SF 501

2nd 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 investments by certain 
  1.4             licensees; regulating securities; modifying the real 
  1.5             estate licensing exemption for closing agents; 
  1.6             regulating real property appraisers; regulating 
  1.7             residential building contractors and remodelers; 
  1.8             requiring a compliance bond for sign contractors; 
  1.9             modifying licensing requirements for collection 
  1.10            agencies; regulating charitable trusts; regulating 
  1.11            notaries public; regulating certificates of release by 
  1.12            title insurance companies; making technical changes; 
  1.13            amending Minnesota Statutes 1996, sections 45.011, 
  1.14            subdivision 1; 45.028, subdivision 1; 67A.231; 80A.02, 
  1.15            subdivision 1; 80A.04, subdivisions 3, 4, and by 
  1.16            adding a subdivision; 80A.05, subdivisions 4, 5, and 
  1.17            by adding a subdivision; 80A.06, subdivisions 1, 2, 
  1.18            and 3; 80A.08; 80A.12, by adding a subdivision; 
  1.19            80A.14, subdivisions 3, 4, and by adding subdivisions; 
  1.20            80A.15, subdivisions 1 and 2; 80A.16; 80A.28, 
  1.21            subdivisions 1 and 2; 80C.01, subdivision 4; 82.19, by 
  1.22            adding a subdivision; 82.20, subdivision 15; 82.22, 
  1.23            subdivision 13; 82.24, subdivision 5; 82B.13, 
  1.24            subdivisions 1, 4, and 5; 82B.14; 82B.19, subdivision 
  1.25            1; 317A.141, by adding a subdivision; 317A.671; 
  1.26            326.83, subdivisions 11 and 19; 326.84, subdivision 3; 
  1.27            326.85, by adding a subdivision; 326.921; 332.33, 
  1.28            subdivision 1, and by adding a subdivision; 332.34; 
  1.29            333.01; 359.061; 359.071; 501B.35, subdivision 3; and 
  1.30            507.401, subdivisions 2 and 3; proposing coding for 
  1.31            new law in Minnesota Statutes, chapters 45; 60K; 80A; 
  1.32            325E; and 333; repealing Minnesota Statutes 1996, 
  1.33            section 60K.07, subdivision 1. 
  1.34  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.35     Section 1.  Minnesota Statutes 1996, section 45.011, 
  1.36  subdivision 1, is amended to read: 
  1.37     Subdivision 1.  [SCOPE.] As used in chapters 45 to 83, 
  1.38  155A, 309, 332, 345, and 359, and sections 326.83 to 326.98 
  1.39  326.991, and 386.61 to 386.78, unless the context indicates 
  2.1   otherwise, the terms defined in this section have the meanings 
  2.2   given them.  
  2.3      Sec. 2.  [45.0111] [TEMPORARY LICENSES.] 
  2.4      Subdivision 1.  [AUTHORITY.] The commissioner may grant a 
  2.5   temporary license to an applicant who can demonstrate successful 
  2.6   completion of all requirements for a permanent license.  The 
  2.7   temporary license will remain in effect until the earliest of: 
  2.8      (1) receipt by the applicant of the permanent license; 
  2.9      (2) the expiration of 45 days from the date on which the 
  2.10  temporary license was granted; or 
  2.11     (3) denial by the commissioner of the permanent license. 
  2.12     Subd. 2.  [NONAPPLICATION.] A temporary license as 
  2.13  described in this section may not be issued to an applicant for 
  2.14  licensure as a: 
  2.15     (1) currency exchange regulated under chapter 53A; 
  2.16     (2) collection agency regulated under sections 332.31 to 
  2.17  332.45; 
  2.18     (3) credit service organization regulated under sections 
  2.19  332.52 to 332.60; or 
  2.20     (4) broker dealer, investment advisor, or agent regulated 
  2.21  under chapter 80A. 
  2.22     Sec. 3.  [45.0112] [STREET ADDRESSES REQUIRED.] 
  2.23     Licensees or applicants for licenses issued by the 
  2.24  commissioner shall provide to the commissioner a residence 
  2.25  telephone number, a street address where the licensee actually 
  2.26  resides, and a street address where the licensee's business is 
  2.27  physically located.  A post office box address is not sufficient 
  2.28  to satisfy this requirement.  The individual shall notify the 
  2.29  department of any change in street address or residence 
  2.30  telephone number within ten days. 
  2.31     Sec. 4.  Minnesota Statutes 1996, section 45.028, 
  2.32  subdivision 1, is amended to read: 
  2.33     Subdivision 1.  [REQUIREMENT.] (a) When a person, including 
  2.34  any nonresident of this state, engages in conduct prohibited or 
  2.35  made actionable by chapters 45 to 83, 155A, 309, and 332, and 
  2.36  section 326.83, or any rule or order under those chapters, and 
  3.1   the person has not filed a consent to service of process under 
  3.2   chapters 45 to 83, 155A, 309, and 332, and section 326.83, that 
  3.3   conduct is equivalent to an appointment of the commissioner as 
  3.4   the person's attorney to receive service of process in any 
  3.5   noncriminal suit, action, or proceeding against the person which 
  3.6   is based on that conduct and is brought under chapters 45 to 83, 
  3.7   155A, 309, and 332, and section 326.83, or any rule or order 
  3.8   under those chapters.  
  3.9      (b) Subdivision 2 applies in all other cases under chapters 
  3.10  45 to 83, 155A, 309, and 332, and section 326.83, or any rule or 
  3.11  order under those chapters, in which a person, including a 
  3.12  nonresident of this state, has filed a consent to service of 
  3.13  process.  This paragraph supersedes any inconsistent provision 
  3.14  of law.  
  3.15     (c) Subdivision 2 applies in all cases in which service of 
  3.16  process is allowed to be made on the commissioner of commerce. 
  3.17     Sec. 5.  [45.0292] [LICENSE RECIPROCITY.] 
  3.18     The commissioner may waive all or part of the requirements 
  3.19  of prelicense education, examination, and continuing education 
  3.20  for individuals of other jurisdictions if: 
  3.21     (1) a written reciprocal licensing agreement is in effect 
  3.22  between the commissioner and the licensing officials of that 
  3.23  jurisdiction; 
  3.24     (2) the individual is licensed in that jurisdiction; and 
  3.25     (3) the licensing requirements of that jurisdiction are 
  3.26  substantially similar to the corresponding licensing 
  3.27  requirements of the commerce department. 
  3.28     Sec. 6.  [45.0293] [REGULATION OF GROUP LIFE INSURANCE.] 
  3.29     The commissioner may waive all or part of the requirements 
  3.30  of section 61A.09, subdivision 3, if: 
  3.31     (1) all the premiums under the group policy are paid by the 
  3.32  group policyholder; 
  3.33     (2) the loans insured are first real estate residential 
  3.34  mortgage loans owned or guaranteed by the group policyholder; 
  3.35  and 
  3.36     (3) the group policy is in the best interests of insured 
  4.1   debtors. 
  4.2      Sec. 7.  [60K.20] [SOCIAL SECURITY NUMBERS OF LICENSED 
  4.3   AGENTS; COMMISSIONER'S AUTHORITY TO PROVIDE TO NAIC.] 
  4.4      The commissioner may provide the social security numbers of 
  4.5   licensed insurance agents to the National Association of 
  4.6   Insurance Commissioners. 
  4.7      Sec. 8.  Minnesota Statutes 1996, section 67A.231, is 
  4.8   amended to read: 
  4.9      67A.231 [DEPOSIT OF FUNDS; INVESTMENT; LIMITATIONS.] 
  4.10     The directors of any township mutual insurance company may 
  4.11  authorize the treasurer to invest any of its funds and 
  4.12  accumulations in:  
  4.13     (a) Bonds, notes, mortgages, or other obligations 
  4.14  guaranteed by the full faith and credit of the United States of 
  4.15  America and those for which the credit of the United States is 
  4.16  pledged to pay principal, interest or dividends, including 
  4.17  United States agency and instrumentality bonds, debentures, or 
  4.18  obligations; 
  4.19     (b) Bonds, notes, evidence of indebtedness, or other public 
  4.20  authority obligations guaranteed by this state; 
  4.21     (c) Bonds, notes, evidence of the indebtedness or other 
  4.22  obligations guaranteed by the full faith and credit of any 
  4.23  county, municipality, school district, or other duly authorized 
  4.24  political subdivision of this state; 
  4.25     (d) Bonds or other interest bearing obligations, payable 
  4.26  from revenues, provided that the bonds or other interest bearing 
  4.27  obligations are at the time of purchase rated among the highest 
  4.28  four quality categories used by a nationally recognized rating 
  4.29  agency for rating the quality of similar bonds or other interest 
  4.30  bearing obligations, and are not rated lower by any other such 
  4.31  agency; or obligations of a United States agency or 
  4.32  instrumentality that have been rated in one of the two highest 
  4.33  categories established by the Securities Valuation Office of the 
  4.34  National Association of Insurance Commissioners.  A company may 
  4.35  not invest more than 20 percent of its admitted assets in the 
  4.36  obligations of any one corporation.  This is not applicable to 
  5.1   bonds or other interest bearing obligations in default as to 
  5.2   principal; 
  5.3      (e) Investments in the obligations stated in paragraphs 
  5.4   (a), (b), (c), and (d), may be made either directly or in the 
  5.5   form of securities of, or other interests in, an investment 
  5.6   company registered under the Federal Investment Company Act of 
  5.7   1940.  Investment company shares authorized pursuant to this 
  5.8   subdivision shall not exceed 20 percent of the company's 
  5.9   surplus.  These obligations must be carried at the lower of cost 
  5.10  or market on the annual statement filed with the commissioner 
  5.11  and adjusted to market on an annual basis; 
  5.12     (f) Loans upon improved and unencumbered real property in 
  5.13  this state worth at least twice the amount loaned thereon, not 
  5.14  including buildings, unless insured by property insurance 
  5.15  policies payable to and held by the security holder; 
  5.16     (g) Real estate, including land, buildings and fixtures, 
  5.17  located in this state and used primarily as home office space 
  5.18  for the insurance company; 
  5.19     (h) Demand or time deposits or savings accounts in 
  5.20  federally insured depositories located in this state to the 
  5.21  extent that the deposit or investment is insured by the Federal 
  5.22  Deposit Insurance Corporation, Federal Savings and Loan 
  5.23  Corporation, or the National Credit Union Administration.  An 
  5.24  additional deposit not to exceed 50 percent of the township 
  5.25  mutual insurance company's policyholder surplus may be located 
  5.26  in these depositories if covered by private deposit insurance 
  5.27  written by an insurer licensed by the department of commerce; 
  5.28     (i) Guarantee fund certificates of a mutual insurer which 
  5.29  reinsures the business of the township mutual insurance 
  5.30  company.  The commissioner may by rule limit the amount of 
  5.31  guarantee fund certificates which the township mutual insurance 
  5.32  company may purchase and this limit may be a function of the 
  5.33  size of the township mutual insurance company; and 
  5.34     (j) Up to $1,500 in stock of an insurer which issues 
  5.35  directors and officers liability insurance to township mutual 
  5.36  insurance company directors and officers. 
  6.1      Sec. 9.  Minnesota Statutes 1996, section 80A.02, 
  6.2   subdivision 1, is amended to read: 
  6.3      Subdivision 1.  [ADVISORY ACTIVITIES AND PRINCIPAL 
  6.4   TRANSACTIONS.] (a) It is unlawful for any person who receives, 
  6.5   directly or indirectly, any consideration from another primarily 
  6.6   for advising the other as to the value of securities or their 
  6.7   purchase or sale: 
  6.8      (a) (1)  to employ any device, scheme, or artifice to 
  6.9   defraud the other; or 
  6.10     (b) (2) to engage in any act, practice, or course of 
  6.11  business which operates or would operate as a fraud or deceit 
  6.12  upon the other; or. 
  6.13     (c) (b) It is unlawful for an investment adviser to 
  6.14  knowingly sell any security to or purchase any security from a 
  6.15  client while acting as principal for the person's own account or 
  6.16  knowingly effect any sale or purchase of any security for the 
  6.17  account of a client while acting as broker for one other than 
  6.18  the client, unless the person discloses to the client in writing 
  6.19  before the execution of the transaction the capacity in which 
  6.20  the person is acting and obtains the consent of the client to 
  6.21  the transaction. 
