Minnesota Legislature
SF 5031
as introduced - 93rd Legislature (2023 - 2024) Posted on 03/19/2024 09:08am
Current Version - as introduced
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A bill for an act
relating to financial institutions; modifying provisions governing money
transmitters; amending Minnesota Statutes 2023 Supplement, sections 53B.28,
subdivisions 18, 25; 53B.29; repealing Minnesota Statutes 2023 Supplement,
section 53B.58.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2023 Supplement, section 53B.28, subdivision 18, is amended
to read:
Subd. 18.
Money transmission.
(a) "Money transmission" means:
(1) selling or issuing payment instruments to a person located in this state;
(2) selling or issuing stored value to a person located in this state; or
(3) receiving money for transmission from a person located in this state.
(b) deleted text begin Money includes payroll processing services.deleted text end Money does not include the provision
solely of online or telecommunications services or network access.
Sec. 2.
Minnesota Statutes 2023 Supplement, section 53B.28, subdivision 25, is amended
to read:
Subd. 25.
Payroll processing services.
"Payroll processing services" means deleted text begin receiving
money for transmission pursuant to a contract with a person to deliverdeleted text end new text begin deliveringnew text end wages or
salaries, deleted text begin makedeleted text end new text begin makingnew text end payment of payroll taxes to state and federal agencies, deleted text begin makedeleted text end new text begin makingnew text end
payments relating to employee benefit plans, deleted text begin or makedeleted text end new text begin makingnew text end distributions of other authorized
deductions from wages or salariesnew text begin , or new text end new text begin transmitting other funds on behalf of an employer in
connection with transactions related to employeesnew text end . The term payroll processing services
deleted text begin does not includedeleted text end new text begin includesnew text end an employer performing payroll processing services on the
employer's own behalf or on behalf of the employer's affiliatedeleted text begin , or adeleted text end new text begin andnew text end professional
employment deleted text begin organization subject to regulation under other applicable state lawdeleted text end new text begin organizationsnew text end .
Sec. 3.
Minnesota Statutes 2023 Supplement, section 53B.29, is amended to read:
53B.29 EXEMPTIONS.
This chapter does not apply to:
(1) an operator of a payment system, to the extent the operator of a payment system
provides processing, clearing, or settlement services between or among persons exempted
by this section or licensees in connection with wire transfers, credit card transactions, debit
card transactions, stored-value transactions, automated clearing house transfers, or similar
funds transfers;
(2) a person appointed as an agent of a payee to collect and process a payment from a
payor to the payee for goods or services, other than money transmission itself, provided to
the payor by the payee, provided that:
(i) there exists a written agreement between the payee and the agent directing the agent
to collect and process payments from payors on the payee's behalf;
(ii) the payee holds the agent out to the public as accepting payments for goods or services
on the payee's behalf; and
(iii) payment for the goods and services is treated as received by the payee upon receipt
by the agent so that the payor's obligation is extinguished and there is no risk of loss to the
payor if the agent fails to remit the funds to the payee;
(3) a person that acts as an intermediary by processing payments between an entity that
has directly incurred an outstanding money transmission obligation to a sender, and the
sender's designated recipient, provided that the entity:
(i) is properly licensed or exempt from licensing requirements under this chapter;
(ii) provides a receipt, electronic record, or other written confirmation to the sender
identifying the entity as the provider of money transmission in the transaction; and
(iii) bears sole responsibility to satisfy the outstanding money transmission obligation
to the sender, including the obligation to make the sender whole in connection with any
failure to transmit the funds to the sender's designated recipient;
(4) the United States; a department, agency, or instrumentality of the United States; or
an agent of the United States;
(5) money transmission by the United States Postal Service or by an agent of the United
States Postal Service;
(6) a state; county; city; any other governmental agency, governmental subdivision, or
instrumentality of a state; or the state's agent;
(7) a federally insured depository financial institution; bank holding company; office of
an international banking corporation; foreign bank that establishes a federal branch pursuant
to the International Bank Act, United States Code, title 12, section 3102, as amended or
recodified from time to time; corporation organized pursuant to the Bank Service Corporation
Act, United States Code, title 12, sections 1861 to 1867, as amended or recodified from
time to time; or corporation organized under the Edge Act, United States Code, title 12,
sections 611 to 633, as amended or recodified from time to time;
(8) electronic funds transfer of governmental benefits for a federal, state, county, or
governmental agency by a contractor on behalf of the United States or a department, agency,
or instrumentality thereof, or on behalf of a state or governmental subdivision, agency, or
instrumentality thereof;
(9) a board of trade designated as a contract market under the federal Commodity
Exchange Act, United States Code, title 7, sections 1 to 25, as amended or recodified from
time to time; or a person that in the ordinary course of business provides clearance and
settlement services for a board of trade to the extent of its operation as or for a board;
(10) a registered futures commission merchant under the federal commodities laws, to
the extent of the registered futures commission merchant's operation as a merchant;
(11) a person registered as a securities broker-dealer under federal or state securities
laws, to the extent of the person's operation as a securities broker-dealer;
(12) an individual employed by a licensee, authorized delegate, or any person exempted
from the licensing requirements under this chapter when acting within the scope of
employment and under the supervision of the licensee, authorized delegate, or exempted
person as an employee and not as an independent contractor;
(13) a person expressly appointed as a third-party service provider to or agent of an
entity exempt under clause (7), solely to the extent that:
(i) the service provider or agent is engaging in money transmission on behalf of and
pursuant to a written agreement with the exempt entity that sets forth the specific functions
that the service provider or agent is to perform; and
(ii) the exempt entity assumes all risk of loss and all legal responsibility for satisfying
the outstanding money transmission obligations owed to purchasers and holders of the
outstanding money transmission obligations upon receipt of the purchaser's or holder's
money or monetary value by the service provider or agent; deleted text begin or
deleted text end
new text begin
(14) payroll processing services providers; or
new text end
deleted text begin (14)deleted text end new text begin (15)new text end a person exempt by regulation or order if the commissioner finds that (i) the
exemption is in the public interest, and (ii) the regulation of the person is not necessary for
the purposes of this chapter.
Sec. 4. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2023 Supplement, section 53B.58,
new text end
new text begin
is repealed.
new text end
APPENDIX
Repealed Minnesota Statutes: 24-06745
53B.58 PAYROLL PROCESSING SERVICES; DISCLOSURES.
(a) A licensee that provides payroll processing services must:
(1) issue reports to clients detailing client payroll obligations in advance of the payroll funds being deducted from an account; and
(2) make available worker pay stubs or an equivalent statement to workers.
(b) Paragraph (a) does not apply to a licensee providing payroll processing services if the licensee's client designates the intended recipients to the licensee and is responsible for providing the disclosures required by paragraph (a), clause (2).