Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                        CHAPTER 341-H.F.No. 624 
           An act relating to commerce; regulating real estate 
          appraisers; creating the real estate appraiser 
          advisory board; providing for membership, 
          compensation, powers, and duties; providing licensing 
          and education requirements; regulating the issuance, 
          renewal, suspension, and revocation of licenses; 
          providing fees; prescribing penalties; appropriating 
          money; authorizing certain investments by state banks; 
          regulating lending practices of industrial loan and 
          thrifts; prescribing the qualifications of the 
          directors of certain companies; regulating delinquency 
          and collection charges or retail installment 
          contracts; amending Minnesota Statutes 1988, sections 
          48.61, by adding a subdivision; 53.04, by adding a 
          subdivision; 53.06; and 168.71; proposing coding for 
          new law as Minnesota Statutes, chapter 82B. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1
    Section 1.  [82B.02] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] For the purposes of this chapter, 
the terms in this section have the meanings given them. 
    Subd. 2.  [ANALYSIS.] "Analysis" means a study of real 
estate or real property other than estimating value. 
    Subd. 3.  [APPRAISAL OR REAL ESTATE APPRAISAL.] "Appraisal" 
or "real estate appraisal" means an analysis, opinion, or 
conclusion relating to the nature, quality, value, or utility of 
named interests in, or aspects of, identified real estate for 
purposes of preparing an appraisal report.  An appraisal may be 
classified by subject matter into either a valuation or an 
analysis. 
    Subd. 4.  [APPRAISAL ASSIGNMENT.] "Appraisal assignment" 
means an engagement for which an appraiser is employed or 
retained to act, or would be perceived by third parties or the 
public as acting, as a disinterested third party in giving an 
unbiased analysis, opinion, or conclusion relating to the 
nature, quality, value, or utility of named interests in, or 
aspects of, identified real estate. 
    Subd. 5.  [APPRAISAL REPORT.] "Appraisal report" means an 
oral or written communication of an appraisal for compensation 
that is not a contingent fee as defined in section 82B.22 given 
or signed by a licensed real estate appraiser.  
    Subd. 6.  [BOARD.] "Board" means the real estate appraisal 
advisory board established under section 82B.05. 
    Subd. 7.  [COMMISSIONER.] "Commissioner" means the 
commissioner of commerce. 
    Subd. 8.  [LICENSED REAL ESTATE APPRAISER.] "Licensed real 
estate appraiser" means a person who develops and communicates 
real estate appraisals and who holds a current, valid license 
issued for licensed appraisal level I or II under this chapter, 
including an appraiser employed by a state agency. 
    Subd. 9.  [MARKET ANALYSIS.] "Market analysis" means a 
price opinion prepared by a licensed real estate salesperson or 
broker for marketing purposes. 
    Subd. 10.  [REAL ESTATE.] "Real estate" means an identified 
parcel or tract of land, including improvements, if any. 
    Subd. 11.  [REAL PROPERTY.] "Real property" means one or 
more defined interests, benefits, and rights inherent in the 
ownership of real estate. 
    Subd. 12.  [STANDARDS OF PROFESSIONAL PRACTICE.] "Standards 
of professional practice" means the uniform standards of 
professional appraisal practice adopted by the Appraisers 
Standards Board of the Appraisal Foundation as of January 1, 
1989, or other version of these standards the commissioner may 
by order designate. 
    Subd. 13.  [VALUATION.] "Valuation" means an estimate of 
value of real estate or real property. 
    Sec. 2.  [82B.03] [PROHIBITIONS.] 
    Subdivision 1.  [LICENSE REQUIRED.] (a) It is unlawful for 
a person to act as a real estate appraiser in this state unless 
licensed under this chapter. 
    (b) Only persons licensed under this chapter may advertise 
or represent themselves to be real estate appraisers. 
    (c) No person, other than a licensed real estate appraiser, 
may assume or use that title or a title, designation, or 
abbreviation likely to create the impression of licensure as a 
real estate appraiser by this state.  
     Subd. 2.  [LICENSE NOT REQUIRED.] (a) An officer or 
employee of a corporation, partnership, or other business entity 
may act as a real estate appraiser without obtaining a license 
under this chapter if the corporation, partnership, or other 
business entity in which the person is employed or is an officer 
has an interest in the real estate that is the subject of the 
appraisal as owners, lenders, investors, or insurers. 
    (b) An appraisal conducted by a person exempt under this 
subdivision is subject to the guidelines for real estate 
appraisal policies and review procedures of the Federal Deposit 
Insurance Corporation, the Federal Savings and Loan Insurance 
Corporation, the Federal Reserve Board, the Farm Credit 
Administration, or the comptroller of the currency. 
    (c) If a real estate appraisal is made by a person who is 
exempt from licensing under this subdivision, the person for 
whom the appraisal is conducted must be given written notice 
that the appraisal was not conducted by a licensed appraiser, 
and the appraisal report must clearly state that it was 
conducted by an interested party and not by a licensed real 
estate appraiser. 
    Sec. 3.  [82B.035] [EXEMPTION.] 
    Subdivision 1.  [MARKET ANALYSIS.] This chapter does not 
apply to a licensed real estate salesperson or broker who, in 
the ordinary course of the licensee's business, gives a market 
analysis of the price of real estate, if the market analysis is 
not referred to or construed as an appraisal. 
    Subd. 2.  [ASSESSORS.] Nothing in this chapter shall be 
construed as requiring the licensing of persons employed and 
acting in their capacity as assessors for political subdivisions 
of the state. 
    Sec. 4.  [82B.04] [RESPONSIBILITY FOR AGENTS.] 
    A real estate appraiser is responsible for the acts of 
persons acting on the appraiser's behalf.  
    Sec. 5.  [82B.05] [REAL ESTATE APPRAISER ADVISORY BOARD.] 
    Subdivision 1.  [CREATION.] The real estate appraiser 
advisory board consists of 15 members appointed by the 
commissioner of commerce.  Three of the members must be public 
members, four must be consumers of appraisal services, and eight 
must be licensed real estate appraisers of whom not less than 
two members shall be level II.  Mere membership in an 
organization does not make a person the organization's 
representative on the board. 
    Subd. 2.  [QUALIFICATIONS.] The real estate appraiser 
members first appointed to the board must:  (1) be members in 
good standing of a nationally recognized real estate appraisal 
organization that as of January 1, 1989, required appraisal 
experience, education, and testing to become a designated 
member, in addition to adherence to standards of professional 
practice to keep the designation; or (2) have five years of 
active appraisal experience.  
    Each real estate appraiser member of the board appointed 
after January 1, 1991, must be a licensed real estate appraiser. 
    Subd. 3.  [TERMS.] The term of office for members is three 
years. 
    Upon expiration of their terms, members of the board shall 
continue to hold office until the appointment and qualification 
of their successors.  No person may serve as a member of the 
board for more than two consecutive terms.  The commissioner may 
remove a member for cause. 
    Subd. 4.  [PRACTICE OF PUBLIC MEMBERS PROHIBITED.] The 
public members of the board may not be engaged in the practice 
of real estate appraising. 
    Subd. 5.  [CONDUCT OF MEETINGS.] Places of regular board 
meetings must be decided by the vote of members.  Written notice 
must be given to each member of the time and place of each 
meeting of the board at least ten days before the scheduled date 
of regular board meetings.  The board shall establish procedures 
for emergency board meetings and other operational procedures, 
subject to the approval of the commissioner.  
    The members of the board shall elect a chair from among the 
members to preside at board meetings. 
    A quorum of the board is eight members.  
     The board shall meet at least quarterly, except that a 
meeting may be canceled, subject to the approval by the 
commissioner if a majority of the members determine that the 
meeting is not necessary. 
    The commissioner or a majority of the members may schedule 
additional meetings as necessary. 
    Subd. 6.  [COMPENSATION.] Each member of the board is 
entitled to a per diem allowance of $35 for each meeting of the 
board at which the member is present and for each day or 
substantial part of a day actually spent in the conduct of the 
business of the board, plus all appropriate expenses unless a 
greater amount is authorized by Minnesota Statutes, section 
15.0575. 
    Sec. 6.  [82B.06] [POWERS OF THE BOARD.] 
    The board shall make recommendations to the commissioner as 
the commissioner requests on: 
    (1) rules with respect to each category of licensed real 
estate appraiser, the type of educational experience, appraisal 
experience, and equivalent experience that will meet the 
requirements of this chapter; 
    (2) examination specifications for each category of 
licensed real estate appraiser, to assist in providing or 
obtaining appropriate examination questions and answers, and 
procedures for grading examinations; 
    (3) rules with respect to each category of licensed real 
estate appraiser, the continuing education requirements for the 
renewal of licensing that will meet the requirements provided in 
this chapter; 
    (4) periodic review of the standards for the development 
and communication of real estate appraisals provided in this 
chapter and rules explaining and interpreting the standards; and 
    (5) other matters necessary in carrying out the provisions 
of this chapter. 