  6.22     Sec. 10.  Minnesota Statutes 1996, section 80A.04, 
  6.23  subdivision 3, is amended to read: 
  6.24     Subd. 3.  It is unlawful for any person to transact 
  6.25  business in this state as an investment adviser unless that 
  6.26  person is so licensed or licensed as a broker-dealer under this 
  6.27  chapter or unless:  (1) that person's only clients in this state 
  6.28  are investment companies as defined in the Investment Company 
  6.29  Act of 1940, other investment advisers, broker-dealers, banks, 
  6.30  trust companies, savings associations, federal covered advisers 
  6.31  insurance companies, employee benefit plans, corporations with a 
  6.32  class of equity securities registered under section 12(b) or 
  6.33  12(g) of the Securities Exchange Act of 1934, small business 
  6.34  investment companies, and government agencies or 
  6.35  instrumentalities, whether acting for themselves or as trustees 
  6.36  with investment control, or other institutional investors as are 
  7.1   designated by rule or order of the commissioner. buyers; or (2) 
  7.2   that person has no place of business in this state and during 
  7.3   the preceding 12-month period has had fewer than six clients who 
  7.4   are residents of this state. 
  7.5      Sec. 11.  Minnesota Statutes 1996, section 80A.04, 
  7.6   subdivision 4, is amended to read: 
  7.7      Subd. 4.  Every license shall expire or notice filing 
  7.8   expires on December 31 of each year unless an application for 
  7.9   renewal has been received by the commissioner by November 15. 
  7.10     Sec. 12.  Minnesota Statutes 1996, section 80A.04, is 
  7.11  amended by adding a subdivision to read: 
  7.12     Subd. 5.  Except with respect to advisers whose only 
  7.13  clients are those described in subdivision 3, clause (2), it is 
  7.14  unlawful for a federal covered adviser to conduct advisory 
  7.15  business in this state unless the person complies with section 
  7.16  80A.05, subdivision 1a. 
  7.17     Sec. 13.  Minnesota Statutes 1996, section 80A.05, is 
  7.18  amended by adding a subdivision to read: 
  7.19     Subd. 1a.  [FEDERAL COVERED ADVISERS.] Except with respect 
  7.20  to federal covered advisers whose only clients are those 
  7.21  described in section 80A.04, subdivision 3, clause (2), a 
  7.22  federal covered adviser shall file with the commissioner, before 
  7.23  acting as a federal covered adviser in this state, all documents 
  7.24  required by the commissioner that have been filed with the 
  7.25  Securities and Exchange Commission.  Notwithstanding any other 
  7.26  provision of this section, until October 10, 1999, the 
  7.27  commissioner may require the registration of any federal covered 
  7.28  investment adviser who has failed to promptly pay the fees 
  7.29  required by section 80A.28 after being notified in writing by 
  7.30  the commissioner of the nonpayment or underpayment of such 
  7.31  fees.  A person shall be considered to have promptly paid such 
  7.32  fees if the fees are remitted to the commissioner within 15 days 
  7.33  following the receipt of written notification from the 
  7.34  commissioner. 
  7.35     Sec. 14.  Minnesota Statutes 1996, section 80A.05, 
  7.36  subdivision 4, is amended to read: 
  8.1      Subd. 4.  The commissioner may by rule require a minimum 
  8.2   capital for broker-dealers, subject to the limitations of 
  8.3   section 15 of the Securities Act of 1934, and establish minimum 
  8.4   financial requirements for investment advisers and establish 
  8.5   limitations on aggregate indebtedness of broker-dealers in 
  8.6   relation to net capital., subject to the limitations of section 
  8.7   222 of the Investment Advisers Act of 1940 which may include 
  8.8   different requirements for those investment advisers who 
  8.9   maintain custody of clients' funds or securities or who have 
  8.10  discretionary authority over the funds or securities and those 
  8.11  investment advisers who do not. 
  8.12     Sec. 15.  Minnesota Statutes 1996, section 80A.05, 
  8.13  subdivision 5, is amended to read: 
  8.14     Subd. 5.  The commissioner may by rule require licensed 
  8.15  broker-dealers, agents and investment advisers who have custody 
  8.16  of or discretionary authority over client funds or securities, 
  8.17  to post surety bonds in amounts up to $25,000, as the 
  8.18  commissioner may prescribe subject to the limitations of section 
  8.19  15 of the Securities Exchange Act of 1934 for broker-dealers and 
  8.20  section 222 of the Investment Advisers Act of 1940 for 
  8.21  investment advisers and may by rule or order determine their 
  8.22  conditions.  Any appropriate deposit of cash or securities shall 
  8.23  be accepted in lieu of any bond so required.  No bond may be 
  8.24  required of any broker-dealer whose net capital, which may be 
  8.25  defined by rule, exceeds $25,000 the amounts required by the 
  8.26  commissioner.  Every bond shall provide for suit thereon by any 
  8.27  person who has a cause of action under section 80A.23 and, if 
  8.28  the commissioner by rule or order requires, by any person who 
  8.29  has a cause of action not arising under sections 80A.01 to 
  8.30  80A.31.  Every bond shall provide that no suit may be maintained 
  8.31  to enforce any liability on the bond unless brought within three 
  8.32  years after the sale or other act upon which it is based.  
  8.33     Sec. 16.  Minnesota Statutes 1996, section 80A.06, 
  8.34  subdivision 1, is amended to read: 
  8.35     Subdivision 1.  Every licensed broker-dealer and investment 
  8.36  adviser shall make and keep all accounts, correspondence, 
  9.1   memoranda, papers, books and other records which the 
  9.2   commissioner by rule prescribes by rule or order, except as 
  9.3   provided by section 15 of the Securities Act of 1934 in the case 
  9.4   of a broker-dealer and section 222 of the Investment Advisers 
  9.5   Act of 1940 in the case of an investment adviser.  All records 
  9.6   required shall be preserved for three years unless the 
  9.7   commissioner by rule prescribes otherwise for particular types 
  9.8   of records.  All required records shall be kept within the state 
  9.9   or shall, at the request of the commissioner, be made available 
  9.10  at any time for examination by the commissioner either in the 
  9.11  principal office of the licensee or by production of exact 
  9.12  copies thereof in this state. 
  9.13     Sec. 17.  Minnesota Statutes 1996, section 80A.06, 
  9.14  subdivision 2, is amended to read: 
  9.15     Subd. 2.  Every licensed broker-dealer and investment 
  9.16  adviser shall file such reports as the commissioner by rule or 
  9.17  order prescribes except as provided in section 15 of the 
  9.18  Securities Exchange Act of 1934 in the case of a broker-dealer 
  9.19  and section 222 of the Investment Advisers Act of 1940 in the 
  9.20  case of an investment adviser.  
  9.21     Sec. 18.  Minnesota Statutes 1996, section 80A.06, 
  9.22  subdivision 3, is amended to read: 
  9.23     Subd. 3.  If the information contained in any document 
  9.24  filed with the commissioner is or becomes inaccurate or 
  9.25  incomplete in any material respect, the licensee or federal 
  9.26  covered adviser shall within 30 days file a correcting amendment 
  9.27  unless notification of the correction has been given under 
  9.28  section 80A.04, subdivision 2.  
  9.29     Sec. 19.  Minnesota Statutes 1996, section 80A.08, is 
  9.30  amended to read: 
  9.31     80A.08 [REGISTRATION REQUIREMENT.] 
  9.32     It is unlawful for any person to offer or sell any security 
  9.33  in this state unless (a) it is registered under sections 80A.01 
  9.34  to 80A.31 or (b) the security or transaction is exempted under 
  9.35  section 80A.15 or (c) it is a federal covered security.  
  9.36     Sec. 20.  Minnesota Statutes 1996, section 80A.12, is 
 10.1   amended by adding a subdivision to read: 
 10.2      Subd. 12.  [COORDINATED REGISTRATION.] The commissioner may 
 10.3   enter into cooperative and reciprocal agreements with members of 
 10.4   a national securities regulatory organization composed of 
 10.5   securities administrators of this and other states to 
 10.6   participate in a coordinated review of securities offerings in 
 10.7   lieu of conducting the commissioner's own review. 
 10.8      Sec. 21.  [80A.122] [FEDERAL COVERED SECURITIES.] 
 10.9      Subdivision 1.  [18(b)(2) FILINGS.] The commissioner may, 
 10.10  by rule or otherwise, require the filing of any or all of the 
 10.11  following documents with respect to a federal covered security 
 10.12  under section 18(b)(2) of the Securities Act of 1933: 
 10.13     (1) prior to the initial offer of a federal covered 
 10.14  security in this state, all documents that are part of a current 
 10.15  federal registration statement filed with the Securities and 
 10.16  Exchange Commission under the Securities Act of 1933, together 
 10.17  with a fee and a consent to service of process; 
 10.18     (2) after the initial offer of a federal covered security 
 10.19  in this state, all documents that are part of an amendment to a 
 10.20  current federal registration statement filed with the Securities 
 10.21  and Exchange Commission under the Securities Act of 1933, which 
 10.22  must be filed concurrently with the commissioner; 
 10.23     (3) notices that increase the aggregate amount of 
 10.24  securities offered or sold in this state, together with the fee. 
 10.25     Subd. 2.  [18(b)(4)(D) FILINGS.] With respect to a security 
 10.26  that is a federal covered security under section 18(b)(4)(D) of 
 10.27  the Securities Act of 1933, the commissioner, by rule or 
 10.28  otherwise, may require the issuer to file a notice on form D of 
 10.29  the Securities and Exchange Commission, together with a fee and 
 10.30  a consent to service of process no later than 15 days after the 
 10.31  first sale of the covered security in this state. 
 10.32     Subd. 3.  [18(b)(3) or (4) FILINGS.] The commissioner, by 
 10.33  rule or otherwise, may require the filing of any document filed 
 10.34  with the Securities and Exchange Commission under the Securities 
 10.35  Act of 1933 with respect to a federal covered security under 
 10.36  section 18(b)(3) or (4) of the Securities Act of 1933 together 
 11.1   with the fee. 
 11.2      Subd. 4.  [REGISTRATION.] Notwithstanding any other 
 11.3   provision of this section, until October 10, 1999, the 
 11.4   commissioner may require registration of a federal covered 
 11.5   security for which the fees required by section 80A.28 have not 
 11.6   been promptly paid after the issuer of such securities has been 
 11.7   notified in writing by the commissioner of the nonpayment or 
 11.8   underpayment of such fees.  An issuer shall be considered to 
 11.9   have promptly paid such fees if the fees are remitted to the 
 11.10  commissioner within 15 days following the receipt of written 
 11.11  notification from the commissioner. 
 11.12     Subd. 5.  [STOP ORDERS.] The commissioner may issue a stop 
 11.13  order suspending the offer and sale of a federal covered 
 11.14  security, except a federal covered security under section 
 11.15  18(b)(1) of the Securities Act of 1933, if the commissioner 
 11.16  finds that:  (1) the order is in the public interest; and (2) 
 11.17  there is a failure to comply with any condition established 
 11.18  under this section. 
 11.19     Subd. 6.  [COMMISSIONER'S WAIVER.] The commissioner may, by 
 11.20  rule or otherwise, waive any or all of the provisions of this 
 11.21  section. 
