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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 208-S.F.No. 1541 
                  An act relating to commerce; regulating currency 
                  exchanges, real estate brokers, real property 
                  appraisers, subdivided land sales licenses, 
                  residential contractors, notaries public, and 
                  collection agencies; modifying certain continuing 
                  education requirements; regulating certain fees, 
                  costs, duties, rights, and penalties; regulating 
                  nonprofit corporations; requiring a study; 
                  appropriating money; amending Minnesota Statutes 2000, 
                  sections 45.0295; 53A.081, subdivision 2; 58.10, 
                  subdivision 1, by adding a subdivision; 60K.19, 
                  subdivision 8; 72B.04, subdivisions 6, 7; 80B.03, 
                  subdivision 4a; 82.195, subdivision 2; 82.196, 
                  subdivision 2; 82.197, subdivisions 1, 4, by adding a 
                  subdivision; 82.22, subdivision 13; 82.24, subdivision 
                  8; 82.27, subdivision 3; 82.34, subdivision 15, by 
                  adding a subdivision; 82B.14; 83.25, subdivision 1; 
                  317A.203; 326.91, subdivision 1; 326.975, subdivision 
                  1; 332.41; 359.02; 507.45, subdivision 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 45.0295, is 
        amended to read: 
           45.0295 [FEES.] 
           (a) The following fees shall be paid to the commissioner: 
           (1) for each hour or fraction of one hour of education 
        course approval for continuing education sought, $10; and 
           (2) for each continuing education course coordinator 
        approval, $100. 
           (b) All fees paid to the commissioner under this section 
        are nonrefundable, except that an overpayment of a fee shall be 
        returned upon proper application. 
           Sec. 2.  Minnesota Statutes 2000, section 53A.081, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INVESTIGATION.] The commissioner may at any time 
        and shall at least once in each year investigate the currency 
        exchange business of any licensee and of every person, 
        partnership, association, and corporation engaged in the 
        business of operating a currency exchange in the manner provided 
        under section 45.027. 
           Sec. 3.  Minnesota Statutes 2000, section 58.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AMOUNTS.] The following fees must be paid 
        to the commissioner: 
           (1) for an initial residential mortgage originator license, 
        $800 $850, $50 of which is credited to the consumer education 
        account in the special revenue fund; 
           (2) for a renewal license, $400 $450, $50 of which is 
        credited to the consumer education account in the special 
        revenue fund; 
           (3) for an initial residential mortgage servicer's license, 
        $1,000; 
           (4) for a renewal license, $500; and 
           (5) for a certificate of exemption, $100. 
           Sec. 4.  Minnesota Statutes 2000, section 58.10, is amended 
        by adding a subdivision to read: 
           Subd. 3.  [CONSUMER EDUCATION ACCOUNT; MONEY CREDITED AND 
        APPROPRIATED.] (a) The consumer education account is created in 
        the special revenue fund.  Money credited to this account may be 
        appropriated to the commissioner for the purpose of making 
        grants to programs and campaigns designed to help consumers 
        avoid being victimized by unscrupulous lenders and mortgage 
        brokers.  Preference shall be given to programs and campaigns 
        designed by coalitions of public sector, private sector, and 
        nonprofit agencies, institutions, companies, and organizations. 
           (b) A sum sufficient is appropriated annually from the 
        consumer education account to the commissioner to make the 
        grants described in paragraph (a). 
           Sec. 5.  Minnesota Statutes 2000, 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.  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 three 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. 6.  Minnesota Statutes 2000, section 72B.04, 
        subdivision 6, is amended to read: 
           Subd. 6.  [EXCEPTIONS.] A person who on January 1, 1972, 
        meets all of the qualifications specified in subdivision 2 with 
        regard to the class of license applied for and, if experience is 
        one of the requisites, has gained the experience within the 
        three years next preceding January 1, 1972, shall be eligible 
        for the issuance of a license without taking an examination. 
           A person who has held a license of any given class or in 
        any field or fields within three years prior to the application 
        shall be entitled to a renewal of the license in the same class 
        or in the same fields without taking an examination. 
           A person applying for a license as a crop hail adjuster 
        shall not be required to comply with the requirements of 
        subdivision 5. 
           The commissioner may issue a license under sections 72B.01 
        to 72B.14 without an examination, if the applicant presents 
        sufficient and satisfactory evidence of having passed a similar 
        examination in another state and if the commissioner, with the 
        advice of the advisory board, has determined that the standards 
        of such other state are equivalent to those in Minnesota for the 
        class of license applied for.  Any applicant who presents 
        sufficient and satisfactory evidence of having successfully 
        completed all six parts of the insurance institute of America 
        program in adjusting or other programs approved by the 
        commissioner shall be entitled to an adjuster's license without 
        taking the examination prescribed in subdivision 5. 
           Sec. 7.  Minnesota Statutes 2000, section 72B.04, 
        subdivision 7, is amended to read: 
           Subd. 7.  [LICENSE TERM.] Every adjuster's and public 
        adjuster solicitor's license shall be for a term expiring on 
        October 31 next following the date of its issuance, and may be 
        renewed for the ensuing calendar year upon the timely filing of 
        an application for renewal.  (a) Initial licenses issued under 
        this section are valid for a period not to exceed two years.  
        Each initial license must expire on October 31 of the expiration 
        year assigned by the commissioner. 
           (b) Licenses issued under this section may be renewed upon 
        the timely filing of an application for renewal.  Every renewal 
        license is valid for a period of 24 months. 
           Sec. 8.  Minnesota Statutes 2000, section 80B.03, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  Within three calendar business days of the date 
        of filing of the registration statement, the commissioner may by 
        order summarily suspend the effectiveness of the takeover offer 
        if the commissioner determines that the registration statement 
        does not contain all of the information specified in 
        subdivisions 2 and 6 or that the takeover offer materials 
        provided to offerees do not provide full disclosure to offerees 
        of all material information concerning the takeover offer.  The 
        suspension shall remain in effect only until the determination 
        following a hearing held pursuant to subdivision 5.  
           Sec. 9.  Minnesota Statutes 2000, section 82.195, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTENTS.] All listing agreements must be in 
        writing and must include:  
           (1) a definite expiration date; 
           (2) a description of the real property involved; 
           (3) the list price and any terms required by the seller; 
           (4) the amount of any compensation or commission or the 
        basis for computing the commission; 
           (5) a clear statement explaining the events or conditions 
        that will entitle a broker to a commission; 
           (6) information regarding an override clause, if 
        applicable, including a statement to the effect that the 
        override clause will not be effective unless the licensee 
        supplies the seller with a protective list within 72 hours after 
        the expiration of the listing agreement; 
           (7) the following notice in not less than ten point 
        boldface type immediately preceding any provision of the listing 
        agreement relating to compensation of the licensee:  
           "NOTICE:  THE COMMISSION RATE COMPENSATION FOR THE SALE, 
        LEASE, RENTAL, OR MANAGEMENT OF REAL PROPERTY SHALL BE 
        DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND ITS THE BROKER'S 
        CLIENT."; 
           (8) for residential property listings, the following "dual 
        agency" disclosure statement: 
           If a buyer represented by broker wishes to buy your 
        property, a dual agency will be created.  This means that broker 
        will represent both you and the buyer(s), and owe the same 
        duties to the buyer(s) that broker owes to you.  This conflict 
        of interest will prohibit broker from advocating exclusively on 
        your behalf.  Dual agency will limit the level of representation 
        broker can provide.  If a dual agency should arise, you will 
        need to agree that confidential information about price, terms, 
        and motivation will still be kept confidential unless you 
        instruct broker in writing to disclose specific information 
        about you.  All other information will be shared.  Broker cannot 
        act as a dual agent unless both you and the buyer(s) agree to 
        it.  By agreeing to a possible dual agency, you will be giving 
        up the right to exclusive representation in an in-house 
        transaction.  However, if you should decide not to agree to a 
        possible dual agency, and you want broker to represent you, you 
        may give up the opportunity to sell your property to buyers 
        represented by broker. 
                        Seller's Instructions to Broker 
           
           Having read and understood this information about dual 
        agency, seller(s) now instructs broker as follows: 
        .......     Seller(s) will agree to a dual agency 
                    representation and will consider offers made 
                    by buyers represented by broker. 
           
        .......     Seller will not agree to a dual agency
                    representation and will not consider offers
                    made by buyers represented by broker. 
           
           
        .........................      ......................... 
        Seller                         Broker 
           
           
        .........................      By:  .................... 
        Seller                              Salesperson 
           
        Date:  ..................; 
           (9) a notice requiring the seller to indicate in writing 
        whether it is acceptable to the seller to have the licensee 
        arrange for closing services or whether the seller wishes to 
        arrange for others to conduct the closing.  The notice must also 
        include the disclosure of any controlled business arrangement, 
        as the term is defined in United States Code, title 12, section 
        2602, between the licensee and the real estate closing agent 
        through which the licensee proposes to arrange closing services; 
        and 
           (10) for residential listings, a notice stating that after 
        the expiration of the listing agreement, the seller will not be 
        obligated to pay the licensee a fee or commission if the seller 
        has executed another valid listing agreement pursuant to which 
        the seller is obligated to pay a fee or commission to another 
        licensee for the sale, lease, or exchange of the real property 
        in question.  This notice may be used in the listing agreement 
        for any other type of real estate.  
           Sec. 10.  Minnesota Statutes 2000, section 82.196, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTENTS.] All buyer's broker agreements must be 
        in writing and must include:  
           (1) a definite expiration date; 
           (2) the amount of any compensation or commission, or the 
        basis for computing the commission; 
           (3) a clear statement explaining the services to be 
        provided to the buyer by the broker, and the events or 
        conditions that will entitle a broker to a commission or other 
        compensation; 
           (4) a provision for cancellation of the agreement by either 
        party upon terms agreed upon by the parties; a clear statement 
        explaining if the agreement may be canceled and the terms under 
        which the agreement may be canceled; 
           (5) information regarding an override clause, if 
        applicable, including a statement to the effect that the 
        override clause will not be effective unless the licensee 
        supplies the buyer with a protective list within 72 hours after 
        the expiration of the buyer's broker agreement; 
           (6) the following notice in not less than ten point bold 
        face type immediately preceding any provision of the buyer's 
        broker agreement relating to compensation of the licensee: 
           "NOTICE:  THE COMMISSION RATE COMPENSATION FOR THE 
        PURCHASE, LEASE, RENTAL, OR MANAGEMENT OF REAL PROPERTY IS 
        NEGOTIABLE AND SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL 
        BROKER AND ITS THE BROKER'S CLIENT."; 
           (7) the following "dual agency" disclosure statement: 
           If you choose to purchase a property listed by broker, a 
        dual agency will be created.  This means that broker will 
        represent both you and the seller(s), and owe the same duties to 
        the seller(s) that broker owes to you.  This conflict of 
        interest will prohibit broker from advocating exclusively on 
        your behalf.  Dual agency will limit the level of representation 
        broker can provide.  If a dual agency should arise, you will 
        need to agree that confidential information about price, terms, 
        and motivation will still be kept confidential unless you 
        instruct broker in writing to disclose specific information 
        about you.  All other information will be shared.  Broker cannot 
        act as a dual agent unless both you and the seller(s) agree to 
        it.  By agreeing to a possible dual agency, you will be giving 
        up the right to exclusive representation in an in-house 
        transaction.  However, if you should decide not to agree to a 
        possible dual agency, and you want broker to represent you, you 
        may give up the opportunity to purchase the properties listed by 
        broker. 
                         Buyer's Instructions to Broker 
           
        .......      Buyer(s) will agree to a dual agency representation 
                     and will consider properties listed by broker.
           
        .......      Buyer will not agree to a dual agency 
                     representation and will not consider 
                     properties listed by broker. 
           
           
        .........................      ......................... 
        Buyer                          Broker 
           
        .........................      By:  .................... 
        Buyer                               Salesperson 
           
        Date:  ...................; and 
           (8) for buyer's broker agreements which involve residential 
        real property, a notice stating that after the expiration of the 
        buyer's broker agreement, the buyer will not be obligated to pay 
        the licensee a fee or commission if the buyer has executed 
        another valid buyer's broker agreement pursuant to which the 
        buyer is obligated to pay a fee or commission to another 
        licensee for the purchase, lease, or exchange of real property. 
           Sec. 11.  Minnesota Statutes 2000, section 82.197, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AGENCY DISCLOSURE.] A real estate broker 
        or salesperson shall provide to a consumer in the sale and 
        purchase of a residential real property transaction at the first 
        substantive contact with the consumer an agency disclosure form 
        in substantially the form set forth in subdivision 4.  The 
        agency disclosure form shall be intended to provide a 
        description of available options for agency and nonagency 
        relationships, and a description of the role of a licensee under 
        each option.  The agency disclosure form shall provide a 
        signature line for acknowledgment of receipt by the consumer. 
           Sec. 12.  Minnesota Statutes 2000, section 82.197, 
        subdivision 4, is amended to read: 
           Subd. 4.  [AGENCY DISCLOSURE FORM.] The agency disclosure 
        form shall be in substantially the form set forth below: 
               AGENCY RELATIONSHIPS IN REAL ESTATE TRANSACTIONS
        Minnesota law requires that early in any relationship, real 
        estate brokers or salespersons discuss with consumers what type 
        of agency representation or relationship they desire.(1)  The 
        available options are listed below.  This is not a contract.  
        This is an agency disclosure form only.  If you desire 
        representation, you must enter into a written contract according 
        to state law (a listing contract or a buyer representation 
        contract).  Until such time as you choose to enter into a 
        written contract for representation or assistance, you will be 
        treated as a customer of the broker or salesperson and not 
        represented by the brokerage and will not receive any 
        representation from the broker or salesperson.  The broker or 
        salesperson would then will be acting as a Seller's broker 
        Facilitator (see paragraph I V below), or as a nonagent (see 
        paragraph IV below) unless the broker or salesperson is 
        representing another party as described below. 
           ACKNOWLEDGMENT:  I/We acknowledge that I/We have been 
        presented with the below-described options.  I/We understand 
        that until I/We have signed a representation contract, I/We are 
        not represented by the broker/salesperson and information given 
        to the broker/salesperson may be disclosed.  I/We understand 
        that written consent is required for a dual agency 
        relationship.  THIS IS A DISCLOSURE ONLY, NOT A CONTRACT FOR 
        REPRESENTATION. 
        ...............     .......... 
        Signature           Date
        ...............     .......... 
        Signature           Date
        I.