    Sec. 7.  [82B.07] [POWERS OF THE COMMISSIONER.] 
    The commissioner shall: 
    (1) receive applications for licenses; 
    (2) establish the procedures for processing applications 
for licensing; 
    (3) issue a license for appraisers; 
    (4) maintain a registry of the names and addresses of 
people licensed under this chapter; 
    (5) keep records and all application materials submitted to 
the commissioner; 
    (6) conduct investigations; 
    (7) deny, revoke, and suspend licenses; and 
    (8) take other actions necessary to carry out the purposes 
of this chapter.  
    Sec. 8.  [82B.08] [LICENSING REQUIREMENTS.] 
    Subdivision 1.  [GENERALLY.] The commissioner shall issue a 
license as a real estate appraiser to a person who qualifies for 
the license under the terms of this chapter. 
    Subd. 2.  [QUALIFICATION OF APPLICANTS.] An applicant must 
be at least 18 years of age when making application. 
    Subd. 3.  [APPLICATION FOR LICENSE; CONTENTS.] (a) An 
applicant for a license must apply in writing upon forms 
prescribed by the commissioner.  Each application must be signed 
and sworn to by the applicant and must be accompanied by the 
license fee required by this chapter. 
    (b) An application must contain information required by the 
commissioner consistent with the provisions and purposes of this 
chapter. 
    (c) An application must give the applicant's name, age, 
residence address, and the name and place of business. 
    (d) The commissioner may require additional information the 
commissioner considers appropriate to administer this chapter. 
    (e) When filing an initial application or application for 
renewal for a license, the applicant shall state that the person 
agrees to comply with the standards set forth in this chapter 
and that the person understands the types of misconduct for 
which disciplinary proceedings may be started against a licensed 
real estate appraiser. 
    (f) The application for original licensing, renewal 
licensing, and examination must specify the classification of 
licensing being applied for and previously granted. 
    Subd. 4.  [EFFECTIVE DATE OF LICENSE.] A license issued 
under this chapter expires on the August 31 next following the 
issuance of the license. 
    Subd. 5.  [RENEWALS.] (a) Persons whose applications have 
been properly and timely filed who have not received notice of 
denial of renewal are considered to have been approved for 
renewal and may continue to transact business as a real estate 
appraiser whether or not the renewed license has been received 
on or before September 1.  Application for renewal of a license 
is considered to have been timely filed if received by the 
commissioner by, or mailed with proper postage and postmarked 
by, August 1 in each year.  Applications for renewal are 
considered properly filed if made upon forms duly executed and 
sworn to, accompanied by fees prescribed by this chapter and 
containing information the commissioner requires.  
    (b) Persons who have failed to make a timely application 
for renewal of a license and who have not received the renewal 
license as of September 1 are unlicensed until the time the 
license has been issued by the commissioner and is received. 
    Subd. 6.  [NOTICE.] Notice in writing must be given to the 
commissioner by each licensee of any change in personal name, 
trade name, address or business location not later than ten days 
after the change.  The commissioner shall issue a new license if 
required for the unexpired period. 
    Subd. 7.  [NONRESIDENTS.] A nonresident of Minnesota may be 
licensed as a real estate appraiser upon compliance with all 
provisions of this chapter. 
    Sec. 9.  [82B.09] [FEES.] 
    Subdivision 1.  [AMOUNTS.] The following fees must be paid 
to the commissioner: 
    (1) a fee of $50 for each initial individual real estate 
appraiser's license and a fee of $25 for each annual renewal; 
    (2) a fee of $5 for a change in personal name or trade name 
or personal address or business location; 
    (3) a fee of $10 for a license history; and 
    (4) a fee of $20 for a duplicate license. 
    Subd. 2.  [FORFEITURE.] All fees must be kept by the 
commissioner and are nonreturnable, except that an overpayment 
of a fee shall be refunded upon proper application.  
    Sec. 10.  [82B.10] [EXAMINATIONS.] 
    Subdivision 1.  [GENERALLY.] An applicant for a license 
must pass an examination conducted by the commissioner.  The 
examinations must be of sufficient scope to establish the 
competency of the applicant to act as a real estate appraiser. 
    Subd. 2.  [REEXAMINATIONS.] An examination must be required 
before renewal of a license that has been suspended, or before 
the issuance of a license to a person whose license has been 
ineffective for a period of two years.  No reexamination is 
required of an individual who has failed to renew an existing 
license because of absence from the state while on active duty 
with the armed services of the United States of America.  
    Subd. 3.  [EXAMINATION FREQUENCY.] The commissioner shall 
hold examinations at times and places the commissioner 
determines.  
    Subd. 4.  [PERIOD FOR APPLICATION.] An applicant who 
obtains an acceptable score on an examination must file an 
application and obtain the license within one year of the date 
of successful completion of the examination or a second 
examination must be taken to qualify for the license.  
    Subd. 5.  [RENEWAL; EXAMINATION.] Except as provided in 
subdivision 2, no examination is required for the renewal of a 
license.  However, a licensee who has been licensed in the state 
of Minnesota and who fails to renew the license for a period of 
two years must be required by the commissioner to again take an 
examination. 
    Subd. 6.  [EXAMINATION ELIGIBILITY; REVOCATION.] No 
applicant may take an examination if a license as a real estate 
appraiser has been revoked in this or another state within two 
years of the date of the application. 
    Subd. 7.  [RECIPROCITY.] This section may be waived by the 
commissioner for individuals of other jurisdictions if:  (1) a 
written reciprocal licensing agreement is in effect between the 
commissioner and the licensing officials of that jurisdiction, 
(2) the individual is licensed in that jurisdiction, and (3) the 
licensing requirements of that jurisdiction are substantially 
similar to the provisions of this chapter. 
    Subd. 8.  [FEES.] The commissioner may assess an 
examination fee sufficient to recover the actual direct costs of 
holding the examination.  
    Sec. 11.  [82B.11] [CLASSES OF LICENSE.] 
    Subdivision 1.  [GENERALLY.] There are two classes of 
license for licensed real estate appraisers. 
    Subd. 2.  [LEVEL I.] The licensed level I residential real 
estate appraiser is a person meeting the requirements for 
licensing relating to the appraisal of residential real property 
or agricultural acreage when a net income capitalization 
analysis is not required by the uniform standards of 
professional appraisal practice. 
    Subd. 3.  [LEVEL II.] The licensed level II real estate 
appraiser is a person meeting the requirements for licensing 
relating to the appraisal of all types of real property. 
    Sec. 12.  [82B.12] [EXAMINATION REQUIREMENT.] 
    An original license as a licensed real estate appraiser 
must be issued to a person who has demonstrated through a 
written examination process that the appraiser has the following 
qualifications: 
    (1) appropriate knowledge of technical terms commonly used 
in or related to real estate appraising, appraisal report 
writing, and economic concepts applicable to real estate; 
    (2) understanding the principles of land economics, real 
estate appraisal processes, and problems likely to be 
encountered in gathering, interpreting, and processing of data 
in carrying out appraisal disciplines; 
    (3) understanding the standards for the development and 
communication of real estate appraisals as provided in this 
chapter; 
    (4) knowledge of theories of depreciation, cost estimating, 
methods of capitalization, and the mathematics of real estate 
appraisal that are appropriate for the classification of license 
for which the person is applying; 
    (5) knowledge of other principles and procedures 
appropriate for the classification of license for which the 
person is applying; 
    (6) basic understanding of real estate law; and 
    (7) understanding the types of misconduct and ethical 
considerations for which disciplinary proceedings may be started 
against a licensed real estate appraiser. 
    Sec. 13.  [82B.13] [EXAMINATION PREREQUISITES.] 
    Subdivision 1.  [LEVEL I CLASSIFICATION.] As a prerequisite 
to taking the examination for licensing as a licensed level I 
real estate appraiser, an applicant must present evidence 
satisfactory to the commissioner that the person has 
successfully completed at least 75 classroom hours of courses.  
The courses must consist of 60 hours of general real estate 
appraisal principles and 15 hours related to standards of 
professional practice and the provisions of this chapter.  
    Subd. 2.  [LEVEL II CLASSIFICATION.] As a prerequisite to 
taking the examination for licensing as a licensed general real 
estate appraiser, an applicant must present evidence 
satisfactory to the commissioner that the person has 
successfully completed at least 150 classroom hours of courses 
in subjects related to real estate appraisal.  All applicants 
shall complete 15 classroom hours related to standards of 
professional practice and the provisions of this chapter. 
    Subd. 3.  [COMMISSIONER'S APPROVAL; RULES.] The courses and 
instruction and procedures of courses must be approved by the 
commissioner.  The commissioner may adopt rules to administer 
this section.  These rules must, to the extent practicable, 
conform to the rules adopted for real estate and insurance 
education.  
    Sec. 14.  [82B.14] [EXPERIENCE REQUIREMENT.] 