 11.22     Sec. 22.  Minnesota Statutes 1996, section 80A.14, 
 11.23  subdivision 3, is amended to read: 
 11.24     Subd. 3.  [AGENT.] "Agent" means any individual other than 
 11.25  a broker-dealer who represents a broker-dealer or issuer in 
 11.26  effecting or attempting to effect purchases or sales of 
 11.27  securities.  "Agent" does not include: 
 11.28     (a) an individual who represents an issuer in: 
 11.29     (1) effecting transactions in a security exempted by 
 11.30  section 80A.15, subdivision 1; 
 11.31     (2) effecting transactions exempted by section 80A.15, 
 11.32  subdivision 2; 
 11.33     (3) effecting transactions with existing employees, 
 11.34  partners or directors of the issuer if no commission or other 
 11.35  remuneration is paid or given directly or indirectly for 
 11.36  soliciting any person in this state; 
 12.1      (4) effecting other transactions, if the individual is an 
 12.2   officer or director of the issuer, no commission or other 
 12.3   remuneration is paid or given directly or indirectly for 
 12.4   soliciting any person in this state, and, upon application, the 
 12.5   individual is specifically authorized by name in an order issued 
 12.6   by the commissioner; or 
 12.7      (5) effecting transactions in securities registered by 
 12.8   notification under section 80A.09 if no commission or other 
 12.9   remuneration is paid or given directly or indirectly for 
 12.10  soliciting any person in this state.; or 
 12.11     (6) effecting transactions in a federal covered security as 
 12.12  described in sections 18(b)(3) and 18(b)(4) of the Securities 
 12.13  Act of 1933; or 
 12.14     (b) an individual who represents a broker-dealer in 
 12.15  effecting transactions in the state limited to those 
 12.16  transactions described in section 15(h)(2) of the Securities 
 12.17  Exchange Act of 1934. 
 12.18     A partner, officer or director of a broker-dealer or 
 12.19  issuer, or a person occupying a similar status or performing 
 12.20  similar functions, is an agent only if that person otherwise 
 12.21  comes within this definition. 
 12.22     Sec. 23.  Minnesota Statutes 1996, section 80A.14, 
 12.23  subdivision 4, is amended to read: 
 12.24     Subd. 4.  [BROKER-DEALER.] "Broker-dealer" means any person 
 12.25  engaged in the business of effecting transactions in securities 
 12.26  for the account of others or for that person's own account. 
 12.27  "Broker-dealer" does not include: 
 12.28     (1) an agent; 
 12.29     (2) an issuer; 
 12.30     (3) a trust company; or 
 12.31     (4) a bank, savings institution, savings association, 
 12.32  credit union: 
 12.33     (i) acting for the account of others, provided that such 
 12.34  activities are conducted in compliance with such rules as may be 
 12.35  adopted by the commissioner; 
 12.36     (ii) acting for its own account; or 
 13.1      (iii) acting in a fiduciary capacity pursuant to the powers 
 13.2   and privileges described by sections 48.36 to 48.49 or United 
 13.3   States Code, title 12, section 92(a); 
 13.4      (5) a person who has no place of business in this state if 
 13.5   that person effects transactions in this state exclusively with 
 13.6   or through (i) the issuers of the securities involved in the 
 13.7   transactions, (ii) other broker-dealers, or (iii) banks, savings 
 13.8   institutions, trust companies, insurance companies, investment 
 13.9   companies as defined in the Investment Company Act of 1940, 
 13.10  pension or profit sharing trusts, or other financial 
 13.11  institutions or institutional buyers, or to broker-dealers, 
 13.12  whether the purchaser is acting for itself or in some fiduciary 
 13.13  capacity; or 
 13.14     (6) other persons not within the intent of this subsection 
 13.15  whom the commissioner by rule or order designates. 
 13.16     Sec. 24.  Minnesota Statutes 1996, section 80A.14, is 
 13.17  amended by adding a subdivision to read: 
 13.18     Subd. 5a.  [FEDERAL COVERED ADVISER.] "Federal covered 
 13.19  adviser" means a person who is:  (1) registered under section 
 13.20  203 of the Investment Act of 1940; or (2) is excluded from the 
 13.21  definition of "investment adviser" under section 202(a)(11). 
 13.22     Sec. 25.  Minnesota Statutes 1996, section 80A.14, is 
 13.23  amended by adding a subdivision to read: 
 13.24     Subd. 5b.  [FEDERAL COVERED SECURITY.] "Federal covered 
 13.25  security" means a security that is a covered security under 
 13.26  section 18(b) of the Securities Act of 1933 or regulations 
 13.27  adopted under that act. 
 13.28     Sec. 26.  Minnesota Statutes 1996, section 80A.14, is 
 13.29  amended by adding a subdivision to read: 
 13.30     Subd. 8a.  [INSTITUTIONAL BUYER.] For the purposes of 
 13.31  sections 80A.04, subdivision 3; 80A.14, subdivision 4, clause 
 13.32  (5); and 80A.15, subdivision 2, paragraph (g), "institutional 
 13.33  buyer" includes, but is not limited to, a corporation with a 
 13.34  class of equity securities registered under section 12(b) or 
 13.35  12(g) of the Securities Exchange Act of 1934, as amended, a 
 13.36  "qualified institutional buyer" within the meaning of rule 144A, 
 14.1   and an "accredited investor" within the meaning of rule 501(a) 
 14.2   of regulation D. 
 14.3      Sec. 27.  Minnesota Statutes 1996, section 80A.15, 
 14.4   subdivision 1, is amended to read: 
 14.5      Subdivision 1.  The following securities are exempted from 
 14.6   sections 80A.08 and 80A.16: 
 14.7      (a) Any security, including a revenue obligation, issued or 
 14.8   guaranteed by the United States, any state, any political 
 14.9   subdivision of a state, or any agency or corporate or other 
 14.10  instrumentality of one or more of the foregoing.; but this 
 14.11  exemption does not apply to a security issued by any of the 
 14.12  foregoing that is payable solely from payments to be received in 
 14.13  respect of property or money used under a lease, sale, or loan 
 14.14  arrangement by or for a nongovernmental industrial or commercial 
 14.15  enterprise.  Pursuant to section 106(c) of the Secondary 
 14.16  Mortgage Market Enhancement Act of 1984, Public Law Number 
 14.17  98-440, this exemption does not apply to a security that is 
 14.18  offered or sold pursuant to section 106(a)(1) or (2) of that act.
 14.19     (b) Any security issued or guaranteed by Canada, any 
 14.20  Canadian province, any political subdivision of any province, 
 14.21  any agency or corporate or other instrumentality of one or more 
 14.22  of the foregoing, if the security is recognized as a valid 
 14.23  obligation by the issuer or guarantor; but this exemption shall 
 14.24  not include any revenue obligation payable solely from payments 
 14.25  to be made in respect of property or money used under a lease, 
 14.26  sale or loan arrangement by or for a nongovernmental industrial 
 14.27  or commercial enterprise. 
 14.28     (c) Any security issued by and representing an interest in 
 14.29  or a debt of, or guaranteed by, any bank organized under the 
 14.30  laws of the United States, or any bank, savings institution or 
 14.31  trust company organized under the laws of any state and subject 
 14.32  to regulation in respect of the issuance or guarantee of its 
 14.33  securities by a governmental authority of that state. 
 14.34     (d) Any security issued by and representing an interest in 
 14.35  or a debt of, or guaranteed by, any federal savings association, 
 14.36  or any savings association or similar association organized 
 15.1   under the laws of any state and authorized to do business in 
 15.2   this state. 
 15.3      (e) Any security issued or guaranteed by any federal credit 
 15.4   union or any credit union, or similar association organized and 
 15.5   supervised under the laws of this state. 
 15.6      (f) Any security listed or approved for listing upon notice 
 15.7   of issuance on the New York Stock Exchange, the American Stock 
 15.8   Exchange, the Midwest Stock Exchange, the Pacific Stock 
 15.9   Exchange, or the Chicago Board Options Exchange; any other 
 15.10  security of the same issuer which is of senior or substantially 
 15.11  equal rank; any security called for by subscription rights or 
 15.12  warrants so listed or approved; or any warrant or right to 
 15.13  purchase or subscribe to any of the foregoing.  This exemption 
 15.14  does not apply to second tier listings on any of the exchanges 
 15.15  in this paragraph. 
 15.16     (g) Any commercial paper which arises out of a current 
 15.17  transaction or the proceeds of which have been or are to be used 
 15.18  for current transactions, and which evidences an obligation to 
 15.19  pay cash within nine months of the date of issuance, exclusive 
 15.20  of days of grace, or any renewal of the paper which is likewise 
 15.21  limited, or any guarantee of the paper or of any renewal which 
 15.22  are not advertised for sale to the general public in newspapers 
 15.23  or other publications of general circulation or otherwise, or by 
 15.24  radio, television or direct mailing. 
 15.25     (h) Any interest in any employee's savings, stock purchase, 
 15.26  pension, profit sharing or similar benefit plan, or a 
 15.27  self-employed person's retirement plan. 
 15.28     (i) Any security issued or guaranteed by any railroad, 
 15.29  other common carrier or public utility which is subject to 
 15.30  regulation in respect to the issuance or guarantee of its 
 15.31  securities by a governmental authority of the United States. 
 15.32     (j) Any interest in a common trust fund or similar fund 
 15.33  maintained by a state bank or trust company organized and 
 15.34  operating under the laws of Minnesota, or a national bank 
 15.35  wherever located, for the collective investment and reinvestment 
 15.36  of funds contributed thereto by the bank or trust company in its 
 16.1   capacity as trustee, executor, administrator, or guardian; and 
 16.2   any interest in a collective investment fund or similar fund 
 16.3   maintained by the bank or trust company, or in a separate 
 16.4   account maintained by an insurance company, for the collective 
 16.5   investment and reinvestment of funds contributed thereto by the 
 16.6   bank, trust company or insurance company in its capacity as 
 16.7   trustee or agent, which interest is issued in connection with an 
 16.8   employee's savings, pension, profit sharing or similar benefit 
 16.9   plan, or a self-employed person's retirement plan. 
 16.10     (k) Any security which meets all of the following 
 16.11  conditions: 
 16.12     (1) If the issuer is not organized under the laws of the 
 16.13  United States or a state, it has appointed a duly authorized 
 16.14  agent in the United States for service of process and has set 
 16.15  forth the name and address of the agent in its prospectus; 
 16.16     (2) A class of the issuer's securities is required to be 
 16.17  and is registered under section 12 of the Securities Exchange 
 16.18  Act of 1934, and has been so registered for the three years 
 16.19  immediately preceding the offering date; 
 16.20     (3) Neither the issuer nor a significant subsidiary has had 
 16.21  a material default during the last seven years, or for the 
 16.22  period of the issuer's existence if less than seven years, in 
 16.23  the payment of (i) principal, interest, dividend, or sinking 
 16.24  fund installment on preferred stock or indebtedness for borrowed 
 16.25  money, or (ii) rentals under leases with terms of three years or 
 16.26  more; 
 16.27     (4) The issuer has had consolidated net income, before 
 16.28  extraordinary items and the cumulative effect of accounting 
 16.29  changes, of at least $1,000,000 in four of its last five fiscal 
 16.30  years including its last fiscal year; and if the offering is of 
 16.31  interest bearing securities, has had for its last fiscal year, 
 16.32  net income, before deduction for income taxes and depreciation, 
 16.33  of at least 1-1/2 times the issuer's annual interest expense, 
 16.34  giving effect to the proposed offering and the intended use of 
 16.35  the proceeds.  For the purposes of this clause "last fiscal 
 16.36  year" means the most recent year for which audited financial 
 17.1   statements are available, provided that such statements cover a 
 17.2   fiscal period ended not more than 15 months from the 
 17.3   commencement of the offering; 
 17.4      (5) If the offering is of stock or shares other than 
 17.5   preferred stock or shares, the securities have voting rights and 
 17.6   the rights include (i) the right to have at least as many votes 
 17.7   per share, and (ii) the right to vote on at least as many 
 17.8   general corporate decisions, as each of the issuer's outstanding 
 17.9   classes of stock or shares, except as otherwise required by law; 
 17.10  and 
 17.11     (6) If the offering is of stock or shares, other than 
 17.12  preferred stock or shares, the securities are owned beneficially 
 17.13  or of record, on any date within six months prior to the 
 17.14  commencement of the offering, by at least 1,200 persons, and on 
 17.15  that date there are at least 750,000 such shares outstanding 
 17.16  with an aggregate market value, based on the average bid price 
 17.17  for that day, of at least $3,750,000.  In connection with the 
 17.18  determination of the number of persons who are beneficial owners 
 17.19  of the stock or shares of an issuer, the issuer or broker-dealer 
 17.20  may rely in good faith for the purposes of this clause upon 
 17.21  written information furnished by the record owners. 
