Office of the Revisor of Statutes
Minnesota Session Laws - 2003, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 51-S.F.No. 1069
An act relating to commerce; regulating financial
institution examinations, applications, loans,
advertising, and organizational provisions; revising
the standard nonforfeiture law for individual deferred
annuities; regulating the deposit and investment of
local public funds; making various technical changes;
repealing obsolete rules; amending Minnesota Statutes
2002, sections 46.04, subdivision 1; 46.041,
subdivision 2; 47.015, by adding a subdivision;
47.101, subdivision 2; 47.59, subdivision 2; 47.67;
48.08; 48.24, subdivision 6; 52.06, subdivision 1;
61A.245, subdivisions 3, 4, 5, 6, 12; 118A.03,
subdivisions 2, 3; 300.025; 300.23; 332.29,
subdivision 1; repealing Minnesota Rules, parts
2675.0300; 2675.2250; 2675.6400.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2002, section 46.04,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL.] The commissioner of commerce,
referred to in chapters 46 to 59A, and sections 332.12 to
332.29, as the commissioner, is vested with all the powers,
authority, and privileges which, prior to the enactment of Laws
1909, chapter 201, were conferred by law upon the public
examiner, and shall take over all duties in relation to state
banks, savings banks, trust companies, savings associations, and
other financial institutions within the state which, prior to
the enactment of chapter 201, were imposed upon the public
examiner. The commissioner of commerce shall exercise a
constant supervision, either personally or through the examiners
herein provided for, over the books and affairs of all state
banks, savings banks, trust companies, savings associations,
credit unions, industrial loan and thrift companies, and other
financial institutions doing business within this state; and
shall, through examiners, examine each financial institution at
least once every 18 24 calendar months. In satisfying this
examination requirement, the commissioner may accept reports of
examination prepared by a federal agency having comparable
supervisory powers and examination procedures. With the
exception of industrial loan and thrift companies which do not
have deposit liabilities and licensed regulated lenders, it
shall be the principal purpose of these examinations to inspect
and verify the assets and liabilities of each and so far
investigate the character and value of the assets of each
institution as to determine with reasonable certainty that the
values are correctly carried on its books. Assets and
liabilities shall be verified in accordance with methods of
procedure which the commissioner may determine to be adequate to
carry out the intentions of this section. It shall be the
further purpose of these examinations to assess the adequacy of
capital protection and the capacity of the institution to meet
usual and reasonably anticipated deposit withdrawals and other
cash commitments without resorting to excessive borrowing or
sale of assets at a significant loss, and to investigate each
institution's compliance with applicable laws and rules. Based
on the examination findings, the commissioner shall make a
determination as to whether the institution is being operated in
a safe and sound manner. None of the above provisions limits
the commissioner in making additional examinations as deemed
necessary or advisable. The commissioner shall investigate the
methods of operation and conduct of these institutions and their
systems of accounting, to ascertain whether these methods and
systems are in accordance with law and sound banking
principles. The commissioner may make requirements as to
records as deemed necessary to facilitate the carrying out of
the commissioner's duties and to properly protect the public
interest. The commissioner may examine, or cause to be examined
by these examiners, on oath, any officer, director, trustee,
owner, agent, clerk, customer, or depositor of any financial
institution touching the affairs and business thereof, and may
issue, or cause to be issued by the examiners, subpoenas, and
administer, or cause to be administered by the examiners,
oaths. In case of any refusal to obey any subpoena issued under
the commissioner's direction, the refusal may at once be
reported to the district court of the district in which the bank
or other financial institution is located, and this court shall
enforce obedience to these subpoenas in the manner provided by
law for enforcing obedience to subpoenas of the court. In all
matters relating to official duties, the commissioner of
commerce has the power possessed by courts of law to issue
subpoenas and cause them to be served and enforced, and all
officers, directors, trustees, and employees of state banks,
savings banks, trust companies, savings associations, and other
financial institutions within the state, and all persons having
dealings with or knowledge of the affairs or methods of these
institutions, shall afford reasonable facilities for these
examinations, make returns and reports to the commissioner of
commerce as the commissioner may require; attend and answer,
under oath, the commissioner's lawful inquiries; produce and
exhibit any books, accounts, documents, and property as the
commissioner may desire to inspect, and in all things aid the
commissioner in the performance of duties.
Sec. 2. Minnesota Statutes 2002, section 46.041,
subdivision 2, is amended to read:
Subd. 2. [NOTICE OF FILING APPLICATION; PUBLICATION.] Upon
notice of acceptance of an application as complete in all
respects for filing, the applicant shall within 30 days of the
receipt of the form prescribed by the commissioner, publish a
notice of the filing of the application, in a qualified
newspaper published in the municipality in which the proposed
bank is to be located, and if there is no such newspaper, then
in a qualified newspaper likely to give notice in the
municipality in which the bank is proposed to be located. The
notice must be in the form prescribed by the commissioner and,
in addition to the publication, the applicant shall mail a copy
of the notice by certified mail to every bank located within
three miles of the proposed location of the bank.
Sec. 3. Minnesota Statutes 2002, section 47.015, is
amended by adding a subdivision to read:
Subd. 5. [PERMISSIVE CLOSING ON DECEMBER 24.] A financial
institution may close at noon on December 24 or on December 31.
The financial institution shall post on its premises a written
notice of the closing.
Sec. 4. Minnesota Statutes 2002, section 47.101,
subdivision 2, is amended to read:
Subd. 2. [BANKING INSTITUTIONS; CERTAIN RELOCATIONS,
APPLICATIONS, NOTICE, APPROVAL.] A banking institution defined
in section 48.01, subdivision 2, desiring to relocate its main
office within the lesser of a radius of three miles measured in
a straight line or the municipality, as defined in section
47.51, in which it is located shall notify the commissioner of
commerce in a form prescribed by the commissioner of commerce.
The applicant shall publish once in a form prescribed by the
commissioner a notice of the relocation in a qualified newspaper
published in the municipality where the banking institution is
located. If there are no such newspapers, then notice shall be
published in qualified newspapers likely to give notice in the
municipality. The applicant shall cause the notice to be
publicly displayed in its lobby and sent by certified mail to
all banking institutions within three miles of the proposed
location measured in a straight line.
Sec. 5. Minnesota Statutes 2002, section 47.59,
subdivision 2, is amended to read:
Subd. 2. [APPLICATION.] Extensions of credit or purchases
of extensions of credit by financial institutions under sections
47.20, 47.21, 47.201, 47.204, 47.58, 47.60, 48.153, 48.185,
48.195, 59A.01 to 59A.15, 334.01, 334.011, 334.012, 334.021
334.022, 334.06, and 334.061 to 334.19 may, but need not, be
made according to those sections in lieu of the authority set
forth in this section to the extent those sections authorize the
financial institution to make extensions of credit or purchase
extensions of credit under those sections. If a financial
institution elects to make an extension of credit or to purchase
an extension of credit under those other sections, the extension
of credit or the purchase of an extension of credit is subject
to those sections and not this section, except this subdivision,
and except as expressly provided in those sections. A financial
institution may also charge an organization a rate of interest
and any charges agreed to by the organization and may calculate
and collect finance and other charges in any manner agreed to by
that organization. Except for extensions of credit a financial
institution elects to make under section 334.01, 334.011,
334.012, 334.021, 334.06, or 334.061 to 334.19, chapter 334 does
not apply to extensions of credit made according to this section
or the sections listed in this subdivision. This subdivision
does not authorize a financial institution to extend credit or
purchase an extension of credit under any of the sections listed
in this subdivision if the financial institution is not
authorized to do so under those sections. A financial
institution extending credit under any of the sections listed in
this subdivision shall specify in the promissory note, contract,
or other loan document the section under which the extension of
credit is made.
Sec. 6. Minnesota Statutes 2002, section 47.67, is amended
to read:
47.67 [ADVERTISING.]
