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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 483-H.F.No. 3505 
                  An act relating to commerce; providing enforcement 
                  authority to the commissioner; providing technical 
                  changes; regulating certain disclosures; specifying 
                  the license term and fees of a managing general agent; 
                  regulating motor vehicle service contracts; regulating 
                  underwriting practices; regulating insurance brokerage 
                  business; regulating workers' compensation 
                  self-insurance; regulating securities broker-dealers 
                  and investment advisers; authorizing the commissioner 
                  to withdraw certain inactive registration 
                  applications; regulating real estate and insurance 
                  agent continuing education; regulating the contractor 
                  recovery fund; making collection agencies responsible 
                  for the acts of collectors; providing standards of 
                  conduct for notarial acts; regulating unclaimed 
                  property; amending Minnesota Statutes 1998, sections 
                  45.027, subdivision 7a; 60A.052, subdivision 1; 
                  60A.129, subdivision 5; 60H.03, by adding a 
                  subdivision; 60K.03, subdivision 4; 60K.14, 
                  subdivision 1; 61A.092, subdivision 6; 62A.136; 
                  62C.11, subdivision 1; 62C.142, subdivision 2a; 
                  62E.04, subdivision 4; 62H.10, subdivision 4; 62S.02, 
                  subdivision 1; 64B.30, subdivision 1; 65B.29, 
                  subdivisions 2 and 3; 72A.20, subdivision 17; 72A.499, 
                  subdivision 1; 79A.04, subdivisions 1, 2, 7, and 9; 
                  79A.11, subdivision 2, and by adding a subdivision; 
                  79A.22, subdivisions 3 and 11; 80A.04, subdivisions 2 
                  and 3; 80A.07, subdivision 1; 80A.10, subdivision 2; 
                  80C.05, subdivision 4; 80C.07; 82.22, subdivision 13; 
                  82A.04, subdivision 4, and by adding a subdivision; 
                  82B.14; 83.23, by adding a subdivision; 308A.711, 
                  subdivision 1; 326.975, subdivision 1; and 345.515; 
                  Minnesota Statutes 1999 Supplement, sections 60A.052, 
                  subdivision 2; 60K.19, subdivision 8; 62J.535, 
                  subdivision 2; 72A.20, subdivision 23; 79A.22, 
                  subdivision 2; 79A.23, subdivisions 1, 2, and 3; 
                  79A.24, subdivision 2; and 80A.15, subdivision 2; Laws 
                  1999, chapter 177, section 89; proposing coding for 
                  new law in Minnesota Statutes, chapters 60K; 332; and 
                  359; repealing Minnesota Statutes 1998, sections 
                  62A.285, subdivision 4; 62A.651; and 65B.13. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1998, section 45.027, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [AUTHORIZED DISCLOSURES OF INFORMATION AND 
        DATA.] (a) The commissioner may release and disclose any active 
        or inactive investigative information and data on licensees to 
        any national securities exchange or national securities 
        association registered under the Securities Exchange Act of 1934 
        when necessary for the requesting agency in initiating, 
        furthering, or completing an investigation. 
           (b) The commissioner may release any active or inactive 
        investigative data relating to the conduct of the business of 
        insurance to the Office of the Comptroller of the Currency or 
        the Office of Thrift Supervision in order to facilitate the 
        initiation, furtherance, or completion of the investigation. 
           Sec. 2.  Minnesota Statutes 1998, section 60A.052, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GROUNDS.] The commissioner may by order 
        take any or all of the following actions:  (a) deny, suspend, or 
        revoke a certificate of authority; (b) censure the insurance 
        company; or (c) impose a civil penalty as provided for in 
        section 45.027, subdivision 6; or (d) under a written agreement 
        with the insurance company based upon the company's financial 
        condition, impose conditions or restrictions on the insurance 
        company's authority to transact business in Minnesota.  In order 
        to take this action the commissioner must find that the order is 
        in the public interest, and the insurance company: 
           (1) has a board of directors or principal management that 
        is incompetent, untrustworthy, or so lacking in insurance 
        company managerial experience as to make its operation hazardous 
        to policyholders, its stockholders, or to the insurance buying 
        public; 
           (2) is controlled directly or indirectly through ownership, 
        management, reinsurance transactions, or other business 
        relations by any person or persons whose business operations are 
        or have been marked by manipulation of any assets, reinsurance, 
        or accounts as to create a hazard to the company's 
        policyholders, stockholders, or the insurance buying public; 
           (3) is in an unsound or unsafe condition; 
           (4) has the actual liabilities that exceed the actual funds 
        of the company; 
           (5) has filed an application for a license which is 
        incomplete in any material respect or contains any statement 
        which, in light of the circumstances under which it was made, 
        contained any misrepresentation or was false, misleading, or 
        fraudulent; 
           (6) has pled guilty, with or without explicitly admitting 
        guilt, pled nolo contendere, or been convicted of a felony, 
        gross misdemeanor, or misdemeanor involving moral turpitude, or 
        similar conduct; 
           (7) is permanently or temporarily enjoined by any court of 
        competent jurisdiction from engaging in or continuing any 
        conduct or practice involving any aspect of the insurance 
        business; 
           (8) has violated or failed to comply with any order of the 
        insurance regulator of any other state or jurisdiction; 
           (9) has had a certificate of authority denied, suspended, 
        or revoked, has been censured or reprimanded, has been the 
        subject of any other discipline imposed by, or has paid or has 
        been required to pay a monetary penalty or fine to, another 
        state; 
           (10) agents, officers, or directors refuse to submit to 
        examination or perform any related legal obligation; or 
           (11) has violated or failed to comply with, any of the 
        provisions of the insurance laws including chapter 45 or 
        chapters 60A to 72A or any rule or order under those chapters. 
           Sec. 3.  Minnesota Statutes 1999 Supplement, section 
        60A.052, subdivision 2, is amended to read: 
           Subd. 2.  [SUSPENSION OR REVOCATION OF AUTHORITY OR 
        CENSURE.] If the commissioner determines that one of the 
        conditions listed in subdivision 1 exists, the commissioner may 
        issue an order requiring the insurance company to show cause why 
        any or all of the following should not occur:  (1) revocation or 
        suspension of any or all certificates of authority granted to 
        the foreign or domestic insurance company or its agent; (2) 
        censuring of the insurance company; (3) cancellation of all or 
        some of the company's insurance contracts then in force in this 
        state; or (4) the imposition of a civil penalty; or (5) under a 
        written agreement with the insurance company based upon the 
        company's financial condition, imposition of conditions or 
        restrictions on the insurance company's authority to transact 
        business in Minnesota.  The order shall be calculated to give 
        reasonable notice of the time and place for hearing thereon, and 
        shall state the reasons for the entry of the order.  All 
        hearings shall be conducted in accordance with chapter 14.  The 
        insurer may waive its right to the hearing.  If the insurer is 
        under the supervision or control of the insurance department of 
        the insurer's state of domicile, that insurance department, 
        acting on behalf of the insurer, may waive the insurer's right 
        to the hearing.  After the hearing, the commissioner shall enter 
        an order disposing of the matter as the facts require.  If the 
        insurance company fails to appear at a hearing after having been 
        duly notified of it, the company shall be considered in default, 
        and the proceeding may be determined against the company upon 
        consideration of the order to show cause, the allegations of 
        which may be considered to be true. 
           Sec. 4.  Minnesota Statutes 1998, section 60A.129, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CONSOLIDATED FILING.] (a) The commissioner may 
        allow an insurer to file a consolidated loss reserve 
        certification required by subdivision 2, in lieu of separate 
        loss certifications and may allow an insurer to file 
        consolidated or combined audited financial statements required 
        by subdivision 3, paragraph (a), in lieu of separate annual 
        audited financial statements, where it can be demonstrated that 
        an insurer is part of a group of insurance companies that has a 
        pooling or 100 percent reinsurance agreement which substantially 
        affects the solvency and integrity of the reserves of the 
        insurer and the insurer cedes all of its direct and assumed 
        business to the pool.  An affiliated insurance company not 
        meeting these requirements may be included in the consolidated 
        or combined audited financial statements, if the company's total 
        admitted assets are less than five percent of the consolidated 
        group's total admitted assets.  If these circumstances exist, 
        then the company may file a written application to file a 
        consolidated loss reserve certification and/or consolidated or 
        combined audited financial statements.  This application shall 
        be for a specified period. 
