission or other 8.30 remuneration is paid or given directly or indirectly for 8.31 soliciting any person in this state.; or 8.32 (6) effecting transactions in a federal covered security as 8.33 described in sections 18(b)(3) and 18(b)(4) of the Securities 8.34 Act of 1933; or 8.35 (b) an individual who represents a broker-dealer in 8.36 effecting transactions in the state limited to those 9.1 transactions described in section 15(h)(2) of the Securities 9.2 Exchange Act of 1934. 9.3 A partner, officer or director of a broker-dealer or 9.4 issuer, or a person occupying a similar status or performing 9.5 similar functions, is an agent only if that person otherwise 9.6 comes within this definition. 9.7 Sec. 20. Minnesota Statutes 1996, section 80A.14, 9.8 subdivision 4, is amended to read: 9.9 Subd. 4. [BROKER-DEALER.] "Broker-dealer" means any person 9.10 engaged in the business of effecting transactions in securities 9.11 for the account of others or for that person's own account. 9.12 "Broker-dealer" does not include: 9.13 (1) an agent; 9.14 (2) an issuer; 9.15 (3) a trust company; or 9.16 (4) a bank, savings institution, savings association, 9.17 credit union: 9.18 (i) acting for the account of others, provided that such 9.19 activities are conducted in compliance with such rules as may be 9.20 adopted by the commissioner; 9.21 (ii) acting for its own account; or 9.22 (iii) acting in a fiduciary capacity pursuant to the powers 9.23 and privileges described by sections 48.36 to 48.49 or United 9.24 States Code, title 12, section 92(a); 9.25 (5) a person who has no place of business in this state if 9.26 that person effects transactions in this state exclusively with 9.27 or through (i) the issuers of the securities involved in the 9.28 transactions, (ii) other broker-dealers, or (iii) banks, savings 9.29 institutions, trust companies, insurance companies, investment 9.30 companies as defined in the Investment Company Act of 1940, 9.31pension or profit sharing trusts,or other financial 9.32 institutions or institutional buyers, or to broker-dealers, 9.33 whether the purchaser is acting for itself or in some fiduciary 9.34 capacity; or 9.35 (6) other persons not within the intent of this subsection 9.36 whom the commissioner by rule or order designates. 10.1 Sec. 21. Minnesota Statutes 1996, section 80A.14, is 10.2 amended by adding a subdivision to read: 10.3 Subd. 5a. [FEDERAL COVERED ADVISER.] "Federal covered 10.4 adviser" means a person who is: (1) registered under section 10.5 203 of the Investment Act of 1940; or (2) is excluded from the 10.6 definition of "investment adviser" under section 202(a)(11), 10.7 except that, until October 10, 1999, a federal covered adviser 10.8 for which a nonpayment or underpayment of a fee has not been 10.9 promptly remedied following written notification to the adviser 10.10 of such nonpayment or underpayment shall not be a federal 10.11 covered adviser. 10.12 Sec. 22. Minnesota Statutes 1996, section 80A.14, is 10.13 amended by adding a subdivision to read: 10.14 Subd. 5b. [FEDERAL COVERED SECURITY.] "Federal covered 10.15 security" means a security that is a covered security under 10.16 section 18(b) of the Securities Act of 1933 or regulations 10.17 adopted under that act, except, up through October 10, 1999, or 10.18 other date as may be legally permissible, a federal covered 10.19 security for which a fee has not been paid and promptly remedied 10.20 following written notification from the commissioner to the 10.21 issuer of the nonpayment or underpayment of the fees as required 10.22 by this chapter is not a federal covered security. 10.23 Sec. 23. Minnesota Statutes 1996, section 80A.14, is 10.24 amended by adding a subdivision to read: 10.25 Subd. 8a. [INSTITUTIONAL BUYER.] For the purposes of 10.26 sections 80A.04, subdivision 3; 80A.14, subdivision 4, clause 10.27 (5); and 80A.15, subdivision 2, paragraph (g), "institutional 10.28 buyer" includes, but is not limited to, a corporation with a 10.29 class of equity securities registered under section 12(b) or 10.30 12(g) of the Securities Exchange Act of 1934, as amended, a 10.31 "qualified institutional buyer" within the meaning of rule 144A, 10.32 and an "accredited investor" within the meaning of rule 501(a) 10.33 of regulation D. 10.34 Sec. 24. Minnesota Statutes 1996, section 80A.15, 10.35 subdivision 1, is amended to read: 10.36 Subdivision 1. The following securities are exempted from 11.1 sections 80A.08 and 80A.16: 11.2 (a) Any security, including a revenue obligation, issued or 11.3 guaranteed by the United States, any state, any political 11.4 subdivision of a state, or any agency or corporate or other 11.5 instrumentality of one or more of the foregoing.; but this 11.6 exemption does not apply to a security issued by any of the 11.7 foregoing that is payable solely from payments to be received in 11.8 respect of property or money used under a lease, sale, or loan 11.9 arrangement by or for a nongovernmental industrial or commercial 11.10 enterprise. Pursuant to section 106(c) of the Secondary 11.11 Mortgage Market Enhancement Act of 1984, Public Law Number 11.12 98-440, this exemption does not apply to a security that is 11.13 offered or sold pursuant to section 106(a)(1) or (2) of that act. 11.14 (b) Any security issued or guaranteed by Canada, any 11.15 Canadian province, any political subdivision of any province, 11.16 any agency or corporate or other instrumentality of one or more 11.17 of the foregoing, if the security is recognized as a valid 11.18 obligation by the issuer or guarantor; but this exemption shall 11.19 not include any revenue obligation payable solely from payments 11.20 to be made in respect of property or money used under a lease, 11.21 sale or loan arrangement by or for a nongovernmental industrial 11.22 or commercial enterprise. 11.23 (c) Any security issued by and representing an interest in 11.24 or a debt of, or guaranteed by, any bank organized under the 11.25 laws of the United States, or any bank, savings institution or 11.26 trust company organized under the laws of any state and subject 11.27 to regulation in respect of the issuance or guarantee of its 11.28 securities by a governmental authority of that state. 11.29 (d) Any security issued by and representing an interest in 11.30 or a debt of, or guaranteed by, any federal savings association, 11.31 or any savings association or similar association organized 11.32 under the laws of any state and authorized to do business in 11.33 this state. 11.34 (e) Any security issued or guaranteed by any federal credit 11.35 union or any credit union, or similar association organized and 11.36 supervised under the laws of this state. 12.1 (f) Any security listed or approved for listing upon notice 12.2 of issuance on the New York Stock Exchange, the American Stock 12.3 Exchange, the Midwest Stock Exchange, the Pacific Stock 12.4 Exchange, or the Chicago Board Options Exchange; any other 12.5 security of the same issuer which is of senior or substantially 12.6 equal rank; any security called for by subscription rights or 12.7 warrants so listed or approved; or any warrant or right to 12.8 purchase or subscribe to any of the foregoing. This exemption 12.9 does not apply to second tier listings on any of the exchanges 12.10 in this paragraph. 