           Seller's Broker:  A broker who lists a property, or a 
           salesperson who is licensed to the listing broker, 
           represents the Seller and acts on behalf of the Seller.  A 
           broker or salesperson working with a Buyer may also act as 
           a subagent of the Seller, in which case the Buyer is the 
           broker's customer and is not represented by that broker.  A 
           Seller's broker owes to the Seller the fiduciary duties 
           described below.(2)  The broker must also disclose to the 
           Buyer any material facts as defined in Minnesota Statutes, 
           section 82.197, subdivision 6, of which the broker is aware 
           that could adversely and significantly affect the Buyer's 
           use or enjoyment of the property.  If a broker or 
           salesperson who is working with a Buyer as a customer and 
           is representing the Seller and to whom any information is 
           disclosed, he or she must act in the Seller's interests 
           best interest and must tell the Seller the any information 
           disclosed to him or her, except confidential information 
           acquired in a facilitator relationship (see paragraph V 
           below).  In that case, the Buyer will not be represented 
           and will not receive advice and counsel from the broker or 
           salesperson. 
        II. 
           Subagent:  A broker or salesperson who is working with a 
           Buyer but represents the Seller.  In this case, the Buyer 
           is the broker's customer and is not represented by that 
           broker.  If a broker or salesperson working with a Buyer as 
           a customer is representing the Seller, he or she must act 
           in the Seller's best interest and must tell the Seller any 
           information that is disclosed to him or her.  In that case, 
           the Buyer will not be represented and will not receive 
           advice and counsel from the broker or salesperson. 
        III.
           Buyer's Broker:  A Buyer may enter into an agreement for 
           the broker or salesperson to represent and act on behalf of 
           the Buyer.  The broker may represent the Buyer only, and 
           not the Seller, even if the broker he or she is being paid 
           in whole or in part by the Seller.  A Buyer's broker owes 
           to the Buyer the fiduciary duties described below.(2)  The 
           broker must disclose to the Buyer any material facts as 
           defined in Minnesota Statutes, section 82.197, subdivision 
           6, of which the broker is aware that could adversely and 
           significantly affect the Buyer's use or enjoyment of the 
           property.  If a broker or salesperson working with a Seller 
           as a customer is representing the Buyer, he or she must act 
           in the Buyer's best interest and must tell the Buyer any 
           information disclosed to him or her, except confidential 
           information acquired in a facilitator relationship (see 
           paragraph V below).  In that case, the Seller will not be 
           represented and will not receive advice and counsel from 
           the broker or salesperson. 
        III. IV.
           Dual Agency-Broker Representing both Seller and Buyer:  
           Dual agency occurs when one broker or salesperson 
           represents both parties to a transaction, or when two 
           salespersons licensed to the same broker each represent a 
           party to the transaction.  Dual agency requires the 
           informed consent of all parties, and means that the broker 
           and salesperson owe the same duties to the Seller and the 
           Buyer.  This role limits the level of representation the 
           broker and salespersons can provide, and prohibits them 
           from acting exclusively for either party.  In a dual 
           agency, confidential information about price, terms, and 
           motivation for pursuing a transaction will be kept 
           confidential unless one party instructs the broker or 
           salesperson in writing to disclose specific information 
           about the party writing him or her.  Other information will 
           be shared.  Dual agents may not advocate for one party to 
           the detriment of the other.(3) 
           Within the limitations described above, dual agents owe to 
           both Seller and Buyer the fiduciary duties described 
           below.(2)  Dual agents must disclose to Buyers any material 
           facts as defined in Minnesota Statutes, section 82.197, 
           subdivision 6, of which the broker is aware that could 
           adversely and significantly affect the Buyer's use or 
           enjoyment of the property. 
        IV. V.
           Nonagent Facilitator:  A broker or salesperson may perform 
           who performs services for either party as a nonagent, if 
           that party signs a nonagency services agreement a Buyer, a 
           Seller, or both but does not represent either in a 
           fiduciary capacity as a Buyer's Broker, Seller's Broker, or 
           Dual Agent.  As a nonagent the broker or salesperson 
           facilitates the transaction, but does not act on behalf of 
           either party.  THE NONAGENT FACILITATOR BROKER OR 
           SALESPERSON DOES NOT OWE ANY PARTY ANY OF THE FIDUCIARY 
           DUTIES LISTED BELOW, EXCEPT CONFIDENTIALITY, UNLESS THOSE 
           DUTIES ARE INCLUDED IN THE WRITTEN NONAGENCY FACILITATOR 
           SERVICES AGREEMENT.  The nonagent facilitator broker or 
           salesperson owes only the duty of confidentiality to the 
           party but owes no other duty to the party except those 
           duties required by law or contained in the a written 
           nonagency facilitator services agreement, if any.  In the 
           event a facilitator broker or salesperson, working with a 
           Buyer, shows a property listed by the facilitator broker or 
           salesperson, then the facilitator broker or salesperson 
           must act as a Seller's Broker (see paragraph I above).  In 
           the event a facilitator broker or salesperson, working with 
           a Seller, accepts a showing of the property by a Buyer 
           being represented by the facilitator broker or salesperson, 
           then the facilitator broker or salesperson must act as a 
           Buyer's Broker (see paragraph III above). 
        ACKNOWLEDGMENT:  I/We acknowledge that I/We have been presented 
        with the above-described options.  I/We understand that Buyers 
        who have not signed a Buyer representation contract or nonagency 
        services agreement are not represented by the broker/salesperson 
        and information given to the broker/salesperson will be 
        disclosed to the Seller.  I/We understand that written consent 
        is required for a dual agency relationship.  This is a 
        disclosure only, NOT a contract for representation. 
        .........................       ........................ 
          Seller            Date         Buyer              Date
        .........................       ........................ 
          Seller            Date         Buyer              Date 
        **************************************************************** 
           (1) This disclosure is required by law in any transaction 
        involving property occupied or intended to be occupied by one to 
        four families as their residence. 
           (2) The fiduciary duties mentioned above are listed below 
        and have the following meanings: 
           Loyalty-broker/salesperson will act only in client(s)' best 
        interest. 
           Obedience-broker/salesperson will carry out all client(s)' 
        lawful instructions. 
           Disclosure-broker/salesperson will disclose to client(s) 
        all material facts of which broker/salesperson has knowledge 
        which might reasonably affect the client's rights and interests. 
           Confidentiality-broker/salesperson will keep client(s)' 
        confidences unless required by law to disclose specific 
        information (such as disclosure of material facts to Buyers). 
           Reasonable Care-broker/salesperson will use reasonable care 
        in performing duties as an agent. 
           Accounting-broker/salesperson will account to client(s) for 
        all client(s)' money and property received as agent. 
           (3) If Seller(s) decides not to agree to a dual agency 
        relationship, Seller(s) may give up the opportunity to sell the 
        property to Buyers represented by the broker/salesperson.  If 
        Buyer(s) decides not to agree to a dual agency relationship, 
        Buyer(s) may give up the opportunity to purchase properties 
        listed by the broker. 
           Sec. 13.  Minnesota Statutes 2000, section 82.197, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [MATERIAL FACTS.] (a) Licensees shall disclose to 
        any prospective purchaser all material facts of which the 
        licensees are aware, which could adversely and significantly 
        affect an ordinary purchaser's use or enjoyment of the property, 
        or any intended use of the property of which the licensees are 
        aware. 
           (b) It is not a material fact relating to real property 
        offered for sale and no regulatory action shall be brought 
        against a licensee for failure to disclose in any real estate 
        transaction the fact or suspicion that the property: 
           (1) is or was occupied by an owner or occupant who is or 
        was suspected to be infected with human immunodeficiency virus 
        or diagnosed with acquired immunodeficiency syndrome; or 
           (2) was the site of an accidental death, natural death, or 
        perceived paranormal activity.  
           (c) A licensee or employee of the licensee has no duty to 
        disclose information regarding an offender who is required to 
        register under section 243.166, or about whom notification is 
        made under that section, if the broker or salesperson, in a 
        timely manner, provides a written notice that information about 
        the predatory offender registry and persons registered with the 
        registry may be obtained by contacting local law enforcement 
        where the property is located or the department of corrections. 
           (d) A licensee is not required to disclose, except as 
        otherwise provided in paragraph (e), information relating to the 
        physical condition of the property or any other information 
        relating to the real estate transaction, if a written report 
        that discloses the information has been prepared by a qualified 
        third party and provided to the person.  For the purposes of 
        this paragraph, "qualified third party" means a federal, state, 
        or local governmental agency, or any person whom the broker, 
        salesperson, or a party to the real estate transaction 
        reasonably believes has the expertise necessary to meet the 
        industry standards of practice for the type of inspection or 
        investigation that has been conducted by the third party in 
        order to prepare the written report and who is acceptable to the 
        person to whom the disclosure is being made. 
           (e) A licensee shall disclose to the parties to a real 
        estate transaction any facts known by the broker or salesperson 
        that contradict any information included in a written report, if 
        a copy of the report is provided to the licensee, described in 
        paragraph (d). 
           Sec. 14.  Minnesota Statutes 2000, 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 except accredited courses using 
        new delivery technology, including interactive technology, and 
        the Internet.  This pilot program expires on August 1, 
        2001.  Courses in motivation, salesmanship, psychology, or time 
        management shall not be approved by the commissioner for 
        continuing education credit. 
           (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 one hour of training during each 
        license period in courses in laws or regulations on agency 
        representation and disclosure; and 
           (2) at least two hours one hour of training during each 
        license period in courses in state and federal fair housing 
        laws, regulations, and rules, or other antidiscrimination laws, 
        or courses designed to help licensees to meet the housing needs 
        of immigrant and other underserved populations. 
           Clause Clauses (1) does and (2) do 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. 
           (f) Approved courses may be sponsored or offered by a 
        broker of a real estate company and may be held on the premises 
        of a company licensed under this chapter.  All course offerings 
        must be open to any interested individuals.  Access may be 
        restricted by the sponsor based on class size only.  Courses 
        must not be approved if attendance is restricted to any 
        particular group of people.  A broker must comply with all 
        continuing education rules prescribed by the commissioner. 
           (g) No more than one-half of the credit hours per licensing 
        period, including continuing education required under 
        subdivision 6, may be credited to a person for attending any 
        combination of courses either:  
           (1) sponsored by, offered by, or affiliated with a real 
        estate company or its agents; or 
           (2) offered using new delivery technology, including 
        interactive technology, and the Internet. 
           Sec. 15.  Minnesota Statutes 2000, section 82.24, 
        subdivision 8, is amended to read: 
           Subd. 8.  [ACCRUED INTEREST.] (a) Each broker shall 
        maintain a pooled interest-bearing trust account for deposit of 
        client funds.  The interest accruing on the trust account, less 
        reasonable transaction costs, must be paid to the state 
        treasurer for deposit in the housing trust fund account created 
        under section 462A.201 unless otherwise specified pursuant to an 
        expressed written agreement between the parties to a transaction.
           (b) For an account created under paragraph (a), each broker 
        shall direct the financial institution to:  
           (1) pay the interest, less reasonable transaction costs, 
        computed in accordance with the financial institution's standard 
        accounting practice, at least quarterly, to the state treasurer; 
        and 
           (2) send a statement to the state treasurer showing the 
        name of the broker for whom the payment is made, the rate of 
        interest applied, the amount of service charges deducted, and 
        the account balance for the period in which the report is made. 
           The state treasurer shall credit the amount collected under 
        this subdivision to the housing trust fund account established 
        in section 462A.201. 
           (c) The financial institution must promptly notify the 
        commissioner if a draft drawn on the account is dishonored.  A 
        draft is not dishonored if a stop payment order is requested by 
        an issuer who has a good faith defense to payment on the draft. 
           Sec. 16.  Minnesota Statutes 2000, section 82.27, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ORDER TO SHOW CAUSE.] The commissioner shall 
        issue an order requiring a licensee or applicant for a license 
        to show cause why the license should not be revoked or 
        suspended, or the licensee censured, or the application denied.  
        The order shall be calculated to give reasonable notice of the 
        time and place for hearing thereon, and shall state the reasons 
        specific statute or rule that has been violated for the entry of 
        the order.  The commissioner may by order summarily suspend a 
        license pending final determination of any order to show cause.  
        If a license is suspended pending final determination of an 
        order to show cause, a hearing on the merits shall be held 
        within 30 days of the issuance of the order of suspension.  All 
        hearings shall be conducted in accordance with the provisions of 
        chapter 14.  After the hearing, the commissioner shall enter an 
        order making such disposition of the matter as the facts 
        require.  If the licensee or applicant fails to appear at a 
        hearing after having been duly notified of it, such person shall 
        be deemed in default, and the proceeding may be determined 
        against the licensee or applicant upon consideration of the 
        order to show cause, the allegations of which may be deemed to 
        be true. 
           Sec. 17.  Minnesota Statutes 2000, section 82.34, is 
        amended by adding a subdivision to read: 
           Subd. 7a.  [ACCELERATED CLAIMS PAYMENT.] (a) The 
        commissioner shall pay claims from the recovery portion of the 
        fund that do not exceed the jurisdiction limits for conciliation 
        court matters as specified in section 491A.01 on an accelerated 
        basis if all of the requirements in subdivision 7 and paragraphs 
        (b) to (f) have been satisfied. 
           (b) When any aggrieved person as defined in subdivision 7 
        obtains a judgment in any court of competent jurisdiction, 
        regardless of whether the judgment has been discharged by a 
        bankruptcy court against a licensee on grounds specified in 
        subdivision 7, the aggrieved person may file a verified 
        application with the commissioner for payment out of the 
        recovery portion of the fund of the amount of actual and direct 
        out-of-pocket loss in the transaction, but excluding any 
        attorney fees, interest on the loss, and on any judgment 
        obtained as a result of the loss, up to the conciliation court 
        jurisdiction limits, of the amount unpaid upon the judgment.  
        For purposes of this section, persons who are joint tenants or 
        tenants in common are deemed to be a single claimant. 
           (c) The commissioner shall send the licensee a copy of the 
        verified application by first-class mail to the licensee's 
        address as it appears in the records of the department of 
        commerce with a notice that the claim will be paid 15 days from 
        the date of the notice unless the licensee notifies the 
        commissioner before that date of the commencement of an appeal 
        of the judgment, if the time for appeal has not expired, and 
        that payment of the claim will result in automatic suspension of 
        the licensee's license. 
           (d) If the licensee does not notify the commissioner of the 
        commencement of an appeal, the commissioner shall pay the claim 
        at the end of the 15-day period. 
           (e) If an appeal is commenced, the payment of the claim is 
        stayed until the conclusion of the appeal. 
           (f) The commissioner may pay claims which total no more 
        than $50,000 against the licensee under this accelerated 
        process.  The commissioner may prorate the amount of claims paid 
        under this subdivision if claims in excess of $50,000 against 
        the licensee are submitted.  Any unpaid portions of these claims 
        must be satisfied in the manner set forth in subdivision 7. 
