Office of the Revisor of Statutes
Minnesota Session Laws - 1997, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 222-S.F.No. 501
An act relating to commerce; providing powers and
duties to the commissioner; regulating investments by
certain licensees; regulating securities; modifying
the real estate licensing exemption for closing
agents; regulating real property appraisers;
regulating residential building contractors and
remodelers; requiring a compliance bond for sign
contractors; modifying licensing requirements for
collection agencies; regulating charitable trusts;
regulating notaries public; regulating certificates of
release by title insurance companies; making technical
changes; amending Minnesota Statutes 1996, sections
45.011, subdivision 1; 45.028, subdivision 1; 67A.231;
80A.02, subdivision 1; 80A.04, subdivisions 3, 4, and
by adding a subdivision; 80A.05, subdivisions 4, 5,
and by adding a subdivision; 80A.06, subdivisions 1,
2, and 3; 80A.08; 80A.12, by adding a subdivision;
80A.14, subdivisions 3, 4, and by adding subdivisions;
80A.15, subdivisions 1 and 2; 80A.16; 80A.28,
subdivisions 1 and 2; 80C.01, subdivision 4; 82.19, by
adding a subdivision; 82.20, subdivision 15; 82.22,
subdivision 13; 82.24, subdivision 5; 82B.13,
subdivisions 1, 4, and 5; 82B.14; 82B.19, subdivision
1; 317A.141, by adding a subdivision; 317A.671;
326.83, subdivisions 11 and 19; 326.84, subdivision 3;
326.85, by adding a subdivision; 326.921; 332.33,
subdivision 1, and by adding a subdivision; 332.34;
333.01; 359.061; 359.071; 501B.35, subdivision 3; and
507.401, subdivisions 2 and 3; proposing coding for
new law in Minnesota Statutes, chapters 45; 60K; 80A;
325E; and 333; repealing Minnesota Statutes 1996,
section 60K.07, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1996, section 45.011,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE.] As used in chapters 45 to 83,
155A, 309, 332, 345, and 359, and sections 326.83 to 326.98
326.991, and 386.61 to 386.78, unless the context indicates
otherwise, the terms defined in this section have the meanings
given them.
Sec. 2. [45.0111] [TEMPORARY LICENSES.]
Subdivision 1. [AUTHORITY.] The commissioner may grant a
temporary license to an applicant who can demonstrate successful
completion of all requirements for a permanent license. The
temporary license will remain in effect until the earliest of:
(1) receipt by the applicant of the permanent license;
(2) the expiration of 45 days from the date on which the
temporary license was granted; or
(3) denial by the commissioner of the permanent license.
Subd. 2. [NONAPPLICATION.] A temporary license as
described in this section may not be issued to an applicant for
licensure as a:
(1) currency exchange regulated under chapter 53A;
(2) collection agency regulated under sections 332.31 to
332.45;
(3) credit service organization regulated under sections
332.52 to 332.60; or
(4) broker dealer, investment advisor, or agent regulated
under chapter 80A.
Sec. 3. [45.0112] [STREET ADDRESSES REQUIRED.]
Licensees or applicants for licenses issued by the
commissioner shall provide to the commissioner a residence
telephone number, a street address where the licensee actually
resides, and a street address where the licensee's business is
physically located. A post office box address is not sufficient
to satisfy this requirement. The individual shall notify the
department of any change in street address or residence
telephone number within ten days.
Sec. 4. Minnesota Statutes 1996, section 45.028,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENT.] (a) When a person, including
any nonresident of this state, engages in conduct prohibited or
made actionable by chapters 45 to 83, 155A, 309, and 332, and
section 326.83, or any rule or order under those chapters, and
the person has not filed a consent to service of process under
chapters 45 to 83, 155A, 309, and 332, and section 326.83, that
conduct is equivalent to an appointment of the commissioner as
the person's attorney to receive service of process in any
noncriminal suit, action, or proceeding against the person which
is based on that conduct and is brought under chapters 45 to 83,
155A, 309, and 332, and section 326.83, or any rule or order
under those chapters.
(b) Subdivision 2 applies in all other cases under chapters
45 to 83, 155A, 309, and 332, and section 326.83, or any rule or
order under those chapters, in which a person, including a
nonresident of this state, has filed a consent to service of
process. This paragraph supersedes any inconsistent provision
of law.
(c) Subdivision 2 applies in all cases in which service of
process is allowed to be made on the commissioner of commerce.
Sec. 5. [45.0292] [LICENSE RECIPROCITY.]
The commissioner may waive all or part of the requirements
of prelicense education, examination, and continuing education
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 corresponding licensing
requirements of the commerce department.
Sec. 6. [45.0293] [REGULATION OF GROUP LIFE INSURANCE.]
The commissioner may waive all or part of the requirements
of section 61A.09, subdivision 3, if:
(1) all the premiums under the group policy are paid by the
group policyholder;
(2) the loans insured are first real estate residential
mortgage loans owned or guaranteed by the group policyholder;
and
(3) the group policy is in the best interests of insured
debtors.
Sec. 7. [60K.20] [SOCIAL SECURITY NUMBERS OF LICENSED
AGENTS; COMMISSIONER'S AUTHORITY TO PROVIDE TO NAIC.]
The commissioner may provide the social security numbers of
licensed insurance agents to the National Association of
Insurance Commissioners.
Sec. 8. Minnesota Statutes 1996, section 67A.231, is
amended to read:
67A.231 [DEPOSIT OF FUNDS; INVESTMENT; LIMITATIONS.]
The directors of any township mutual insurance company may
authorize the treasurer to invest any of its funds and
accumulations in:
(a) Bonds, notes, mortgages, or other obligations
guaranteed by the full faith and credit of the United States of
America and those for which the credit of the United States is
pledged to pay principal, interest or dividends, including
United States agency and instrumentality bonds, debentures, or
obligations;
(b) Bonds, notes, evidence of indebtedness, or other public
authority obligations guaranteed by this state;
(c) Bonds, notes, evidence of the indebtedness or other
obligations guaranteed by the full faith and credit of any
county, municipality, school district, or other duly authorized
political subdivision of this state;
(d) Bonds or other interest bearing obligations, payable
from revenues, provided that the bonds or other interest bearing
obligations are at the time of purchase rated among the highest
four quality categories used by a nationally recognized rating
agency for rating the quality of similar bonds or other interest
bearing obligations, and are not rated lower by any other such
agency; or obligations of a United States agency or
instrumentality that have been rated in one of the two highest
categories established by the Securities Valuation Office of the
National Association of Insurance Commissioners. A company may
not invest more than 20 percent of its admitted assets in the
obligations of any one corporation. This is not applicable to
bonds or other interest bearing obligations in default as to
principal;
(e) Investments in the obligations stated in paragraphs
(a), (b), (c), and (d), may be made either directly or in the
form of securities of, or other interests in, an investment
company registered under the Federal Investment Company Act of
1940. Investment company shares authorized pursuant to this
subdivision shall not exceed 20 percent of the company's
surplus. These obligations must be carried at the lower of cost
or market on the annual statement filed with the commissioner
and adjusted to market on an annual basis;
(f) Loans upon improved and unencumbered real property in
this state worth at least twice the amount loaned thereon, not
including buildings, unless insured by property insurance
policies payable to and held by the security holder;
(g) Real estate, including land, buildings and fixtures,
located in this state and used primarily as home office space
for the insurance company;
(h) Demand or time deposits or savings accounts in
federally insured depositories located in this state to the
extent that the deposit or investment is insured by the Federal
Deposit Insurance Corporation, Federal Savings and Loan
Corporation, or the National Credit Union Administration. An
additional deposit not to exceed 50 percent of the township
mutual insurance company's policyholder surplus may be located
in these depositories if covered by private deposit insurance
written by an insurer licensed by the department of commerce;
(i) Guarantee fund certificates of a mutual insurer which
reinsures the business of the township mutual insurance
company. The commissioner may by rule limit the amount of
guarantee fund certificates which the township mutual insurance
company may purchase and this limit may be a function of the
size of the township mutual insurance company; and
(j) Up to $1,500 in stock of an insurer which issues
directors and officers liability insurance to township mutual
insurance company directors and officers.