12.11 (g) Any commercial paper which arises out of a current 12.12 transaction or the proceeds of which have been or are to be used 12.13 for current transactions, and which evidences an obligation to 12.14 pay cash within nine months of the date of issuance, exclusive 12.15 of days of grace, or any renewal of the paper which is likewise 12.16 limited, or any guarantee of the paper or of any renewal which 12.17 are not advertised for sale to the general public in newspapers 12.18 or other publications of general circulation or otherwise, or by 12.19 radio, television or direct mailing. 12.20 (h) Any interest in any employee's savings, stock purchase, 12.21 pension, profit sharing or similar benefit plan, or a 12.22 self-employed person's retirement plan. 12.23 (i) Any security issued or guaranteed by any railroad, 12.24 other common carrier or public utility which is subject to 12.25 regulation in respect to the issuance or guarantee of its 12.26 securities by a governmental authority of the United States. 12.27 (j) Any interest in a common trust fund or similar fund 12.28 maintained by a state bank or trust company organized and 12.29 operating under the laws of Minnesota, or a national bank 12.30 wherever located, for the collective investment and reinvestment 12.31 of funds contributed thereto by the bank or trust company in its 12.32 capacity as trustee, executor, administrator, or guardian; and 12.33 any interest in a collective investment fund or similar fund 12.34 maintained by the bank or trust company, or in a separate 12.35 account maintained by an insurance company, for the collective 12.36 investment and reinvestment of funds contributed thereto by the 13.1 bank, trust company or insurance company in its capacity as 13.2 trustee or agent, which interest is issued in connection with an 13.3 employee's savings, pension, profit sharing or similar benefit 13.4 plan, or a self-employed person's retirement plan. 13.5 (k) Any security which meets all of the following 13.6 conditions: 13.7 (1) If the issuer is not organized under the laws of the 13.8 United States or a state, it has appointed a duly authorized 13.9 agent in the United States for service of process and has set 13.10 forth the name and address of the agent in its prospectus; 13.11 (2) A class of the issuer's securities is required to be 13.12 and is registered under section 12 of the Securities Exchange 13.13 Act of 1934, and has been so registered for the three years 13.14 immediately preceding the offering date; 13.15 (3) Neither the issuer nor a significant subsidiary has had 13.16 a material default during the last seven years, or for the 13.17 period of the issuer's existence if less than seven years, in 13.18 the payment of (i) principal, interest, dividend, or sinking 13.19 fund installment on preferred stock or indebtedness for borrowed 13.20 money, or (ii) rentals under leases with terms of three years or 13.21 more; 13.22 (4) The issuer has had consolidated net income, before 13.23 extraordinary items and the cumulative effect of accounting 13.24 changes, of at least $1,000,000 in four of its last five fiscal 13.25 years including its last fiscal year; and if the offering is of 13.26 interest bearing securities, has had for its last fiscal year, 13.27 net income, before deduction for income taxes and depreciation, 13.28 of at least 1-1/2 times the issuer's annual interest expense, 13.29 giving effect to the proposed offering and the intended use of 13.30 the proceeds. For the purposes of this clause "last fiscal 13.31 year" means the most recent year for which audited financial 13.32 statements are available, provided that such statements cover a 13.33 fiscal period ended not more than 15 months from the 13.34 commencement of the offering; 13.35 (5) If the offering is of stock or shares other than 13.36 preferred stock or shares, the securities have voting rights and 14.1 the rights include (i) the right to have at least as many votes 14.2 per share, and (ii) the right to vote on at least as many 14.3 general corporate decisions, as each of the issuer's outstanding 14.4 classes of stock or shares, except as otherwise required by law; 14.5 and 14.6 (6) If the offering is of stock or shares, other than 14.7 preferred stock or shares, the securities are owned beneficially 14.8 or of record, on any date within six months prior to the 14.9 commencement of the offering, by at least 1,200 persons, and on 14.10 that date there are at least 750,000 such shares outstanding 14.11 with an aggregate market value, based on the average bid price 14.12 for that day, of at least $3,750,000. In connection with the 14.13 determination of the number of persons who are beneficial owners 14.14 of the stock or shares of an issuer, the issuer or broker-dealer 14.15 may rely in good faith for the purposes of this clause upon 14.16 written information furnished by the record owners. 14.17 (l) Any certificate of indebtedness sold or issued for 14.18 investment, other than a certificate of indebtedness pledged as 14.19 a security for a loan made contemporaneously therewith, and any 14.20 savings account or savings deposit issued, by an industrial loan 14.21 and thrift company. 14.22 (m) Any security designated or approved for designation 14.23 upon notice of issuance on the NASDAQ/National Market System; 14.24 any other security of the same issuer that is of senior or 14.25 substantially equal rank; any security called for by 14.26 subscription rights or warrants so designated or approved; or 14.27 any warrant or right to purchase or subscribe to any of the 14.28 securities referred to in this paragraph; provided that the 14.29 National Market System provides the commissioner with notice of 14.30 any material change in its designation requirements. The 14.31 commissioner may revoke this exemption if the commissioner 14.32 determines that the designation requirements are not enforced or 14.33 are amended in a manner that lessens protection to investors. 14.34 Sec. 25. Minnesota Statutes 1996, section 80A.15, 14.35 subdivision 2, is amended to read: 14.36 Subd. 2. The following transactions are exempted from 15.1 sections 80A.08 and 80A.16: 15.2 (a) Any sales, whether or not effected through a 15.3 broker-dealer, provided that: 15.4 (1) no person shall make more than ten sales of securities 15.5 of the same issuer pursuant to this exemption, exclusive of 15.6 sales according to clause (2), during any period of 12 15.7 consecutive months; provided further, that in the case of sales 15.8 by an issuer, except sales of securities registered under the 15.9 Securities Act of 1933 or exempted by section 3(b) of that act, 15.10 (i) the seller reasonably believes that all buyers are 15.11 purchasing for investment, and (ii) the securities are not 15.12 advertised for sale to the general public in newspapers or other 15.13 publications of general circulation or otherwise, or by radio, 15.14 television, electronic means or similar communications media, or 15.15 through a program of general solicitation by means of mail or 15.16 telephone; and 15.17 (2) no issuer shall make more than 25 sales of its 15.18 securities according to this exemption, exclusive of sales 15.19 pursuant to clause (1), during any period of 12 consecutive 15.20 months; provided further, that the issuer meets the conditions 15.21 in clause (1) and, in addition meets the following additional 15.22 conditions: (i) files with the commissioner, ten days before a 15.23 sale according to this clause, a statement of issuer on a form 15.24 prescribed by the commissioner; and (ii) no commission or other 15.25 remuneration is paid or given directly or indirectly for 15.26 soliciting any prospective buyers in this state in connection 15.27 with a sale according to this clause except reasonable and 15.28 customary commissions paid by the issuer to a broker-dealer 15.29 licensed under this chapter. 