           Sec. 18.  Minnesota Statutes 2000, section 82.34, 
        subdivision 15, is amended to read: 
           Subd. 15.  Any sums received by the commissioner pursuant 
        to any provisions of this section shall be deposited in the 
        state treasury, and credited to the real estate education, 
        research and recovery fund, and said sums shall be allocated 
        exclusively for the purposes provided in this section.  All 
        moneys in the fund are appropriated annually to the commissioner 
        for the purposes of this section. 
           All money credited to the fund under section 462A.201 may 
        only be used for purposes under subdivision 6, clause (g).  
        Beginning in 1990, the commissioner must, on February 1 of each 
        year, review the amount of money spent or allocated for uses 
        under subdivision 6, clause (g), for the previous calendar 
        year.  If the amount spent or allocated is less than the amount 
        credited to the fund under section 462A.201 during the same 
        calendar year, the difference must be transferred from the fund 
        to the housing trust fund account established in section 
        462A.201.  If the fund balance exceeds $4,000,000, the 
        commissioner may suspend the fee imposed under subdivision 3. 
           Sec. 19.  Minnesota Statutes 2000, 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. 20.  Minnesota Statutes 2000, section 83.25, 
        subdivision 1, is amended to read: 
           Subdivision 1.  No person shall offer or sell in this state 
        any interest in subdivided lands without having obtained: 
           (1) a license under chapter 82; and 
           (2) an additional license to offer or dispose of subdivided 
        lands.  This license may be obtained by submitting an 
        application in writing to the commissioner upon forms prepared 
        and furnished by the commissioner.  Each application shall be 
        signed and sworn to by the applicant and accompanied by a 
        license fee of $10 per year.  The commissioner may also require 
        an additional examination for this license.  This clause expires 
        July 1, 2003. 
           Sec. 21.  Minnesota Statutes 2000, section 317A.203, is 
        amended to read: 
           317A.203 [NUMBER.] 
           A board of directors must consist of three or more 
        individuals, with the number specified in or fixed in accordance 
        with the articles or bylaws, except that if the corporation has 
        either one or two members with voting rights, the number of 
        directors may be less than three but not less than the number of 
        members with voting rights. 
           Sec. 22.  Minnesota Statutes 2000, section 326.91, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CAUSE.] The commissioner may by order 
        deny, suspend, or revoke any license or may censure a licensee, 
        and may impose a civil penalty as provided for in section 
        45.027, subdivision 6, if the commissioner finds that the order 
        is in the public interest, and that the applicant, licensee, or 
        affiliate of an applicant or licensee, or other agent, owner, 
        partner, director, governor, shareholder, member, officer, 
        qualifying person, or managing employee of the applicant or 
        licensee or any person occupying a similar status or performing 
        similar functions:  
           (1) 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 is made, is 
        false or misleading with respect to any material fact; 
           (2) has engaged in a fraudulent, deceptive, or dishonest 
        practice; 
           (3) 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 business; 
           (4) has failed to reasonably supervise employees, agents, 
        subcontractors, or salespersons, or has performed negligently or 
        in breach of contract, so as to cause injury or harm to the 
        public; 
           (5) has violated or failed to comply with any provision of 
        sections 326.83 to 326.98 or any rule or order under sections 
        326.83 to 326.98; 
           (6) has been shown to be incompetent, untrustworthy, or 
        financially irresponsible; 
           (7) has been convicted of a violation of the State Building 
        Code or, in jurisdictions that do not enforce the State Building 
        Code, has refused to correct a violation of the State Building 
        Code when the violation has been certified by a Minnesota 
        licensed structural engineer; 
           (8) has failed to use the proceeds of any payment made to 
        the licensee for the construction of, or any improvement to, 
        residential real estate, as defined in section 326.83, 
        subdivision 17, for the payment of labor, skill, material, and 
        machinery contributed to the construction or improvement, 
        knowing that the cost of any labor performed, or skill, 
        material, or machinery furnished for the improvement remains 
        unpaid; 
           (9) has not furnished to the person making payment either a 
        valid lien waiver as to any unpaid labor performed, or skill, 
        material, or machinery furnished for an improvement, or a 
        payment bond in the basic amount of the contract price for the 
        improvement conditioned for the prompt payment to any person or 
        persons entitled to payment; 
           (10) has engaged in conduct which was the basis for a 
        contractor's recovery fund payment pursuant to section 326.975, 
        which payment has not been reimbursed; 
           (11) has engaged in bad faith, unreasonable delays, or 
        frivolous claims in defense of a civil lawsuit arising out of 
        their activities as a licensee under this chapter; 
           (12) has had a judgment entered against them for failure to 
        make payments to employees or subcontractors, and all appeals of 
        the judgment have been exhausted or the period for appeal has 
        expired; 
           (13) if unlicensed, has obtained a building permit by the 
        fraudulent use of a fictitious license number or the license 
        number of another, or, if licensed, has knowingly allowed an 
        unlicensed person to use the licensee's license number for the 
        purpose of fraudulently obtaining a building permit; or 
           (14) has made use of forged mechanics' lien waivers under 
        chapter 514. 