           (b) A consolidated annual audit filing shall include a 
        columnar consolidated or combining worksheet.  Amounts shown on 
        the audited consolidated or combined financial statement shall 
        be shown on the worksheet.  Amounts for each insurer shall be 
        stated separately.  Noninsurance operations may be shown on the 
        worksheet on a combined or individual basis.  Explanations of 
        consolidating or eliminating entries shall be shown on the 
        worksheet.  A reconciliation of any differences between the 
        amounts shown in the individual insurer columns of the worksheet 
        and comparable amounts shown on the annual statement of the 
        insurers shall be included on the worksheet. 
           Sec. 5.  Minnesota Statutes 1998, section 60H.03, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [TERM AND FEES.] The term of a managing general 
        agent license issued under this section and the license fees 
        imposed are the same as those applicable to a licensed insurance 
        agent under chapter 60K.  
           Sec. 6.  Minnesota Statutes 1998, section 60K.03, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TERM.] All licenses issued pursuant to this 
        section remain in force until voluntarily terminated by the 
        licensee, not renewed as prescribed in section 60K.06, or until 
        suspended or revoked by the commissioner.  A voluntary 
        termination occurs when the license is surrendered to the 
        commissioner with the request that it be terminated or when the 
        licensee dies, or when the licensee is dissolved or its 
        existence is terminated.  In the case of a nonresident license, 
        a voluntary termination also occurs upon the happening of the 
        event described in subdivision 3, paragraph (c).  
           Every licensed agent shall notify the commissioner within 
        30 ten days of a change of name, address, or information 
        contained in the application. 
           Sec. 7.  [60K.081] [BROKERAGE BUSINESS.] 
           Every insurance agent licensed to transact business in this 
        state may procure the insurance of risks, or parts of risks, in 
        the class or classes of insurance for which the agent is 
        licensed, from an insurer authorized to transact business in 
        this state, when the agent is not an appointed agent of the 
        insurer, but the insurance must be consummated only through an 
        appointed agent of the insurer. 
           Sec. 8.  Minnesota Statutes 1998, section 60K.14, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PERSONAL SOLICITATION OF INSURANCE SALES.] 
        (a)  [DEFINITIONS.] For the purposes of this section, the 
        following terms have the meanings given them:  
           (1) "agent" means a person, copartnership, or corporation 
        required to be licensed pursuant to section 60K.02; and 
           (2) "personal solicitation" means any contact by an agent, 
        or any person acting on behalf of an agent, made for the purpose 
        of selling or attempting to sell insurance, when either the 
        agent or a person acting for the agent contacts the buyer by 
        telephone or in person, except:  (i) an attempted sale in which 
        the buyer personally knows the identity of the agent, the name 
        of the general agency, if any, which the agent represents, and 
        the fact that the agent is an insurance agent; (ii) an attempted 
        sale in which the prospective purchaser of insurance initiated 
        the contact; or (iii) a personal contact which takes place at 
        the agent's place of business.  
           (b)  [DISCLOSURE REQUIREMENT.] Before a personal 
        solicitation, the agent or person acting for an agent shall, at 
        the time of initial personal contact with the potential buyer, 
        clearly and expressly disclose in writing:  
           (1) the name and state insurance agent license number of 
        the person making the contact; 
           (2) the name of the agent, general agency, or insurer that 
        person represents; and 
           (3) the fact that the agent, agency, or insurer is in the 
        business of selling insurance.  
           If the initial personal contact is made by telephone, the 
        disclosures required by this subdivision need not be made in 
        writing. 
           (c)  [FALSE REPRESENTATION OF GOVERNMENT AFFILIATION.] No 
        agent or person acting for an agent shall make any communication 
        to a potential buyer that indicates or gives the impression that 
        the agent is acting on behalf of a government agency. 
           Sec. 9.  Minnesota Statutes 1999 Supplement, section 
        60K.19, subdivision 8, is amended to read: 
           Subd. 8.  [MINIMUM EDUCATION REQUIREMENT.] Each person 
        subject to this section shall complete a minimum of 30 credit 
        hours of courses accredited by the commissioner during each 
        24-month licensing period, two hours of which must be devoted to 
        state law, regulations, and rules applicable to the line or 
        lines of insurance for which the agent is licensed.  Any person 
        whose initial licensing period extends more than six months 
        shall complete 15 hours of courses accredited by the 
        commissioner during the initial license period.  Any person 
        teaching or lecturing at an accredited course qualifies for 
        1-1/2 times the number of credit hours that would be granted to 
        a person completing the accredited course.  No more than 15 
        credit hours per licensing period may be credited to a person 
        for courses sponsored by, offered by, or affiliated with an 
        insurance company or its agents.  Courses sponsored by, offered 
        by, or affiliated with an insurance company or agent may 
        restrict its students to agents of the company or agency. 
           Sec. 10.  Minnesota Statutes 1998, section 61A.092, 
        subdivision 6, is amended to read: 
           Subd. 6.  [APPLICATION.] This section applies to a policy, 
        certificate of insurance, or similar evidence of coverage issued 
        to a Minnesota resident or issued to provide coverage to a 
        Minnesota resident.  This section does not apply to:  (1) a 
        certificate of insurance or similar evidence of coverage that 
        meets the conditions of section 61A.093, subdivision 2; or (2) a 
        group life insurance policy that contains a provision permitting 
        the certificate holder, upon termination or layoff from 
        employment, to retain the coverage provided under the group 
        policy by paying premiums directly to the insurer, provided that 
        the employer shall give the employee notice of the employee's 
        and each related certificate holder's right to continue the 
        insurance by paying premiums directly to the insurer.  A related 
        certificate holder is an insured spouse or dependent child of 
        the employee.  Upon termination of this group policy, each 
        covered employee, spouse, and dependent child is entitled to 
        have issued to them a life conversion policy as prescribed in 
        section 61A.09, subdivision 1, paragraph (h). 
           Sec. 11.  Minnesota Statutes 1998, section 62A.136, is 
        amended to read: 
           62A.136 [DENTAL AND VISION PLAN COVERAGE.] 
           The following provisions do not apply to health plans 
        providing dental or vision coverage only:  sections 62A.041; 
        62A.0411; 62A.047; 62A.149; 62A.151; 62A.152; 62A.154; 62A.155; 
        62A.17, subdivision 6; 62A.21, subdivision 2b; 62A.26; 
        62A.28; and 62A.285; 62A.30; 62A.304; 62A.3093; and 62E.16. 
           Sec. 12.  Minnesota Statutes 1998, section 62C.11, 
        subdivision 1, is amended to read: 
           Subdivision 1.  A service plan corporation shall annually 
        on or before the last day of March, file with the commissioner a 
        financial statement, in such form as the commissioner shall 
        prescribe, verified by not less than two of its principal 
        officers, showing the financial condition of the corporation as 
        of December 31 of the preceding year.  The statement shall 
        include an audit report certified by an independent certified 
        public accountant and reconciled and adjusted to conform to the 
        financial statement.  
           Sec. 13.  Minnesota Statutes 1998, section 62C.142, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [CONTINUATION PRIVILEGE.] Every subscriber 
        contract, other than a contract whose continuance is contingent 
        upon continued employment or membership, shall contain a 
        provision which permits continuation of coverage under the 
        contract for the subscriber's former spouse and children upon 
        entry of a valid decree of dissolution of marriage, if the 
        decree requires the subscriber to provide continued coverage for 
        those persons.  The coverage may be continued until the earlier 
        of the following dates:  
           (a) the date of remarriage of either the subscriber or the 
        subscriber's former spouse becomes covered under any other group 
        health plan; or 
           (b) the date coverage would otherwise terminate under the 
        subscriber contract.  
           The contract must require the group contract holder to, 
        upon request, provide the insured with written verification from 
        the insurer of the cost of this coverage promptly at the time of 
        eligibility for this coverage and at any time during the 
        continuation period.  In no event shall the amount of premium 
        charged exceed 102 percent of the cost to the plan for such 
        period of coverage for other similarly situated spouses and 
        dependent children with respect to whom the marital relationship 
        has not dissolved, without regard to whether such cost is paid 
        by the employer or employee. 
           Sec. 14.  Minnesota Statutes 1998, section 62E.04, 
        subdivision 4, is amended to read: 
           Subd. 4.  [MAJOR MEDICAL COVERAGE.] Each insurer and 
        fraternal shall affirmatively offer coverage of major medical 
        expenses to every applicant who applies to the insurer or 
        fraternal for a new unqualified policy, which has a lifetime 
        benefit limit of less than $1,000,000, at the time of 
        application and annually to every holder of such an unqualified 
        policy of accident and health insurance renewed by the insurer 
        or fraternal.  The coverage shall provide that when a covered 
        individual incurs out-of-pocket expenses of $5,000 or more 
        within a calendar year for services covered in section 62E.06, 
        subdivision 1, benefits shall be payable, subject to any 
        copayment authorized by the commissioner, up to a maximum 
        lifetime limit of $500,000.  The offer of coverage of major 
        medical expenses may consist of the offer of a rider on an 
        existing unqualified policy or a new policy which is a qualified 
        plan. 
           Sec. 15.  Minnesota Statutes 1998, section 62H.10, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BROKER.] "Broker" means an agent engaged in 
        brokerage business pursuant to section 60K.08 60K.081. 
           Sec. 16.  Minnesota Statutes 1999 Supplement, section 
        62J.535, subdivision 2, is amended to read: 
           Subd. 2.  [COMPLIANCE.] (a) Concurrent with the effective 
        dates date of required compliance established under United 
        States Code, title 42, sections 1320d to 1320d-8, as amended 
        from time to time, for uniform electronic billing standards, all 
        health care providers must conform to the uniform billing 
        standards developed under subdivision 1. 
           (b) Notwithstanding paragraph (a), the requirements for the 
        uniform remittance advice report shall be effective 12 months 
        after the date of the required compliance of the standards for 
        the electronic remittance advice transaction are effective under 
        United States Code, title 42, sections 1320d to 1320d-8, as 
        amended from time to time. 
           Sec. 17.  Minnesota Statutes 1998, section 62S.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUIREMENTS.] A qualified long-term care 
        insurance policy may not be offered, issued, delivered, or 
        renewed in this state unless the policy satisfies the 
        requirements of this chapter and the filing provisions of 
        section 62A.02.  A qualified long-term care insurance policy 
        must cover qualified long-term care services. 
           Sec. 18.  Minnesota Statutes 1998, section 64B.30, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [VISITATION AND EXAMINATION.] The 
        commissioner, or any person the commissioner may appoint, shall 
        have the power of visitation and examination into the affairs of 
        any domestic society.  The commissioner shall conduct an 
        examination at least once in every three years as often as is 
        required in section 60A.031, subdivision 1.  The commissioner 
        may: 
           (1) employ assistance for the purposes of examination and 
        the commissioner, or any person the commissioner may appoint, 
        shall have free access to any books, papers, and documents that 
        relate to the business of the association; and 
           (2) summon and qualify as witnesses, under oath, and 
        examine its officers, agents, and employees, or other persons, 
        in relation to the affairs, transactions, and condition of the 
        association. 
           Sec. 19.  Minnesota Statutes 1998, section 65B.29, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INSURANCE REQUIRED.] No motor vehicle service 
        contract may be issued, sold, or offered for sale in this state 
        unless the provider of the service contract is insured under a 
        motor vehicle service contract reimbursement insurance policy 
        issued by an insurer authorized to do business in this 
        state.  Insurers issuing such a policy are required to have 
        capital and surplus equal to at least $5,000,000 at the end of 
        the preceding year.  Capital and surplus must be calculated 
        using the accounting standards required by section 60A.13. 
           Sec. 20.  Minnesota Statutes 1998, section 65B.29, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FILING REQUIREMENTS.] No motor vehicle service 
        contract may be issued, sold, or offered for sale in this state 
        unless a true and correct copy of the service contract and the 
        provider's reimbursement insurance policy have been filed with 
        the commissioner and either (1) the commissioner has approved it 
        or (2) 60 days have elapsed and the commissioner has not 
        disapproved it as misleading or violative of public policy.  The 
        commissioner may, by written notice to the provider, extend the 
        review for an additional period not to exceed 60 days. 
           Sec. 21.  Minnesota Statutes 1998, section 72A.20, 
        subdivision 17, is amended to read: 
           Subd. 17.  [RETURN OF PREMIUMS.] (a) Refusing, upon 
        surrender of an individual policy of life insurance in the case 
        of the insured's death, or in the case of a surrender prior to 
        death, of an individual insurance policy not covered by the 
        standard nonforfeiture laws under section 61A.24, to refund to 
        the owner all unearned premiums paid on the policy covering the 
        insured as of the time of the insured's death or surrender if 
        the unearned premium is for a period of more than one 
        month.  The return of unearned premium must be delivered to the 
        insured within 30 days following receipt by the insurer of the 
        insured's request for cancellation.  
           (b) Refusing, upon termination or cancellation of a policy 
        of automobile insurance under section 65B.14, subdivision 2, or 
        a policy of homeowner's insurance under section 65A.27, 
        subdivision 4, or a policy of accident and sickness insurance 
        under section 62A.01, or a policy of comprehensive health 
        insurance under chapter 62E, to refund to the insured all 
        unearned premiums paid on the policy covering the insured as of 
        the time of the termination or cancellation if the unearned 
        premium is for a period of more than one month.  The return of 
        unearned premium must be delivered to the insured within 30 days 
        following receipt by the insurer of the insured's request for 
        cancellation. 
           (c) This subdivision does not apply to policies of 
        insurance providing coverage only for motorcycles or other 
        seasonally rated or limited use vehicles where the rate is 
        reduced to reflect seasonal or limited use. 
           (d) For purposes of this section, a premium is unearned 
        during the period of time the insurer has not been exposed to 
        any risk of loss.  Except for premiums for motorcycle coverage 
        or other seasonally rated or limited use vehicles where the rate 
        is reduced to reflect seasonal or limited use, the unearned 
        premium is determined by multiplying the premium by the fraction 
        that results from dividing the period of time from the date of 
        termination to the date the next scheduled premium is due by the 
        period of time for which the premium was paid. 
           (e) The owner may cancel a policy referred to in this 
        section at any time during the policy period.  This provision 
        supersedes any inconsistent provision of law or any inconsistent 
        policy provision. 
           Sec. 22.  Minnesota Statutes 1999 Supplement, section 
        72A.20, subdivision 23, is amended to read: 
           Subd. 23.  [DISCRIMINATION IN AUTOMOBILE INSURANCE 
        POLICIES.] (a) No insurer that offers an automobile insurance 
        policy in this state shall: 
           (1) use the employment status of the applicant as an 
        underwriting standard or guideline; or 
           (2) deny coverage to a policyholder for the same reason. 
           (b) No insurer that offers an automobile insurance policy 
        in this state shall: 
           (1) use the applicant's status as a residential tenant, as 
        the term is defined in section 504B.001, subdivision 12, as an 
        underwriting standard or guideline; or 
           (2) deny coverage to a policyholder for the same reason; or 
           (3) make any discrimination in offering or establishing 
        rates, premiums, dividends, or benefits of any kind, or by way 
        of rebate, for the same reason.  
           (c) No insurer that offers an automobile insurance policy 
        in this state shall: 
           (1) use the failure of the applicant to have an automobile 
        policy in force during any period of time before the application 
        is made as an underwriting standard or guideline; or 
           (2) deny coverage to a policyholder for the same reason. 
           This provision Paragraph (c) does not apply if the 
        applicant was required by law to maintain automobile insurance 
        coverage and failed to do so. 
           An insurer may require reasonable proof that the applicant 
        did not fail to maintain this coverage.  The insurer is not 
        required to accept the mere lack of a conviction or citation for 
        failure to maintain this coverage as proof of failure to 
        maintain coverage.  The insurer must provide the applicant with 
        information identifying the documentation that is required to 
        establish reasonable proof that the applicant did not fail to 
        maintain the coverage. 
           (d) No insurer that offers an automobile insurance policy 
        in this state shall use an applicant's prior claims for benefits 
        paid under section 65B.44 as an underwriting standard or 
        guideline if the applicant was 50 percent or less negligent in 
        the accident or accidents causing the claims. 
           (e) No insurer shall refuse to issue any standard or 
        preferred policy of motor vehicle insurance or make any 
        discrimination in the acceptance of risks, in rates, premiums, 
        dividends, or benefits of any kind, or by way of rebate:  
           (1) between persons of the same class, or 
           (2) on account of race, or 
           (3) on account of physical handicap if the handicap is 
        compensated for by special training, equipment, prosthetic 
        device, corrective lenses, or medication and if the physically 
        handicapped person: 
           (i) is licensed by the department of public safety to 
        operate a motor vehicle in this state, and 
           (ii) operates only vehicles that are equipped with 
        auxiliary devices and equipment necessary for safe and effective 
        operation by the handicapped person, or 
           (4) on account of marital dissolution.  
           Sec. 23.  Minnesota Statutes 1998, section 72A.499, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTICE AND INFORMATION.] (a) In the event 
        of an adverse underwriting decision, the insurer or insurance 
        agent responsible for the decision shall provide in writing to 
        the applicant, policyholder, or individual proposed for coverage:
           (1) the specific reason or reasons for the adverse 
        underwriting decision, a summary of the person's rights under 
        sections 72A.497 and 72A.498, and that upon request the person 
        may receive the specific items of personal information that 
        support those reasons and the specific sources of the 
        information; or 
           (2) the specific reason or reasons for the adverse 
        underwriting decision, the specific items of personal and 
        privileged information that support those reasons, the names and 
        addresses of the sources that supplied the specific items of 
        information specified, and a summary of the rights established 
        under sections 72A.497 and 72A.498.  
           (b) In addition to the requirements of paragraph (a), if 
        the adverse underwriting decision is either solely or partially 
        based upon a report of credit worthiness, credit standing, or 
        credit capacity that an insurer receives from a consumer 
        reporting agency, the insurer or insurance agent responsible for 
        the decision shall provide in writing to the applicant, 
        policyholder, or individual proposed for coverage the primary 
        reason or reasons for the credit score or other credit based 
        information used by the insurer in the insurer's adverse 
        underwriting decision. 
           Sec. 24.  Minnesota Statutes 1998, section 79A.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ANNUAL SECURING OF LIABILITY.] Each year 
        every private self-insuring employer shall secure incurred 
        liabilities for the payment of compensation and the performance 
        of the its obligations and the obligations of all self-insuring 
        employers imposed under chapter 176 by renewing the prior year's 
        security deposit or by making a new deposit of security.  If a 
        new deposit is made, it must be posted within 60 days of the 
        filing of the self-insured employer's annual report with the 
        commissioner, but in no event later than July 1. 
           Sec. 25.  Minnesota Statutes 1998, section 79A.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MINIMUM DEPOSIT.] The minimum deposit is 110 
        percent of the private self-insurer's estimated future liability.
        Up to ten percent of that The deposit may be used to secure 
        payment of all administrative and legal costs, and unpaid 
        assessments required by section 79A.12, subdivision 2, relating 
        to or arising from the employer's its or other employers' 
        self-insuring.  As used in this section, "private self-insurer" 
        includes both current and former members of the self-insurers' 
        security fund; and "private self-insurers' estimated future 
        liability" means the private self-insurers' total of estimated 
        future liability as determined by an Associate or Fellow of the 
        Casualty Actuarial Society every year for group member private 
        self-insurers and, for a nongroup member private self-insurer's 
        authority to self-insure, every year for the first five years.  
        After the first five years, the nongroup member's total shall be 
        as determined by an Associate or Fellow of the Casualty 
        Actuarial Society at least every two years, and each such 
        actuarial study shall include a projection of future losses 
        during the period until the next scheduled actuarial study, less 
        payments anticipated to be made during that time.  
           All data and information furnished by a private 
        self-insurer to an Associate or Fellow of the Casualty Actuarial 
        Society for purposes of determining private self-insurers' 
        estimated future liability must be certified by an officer of 
        the private self-insurer to be true and correct with respect to 
        payroll and paid losses, and must be certified, upon information 
        and belief, to be true and correct with respect to reserves.  
        The certification must be made by sworn affidavit.  In addition 
        to any other remedies provided by law, the certification of 
        false data or information pursuant to this subdivision may 
        result in a fine imposed by the commissioner of commerce on the 
        private self-insurer up to the amount of $5,000, and termination 
        of the private self-insurers' authority to self-insure.  The 
        determination of private self-insurers' estimated future 
        liability by an Associate or Fellow of the Casualty Actuarial 
        Society shall be conducted in accordance with standards and 
        principles for establishing loss and loss adjustment expense 
        reserves by the Actuarial Standards Board, an affiliate of the 
        American Academy of Actuaries.  The commissioner may reject an 
        actuarial report that does not meet the standards and principles 
        of the Actuarial Standards Board, and may further disqualify the 
        actuary who prepared the report from submitting any future 
        actuarial reports pursuant to this chapter.  Within 30 days 
        after the actuary has been served by the commissioner with a 
        notice of disqualification, an actuary who is aggrieved by the 
        disqualification may request a hearing to be conducted in 
        accordance with chapter 14.  Based on a review of the actuarial 
        report, the commissioner of commerce may require an increase in 
        the minimum security deposit in an amount the commissioner 
        considers sufficient. 
           Estimated future liability is determined by first taking 
        the total amount of the self-insured's future liability of 
        workers' compensation claims and then deducting the total amount 
        which is estimated to be returned to the self-insurer from any 
        specific excess insurance coverage, aggregate excess insurance 
        coverage, and any supplementary benefits or second injury 
        benefits which are estimated to be reimbursed by the special 
        compensation fund. Supplementary benefits or second injury 
        benefits will not be reimbursed by the special compensation fund 
        unless the special compensation fund assessment pursuant to 
        section 176.129 is paid and the reports required thereunder are 
        filed with the special compensation fund.  In the case of surety 
        bonds, bonds shall secure administrative and legal costs in 
        addition to the liability for payment of compensation reflected 
        on the face of the bond.  In no event shall the security be less 
        than the last retention limit selected by the self-insurer with 
        the workers' compensation reinsurance association, provided that 
        the commissioner may allow former members to post less than the 
        workers' compensation reinsurance association retention level if 
        that amount is adequate to secure payment of the self-insurers' 
        estimated future liability, as defined in this subdivision, 
        including payment of claims, administrative and legal costs, and 
        unpaid assessments required by section 79A.12, subdivision 2.  
        The posting or depositing of security pursuant to this section 
        shall release all previously posted or deposited security from 
        any obligations under the posting or depositing and any surety 
        bond so released shall be returned to the surety.  Any other 
        security shall be returned to the depositor or the person 
        posting the bond. 
           As a condition for the granting or renewing of a 
        certificate to self-insure, the commissioner may require a 
        private self-insurer to furnish any additional security the 
        commissioner considers sufficient to insure payment of all 
        claims under chapter 176. 
           Sec. 26.  Minnesota Statutes 1998, section 79A.04, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PERFECTION OF SECURITY.] Upon the commissioner 
        sending a request to renew, request to post, or request to 
        increase a security deposit, a perfected security interest is 
        created in the private self-insured's assets in favor of the 
        commissioner to the extent of any then unsecured portion of the 
        self-insured's incurred liabilities.  That perfected security 
        interest is transferred to any cash or securities thereafter 
        posted by the private self-insured with the state treasurer and 
        is released only upon either of the following: 
           (1) the acceptance by the commissioner of a surety bond or 
        irrevocable letter of credit for the full amount of the incurred 
        liabilities for the payment of compensation; or 
           (2) the return of cash or securities by the commissioner. 
           The private self-insured employer loses all right, title, 
        and interest in and any right to control all assets or 
        obligations posted or left on deposit as security.  In the event 
        of a declaration of bankruptcy or insolvency by a court of 
        competent jurisdiction that a private self-insurer is the 
        subject of a voluntary or involuntary petition under the United 
        States Bankruptcy Code, title 11, or a court of competent 
        jurisdiction has declared the private self-insurer to be 
        bankrupt or insolvent, or in the event of the issuance of a 
        certificate of default by the commissioner, the commissioner 
        shall liquidate the deposit as provided in this chapter, and 
        transfer it to the self-insurer's security fund for application 
        to the self-insured employer's incurred liability and other 
        current or future obligations of the self-insurers' security 
        fund.  In the event that a private self-insurer is the subject 
        of a voluntary or involuntary petition under the United States 
        Bankruptcy Code, title 11, or a court of competent jurisdiction 
        has declared the private self-insurer to be bankrupt or 
        insolvent, or in the event of the issuance of a certificate of 
        default by the commissioner, all right, title, and interest in 
        and any right to control all assets or obligations which have 
        been posted or deposited as security must be transferred to the 
        self-insurers' security fund. 
           Sec. 27.  Minnesota Statutes 1998, section 79A.04, 
        subdivision 9, is amended to read: 
           Subd. 9.  [INSOLVENCY, BANKRUPTCY, OR DEFAULT; UTILIZATION 
        OF SECURITY DEPOSIT.] The commissioner of labor and industry 
        shall notify the commissioner and the security fund if the 
        commissioner of labor and industry has knowledge that any 
        private self-insurer has failed to pay workers' compensation 
        benefits as required by chapter 176.  If the commissioner 
        determines that a private self-insurer is the subject of a 
        voluntary or involuntary petition under the United States 
        Bankruptcy Code, title 11, or the commissioner determines that a 
        court of competent jurisdiction has declared the private 
        self-insurer to be bankrupt or insolvent, and the private 
        self-insurer has failed to pay workers' compensation as required 
        by chapter 176 or, if the commissioner issues a certificate of 
        default against a private self-insurer for failure to pay 
        workers' compensation as required by chapter 176, or failure to 
        pay an assessment to the self-insurers' security fund when due, 
        then the security deposit shall be utilized to administer and 
        pay the private self-insurers' workers' compensation or 
        assessment obligations or any other current or future 
        obligations of the self-insurers' security fund.  
           Sec. 28.  Minnesota Statutes 1998, section 79A.11, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SECURITY DEPOSITS.] The security fund shall have 
        the right and obligation to obtain from and retain the security 
        deposit of an insolvent private self-insurer the amount of to 
        apply to the private self-insurer's current or future 
        compensation obligations, including reasonable administrative 
        and legal costs, paid or assumed by the security fund and to 
        other current or future obligations of the security fund.  
        Reimbursement of administrative costs, including legal costs, 
        shall be subject to approval by a majority of the security 
        fund's voting trustees.  The security fund shall be a party in 
        interest in any action to obtain the security deposit for the 
        payment of compensation obligations of an insolvent self-insurer.
           Sec. 29.  Minnesota Statutes 1998, section 79A.11, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [REPLACEMENT INSURANCE POLICY.] The insolvent 
        self-insurer may obtain an insurance policy as described in 
        section 79A.06, subdivision 5, to discharge further workers' 
        compensation obligations assumed by the self-insurers' security 
        fund on behalf of the insolvent insurer.  At the self-insurers' 
        security fund's option and in its sole discretion, any part of 
        the insolvent self-insurer's security deposit may be used to 
        fund the acquisition of this policy.  After the security deposit 
        has been used to:  (1) fund the acquisition of this policy; (2) 
        pay all direct and indirect administrative and professional 
        expenses of the fund related to the insolvent self-insurer; and 
        (3) to the extent not covered by the insurance policy, pay the 
        insolvent self-insurer's losses, allocated loss expense and 
        unallocated loss expense, any part of the insolvent 
        self-insurer's security deposit that remains must be promptly 
        returned to the insolvent self-insurer. 
           Sec. 30.  Minnesota Statutes 1999 Supplement, section 
        79A.22, subdivision 2, is amended to read: 
           Subd. 2.  [FINANCIAL STANDARDS.] Commercial self-insurance 
        groups shall have and maintain: 
           (1) combined net worth of all of the members in an amount 
        at least equal to 12 ten times the group's selected retention 
        level of the workers' compensation reinsurance association.  For 
        purposes of this clause, the amount of any retained surplus by 
        the group is considered part of the combined net worth of all 
        the members; 
           (2) sufficient assets and liquidity in the group's common 
        claims fund to promptly and completely meet all obligations of 
        its members under this chapter and chapter 176. 
           Sec. 31.  Minnesota Statutes 1998, section 79A.22, 
        subdivision 3, is amended to read: 
           Subd. 3.  [NEW MEMBERSHIP.] The commercial self-insurance 
        group shall file with the commissioner the name of any new 
        employer that has been accepted in the group prior to the 
        initiation date of membership along with the member's signed 
        indemnity agreement and evidence the member has deposited 
        sufficient premiums with the group as required by the commercial 
        self-insurance group's bylaws or plan of operation.  The 
        security deposit of the group will shall be increased quarterly 
        to an amount equal to 50 percent of the new member's premium 
        members' premiums for that quarter.  If the total increase of 
        new members' premiums for the first quarter is less than five 
        percent of the total annual premium of the group, no quarterly 
        increase is necessary until the cumulative quarterly increases 
        for that calendar year exceed five percent of the total premium 
        of the group.  The department of commerce commissioner may, at 
        its the commissioner's option, review the financial statement of 
        any applicant whose premium equals 25 percent or more of the 
        group's total premium. 
           Sec. 32.  Minnesota Statutes 1998, section 79A.22, 
        subdivision 11, is amended to read: 
           Subd. 11.  [DISBURSEMENT OF FUND SURPLUS.] (a) One hundred 
        percent of any surplus money for a fund year in excess of 125 
        percent of the amount necessary to fulfill all obligations under 
        the Workers' Compensation Act, chapter 176, for that fund year 
        may be declared refundable to a member at any time.  The date 
        shall be no earlier than 18 months following the end of such 
        fund year.  The first disbursement of fund surplus may not be 
        made prior to the completion of an operational audit by the 
        commissioner written approval of the commissioner.  There can be 
        no more than one refund made in any 12-month period.  When all 
        the claims of any one fund year have been fully paid, as 
        certified by an actuary, all surplus money from that fund year 
        may be declared refundable. 
           (b) The commercial self-insurance group shall give notice 
        to the commissioner of any refund.  Said notice shall be 
        accompanied by a statement from the commercial self-insurer 
        group's certified public accountant certifying that the proposed 
        refund is in compliance with paragraph (a). 
           Sec. 33.  Minnesota Statutes 1999 Supplement, section 
        79A.23, subdivision 1, is amended to read: 
           Subdivision 1.  [REQUIRED REPORTS TO COMMISSIONER.] Each 
        commercial self-insurance group shall submit the following 
        documents to the commissioner.  
           (a) An annual report shall be submitted by April 1 showing 
        the incurred losses, paid and unpaid, specifying indemnity and 
        medical losses by classification, payroll by classification, and 
        current estimated outstanding liability for workers' 
        compensation on a calendar year basis, in a manner and on forms 
        available from the commissioner.  In addition each group will 
        submit a quarterly interim loss report showing incurred losses 
        for all its membership. 
           (b) Each commercial self-insurance group shall submit 
        within 45 days of the end of each quarter:  
           (1) a schedule showing all the members who participate in 
        the group, their date of inception, and date of withdrawal, if 
        applicable; 
           (2) a separate section identifying which members were added 
        or withdrawn during that quarter; and 
           (3) an internal financial statement and copies of the 
        fiscal agent's statements supporting the balances in the common 
        claims fund. 
           (c) The commercial self-insurance group shall submit an 
        annual certified financial audit report of the commercial 
        self-insurance group fund by April 1 of the following year.  The 
        report must be accompanied by an expense schedule showing the 
        commercial self-insurance group's operational costs for the same 
        year including service company charges, accounting and actuarial 
        fees, fund administration charges, reinsurance premiums, 
        commissions, and any other costs associated with the 
        administration of the group program. 