15.30 (b) Any nonissuer distribution of an outstanding security 15.31 if (1) either Moody's, Fitch's, or Standard & Poor's Securities 15.32 Manuals, or other recognized manuals approved by the 15.33 commissioner contains the names of the issuer's officers and 15.34 directors, a balance sheet of the issuer as of a date not more 15.35 than 18 months prior to the date of the sale, and a profit and 15.36 loss statement for the fiscal year preceding the date of the 16.1 balance sheet, and (2) the issuer or its predecessor has been in 16.2 active, continuous business operation for the five-year period 16.3 next preceding the date of sale, and (3) if the security has a 16.4 fixed maturity or fixed interest or dividend provision, the 16.5 issuer has not, within the three preceding fiscal years, 16.6 defaulted in payment of principal, interest, or dividends on the 16.7 securities. 16.8 (c) The execution of any orders by a licensed broker-dealer 16.9 for the purchase or sale of any security, pursuant to an 16.10 unsolicited offer to purchase or sell; provided that the 16.11 broker-dealer acts as agent for the purchaser or seller, and has 16.12 no direct material interest in the sale or distribution of the 16.13 security, receives no commission, profit, or other compensation 16.14 from any source other than the purchaser and seller and delivers 16.15 to the purchaser and seller written confirmation of the 16.16 transaction which clearly itemizes the commission, or other 16.17 compensation. 16.18 (d) Any nonissuer sale of notes or bonds secured by a 16.19 mortgage lien if the entire mortgage, together with all notes or 16.20 bonds secured thereby, is sold to a single purchaser at a single 16.21 sale. 16.22 (e) Any judicial sale, exchange, or issuance of securities 16.23 made pursuant to an order of a court of competent jurisdiction. 16.24 (f) The sale, by a pledge holder, of a security pledged in 16.25 good faith as collateral for a bona fide debt. 16.26 (g) Any offer or sale to a bank, savings institution, trust 16.27 company, insurance company, investment company as defined in the 16.28 Investment Company Act of 1940,pension or profit sharing trust,16.29 or other financial institution or institutional buyer, or to a 16.30 broker-dealer, whether the purchaser is acting for itself or in 16.31 some fiduciary capacity. 16.32 (h) An offer or sale of securities by an issuer made in 16.33 reliance on the exemptions provided by Rule 505 or 506 of 16.34 Regulation D promulgated by the Securities and Exchange 16.35 Commission, Code of Federal Regulations, title 17, sections 16.36 230.501 to 230.508, subject to the conditions and definitions 17.1 provided by Rules 501 to 503 of Regulation D, if the offer and 17.2 sale also satisfies the conditions and limitations in clauses 17.3 (1) to (10). 17.4 (1) The exemption under this paragraph is not available for 17.5 the securities of an issuer if any of the persons described in 17.6 Rule 252(c) to (f) of Regulation A promulgated by the Securities 17.7 and Exchange Commission, Code of Federal Regulations, title 17, 17.8 sections 230.251 to 230.263: 17.9 (i) has filed a registration statement that is the subject 17.10 of a currently effective order entered against the issuer, its 17.11 officers, directors, general partners, controlling persons, or 17.12 affiliates, according to any state's law within five years 17.13 before the filing of the notice required under clause (5), 17.14 denying effectiveness to, or suspending or revoking the 17.15 effectiveness of, the registration statement; 17.16 (ii) has been convicted, within five years before the 17.17 filing of the notice required under clause (5), of a felony or 17.18 misdemeanor in connection with the offer, sale, or purchase of a 17.19 security or franchise, or a felony involving fraud or deceit, 17.20 including but not limited to forgery, embezzlement, obtaining 17.21 money under false pretenses, larceny, or conspiracy to defraud; 17.22 (iii) is subject to an effective administrative order or 17.23 judgment entered by a state securities administrator within five 17.24 years before the filing of the notice required under clause (5), 17.25 that prohibits, denies, or revokes the use of an exemption from 17.26 securities registration, that prohibits the transaction of 17.27 business by the person as a broker-dealer or agent, or that is 17.28 based on fraud, deceit, an untrue statement of a material fact, 17.29 or an omission to state a material fact; or 17.30 (iv) is subject to an order, judgment, or decree of a court 17.31 entered within five years before the filing of the notice 17.32 required under clause (5), temporarily, preliminarily, or 17.33 permanently restraining or enjoining the person from engaging in 17.34 or continuing any conduct or practice in connection with the 17.35 offer, sale, or purchase of a security, or the making of a false 17.36 filing with a state. 18.1 A disqualification under paragraph (h) involving a 18.2 broker-dealer or agent is waived if the broker-dealer or agent 18.3 is or continues to be licensed in the state in which the 18.4 administrative order or judgment was entered against the person 18.5 or if the broker-dealer or agent is or continues to be licensed 18.6 in this state as a broker-dealer or agent after notifying the 18.7 commissioner of the act or event causing disqualification. 18.8 The commissioner may waive a disqualification under 18.9 paragraph (h) upon a showing of good cause that it is not 18.10 necessary under the circumstances that use of the exemption be 18.11 denied. 18.12 A disqualification under paragraph (h) may be waived if the 18.13 state securities administrator or agency of the state that 18.14 created the basis for disqualification has determined, upon a 18.15 showing of good cause, that it is not necessary under the 18.16 circumstances that an exemption from registration of securities 18.17 under the state's laws be denied. 18.18 It is a defense to a violation of paragraph (h) based upon 18.19 a disqualification if the issuer sustains the burden of proof to 18.20 establish that the issuer did not know, and in the exercise of 18.21 reasonable care could not have known, that a disqualification 18.22 under paragraph (h) existed. 18.23 (2) This exemption must not be available to an issuer with 18.24 respect to a transaction that, although in technical compliance 18.25 with this exemption, is part of a plan or scheme to evade 18.26 registration or the conditions or limitations explicitly stated 18.27 in paragraph (h). 18.28 (3) No commission, finder's fee, or other remuneration 18.29 shall be paid or given, directly or indirectly, for soliciting a 18.30 prospective purchaser, unless the recipient is appropriately 18.31registeredlicensed, or exempt fromregistrationlicensure, in 18.32 this state as a broker-dealer. 18.33 (4) Nothing in this exemption is intended to or should be 18.34 in any way construed as relieving issuers or persons acting on 18.35 behalf of issuers from providing disclosure to prospective 18.36 investors adequate to satisfy the antifraud provisions of the 19.1 securities law of Minnesota. 19.2 (5) The issuer shall file with the commissioner a notice on 19.3 form D as adopted by the Securities and Exchange Commission 19.4 according to Regulation D, Code of Federal Regulations, title 19.5 17, section 230.502. The notice must be filed not later than 15 19.6 days after the first sale in this state of securities in an 19.7 offering under this exemption. Every notice on form D must be 19.8 manually signed by a person duly authorized by the issuer and 19.9 must be accompanied by a consent to service of process on a form 19.10 prescribed by the commissioner. 19.11 (6) A failure to comply with a term, condition, or 19.12 requirement of paragraph (h) will not result in loss of the 19.13 exemption for an offer or sale to a particular individual or 19.14 entity if the person relying on the exemption shows that: (i) 19.15 the failure to comply did not pertain to a term, condition, or 19.16 requirement directly intended to protect that particular 19.17 individual or entity, and the failure to comply was 19.18 insignificant with respect to the offering as a whole; and (ii) 19.19 a good faith and reasonable attempt was made to comply with all 19.20 applicable terms, conditions, and requirements of paragraph (h), 19.21 except that, where an exemption is established only through 19.22 reliance upon this provision, the failure to comply shall 19.23 nonetheless constitute a violation of section 80A.08 and be 19.24 actionable by the commissioner. 19.25 (7) The issuer, upon request by the commissioner, shall, 19.26 within ten days of the request, furnish to the commissioner a 19.27 copy of any and all information, documents, or materials 19.28 furnished to investors or offerees in connection with the offer 19.29 and sale according to paragraph (h). 19.30 (8) Neither compliance nor attempted compliance with the 19.31 exemption provided by paragraph (h), nor the absence of an 19.32 objection or order by the commissioner with respect to an offer 19.33 or sale of securities undertaken according to this exemption, 19.34 shall be considered to be a waiver of a condition of the 19.35 exemption or considered to be a confirmation by the commissioner 19.36 of the availability of this exemption. 20.1 (9) The commissioner may, by rule or order, increase the 20.2 number of purchasers or waive any other condition of this 20.3 exemption. 20.4 (10) The determination whether offers and sales made in 20.5 reliance on the exemption set forth in paragraph (h) shall be 20.6 integrated with offers and sales according to other paragraphs 20.7 of this subdivision shall be made according to the integration 20.8 standard set forth in Rule 502 of Regulation D promulgated by 20.9 the Securities and Exchange Commission, Code of Federal 20.10 Regulations, title 17, section 230.502. If not subject to 20.11 integration according to that rule, offers and sales according 20.12 to paragraph (h) shall not otherwise be integrated with offers 20.13 and sales according to other exemptions set forth in this 20.14 subdivision. 20.15 (i) Any offer (but not a sale) of a security for which a 20.16 registration statement has been filed under sections 80A.01 to 20.17 80A.31, if no stop order or refusal order is in effect and no 20.18 public proceeding or examination looking toward an order is 20.19 pending; and any offer of a security if the sale of the security 20.20 is or would be exempt under this section. The commissioner may 20.21 by rule exempt offers (but not sales) of securities for which a 20.22 registration statement has been filed as the commissioner deems 20.23 appropriate, consistent with the purposes of sections 80A.01 to 20.24 80A.31. 20.25 (j) The offer and sale by a cooperative organized under 20.26 chapter 308A or under the laws of another state, of its 20.27 securities when the securities are offered and sold only to its 20.28 members, or when the purchase of the securities is necessary or 20.29 incidental to establishing membership in the cooperative, or 20.30 when such securities are issued as patronage dividends. This 20.31 paragraph applies to a cooperative organized under the laws of 20.32 another state only if the cooperative has filed with the 20.33 commissioner a consent to service of process under section 20.34 80A.27, subdivision 7, and has, not less than ten days prior to 20.35 the issuance or delivery, furnished the commissioner with a 20.36 written general description of the transaction and any other 21.1 information that the commissioner requires by rule or otherwise. 21.2 (l) The issuance and delivery of any securities of one 21.3 corporation to another corporation or its security holders in 21.4 connection with a merger, exchange of shares, or transfer of 21.5 assets whereby the approval of stockholders of the other 21.6 corporation is required to be obtained, provided, that the 21.7 commissioner has been furnished with a general description of 21.8 the transaction and with other information as the commissioner 21.9 by rule prescribes not less than ten days prior to the issuance 21.10 and delivery. 21.11 (m) Any transaction between the issuer or other person on 21.12 whose behalf the offering is made and an underwriter or among 21.13 underwriters. 21.14 (n) The distribution by a corporation of its or other 21.15 securities to its own security holders as a stock dividend or as 21.16 a dividend from earnings or surplus or as a liquidating 21.17 distribution; or upon conversion of an outstanding convertible 21.18 security; or pursuant to a stock split or reverse stock split. 21.19 (o) Any offer or sale of securities by an affiliate of the 21.20 issuer thereof if: (1) a registration statement is in effect 21.21 with respect to securities of the same class of the issuer and 21.22 (2) the offer or sale has been exempted from registration by 21.23 rule or order of the commissioner. 21.24 (p) Any transaction pursuant to an offer to existing 21.25 security holders of the issuer, including persons who at the 21.26 time of the transaction are holders of convertible securities, 21.27 nontransferable warrants, or transferable warrants exercisable 21.28 within not more than 90 days of their issuance, if: (1) no 21.29 commission or other remuneration (other than a standby 21.30 commission) is paid or given directly or indirectly for 21.31 soliciting any security holder in this state; and (2) the 21.32 commissioner has been furnished with a general description of 21.33 the transaction and with other information as the commissioner 21.34 may by rule prescribe no less than ten days prior to the 21.35 transaction. 21.36 (q) Any nonissuer sales of any security, including a 22.1 revenue obligation, issued by the state of Minnesota or any of 22.2 its political or governmental subdivisions, municipalities, 22.3 governmental agencies, or instrumentalities. 22.4 (r) Any transaction as to which the commissioner by rule or 22.5 order finds that registration is not necessary in the public 22.6 interest and for the protection of investors. 