    (a) An original license as a level II licensed real estate 
appraiser may not be issued to a person who does not have the 
equivalent of two years of experience in real property appraisal 
supported by adequate written reports or file memoranda.  This 
experience, or the equivalent of this experience, must be 
acquired within a period of five years immediately preceding the 
filing of the application for licensing. 
    (b) Each applicant for license as a level II licensed real 
estate appraiser shall give under oath a detailed listing of the 
real estate appraisal reports or file memoranda for each year 
for which experience is claimed by the applicant.  Upon request, 
the applicant shall make available to the commissioner for 
examination, a sample of appraisal reports that the applicant 
has prepared in the course of appraisal practice. 
    Sec. 15.  [82B.15] [NONRESIDENT SERVICE OF PROCESS.] 
    Subdivision 1.  [APPOINTMENT OF COMMISSIONER.] A 
nonresident, before being licensed as a real estate appraiser, 
shall appoint the commissioner and a successor or successors in 
office as true and lawful attorney, upon whom may be served all 
legal process in an action or proceedings against the person, or 
in which the person may be a party, in relation to or involving 
a transaction covered by this chapter or a rule or order under 
this chapter.  The appointment is irrevocable.  Service upon the 
attorney is as valid and binding as if due and personal service 
had been made upon the person.  The appointment is effective 
upon the issuance of the license in connection with which the 
appointment was filed. 
    Subd. 2.  [EFFECT OF NONAPPOINTMENT.] The commission of an 
act constituting a violation of this chapter or rule or order 
adopted under this chapter by a nonresident person who has not 
appointed the commissioner as attorney in compliance with 
subdivision 1, is conclusively considered an irrevocable 
appointment by the person of the commissioner and a successor or 
successors in an action or proceedings against the nonresident 
or in which the nonresident may be a party in relation to or 
involving the violation.  The violation is a signification of 
agreement that all legal process that is served is as valid and 
binding upon the nonresident as if due and personal service had 
been made. 
    Subd. 3.  [PROCEDURE.] Service of process under this 
section may be made by filing a copy of the process with the 
commissioner or a representative, but is not effective unless:  
    (1) the plaintiff, who may be the commissioner in an action 
or proceeding started by the commissioner, sends notice of the 
service and a copy of the process by certified mail to the 
defendant or respondent at the address as shown by the records 
at the office of the commissioner in the case of service made on 
the commissioner as attorney by appointment under subdivision 1, 
and at the defendant's or respondent's last known address in the 
case of service on the commissioner as attorney by appointment 
under subdivision 2; and 
    (2) the plaintiff's affidavit of compliance with this 
subdivision is filed in the action or proceeding on or before 
the return day of the process, if any, or within any additional 
time the court or administrative law judge allows. 
    Sec. 16.  [82B.16] [PRINCIPAL PLACE OF BUSINESS AND 
NOTICE.] 
    A licensed real estate appraiser shall advise the 
commissioner of the address of the person's principal place of 
business and all other addresses at which the person is now 
engaged in the business of preparing real property appraisal 
reports. 
    When a licensed real estate appraiser changes a place of 
business, the person shall immediately give written notification 
of the change to the commissioner and apply for an amended 
license. 
    A licensed real estate appraiser shall notify the 
commissioner of the person's current residence address. 
    Sec. 17.  [82B.17] [LICENSE DESIGNATION.] 
    When a licensed real estate appraiser uses the designation 
real estate appraiser or licensed real estate appraiser in an 
appraisal report or in a contract or other instrument used by 
the license holder in conducting real property appraisal 
activities or in advertisements, the appraiser shall place the 
person's license number adjacent to or immediately below the 
designation used and indicate the class of license held. 
    Sec. 18.  [82B.18] [USE OF TERM.] 
    The term "licensed real estate appraiser" may only be used 
to refer to individuals who hold the license.  The term may not 
be used following or immediately in connection with the name or 
signature of a firm, partnership, corporation, or group; or in a 
manner that might cause it to be interpreted as referring to a 
firm, partnership, corporation, group, or anyone other than an 
individual holder of the license. 
    No license may be issued under this chapter to a 
corporation, partnership, firm, or group.  This does not prevent 
a licensed real estate appraiser from signing an appraisal 
report on behalf of a corporation, partnership, firm, or group 
practice. 
    Sec. 19.  [82B.19] [CONTINUING EDUCATION.] 
    Subdivision 1.  [LICENSE RENEWALS.] A licensed real estate 
appraiser shall present evidence satisfactory to the 
commissioner of having met the continuing education requirements 
of this chapter before the commissioner renews a license. 
    The basic continuing education requirement for renewal of a 
license is the completion by the applicant either as a student 
or as an instructor, during the immediately preceding term of 
licensing, of at least 15 classroom hours per year, of 
instruction in courses or seminars that have received the 
approval of the commissioner. 
    Subd. 2.  [RULES.] The commissioner may adopt rules to 
assure that persons renewing their licenses as licensed real 
estate appraisers have current knowledge of real property 
appraisal theories, practices, and techniques that will provide 
a high degree of service and protection to those members of the 
public with whom they deal in a professional relationship under 
authority of their license.  The rules must include the 
following: 
    (1) policies and procedures for obtaining approval of 
courses of instruction; 
    (2) standards, monitoring methods, and systems for 
recording attendance to be employed by course sponsors as a 
prerequisite to approval of courses for credit; and 
     (3) coordination with real estate continuing education 
requirements so that as the commissioner considers courses or 
parts of courses appropriate they may be used to satisfy both 
real estate and appraiser continuing education requirements. 
    Subd. 3.  [REINSTATEMENTS.] On or after September 1, 1991, 
a license as a real estate appraiser that has been revoked as a 
result of disciplinary action by the commissioner may not be 
reinstated unless the applicant presents evidence of completion 
of the continuing education required by this chapter.  This 
requirement may not be imposed upon an applicant for 
reinstatement who has been required to successfully complete the 
examination for licensed real estate appraiser as a condition to 
reinstatement of a license. 
    Sec. 20.  [82B.20] [PROHIBITED PRACTICES.] 
    Subdivision 1.  [ENFORCEMENT.] The license of a licensed 
real estate appraiser may be denied, revoked, or suspended, or 
the person may be otherwise disciplined in accordance with this 
chapter, upon any of the grounds set forth in this section.  
    Subd. 2.  [CONDUCT PROHIBITED.] No person may: 
     (1) obtain or try to obtain a license under this chapter by 
knowingly making a false statement, submitting false 
information, refusing to provide complete information in 
response to a question in an application for license, or through 
any form of fraud or misrepresentation; 
    (2) fail to meet the minimum qualifications established by 
this chapter; 
    (3) be convicted, including a conviction based upon a plea 
of guilty or nolo contendere, of a crime that is substantially 
related to the qualifications, functions, and duties of a person 
developing real estate appraisals and communicating real estate 
appraisals to others; 
    (4) engage in an act or omission involving dishonesty, 
fraud, or misrepresentation with the intent to substantially 
benefit the license holder or another person or with the intent 
to substantially injure another person; 
    (5) engage in a violation of any of the standards for the 
development or communication of real estate appraisals as 
provided in this chapter; 
    (6) fail or refuse without good cause to exercise 
reasonable diligence in developing an appraisal, preparing an 
appraisal report, or communicating an appraisal; 
    (7) engage in negligence or incompetence in developing an 
appraisal, in preparing an appraisal report, or in communicating 
an appraisal; 
    (8) willfully disregard or violate any of the provisions of 
this chapter or the rules of the commissioner for the 
administration and enforcement of the provisions of this 
chapter; 
    (9) accept an appraisal assignment when the employment 
itself is contingent upon the appraiser reporting a 
predetermined estimate, analysis, or opinion, or where the fee 
to be paid is contingent upon the opinion, conclusion, or 
valuation reached, or upon the consequences resulting from the 
appraisal assignment; 
    (10) violate the confidential nature of governmental 
records to which the person gained access through employment or 
engagement as an appraiser by a governmental agency; 
    (11) offer, pay, or give, and no person shall accept, any 
compensation or other thing of value from a real estate 
appraiser by way of commission-splitting, rebate, finder's fee, 
or otherwise in connection with a real estate appraisal.  This 
prohibition does not apply to transactions among persons 
licensed under this chapter if the transactions involve 
appraisals for which the license is required; 
    (12) engage or authorize a person, except a person licensed 
under this chapter, to act as a real estate appraiser on the 
appraiser's behalf; 
    (13) violate standards of professional practice as defined 
by section 82B.02, subdivision 11; 
     (14) make an oral appraisal report without also making a 
written report within a reasonable time after the oral report is 
made; 
    (15) represent a market analysis to be an appraisal report; 
    (16) give an appraisal in any circumstances where the 
appraiser has a conflict of interest, as determined under rules 
adopted by the commissioner; or 
    (17) engage in other acts the commissioner by rule 
prohibits. 
    Sec. 21.  [82B.21] [CLASSIFICATION OF SERVICES.] 
    A client or employer may retain or employ a licensed real 
estate appraiser to act as a disinterested third party in giving 
an unbiased estimate of value or analysis.  A client or employer 
may also retain or employ a licensed real estate appraiser to 
provide a market analysis to facilitate the client's or 
employer's objectives.  In either case, the appraisal and the 
appraisal report must comply with the provisions of this chapter.
    Sec. 22.  [82B.22] [CONTINGENT FEES.] 
    A licensed real estate appraiser may not accept a 
commission for an appraisal assignment that is contingent upon 
the appraiser reporting a predetermined estimate, analysis, or 
opinion, or is contingent upon the opinion, conclusion, or 
valuation reached, or upon the consequences resulting from the 
appraisal assignment. 
    A licensed real estate appraiser who enters into an 
agreement to perform a market analysis may be paid a fixed fee 
or a fee that is contingent on the results achieved by the 
specialized services. 
    If a licensed real estate appraiser enters into an 
agreement to perform a market analysis for a contingent fee, 
this fact must be clearly stated in each written and oral 
report.  In each written report, this fact must be clearly 
stated in a prominent location in the report and also in each 
letter of transmittal and in the licensing statement made by the 
appraiser in the report. 
    Sec. 23.  [82B.225] [TRANSITIONAL LICENSES.] 
    Until September 1, 1991, a person already engaged in the 
business of real estate appraisal may apply to the commissioner 
of commerce for a license as a real estate appraiser.  The 
application must contain the information listed in section 
82B.08.  The commissioner shall issue a license to a person who 
satisfies the requirements of section 82B.08 and who 
demonstrates at least one year's experience as a real estate 
appraiser.  
    An appraiser who is issued a license under this section 
shall pass an examination conducted by the commissioner of 
commerce under section 82B.10 or successfully complete 
sufficient classroom hours of courses under section 82B.13, no 
later than August 31, 1991.  If the appraiser intends to satisfy 
the requirements of section 82B.13, the appraiser must provide 
adequate written reports or file memoranda as evidence of 
compliance.  An appraiser who has not met either of those 
requirements as of that date may not be issued a renewal license 
and must meet all the requirements for a new licensee.  
    Sec. 24.  [INITIAL APPOINTMENTS.] 
    Notwithstanding section 5, subdivision 3, the commissioner 
of commerce shall appoint the initial members of the real estate 
appraiser advisory board to the following terms: 
    (1) two public members, three appraiser members, and two 
consumer members to three-year terms; 
    (2) two public members, three appraiser members, and one 
consumer member to two-year terms; and 
    (3) two appraiser members to one-year terms. 
    Sec. 25.  [APPROPRIATION.] 
    $213,000 is appropriated from the general fund to the 
commissioner of commerce to administer Minnesota Statutes, 
chapter 82B.  $121,000 is for fiscal year 1990 and $92,000 is 
for fiscal year 1991.  The approved complement of the department 
of commerce is increased by two positions. 
    Sec. 26.  [REPEALER.] 
    Section 23 is repealed September 1, 1991. 

                               ARTICLE 2 
    Section 1.  Minnesota Statutes 1988, section 48.61, is 
amended by adding a subdivision to read:  
    Subd. 8.  [PARITY WITH NATIONAL BANKS.] A state bank or 
trust company may invest in any securities that are authorized 
investments for national banks on the effective date of this 
section, subject to the same restrictions as apply to national 
banks.  The commissioner may authorize a state bank or trust 
company to invest in any securities that become authorized 
investments for national banks after the effective date of this 
section, subject to the same restrictions as apply to national 
banks.  This authority is in addition to the investment 
authority granted to state banks under other provisions of state 
law. 
    Sec. 2.  Minnesota Statutes 1988, section 53.04, is amended 
by adding a subdivision to read: 
    Subd. 3c.  The right to extend credit and make loans under 
chapter 51A on the same terms and subject to the same conditions 
as apply to other lenders under that chapter.  This subdivision 
does not authorize an industrial loan and thrift company to make 
loans under a credit card or overdraft checking plan. 
    Sec. 3.  Minnesota Statutes 1988, section 53.06, is amended 
to read: 
    53.06 [DIRECTORS, RESIDENCE.] 
    At least three-fourths of the directors of any industrial 
loan and thrift company holding a certificate that includes the 
right to issue thrift certificates for investment must be 
residents of the county in which the industrial loan and thrift 
company maintains its principal place of business, an adjacent 
county or any county in which the industrial loan and thrift 
company maintains a place of business pursuant to this 
chapter Minnesota.  
    Sec. 4.  Minnesota Statutes 1988, section 168.71, is 
amended to read: 
    168.71 [RETAIL INSTALLMENT CONTRACTS.] 
    (a)(1) Every retail installment contract shall be in 
writing, shall contain all the agreements of the parties, shall 
be signed by the retail buyer and seller, and a copy thereof 
shall be furnished to such retail buyer at the time of the 
execution of the contract.  
    (2) No provisions for confession of judgment or power of 
attorney therefor contained in any retail installment contract 
or contained in a separate agreement relating thereto, shall be 
valid or enforceable.  
    (3) The holder of a precomputed retail installment contract 
may, if the contract so provides, collect a delinquency and 
collection charge on each installment in arrears for a period 
not less than ten days in an amount not in excess of five 
percent of each installment or $5, whichever is the less greater.
In addition to such delinquency and collection charge, the 
retail installment contract, whether interest-bearing or 
precomputed, may provide for the payment of attorneys' fees not 
exceeding 15 percent of the amount due and payable under such 
contract where such contract is referred to an attorney not a 
salaried employee of the holder of the contract for collection 
plus the court costs.  
    (4) Unless written notice has been given to the retail 
buyer of actual or intended assignment of a retail installment 
contract, payment thereunder or tender thereof made by the 
retail buyer to the last known holder of such contract shall be 
binding upon all subsequent holders or assignees.  
     (5) Upon written request from the retail buyer, the holder 
of the retail installment contract shall give or forward to the 
retail buyer a written statement of the dates and amounts of 
payments and the total amount unpaid under such contract.  A 
retail buyer shall be given a written receipt for any payment 
when made in cash.  
     (b) The retail installment contract shall contain the 
following items: 
     (1) The cash sale price of the motor vehicle which is the 
subject matter of the retail installment contract; 
     (2) The total amount of the retail buyer's down payment, 
whether made in money or goods, or partly in money or partly in 
goods; 
     (3) The difference between items one and two; 
     (4) The charge, if any, included in the transaction for any 
insurance and other benefits not included in clause (1), 
specifying the types of coverage and taxes, fees, and charges 
that actually are or will be paid to public officials or 
government agencies, including those for perfecting, releasing, 
or satisfying a security interest if such taxes, fees, or 
charges are not included in clause (1); 
     (5) Principal balance, which is the sum of items three and 
four; 
     (6) The amount of the finance charge; 
     (7) The total of payments payable by the retail buyer to 
the retail seller and the number of installment payments 
required and the amount of each installment expressed in dollars 
or percentages, and date of each payment necessary finally to 
pay the total of payments which is the sum of item five and item 
six.  
     Provided, however, that said items one to seven inclusive 
need not be stated in the terms, sequence or order set forth 
above.  Provided further, that clauses (6) and (7) may be 
disclosed on the assumption that all scheduled payments under 
the contract will be made when due. 
     In lieu of the above clauses, the retail seller may give 
the retail buyer disclosures which satisfy the requirements of 
the Federal Truth-In-Lending Act in effect as of the time of the 
contract, notwithstanding whether or not that act applies to the 
transaction. 
     (c) Every retail seller or sales finance company, if a 
charge for insurance on the motor vehicle is included in a 
retail installment contract shall within 30 days after execution 
of the retail installment contract send or cause to be sent to 
the retail buyer a policy or policies or certificate of 
insurance, which insurance shall be written by a company 
authorized to do business in this state, clearly setting forth 
the amount of the premium, the kind or kinds of insurance and 
the scope of the coverage and all the terms, exceptions, 
limitations, restrictions and conditions of the contract or 
contracts of the insurance.  The buyer of a motor vehicle under 
a retail installment contract shall have the privilege of 
purchasing such insurance from an agent or broker of the buyer's 
own selection and selecting an insurance company mutually 
acceptable to the seller and the buyer; provided, however, that 
the inclusion of the cost of the insurance premium in the retail 
installment contract when the buyer selects the agent, broker or 
company, shall be optional with the seller.  
    (d) Any sales finance company hereunder may purchase or 
acquire from any retail seller any retail installment contract 
on such terms and conditions as may be mutually agreed upon 
between them.  
    (e) An acknowledgment by the retail buyer of the delivery 
of any such copy or notice as required in subsection (a) 
contained in the body of the statement or contract shall be 
conclusive proof of delivery in any action or proceeding by or 
against any assignee of a retail installment contract.  
    Sec. 5.  [EFFECTIVE DATE.] 
    Sections 1 to 4 are effective the day following final 
enactment. 
    Presented to the governor May 26, 1989 
    Signed by the governor May 26, 1989, 6:10 p.m.