           (d) An officer of the commercial self-insurance group 
        shall, under oath, attest to the accuracy of each report 
        submitted under paragraphs (a), (b), and (c).  Upon sufficient 
        cause, the commissioner shall require the commercial 
        self-insurance group to submit a certified audit of payroll and 
        claim records conducted by an independent auditor approved by 
        the commissioner, based on generally accepted accounting 
        principles and generally accepted auditing standards, and 
        supported by an actuarial review and opinion of the future 
        contingent liabilities.  The basis for sufficient cause shall 
        include the following factors: 
           (1) where the losses reported appear significantly 
        different from similar types of groups; 
           (2) where major changes in the reports exist from year to 
        year, which are not solely attributable to economic factors; or 
           (3) where the commissioner has reason to believe that the 
        losses and payroll in the report do not accurately reflect the 
        losses and payroll of the commercial self-insurance group.  
        If any discrepancy is found, the commissioner shall require 
        changes in the commercial self-insurance group's business plan 
        or service company recordkeeping practices. 
           (e) Each commercial self-insurance group shall submit by 
        September 15 a copy of the group's annual federal and state 
        income tax returns or provide proof that it has received an 
        exemption from these filings. 
           (f) With the annual loss report each commercial 
        self-insurance group shall report to the commissioner any 
        worker's compensation claim where the full, undiscounted value 
        is estimated to exceed $50,000, in a manner and on forms 
        prescribed by the commissioner. 
           (g) Each commercial self-insurance group shall submit by 
        May 1 a list of all members and the percentage of premium each 
        represents to the total group's premium for the previous 
        calendar year.  
           (h) Each commercial self-insurance group shall submit by 
        October 15 the following documents prepared by the group's 
        certified public accountant:  
           (1) a compiled combined financial statement of group 
        members and a list of members included in this statement.  An 
        "Agreed Upon Procedures" report, as determined by the 
        commissioner, indicating combined net worth, total assets, cash 
        flow, and net income of the group members may be filed in lieu 
        of the compiled combined financial statement; and 
           (2) a report that the statements which were combined have 
        met the requirements of subdivision 2.  
           (i) If any group member comprises over 25 percent of total 
        group premium, that member's financial statement must be 
        reviewed or audited, and, at the commissioner's option, must be 
        filed with the department of commerce commissioner by October 15 
        of the following year. 
           (j) Each commercial self-insurance group shall submit a 
        copy of each member's accountant's report letter from the 
        reports used in compiling the combined financial 
        statements.  This requirement does not apply to any group that 
        has been in existence for at least three years. 
           Sec. 34.  Minnesota Statutes 1999 Supplement, section 
        79A.23, subdivision 2, is amended to read: 
           Subd. 2.  [REQUIRED REPORTS FROM MEMBERS TO GROUP.] (a) 
        Each member of the commercial self-insurance group shall, by 
        September 15, submit to the group its most recent annual 
        financial statement, together with other financial information 
        the group may require.  These financial statements submitted 
        must not have a fiscal year end date older than January 15 of 
        the group's calendar year end.  Individual group members 
        constituting at least 25 percent of the group's annual premium 
        shall submit to the group reviewed or audited financial 
        statements.  The remaining members must submit compilation level 
        statements.  
           (b) For groups that have been in existence for at least 
        three years, individual group members may satisfy the 
        requirements of paragraph (a) by submitting compiled, reviewed, 
        or audited statements or the most recent federal income tax 
        return filed by the member. 
           Sec. 35.  Minnesota Statutes 1999 Supplement, section 
        79A.23, subdivision 3, is amended to read: 
           Subd. 3.  [OPERATIONAL AUDIT.] (a) The commissioner, prior 
        to authorizing surplus distribution of a commercial 
        self-insurance group's first fund year or no later than after 
        the third anniversary of the group's authority to self-insure, 
        shall may conduct an operational audit of the commercial 
        self-insurance group's claim handling and reserve practices as 
        well as its underwriting procedures to determine if they adhere 
        to the group's business plan.  The commissioner may select 
        outside consultants to assist in conducting the audit.  After 
        completion of the audit, the commissioner shall either renew or 
        revoke the commercial self-insurance group's authority to 
        self-insure.  The commissioner may also order any changes deemed 
        necessary in the claims handling, reserving practices, or 
        underwriting procedures of the group. 
           (b) The cost of the operational audit shall be borne by the 
        commercial self-insurance group. 
           Sec. 36.  Minnesota Statutes 1999 Supplement, section 
        79A.24, subdivision 2, is amended to read: 
           Subd. 2.  [MINIMUM DEPOSIT.] The minimum deposit is 125 
        percent of the commercial self-insurance group's estimated 
        future liability for the payment of compensation as determined 
        by an actuary.  If all the members of the commercial 
        self-insurance group have submitted reviewed or audited 
        financial statements to the group's accountant has been in 
        existence for three years, this minimum deposit shall be 110 
        percent of the commercial self-insurance group's estimated 
        future liability for the payment of workers' compensation as 
        determined by an actuary.  The group must file a letter with the 
        commissioner from the group's accountant which confirms that the 
        compiled combined financial statements were prepared from 
        members reviewed or audited financial statements only before the 
        lower security deposit is allowed.  Each actuarial study shall 
        include a projection of future losses during a one-year period 
        until the next scheduled actuarial study, less payments 
        anticipated to be made during that time.  Deduction should be 
        made for the total amount which is estimated to be returned to 
        the commercial self-insurance group from any specific excess 
        insurance coverage, aggregate excess insurance coverage, and any 
        supplementary benefits which are estimated to be reimbursed by 
        the special compensation fund.  Supplementary benefits will not 
        be reimbursed by the special compensation fund unless the 
        special compensation fund assessment pursuant to section 176.129 
        is paid and the required reports are filed with the special 
        compensation fund.  In the case of surety bonds, bonds shall 
        secure administrative and legal costs in addition to the 
        liability for payment of compensation reflected on the face of 
        the bond.  In no event shall the security be less than the 
        group's selected retention limit of the workers' compensation 
        reinsurance association.  The posting or depositing of security 
        under this section shall release all previously posted or 
        deposited security from any obligations under the posting or 
        depositing and any surety bond so released shall be returned to 
        the surety.  Any other security shall be returned to the 
        depositor or the person posting the bond. 
           Sec. 37.  Minnesota Statutes 1998, section 80A.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  It is unlawful for any broker-dealer or issuer to 
        employ an agent as a representative in this state unless the 
        agent is licensed.  The licensing of an agent is not effective 
        during any period when the agent is not associated with a 
        specified broker-dealer licensed under this chapter or a 
        specified issuer.  No agent shall at any time represent more 
        than one broker-dealer or issuer, except that where 
        broker-dealers affiliated by direct common control are licensed 
        under this chapter, an agent may represent the broker-dealer.  
        When an agent begins or terminates employment with a 
        broker-dealer or issuer, or begins or terminates those 
        activities which make that person an agent, the agent as well as 
        the broker-dealer or issuer shall promptly notify the 
        commissioner or the commissioner's designated representative. 
           A broker-dealer or investment adviser is affiliated by 
        direct common control when 80 percent or more of the equity of 
        each broker-dealer or investment adviser is beneficially owned 
        by the same person or group of persons. 
           Sec. 38.  Minnesota Statutes 1998, 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 as described in section 80A.14, subdivision 9, clause 
        (3), 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, 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 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. 39.  Minnesota Statutes 1998, section 80A.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL GROUNDS.] The commissioner may by 
        order deny, suspend, or revoke any license or may censure the 
        licensee, if the commissioner finds (a) that the order is in the 
        public interest and (b) that the applicant or licensee or, in 
        the case of a broker-dealer or investment adviser, any partner, 
        officer, or director, any person occupying a similar status or 
        performing similar functions, or any person directly or 
        indirectly controlling the broker-dealer or investment adviser: 
           (1) has filed an application for license which as of its 
        effective date, or as of any date after filing in the case of an 
        order denying effectiveness, was incomplete in any material 
        respect or contained any statement which was, in light of the 
        circumstances under which it was made, false or misleading with 
        respect to any material fact; 
           (2) has willfully violated or failed to comply with any 
        provision of this chapter or a predecessor law or any provision 
        of the Securities Act of 1933, the Securities Exchange Act of 
        1934, the Investment Advisers Act of 1940, the Investment 
        Company Act of 1940, the Commodity Exchange Act, or any rule or 
        order under any of these statutes, of which that person has 
        notice and is subject; 
           (3) has been convicted, within the past ten years, of any 
        misdemeanor involving a security or any aspect of the securities 
        business, or any felony; 
           (4) is permanently or temporarily enjoined by any court of 
        competent jurisdiction from engaging in or continuing any 
        conduct or practice involving any aspect of the securities 
        business; 
           (5) is the subject of an order of the commissioner denying, 
        suspending, or revoking a license as a broker-dealer, agent or 
        investment adviser; 
           (6) is the subject of an order entered within the past five 
        years by the securities administrator of any other state or by 
        the securities and exchange commission, or any national 
        securities exchange or national securities association 
        registered under the Securities Exchange Act of 1934, denying or 
        revoking registration or license as a broker-dealer, agent, or 
        investment adviser, or is the subject of an order of the 
        securities and exchange commission or any national securities 
        exchange or national securities association registered under the 
        Securities Exchange Act of 1934, suspending, barring, or 
        expelling that person from a national securities exchange or 
        association registered under the Securities Exchange Act of 
        1934, or is the subject of a United States post office fraud 
        order.  The commissioner may not institute a revocation or 
        suspension proceeding under this clause more than one year from 
        the date of the order relied on, and may not enter an order 
        under this clause on the basis of an order under another state 
        law unless the order was based on facts which would currently 
        constitute a ground for an order under this section; 
           (7) has engaged in dishonest or fraudulent practices in the 
        securities business; 
           (8) has failed to maintain the minimum net capital or to 
        comply with the limitation on aggregate indebtedness which the 
        commissioner by rule prescribes; 
           (9) is not qualified on the basis of such factors as 
        training, experience, and knowledge of the securities business; 
           (10) has failed reasonably to supervise agents, investment 
        adviser representatives, or employees to assure their compliance 
        with this chapter; 
           (11) has failed to pay the proper filing fee, but the 
        commissioner shall vacate the order when the deficiency has been 
        corrected; 
           (12) has offered or sold securities in this state through 
        any unlicensed agent; 
           (13) has made any material misrepresentation to the 
        commissioner, or upon request reasonably made by the 
        commissioner, has withheld or concealed information from, or 
        refused to furnish information to, the commissioner; 
           (14) has failed to reasonably supervise agents, investment 
        adviser representatives, or employees if that person has assumed 
        or has been designated to carry out the supervisory procedures 
        of the broker-dealer or investment adviser; or 
           (15) has failed, within 20 business days after receiving 
        written instructions from a customer, to do any of the following:
           (a) transfer or deliver securities that have been 
        purchased; 
           (b) transfer or deliver any free credit balances reflecting 
        completed transactions; or 
           (c) transfer or deliver a customer's account securities 
        positions and balances to another broker-dealer. 
        This clause shall not serve as a basis for denial, suspension, 
        or revocation of a broker-dealer's or agent's license if:  (i) 
        the transfer or delivery is between broker-dealers and meets the 
        rules and requirements established by the New York Stock 
        Exchange with regard to the transfer or delivery; or (ii) the 
        delivery of securities to a customer cannot be accomplished 
        within 20 business days, and the broker-dealer or agent has 
        notified the customer in writing of the inability to deliver the 
        securities and the reasons for the nondelivery within 20 
        business days of receiving the customer's written instructions.  
           Sec. 40.  Minnesota Statutes 1998, section 80A.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  A registration statement under this section shall 
        contain the following information and be accompanied by the 
        following documents in addition to the information specified in 
        section 80A.12 and the consent to service of process required by 
        section 80A.27, subdivision 7; 
           (a) Two copies One copy of the latest form of prospectus 
        filed under the Securities Act of 1933; 
           (b) If the commissioner by rule or otherwise requires, a 
        copy of the articles of incorporation and bylaws (or their 
        substantial equivalent) currently in effect, a copy of any 
        agreements with or among underwriters, a copy of any indenture 
        or other instrument governing the issuance of the security to be 
        registered, and a specimen or copy of the security; 
           (c) If the commissioner requests, any other information, or 
        copies of any other documents, filed under the Securities Act of 
        1933; and 
           (d) An undertaking to forward all amendments to the federal 
        prospectus, other than an amendment which merely delays the 
        effective date of the registration statement, not later than the 
        first business day after the day they are forwarded to or filed 
        with the securities and exchange commission or such longer 
        period as the commissioner permits.  
           Sec. 41.  Minnesota Statutes 1999 Supplement, 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 in Minnesota 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 or 
           (2) no issuer shall make more than 25 sales of its 
        securities in Minnesota 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, 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 
        licensed, or exempt from 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. 
        This exemption only applies when the issuing cooperative is 
        seeking to raise up to $1,000,000. 
           (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. 42.  Minnesota Statutes 1998, section 80C.05, 
        subdivision 4, is amended to read: 
           Subd. 4.  An application for registration that has not 
        become effective will be considered withdrawn If no activity 
        occurs with respect to the an application for registration for a 
        period of 120 days, the commissioner may by order declare the 
        application withdrawn. 
           Sec. 43.  Minnesota Statutes 1998, section 80C.07, is 
        amended to read: 
           80C.07 [AMENDMENT OF REGISTRATION.] 
           A person with a registration in effect shall, within 30 
        days after the occurrence of any material change in the 
        information on file with the commissioner, notify the 
        commissioner in writing of the change by an application to amend 
        the registration accompanied by a fee of $100.  The commissioner 
        may by rule define what shall be considered a material change 
        for such purposes, and may determine the circumstances under 
        which a revised public offering statement must accompany the 
        application.  If the amendment is approved by the commissioner, 
        it shall become effective upon the issuance by the commissioner 
        of an order amending the registration.  
           The commissioner may withdraw an amendment application that 
        has not become effective.  If no activity occurs with respect to 
        the application for a period of 120 days, the commissioner may 
        by order declare the application withdrawn. 
           Sec. 44.  Minnesota Statutes 1998, 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 2001. 
           (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. 45.  Minnesota Statutes 1998, section 82A.04, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EFFECTIVE DATE.] Unless an order denying 
        registration under section 82A.12 is in effect, or unless 
        declared effective by order of the commissioner prior thereto, 
        the application for registration shall automatically become 
        effective upon the expiration of 15 business days following 
        filing with the commissioner, but an applicant may consent in 
        writing to the delay of registration until the time the 
        commissioner may issue an order of registration.  If the 
        commissioner requests additional information with respect to the 
        application, the application shall become effective upon the 
        expiration of 15 business days following the filing with the 
        commissioner of the additional information unless an order 
        denying registration under section 82A.12 is in effect or unless 
        declared effective by order of the commissioner prior thereto. 
        The registration is effective on the date the commissioner 
        declares by order. 
           Sec. 46.  Minnesota Statutes 1998, section 82A.04, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [WITHDRAWAL OF APPLICATION.] If no activity 
        occurs with respect to an application for a period of 120 days, 
        the commissioner may by order declare the application 
        withdrawn.  No part of the filing fee will be returned by the 
        commissioner if a registration application is withdrawn 
        according to this subdivision. 
           Sec. 47.  Minnesota Statutes 1998, section 82B.14, is 
        amended to read: 
           82B.14 [EXPERIENCE REQUIREMENT.] 
           (a) 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.  At least 
        50 percent, or 1,500 hours, must be in nonresidential appraisal 
        work. 
           (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 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. 48.  Minnesota Statutes 1998, section 83.23, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [WITHDRAWAL OF APPLICATION.] If no activity 
        occurs with respect to an application for a period of 120 days, 
        the commissioner may by order declare the application 
        withdrawn.  No part of the filing fee will be returned by the 
        commissioner if a registration application is withdrawn 
        according to this subdivision. 
           Sec. 49.  Minnesota Statutes 1998, section 308A.711, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ALTERNATE PROCEDURE TO DISBURSE PROPERTY.] 
        Notwithstanding the provisions of section 345.43, a cooperative 
        may, in lieu of paying or delivering to the commissioner of 
        commerce the unclaimed property specified in its report of 
        unclaimed property, distribute the unclaimed property to a 
        corporation or organization that is exempt from taxation under 
        section 290.05, subdivision 1, paragraph (b), or 2.  A 
        cooperative making the election to distribute unclaimed property 
        shall, within 20 days after the time specified in section 345.42 
        for claiming the property from the holder, 85 days following the 
        publication of lists of abandoned property file with the 
        commissioner of commerce: 
           (1) a verified written explanation of the proof of claim of 
        an owner establishing a right to receive the abandoned property; 
           (2) any errors in the presumption of abandonment; 
           (3) the name, address, and exemption number of the 
        corporation or organization to which the property was or is to 
        be distributed; and 
           (4) the approximate date of distribution. 
           Sec. 50.  Minnesota Statutes 1998, section 326.975, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERALLY.] (a) In addition to any other 
        fees, each applicant for a license under sections 326.83 to 
        326.98 shall pay a fee to the contractor's recovery fund.  The 
        contractor's recovery fund is created in the state treasury and 
        must be administered by the commissioner in the manner and 
        subject to all the requirements and limitations provided by 
        section 82.34 with the following exceptions: 
           (1) each licensee who renews a license shall pay in 
        addition to the appropriate renewal fee an additional fee which 
        shall be credited to the contractor's recovery fund.  The amount 
        of the fee shall be based on the licensee's gross annual 
        receipts for the licensee's most recent fiscal year preceding 
        the renewal, on the following scale: 
                  Fee           Gross Receipts
                  $100          under $1,000,000
                  $150          $1,000,000 to $5,000,000
                  $200          over $5,000,000
        Any person who receives a new license shall pay a fee based on 
        the same scale; 
           (2) the sole purpose of this fund is to compensate any 
        aggrieved owner or lessee of residential property located within 
        this state who obtains a final judgment in any court of 
        competent jurisdiction against a licensee licensed under section 
        326.84, on grounds of fraudulent, deceptive, or dishonest 
        practices, conversion of funds, or failure of performance 
        arising directly out of any transaction when the judgment debtor 
        was licensed and performed any of the activities enumerated 
        under section 326.83, subdivision 19, on the owner's residential 
        property or on residential property rented by the lessee, or on 
        new residential construction which was never occupied prior to 
        purchase by the owner, or which was occupied by the licensee for 
        less than one year prior to purchase by the owner, and which 
        cause of action arose on or after April 1, 1994; 
           (3) nothing may obligate the fund for more than $50,000 per 
        claimant, nor more than $50,000 per licensee; and 
           (4) nothing may obligate the fund for claims based on a 
        cause of action that arose before the licensee paid the recovery 
        fund fee set in clause (1), or as provided in section 326.945, 
        subdivision 3.  
           (b) Should the commissioner pay from the contractor's 
        recovery fund any amount in settlement of a claim or toward 
        satisfaction of a judgment against a licensee, the license shall 
        be automatically suspended upon the effective date of an order 
        by the court authorizing payment from the fund.  No licensee 
        shall be granted reinstatement until the licensee has repaid in 
        full, plus interest at the rate of 12 percent a year, twice the 
        amount paid from the fund on the licensee's account, and has 
        obtained a surety bond issued by an insurer authorized to 
        transact business in this state in the amount of at least 
        $40,000.  
           Sec. 51.  [332.355] [AGENCY RESPONSIBILITY FOR COLLECTORS.] 
           The commissioner may take action against a collection 
        agency for any violations of debt collection laws by its debt 
        collectors.  The commissioner may also take action against the 
        debt collectors themselves for these same violations. 
           Sec. 52.  Minnesota Statutes 1998, section 345.515, is 
        amended to read: 
           345.515 [AGREEMENTS TO LOCATE REPORTED PROPERTY.] 
           It is unlawful for a person to seek or receive from another 
        person or contract with a person for a fee or compensation for 
        locating property, knowing it to have been reported or paid or 
        delivered to the commissioner pursuant to chapter 345 prior to 
        seven months after the date of published notice by the 
        commissioner as required by section 345.42 24 months after the 
        date the property is paid or delivered to the commissioner. 
           No agreement entered into after seven months from the date 
        of published notice by the 24 months after the date the property 
        is paid or delivered to the commissioner is valid if a person 
        thereby undertakes to locate property included in a report for a 
        fee or other compensation exceeding ten percent of the value of 
        the recoverable property unless the agreement is in writing and 
        signed by the owner and discloses the nature and value of the 
        property and the name and address of the holder thereof as such 
        facts have been reported.  Nothing in this section shall be 
        construed to prevent an owner from asserting at any time that an 
        agreement to locate property is based upon an excessive or 
        unjust consideration.  
           Sec. 53.  [359.085] [STANDARDS OF CONDUCT FOR NOTARIAL 
        ACTS.] 
           Subdivision 1.  [ACKNOWLEDGMENTS.] In taking an 
        acknowledgment, the notarial officer must determine, either from 
        personal knowledge or from satisfactory evidence, that the 
        person appearing before the officer and making the 
        acknowledgment is the person whose true signature is on the 
        instrument. 
           Subd. 2.  [VERIFICATIONS.] In taking a verification upon 
        oath or affirmation, the notarial officer must determine, either 
        from personal knowledge or from satisfactory evidence, that the 
        person appearing before the officer and making the verification 
        is the person whose true signature is on the statement verified. 
           Subd. 3.  [WITNESSING OR ATTESTING SIGNATURES.] In 
        witnessing or attesting a signature the notarial officer must 
        determine, either from personal knowledge or from satisfactory 
        evidence, that the signature is that of the person appearing 
        before the officer and named in the document. 
           Subd. 4.  [CERTIFYING OR ATTESTING DOCUMENTS.] In 
        certifying or attesting a copy of a document or other item, the 
        notarial officer must determine that the proffered copy is a 
        full, true, and accurate transcription or reproduction of that 
        which was copied. 
           Subd. 5.  [MAKING OR NOTING PROTESTS OF NEGOTIABLE 
        INSTRUMENTS.] In making or noting a protest of a negotiable 
        instrument the notarial officer must determine the matters set 
        forth in section 336.3-505. 
           Subd. 6.  [SATISFACTORY EVIDENCE.] A notarial officer has 
        satisfactory evidence that a person is the person whose true 
        signature is on a document if that person (i) is personally 
        known to the notarial officer, (ii) is identified upon the oath 
        or affirmation of a credible witness personally known to the 
        notarial officer, or (iii) is identified on the basis of 
        identification documents. 
           Subd. 7.  [PROHIBITED ACTS.] A notarial officer may not 
        acknowledge, witness or attest to the officer's own signature, 
        or take a verification of the officer's own oath or affirmation. 
           Sec. 54.  Laws 1999, chapter 177, section 89, is amended to 
        read: 
           Sec. 89.  [EFFECTIVE DATES.] 
           (a) Sections 1, 3, 5 to 8, 20, 22 to 28, 31, 34, 35, 38, 
        39, 44 to 51, 54 to 56, 58 to 60, 66, 67, 69 to 87, and 88, 
        paragraph (b), are effective the day following final enactment. 
           (b) Sections 13 to 15 are effective the day following final 
        enactment and apply to plans of merger approved on or after that 
        date by the board of directors of the first of the constituent 
        corporations to grant such approval.  Merging or consolidating 
        insurance corporations may, however, elect to have the changes 
        made by sections 13 to 15 not apply to a merger or consolidation 
        arising out of a joint agreement entered into prior to January 
        1, 2000. 
           (c) Section 32 is effective July 1, 2000 2001. 
           (d) Section 33 is effective December 1, 1999, and applies 
        to all license renewals on or after that date. 
           (e) Section 30 is effective as follows: 
           (1) The amendment to Minnesota Statutes, section 60K.03, 
        subdivision 2, paragraph (d), is effective January 1, 2000. 
           (2) The amendment to Minnesota Statutes, section 60K.03, 
        subdivision 2, paragraph (e), is effective the day following 
        final enactment. 
           Sec. 55.  [REPEALER.] 
           Minnesota Statutes 1998, sections 62A.285, subdivision 4; 
        62A.651; and 65B.13, are repealed. 
           Sec. 56.  [EFFECTIVE DATE.] 
           Sections 1, 2, 3, 5, 7 to 9, 11 to 13, 15 to 18, 22, 24, 
        36, 37, 38, 40 to 44, 47, and 50 to 55 are effective the day 
        following enactment.  Section 19 is effective January 1, 2001. 
           Presented to the governor May 11, 2000 
           Signed by the governor May 15, 2000, 10:47 a.m.