22.7 (s) An offer or sale of a security issued in connection 22.8 with an employee's stock purchase, savings, option, profit 22.9 sharing, pension, or similar employee benefit plan, if the 22.10 following conditions are met: 22.11 (1) the issuer, its parent corporation or any of its 22.12 majority-owned subsidiaries offers or sells the security 22.13 according to a written benefit plan or written contract relating 22.14 to the compensation of the purchaser; and 22.15 (2) the class of securities offered according to the plan 22.16 or contract, or if an option or right to purchase a security, 22.17 the class of securities to be issued upon the exercise of the 22.18 option or right, is registered under section 12 of the 22.19 Securities Exchange Act of 1934, or is a class of securities 22.20 with respect to which the issuer files reports according to 22.21 section 15(d) of the Securities Exchange Act of 1934; or 22.22 (3) the issuer fully complies with the provisions of Rule 22.23 701 as adopted by the Securities and Exchange Commission, Code 22.24 of Federal Regulations, title 12, section 230.701. 22.25 The issuer shall file not less than ten days before the 22.26 transaction, a general description of the transaction and any 22.27 other information that the commissioner requires by rule or 22.28 otherwise or, if applicable, a Securities and Exchange Form S-8. 22.29 Annually, within 90 days after the end of the issuer's fiscal 22.30 year, the issuer shall file a notice as provided with the 22.31 commissioner. 22.32 (t) Any sale of a security of an issuer that is a pooled 22.33 income fund, a charitable remainder trust, or a charitable lead 22.34 trust that has a qualified charity as the only charitable 22.35 beneficiary. 22.36 (u) Any sale by a qualified charity of a security that is a 23.1 charitable gift annuity if the issuer has a net worth, otherwise 23.2 defined as unrestricted fund balance, of not less than $300,000 23.3 and either: (1) has been in continuous operation for not less 23.4 than three years; or (2) is a successor or affiliate of a 23.5 qualified charity that has been in continuous operation for not 23.6 less than three years. 23.7 Sec. 26. Minnesota Statutes 1996, section 80A.16, is 23.8 amended to read: 23.9 80A.16 [FILING OF SALES AND ADVERTISING LITERATURE.] 23.10 The commissioner may by rule or order require the filing of 23.11 any prospectus, pamphlet, circular, form letter, advertisement, 23.12 or other sales literature or advertising communication addressed 23.13 or intended for distribution to prospective investors, including 23.14 clients or prospective clients of an investment adviser or 23.15 broker-dealer unless: (1) the security or transaction is 23.16 exempted by section 80A.15; or (2) the security is a federal 23.17 covered security. 23.18 Sec. 27. Minnesota Statutes 1996, section 80A.28, 23.19 subdivision 1, is amended to read: 23.20 Subdivision 1. (a) There shall be a filing fee of $100 for 23.21 every application for registration or notice filing. There 23.22 shall be an additional fee of one-tenth of one percent of the 23.23 maximum aggregate offering price at which theregistered23.24 securities are to be offered in this state, and the maximum 23.25 combined fees shall not exceed $300. 23.26 (b)If the registration statement relates to redeemable23.27securities issued by an open end management company or unit23.28investment trust, as defined in the Investment Company Act of23.291940, there shall be a filing fee of $100 for every application23.30for registration. There shall be an additional fee of 1/20 of23.31one percent of the maximum aggregate offering price at which the23.32registered securities are to be offered in this state. There23.33shall be no maximum fee for securities registered pursuant to23.34this clause.23.35(c)When an application for registration is withdrawn 23.36 before the effective date or a preeffective stop order is 24.1 entered under section 80A.13, subdivision 1, all but the $100 24.2 filing fee shall be returned. If an application to register 24.3 securities is denied, the total of all fees received shall be 24.4 retained. 24.5 (c) Where a filing is made in connection with a federal 24.6 covered security under section 18(b)(2) of the Securities Act of 24.7 1933, there is a fee of $100 for every initial filing. There is 24.8 an additional fee of 1/20 of one percent of the maximum 24.9 aggregate offering price at which the securities are to be 24.10 offered in this state. There is no maximum fee for securities 24.11 filings made according to this section. 24.12 Sec. 28. Minnesota Statutes 1996, section 80A.28, 24.13 subdivision 2, is amended to read: 24.14 Subd. 2. Every applicant for an initial or renewal license 24.15 shall pay a filing fee of $200 in the case of a broker-dealer, 24.16 $50 in the case of an agent, and $100 in the case of an 24.17 investment adviser. When an application is denied or withdrawn, 24.18 the filing fee shall be retained. A licensed agent who has 24.19 terminated employment with one broker-dealer shall, before 24.20 beginning employment with another broker-dealer, pay a transfer 24.21 fee of $25. The fee for a filing made according to section 24.22 80A.05, subdivision 1a, is $100. 24.23 Sec. 29. Minnesota Statutes 1996, section 82.19, is 24.24 amended by adding a subdivision to read: 24.25 Subd. 9. [EXCLUSIVE AGENCY AGREEMENTS.] (a) Except as 24.26 provided in paragraph (b), a licensee shall not negotiate the 24.27 sale, exchange, lease, or listing of any real property directly 24.28 with the owner or lessor knowing that the owner or lessor has 24.29 executed a written exclusive listing contract or exclusive 24.30 contract for nonagency services in connection with the property 24.31 with another real estate broker, buyer, or lessee nor shall a 24.32 licensee negotiate the purchase, lease, or exchange of real 24.33 property knowing that the buyer or lessee has executed a written 24.34 exclusive buyer representation contract or exclusive contract 24.35 for nonagency services for the purchase, lease, or exchange of 24.36 the real property with another real estate broker. 25.1 (b) A licensee may discuss the terms upon which a listing 25.2 or buyer representation contract or a contract for nonagency 25.3 services may be entered into after expiration of any existing 25.4 exclusive contract when the inquiry or discussion is initiated 25.5 by the owner, lessor, buyer, or lessee, and may enter into a 25.6 contract with the owner, lessor, buyer, or lessee to begin after 25.7 the expiration date of the existing exclusive contract. The 25.8 licensee must inquire of the owner, lessor, buyer, or lessee 25.9 whether such an exclusive contract exists. 25.10 Sec. 30. Minnesota Statutes 1996, section 82.20, 25.11 subdivision 15, is amended to read: 25.12 Subd. 15. [EXEMPTION.] The following persons, when acting 25.13 as closing agents, are exempt from the requirements of sections 25.14 82.19 and 82.24 unless otherwise required in this section or 25.15 chapter: 25.16 (1) a direct employee of a title insurance company 25.17 authorized to do business in this state, or a direct employee of 25.18 a title company, or a person who has an agency agreement with a 25.19 title insurance company or a title company in which the agent 25.20 agrees to perform closing services on the title insurance 25.21 company's or title company's behalf and the title insurance 25.22 company or title company assumes responsibility for the actions 25.23 of the agent as if the agent were a direct employee of the title 25.24 insurance company or title company; 25.25 (2) a licensed attorney or a direct employee of a licensed 25.26 attorney; 25.27 (3) a licensed real estate broker or salesperson; 25.28 (4) a direct employee of a licensed real estate broker if 25.29 the broker maintains all funds received in connection with the 25.30 closing services in the broker's trust account; 25.31 (5) any bank, trust company, savings association, credit 25.32 union, industrial loan and thrift company, regulated lender 25.33 under chapter 56, public utility, or land mortgage or farm loan 25.34 association organized under the laws of this state or the United 25.35 States, when engaged in the transaction of businesses within the 25.36 scope of its corporate powers as provided by law;and26.1 (6) a title insurance company authorized to do business in 26.2 this stateor a title company which is the appointed agent of a26.3title insurance company authorized to do business in this26.4state.; and 26.5 (7) a title company that has a contractual agency 26.6 relationship with a title insurance company authorized to do 26.7 business in this state, where the title insurance company 26.8 assumes responsibility for the actions of the title company and 26.9 its employees or agents as if they were the employees or agents 26.10 of the title insurance company. 26.11 Sec. 31. Minnesota Statutes 1996, section 82.22, 26.12 subdivision 13, is amended to read: 26.13 Subd. 13. [CONTINUING EDUCATION.] (a) After their first 26.14 renewal date, all real estate salespersons and all real estate 26.15 brokers shall be required to successfully complete 30 hours of 26.16 real estate continuing education, either as a student or a 26.17 lecturer, in courses of study approved by the commissioner, 26.18 during each 24-month license period. At least 15 of the 30 26.19 credit hours must be completed during the first 12 months of the 26.20 24-month licensing period. Salespersons and brokers whose 26.21 initial license period extends more than 12 months are required 26.22 to complete 15 hours of real estate continuing education during 26.23 the initial license period. Those licensees who will receive a 26.24 12-month license on July 1, 1995, because of the staggered 26.25 implementation schedule must complete 15 hours of real estate 26.26 continuing education as a requirement for renewal on July 1, 26.27 1996. Licensees may not claim credit for continuing education 26.28 not actually completed as of the date their report of continuing 26.29 education compliance is filed. 26.30 (b) The commissioner shall adopt rules defining the 26.31 standards for course and instructor approval, and may adopt 26.32 rules for the proper administration of this subdivision. The 26.33 commissioner may not approve a course which can be completed by 26.34 the student at home or outside the classroom without the 26.35 supervision of an instructor approved by the department of 26.36 commerce. The commissioner has discretion to establish a pilot 27.1 program to explore delivery of accredited courses using new 27.2 delivery technology, including interactive technology. This 27.3 pilot program expires on August 1, 2000. 27.4 (c) Any program approved by Minnesota continuing legal 27.5 education shall be approved by the commissioner of commerce for 27.6 continuing education for real estate brokers and salespeople if 27.7 the program or any part thereof relates to real estate. 27.8 (d) As part of the continuing education requirements of 27.9 this section, the commissioner shall require that all real 27.10 estate brokers and salespersons receive: 27.11 (1) at least two hours of training during each license 27.12 period in courses in laws or regulations on agency 27.13 representation and disclosure; and 27.14 (2) at least two hours of training during each license 27.15 period in courses in state and federal fair housing laws, 27.16 regulations, and rules, or other antidiscrimination laws. 27.17 Clause (1) does not apply to real estate salespersons and 27.18 real estate brokers engaged solely in the commercial real estate 27.19 business who file with the commissioner a verification of this 27.20 status along with the continuing education report required under 27.21 paragraph (a). 27.22 (e) The commissioner is authorized to establish a procedure 27.23 for renewal of course accreditation. 27.24 Sec. 32. Minnesota Statutes 1996, section 82.24, 27.25 subdivision 5, is amended to read: 27.26 Subd. 5. [TRUSTACCOUNT RECORDSACCOUNTS.] (a) Each broker 27.27 or closing agent shall maintain and retain records of all trust 27.28 funds and trust accounts. The commissioner may prescribe 27.29 information to be included in the records by appropriate rules. 27.30 (b) A check received from a potential buyer shall be 27.31 deposited into the listing broker's trust account not later than 27.32 the third business day after delivery of the check to the broker 27.33 except that the check may be held by the listing broker until 27.34 acceptance or rejection of the offer if: 27.35 (1) the check by its terms is not negotiable by the broker 27.36 or if the potential buyer has given written instructions that 28.1 the check shall not be deposited nor cashed until acceptance or 28.2 shall be immediately returned if the offer is rejected; and 28.3 (2) the potential seller is informed that the check is 28.4 being so held before or at the time the offer is presented to 28.5 that person for acceptance. 28.6 If the offer is accepted, the check shall be deposited in a 28.7 neutral escrow depository or the trust fund account of the 28.8 listing broker not later than the third business day following 28.9 acceptance of the offer unless said broker has received written 28.10 authorization from all parties to the transaction to continue to 28.11 hold the check. If the offer is rejected, the check shall be 28.12 returned to the potential buyer not later than the next business 28.13 day after rejection. 28.14 Sec. 33. Minnesota Statutes 1996, section 82B.13, 28.15 subdivision 1, is amended to read: 28.16 Subdivision 1. [REGISTERED REAL PROPERTY APPRAISER OR 28.17 LICENSED REAL PROPERTY APPRAISER.] As a prerequisite for 28.18 licensing as a registered real property appraiser or licensed 28.19 real property appraiser, an applicant must present evidence 28.20 satisfactory to the commissioner that the person has 28.21 successfully completed at least7590 classroom hours of courses. 28.22 The courses must consist of6075 hours of general real estate 28.23 appraisal principles and 15 hours related to standards of 28.24 professional appraisal practice and the provisions of this 28.25 chapter. 28.26 Sec. 34. Minnesota Statutes 1996, section 82B.13, 28.27 subdivision 4, is amended to read: 28.28 Subd. 4. [CERTIFIED RESIDENTIAL REAL PROPERTY APPRAISER.] 28.29 As a prerequisite for licensing as a certified residential real 28.30 property appraiser, an applicant must present evidence 28.31 satisfactory to the commissioner that the person has 28.32 successfully completed at least165120 classroom hours of 28.33 courses, including 15 hours related to the standards of 28.34 professional appraisal practice and the provisions of this 28.35 chapter, with particular emphasis on the appraisal of one to 28.36 four unit residential properties. 29.1 Sec. 35. Minnesota Statutes 1996, section 82B.13, 29.2 subdivision 5, is amended to read: 29.3 Subd. 5. [CERTIFIED GENERAL REAL PROPERTY APPRAISER.] As a 29.4 prerequisite for licensing as a certified general real property 29.5 appraiser, an applicant must present evidence satisfactory to 29.6 the commissioner that the person has successfully completed at 29.7 least165180 classroom hours of courses, including 15 hours 29.8 related to the standards of professional appraisal practice and 29.9 the provisions of this chapter, with particular emphasis on the 29.10 appraisal of nonresidential properties. 29.11 Sec. 36. Minnesota Statutes 1996, section 82B.14, is 29.12 amended to read: 29.13 82B.14 [EXPERIENCE REQUIREMENT.] 29.14 (a)A license under section 82B.11, subdivision 3, 4, or 5,29.15may not be issued to a person who does not have the equivalent29.16of two years of experience in real property appraisal supported29.17by adequate written reports or file memoranda.As a 29.18 prerequisite for licensing as a licensed real property 29.19 appraiser, an applicant must present evidence satisfactory to 29.20 the commissioner that the person has obtained 2,000 hours of 29.21 experience in real property appraisal. 29.22 As a prerequisite for licensing as a certified residential 29.23 real property appraiser, an applicant must present evidence 29.24 satisfactory to the commissioner that the person has obtained 29.25 2,500 hours of experience in real property appraisal. 29.26 As a prerequisite for licensing as a certified general real 29.27 property appraiser, an applicant must present evidence 29.28 satisfactory to the commissioner that the person has obtained 29.29 3,000 hours of experience in real property appraisal. 29.30 (b) Each applicant for license under section 82B.11, 29.31 subdivision 3, 4, or 5, shall give under oath a detailed listing 29.32 of the real estate appraisal reports or file memorandafor each29.33yearfor which experience is claimed by the applicant. Upon 29.34 request, the applicant shall make available to the commissioner 29.35 for examination, a sample of appraisal reports that the 29.36 applicant has prepared in the course of appraisal practice. 30.1 (c) Applicants may not receive credit for experience 30.2 accumulated while unlicensed, if the experience is based on 30.3 activities which required a license under this section. 30.4 Sec. 37. Minnesota Statutes 1996, section 82B.19, 30.5 subdivision 1, is amended to read: 30.6 Subdivision 1. [LICENSE RENEWALS.] A licensed real estate 30.7 appraiser shall present evidence satisfactory to the 30.8 commissioner of having met the continuing education requirements 30.9 of this chapter before the commissioner renews a license. 30.10 The basic continuing education requirement for renewal of a 30.11 license is the completion by the applicant either as a student 30.12 or as an instructor, during the immediately preceding term of 30.13 licensing, of at least 30 classroom hours of instruction in 30.14 courses or seminars that have received the approval of the 30.15 commissioner. As part of the continuing education requirements 30.16 of this section, the commissioner shall require that all real 30.17 estate appraisers receive at least four hours of training each 30.18 license period in courses in laws or regulations on standards of 30.19 professional practice. If the applicant's immediately preceding 30.20 term of licensing consisted of 12 or more months, but fewer than 30.21 24 months, the applicant must provide evidence of completion of 30.22 15 hours of instruction during the license period. If the 30.23 immediately preceding term of licensing consisted of fewer than 30.24 12 months, no continuing education need be reported. 30.25 Sec. 38. Minnesota Statutes 1996, section 326.83, 30.26 subdivision 11, is amended to read: 30.27 Subd. 11. [OWNER.] Except in section 326.91, subdivision 30.28 1, "owner" means a person who has any legal or equitable 30.29 interest in real property. For purposes of sections 326.83 to 30.30 326.991, "owner" does not include a residential building 30.31 contractor or residential remodeler who constructs or improves 30.32 its own property for purposes of speculation. A residential 30.33 building contractor or residential remodeler will be presumed to 30.34 be building or improving for purposes of speculation if it 30.35 constructs or improves more than one property within any 30.3612-month24-month period. 31.1 Sec. 39. Minnesota Statutes 1996, section 326.83, 31.2 subdivision 19, is amended to read: 31.3 Subd. 19. [SPECIAL SKILL.] "Special skill" means one of 31.4 the following eight categories: 31.5 (a) [EXCAVATION.] Excavation includes work in any of the 31.6 following areas: 31.7 (1) excavation; 31.8 (2) trenching; 31.9 (3) grading; and 31.10 (4) site grading. 31.11 (b) [MASONRY AND CONCRETE.] Masonry and concrete includes 31.12 work in any of the following areas: 31.13 (1) drain systems; 31.14 (2) poured walls; 31.15 (3) slabs and poured-in-place footings; 31.16 (4) masonry walls; 31.17 (5) masonry fireplaces; 31.18 (6) masonry veneer; and 31.19 (7) water resistance and waterproofing. 31.20 (c) [CARPENTRY.] Carpentry includes work in any of the 31.21 following areas: 31.22 (1) rough framing; 31.23 (2) finish carpentry; 31.24 (3)siding;31.25(4)doors, windows, and skylights; 31.26(5) exterior covering;31.27(6)(4) porches and decks, excluding footings; 31.28(7)(5) wood foundations; and 31.29(8) insulation and vapor barrier;31.30(9)(6) drywall installation, excluding taping and 31.31 finishing;. 31.32(10) cabinet and counter top installation;31.33(11) wood floors;31.34(12) installation of roofing materials, excluding roofing;31.35and31.36(13) soffit, fascia, and trim.32.1 (d) [INTERIOR FINISHING.] Interior finishing includes work 32.2 in any of the following areas: 32.3 (1) floor covering; 32.4 (2) wood floors; 32.5 (3) cabinet and counter top installation; 32.6 (4) insulation and vapor barriers; 32.7 (5) interior or exterior painting; 32.8 (6) ceramic, marble, and quarry tile; 32.9 (7) ornamental guardrail and installation of prefabricated 32.10 stairs; and 32.11 (8) wallpapering. 32.12 (e) [EXTERIOR FINISHING.] Exterior finishing includes work 32.13 in any of the following areas: 32.14 (1) siding; 32.15 (2)doors, skylights, and windows;32.16(3)soffit, fascia, and trim; 32.17(4)(3) exterior plaster and stucco; 32.18(5)(4) painting; and 32.19(6)(5) rain carrying systems, including gutters and down 32.20 spouts. 32.21 (f) [DRYWALL AND PLASTER.] Drywall and plaster includes 32.22 work in any of the following areas: 32.23 (1) installation; 32.24 (2) taping; 32.25 (3) finishing; 32.26 (4) interior plaster; 32.27 (5) painting; and 32.28 (6) wallpapering. 32.29 (g) [ROOFING.] Roofing includes work in any of the 32.30 following areas: 32.31 (1) roof coverings; 32.32 (2) roof sheathing; 32.33 (3) roof weatherproofing and insulation; and 32.34 (4) repair of roof support system, but not construction of 32.35 new roof support system. 32.36 (h) [GENERAL INSTALLATION SPECIALTIES.] Installation 33.1 includes work in any of the following areas: 33.2 (1) garage doors and openers; 33.3 (2) pools, spas, and hot tubs; 33.4 (3) fireplaces and wood stoves; 33.5 (4) asphalt paving and seal coating; 33.6 (5) exterior plaster and stucco; and 33.7 (6) ornamental guardrail and prefabricated stairs. 33.8 Sec. 40. Minnesota Statutes 1996, section 326.84, 33.9 subdivision 3, is amended to read: 33.10 Subd. 3. [EXEMPTIONS.] The license requirement does not 33.11 apply to: 33.12 (1) an employee of a licensee performing work for the 33.13 licensee; 33.14 (2) a material person, manufacturer, or retailer furnishing 33.15 finished products, materials, or articles of merchandise who 33.16 does not install or attach the items; 33.17 (3) an owner or owners of residential real estate who build 33.18 or improve residential real estate and who do the work 33.19 themselves or jointly with the owner's own bona fide employees. 33.20 This exemption does not apply to a person who engages in a 33.21 pattern of building or improving real estate for purposes of 33.22 resale. Such a pattern is presumed to exist if the person 33.23 constructs or improves more than one property within any 33.2412-month24-month period; 33.25 (4) an architect or engineer engaging in professional 33.26 practice as defined in this chapter; 33.27 (5) a person whose total gross annual receipts from 33.28 projects regulated under this section do not exceed $15,000; 33.29 (6) a mechanical contractor; 33.30 (7) a plumber, electrician, or other person whose 33.31 profession is otherwise subject to statewide licensing, when 33.32 engaged in the activity which is the subject of licensure; 33.33 (8) specialty contractors who provide only one special 33.34 skill as defined in section 326.83; 33.35 (9) a school district, or a technical college governed 33.36 under chapter 136F; 34.1 (10) manufactured housing installers; and 34.2 (11) Habitat for Humanity and Builders Outreach Foundation, 34.3 and their individual volunteers when engaged in activities on 34.4 their behalf. 34.5 To qualify for the exemption in clause (5), a person must 34.6 obtain a certificate of exemption from licensing from the 34.7 commissioner. 34.8 A certificate of exemption will be issued upon the 34.9 applicant's filing with the commissioner, an affidavit stating 34.10 that the applicant does not expect to exceed $15,000 in gross 34.11 annual receipts derived from contracting activities during the 34.12 calendar year for which the exemption is requested. 34.13 To renew the exemption in clause (5), the applicant must 34.14 file an affidavit stating that the applicant did not exceed 34.15 $15,000 in gross annual receipts during the past calendar year, 34.16 and the applicant does not expect to exceed $15,000 in gross 34.17 annual receipts during the calendar year for which the exemption 34.18 is requested. 34.19 If a person, operating under the exemption in clause (5), 34.20 exceeds $15,000 in gross receipts during any calendar year, the 34.21 person must immediately surrender the exemption certificate and 34.22 apply for the appropriate license. The person must remain 34.23 licensed until such time as the person's gross annual receipts 34.24 during a calendar year fall below $15,000. The person may then 34.25 apply for this exemption for the next calendar year. 34.26 Sec. 41. Minnesota Statutes 1996, section 326.85, is 34.27 amended by adding a subdivision to read: 34.28 Subd. 4. [NONEXPIRATION.] The council is not subject to 34.29 the expiration provisions of section 15.059, subdivision 5. 34.30 Sec. 42. Minnesota Statutes 1996, section 326.921, is 34.31 amended to read: 34.32 326.921 [BUILDING PERMIT CONDITIONED ON LICENSURE.] 34.33 A political subdivision shall not issue a building permit 34.34 to an unlicensed person who is required to be licensed under 34.35 sections 326.83 to 326.991. A political subdivision that issues 34.36 zoning or land use permits in lieu of a building permit shall 35.1 not issue those permits to an unlicensed person who is required 35.2 to be licensed under sections 326.83 to 326.911. The political 35.3 subdivision shall report the person applying fora buildingthe 35.4 permit to the commissioner who may bring an action against the 35.5 person. 35.6 Sec. 43. Minnesota Statutes 1996, section 332.33, 35.7 subdivision 1, is amended to read: 35.8 Subdivision 1. [REQUIREMENT.] Except as otherwise provided 35.9 in this chapter, no person shall conduct within this state a 35.10 collection agency or engage within this state in the business of 35.11 collecting claims for others as defined in sections 332.31 to 35.12 332.45, without having first applied for and obtained 35.13 a collection agency license. A person acting under the 35.14 authority of a collection agency, as a collector, must first 35.15 obtain a Minnesota collector license. A licensed collector may 35.16 use one additional assumed name only if the assumed name is 35.17 registered with and approved by the commissioner. 35.18 Sec. 44. Minnesota Statutes 1996, section 332.33, is 35.19 amended by adding a subdivision to read: 35.20 Subd. 7. [NOTICE.] A licensed collection agency or 35.21 individual collector must give the commissioner written notice 35.22 of a change in personal name, company name, address, or 35.23 ownership not later than 15 days after the change occurs. 35.24 Sec. 45. Minnesota Statutes 1996, section 332.34, is 35.25 amended to read: 35.26 332.34 [BOND.] 35.27 The commissioner of commerce shall require each collection 35.28 agency licensee to annually file and maintain in force a 35.29 corporate surety bond, in a form to be prescribed by, and 35.30 acceptable to, the commissioner, and inthea sum of at 35.31 least $20,000.An applicant for a new or renewal license may35.32request that the amount of the bond be reduced to an amount not35.33less than $5,000. This request may be granted upon a showing35.34that the total dollar amount received from debtors by the35.35collection agency in the preceding fiscal year did not exceed35.36$30,000.A collection agency may deposit cash in and with a 36.1 depository acceptable to the commissioner in an amount and in 36.2 the manner prescribed and approved by the commissioner in lieu 36.3 of a bond. 36.4 Sec. 46. Minnesota Statutes 1996, section 359.061, is 36.5 amended to read: 36.6 359.061 [RECORD OF COMMISSION; CERTIFICATE.] 36.7 The commission of every notary shall be recorded in the 36.8 office of the court administrator of the district court of the 36.9 notary's county of residence, in a record kept for that 36.10 purpose. The commission of a nonresident notary must be 36.11 recorded in the office of the court administrator of the 36.12 district court of the Minnesota county that borders the county 36.13 in which the nonresident notary resides. The court 36.14 administrator, when requested, shall certify to official acts in 36.15 the manner and for the fees prescribed by statute or court rule. 36.16 Sec. 47. Minnesota Statutes 1996, section 359.071, is 36.17 amended to read: 36.18 359.071 [CHANGE OF NAME OR ADDRESS.] 36.19 A notary shall notify the commissioner of any name or 36.20 address change within 30 days of the change. 36.21 Sec. 48. [REPEALER.] 36.22 Minnesota Statutes 1996, section 60K.07, subdivision 1, is 36.23 repealed. 36.24 Sec. 49. [EFFECTIVE DATE.] 36.25 Sections 39 and 41 are effective the day following final 36.26 enactment.