           Sec. 23.  Minnesota Statutes 2000, 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 $75,000 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. 24.  Minnesota Statutes 2000, section 332.41, is 
        amended to read: 
           332.41 [APPEALS.] 
           Subdivision 1.  [FILING OF APPEAL.] In the rejection of an 
        application for a license or the renewal thereof filed under 
        sections 332.31 to 332.45 or of the suspension or revocation of 
        a license granted under sections 332.31 to 332.45 the applicant 
        or licensee may within 90 days after receipt of notice of such 
        rejection, suspension, or revocation, file an appeal and 
        thereafter prosecute the appeal in accordance with the 
        provisions of the statutes governing appeal from, or review of, 
        decisions of administrative agencies in this state.  
           Subd. 2.  [SUPERSEDEAS.] The filing of an appeal from an 
        order of the commissioner of commerce rejecting an application 
        for a license by a collection agency engaged in business as of 
        July 1, 1969, or rejecting an application for the renewal of a 
        license, or suspending or revoking a license within 60 days 
        after the date of such order, shall operate as a supersedeas 
        which shall continue pending final determination of such appeal. 
           Appeal from a denial, suspension, revocation, or censure of 
        a license must be made according to chapter 14. 
           Sec. 25.  Minnesota Statutes 2000, section 359.02, is 
        amended to read: 
           359.02 [TERM.] 
           A notary commissioned under section 359.01 holds office for 
        five years, unless sooner removed by the governor or the 
        district court, or by action of the commissioner.  Within seven 
        months 60 days before the expiration of the commission a notary 
        may be reappointed apply for reappointment for a new term to 
        commence and to be designated in the new commission as beginning 
        upon the day immediately following the date of the 
        expiration.  A notary whose commission expires on January 1, 
        2005, may apply for reappointment six months before the 
        expiration date.  The reappointment takes effect and is valid 
        although the appointing governor may not be in the office of 
        governor on the effective day. 
           (a) All notary commissions issued before January 31, 1995, 
        will expire on January 31, 1995. 
           (b) All notary commissions issued after January 31, 1995, 
        will expire at the end of the licensing period, which will end 
        every fifth year following January 31, 1995. 
           (c) All notary commissions issued during a licensing period 
        expire at the end of that period as set forth in this 
        section expire on January 31 of the fifth year following the 
        year of issue. 
           Sec. 26.  Minnesota Statutes 2000, section 507.45, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REQUIREMENTS FOR REAL ESTATE PERSONNEL.] If the 
        closing services are to be provided by a real estate broker, 
        real estate salesperson, or real estate closing agent, the 
        following regulations shall apply. 
           (a) The written contract for closing services shall state 
        in at least 10-point type that the real estate broker, real 
        estate salesperson, or real estate closing agent has not and, 
        under applicable state law, may not express opinions regarding 
        the legal effect of the closing documents or of the closing 
        itself. 
           (b) No closing fee may be charged in connection with the 
        transfer of the legal or equitable ownership of a property if a 
        closing is performed without either a mortgagee's or owner's 
        title insurance commitment or a legal opinion regarding the 
        status of title. 
           Sec. 27.  [STUDY; FAIR HOUSING TRAINING.] 
           The commissioner of commerce shall examine the issue of 
        whether licensed occupations under the jurisdiction of the 
        department and related to the purchase or financing of 
        residential housing, including, but not limited to, appraisers, 
        and employees of licensed mortgage originators and servicers, 
        should be required to attend continuing education courses in 
        state and federal fair housing law, and other antidiscrimination 
        laws, in order to further consumer protection.  The commissioner 
        shall report the results of the examination to the commerce 
        committees of the legislature by February 1, 2002. 
           Sec. 28.  [APPROPRIATION.] 
           Up to $1,000,000 is appropriated from the real estate 
        education, research, and recovery fund established under 
        Minnesota Statutes, section 82.34, to the department of commerce 
        for an educational campaign aimed at fair housing and 
        housing-related antidiscrimination initiatives.  The 
        appropriation must be used for educating real estate licensees 
        and for a public information campaign across the state on 
        consumer's rights under current fair housing laws.  The 
        educational campaign may include, but is not limited to, 
        television and radio advertisements and printed material.  The 
        materials used for the public information campaign may be 
        prepared in multiple languages if necessary. 
           Sec. 29.  [EFFECTIVE DATE.] 
           Sections 1 to 8, 13, 19, and 26 are effective the day 
        following final enactment.  Section 14 is effective July 1, 2001.
        Section 21 is effective July 1, 2001, and applies to nonprofit 
        corporations formed on or after that date.  Section 23 is 
        effective January 1, 2001, and applies to claims arising from 
        incidents or conduct occurring on or after that date. 
           Presented to the governor May 25, 2001 
           Signed by the governor May 29, 2001, 11:28 a.m.