 17.22     (l) Any certificate of indebtedness sold or issued for 
 17.23  investment, other than a certificate of indebtedness pledged as 
 17.24  a security for a loan made contemporaneously therewith, and any 
 17.25  savings account or savings deposit issued, by an industrial loan 
 17.26  and thrift company. 
 17.27     (m) Any security designated or approved for designation 
 17.28  upon notice of issuance on the NASDAQ/National Market System; 
 17.29  any other security of the same issuer that is of senior or 
 17.30  substantially equal rank; any security called for by 
 17.31  subscription rights or warrants so designated or approved; or 
 17.32  any warrant or right to purchase or subscribe to any of the 
 17.33  securities referred to in this paragraph; provided that the 
 17.34  National Market System provides the commissioner with notice of 
 17.35  any material change in its designation requirements.  The 
 17.36  commissioner may revoke this exemption if the commissioner 
 18.1   determines that the designation requirements are not enforced or 
 18.2   are amended in a manner that lessens protection to investors. 
 18.3      Sec. 28.  Minnesota Statutes 1996, section 80A.15, 
 18.4   subdivision 2, is amended to read: 
 18.5      Subd. 2.  The following transactions are exempted from 
 18.6   sections 80A.08 and 80A.16: 
 18.7      (a) Any sales, whether or not effected through a 
 18.8   broker-dealer, provided that: 
 18.9      (1) no person shall make more than ten sales of securities 
 18.10  of the same issuer pursuant to this exemption, exclusive of 
 18.11  sales according to clause (2), during any period of 12 
 18.12  consecutive months; provided further, that in the case of sales 
 18.13  by an issuer, except sales of securities registered under the 
 18.14  Securities Act of 1933 or exempted by section 3(b) of that act, 
 18.15  (i) the seller reasonably believes that all buyers are 
 18.16  purchasing for investment, and (ii) the securities are not 
 18.17  advertised for sale to the general public in newspapers or other 
 18.18  publications of general circulation or otherwise, or by radio, 
 18.19  television, electronic means or similar communications media, or 
 18.20  through a program of general solicitation by means of mail or 
 18.21  telephone; and 
 18.22     (2) no issuer shall make more than 25 sales of its 
 18.23  securities according to this exemption, exclusive of sales 
 18.24  pursuant to clause (1), during any period of 12 consecutive 
 18.25  months; provided further, that the issuer meets the conditions 
 18.26  in clause (1) and, in addition meets the following additional 
 18.27  conditions:  (i) files with the commissioner, ten days before a 
 18.28  sale according to this clause, a statement of issuer on a form 
 18.29  prescribed by the commissioner; and (ii) no commission or other 
 18.30  remuneration is paid or given directly or indirectly for 
 18.31  soliciting any prospective buyers in this state in connection 
 18.32  with a sale according to this clause except reasonable and 
 18.33  customary commissions paid by the issuer to a broker-dealer 
 18.34  licensed under this chapter. 
 18.35     (b) Any nonissuer distribution of an outstanding security 
 18.36  if (1) either Moody's, Fitch's, or Standard & Poor's Securities 
 19.1   Manuals, or other recognized manuals approved by the 
 19.2   commissioner contains the names of the issuer's officers and 
 19.3   directors, a balance sheet of the issuer as of a date not more 
 19.4   than 18 months prior to the date of the sale, and a profit and 
 19.5   loss statement for the fiscal year preceding the date of the 
 19.6   balance sheet, and (2) the issuer or its predecessor has been in 
 19.7   active, continuous business operation for the five-year period 
 19.8   next preceding the date of sale, and (3) if the security has a 
 19.9   fixed maturity or fixed interest or dividend provision, the 
 19.10  issuer has not, within the three preceding fiscal years, 
 19.11  defaulted in payment of principal, interest, or dividends on the 
 19.12  securities. 
 19.13     (c) The execution of any orders by a licensed broker-dealer 
 19.14  for the purchase or sale of any security, pursuant to an 
 19.15  unsolicited offer to purchase or sell; provided that the 
 19.16  broker-dealer acts as agent for the purchaser or seller, and has 
 19.17  no direct material interest in the sale or distribution of the 
 19.18  security, receives no commission, profit, or other compensation 
 19.19  from any source other than the purchaser and seller and delivers 
 19.20  to the purchaser and seller written confirmation of the 
 19.21  transaction which clearly itemizes the commission, or other 
 19.22  compensation. 
 19.23     (d) Any nonissuer sale of notes or bonds secured by a 
 19.24  mortgage lien if the entire mortgage, together with all notes or 
 19.25  bonds secured thereby, is sold to a single purchaser at a single 
 19.26  sale. 
 19.27     (e) Any judicial sale, exchange, or issuance of securities 
 19.28  made pursuant to an order of a court of competent jurisdiction. 
 19.29     (f) The sale, by a pledge holder, of a security pledged in 
 19.30  good faith as collateral for a bona fide debt. 
 19.31     (g) Any offer or sale to a bank, savings institution, trust 
 19.32  company, insurance company, investment company as defined in the 
 19.33  Investment Company Act of 1940, pension or profit sharing trust, 
 19.34  or other financial institution or institutional buyer, or to a 
 19.35  broker-dealer, whether the purchaser is acting for itself or in 
 19.36  some fiduciary capacity. 
 20.1      (h) An offer or sale of securities by an issuer made in 
 20.2   reliance on the exemptions provided by Rule 505 or 506 of 
 20.3   Regulation D promulgated by the Securities and Exchange 
 20.4   Commission, Code of Federal Regulations, title 17, sections 
 20.5   230.501 to 230.508, subject to the conditions and definitions 
 20.6   provided by Rules 501 to 503 of Regulation D, if the offer and 
 20.7   sale also satisfies the conditions and limitations in clauses 
 20.8   (1) to (10). 
 20.9      (1) The exemption under this paragraph is not available for 
 20.10  the securities of an issuer if any of the persons described in 
 20.11  Rule 252(c) to (f) of Regulation A promulgated by the Securities 
 20.12  and Exchange Commission, Code of Federal Regulations, title 17, 
 20.13  sections 230.251 to 230.263:  
 20.14     (i) has filed a registration statement that is the subject 
 20.15  of a currently effective order entered against the issuer, its 
 20.16  officers, directors, general partners, controlling persons, or 
 20.17  affiliates, according to any state's law within five years 
 20.18  before the filing of the notice required under clause (5), 
 20.19  denying effectiveness to, or suspending or revoking the 
 20.20  effectiveness of, the registration statement; 
 20.21     (ii) has been convicted, within five years before the 
 20.22  filing of the notice required under clause (5), of a felony or 
 20.23  misdemeanor in connection with the offer, sale, or purchase of a 
 20.24  security or franchise, or a felony involving fraud or deceit, 
 20.25  including but not limited to forgery, embezzlement, obtaining 
 20.26  money under false pretenses, larceny, or conspiracy to defraud; 
 20.27     (iii) is subject to an effective administrative order or 
 20.28  judgment entered by a state securities administrator within five 
 20.29  years before the filing of the notice required under clause (5), 
 20.30  that prohibits, denies, or revokes the use of an exemption from 
 20.31  securities registration, that prohibits the transaction of 
 20.32  business by the person as a broker-dealer or agent, or that is 
 20.33  based on fraud, deceit, an untrue statement of a material fact, 
 20.34  or an omission to state a material fact; or 
 20.35     (iv) is subject to an order, judgment, or decree of a court 
 20.36  entered within five years before the filing of the notice 
 21.1   required under clause (5), temporarily, preliminarily, or 
 21.2   permanently restraining or enjoining the person from engaging in 
 21.3   or continuing any conduct or practice in connection with the 
 21.4   offer, sale, or purchase of a security, or the making of a false 
 21.5   filing with a state. 
 21.6      A disqualification under paragraph (h) involving a 
 21.7   broker-dealer or agent is waived if the broker-dealer or agent 
 21.8   is or continues to be licensed in the state in which the 
 21.9   administrative order or judgment was entered against the person 
 21.10  or if the broker-dealer or agent is or continues to be licensed 
 21.11  in this state as a broker-dealer or agent after notifying the 
 21.12  commissioner of the act or event causing disqualification. 
 21.13     The commissioner may waive a disqualification under 
 21.14  paragraph (h) upon a showing of good cause that it is not 
 21.15  necessary under the circumstances that use of the exemption be 
 21.16  denied. 
 21.17     A disqualification under paragraph (h) may be waived if the 
 21.18  state securities administrator or agency of the state that 
 21.19  created the basis for disqualification has determined, upon a 
 21.20  showing of good cause, that it is not necessary under the 
 21.21  circumstances that an exemption from registration of securities 
 21.22  under the state's laws be denied. 
 21.23     It is a defense to a violation of paragraph (h) based upon 
 21.24  a disqualification if the issuer sustains the burden of proof to 
 21.25  establish that the issuer did not know, and in the exercise of 
 21.26  reasonable care could not have known, that a disqualification 
 21.27  under paragraph (h) existed. 
 21.28     (2) This exemption must not be available to an issuer with 
 21.29  respect to a transaction that, although in technical compliance 
 21.30  with this exemption, is part of a plan or scheme to evade 
 21.31  registration or the conditions or limitations explicitly stated 
 21.32  in paragraph (h). 
 21.33     (3) No commission, finder's fee, or other remuneration 
 21.34  shall be paid or given, directly or indirectly, for soliciting a 
 21.35  prospective purchaser, unless the recipient is appropriately 
 21.36  registered licensed, or exempt from registration licensure, in 
 22.1   this state as a broker-dealer. 
 22.2      (4) Nothing in this exemption is intended to or should be 
 22.3   in any way construed as relieving issuers or persons acting on 
 22.4   behalf of issuers from providing disclosure to prospective 
 22.5   investors adequate to satisfy the antifraud provisions of the 
 22.6   securities law of Minnesota.  
 22.7      (5) The issuer shall file with the commissioner a notice on 
 22.8   form D as adopted by the Securities and Exchange Commission 
 22.9   according to Regulation D, Code of Federal Regulations, title 
 22.10  17, section 230.502.  The notice must be filed not later than 15 
 22.11  days after the first sale in this state of securities in an 
 22.12  offering under this exemption.  Every notice on form D must be 
 22.13  manually signed by a person duly authorized by the issuer and 
 22.14  must be accompanied by a consent to service of process on a form 
 22.15  prescribed by the commissioner.  
 22.16     (6) A failure to comply with a term, condition, or 
 22.17  requirement of paragraph (h) will not result in loss of the 
 22.18  exemption for an offer or sale to a particular individual or 
 22.19  entity if the person relying on the exemption shows that:  (i) 
 22.20  the failure to comply did not pertain to a term, condition, or 
 22.21  requirement directly intended to protect that particular 
 22.22  individual or entity, and the failure to comply was 
 22.23  insignificant with respect to the offering as a whole; and (ii) 
 22.24  a good faith and reasonable attempt was made to comply with all 
 22.25  applicable terms, conditions, and requirements of paragraph (h), 
 22.26  except that, where an exemption is established only through 
 22.27  reliance upon this provision, the failure to comply shall 
 22.28  nonetheless constitute a violation of section 80A.08 and be 
 22.29  actionable by the commissioner.  
 22.30     (7) The issuer, upon request by the commissioner, shall, 
 22.31  within ten days of the request, furnish to the commissioner a 
 22.32  copy of any and all information, documents, or materials 
 22.33  furnished to investors or offerees in connection with the offer 
 22.34  and sale according to paragraph (h).  
 22.35     (8) Neither compliance nor attempted compliance with the 
 22.36  exemption provided by paragraph (h), nor the absence of an 
 23.1   objection or order by the commissioner with respect to an offer 
 23.2   or sale of securities undertaken according to this exemption, 
 23.3   shall be considered to be a waiver of a condition of the 
 23.4   exemption or considered to be a confirmation by the commissioner 
 23.5   of the availability of this exemption.  
 23.6      (9) The commissioner may, by rule or order, increase the 
 23.7   number of purchasers or waive any other condition of this 
 23.8   exemption.  
 23.9      (10) The determination whether offers and sales made in 
 23.10  reliance on the exemption set forth in paragraph (h) shall be 
 23.11  integrated with offers and sales according to other paragraphs 
 23.12  of this subdivision shall be made according to the integration 
 23.13  standard set forth in Rule 502 of Regulation D promulgated by 
 23.14  the Securities and Exchange Commission, Code of Federal 
 23.15  Regulations, title 17, section 230.502.  If not subject to 
 23.16  integration according to that rule, offers and sales according 
 23.17  to paragraph (h) shall not otherwise be integrated with offers 
 23.18  and sales according to other exemptions set forth in this 
 23.19  subdivision. 
 23.20     (i) Any offer (but not a sale) of a security for which a 
 23.21  registration statement has been filed under sections 80A.01 to 
 23.22  80A.31, if no stop order or refusal order is in effect and no 
 23.23  public proceeding or examination looking toward an order is 
 23.24  pending; and any offer of a security if the sale of the security 
 23.25  is or would be exempt under this section.  The commissioner may 
 23.26  by rule exempt offers (but not sales) of securities for which a 
 23.27  registration statement has been filed as the commissioner deems 
 23.28  appropriate, consistent with the purposes of sections 80A.01 to 
 23.29  80A.31. 
 23.30     (j) The offer and sale by a cooperative organized under 
 23.31  chapter 308A or under the laws of another state, of its 
 23.32  securities when the securities are offered and sold only to its 
 23.33  members, or when the purchase of the securities is necessary or 
 23.34  incidental to establishing membership in the cooperative, or 
 23.35  when such securities are issued as patronage dividends.  This 
 23.36  paragraph applies to a cooperative organized under the laws of 
 24.1   another state only if the cooperative has filed with the 
 24.2   commissioner a consent to service of process under section 
 24.3   80A.27, subdivision 7, and has, not less than ten days prior to 
 24.4   the issuance or delivery, furnished the commissioner with a 
 24.5   written general description of the transaction and any other 
 24.6   information that the commissioner requires by rule or otherwise. 
 24.7      (l) The issuance and delivery of any securities of one 
 24.8   corporation to another corporation or its security holders in 
 24.9   connection with a merger, exchange of shares, or transfer of 
 24.10  assets whereby the approval of stockholders of the other 
 24.11  corporation is required to be obtained, provided, that the 
 24.12  commissioner has been furnished with a general description of 
 24.13  the transaction and with other information as the commissioner 
 24.14  by rule prescribes not less than ten days prior to the issuance 
 24.15  and delivery. 
 24.16     (m) Any transaction between the issuer or other person on 
 24.17  whose behalf the offering is made and an underwriter or among 
 24.18  underwriters. 
 24.19     (n) The distribution by a corporation of its or other 
 24.20  securities to its own security holders as a stock dividend or as 
 24.21  a dividend from earnings or surplus or as a liquidating 
 24.22  distribution; or upon conversion of an outstanding convertible 
 24.23  security; or pursuant to a stock split or reverse stock split. 
 24.24     (o) Any offer or sale of securities by an affiliate of the 
 24.25  issuer thereof if:  (1) a registration statement is in effect 
 24.26  with respect to securities of the same class of the issuer and 
 24.27  (2) the offer or sale has been exempted from registration by 
 24.28  rule or order of the commissioner.  
 24.29     (p) Any transaction pursuant to an offer to existing 
 24.30  security holders of the issuer, including persons who at the 
 24.31  time of the transaction are holders of convertible securities, 
 24.32  nontransferable warrants, or transferable warrants exercisable 
 24.33  within not more than 90 days of their issuance, if:  (1) no 
 24.34  commission or other remuneration (other than a standby 
 24.35  commission) is paid or given directly or indirectly for 
 24.36  soliciting any security holder in this state; and (2) the 
 25.1   commissioner has been furnished with a general description of 
 25.2   the transaction and with other information as the commissioner 
 25.3   may by rule prescribe no less than ten days prior to the 
 25.4   transaction. 
 25.5      (q) Any nonissuer sales of any security, including a 
 25.6   revenue obligation, issued by the state of Minnesota or any of 
 25.7   its political or governmental subdivisions, municipalities, 
 25.8   governmental agencies, or instrumentalities. 
 25.9      (r) Any transaction as to which the commissioner by rule or 
 25.10  order finds that registration is not necessary in the public 
 25.11  interest and for the protection of investors. 
 25.12     (s) An offer or sale of a security issued in connection 
 25.13  with an employee's stock purchase, savings, option, profit 
 25.14  sharing, pension, or similar employee benefit plan, if the 
 25.15  following conditions are met:  
 25.16     (1) the issuer, its parent corporation or any of its 
 25.17  majority-owned subsidiaries offers or sells the security 
 25.18  according to a written benefit plan or written contract relating 
 25.19  to the compensation of the purchaser; and 
 25.20     (2) the class of securities offered according to the plan 
 25.21  or contract, or if an option or right to purchase a security, 
 25.22  the class of securities to be issued upon the exercise of the 
 25.23  option or right, is registered under section 12 of the 
 25.24  Securities Exchange Act of 1934, or is a class of securities 
 25.25  with respect to which the issuer files reports according to 
 25.26  section 15(d) of the Securities Exchange Act of 1934; or 
 25.27     (3) the issuer fully complies with the provisions of Rule 
 25.28  701 as adopted by the Securities and Exchange Commission, Code 
 25.29  of Federal Regulations, title 12, section 230.701. 
 25.30     The issuer shall file not less than ten days before the 
 25.31  transaction, a general description of the transaction and any 
 25.32  other information that the commissioner requires by rule or 
 25.33  otherwise or, if applicable, a Securities and Exchange Form S-8. 
 25.34  Annually, within 90 days after the end of the issuer's fiscal 
 25.35  year, the issuer shall file a notice as provided with the 
 25.36  commissioner. 
 26.1      (t) Any sale of a security of an issuer that is a pooled 
 26.2   income fund, a charitable remainder trust, or a charitable lead 
 26.3   trust that has a qualified charity as the only charitable 
 26.4   beneficiary. 
 26.5      (u) Any sale by a qualified charity of a security that is a 
 26.6   charitable gift annuity if the issuer has a net worth, otherwise 
 26.7   defined as unrestricted fund balance, of not less than $300,000 
 26.8   and either:  (1) has been in continuous operation for not less 
 26.9   than three years; or (2) is a successor or affiliate of a 
 26.10  qualified charity that has been in continuous operation for not 
 26.11  less than three years. 
 26.12     Sec. 29.  Minnesota Statutes 1996, section 80A.16, is 
 26.13  amended to read: 
 26.14     80A.16 [FILING OF SALES AND ADVERTISING LITERATURE.] 
 26.15     The commissioner may by rule or order require the filing of 
 26.16  any prospectus, pamphlet, circular, form letter, advertisement, 
 26.17  or other sales literature or advertising communication addressed 
 26.18  or intended for distribution to prospective investors, including 
 26.19  clients or prospective clients of an investment adviser or 
 26.20  broker-dealer unless:  (1) the security or transaction is 
 26.21  exempted by section 80A.15; or (2) the security is a federal 
 26.22  covered security. 
 26.23     Sec. 30.  Minnesota Statutes 1996, section 80A.28, 
 26.24  subdivision 1, is amended to read: 
 26.25     Subdivision 1.  (a) There shall be a filing fee of $100 for 
 26.26  every application for registration or notice filing.  There 
 26.27  shall be an additional fee of one-tenth of one percent of the 
 26.28  maximum aggregate offering price at which the registered 
 26.29  securities are to be offered in this state, and the maximum 
 26.30  combined fees shall not exceed $300.  
 26.31     (b) If the registration statement relates to redeemable 
 26.32  securities issued by an open end management company or unit 
 26.33  investment trust, as defined in the Investment Company Act of 
 26.34  1940, there shall be a filing fee of $100 for every application 
 26.35  for registration.  There shall be an additional fee of 1/20 of 
 26.36  one percent of the maximum aggregate offering price at which the 
 27.1   registered securities are to be offered in this state.  There 
 27.2   shall be no maximum fee for securities registered pursuant to 
 27.3   this clause.  
 27.4      (c) When an application for registration is withdrawn 
 27.5   before the effective date or a preeffective stop order is 
 27.6   entered under section 80A.13, subdivision 1, all but the $100 
 27.7   filing fee shall be returned.  If an application to register 
 27.8   securities is denied, the total of all fees received shall be 
 27.9   retained. 
 27.10     (c) Where a filing is made in connection with a federal 
 27.11  covered security under section 18(b)(2) of the Securities Act of 
 27.12  1933, there is a fee of $100 for every initial filing.  There is 
 27.13  an additional fee of 1/20 of one percent of the maximum 
 27.14  aggregate offering price at which the securities are to be 
 27.15  offered in this state.  There is no maximum fee for securities 
 27.16  filings made according to this section. 
 27.17     Sec. 31.  Minnesota Statutes 1996, section 80A.28, 
 27.18  subdivision 2, is amended to read: 
 27.19     Subd. 2.  Every applicant for an initial or renewal license 
 27.20  shall pay a filing fee of $200 in the case of a broker-dealer, 
 27.21  $50 in the case of an agent, and $100 in the case of an 
 27.22  investment adviser.  When an application is denied or withdrawn, 
 27.23  the filing fee shall be retained.  A licensed agent who has 
 27.24  terminated employment with one broker-dealer shall, before 
 27.25  beginning employment with another broker-dealer, pay a transfer 
 27.26  fee of $25.  The fee for a filing made according to section 
 27.27  80A.05, subdivision 1a, is $100. 
 27.28     Sec. 32.  Minnesota Statutes 1996, section 80C.01, 
 27.29  subdivision 4, is amended to read: 
 27.30     Subd. 4.  "Franchise" means (a) a contract or agreement, 
 27.31  either express or implied, whether oral or written, for a 
 27.32  definite or indefinite period, between two or more persons: 
 27.33     (1) by which a franchisee is granted the right to engage in 
 27.34  the business of offering or distributing goods or services using 
 27.35  the franchisor's trade name, trademark, service mark, logotype, 
 27.36  advertising, or other commercial symbol or related 
 28.1   characteristics; 
 28.2      (2) in which the franchisor and franchisee have a community 
 28.3   of interest in the marketing of goods or services at wholesale, 
 28.4   retail, by lease, agreement, or otherwise; and 
 28.5      (3) for which the franchisee pays, directly or indirectly, 
 28.6   a franchise fee; or 
 28.7      (b) a contract, lease, or other agreement, either express 
 28.8   or implied, whether oral or written, for a definite or 
 28.9   indefinite period, between two or more persons, whereby the 
 28.10  franchisee is granted the right to market motor vehicle 
 28.11  fuel using the franchisor's trade name, trademark, service mark, 
 28.12  logotype, advertising, or other commercial symbol or related 
 28.13  characteristics for which the franchisee pays a franchise fee; 
 28.14  or 
 28.15     (c) the sale or lease of any products, equipment, chattels, 
 28.16  supplies, or services to the purchaser, other than the sale of 
 28.17  sales demonstration equipment, materials or samples for a total 
 28.18  price of $500 or less to any one person, for the purpose of 
 28.19  enabling the purchaser to start a business and in which the 
 28.20  seller:  
 28.21     (1) represents that the seller, lessor, or an affiliate 
 28.22  thereof will provide locations or assist the purchaser in 
 28.23  finding locations for the use or operation of vending machines, 
 28.24  racks, display cases, or similar devices, or currency operated 
 28.25  amusement machines or devices, on premises neither owned or 
 28.26  leased by the purchaser or seller; or 
 28.27     (2) represents that the seller will purchase any or all 
 28.28  products made, produced, fabricated, grown, bred, or modified by 
 28.29  the purchaser using, in whole or in part, the supplies, 
 28.30  services, or chattels sold to the purchaser; or 
 28.31     (3) guarantees that the purchaser will derive income from 
 28.32  the business which exceeds the price paid to the seller; or 
 28.33     (d) an oral or written contract or agreement, either 
 28.34  expressed or implied, for a definite or indefinite period, 
 28.35  between two or more persons, under which a manufacturer, selling 
 28.36  security systems through dealers or distributors in this state, 
 29.1   requires regular payments from the distributor or dealer as 
 29.2   royalties or residuals for products purchased and paid for by 
 29.3   the dealer or distributor.  
 29.4      (e) "Franchise" does not include any business which is 
 29.5   operated under a lease or license on the premises of the lessor 
 29.6   or licensor as long as such business is incidental to the 
 29.7   business conducted by the lessor or licensor on such premises, 
 29.8   including, without limitation, leased departments, licensed 
 29.9   departments, and concessions. 
 29.10     (f) "Franchise" does not include any contract, lease or 
 29.11  other agreement whereby the franchisee is required to pay less 
 29.12  than $100 on an annual basis, except those franchises identified 
 29.13  in paragraph (b). 
 29.14     (g) "Franchise" does not include a contract, lease or other 
 29.15  agreement between a new motor vehicle manufacturer, distributor, 
 29.16  or factory branch and a franchisee whereby the franchisee is 
 29.17  granted the right to market automobiles, motorcycles, trucks, 
 29.18  truck tractors, or self-propelled motor homes or campers if the 
 29.19  foregoing are designed primarily for the transportation of 
 29.20  persons or property on public highways. 
 29.21     (h) "Franchise" does not include a contract, lease, or 
 29.22  other agreement or arrangement between two or more air carriers, 
 29.23  or between one or more air carriers and one or more foreign air 
 29.24  carriers.  The terms "air carrier" and "foreign air carrier" 
 29.25  shall have the meanings assigned to them by the Federal Aviation 
 29.26  Act, United States Code Appendix, title 49, sections 1301(3) and 
 29.27  1301(22), respectively. 
 29.28     Sec. 33.  Minnesota Statutes 1996, section 82.19, is 
 29.29  amended by adding a subdivision to read: 
 29.30     Subd. 9.  [EXCLUSIVE AGENCY AGREEMENTS.] (a) Except as 
 29.31  provided in paragraph (b), a licensee shall not negotiate the 
 29.32  sale, exchange, lease, or listing of any real property directly 
 29.33  with the owner or lessor knowing that the owner or lessor has 
 29.34  executed a written exclusive listing contract or exclusive 
 29.35  contract for nonagency services in connection with the property 
 29.36  with another real estate broker, buyer, or lessee, nor shall a 
 30.1   licensee negotiate the purchase, lease, or exchange of real 
 30.2   property knowing that the buyer or lessee has executed a written 
 30.3   exclusive buyer representation contract or exclusive contract 
 30.4   for nonagency services for the purchase, lease, or exchange of 
 30.5   the real property with another real estate broker. 
 30.6      (b) A licensee may discuss the terms upon which a listing 
 30.7   or buyer representation contract or a contract for nonagency 
 30.8   services may be entered into after expiration of any existing 
 30.9   exclusive contract when the inquiry or discussion is initiated 
 30.10  by the owner, lessor, buyer, or lessee.  The licensee must 
 30.11  inquire of the owner, lessor, buyer, or lessee whether such an 
 30.12  exclusive contract exists. 
 30.13     Sec. 34.  Minnesota Statutes 1996, section 82.20, 
 30.14  subdivision 15, is amended to read: 
 30.15     Subd. 15.  [EXEMPTION.] The following persons, when acting 
 30.16  as closing agents, are exempt from the requirements of sections 
 30.17  82.19 and 82.24 unless otherwise required in this section or 
 30.18  chapter: 
 30.19     (1) a direct employee of a title insurance company 
 30.20  authorized to do business in this state, or a direct employee of 
 30.21  a title company, or a person who has an agency agreement with a 
 30.22  title insurance company or a title company in which the agent 
 30.23  agrees to perform closing services on the title insurance 
 30.24  company's or title company's behalf and the title insurance 
 30.25  company or title company assumes responsibility for the actions 
 30.26  of the agent as if the agent were a direct employee of the title 
 30.27  insurance company or title company; 
 30.28     (2) a licensed attorney or a direct employee of a licensed 
 30.29  attorney; 
 30.30     (3) a licensed real estate broker or salesperson; 
 30.31     (4) a direct employee of a licensed real estate broker if 
 30.32  the broker maintains all funds received in connection with the 
 30.33  closing services in the broker's trust account; 
 30.34     (5) any bank, trust company, savings association, credit 
 30.35  union, industrial loan and thrift company, regulated lender 
 30.36  under chapter 56, public utility, or land mortgage or farm loan 
 31.1   association organized under the laws of this state or the United 
 31.2   States, when engaged in the transaction of businesses within the 
 31.3   scope of its corporate powers as provided by law; and 
 31.4      (6) a title insurance company authorized to do business in 
 31.5   this state or a title company which is the appointed agent of a 
 31.6   title insurance company authorized to do business in this 
 31.7   state.; and 
 31.8      (7) a title company that has a contractual agency 
 31.9   relationship with a title insurance company authorized to do 
 31.10  business in this state, where the title insurance company 
 31.11  assumes responsibility for the actions of the title company and 
 31.12  its employees or agents as if they were the employees or agents 
 31.13  of the title insurance company. 
 31.14     Sec. 35.  Minnesota Statutes 1996, section 82.22, 
 31.15  subdivision 13, is amended to read: 
 31.16     Subd. 13.  [CONTINUING EDUCATION.] (a) After their first 
 31.17  renewal date, all real estate salespersons and all real estate 
 31.18  brokers shall be required to successfully complete 30 hours of 
 31.19  real estate continuing education, either as a student or a 
 31.20  lecturer, in courses of study approved by the commissioner, 
 31.21  during each 24-month license period.  At least 15 of the 30 
 31.22  credit hours must be completed during the first 12 months of the 
 31.23  24-month licensing period.  Salespersons and brokers whose 
 31.24  initial license period extends more than 12 months are required 
 31.25  to complete 15 hours of real estate continuing education during 
 31.26  the initial license period.  Those licensees who will receive a 
 31.27  12-month license on July 1, 1995, because of the staggered 
 31.28  implementation schedule must complete 15 hours of real estate 
 31.29  continuing education as a requirement for renewal on July 1, 
 31.30  1996.  Licensees may not claim credit for continuing education 
 31.31  not actually completed as of the date their report of continuing 
 31.32  education compliance is filed. 
 31.33     (b) The commissioner shall adopt rules defining the 
 31.34  standards for course and instructor approval, and may adopt 
 31.35  rules for the proper administration of this subdivision.  The 
 31.36  commissioner may not approve a course which can be completed by 
 32.1   the student at home or outside the classroom without the 
 32.2   supervision of an instructor approved by the department of 
 32.3   commerce.  The commissioner has discretion to establish a pilot 
 32.4   program to explore delivery of accredited courses using new 
 32.5   delivery technology, including interactive technology.  This 
 32.6   pilot program expires on August 1, 2000. 
 32.7      (c) Any program approved by Minnesota continuing legal 
 32.8   education shall be approved by the commissioner of commerce for 
 32.9   continuing education for real estate brokers and salespeople if 
 32.10  the program or any part thereof relates to real estate.  
 32.11     (d) As part of the continuing education requirements of 
 32.12  this section, the commissioner shall require that all real 
 32.13  estate brokers and salespersons receive: 
 32.14     (1) at least two hours of training during each license 
 32.15  period in courses in laws or regulations on agency 
 32.16  representation and disclosure; and 
 32.17     (2) at least two hours of training during each license 
 32.18  period in courses in state and federal fair housing laws, 
 32.19  regulations, and rules, or other antidiscrimination laws. 
 32.20     Clause (1) does not apply to real estate salespersons and 
 32.21  real estate brokers engaged solely in the commercial real estate 
 32.22  business who file with the commissioner a verification of this 
 32.23  status along with the continuing education report required under 
 32.24  paragraph (a). 
 32.25     (e) The commissioner is authorized to establish a procedure 
 32.26  for renewal of course accreditation. 
 32.27     Sec. 36.  Minnesota Statutes 1996, section 82.24, 
 32.28  subdivision 5, is amended to read: 
 32.29     Subd. 5.  [TRUST ACCOUNT RECORDS ACCOUNTS.] (a) Each broker 
 32.30  or closing agent shall maintain and retain records of all trust 
 32.31  funds and trust accounts.  The commissioner may prescribe 
 32.32  information to be included in the records by appropriate rules.  
 32.33     (b) A check received from a potential buyer shall be 
 32.34  deposited into the listing broker's trust account not later than 
 32.35  the third business day after delivery of the check to the 
 32.36  broker, except that the check may be held by the listing broker 
 33.1   until acceptance or rejection of the offer if: 
 33.2      (1) the check by its terms is not negotiable by the broker 
 33.3   or if the potential buyer has given written instructions that 
 33.4   the check shall not be deposited nor cashed until acceptance or 
 33.5   shall be immediately returned if the offer is rejected; and 
 33.6      (2) the potential seller is informed that the check is 
 33.7   being so held before or at the time the offer is presented to 
 33.8   that person for acceptance. 
 33.9      If the offer is accepted, the check shall be deposited in a 
 33.10  neutral escrow depository or the trust fund account of the 
 33.11  listing broker not later than the third business day following 
 33.12  acceptance of the offer unless the broker has received written 
 33.13  authorization from all parties to the transaction to continue to 
 33.14  hold the check.  If the offer is rejected, the check shall be 
 33.15  returned to the potential buyer not later than the next business 
 33.16  day after rejection. 
 33.17     Sec. 37.  Minnesota Statutes 1996, section 82B.13, 
 33.18  subdivision 1, is amended to read: 
 33.19     Subdivision 1.  [REGISTERED REAL PROPERTY APPRAISER OR 
 33.20  LICENSED REAL PROPERTY APPRAISER.] As a prerequisite for 
 33.21  licensing as a registered real property appraiser or licensed 
 33.22  real property appraiser, an applicant must present evidence 
 33.23  satisfactory to the commissioner that the person has 
 33.24  successfully completed at least 75 90 classroom hours of courses.
 33.25  The courses must consist of 60 75 hours of general real estate 
 33.26  appraisal principles and 15 hours related to standards of 
 33.27  professional appraisal practice and the provisions of this 
 33.28  chapter.  
 33.29     Sec. 38.  Minnesota Statutes 1996, section 82B.13, 
 33.30  subdivision 4, is amended to read: 
 33.31     Subd. 4.  [CERTIFIED RESIDENTIAL REAL PROPERTY APPRAISER.] 
 33.32  As a prerequisite for licensing as a certified residential real 
 33.33  property appraiser, an applicant must present evidence 
 33.34  satisfactory to the commissioner that the person has 
 33.35  successfully completed at least 165 120 classroom hours of 
 33.36  courses, including 15 hours related to the standards of 
 34.1   professional appraisal practice and the provisions of this 
 34.2   chapter, with particular emphasis on the appraisal of one to 
 34.3   four unit residential properties. 
 34.4      Sec. 39.  Minnesota Statutes 1996, section 82B.13, 
 34.5   subdivision 5, is amended to read: 
 34.6      Subd. 5.  [CERTIFIED GENERAL REAL PROPERTY APPRAISER.] As a 
 34.7   prerequisite for licensing as a certified general real property 
 34.8   appraiser, an applicant must present evidence satisfactory to 
 34.9   the commissioner that the person has successfully completed at 
 34.10  least 165 180 classroom hours of courses, including 15 hours 
 34.11  related to the standards of professional appraisal practice and 
 34.12  the provisions of this chapter, with particular emphasis on the 
 34.13  appraisal of nonresidential properties. 
 34.14     Sec. 40.  Minnesota Statutes 1996, section 82B.14, is 
 34.15  amended to read: 
 34.16     82B.14 [EXPERIENCE REQUIREMENT.] 
 34.17     (a) A license under section 82B.11, subdivision 3, 4, or 5, 
 34.18  may not be issued to a person who does not have the equivalent 
 34.19  of two years of experience in real property appraisal supported 
 34.20  by adequate written reports or file memoranda.  As a 
 34.21  prerequisite for licensing as a registered real property 
 34.22  appraiser or licensed real property appraiser, an applicant must 
 34.23  present evidence satisfactory to the commissioner that the 
 34.24  person has obtained 2,000 hours of experience in real property 
 34.25  appraisal. 
 34.26     As a prerequisite for licensing as a certified residential 
 34.27  real property appraiser, an applicant must present evidence 
 34.28  satisfactory to the commissioner that the person has obtained 
 34.29  2,500 hours of experience in real property appraisal. 
 34.30     As a prerequisite for licensing as a certified general real 
 34.31  property appraiser, an applicant must present evidence 
 34.32  satisfactory to the commissioner that the person has obtained 
 34.33  3,000 hours of experience in real property appraisal. 
 34.34     (b) Each applicant for license under section 82B.11, 
 34.35  subdivision 3, 4, or 5, shall give under oath a detailed listing 
 34.36  of the real estate appraisal reports or file memoranda for each 
 35.1   year for which experience is claimed by the applicant.  Upon 
 35.2   request, the applicant shall make available to the commissioner 
 35.3   for examination, a sample of appraisal reports that the 
 35.4   applicant has prepared in the course of appraisal practice. 
 35.5      (c) Applicants may not receive credit for experience 
 35.6   accumulated while unlicensed, if the experience is based on 
 35.7   activities which required a license under this section. 
 35.8      Sec. 41.  Minnesota Statutes 1996, section 82B.19, 
 35.9   subdivision 1, is amended to read: 
 35.10     Subdivision 1.  [LICENSE RENEWALS.] A licensed real estate 
 35.11  appraiser shall present evidence satisfactory to the 
 35.12  commissioner of having met the continuing education requirements 
 35.13  of this chapter before the commissioner renews a license. 
 35.14     The basic continuing education requirement for renewal of a 
 35.15  license is the completion by the applicant either as a student 
 35.16  or as an instructor, during the immediately preceding term of 
 35.17  licensing, of at least 30 classroom hours of instruction in 
 35.18  courses or seminars that have received the approval of the 
 35.19  commissioner.  As part of the continuing education requirements 
 35.20  of this section, the commissioner shall require that all real 
 35.21  estate appraisers receive at least four hours of training each 
 35.22  license period in courses in laws or regulations on standards of 
 35.23  professional practice.  If the applicant's immediately preceding 
 35.24  term of licensing consisted of 12 or more months, but fewer than 
 35.25  24 months, the applicant must provide evidence of completion of 
 35.26  15 hours of instruction during the license period.  If the 
 35.27  immediately preceding term of licensing consisted of fewer than 
 35.28  12 months, no continuing education need be reported. 
 35.29     Sec. 42.  Minnesota Statutes 1996, section 317A.141, is 
 35.30  amended by adding a subdivision to read: 
 35.31     Subd. 4.  [EFFECT OF AMENDMENTS ON CHARITABLE TRUST 
 35.32  ASSETS.] Assets held by a corporation, including income or fees 
 35.33  from services, are restricted to the uses and purposes for which 
 35.34  the property was received and held. 
 35.35     Sec. 43.  Minnesota Statutes 1996, section 317A.671, is 
 35.36  amended to read: 
 36.1      317A.671 [CERTAIN ASSETS NOT TO BE DIVERTED.] 
 36.2      Except as provided in section 501B.31, when a corporation 
 36.3   dissolves, merges, substantially changes the use or purposes for 
 36.4   which it will use its assets, or consolidates, transfers its 
 36.5   assets, or grants a mortgage or other security interest in its 
 36.6   assets, assets of the corporation or a constituent corporation, 
 36.7   and assets subsequently received by a single corporation after a 
 36.8   merger or consolidation, may not be diverted from the uses and 
 36.9   purposes for which the assets have been received and held, or 
 36.10  from the uses and purposes expressed or intended by the original 
 36.11  donor. 
 36.12     Sec. 44.  [325E.58] [SIGN CONTRACTOR; BOND.] 
 36.13     (a) A sign contractor may post a compliance bond with the 
 36.14  commissioner, conditioned that the sign contractor shall 
 36.15  faithfully perform duties and comply with laws, ordinances, 
 36.16  rules, and contracts entered into for the installation of 
 36.17  signs.  The bond must be renewed annually and maintained for so 
 36.18  long as determined by the commissioner.  The aggregate liability 
 36.19  of the surety on the bond to any and all persons, regardless of 
 36.20  the number of claims made against the bond, may not exceed the 
 36.21  annual amount of the bond.  The bond may be canceled as to 
 36.22  future liability by the surety upon 30 days' written notice 
 36.23  mailed to the commissioner by United States mail. 
 36.24     (b) The amount of the bond shall be $8,000.  The bond may 
 36.25  be drawn upon only by a local unit of government that requires 
 36.26  sign installers to post a compliance bond.  The bond is in lieu 
 36.27  of any compliance bond required by a local unit of government. 
 36.28     (c) For purposes of this section, "sign" means a device, 
 36.29  structure, fixture, or placard using graphics, symbols, or 
 36.30  written copy that is erected on the premises of an establishment 
 36.31  including the name of the establishment or identifying the 
 36.32  merchandise, services, activities, or entertainment available on 
 36.33  the premises. 
 36.34     Sec. 45.  Minnesota Statutes 1996, section 326.83, 
 36.35  subdivision 11, is amended to read: 
 36.36     Subd. 11.  [OWNER.] Except in section 326.91, subdivision 
 37.1   1, "owner" means a person who has any legal or equitable 
 37.2   interest in real property.  For purposes of sections 326.83 to 
 37.3   326.991, "owner" does not include a residential building 
 37.4   contractor or residential remodeler who constructs or improves 
 37.5   its own property for purposes of speculation.  A residential 
 37.6   building contractor or residential remodeler will be presumed to 
 37.7   be building or improving for purposes of speculation if it 
 37.8   constructs or improves more than one property within any 
 37.9   12-month 24-month period. 
 37.10     Sec. 46.  Minnesota Statutes 1996, section 326.83, 
 37.11  subdivision 19, is amended to read: 
 37.12     Subd. 19.  [SPECIAL SKILL.] "Special skill" means one of 
 37.13  the following eight categories: 
 37.14     (a)  [EXCAVATION.] Excavation includes work in any of the 
 37.15  following areas: 
 37.16     (1) excavation; 
 37.17     (2) trenching; 
 37.18     (3) grading; and 
 37.19     (4) site grading.  
 37.20     (b)  [MASONRY AND CONCRETE.] Masonry and concrete includes 
 37.21  work in any of the following areas: 
 37.22     (1) drain systems; 
 37.23     (2) poured walls; 
 37.24     (3) slabs and poured-in-place footings; 
 37.25     (4) masonry walls; 
 37.26     (5) masonry fireplaces; 
 37.27     (6) masonry veneer; and 
 37.28     (7) water resistance and waterproofing. 
 37.29     (c)  [CARPENTRY.] Carpentry includes work in any of the 
 37.30  following areas: 
 37.31     (1) rough framing; 
 37.32     (2) finish carpentry; 
 37.33     (3) siding; 
 37.34     (4) doors, windows, and skylights; 
 37.35     (5) exterior covering; 
 37.36     (6) (4) porches and decks, excluding footings; 
 38.1      (7) (5) wood foundations; and 
 38.2      (8) insulation and vapor barrier; 
 38.3      (9) (6) drywall installation, excluding taping and 
 38.4   finishing;. 
 38.5      (10) cabinet and counter top installation; 
 38.6      (11) wood floors; 
 38.7      (12) installation of roofing materials, excluding roofing; 
 38.8   and 
 38.9      (13) soffit, fascia, and trim. 
 38.10     (d)  [INTERIOR FINISHING.] Interior finishing includes work 
 38.11  in any of the following areas: 
 38.12     (1) floor covering; 
 38.13     (2) wood floors; 
 38.14     (3) cabinet and counter top installation; 
 38.15     (4) insulation and vapor barriers; 
 38.16     (5) interior or exterior painting; 
 38.17     (6) ceramic, marble, and quarry tile; 
 38.18     (7) ornamental guardrail and installation of prefabricated 
 38.19  stairs; and 
 38.20     (8) wallpapering. 
 38.21     (e)  [EXTERIOR FINISHING.] Exterior finishing includes work 
 38.22  in any of the following areas: 
 38.23     (1) siding; 
 38.24     (2) doors, skylights, and windows; 
 38.25     (3) soffit, fascia, and trim; 
 38.26     (4) (3) exterior plaster and stucco; 
 38.27     (5) (4) painting; and 
 38.28     (6) (5) rain carrying systems, including gutters and down 
 38.29  spouts. 
 38.30     (f)  [DRYWALL AND PLASTER.] Drywall and plaster includes 
 38.31  work in any of the following areas: 
 38.32     (1) installation; 
 38.33     (2) taping; 
 38.34     (3) finishing; 
 38.35     (4) interior plaster; 
 38.36     (5) painting; and 
 39.1      (6) wallpapering. 
 39.2      (g)  [ROOFING.] Roofing includes work in any of the 
 39.3   following areas: 
 39.4      (1) roof coverings; 
 39.5      (2) roof sheathing; 
 39.6      (3) roof weatherproofing and insulation; and 
 39.7      (4) repair of roof support system, but not construction of 
 39.8   new roof support system. 
 39.9      (h)  [GENERAL INSTALLATION SPECIALTIES.] Installation 
 39.10  includes work in any of the following areas: 
 39.11     (1) garage doors and openers; 
 39.12     (2) pools, spas, and hot tubs; 
 39.13     (3) fireplaces and wood stoves; 
 39.14     (4) asphalt paving and seal coating; 
 39.15     (5) exterior plaster and stucco; and 
 39.16     (6) ornamental guardrail and prefabricated stairs. 
 39.17     Sec. 47.  Minnesota Statutes 1996, section 326.84, 
 39.18  subdivision 3, is amended to read: 
 39.19     Subd. 3.  [EXEMPTIONS.] The license requirement does not 
 39.20  apply to: 
 39.21     (1) an employee of a licensee performing work for the 
 39.22  licensee; 
 39.23     (2) a material person, manufacturer, or retailer furnishing 
 39.24  finished products, materials, or articles of merchandise who 
 39.25  does not install or attach the items; 
 39.26     (3) an owner or owners of residential real estate who build 
 39.27  or improve residential real estate and who do the work 
 39.28  themselves or jointly with the owner's own bona fide employees.  
 39.29  This exemption does not apply to a person who engages in a 
 39.30  pattern of building or improving real estate for purposes of 
 39.31  resale.  Such a pattern is presumed to exist if the person 
 39.32  constructs or improves more than one property within any 
 39.33  12-month 24-month period; 
 39.34     (4) an architect or engineer engaging in professional 
 39.35  practice as defined in this chapter; 
 39.36     (5) a person whose total gross annual receipts from 
 40.1   projects regulated under this section do not exceed $15,000; 
 40.2      (6) a mechanical contractor; 
 40.3      (7) a plumber, electrician, or other person whose 
 40.4   profession is otherwise subject to statewide licensing, when 
 40.5   engaged in the activity which is the subject of licensure; 
 40.6      (8) specialty contractors who provide only one special 
 40.7   skill as defined in section 326.83; 
 40.8      (9) a school district, or a technical college governed 
 40.9   under chapter 136F; 
 40.10     (10) manufactured housing installers; and 
 40.11     (11) Habitat for Humanity and Builders Outreach Foundation, 
 40.12  and their individual volunteers when engaged in activities on 
 40.13  their behalf. 
 40.14     To qualify for the exemption in clause (5), a person must 
 40.15  obtain a certificate of exemption from licensing from the 
 40.16  commissioner.  
 40.17     A certificate of exemption will be issued upon the 
 40.18  applicant's filing with the commissioner, an affidavit stating 
 40.19  that the applicant does not expect to exceed $15,000 in gross 
 40.20  annual receipts derived from contracting activities during the 
 40.21  calendar year for which the exemption is requested. 
 40.22     To renew the exemption in clause (5), the applicant must 
 40.23  file an affidavit stating that the applicant did not exceed 
 40.24  $15,000 in gross annual receipts during the past calendar year, 
 40.25  and the applicant does not expect to exceed $15,000 in gross 
 40.26  annual receipts during the calendar year for which the exemption 
 40.27  is requested. 
 40.28     If a person, operating under the exemption in clause (5), 
 40.29  exceeds $15,000 in gross receipts during any calendar year, the 
 40.30  person must immediately surrender the exemption certificate and 
 40.31  apply for the appropriate license.  The person must remain 
 40.32  licensed until such time as the person's gross annual receipts 
 40.33  during a calendar year fall below $15,000.  The person may then 
 40.34  apply for this exemption for the next calendar year. 
 40.35     Sec. 48.  Minnesota Statutes 1996, section 326.85, is 
 40.36  amended by adding a subdivision to read: 
 41.1      Subd. 4.  [NONEXPIRATION.] The council is not subject to 
 41.2   the expiration provisions of section 15.059, subdivision 5. 
 41.3      Sec. 49.  Minnesota Statutes 1996, section 326.921, is 
 41.4   amended to read: 
 41.5      326.921 [BUILDING PERMIT CONDITIONED ON LICENSURE.] 
 41.6      A political subdivision shall not issue a building permit 
 41.7   to an unlicensed person who is required to be licensed under 
 41.8   sections 326.83 to 326.991.  A political subdivision that issues 
 41.9   zoning or land use permits in lieu of a building permit shall 
 41.10  not issue those permits to an unlicensed person who is required 
 41.11  to be licensed under sections 326.83 to 326.911.  The political 
 41.12  subdivision shall report the person applying for a building the 
 41.13  permit to the commissioner who may bring an action against the 
 41.14  person. 
 41.15     Sec. 50.  Minnesota Statutes 1996, section 332.33, 
 41.16  subdivision 1, is amended to read: 
 41.17     Subdivision 1.  [REQUIREMENT.] Except as otherwise provided 
 41.18  in this chapter, no person shall conduct within this state a 
 41.19  collection agency or engage within this state in the business of 
 41.20  collecting claims for others as defined in sections 332.31 to 
 41.21  332.45, without having first applied for and obtained 
 41.22  a collection agency license.  A person acting under the 
 41.23  authority of a collection agency, as a collector, must first 
 41.24  obtain a Minnesota collector license.  A licensed collector may 
 41.25  use one additional assumed name only if the assumed name is 
 41.26  registered with and approved by the commissioner. 
 41.27     Sec. 51.  Minnesota Statutes 1996, section 332.33, is 
 41.28  amended by adding a subdivision to read: 
 41.29     Subd. 7.  [NOTICE.] A licensed collection agency or 
 41.30  individual collector must give the commissioner written notice 
 41.31  of a change in personal name, company name, address, or 
 41.32  ownership not later than 15 days after the change occurs. 
 41.33     Sec. 52.  Minnesota Statutes 1996, section 332.34, is 
 41.34  amended to read: 
 41.35     332.34 [BOND.] 
 41.36     The commissioner of commerce shall require each collection 
 42.1   agency licensee to annually file and maintain in force a 
 42.2   corporate surety bond, in a form to be prescribed by, and 
 42.3   acceptable to, the commissioner, and in the a sum of at 
 42.4   least $20,000.  An applicant for a new or renewal license may 
 42.5   request that the amount of the bond be reduced to an amount not 
 42.6   less than $5,000.  This request may be granted upon a showing 
 42.7   that the total dollar amount received from debtors by the 
 42.8   collection agency in the preceding fiscal year did not exceed 
 42.9   $30,000.  A collection agency may deposit cash in and with a 
 42.10  depository acceptable to the commissioner in an amount and in 
 42.11  the manner prescribed and approved by the commissioner in lieu 
 42.12  of a bond. 
 42.13     Sec. 53.  Minnesota Statutes 1996, section 333.01, is 
 42.14  amended to read: 
 42.15     333.01 [COMMERCIAL ASSUMED NAMES; CERTIFICATE.] 
 42.16     Subdivision 1.  [CERTIFICATE.] No person shall hereafter 
 42.17  carry on or conduct or transact a commercial business in this 
 42.18  state under any designation, name, or style, which does not set 
 42.19  forth the true name of every person interested in such business 
 42.20  unless such person shall file in the office of the secretary of 
 42.21  state, a certificate setting forth the name and business address 
 42.22  under which the business is conducted or transacted, or is to be 
 42.23  conducted or transacted, and the true name of each person 
 42.24  conducting or transacting the same, with the address of such 
 42.25  person.  The name of the business must not include any of the 
 42.26  following phrases or their abbreviations:  corporation, 
 42.27  incorporated, limited, chartered, professional cooperative, 
 42.28  association, limited partnership, limited liability company, 
 42.29  professional limited liability company, limited liability 
 42.30  partnership, or professional limited liability partnership, 
 42.31  except to the extent that an entity filing a certificate would 
 42.32  be authorized to use the phrase or abbreviation.  The 
 42.33  certificate shall be executed by one of the persons conducting, 
 42.34  or intending to conduct, the business.  The certificate shall be 
 42.35  published after it has been filed with the secretary of state in 
 42.36  a qualified newspaper in the county in which the person has a 
 43.1   principal or registered office for two successive issues. 
 43.2      Subd. 2.  [INTENTIONAL MISREPRESENTATION PROHIBITED.] No 
 43.3   person shall use an assumed or fictitious name in the conduct of 
 43.4   its business to intentionally misrepresent its geographic origin 
 43.5   or location.  
 43.6      Sec. 54.  [333.065] [PENALTY FOR VIOLATION.] 
 43.7      A person who violates any provision of sections 333.01 to 
 43.8   333.06 is subject to the penalties and remedies provided in 
 43.9   section 8.31.  
 43.10     The relief provided in this section is in addition to the 
 43.11  remedies or penalties otherwise available. 
 43.12     Sec. 55.  Minnesota Statutes 1996, section 359.061, is 
 43.13  amended to read: 
 43.14     359.061 [RECORD OF COMMISSION; CERTIFICATE.] 
 43.15     The commission of every notary shall be recorded in the 
 43.16  office of the court administrator of the district court of the 
 43.17  notary's county of residence, in a record kept for that 
 43.18  purpose.  The commission of a nonresident notary must be 
 43.19  recorded in the office of the court administrator of the 
 43.20  district court of the Minnesota county that borders the county 
 43.21  in which the nonresident notary resides.  The court 
 43.22  administrator, when requested, shall certify to official acts in 
 43.23  the manner and for the fees prescribed by statute or court rule. 
 43.24     Sec. 56.  Minnesota Statutes 1996, section 359.071, is 
 43.25  amended to read: 
 43.26     359.071 [CHANGE OF NAME OR ADDRESS.] 
 43.27     A notary shall notify the commissioner of any name or 
 43.28  address change within 30 days of the change. 
 43.29     Sec. 57.  Minnesota Statutes 1996, section 501B.35, 
 43.30  subdivision 3, is amended to read: 
 43.31     Subd. 3.  [CHARITABLE TRUST.] "Charitable trust" means a 
 43.32  fiduciary relationship with respect to property that arises as a 
 43.33  result of a manifestation of an intention to create it, and that 
 43.34  subjects the person by whom the property is held to equitable 
 43.35  duties to deal with the property for a charitable purpose.  As 
 43.36  used in this definition, property includes all income derived 
 44.1   from fees for services. 
 44.2      Sec. 58.  Minnesota Statutes 1996, section 507.401, 
 44.3   subdivision 2, is amended to read: 
 44.4      Subd. 2.  [CERTIFICATE OF RELEASE.] An officer or duly 
 44.5   appointed agent of a title insurance company may, on behalf of a 
 44.6   mortgagor or a person who acquired from the mortgagor title to 
 44.7   all or a part of the property described in a mortgage, execute a 
 44.8   certificate of release that complies with the requirements of 
 44.9   this section and record the certificate of release in the real 
 44.10  property records of each county in which the mortgage is 
 44.11  recorded if:  (i) a satisfaction or release of the mortgage has 
 44.12  not been executed and recorded within 60 days after the date 
 44.13  payment in full of the loan secured by the mortgage was sent in 
 44.14  accordance with a payoff statement furnished by the mortgagee or 
 44.15  the mortgage servicer, and (ii) the title insurance company, its 
 44.16  officer, or agent has sent to the last known address of the 
 44.17  mortgagee or the mortgage servicer, at least 30 days prior to 
 44.18  executing the certificate of release, written notice of its 
 44.19  intention to execute and record a certificate of release in 
 44.20  accordance with this section after the expiration of the 60-day 
 44.21  period. 
 44.22     Sec. 59.  Minnesota Statutes 1996, section 507.401, 
 44.23  subdivision 3, is amended to read: 
 44.24     Subd. 3.  [CONTENTS.] A certificate of release executed 
 44.25  under this section must contain substantially all of the 
 44.26  following: 
 44.27     (1) the name of the mortgagor, the name of the original 
 44.28  mortgagee, and, if applicable, the mortgage servicer, the date 
 44.29  of the mortgage, the date of recording, and volume and page or 
 44.30  document number in the real property records where the mortgage 
 44.31  is recorded, together with similar information for the last 
 44.32  recorded assignment of the mortgage; 
 44.33     (2) a statement that the mortgage was in the original 
 44.34  principal amount of $500,000 or less; 
 44.35     (3) a statement that the person executing the certificate 
 44.36  of release is an officer or a duly appointed agent of a title 
 45.1   insurance company authorized and licensed to transact the 
 45.2   business of insuring titles to interests in real property in 
 45.3   this state under chapter 68A; 
 45.4      (4) a statement that the certificate of release is made on 
 45.5   behalf of the mortgagor or a person who acquired title from the 
 45.6   mortgagor to all or a part of the property described in the 
 45.7   mortgage; 
 45.8      (5) a statement that the mortgagee or mortgage servicer 
 45.9   provided a payoff statement which was used to make payment in 
 45.10  full of the unpaid balance of the loan secured by the 
 45.11  mortgage; and 
 45.12     (6) a statement that payment in full of the unpaid balance 
 45.13  of the loan secured by the mortgage was made in accordance with 
 45.14  the written or verbal payoff statement., and received by the 
 45.15  mortgagee or mortgage servicer, as evidenced by one or more of 
 45.16  the following in the records of the title insurance company or 
 45.17  its agent: 
 45.18     (i) a bank check, certified check, escrow account check 
 45.19  from the title company or title insurance agent, or attorney 
 45.20  trust account check that has been negotiated by the mortgagee or 
 45.21  mortgage servicer; or 
 45.22     (ii) other documentary evidence of payment to the mortgagee 
 45.23  or mortgage servicer; 
 45.24     (7) a statement that more than 60 days have elapsed since 
 45.25  the date payment in full was sent; 
 45.26     (8) a statement that after the expiration of the 60-day 
 45.27  period referred to in subdivision 2, the title insurance 
 45.28  company, its officer, or agent sent to the last known address of 
 45.29  the mortgagee or mortgage servicer, at least 30 days prior to 
 45.30  executing the certificate of release, notice in writing of its 
 45.31  intention to execute and record a certificate of release in 
 45.32  accordance with this section, with an unexecuted copy of the 
 45.33  proposed certificate of release attached to the written notice; 
 45.34  and 
 45.35     (9) a statement that the title insurance company, its 
 45.36  officer, or agent has not received notification in writing of 
 46.1   any reason why the certificate of release should not be executed 
 46.2   and recorded after the expiration of the 30-day notice period 
 46.3   referred to in subdivision 2. 
 46.4      Sec. 60.  [REPEALER.] 
 46.5      Minnesota Statutes 1996, section 60K.07, subdivision 1, is 
 46.6   repealed. 
 46.7      Sec. 61.  [EFFECTIVE DATE.] 
 46.8      Section 32, paragraph (h), is effective the day following 
 46.9   final enactment and shall apply to all agreements or 
 46.10  arrangements regardless of the date they were entered into or 
 46.11  renewed. 
 46.12     Sections 4, 6, 7, 42, 43, 46, 48, and 57 are effective the 
 46.13  day following final enactment. 
 46.14     Sections 53 and 54 are effective the day following final 
 46.15  enactment and apply to causes of action arising from incidents 
 46.16  occurring on or after that date.