No advertisement by a person which relates to an electronic
financial terminal may be inaccurate or misleading with respect
to such a terminal. Except with respect to direct mailings by
financial institutions to their customers, the advertising of
rate of interest paid on accounts in connection with electronic
financial terminals is prohibited. Any advertisement, either on
or off the site of an electronic financial terminal, promoting
the use or identifying the location of an electronic financial
terminal, which identifies any financial institution, group or
combination of financial institutions, or third parties as
owning or providing for the use of its services is prohibited.
The following shall be expressly permitted:
(a) a simple directory listing placed at the site of an
electronic financial terminal identifying the particular
financial institutions using its services;
(b) the use of a generic name, either on or off the site of
an electronic financial terminal, which does not promote or
identify any particular financial institution, group or
combination of financial institutions, or any third parties;
(c) media advertising or direct mailing of information by a
financial institution or retailer identifying locations of
electronic financial terminals and promoting their usage;
(d) any advertising, whether on or off the site, relating
to electronic financial terminals, or the services performed at
the electronic financial terminals located on the premises of
the main office, or any office or detached facility of any
financial institution;
(e) a coupon or other promotional advertising that is
printed upon the reverse side of the receipt or record of each
transaction required under section 47.69, subdivision 6; and
(f) promotional advertising displayed on the electronic
screen.
Sec. 7. Minnesota Statutes 2002, section 48.08, is amended
to read:
48.08 [DIRECTORS AND OFFICERS, RESTRICTED USE OF BANK
FUNDS; DEALINGS WITH BANK.]
No director, officer or employee shall, directly or
indirectly, in any manner, use the funds of the bank, or any
part thereof, except in its regular business transactions, and
every loan made to any of its directors, officers, employees, or
agents shall be upon the same security required of others and in
strict conformity to its rules and regulations. Every such
loan, or line of credit for a stated amount and not to run for
more than one year, shall be authorized in advance by the board
and acted upon in the absence of the applicant, except that a
loan to a director, officer, or employee for an amount which
will not increase such a liability to exceed the greater of (a)
$25,000 or (b) five percent of the bank's capital and unimpaired
surplus or $500,000, whichever is less, may be made without
previous approval but shall be acted upon by the board at the
next succeeding regular meeting. No cashier or other officer or
employee of a bank shall sell to the bank, directly or
indirectly, any mortgage, bond, note, stock, or other security
without the written approval of the board of directors, filed in
the office of the bank or embodied in a resolution adopted by
the board. A copy of this written approval or resolution shall
immediately be sent to the commissioner of commerce.
Sec. 8. Minnesota Statutes 2002, section 48.24,
subdivision 6, is amended to read:
Subd. 6. The discount of the following classes of paper
shall not be regarded as creating liability within the meaning
of this section:
(1) Bonds, orders, warrants, or other evidences of
indebtedness of the United States, of federal land banks, of
this state or of any county, city, town, hospital district, or
school district in this state, or of the bonds, representing
general obligation of any other state in the United States, or
bonds and obligations of the federal home loan banks established
by act of Congress known as the Federal Home Loan Bank Act,
approved July 23, 1932, and acts amendatory thereto, or
debentures and other obligations of the federal intermediate
credit banks established by act of Congress known as the Federal
Intermediate Credit Banks Act, approved March 4, 1923, and acts
amendatory thereto, in obligations issued by the banks for
cooperatives or any of them, and in bonds and obligations of the
home owners' loan corporation established by act of Congress,
known as the Home Owners' Loan Act of 1933, and acts amendatory
thereto, in exchange for mortgages on homes, or contracts for
deed, or real estate held by it.
(2) Bills of exchange drawn in good faith against actually
existing values, including bills which are secured by shipping
documents conveying or securing title to goods shipped, and
which are not to be surrendered until such bills are paid in
cash or solvent credits. This includes bankers' acceptances or
participations in bankers' acceptances of the kind and
maturities made eligible by law for rediscount with, or purchase
by, federal reserve banks, providing the same are accepted or
endorsed by a bank or trust company incorporated under the laws
of this state; or by any bank or trust company in the United
States which is a member of the Federal Reserve system.
(3) Paper based upon the collateral security of warehouse
receipts covering agricultural or manufactured products stored
in elevators or warehouses under the following conditions:
First, when the actual market value of the property covered
by such receipts at all times exceeds by at least ten percent
the amount loaned thereon, and
Second, when the full amount of every such loan is at all
times covered by fire insurance in duly authorized companies,
within the limit of their ability to cover such amounts, and the
excess, if any, in companies having sufficient paid-up capital
to authorize their admission, and payable, in case of loss, to
the bank or holder of the warehouse receipt.
(4) Total loans to an obligor secured by either
certificates of deposit, or savings certificates or both, of any
such bank to the extent of the total of such certificates
pledged as security segregated deposit accounts in the lending
bank, provided that a security interest in the deposit has been
perfected. Where the deposit is eligible for withdrawal before
the secured loan matures, the bank shall establish internal
procedures to prevent release of the deposit without the lending
bank's prior consent.
(5) Debentures issued under the authority of the federal
National Mortgage Association.
(6) Obligations representing loans from one business day to
the next to any state bank or national banking association of
excess reserve balances from time to time maintained under the
provisions of section 48.221, or of section 19 of the Federal
Reserve Act, as amended, United States Code, title 12, sections
461 et seq.
Sec. 9. Minnesota Statutes 2002, section 52.06,
subdivision 1, is amended to read:
Subdivision 1. [REPORT AND AUDIT SCHEDULE.] Credit unions
shall be under the supervision of the commissioner of commerce.
Each credit union shall annually, on or before January 25, file
a report with the commissioner of commerce on forms supplied by
the commissioner for that purpose giving such relevant
information as the commissioner may require concerning the
operations during the preceding calendar year. Additional
reports may be required. Credit unions shall be examined, at
least once every 18 24 calendar months, by the commissioner of
commerce. Further, in lieu of this examination the commissioner
may accept any examination made by the National Credit Union
Administration, provided a copy of the examination is furnished
to the commissioner. A report of the examination by the
commissioner of commerce shall be forwarded to the president, or
the chair of the board if the position is so designated pursuant
to section 52.09, subdivision 4, of the examined credit union
within 60 days after completion of the examination. Within 60
days of the receipt of such report, a general meeting of the
directors and committees shall be called to consider matters
contained in the report. For failure to file reports when due,
unless excused for cause, the credit union shall pay to the
state treasurer $5 for each day of its delinquency.
Sec. 10. Minnesota Statutes 2002, section 61A.245,
subdivision 3, is amended to read:
Subd. 3. (a) In the case of contracts issued on or after
the operative date specified in subdivision 12, no contract of
annuity, except as stated in subdivision 2, shall be delivered
or issued for delivery in this state unless it contains in
substance the following provisions, or corresponding provisions
which in the opinion of the commissioner are at least as
favorable to the contract holder, upon cessation of payment of
considerations under the contract:
(a) (1) that upon cessation of payment of considerations
under a contract, or upon the written request of the contract
owner, the company will shall grant a paid-up annuity benefit on
a plan stipulated in the contract of the value specified in
subdivisions 5, 6, 7, 8 and 10;
(b) (2) if a contract provides for a lump sum settlement at
maturity, or at any other time, that upon surrender of the
contract at or prior to the commencement of any annuity
payments, the company will shall pay in lieu of any paid-up
annuity benefit a cash surrender benefit of the amount specified
in subdivisions 5, 6, 8 and 10. The company shall may reserve
the right to defer the payment of the cash surrender benefit for
a period of not to exceed six months after demand therefor with
surrender of the contract after making a written request and
receiving written approval of the commissioner. The request
must address the necessity and equitability to all contract
holders of the deferral;
(c) (3) a statement of the mortality table, if any, and
interest rates used in calculating any minimum paid-up annuity,
cash surrender or death benefits that are guaranteed under the
contract, together with sufficient information to determine the
amounts of the benefits; and
(d) (4) a statement that any paid-up annuity, cash
surrender or death benefits that may be available under the
contract are not less than the minimum benefits required by any
statute of the state in which the contract is delivered and an
explanation of the manner in which the benefits are altered by
the existence of any additional amounts credited by the company
to the contract, any indebtedness to the company on the contract
or any prior withdrawals from or partial surrenders of the
contract.
(b) Notwithstanding the requirements of this section
subdivision, any deferred annuity contract may provide that if
no considerations have been received under a contract for a
period of two full years and the portion of the paid-up annuity
benefit at maturity on the plan stipulated in the contract
arising from considerations paid prior to the that period would
be less than $20 monthly, the company may at its option
terminate the contract by payment in cash of the then present
value of the portion of the paid-up annuity benefit, calculated
on the basis of the mortality table, if any, and interest rate
specified in the contract for determining the paid-up annuity
benefit, and by the payment shall be relieved of any further
obligation under the contract.
Sec. 11. Minnesota Statutes 2002, section 61A.245,
subdivision 4, is amended to read:
Subd. 4. The minimum values as specified in subdivisions
5, 6, 7, 8 and 10 of any paid-up annuity, cash surrender or
death benefits available under an annuity contract shall be
based upon minimum nonforfeiture amounts as defined in this
subdivision.
(a) With respect to contracts providing for flexible
considerations, The minimum nonforfeiture amount at any time at
or prior to the commencement of any annuity payments shall be
equal to an accumulation up to that time at a rate rates of
interest of three percent per annum as indicated in paragraph (b)
of percentages of the net considerations, as defined in this
subdivision, paid prior to that time, decreased by the sum
of clauses (1) through (4):
(i) (1) any prior withdrawals from or partial surrenders of
the contract accumulated at a rate rates of interest of three
percent per annum and (ii) as indicated in paragraph (b);
(2) an annual contract charge of $50, accumulated at rates
of interest as indicated in paragraph (b);
(3) any premium tax paid by the company for the contract
and not subsequently credited back to the company, such as upon
early termination of the contract, in which case this decrease
must not be taken, accumulated at rates of interest as indicated
in paragraph (b); and
(4) the amount of any indebtedness to the company on the
contract, including interest due and accrued; and increased by
any existing additional amounts credited by the company to the
contract.
The net considerations for a given contract year used to
define the minimum nonforfeiture amount shall be an amount not
less than zero and shall be equal to the corresponding 87.5
percent of the gross considerations credited to the contract
during that contract year less an annual contract charge of $30
and less a collection charge of $1.25 per consideration credited
to the contract during that contract year. The percentages of
net considerations shall be 65 percent of the net consideration
for the first contract year and 87.5 percent of the net
considerations for the second and later contract years.
Notwithstanding the provisions of the preceding sentence, the
percentage shall be 65 percent of the portion of the total net
consideration for any renewal contract year which exceeds by not
more than two times the sum of those portions of the net
considerations in all prior contract years for which the
percentage was 65 percent.
(b) With respect to contracts providing for fixed scheduled
considerations, minimum nonforfeiture amounts shall be
calculated on the assumption that considerations are paid
annually in advance and shall be defined as for contracts with
flexible considerations which are paid annually with two
exceptions:
(1) the portion of the net consideration for the first
contract year to be accumulated shall be the sum of 65 percent
of the net consideration for the first contract year plus 22.5
percent of the excess of the net consideration for the first
contract year over the lesser of the net considerations for the
second and third contract years; and
(2) the annual contract charge shall be the lesser of (i)
$30 or (ii) ten percent of the gross annual consideration.
(c) With respect to contracts providing for a single
consideration, minimum nonforfeiture amounts shall be defined as
for contracts with flexible considerations except that the
percentage of net consideration used to determine the minimum
nonforfeiture amount shall be equal to 90 percent and the net
consideration shall be the gross consideration less a contract
charge of $75.
(b) The interest rate used in determining minimum
nonforfeiture amounts must be an annual rate of interest
determined as the lesser of three percent per annum and the
following, which must be specified in the contract if the
interest rate will be reset:
(1) the five-year constant maturity treasury rate reported
by the Federal Reserve as of a date, or average over a period,
rounded to the nearest 1/20 of one percent, specified in the
contract no longer than 15 months prior to the contract issue
date or redetermination date under clause (4);
(2) reduced by 125 basis points;
(3) where the resulting interest rate is not less than one
percent; and
(4) the interest rate shall apply for an initial period and
may be redetermined for additional periods. The redetermination
date, basis, and period, if any, shall be stated in the
contract. The basis is the date or average over a specified
period that produces the value of the five-year constant
maturity treasury rate to be used at each redetermination date.
(c) During the period or term that a contract provides
substantive participation in an equity indexed benefit, it may
increase the reduction described in clause (2) by up to an
additional 100 basis points to reflect the value of the equity
index benefit. The present value at the contract issue date,
and at each redetermination date thereafter, of the additional
reduction must not exceed the market value of the benefit. The
commissioner may require a demonstration that the present value
of the additional reduction does not exceed the market value of
the benefit. Lacking such a demonstration that is acceptable to
the commissioner, the commissioner may disallow or limit the
additional reduction.
Sec. 12. Minnesota Statutes 2002, section 61A.245,
subdivision 5, is amended to read:
Subd. 5. Any paid-up annuity benefit available under a
contract shall be such that its present value on the date
annuity payments are to commence is at least equal to the
minimum nonforfeiture amount on that date. The present value
shall be computed using the mortality table, if any, and the
interest rate rates specified in the contract for determining
the minimum paid-up annuity benefits guaranteed in the contract.
Sec. 13. Minnesota Statutes 2002, section 61A.245,
subdivision 6, is amended to read:
Subd. 6. For contracts which provide cash surrender
benefits, the cash surrender benefits available prior to
maturity shall not be less than the present value as of the date
of surrender of that portion of the maturity value of the
paid-up annuity benefit which would be provided under the
contract at maturity arising from considerations paid prior to
the time of cash surrender reduced by the amount appropriate to
reflect any prior withdrawals from or partial surrenders of the
contract, the present value being calculated on the basis of an
interest rate not more than one percent higher than the interest
rate specified in the contract for accumulating the net
considerations to determine the maturity value, decreased by the
amount of any indebtedness to the company on the contract,
including interest due and accrued, and increased by any
existing additional amounts credited by the company to the
contract. In no event shall any cash surrender benefit be less
than the minimum nonforfeiture amount at that time. The death
benefit under the contracts shall be at least equal to the cash
surrender benefit.
Sec. 14. Minnesota Statutes 2002, section 61A.245,
subdivision 12, is amended to read:
Subd. 12. After August 1, 1978, any company may file with
the commissioner a written notice of its election to comply with
the provisions of this section after a specified date before
August 1, 1980. After the filing of such notice, then upon the
specified date, which shall be considered the operative date of
this section for such company, this section shall become
operative with respect to annuity contracts thereafter issued by
the company. If a company makes no election, the operative date
of this section for the company shall be August 1, 1980. After
the effective date of this act, a company may elect to apply its
provisions to annuity contracts on a contract form-by-contract
form basis before the second anniversary of the effective date
of this act. In this instance, the operative date of this act
is the date elected for the contract form. In all other
instances, this act applies to annuity contracts issued by the
company after the second anniversary of this act, which then
becomes the operative date of the act.
Sec. 15. Minnesota Statutes 2002, section 118A.03,
subdivision 2, is amended to read:
Subd. 2. [IN LIEU OF SURETY BOND.] The following are the
allowable forms of collateral in lieu of a corporate surety bond:
(1) United States government treasury bills, treasury
notes, treasury bonds;
(2) issues of United States government agencies and
instrumentalities as quoted by a recognized industry quotation
service available to the government entity;
(3) general obligation securities of any state or local
government with taxing powers which is rated "A" or better by a
national bond rating service, or revenue obligation securities
of any state or local government with taxing powers which is
rated "AA" or better by a national bond rating service;
(4) unrated general obligation securities of a local
government with taxing powers may be pledged as collateral
against funds deposited by that same local government entity;
(5) irrevocable standby letters of credit issued by Federal
Home Loan Banks to a municipality accompanied by written
evidence that the bank's public debt is rated "AA" or better by
Moody's Investors Service, Inc., or Standard & Poor's
Corporation; and
(5) (6) time deposits that are fully insured by the Federal
Deposit Insurance Corporation.
Sec. 16. Minnesota Statutes 2002, section 118A.03,
subdivision 3, is amended to read:
Subd. 3. [AMOUNT.] The total amount of the collateral
computed at its market value shall be at least ten percent more
than the amount on deposit plus accrued interest at the close of
the business day, except that where the collateral is
irrevocable standby letters of credit issued by Federal Home
Loan Banks, the amount of collateral shall be at least equal to
the amount on deposit plus accrued interest at the close of the
business day. The financial institution may furnish both a
surety bond and collateral aggregating the required amount.
Sec. 17. Minnesota Statutes 2002, section 300.025, is
amended to read:
300.025 [ORGANIZATION OF FINANCIAL CORPORATIONS.]
(a) Three or more persons may form a corporation for any of
the purposes specified in section 47.12 by applying to the
department of commerce and complying with all applicable
organizational requirements and the conditions set out in
clauses (1) to (7). However, no corporation may be formed under
this section if it may be formed under the Minnesota Business
Corporation Act. The incorporators must subscribe a certificate
specifying:
(1) the corporation's name, which must distinguish it from
all other corporations authorized to do business in this state,
and must contain the word "company," "corporation," "bank,"
"association," or "incorporated";
(2) the general nature of the corporation's business and
its principal place of business;
(3) the period of its duration, if limited;
(4) the names and places of residence of the incorporators;
(5) the board in which the management of the corporation
will be vested, the date of the annual meeting at which it will
be elected, and the names and addresses of the board members
until the first election, a majority of whom must always
be either residents of this state or reside within 50 miles of
the main office of the financial corporation;
(6) the amount of capital stock, if any, how the capital
stock is to be paid in, the number of shares into which it is to
be divided, and the par value of each share; and, if there is to
be more than one class, a description and the terms of issue of
each class, and the method of voting on each class; and
(7) the highest amount of indebtedness or liability to
which the corporation will at any time be subject.
The certificate may contain any other lawful provision
defining and regulating the powers and business of the
corporation, its officers, directors, trustees, members, and
stockholders. However, a corporation subject to section 48.27
may show its highest amount of indebtedness to be 30 times the
amount of its capital and actual surplus.
(b) A person doing business in this state may contest the
subsequent registration of a name with the office of the
secretary of state as provided in section 5.22.
Sec. 18. Minnesota Statutes 2002, section 300.23, is
amended to read:
300.23 [VOTING, HOW REGULATED.]
Unless otherwise provided in the certificate or bylaws, at
every meeting each stockholder or member is entitled to one vote
in person, or by proxy made within one year or other time
specially limited by law, for each share or other lawful unit of
representation held in an individual, corporate, or
representative capacity. No stock may be voted on at an
election within 20 days after its transfer on the books of the
corporation. In the case of a banking corporation, the
commissioner of commerce may waive the 20-day limitation.
Sec. 19. Minnesota Statutes 2002, section 332.29,
subdivision 1, is amended to read:
Subdivision 1. [EXAMINATION; AUDIT.] The commissioner
shall examine the books and records of every licensee hereunder
and of any person engaged in the business of debt prorating
service as defined in section 332.13 at least once every 18 24
calendar months. The commissioner once during any calendar
year, may require the submission of an audit prepared by a
certified public accountant of the books and records of each
licensee hereunder. If the licensee has, within one year
previous to the commissioner's demand, had an audit prepared for
some other purpose, this audit may be submitted to satisfy the
requirement of this section. The commissioner may investigate
any complaint concerning violations of sections 332.12 to 332.29
and may require the attendance and sworn testimony of witnesses
and the production of documents.
Sec. 20. [REPEALER.]
Minnesota Rules, parts 2675.0300; 2675.2250; and 2675.6400,
are repealed effective the day following final enactment.
Sec. 21. [EFFECTIVE DATES.]
Sections 1 to 9 and 15 to 20 are effective the day
following final enactment. Sections 10 to 14 are effective
August 1, 2003, and apply to annuity contracts issued on or
after that date.
Presented to the governor May 13, 2003
Signed by the governor May 16, 2003, 3:45 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes