Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                        CHAPTER 173-H.F.No. 1581 
           An act relating to commerce; securities regulation; 
          exempting certain over-the-counter securities from 
          registration requirements; amending Minnesota Statutes 
          1988, section 80A.15, subdivision 1. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 80A.15, 
subdivision 1, is amended to read: 
    Subdivision 1.  The following securities are exempted from 
sections 80A.08 and 80A.16: 
    (a) Any security, including a revenue obligation, 
guaranteed by the United States, any state, any political 
subdivision of a state or any corporate or other instrumentality 
of one or more of the foregoing; but this exemption shall not 
include any industrial revenue bond.  Pursuant to section 106(c) 
of the Secondary Mortgage Market Enhancement Act of 1984, Public 
Law Number 98-440, this exemption does not apply to a security 
that is offered or sold pursuant to section 106(a)(1) or (2) of 
that act. 
    (b) Any security issued or guaranteed by Canada, any 
Canadian province, any political subdivision of any province, 
any agency or corporate or other instrumentality of one or more 
of the foregoing, if the security is recognized as a valid 
obligation by the issuer or guarantor; but this exemption shall 
not include any revenue obligation payable solely from payments 
to be made in respect of property or money used under a lease, 
sale or loan arrangement by or for a nongovernmental industrial 
or commercial enterprise. 
     (c) Any security issued by and representing an interest in 
or a debt of, or guaranteed by, any bank organized under the 
laws of the United States, or any bank, savings institution or 
trust company organized under the laws of any state and subject 
to regulation in respect of the issuance or guarantee of its 
securities by a governmental authority of that state. 
     (d) Any security issued by and representing an interest in 
or a debt of, or guaranteed by, any federal savings and loan 
association, or any building and loan or similar association 
organized under the laws of any state and authorized to do 
business in this state. 
     (e) Any security issued or guaranteed by any federal credit 
union or any credit union, or similar association organized and 
supervised under the laws of this state. 
     (f) Any security listed or approved for listing upon notice 
of issuance on the New York Stock Exchange, the American Stock 
Exchange, the Midwest Stock Exchange, the Pacific Stock 
Exchange, or the Chicago Board Options Exchange; any other 
security of the same issuer which is of senior or substantially 
equal rank; any security called for by subscription rights or 
warrants so listed or approved; or any warrant or right to 
purchase or subscribe to any of the foregoing. 
     (g) Any commercial paper which arises out of a current 
transaction or the proceeds of which have been or are to be used 
for current transactions, and which evidences an obligation to 
pay cash within nine months of the date of issuance, exclusive 
of days of grace, or any renewal of the paper which is likewise 
limited, or any guarantee of the paper or of any renewal which 
are not advertised for sale to the general public in newspapers 
or other publications of general circulation or otherwise, or by 
radio, television or direct mailing. 
     (h) Any interest in any employee's savings, stock purchase, 
pension, profit sharing or similar benefit plan, or a 
self-employed person's retirement plan. 
     (i) Any security issued or guaranteed by any railroad, 
other common carrier or public utility which is subject to 
regulation in respect to the issuance or guarantee of its 
securities by a governmental authority of the United States. 
     (j) Any interest in a common trust fund or similar fund 
maintained by a state bank or trust company organized and 
operating under the laws of Minnesota, or a national bank 
wherever located, for the collective investment and reinvestment 
of funds contributed thereto by the bank or trust company in its 
capacity as trustee, executor, administrator, or guardian; and 
any interest in a collective investment fund or similar fund 
maintained by the bank or trust company, or in a separate 
account maintained by an insurance company, for the collective 
investment and reinvestment of funds contributed thereto by the 
bank, trust company or insurance company in its capacity as 
trustee or agent, which interest is issued in connection with an 
employee's savings, pension, profit sharing or similar benefit 
plan, or a self-employed person's retirement plan. 
     (k) Any security which meets all of the following 
conditions: 
     (1) If the issuer is not organized under the laws of the 
United States or a state, it has appointed a duly authorized 
agent in the United States for service of process and has set 
forth the name and address of the agent in its prospectus; 
     (2) A class of the issuer's securities is required to be 
and is registered under section 12 of the Securities Exchange 
Act of 1934, and has been so registered for the three years 
immediately preceding the offering date; 
     (3) Neither the issuer nor a significant subsidiary has had 
a material default during the last seven years, or for the 
period of the issuer's existence if less than seven years, in 
the payment of (i) principal, interest, dividend, or sinking 
fund installment on preferred stock or indebtedness for borrowed 
money, or (ii) rentals under leases with terms of three years or 
more; 
     (4) The issuer has had consolidated net income, before 
extraordinary items and the cumulative effect of accounting 
changes, of at least $1,000,000 in four of its last five fiscal 
years including its last fiscal year; and if the offering is of 
interest bearing securities, has had for its last fiscal year, 
net income, before deduction for income taxes and depreciation, 
of at least 1-1/2 times the issuer's annual interest expense, 
giving effect to the proposed offering and the intended use of 
the proceeds.  For the purposes of this clause "last fiscal 
year" means the most recent year for which audited financial 
statements are available, provided that such statements cover a 
fiscal period ended not more than 15 months from the 
commencement of the offering; 
     (5) If the offering is of stock or shares other than 
preferred stock or shares, the securities have voting rights and 
the rights include (i) the right to have at least as many votes 
per share, and (ii) the right to vote on at least as many 
general corporate decisions, as each of the issuer's outstanding 
classes of stock or shares, except as otherwise required by law; 
and 
     (6) If the offering is of stock or shares, other than 
preferred stock or shares, the securities are owned beneficially 
or of record, on any date within six months prior to the 
commencement of the offering, by at least 1,200 persons, and on 
that date there are at least 750,000 such shares outstanding 
with an aggregate market value, based on the average bid price 
for that day, of at least $3,750,000.  In connection with the 
determination of the number of persons who are beneficial owners 
of the stock or shares of an issuer, the issuer or broker-dealer 
may rely in good faith for the purposes of this clause upon 
written information furnished by the record owners. 
     (l) Any certificate of indebtedness sold or issued for 
investment, other than a certificate of indebtedness pledged as 
a security for a loan made contemporaneously therewith, and any 
savings account or savings deposit issued, by an industrial loan 
and thrift company. 
     (m) Any security designated or approved for designation 
upon notice of issuance on the NASDAQ/National Market System; 
any other security of the same issuer that is of senior or 
substantially equal rank; any security called for by 
subscription rights or warrants so designated or approved; or 
any warrant or right to purchase or subscribe to any of the 
securities referred to in this paragraph; provided that the 
National Market System provides the commissioner with notice of 
any material change in its designation requirements.  The 
commissioner may revoke this exemption if the commissioner 
determines that the designation requirements are not enforced or 
are amended in a manner that lessens protection to investors. 
    Presented to the governor May 16, 1989 
    Signed by the governor May 17, 1989, 6:32 p.m.