Sec. 9. Minnesota Statutes 1996, section 80A.02,
subdivision 1, is amended to read:
Subdivision 1. [ADVISORY ACTIVITIES AND PRINCIPAL
TRANSACTIONS.] (a) It is unlawful for any person who receives,
directly or indirectly, any consideration from another primarily
for advising the other as to the value of securities or their
purchase or sale:
(a) (1) to employ any device, scheme, or artifice to
defraud the other; or
(b) (2) to engage in any act, practice, or course of
business which operates or would operate as a fraud or deceit
upon the other; or.
(c) (b) It is unlawful for an investment adviser to
knowingly sell any security to or purchase any security from a
client while acting as principal for the person's own account or
knowingly effect any sale or purchase of any security for the
account of a client while acting as broker for one other than
the client, unless the person discloses to the client in writing
before the execution of the transaction the capacity in which
the person is acting and obtains the consent of the client to
the transaction.
Sec. 10. Minnesota Statutes 1996, section 80A.04,
subdivision 3, is amended to read:
Subd. 3. It is unlawful for any person to transact
business in this state as an investment adviser unless that
person is so licensed or licensed as a broker-dealer under this
chapter or unless: (1) that person's only clients in this state
are investment companies as defined in the Investment Company
Act of 1940, other investment advisers, broker-dealers, banks,
trust companies, savings associations, federal covered advisers
insurance companies, employee benefit plans, corporations with a
class of equity securities registered under section 12(b) or
12(g) of the Securities Exchange Act of 1934, small business
investment companies, and government agencies or
instrumentalities, whether acting for themselves or as trustees
with investment control, or other institutional investors as are
designated by rule or order of the commissioner. buyers; or (2)
that person has no place of business in this state and during
the preceding 12-month period has had fewer than six clients who
are residents of this state.
Sec. 11. Minnesota Statutes 1996, section 80A.04,
subdivision 4, is amended to read:
Subd. 4. Every license shall expire or notice filing
expires on December 31 of each year unless an application for
renewal has been received by the commissioner by November 15.
Sec. 12. Minnesota Statutes 1996, section 80A.04, is
amended by adding a subdivision to read:
Subd. 5. Except with respect to advisers whose only
clients are those described in subdivision 3, clause (2), it is
unlawful for a federal covered adviser to conduct advisory
business in this state unless the person complies with section
80A.05, subdivision 1a.
Sec. 13. Minnesota Statutes 1996, section 80A.05, is
amended by adding a subdivision to read:
Subd. 1a. [FEDERAL COVERED ADVISERS.] Except with respect
to federal covered advisers whose only clients are those
described in section 80A.04, subdivision 3, clause (2), a
federal covered adviser shall file with the commissioner, before
acting as a federal covered adviser in this state, all documents
required by the commissioner that have been filed with the
Securities and Exchange Commission. Notwithstanding any other
provision of this section, until October 10, 1999, the
commissioner may require the registration of any federal covered
investment adviser who has failed to promptly pay the fees
required by section 80A.28 after being notified in writing by
the commissioner of the nonpayment or underpayment of such
fees. A person shall be considered to have promptly paid such
fees if the fees are remitted to the commissioner within 15 days
following the receipt of written notification from the
commissioner.
Sec. 14. Minnesota Statutes 1996, section 80A.05,
subdivision 4, is amended to read:
Subd. 4. The commissioner may by rule require a minimum
capital for broker-dealers, subject to the limitations of
section 15 of the Securities Act of 1934, and establish minimum
financial requirements for investment advisers and establish
limitations on aggregate indebtedness of broker-dealers in
relation to net capital., subject to the limitations of section
222 of the Investment Advisers Act of 1940 which may include
different requirements for those investment advisers who
maintain custody of clients' funds or securities or who have
discretionary authority over the funds or securities and those
investment advisers who do not.
Sec. 15. Minnesota Statutes 1996, section 80A.05,
subdivision 5, is amended to read:
Subd. 5. The commissioner may by rule require licensed
broker-dealers, agents and investment advisers who have custody
of or discretionary authority over client funds or securities,
to post surety bonds in amounts up to $25,000, as the
commissioner may prescribe subject to the limitations of section
15 of the Securities Exchange Act of 1934 for broker-dealers and
section 222 of the Investment Advisers Act of 1940 for
investment advisers and may by rule or order determine their
conditions. Any appropriate deposit of cash or securities shall
be accepted in lieu of any bond so required. No bond may be
required of any broker-dealer whose net capital, which may be
defined by rule, exceeds $25,000 the amounts required by the
commissioner. Every bond shall provide for suit thereon by any
person who has a cause of action under section 80A.23 and, if
the commissioner by rule or order requires, by any person who
has a cause of action not arising under sections 80A.01 to
80A.31. Every bond shall provide that no suit may be maintained
to enforce any liability on the bond unless brought within three
years after the sale or other act upon which it is based.
Sec. 16. Minnesota Statutes 1996, section 80A.06,
subdivision 1, is amended to read:
Subdivision 1. Every licensed broker-dealer and investment
adviser shall make and keep all accounts, correspondence,
memoranda, papers, books and other records which the
commissioner by rule prescribes by rule or order, except as
provided by section 15 of the Securities Act of 1934 in the case
of a broker-dealer and section 222 of the Investment Advisers
Act of 1940 in the case of an investment adviser. All records
required shall be preserved for three years unless the
commissioner by rule prescribes otherwise for particular types
of records. All required records shall be kept within the state
or shall, at the request of the commissioner, be made available
at any time for examination by the commissioner either in the
principal office of the licensee or by production of exact
copies thereof in this state.
Sec. 17. Minnesota Statutes 1996, section 80A.06,
subdivision 2, is amended to read:
Subd. 2. Every licensed broker-dealer and investment
adviser shall file such reports as the commissioner by rule or
order prescribes except as provided in section 15 of the
Securities Exchange Act of 1934 in the case of a broker-dealer
and section 222 of the Investment Advisers Act of 1940 in the
case of an investment adviser.
Sec. 18. Minnesota Statutes 1996, section 80A.06,
subdivision 3, is amended to read:
Subd. 3. If the information contained in any document
filed with the commissioner is or becomes inaccurate or
incomplete in any material respect, the licensee or federal
covered adviser shall within 30 days file a correcting amendment
unless notification of the correction has been given under
section 80A.04, subdivision 2.
Sec. 19. Minnesota Statutes 1996, section 80A.08, is
amended to read:
80A.08 [REGISTRATION REQUIREMENT.]
It is unlawful for any person to offer or sell any security
in this state unless (a) it is registered under sections 80A.01
to 80A.31 or (b) the security or transaction is exempted under
section 80A.15 or (c) it is a federal covered security.
Sec. 20. Minnesota Statutes 1996, section 80A.12, is
amended by adding a subdivision to read:
Subd. 12. [COORDINATED REGISTRATION.] The commissioner may
enter into cooperative and reciprocal agreements with members of
a national securities regulatory organization composed of
securities administrators of this and other states to
participate in a coordinated review of securities offerings in
lieu of conducting the commissioner's own review.
Sec. 21. [80A.122] [FEDERAL COVERED SECURITIES.]
Subdivision 1. [18(b)(2) FILINGS.] The commissioner may,
by rule or otherwise, require the filing of any or all of the
following documents with respect to a federal covered security
under section 18(b)(2) of the Securities Act of 1933:
(1) prior to the initial offer of a federal covered
security in this state, all documents that are part of a current
federal registration statement filed with the Securities and
Exchange Commission under the Securities Act of 1933, together
with a fee and a consent to service of process;
(2) after the initial offer of a federal covered security
in this state, all documents that are part of an amendment to a
current federal registration statement filed with the Securities
and Exchange Commission under the Securities Act of 1933, which
must be filed concurrently with the commissioner;
(3) notices that increase the aggregate amount of
securities offered or sold in this state, together with the fee.
Subd. 2. [18(b)(4)(D) FILINGS.] With respect to a security
that is a federal covered security under section 18(b)(4)(D) of
the Securities Act of 1933, the commissioner, by rule or
otherwise, may require the issuer to file a notice on form D of
the Securities and Exchange Commission, together with a fee and
a consent to service of process no later than 15 days after the
first sale of the covered security in this state.
Subd. 3. [18(b)(3) or (4) FILINGS.] The commissioner, by
rule or otherwise, may require the filing of any document filed
with the Securities and Exchange Commission under the Securities
Act of 1933 with respect to a federal covered security under
section 18(b)(3) or (4) of the Securities Act of 1933 together
with the fee.
Subd. 4. [REGISTRATION.] Notwithstanding any other
provision of this section, until October 10, 1999, the
commissioner may require registration of a federal covered
security for which the fees required by section 80A.28 have not
been promptly paid after the issuer of such securities has been
notified in writing by the commissioner of the nonpayment or
underpayment of such fees. An issuer shall be considered to
have promptly paid such fees if the fees are remitted to the
commissioner within 15 days following the receipt of written
notification from the commissioner.
Subd. 5. [STOP ORDERS.] The commissioner may issue a stop
order suspending the offer and sale of a federal covered
security, except a federal covered security under section
18(b)(1) of the Securities Act of 1933, if the commissioner
finds that: (1) the order is in the public interest; and (2)
there is a failure to comply with any condition established
under this section.
Subd. 6. [COMMISSIONER'S WAIVER.] The commissioner may, by
rule or otherwise, waive any or all of the provisions of this
section.
Sec. 22. Minnesota Statutes 1996, section 80A.14,
subdivision 3, is amended to read:
Subd. 3. [AGENT.] "Agent" means any individual other than
a broker-dealer who represents a broker-dealer or issuer in
effecting or attempting to effect purchases or sales of
securities. "Agent" does not include:
(a) an individual who represents an issuer in:
(1) effecting transactions in a security exempted by
section 80A.15, subdivision 1;
(2) effecting transactions exempted by section 80A.15,
subdivision 2;
(3) effecting transactions with existing employees,
partners or directors of the issuer if no commission or other
remuneration is paid or given directly or indirectly for
soliciting any person in this state;
(4) effecting other transactions, if the individual is an
officer or director of the issuer, no commission or other
remuneration is paid or given directly or indirectly for
soliciting any person in this state, and, upon application, the
individual is specifically authorized by name in an order issued
by the commissioner; or
(5) effecting transactions in securities registered by
notification under section 80A.09 if no commission or other
remuneration is paid or given directly or indirectly for
soliciting any person in this state.; or
(6) effecting transactions in a federal covered security as
described in sections 18(b)(3) and 18(b)(4) of the Securities
Act of 1933; or
(b) an individual who represents a broker-dealer in
effecting transactions in the state limited to those
transactions described in section 15(h)(2) of the Securities
Exchange Act of 1934.
A partner, officer or director of a broker-dealer or
issuer, or a person occupying a similar status or performing
similar functions, is an agent only if that person otherwise
comes within this definition.
Sec. 23. Minnesota Statutes 1996, section 80A.14,
subdivision 4, is amended to read:
Subd. 4. [BROKER-DEALER.] "Broker-dealer" means any person
engaged in the business of effecting transactions in securities
for the account of others or for that person's own account.
"Broker-dealer" does not include:
(1) an agent;
(2) an issuer;
(3) a trust company; or
(4) a bank, savings institution, savings association,
credit union:
(i) acting for the account of others, provided that such
activities are conducted in compliance with such rules as may be
adopted by the commissioner;
(ii) acting for its own account; or
(iii) acting in a fiduciary capacity pursuant to the powers
and privileges described by sections 48.36 to 48.49 or United
States Code, title 12, section 92(a);
(5) a person who has no place of business in this state if
that person effects transactions in this state exclusively with
or through (i) the issuers of the securities involved in the
transactions, (ii) other broker-dealers, or (iii) banks, savings
institutions, trust companies, insurance companies, investment
companies as defined in the Investment Company Act of 1940,
pension or profit sharing trusts, or other financial
institutions or institutional buyers, or to broker-dealers,
whether the purchaser is acting for itself or in some fiduciary
capacity; or
(6) other persons not within the intent of this subsection
whom the commissioner by rule or order designates.
Sec. 24. Minnesota Statutes 1996, section 80A.14, is
amended by adding a subdivision to read:
Subd. 5a. [FEDERAL COVERED ADVISER.] "Federal covered
adviser" means a person who is: (1) registered under section
203 of the Investment Act of 1940; or (2) is excluded from the
definition of "investment adviser" under section 202(a)(11).
Sec. 25. Minnesota Statutes 1996, section 80A.14, is
amended by adding a subdivision to read:
Subd. 5b. [FEDERAL COVERED SECURITY.] "Federal covered
security" means a security that is a covered security under
section 18(b) of the Securities Act of 1933 or regulations
adopted under that act.
Sec. 26. Minnesota Statutes 1996, section 80A.14, is
amended by adding a subdivision to read:
Subd. 8a. [INSTITUTIONAL BUYER.] For the purposes of
sections 80A.04, subdivision 3; 80A.14, subdivision 4, clause
(5); and 80A.15, subdivision 2, paragraph (g), "institutional
buyer" includes, but is not limited to, a corporation with a
class of equity securities registered under section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended, a
"qualified institutional buyer" within the meaning of rule 144A,
and an "accredited investor" within the meaning of rule 501(a)
of regulation D.
Sec. 27. Minnesota Statutes 1996, 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, issued or
guaranteed by the United States, any state, any political
subdivision of a state, or any agency or corporate or other
instrumentality of one or more of the foregoing.; but this
exemption does not apply to a security issued by any of the
foregoing that is payable solely from payments to be received in
respect of property or money used under a lease, sale, or loan
arrangement by or for a nongovernmental industrial or commercial
enterprise. 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 association,
or any savings association 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. This exemption
does not apply to second tier listings on any of the exchanges
in this paragraph.
(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.
Sec. 28. Minnesota Statutes 1996, section 80A.15,
subdivision 2, is amended to read:
Subd. 2. The following transactions are exempted from
sections 80A.08 and 80A.16:
(a) Any sales, whether or not effected through a
broker-dealer, provided that:
(1) no person shall make more than ten sales of securities
of the same issuer pursuant to this exemption, exclusive of
sales according to clause (2), during any period of 12
consecutive months; provided further, that in the case of sales
by an issuer, except sales of securities registered under the
Securities Act of 1933 or exempted by section 3(b) of that act,
(i) the seller reasonably believes that all buyers are
purchasing for investment, and (ii) the securities are not
advertised for sale to the general public in newspapers or other
publications of general circulation or otherwise, or by radio,
television, electronic means or similar communications media, or
through a program of general solicitation by means of mail or
telephone; and
(2) no issuer shall make more than 25 sales of its
securities according to this exemption, exclusive of sales
pursuant to clause (1), during any period of 12 consecutive
months; provided further, that the issuer meets the conditions
in clause (1) and, in addition meets the following additional
conditions: (i) files with the commissioner, ten days before a
sale according to this clause, a statement of issuer on a form
prescribed by the commissioner; and (ii) no commission or other
remuneration is paid or given directly or indirectly for
soliciting any prospective buyers in this state in connection
with a sale according to this clause except reasonable and
customary commissions paid by the issuer to a broker-dealer
licensed under this chapter.
(b) Any nonissuer distribution of an outstanding security
if (1) either Moody's, Fitch's, or Standard & Poor's Securities
Manuals, or other recognized manuals approved by the
commissioner contains the names of the issuer's officers and
directors, a balance sheet of the issuer as of a date not more
than 18 months prior to the date of the sale, and a profit and
loss statement for the fiscal year preceding the date of the
balance sheet, and (2) the issuer or its predecessor has been in
active, continuous business operation for the five-year period
next preceding the date of sale, and (3) if the security has a
fixed maturity or fixed interest or dividend provision, the
issuer has not, within the three preceding fiscal years,
defaulted in payment of principal, interest, or dividends on the
securities.
(c) The execution of any orders by a licensed broker-dealer
for the purchase or sale of any security, pursuant to an
unsolicited offer to purchase or sell; provided that the
broker-dealer acts as agent for the purchaser or seller, and has
no direct material interest in the sale or distribution of the
security, receives no commission, profit, or other compensation
from any source other than the purchaser and seller and delivers
to the purchaser and seller written confirmation of the
transaction which clearly itemizes the commission, or other
compensation.
(d) Any nonissuer sale of notes or bonds secured by a
mortgage lien if the entire mortgage, together with all notes or
bonds secured thereby, is sold to a single purchaser at a single
sale.
(e) Any judicial sale, exchange, or issuance of securities
made pursuant to an order of a court of competent jurisdiction.
(f) The sale, by a pledge holder, of a security pledged in
good faith as collateral for a bona fide debt.
(g) Any offer or sale to a bank, savings institution, trust
company, insurance company, investment company as defined in the
Investment Company Act of 1940, pension or profit sharing trust,
or other financial institution or institutional buyer, or to a
broker-dealer, whether the purchaser is acting for itself or in
some fiduciary capacity.
(h) An offer or sale of securities by an issuer made in
reliance on the exemptions provided by Rule 505 or 506 of
Regulation D promulgated by the Securities and Exchange
Commission, Code of Federal Regulations, title 17, sections
230.501 to 230.508, subject to the conditions and definitions
provided by Rules 501 to 503 of Regulation D, if the offer and
sale also satisfies the conditions and limitations in clauses
(1) to (10).
(1) The exemption under this paragraph is not available for
the securities of an issuer if any of the persons described in
Rule 252(c) to (f) of Regulation A promulgated by the Securities
and Exchange Commission, Code of Federal Regulations, title 17,
sections 230.251 to 230.263:
(i) has filed a registration statement that is the subject
of a currently effective order entered against the issuer, its
officers, directors, general partners, controlling persons, or
affiliates, according to any state's law within five years
before the filing of the notice required under clause (5),
denying effectiveness to, or suspending or revoking the
effectiveness of, the registration statement;
(ii) has been convicted, within five years before the
filing of the notice required under clause (5), of a felony or
misdemeanor in connection with the offer, sale, or purchase of a
security or franchise, or a felony involving fraud or deceit,
including but not limited to forgery, embezzlement, obtaining
money under false pretenses, larceny, or conspiracy to defraud;
(iii) is subject to an effective administrative order or
judgment entered by a state securities administrator within five
years before the filing of the notice required under clause (5),
that prohibits, denies, or revokes the use of an exemption from
securities registration, that prohibits the transaction of
business by the person as a broker-dealer or agent, or that is
based on fraud, deceit, an untrue statement of a material fact,
or an omission to state a material fact; or
(iv) is subject to an order, judgment, or decree of a court
entered within five years before the filing of the notice
required under clause (5), temporarily, preliminarily, or
permanently restraining or enjoining the person from engaging in
or continuing any conduct or practice in connection with the
offer, sale, or purchase of a security, or the making of a false
filing with a state.
A disqualification under paragraph (h) involving a
broker-dealer or agent is waived if the broker-dealer or agent
is or continues to be licensed in the state in which the
administrative order or judgment was entered against the person
or if the broker-dealer or agent is or continues to be licensed
in this state as a broker-dealer or agent after notifying the
commissioner of the act or event causing disqualification.
The commissioner may waive a disqualification under
paragraph (h) upon a showing of good cause that it is not
necessary under the circumstances that use of the exemption be
denied.
A disqualification under paragraph (h) may be waived if the
state securities administrator or agency of the state that
created the basis for disqualification has determined, upon a
showing of good cause, that it is not necessary under the
circumstances that an exemption from registration of securities
under the state's laws be denied.
It is a defense to a violation of paragraph (h) based upon
a disqualification if the issuer sustains the burden of proof to
establish that the issuer did not know, and in the exercise of
reasonable care could not have known, that a disqualification
under paragraph (h) existed.
(2) This exemption must not be available to an issuer with
respect to a transaction that, although in technical compliance
with this exemption, is part of a plan or scheme to evade
registration or the conditions or limitations explicitly stated
in paragraph (h).
(3) No commission, finder's fee, or other remuneration
shall be paid or given, directly or indirectly, for soliciting a
prospective purchaser, unless the recipient is appropriately
registered licensed, or exempt from registration licensure, in
this state as a broker-dealer.
(4) Nothing in this exemption is intended to or should be
in any way construed as relieving issuers or persons acting on
behalf of issuers from providing disclosure to prospective
investors adequate to satisfy the antifraud provisions of the
securities law of Minnesota.
(5) The issuer shall file with the commissioner a notice on
form D as adopted by the Securities and Exchange Commission
according to Regulation D, Code of Federal Regulations, title
17, section 230.502. The notice must be filed not later than 15
days after the first sale in this state of securities in an
offering under this exemption. Every notice on form D must be
manually signed by a person duly authorized by the issuer and
must be accompanied by a consent to service of process on a form
prescribed by the commissioner.
(6) A failure to comply with a term, condition, or
requirement of paragraph (h) will not result in loss of the
exemption for an offer or sale to a particular individual or
entity if the person relying on the exemption shows that: (i)
the failure to comply did not pertain to a term, condition, or
requirement directly intended to protect that particular
individual or entity, and the failure to comply was
insignificant with respect to the offering as a whole; and (ii)
a good faith and reasonable attempt was made to comply with all
applicable terms, conditions, and requirements of paragraph (h),
except that, where an exemption is established only through
reliance upon this provision, the failure to comply shall
nonetheless constitute a violation of section 80A.08 and be
actionable by the commissioner.
(7) The issuer, upon request by the commissioner, shall,
within ten days of the request, furnish to the commissioner a
copy of any and all information, documents, or materials
furnished to investors or offerees in connection with the offer
and sale according to paragraph (h).
(8) Neither compliance nor attempted compliance with the
exemption provided by paragraph (h), nor the absence of an
objection or order by the commissioner with respect to an offer
or sale of securities undertaken according to this exemption,
shall be considered to be a waiver of a condition of the
exemption or considered to be a confirmation by the commissioner
of the availability of this exemption.
(9) The commissioner may, by rule or order, increase the
number of purchasers or waive any other condition of this
exemption.
(10) The determination whether offers and sales made in
reliance on the exemption set forth in paragraph (h) shall be
integrated with offers and sales according to other paragraphs
of this subdivision shall be made according to the integration
standard set forth in Rule 502 of Regulation D promulgated by
the Securities and Exchange Commission, Code of Federal
Regulations, title 17, section 230.502. If not subject to
integration according to that rule, offers and sales according
to paragraph (h) shall not otherwise be integrated with offers
and sales according to other exemptions set forth in this
subdivision.
(i) Any offer (but not a sale) of a security for which a
registration statement has been filed under sections 80A.01 to
80A.31, if no stop order or refusal order is in effect and no
public proceeding or examination looking toward an order is
pending; and any offer of a security if the sale of the security
is or would be exempt under this section. The commissioner may
by rule exempt offers (but not sales) of securities for which a
registration statement has been filed as the commissioner deems
appropriate, consistent with the purposes of sections 80A.01 to
80A.31.
(j) The offer and sale by a cooperative organized under
chapter 308A or under the laws of another state, of its
securities when the securities are offered and sold only to its
members, or when the purchase of the securities is necessary or
incidental to establishing membership in the cooperative, or
when such securities are issued as patronage dividends. This
paragraph applies to a cooperative organized under the laws of
another state only if the cooperative has filed with the
commissioner a consent to service of process under section
80A.27, subdivision 7, and has, not less than ten days prior to
the issuance or delivery, furnished the commissioner with a
written general description of the transaction and any other
information that the commissioner requires by rule or otherwise.
(l) The issuance and delivery of any securities of one
corporation to another corporation or its security holders in
connection with a merger, exchange of shares, or transfer of
assets whereby the approval of stockholders of the other
corporation is required to be obtained, provided, that the
commissioner has been furnished with a general description of
the transaction and with other information as the commissioner
by rule prescribes not less than ten days prior to the issuance
and delivery.
(m) Any transaction between the issuer or other person on
whose behalf the offering is made and an underwriter or among
underwriters.
(n) The distribution by a corporation of its or other
securities to its own security holders as a stock dividend or as
a dividend from earnings or surplus or as a liquidating
distribution; or upon conversion of an outstanding convertible
security; or pursuant to a stock split or reverse stock split.
(o) Any offer or sale of securities by an affiliate of the
issuer thereof if: (1) a registration statement is in effect
with respect to securities of the same class of the issuer and
(2) the offer or sale has been exempted from registration by
rule or order of the commissioner.
(p) Any transaction pursuant to an offer to existing
security holders of the issuer, including persons who at the
time of the transaction are holders of convertible securities,
nontransferable warrants, or transferable warrants exercisable
within not more than 90 days of their issuance, if: (1) no
commission or other remuneration (other than a standby
commission) is paid or given directly or indirectly for
soliciting any security holder in this state; and (2) the
commissioner has been furnished with a general description of
the transaction and with other information as the commissioner
may by rule prescribe no less than ten days prior to the
transaction.
(q) Any nonissuer sales of any security, including a
revenue obligation, issued by the state of Minnesota or any of
its political or governmental subdivisions, municipalities,
governmental agencies, or instrumentalities.
(r) Any transaction as to which the commissioner by rule or
order finds that registration is not necessary in the public
interest and for the protection of investors.
(s) An offer or sale of a security issued in connection
with an employee's stock purchase, savings, option, profit
sharing, pension, or similar employee benefit plan, if the
following conditions are met:
(1) the issuer, its parent corporation or any of its
majority-owned subsidiaries offers or sells the security
according to a written benefit plan or written contract relating
to the compensation of the purchaser; and
(2) the class of securities offered according to the plan
or contract, or if an option or right to purchase a security,
the class of securities to be issued upon the exercise of the
option or right, is registered under section 12 of the
Securities Exchange Act of 1934, or is a class of securities
with respect to which the issuer files reports according to
section 15(d) of the Securities Exchange Act of 1934; or
(3) the issuer fully complies with the provisions of Rule
701 as adopted by the Securities and Exchange Commission, Code
of Federal Regulations, title 12, section 230.701.
The issuer shall file not less than ten days before the
transaction, a general description of the transaction and any
other information that the commissioner requires by rule or
otherwise or, if applicable, a Securities and Exchange Form S-8.
Annually, within 90 days after the end of the issuer's fiscal
year, the issuer shall file a notice as provided with the
commissioner.
(t) Any sale of a security of an issuer that is a pooled
income fund, a charitable remainder trust, or a charitable lead
trust that has a qualified charity as the only charitable
beneficiary.
(u) Any sale by a qualified charity of a security that is a
charitable gift annuity if the issuer has a net worth, otherwise
defined as unrestricted fund balance, of not less than $300,000
and either: (1) has been in continuous operation for not less
than three years; or (2) is a successor or affiliate of a
qualified charity that has been in continuous operation for not
less than three years.
Sec. 29. Minnesota Statutes 1996, section 80A.16, is
amended to read:
80A.16 [FILING OF SALES AND ADVERTISING LITERATURE.]
The commissioner may by rule or order require the filing of
any prospectus, pamphlet, circular, form letter, advertisement,
or other sales literature or advertising communication addressed
or intended for distribution to prospective investors, including
clients or prospective clients of an investment adviser or
broker-dealer unless: (1) the security or transaction is
exempted by section 80A.15; or (2) the security is a federal
covered security.
Sec. 30. Minnesota Statutes 1996, section 80A.28,
subdivision 1, is amended to read:
Subdivision 1. (a) There shall be a filing fee of $100 for
every application for registration or notice filing. There
shall be an additional fee of one-tenth of one percent of the
maximum aggregate offering price at which the registered
securities are to be offered in this state, and the maximum
combined fees shall not exceed $300.
(b) If the registration statement relates to redeemable
securities issued by an open end management company or unit
investment trust, as defined in the Investment Company Act of
1940, there shall be a filing fee of $100 for every application
for registration. There shall be an additional fee of 1/20 of
one percent of the maximum aggregate offering price at which the
registered securities are to be offered in this state. There
shall be no maximum fee for securities registered pursuant to
this clause.
(c) When an application for registration is withdrawn
before the effective date or a preeffective stop order is
entered under section 80A.13, subdivision 1, all but the $100
filing fee shall be returned. If an application to register
securities is denied, the total of all fees received shall be
retained.
(c) Where a filing is made in connection with a federal
covered security under section 18(b)(2) of the Securities Act of
1933, there is a fee of $100 for every initial filing. There is
an additional fee of 1/20 of one percent of the maximum
aggregate offering price at which the securities are to be
offered in this state. There is no maximum fee for securities
filings made according to this section.
Sec. 31. Minnesota Statutes 1996, section 80A.28,
subdivision 2, is amended to read:
Subd. 2. Every applicant for an initial or renewal license
shall pay a filing fee of $200 in the case of a broker-dealer,
$50 in the case of an agent, and $100 in the case of an
investment adviser. When an application is denied or withdrawn,
the filing fee shall be retained. A licensed agent who has
terminated employment with one broker-dealer shall, before
beginning employment with another broker-dealer, pay a transfer
fee of $25. The fee for a filing made according to section
80A.05, subdivision 1a, is $100.
Sec. 32. Minnesota Statutes 1996, section 80C.01,
subdivision 4, is amended to read:
Subd. 4. "Franchise" means (a) a contract or agreement,
either express or implied, whether oral or written, for a
definite or indefinite period, between two or more persons:
(1) by which a franchisee is granted the right to engage in
the business of offering or distributing goods or services using
the franchisor's trade name, trademark, service mark, logotype,
advertising, or other commercial symbol or related
characteristics;
(2) in which the franchisor and franchisee have a community
of interest in the marketing of goods or services at wholesale,
retail, by lease, agreement, or otherwise; and
(3) for which the franchisee pays, directly or indirectly,
a franchise fee; or
(b) a contract, lease, or other agreement, either express
or implied, whether oral or written, for a definite or
indefinite period, between two or more persons, whereby the
franchisee is granted the right to market motor vehicle
fuel using the franchisor's trade name, trademark, service mark,
logotype, advertising, or other commercial symbol or related
characteristics for which the franchisee pays a franchise fee;
or
(c) the sale or lease of any products, equipment, chattels,
supplies, or services to the purchaser, other than the sale of
sales demonstration equipment, materials or samples for a total
price of $500 or less to any one person, for the purpose of
enabling the purchaser to start a business and in which the
seller:
(1) represents that the seller, lessor, or an affiliate
thereof will provide locations or assist the purchaser in
finding locations for the use or operation of vending machines,
racks, display cases, or similar devices, or currency operated
amusement machines or devices, on premises neither owned or
leased by the purchaser or seller; or
(2) represents that the seller will purchase any or all
products made, produced, fabricated, grown, bred, or modified by
the purchaser using, in whole or in part, the supplies,
services, or chattels sold to the purchaser; or
(3) guarantees that the purchaser will derive income from
the business which exceeds the price paid to the seller; or
(d) an oral or written contract or agreement, either
expressed or implied, for a definite or indefinite period,
between two or more persons, under which a manufacturer, selling
security systems through dealers or distributors in this state,
requires regular payments from the distributor or dealer as
royalties or residuals for products purchased and paid for by
the dealer or distributor.
(e) "Franchise" does not include any business which is
operated under a lease or license on the premises of the lessor
or licensor as long as such business is incidental to the
business conducted by the lessor or licensor on such premises,
including, without limitation, leased departments, licensed
departments, and concessions.
(f) "Franchise" does not include any contract, lease or
other agreement whereby the franchisee is required to pay less
than $100 on an annual basis, except those franchises identified
in paragraph (b).
(g) "Franchise" does not include a contract, lease or other
agreement between a new motor vehicle manufacturer, distributor,
or factory branch and a franchisee whereby the franchisee is
granted the right to market automobiles, motorcycles, trucks,
truck tractors, or self-propelled motor homes or campers if the
foregoing are designed primarily for the transportation of
persons or property on public highways.
(h) "Franchise" does not include a contract, lease, or
other agreement or arrangement between two or more air carriers,
or between one or more air carriers and one or more foreign air
carriers. The terms "air carrier" and "foreign air carrier"
shall have the meanings assigned to them by the Federal Aviation
Act, United States Code Appendix, title 49, sections 1301(3) and
1301(22), respectively.
Sec. 33. Minnesota Statutes 1996, section 82.19, is
amended by adding a subdivision to read:
Subd. 9. [EXCLUSIVE AGENCY AGREEMENTS.] (a) Except as
provided in paragraph (b), a licensee shall not negotiate the
sale, exchange, lease, or listing of any real property directly
with the owner or lessor knowing that the owner or lessor has
executed a written exclusive listing contract or exclusive
contract for nonagency services in connection with the property
with another real estate broker, buyer, or lessee, nor shall a
licensee negotiate the purchase, lease, or exchange of real
property knowing that the buyer or lessee has executed a written
exclusive buyer representation contract or exclusive contract
for nonagency services for the purchase, lease, or exchange of
the real property with another real estate broker.
(b) A licensee may discuss the terms upon which a listing
or buyer representation contract or a contract for nonagency
services may be entered into after expiration of any existing
exclusive contract when the inquiry or discussion is initiated
by the owner, lessor, buyer, or lessee. The licensee must
inquire of the owner, lessor, buyer, or lessee whether such an
exclusive contract exists.
Sec. 34. Minnesota Statutes 1996, section 82.20,
subdivision 15, is amended to read:
Subd. 15. [EXEMPTION.] The following persons, when acting
as closing agents, are exempt from the requirements of sections
82.19 and 82.24 unless otherwise required in this section or
chapter:
(1) a direct employee of a title insurance company
authorized to do business in this state, or a direct employee of
a title company, or a person who has an agency agreement with a
title insurance company or a title company in which the agent
agrees to perform closing services on the title insurance
company's or title company's behalf and the title insurance
company or title company assumes responsibility for the actions
of the agent as if the agent were a direct employee of the title
insurance company or title company;
(2) a licensed attorney or a direct employee of a licensed
attorney;
(3) a licensed real estate broker or salesperson;
(4) a direct employee of a licensed real estate broker if
the broker maintains all funds received in connection with the
closing services in the broker's trust account;
(5) any bank, trust company, savings association, credit
union, industrial loan and thrift company, regulated lender
under chapter 56, public utility, or land mortgage or farm loan
association organized under the laws of this state or the United
States, when engaged in the transaction of businesses within the
scope of its corporate powers as provided by law; and
(6) a title insurance company authorized to do business in
this state or a title company which is the appointed agent of a
title insurance company authorized to do business in this
state.; and
(7) a title company that has a contractual agency
relationship with a title insurance company authorized to do
business in this state, where the title insurance company
assumes responsibility for the actions of the title company and
its employees or agents as if they were the employees or agents
of the title insurance company.
Sec. 35. Minnesota Statutes 1996, section 82.22,
subdivision 13, is amended to read:
Subd. 13. [CONTINUING EDUCATION.] (a) After their first
renewal date, all real estate salespersons and all real estate
brokers shall be required to successfully complete 30 hours of
real estate continuing education, either as a student or a
lecturer, in courses of study approved by the commissioner,
during each 24-month license period. At least 15 of the 30
credit hours must be completed during the first 12 months of the
24-month licensing period. Salespersons and brokers whose
initial license period extends more than 12 months are required
to complete 15 hours of real estate continuing education during
the initial license period. Those licensees who will receive a
12-month license on July 1, 1995, because of the staggered
implementation schedule must complete 15 hours of real estate
continuing education as a requirement for renewal on July 1,
1996. Licensees may not claim credit for continuing education
not actually completed as of the date their report of continuing
education compliance is filed.
(b) The commissioner shall adopt rules defining the
standards for course and instructor approval, and may adopt
rules for the proper administration of this subdivision. The
commissioner may not approve a course which can be completed by
the student at home or outside the classroom without the
supervision of an instructor approved by the department of
commerce. The commissioner has discretion to establish a pilot
program to explore delivery of accredited courses using new
delivery technology, including interactive technology. This
pilot program expires on August 1, 2000.
(c) Any program approved by Minnesota continuing legal
education shall be approved by the commissioner of commerce for
continuing education for real estate brokers and salespeople if
the program or any part thereof relates to real estate.
(d) As part of the continuing education requirements of
this section, the commissioner shall require that all real
estate brokers and salespersons receive:
(1) at least two hours of training during each license
period in courses in laws or regulations on agency
representation and disclosure; and
(2) at least two hours of training during each license
period in courses in state and federal fair housing laws,
regulations, and rules, or other antidiscrimination laws.
Clause (1) does not apply to real estate salespersons and
real estate brokers engaged solely in the commercial real estate
business who file with the commissioner a verification of this
status along with the continuing education report required under
paragraph (a).
(e) The commissioner is authorized to establish a procedure
for renewal of course accreditation.
Sec. 36. Minnesota Statutes 1996, section 82.24,
subdivision 5, is amended to read:
Subd. 5. [TRUST ACCOUNT RECORDS ACCOUNTS.] (a) Each broker
or closing agent shall maintain and retain records of all trust
funds and trust accounts. The commissioner may prescribe
information to be included in the records by appropriate rules.
(b) A check received from a potential buyer shall be
deposited into the listing broker's trust account not later than
the third business day after delivery of the check to the
broker, except that the check may be held by the listing broker
until acceptance or rejection of the offer if:
(1) the check by its terms is not negotiable by the broker
or if the potential buyer has given written instructions that
the check shall not be deposited nor cashed until acceptance or
shall be immediately returned if the offer is rejected; and
(2) the potential seller is informed that the check is
being so held before or at the time the offer is presented to
that person for acceptance.
If the offer is accepted, the check shall be deposited in a
neutral escrow depository or the trust fund account of the
listing broker not later than the third business day following
acceptance of the offer unless the broker has received written
authorization from all parties to the transaction to continue to
hold the check. If the offer is rejected, the check shall be
returned to the potential buyer not later than the next business
day after rejection.
Sec. 37. Minnesota Statutes 1996, section 82B.13,
subdivision 1, is amended to read:
Subdivision 1. [REGISTERED REAL PROPERTY APPRAISER OR
LICENSED REAL PROPERTY APPRAISER.] As a prerequisite for
licensing as a registered real property appraiser or licensed
real property appraiser, an applicant must present evidence
satisfactory to the commissioner that the person has
successfully completed at least 75 90 classroom hours of courses.
The courses must consist of 60 75 hours of general real estate
appraisal principles and 15 hours related to standards of
professional appraisal practice and the provisions of this
chapter.
Sec. 38. Minnesota Statutes 1996, section 82B.13,
subdivision 4, is amended to read:
Subd. 4. [CERTIFIED RESIDENTIAL REAL PROPERTY APPRAISER.]
As a prerequisite for licensing as a certified residential real
property appraiser, an applicant must present evidence
satisfactory to the commissioner that the person has
successfully completed at least 165 120 classroom hours of
courses, including 15 hours related to the standards of
professional appraisal practice and the provisions of this
chapter, with particular emphasis on the appraisal of one to
four unit residential properties.
Sec. 39. Minnesota Statutes 1996, section 82B.13,
subdivision 5, is amended to read:
Subd. 5. [CERTIFIED GENERAL REAL PROPERTY APPRAISER.] As a
prerequisite for licensing as a certified general real property
appraiser, an applicant must present evidence satisfactory to
the commissioner that the person has successfully completed at
least 165 180 classroom hours of courses, including 15 hours
related to the standards of professional appraisal practice and
the provisions of this chapter, with particular emphasis on the
appraisal of nonresidential properties.
Sec. 40. Minnesota Statutes 1996, section 82B.14, is
amended to read:
82B.14 [EXPERIENCE REQUIREMENT.]
(a) A license under section 82B.11, subdivision 3, 4, or 5,
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. As a
prerequisite for licensing as a registered real property
appraiser or licensed real property appraiser, an applicant must
present evidence satisfactory to the commissioner that the
person has obtained 2,000 hours of experience in real property
appraisal.
As a prerequisite for licensing as a certified residential
real property appraiser, an applicant must present evidence
satisfactory to the commissioner that the person has obtained
2,500 hours of experience in real property appraisal.
As a prerequisite for licensing as a certified general real
property appraiser, an applicant must present evidence
satisfactory to the commissioner that the person has obtained
3,000 hours of experience in real property appraisal.
(b) Each applicant for license under section 82B.11,
subdivision 3, 4, or 5, 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.
(c) Applicants may not receive credit for experience
accumulated while unlicensed, if the experience is based on
activities which required a license under this section.
Sec. 41. Minnesota Statutes 1996, section 82B.19,
subdivision 1, is amended to read:
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 30 classroom hours of instruction in
courses or seminars that have received the approval of the
commissioner. As part of the continuing education requirements
of this section, the commissioner shall require that all real
estate appraisers receive at least four hours of training each
license period in courses in laws or regulations on standards of
professional practice. If the applicant's immediately preceding
term of licensing consisted of 12 or more months, but fewer than
24 months, the applicant must provide evidence of completion of
15 hours of instruction during the license period. If the
immediately preceding term of licensing consisted of fewer than
12 months, no continuing education need be reported.
Sec. 42. Minnesota Statutes 1996, section 317A.141, is
amended by adding a subdivision to read:
Subd. 4. [EFFECT OF AMENDMENTS ON CHARITABLE TRUST
ASSETS.] Assets held by a corporation, including income or fees
from services, are restricted to the uses and purposes for which
the property was received and held.
Sec. 43. Minnesota Statutes 1996, section 317A.671, is
amended to read:
317A.671 [CERTAIN ASSETS NOT TO BE DIVERTED.]
Except as provided in section 501B.31, when a corporation
dissolves, merges, substantially changes the use or purposes for
which it will use its assets, or consolidates, transfers its
assets, or grants a mortgage or other security interest in its
assets, assets of the corporation or a constituent corporation,
and assets subsequently received by a single corporation after a
merger or consolidation, may not be diverted from the uses and
purposes for which the assets have been received and held, or
from the uses and purposes expressed or intended by the original
donor.
Sec. 44. [325E.58] [SIGN CONTRACTOR; BOND.]
(a) A sign contractor may post a compliance bond with the
commissioner, conditioned that the sign contractor shall
faithfully perform duties and comply with laws, ordinances,
rules, and contracts entered into for the installation of
signs. The bond must be renewed annually and maintained for so
long as determined by the commissioner. The aggregate liability
of the surety on the bond to any and all persons, regardless of
the number of claims made against the bond, may not exceed the
annual amount of the bond. The bond may be canceled as to
future liability by the surety upon 30 days' written notice
mailed to the commissioner by United States mail.
(b) The amount of the bond shall be $8,000. The bond may
be drawn upon only by a local unit of government that requires
sign installers to post a compliance bond. The bond is in lieu
of any compliance bond required by a local unit of government.
(c) For purposes of this section, "sign" means a device,
structure, fixture, or placard using graphics, symbols, or
written copy that is erected on the premises of an establishment
including the name of the establishment or identifying the
merchandise, services, activities, or entertainment available on
the premises.
Sec. 45. Minnesota Statutes 1996, section 326.83,
subdivision 11, is amended to read:
Subd. 11. [OWNER.] Except in section 326.91, subdivision
1, "owner" means a person who has any legal or equitable
interest in real property. For purposes of sections 326.83 to
326.991, "owner" does not include a residential building
contractor or residential remodeler who constructs or improves
its own property for purposes of speculation. A residential
building contractor or residential remodeler will be presumed to
be building or improving for purposes of speculation if it
constructs or improves more than one property within any
12-month 24-month period.
Sec. 46. Minnesota Statutes 1996, section 326.83,
subdivision 19, is amended to read:
Subd. 19. [SPECIAL SKILL.] "Special skill" means one of
the following eight categories:
(a) [EXCAVATION.] Excavation includes work in any of the
following areas:
(1) excavation;
(2) trenching;
(3) grading; and
(4) site grading.
(b) [MASONRY AND CONCRETE.] Masonry and concrete includes
work in any of the following areas:
(1) drain systems;
(2) poured walls;
(3) slabs and poured-in-place footings;
(4) masonry walls;
(5) masonry fireplaces;
(6) masonry veneer; and
(7) water resistance and waterproofing.
(c) [CARPENTRY.] Carpentry includes work in any of the
following areas:
(1) rough framing;
(2) finish carpentry;
(3) siding;
(4) doors, windows, and skylights;
(5) exterior covering;
(6) (4) porches and decks, excluding footings;
(7) (5) wood foundations; and
(8) insulation and vapor barrier;
(9) (6) drywall installation, excluding taping and
finishing;.
(10) cabinet and counter top installation;
(11) wood floors;
(12) installation of roofing materials, excluding roofing;
and
(13) soffit, fascia, and trim.
(d) [INTERIOR FINISHING.] Interior finishing includes work
in any of the following areas:
(1) floor covering;
(2) wood floors;
(3) cabinet and counter top installation;
(4) insulation and vapor barriers;
(5) interior or exterior painting;
(6) ceramic, marble, and quarry tile;
(7) ornamental guardrail and installation of prefabricated
stairs; and
(8) wallpapering.
(e) [EXTERIOR FINISHING.] Exterior finishing includes work
in any of the following areas:
(1) siding;
(2) doors, skylights, and windows;
(3) soffit, fascia, and trim;
(4) (3) exterior plaster and stucco;
(5) (4) painting; and
(6) (5) rain carrying systems, including gutters and down
spouts.
(f) [DRYWALL AND PLASTER.] Drywall and plaster includes
work in any of the following areas:
(1) installation;
(2) taping;
(3) finishing;
(4) interior plaster;
(5) painting; and
(6) wallpapering.
(g) [ROOFING.] Roofing includes work in any of the
following areas:
(1) roof coverings;
(2) roof sheathing;
(3) roof weatherproofing and insulation; and
(4) repair of roof support system, but not construction of
new roof support system.
(h) [GENERAL INSTALLATION SPECIALTIES.] Installation
includes work in any of the following areas:
(1) garage doors and openers;
(2) pools, spas, and hot tubs;
(3) fireplaces and wood stoves;
(4) asphalt paving and seal coating;
(5) exterior plaster and stucco; and
(6) ornamental guardrail and prefabricated stairs.
Sec. 47. Minnesota Statutes 1996, section 326.84,
subdivision 3, is amended to read:
Subd. 3. [EXEMPTIONS.] The license requirement does not
apply to:
(1) an employee of a licensee performing work for the
licensee;
(2) a material person, manufacturer, or retailer furnishing
finished products, materials, or articles of merchandise who
does not install or attach the items;
(3) an owner or owners of residential real estate who build
or improve residential real estate and who do the work
themselves or jointly with the owner's own bona fide employees.
This exemption does not apply to a person who engages in a
pattern of building or improving real estate for purposes of
resale. Such a pattern is presumed to exist if the person
constructs or improves more than one property within any
12-month 24-month period;
(4) an architect or engineer engaging in professional
practice as defined in this chapter;
(5) a person whose total gross annual receipts from
projects regulated under this section do not exceed $15,000;
(6) a mechanical contractor;
(7) a plumber, electrician, or other person whose
profession is otherwise subject to statewide licensing, when
engaged in the activity which is the subject of licensure;
(8) specialty contractors who provide only one special
skill as defined in section 326.83;
(9) a school district, or a technical college governed
under chapter 136F;
(10) manufactured housing installers; and
(11) Habitat for Humanity and Builders Outreach Foundation,
and their individual volunteers when engaged in activities on
their behalf.
To qualify for the exemption in clause (5), a person must
obtain a certificate of exemption from licensing from the
commissioner.
A certificate of exemption will be issued upon the
applicant's filing with the commissioner, an affidavit stating
that the applicant does not expect to exceed $15,000 in gross
annual receipts derived from contracting activities during the
calendar year for which the exemption is requested.
To renew the exemption in clause (5), the applicant must
file an affidavit stating that the applicant did not exceed
$15,000 in gross annual receipts during the past calendar year,
and the applicant does not expect to exceed $15,000 in gross
annual receipts during the calendar year for which the exemption
is requested.
If a person, operating under the exemption in clause (5),
exceeds $15,000 in gross receipts during any calendar year, the
person must immediately surrender the exemption certificate and
apply for the appropriate license. The person must remain
licensed until such time as the person's gross annual receipts
during a calendar year fall below $15,000. The person may then
apply for this exemption for the next calendar year.
Sec. 48. Minnesota Statutes 1996, section 326.85, is
amended by adding a subdivision to read:
Subd. 4. [NONEXPIRATION.] The council is not subject to
the expiration provisions of section 15.059, subdivision 5.
Sec. 49. Minnesota Statutes 1996, section 326.921, is
amended to read:
326.921 [BUILDING PERMIT CONDITIONED ON LICENSURE.]
A political subdivision shall not issue a building permit
to an unlicensed person who is required to be licensed under
sections 326.83 to 326.991. A political subdivision that issues
zoning or land use permits in lieu of a building permit shall
not issue those permits to an unlicensed person who is required
to be licensed under sections 326.83 to 326.911. The political
subdivision shall report the person applying for a building the
permit to the commissioner who may bring an action against the
person.
Sec. 50. Minnesota Statutes 1996, section 332.33,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENT.] Except as otherwise provided
in this chapter, no person shall conduct within this state a
collection agency or engage within this state in the business of
collecting claims for others as defined in sections 332.31 to
332.45, without having first applied for and obtained
a collection agency license. A person acting under the
authority of a collection agency, as a collector, must first
obtain a Minnesota collector license. A licensed collector may
use one additional assumed name only if the assumed name is
registered with and approved by the commissioner.
Sec. 51. Minnesota Statutes 1996, section 332.33, is
amended by adding a subdivision to read:
Subd. 7. [NOTICE.] A licensed collection agency or
individual collector must give the commissioner written notice
of a change in personal name, company name, address, or
ownership not later than 15 days after the change occurs.
Sec. 52. Minnesota Statutes 1996, section 332.34, is
amended to read:
332.34 [BOND.]
The commissioner of commerce shall require each collection
agency licensee to annually file and maintain in force a
corporate surety bond, in a form to be prescribed by, and
acceptable to, the commissioner, and in the a sum of at
least $20,000. An applicant for a new or renewal license may
request that the amount of the bond be reduced to an amount not
less than $5,000. This request may be granted upon a showing
that the total dollar amount received from debtors by the
collection agency in the preceding fiscal year did not exceed
$30,000. A collection agency may deposit cash in and with a
depository acceptable to the commissioner in an amount and in
the manner prescribed and approved by the commissioner in lieu
of a bond.
Sec. 53. Minnesota Statutes 1996, section 333.01, is
amended to read:
333.01 [COMMERCIAL ASSUMED NAMES; CERTIFICATE.]
Subdivision 1. [CERTIFICATE.] No person shall hereafter
carry on or conduct or transact a commercial business in this
state under any designation, name, or style, which does not set
forth the true name of every person interested in such business
unless such person shall file in the office of the secretary of
state, a certificate setting forth the name and business address
under which the business is conducted or transacted, or is to be
conducted or transacted, and the true name of each person
conducting or transacting the same, with the address of such
person. The name of the business must not include any of the
following phrases or their abbreviations: corporation,
incorporated, limited, chartered, professional cooperative,
association, limited partnership, limited liability company,
professional limited liability company, limited liability
partnership, or professional limited liability partnership,
except to the extent that an entity filing a certificate would
be authorized to use the phrase or abbreviation. The
certificate shall be executed by one of the persons conducting,
or intending to conduct, the business. The certificate shall be
published after it has been filed with the secretary of state in
a qualified newspaper in the county in which the person has a
principal or registered office for two successive issues.
Subd. 2. [INTENTIONAL MISREPRESENTATION PROHIBITED.] No
person shall use an assumed or fictitious name in the conduct of
its business to intentionally misrepresent its geographic origin
or location.
Sec. 54. [333.065] [PENALTY FOR VIOLATION.]
A person who violates any provision of sections 333.01 to
333.06 is subject to the penalties and remedies provided in
section 8.31.
The relief provided in this section is in addition to the
remedies or penalties otherwise available.
Sec. 55. Minnesota Statutes 1996, section 359.061, is
amended to read:
359.061 [RECORD OF COMMISSION; CERTIFICATE.]
The commission of every notary shall be recorded in the
office of the court administrator of the district court of the
notary's county of residence, in a record kept for that
purpose. The commission of a nonresident notary must be
recorded in the office of the court administrator of the
district court of the Minnesota county that borders the county
in which the nonresident notary resides. The court
administrator, when requested, shall certify to official acts in
the manner and for the fees prescribed by statute or court rule.
Sec. 56. Minnesota Statutes 1996, section 359.071, is
amended to read:
359.071 [CHANGE OF NAME OR ADDRESS.]
A notary shall notify the commissioner of any name or
address change within 30 days of the change.
Sec. 57. Minnesota Statutes 1996, section 501B.35,
subdivision 3, is amended to read:
Subd. 3. [CHARITABLE TRUST.] "Charitable trust" means a
fiduciary relationship with respect to property that arises as a
result of a manifestation of an intention to create it, and that
subjects the person by whom the property is held to equitable
duties to deal with the property for a charitable purpose. As
used in this definition, property includes all income derived
from fees for services.
Sec. 58. Minnesota Statutes 1996, section 507.401,
subdivision 2, is amended to read:
Subd. 2. [CERTIFICATE OF RELEASE.] An officer or duly
appointed agent of a title insurance company may, on behalf of a
mortgagor or a person who acquired from the mortgagor title to
all or a part of the property described in a mortgage, execute a
certificate of release that complies with the requirements of
this section and record the certificate of release in the real
property records of each county in which the mortgage is
recorded if: (i) a satisfaction or release of the mortgage has
not been executed and recorded within 60 days after the date
payment in full of the loan secured by the mortgage was sent in
accordance with a payoff statement furnished by the mortgagee or
the mortgage servicer, and (ii) the title insurance company, its
officer, or agent has sent to the last known address of the
mortgagee or the mortgage servicer, at least 30 days prior to
executing the certificate of release, written notice of its
intention to execute and record a certificate of release in
accordance with this section after the expiration of the 60-day
period.
Sec. 59. Minnesota Statutes 1996, section 507.401,
subdivision 3, is amended to read:
Subd. 3. [CONTENTS.] A certificate of release executed
under this section must contain substantially all of the
following:
(1) the name of the mortgagor, the name of the original
mortgagee, and, if applicable, the mortgage servicer, the date
of the mortgage, the date of recording, and volume and page or
document number in the real property records where the mortgage
is recorded, together with similar information for the last
recorded assignment of the mortgage;
(2) a statement that the mortgage was in the original
principal amount of $500,000 or less;
(3) a statement that the person executing the certificate
of release is an officer or a duly appointed agent of a title
insurance company authorized and licensed to transact the
business of insuring titles to interests in real property in
this state under chapter 68A;
(4) a statement that the certificate of release is made on
behalf of the mortgagor or a person who acquired title from the
mortgagor to all or a part of the property described in the
mortgage;
(5) a statement that the mortgagee or mortgage servicer
provided a payoff statement which was used to make payment in
full of the unpaid balance of the loan secured by the
mortgage; and
(6) a statement that payment in full of the unpaid balance
of the loan secured by the mortgage was made in accordance with
the written or verbal payoff statement., and received by the
mortgagee or mortgage servicer, as evidenced by one or more of
the following in the records of the title insurance company or
its agent:
(i) a bank check, certified check, escrow account check
from the title company or title insurance agent, or attorney
trust account check that has been negotiated by the mortgagee or
mortgage servicer; or
(ii) other documentary evidence of payment to the mortgagee
or mortgage servicer;
(7) a statement that more than 60 days have elapsed since
the date payment in full was sent;
(8) a statement that after the expiration of the 60-day
period referred to in subdivision 2, the title insurance
company, its officer, or agent sent to the last known address of
the mortgagee or mortgage servicer, at least 30 days prior to
executing the certificate of release, notice in writing of its
intention to execute and record a certificate of release in
accordance with this section, with an unexecuted copy of the
proposed certificate of release attached to the written notice;
and
(9) a statement that the title insurance company, its
officer, or agent has not received notification in writing of
any reason why the certificate of release should not be executed
and recorded after the expiration of the 30-day notice period
referred to in subdivision 2.
Sec. 60. [REPEALER.]
Minnesota Statutes 1996, section 60K.07, subdivision 1, is
repealed.
Sec. 61. [EFFECTIVE DATE.]
Section 32, paragraph (h), is effective the day following
final enactment and shall apply to all agreements or
arrangements regardless of the date they were entered into or
renewed.
Sections 4, 6, 7, 42, 43, 46, 48, and 57 are effective the
day following final enactment.
Sections 53 and 54 are effective the day following final
enactment and apply to causes of action arising from incidents
occurring on or after that date.
Presented to the governor May 27, 1997
Signed by the governor May 30, 1997, 1:15 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes