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CHAPTER 57--S.F.No. 2744

An act

relating to commerce; establishing a biennial budget for Department of Commerce and related activities; adding and modifying various provisions governing health, property, life, homeowner's, and automobile insurance; regulating financial institutions; modifying provisions governing financial institutions; providing for certain consumer protections and privacy; modifying provisions governing commerce; making technical changes; establishing civil and criminal penalties; authorizing administrative rulemaking; requiring reports; appropriating and transferring money;

amending Minnesota Statutes 2022, sections 46.131, subdivision 11; 47.0153, subdivision 1; 47.59, subdivision 2; 47.60, subdivisions 1, 2, by adding a subdivision; 47.601, subdivisions 1, 2, 6, by adding a subdivision; 53.04, subdivision 3a; 53C.01, subdivision 12c, by adding a subdivision; 53C.08, subdivision 1a; 56.131, subdivision 1; 60A.08, subdivision 15; 60A.14, subdivision 1; 61A.031; 61A.60, subdivision 3; 62A.152, subdivision 3; 62A.3099, by adding a subdivision; 62A.31, subdivisions 1, 1f, 1h, 1p, 1u, 4, by adding a subdivision; 62A.44, subdivision 2; 62D.02, by adding a subdivision; 62D.095, subdivisions 2, 3, 5; 62J.26, subdivisions 1, 2; 62K.10, subdivision 4; 62Q.096; 62Q.19, subdivision 1; 62Q.46, subdivisions 1, 3; 62Q.47; 62Q.735, subdivisions 1, 5; 62Q.76, by adding a subdivision; 62Q.78, by adding subdivisions; 62Q.81, subdivision 4, by adding a subdivision; 65B.49, by adding a subdivision; 80A.50; 80E.041, subdivision 4; 103G.291, subdivision 4; 151.071, subdivisions 1, 2; 237.066; 239.791, subdivision 8; 256B.0631, subdivision 1; 256B.69, subdivision 5a; 256L.03, subdivision 5; 325D.01, subdivision 5; 325D.44, subdivisions 1, 2; 325D.71; 325E.31; 325F.662, subdivisions 2, 3; 325F.6641, subdivision 2; 325F.69, subdivision 1, by adding a subdivision; 325G.051, subdivision 1; 327C.015, subdivision 17, by adding subdivisions; 327C.04, subdivisions 1, 2, by adding subdivisions; 515B.3-102; 515B.3-115; 515B.3-1151; 515B.3-116; Laws 2022, chapter 93, article 1, section 2, subdivision 5; Laws 2023, chapter 24, section 3; proposing coding for new law in Minnesota Statutes, chapters 47; 48; 52; 53B; 58; 58B; 60A; 62J; 62Q; 62W; 65A; 325E; 325F; 332; repealing Minnesota Statutes 2022, sections 48.10; 53B.01; 53B.02; 53B.03; 53B.04; 53B.05; 53B.06; 53B.07; 53B.08; 53B.09; 53B.10; 53B.11; 53B.12; 53B.13; 53B.14; 53B.15; 53B.16; 53B.17; 53B.18; 53B.19; 53B.20; 53B.21; 53B.22; 53B.23; 53B.24; 53B.25; 53B.26; 53B.27, subdivisions 1, 2, 5, 6, 7; 62A.31, subdivisions 1b, 1i; 327C.04, subdivision 4; Minnesota Rules, parts 2675.2610, subparts 1, 3, 4; 2675.2620, subparts 1, 2, 3, 4, 5; 2675.2630, subpart 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

COMMERCE FINANCE

Section 1.

new text begin APPROPRIATIONS.new text end

new text begin The sums shown in the columns marked "Appropriations" are appropriated to the agencies and for the purposes specified in this article. The appropriations are from the general fund, or another named fund, and are available for the fiscal years indicated for each purpose. The figures "2024" and "2025" used in this article mean that the appropriations listed under them are available for the fiscal year ending June 30, 2024, or June 30, 2025, respectively. "The first year" is fiscal year 2024. "The second year" is fiscal year 2025. "The biennium" is fiscal years 2024 and 2025. If an appropriation in this act is enacted more than once in the 2023 legislative session, the appropriation must be given effect only once. new text end

new text begin APPROPRIATIONS new text end
new text begin Available for the Year new text end
new text begin Ending June 30 new text end
new text begin 2024 new text end new text begin 2025 new text end

Sec. 2.

new text begin DEPARTMENT OF COMMERCE new text end

new text begin Subdivision 1. new text end

new text begin Total Appropriation new text end

new text begin $ new text end new text begin 33,757,000 new text end new text begin $ new text end new text begin 34,660,000 new text end
new text begin Appropriations by Fund new text end
new text begin 2024 new text end new text begin 2025 new text end
new text begin General new text end new text begin 30,876,000 new text end new text begin 31,752,000 new text end
new text begin Workers' Compensation Fund new text end new text begin 788,000 new text end new text begin 815,000 new text end
new text begin Special Revenue new text end new text begin 2,093,000 new text end new text begin 2,093,000 new text end

new text begin The amounts that may be spent for each purpose are specified in the following subdivisions. new text end

new text begin Subd. 2. new text end

new text begin Financial Institutions new text end

new text begin 2,372,000 new text end new text begin 2,492,000 new text end

new text begin (a) $400,000 each year is for a grant to Prepare and Prosper to develop, market, evaluate, and distribute a financial services inclusion program that (1) assists low-income and financially underserved populations to build savings and strengthen credit, and (2) provides services to assist low-income and financially underserved populations to become more financially stable and secure. Money remaining after the first year is available for the second year. new text end

new text begin (b) $254,000 each year is to administer the requirements of Minnesota Statutes, chapter 58B. new text end

new text begin Subd. 3. new text end

new text begin Administrative Services new text end

new text begin 10,078,000 new text end new text begin 10,104,000 new text end

new text begin (a) $353,000 each year is for system modernization and cybersecurity upgrades for the unclaimed property program. new text end

new text begin (b) $564,000 each year is for additional operations of the unclaimed property program. new text end

new text begin (c) $249,000 each year is for the senior safe fraud prevention program. new text end

new text begin (d) $568,000 in the first year and $537,000 in the second year are to create and maintain the Prescription Drug Affordability Board established under Minnesota Statutes, section 62J.87. The base in fiscal year 2026 is $500,000. new text end

new text begin (e) $150,000 each year is for a grant to Exodus Lending to expand program and operational capacity to assist individuals with financial stability through small dollar consumer loans, including but not limited to resolving consumer short-term loans carrying interest rates greater than 36 percent. Loans issued under the program must be: (1) interest- and fee-free; and (2) made to Minnesotans facing significant barriers to mainstream financial products. Program participants must be recruited through a statewide network of trusted community-based partners. Loan payments by borrowers must be reported to the credit bureaus. These are onetime appropriations and are available until June 30, 2027. new text end

new text begin (f) $200,000 in the first year is for a grant to Exodus Lending to assist in the development of a character-based small dollar loan program. This is a onetime appropriation and is available until June 30, 2027. new text end

new text begin (g) For the purposes of paragraphs (e) and (f), the following terms have the meanings given: new text end

new text begin (1) "barriers to financial inclusion" means a person's financial history, credit history and credit score requirements, scarcity of depository institutions in lower income and communities of color, and low or irregular income flows; new text end

new text begin (2) "character-based lending" means the practice of issuing loans based on a borrower's involvement in and ties to community-based organizations that provide client services, including but not limited to financial coaching; and new text end

new text begin (3) "mainstream financial products" means financial products that are provided most commonly by regulated financial institutions, including but not limited to credit cards and installment loans. new text end

new text begin (h) No later than July 15, 2024, and annually thereafter until the appropriations under paragraphs (e) and (f) have been exhausted or canceled, Exodus Lending must submit a report to the commissioner of commerce on the activities required of Exodus Lending under paragraphs (e) and (f). Until July 15, 2027, the report must detail, at a minimum, each of the following for the prior calendar year and, after July 15, 2027, the report must detail, at a minimum, each of the following that relate to the activities of Exodus Lending under paragraph (f) for the prior calendar year: new text end

new text begin (1) the total number of loans granted; new text end

new text begin (2) the total number of participants granted loans; new text end

new text begin (3) an analysis of the participants' race, ethnicity, gender, and geographic locations; new text end

new text begin (4) the average loan amount; new text end

new text begin (5) the total loan amounts paid back by participants; new text end

new text begin (6) a list of the trusted community-based partners; new text end

new text begin (7) the final criteria developed for character-based small dollar loan program determinations under paragraph (f); and new text end

new text begin (8) summary data on the significant barriers to mainstream financial products faced by participants. new text end

new text begin (i) No later than August 15, 2024, and annually thereafter until the appropriations under paragraphs (e) and (f) have been exhausted or canceled, the commissioner of commerce must submit a report to the chairs and ranking minority members of the legislative committees with primary jurisdiction over commerce and consumer protection. The report must detail the information collected by the commissioner of commerce under paragraph (h). new text end

new text begin (j) $12,000 each year is for the intermediate blends of gasoline and biofuels report under Minnesota Statutes, section 239.791, subdivision 8. new text end

new text begin (k) The total base for administrative services under this subdivision is $10,042,000 in fiscal year 2026 and beyond. new text end

new text begin Subd. 4. new text end

new text begin Enforcement new text end

new text begin 7,382,000 new text end new text begin 7,670,000 new text end
new text begin Appropriations by Fund new text end
new text begin General new text end new text begin 7,174,000 new text end new text begin 7,455,000 new text end
new text begin Workers' Compensation new text end new text begin 208,000 new text end new text begin 215,000 new text end

new text begin (a) $811,000 each year is for five additional peace officers in the Commerce Fraud Bureau. Money under this paragraph is transferred from the general fund to the insurance fraud prevention account under Minnesota Statutes, section 45.0135, subdivision 6. new text end

new text begin (b) $345,000 each year is for additional staff to focus on market conduct examinations. new text end

new text begin (c) $41,000 in the first year and $21,000 in the second year are for body cameras worn by Commerce Fraud Bureau agents. new text end

new text begin (d) $208,000 in the first year and $215,000 in the second year are from the workers' compensation fund. new text end

new text begin (e) $100,000 in the second year is for the creation and maintenance of the Mental Health Parity and Substance Abuse Accountability Office under Minnesota Statutes, section 62Q.465. The base for fiscal year 2026 is $225,000. new text end

new text begin (f) $197,000 each year is to create and maintain a student loan advocate position under Minnesota Statutes, section 58B.011. new text end

new text begin (g) $283,000 each year is for law enforcement salary increases, as authorized under Laws 2021, chapter 4, article 9, section 1. new text end

new text begin Subd. 5. new text end

new text begin Telecommunications new text end

new text begin 3,221,000 new text end new text begin 3,261,000 new text end
new text begin Appropriations by Fund new text end
new text begin General new text end new text begin 1,128,000 new text end new text begin 1,168,000 new text end
new text begin Special Revenue new text end new text begin 2,093,000 new text end new text begin 2,093,000 new text end

new text begin $2,093,000 each year is from the telecommunications access Minnesota fund account in the special revenue fund for the following transfers: new text end

new text begin (1) $1,620,000 each year is to the commissioner of human services to supplement the ongoing operational expenses of the Commission of Deaf, DeafBlind, and Hard-of-Hearing Minnesotans. This transfer is subject to Minnesota Statutes, section 16A.281; new text end

new text begin (2) $290,000 each year is to the chief information officer to coordinate technology accessibility and usability; new text end

new text begin (3) $133,000 each year is to the Legislative Coordinating Commission for captioning legislative coverage. This transfer is subject to Minnesota Statutes, section 16A.281; and new text end

new text begin (4) $50,000 each year is to the Office of MN.IT Services for a consolidated access fund to provide grants or services to other state agencies related to accessibility of web-based services. new text end

new text begin Subd. 6. new text end

new text begin Insurance new text end

new text begin 9,173,000 new text end new text begin 9,577,000 new text end
new text begin Appropriations by Fund new text end
new text begin General new text end new text begin 8,593,000 new text end new text begin 8,977,000 new text end
new text begin Workers' Compensation new text end new text begin 580,000 new text end new text begin 600,000 new text end

new text begin (a) $136,000 each year is to advance standardized health plan options. new text end

new text begin (b) $318,000 each year is to conduct a feasibility study on a proposal to offer free primary care to Minnesotans. These are onetime appropriations. new text end

new text begin (c) $105,000 each year is to evaluate legislation for new mandated health benefits under Minnesota Statutes, section 62J.26. new text end

new text begin (d) $180,000 each year is for additional staff to focus on property- and casualty-related insurance products. new text end

new text begin (e) $580,000 in the first year and $600,000 in the second year are from the workers' compensation fund. new text end

new text begin (f) $42,000 each year is for ensuring health plan company compliance with Minnesota Statutes, section 62Q.47, paragraph (h). new text end

new text begin (g) $25,000 each year is to evaluate existing statutory health benefit mandates. new text end

new text begin (h) $20,000 each year is to pay membership dues for Minnesota to the National Conference of Insurance Legislators. The appropriations in this paragraph are onetime. new text end

new text begin Subd. 7. new text end

new text begin Weights and Measures Division new text end

new text begin 1,531,000 new text end new text begin 1,556,000 new text end

Sec. 3.

new text begin DEPARTMENT OF EDUCATION new text end

new text begin Subdivision 1. new text end

new text begin Total Appropriation new text end

new text begin $ new text end new text begin 100,000 new text end new text begin $ new text end new text begin -0- new text end
new text begin Appropriations by Fund new text end
new text begin 2024 new text end new text begin 2025 new text end
new text begin General new text end new text begin 100,000 new text end new text begin -0- new text end

new text begin $100,000 in the first year is to issue grants of $50,000 each year to the Minnesota Council on Economic Education. This balance does not cancel but is available in the second year. This appropriation is onetime. new text end

Sec. 4.

new text begin ATTORNEY GENERAL new text end

new text begin Subdivision 1. new text end

new text begin Total Appropriation new text end

new text begin $ new text end new text begin 691,000 new text end new text begin $ new text end new text begin 691,000 new text end
new text begin Appropriations by Fund new text end
new text begin 2024 new text end new text begin 2025 new text end
new text begin General new text end new text begin 691,000 new text end new text begin 691,000 new text end

new text begin The amounts that may be spent for each purpose are specified in the following subdivisions. new text end

new text begin Subd. 2. new text end

new text begin Excessive Price Increases to Generic Drugs new text end

new text begin 549,000 new text end new text begin 549,000 new text end

new text begin $549,000 each year is for the duties under Minnesota Statutes, sections 62J.841 to 64J.845. new text end

new text begin Subd. 3. new text end

new text begin Report. new text end

new text begin 142,000 new text end new text begin 142,000 new text end

new text begin (a) $142,000 each year is for a report on the effect of new and emerging technologies on the well-being of Minnesotans. The appropriations in this paragraph are onetime. The report must: new text end

new text begin (1) evaluate the impact of technology companies and their products on the mental health and well-being of Minnesotans, with a focus on children; new text end

new text begin (2) discuss proposed and enacted consumer protection laws related to the regulation of technology companies in other jurisdictions; and new text end

new text begin (3) include policy recommendations to the Minnesota legislature. new text end

new text begin (b) The report is due beginning February 1, 2024, and by the same date the following year and must be filed according to Minnesota Statutes, section 3.195, with copies submitted to the chairs and ranking minority members of the legislative committees with jurisdiction over data and commerce. new text end

Sec. 5.

new text begin DEPARTMENT OF HEALTH new text end

new text begin Subdivision 1. new text end

new text begin Total Appropriation new text end

new text begin $ new text end new text begin 74,000 new text end new text begin $ new text end new text begin 56,000 new text end
new text begin Appropriations by Fund new text end
new text begin 2024 new text end new text begin 2025 new text end
new text begin General new text end new text begin 74,000 new text end new text begin 56,000 new text end

new text begin (a) $69,000 in the first year and $51,000 in the second year are for the duties under Minnesota Statutes, sections 62J.841 to 64J.845. new text end

new text begin (b) $5,000 each year is to evaluate existing statutory health benefit mandates. new text end

Sec. 6.

new text begin PREMIUM SECURITY ACCOUNT TRANSFER; OUT. new text end

new text begin $275,775,000 in fiscal year 2026 is transferred from the premium security plan account under Minnesota Statutes, section 62E.25, subdivision 1, to the general fund. This is a onetime transfer. new text end

Sec. 7.

new text begin TRANSFER FROM CONSUMER EDUCATION ACCOUNT. new text end

new text begin $100,000 in fiscal year 2024 is transferred from the consumer education account in the special revenue fund to the general fund. new text end

Sec. 8.

Laws 2022, chapter 93, article 1, section 2, subdivision 5, is amended to read:

Subd. 5.

Enforcement and Examinations

-0- 522,000

$522,000 in fiscal year 2023 is for the auto theft prevention library under Minnesota Statutes, section 65B.84, subdivision 1, paragraph (d). This is a onetime appropriationnew text begin and is available until June 30, 2024new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 2

INSURANCE POLICY

Section 1.

Minnesota Statutes 2022, section 60A.08, subdivision 15, is amended to read:

Subd. 15.

Classification of insurance filings data.

(a) All forms, rates, and related information filed with the commissioner under section 61A.02 shall be nonpublic data until the filing becomes effective.

(b) All forms, rates, and related information filed with the commissioner under section 62A.02 shall be nonpublic data until the filing becomes effective.

(c) All forms, rates, and related information filed with the commissioner under section 62C.14, subdivision 10, shall be nonpublic data until the filing becomes effective.

(d) All forms, rates, and related information filed with the commissioner under section 70A.06 shall be nonpublic data until the filing becomes effective.

(e) All forms, rates, and related information filed with the commissioner under section 79.56 shall be nonpublic data until the filing becomes effective.

new text begin (f) All forms, rates, and related information filed with the commissioner under section 65A.298 are nonpublic data until the filing becomes effective. new text end

deleted text begin (f)deleted text end new text begin (g)new text end Notwithstanding paragraphs (b) and (c), for all rate increases subject to review under section 2794 of the Public Health Services Act and any amendments to, or regulations, or guidance issued under the act that are filed with the commissioner on or after September 1, 2011, the commissioner:

(1) may acknowledge receipt of the information;

(2) may acknowledge that the corresponding rate filing is pending review;

(3) must provide public access from the Department of Commerce's website to parts I and II of the Preliminary Justifications of the rate increases subject to review; and

(4) must provide notice to the public on the Department of Commerce's website of the review of the proposed rate, which must include a statement that the public has 30 calendar days to submit written comments to the commissioner on the rate filing subject to review.

deleted text begin (g)deleted text end new text begin (h)new text end Notwithstanding paragraphs (b) and (c), for all proposed premium rates filed with the commissioner for individual health plans, as defined in section 62A.011, subdivision 4, and small group health plans, as defined in section 62K.03, subdivision 12, the commissioner must provide public access on the Department of Commerce's website to compiled data of the proposed changes to rates, separated by health plan and geographic rating area, within ten business days after the deadline by which health carriers, as defined in section 62A.011, subdivision 2, must submit proposed rates to the commissioner for approval.

Sec. 2.

new text begin [60A.0812] PROPERTY AND CASUALTY POLICY EXCLUSIONS. new text end

new text begin Subdivision 1. new text end

new text begin Short title. new text end

new text begin This section may be cited as the "Family Protection Act." new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the meanings given. new text end

new text begin (b) "Boat" means a motorized or nonmotorized vessel that floats and is used for personal, noncommercial use on waters in Minnesota. new text end

new text begin (c) "Boat insurance policy" means an insurance policy that provides liability coverage for bodily injury resulting from the ownership, maintenance, or use of a boat, although the policy may also provide for property insurance coverage for the boat for noncommercial use. new text end

new text begin (d) "Insured" means an insured under a policy specified in subdivision 3, clauses (1) to (4), including the named insured and the following persons not identified by name as an insured while residing in the same household with the named insured: new text end

new text begin (1) a spouse of a named insured; new text end

new text begin (2) a relative of a named insured; or new text end

new text begin (3) a minor in the custody of a named insured, spouse of a named insured, or of a relative residing in the same household with a named insured. new text end

new text begin For purposes of this section, a person resides in or is a member of the same household with the named insured if the person's home is usually in the same family unit, even if the person is temporarily living elsewhere. new text end

new text begin (e) "Permitted exclusion" means an exclusion of or limitation on liability for damages for bodily injury resulting from fraud, intentional conduct, criminal conduct that intentionally causes an injury, and other exclusions permitted by law, including a permitted exclusion contained in a boat insurance policy issued in this state pursuant to subdivision 6. new text end

new text begin (f) "Prohibited exclusion" means an exclusion of or limitation on liability for damages for bodily injury because the injured person is: new text end

new text begin (1) an insured other than a named insured; new text end

new text begin (2) a resident or member of the insured's household; or new text end

new text begin (3) related to the insured by blood or marriage. new text end

new text begin Subd. 3. new text end

new text begin Prohibited exclusions. new text end

new text begin A prohibited exclusion contained in a plan or policy identified in clauses (1) to (4) is against public policy and is void. The following insurance coverage issued in this state must not contain a prohibited exclusion, unless expressly provided otherwise under this section: new text end

new text begin (1) a plan of reparation security, as defined under section 65B.43; new text end

new text begin (2) a boat insurance policy; new text end

new text begin (3) a personal excess liability policy; and new text end

new text begin (4) a personal umbrella policy. new text end

new text begin Subd. 4. new text end

new text begin Permitted exclusions. new text end

new text begin An insurance policy listed in this section may contain a permitted exclusion for bodily injury to an insured. new text end

new text begin Subd. 5. new text end

new text begin Underlying coverage requirement. new text end

new text begin An excess or umbrella policy may contain a requirement that coverage for family or household members under an excess or umbrella policy governed by this section is available only to the extent coverage is first available from an underlying policy that provides coverage for damages for bodily injury. new text end

new text begin Subd. 6. new text end

new text begin Election of coverage for boat insurance policies. new text end

new text begin (a) An insurer issuing bodily injury liability coverage for a boat insurance policy under this section must notify a person at the time of sale of the person's rights under this section to decline coverage for insureds and be provided an updated quote reflecting the appropriate premium for the coverage provided. new text end

new text begin (b) Named insureds must affirmatively make an election to decline coverage, in a form approved by the commissioner, after being informed that an updated quote will be provided. The election must be signed and dated, and is binding on all persons insured under the policy and to any renewal of the policy. new text end

new text begin (c) An insurer offering an election of coverage under this subdivision must have the disclosure approved by the commissioner. The notice must be in 14-point bold type, in a conspicuous location of the notice document, and contain at least the following: new text end

new text begin ELECTION TO DECLINE COVERAGE: YOU HAVE THE RIGHT TO DECLINE BODILY INJURY COVERAGE FOR INJURIES TO YOUR FAMILY AND HOUSEHOLD MEMBERS FOR WHICH YOU WOULD OTHERWISE BE ENTITLED TO UNDER MINNESOTA LAW. IF YOU ELECT TO DECLINE THIS COVERAGE, YOU WILL RECEIVE AN UPDATED PREMIUM QUOTE BASED ON THE COVERAGE YOU ARE ELECTING TO PURCHASE. READ YOUR POLICY CAREFULLY TO DETERMINE WHICH FAMILY AND HOUSEHOLD MEMBERS WOULD NOT BE COVERED FOR BODILY INJURY IF YOU ELECT TO DECLINE COVERAGE. new text end

new text begin Subd. 7. new text end

new text begin No endorsement required. new text end

new text begin An endorsement, rider, or contract amendment is not required for this section to be effective. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, for plans of reparation security, as defined under Minnesota Statutes, section 65B.43, a personal excess liability policy, or a personal umbrella policy offered, issued, or renewed on or after that date. This section is effective on May 1, 2024, for a boat insurance policy covering a personal injury sustained while using a boat. new text end

Sec. 3.

Minnesota Statutes 2022, section 60A.14, subdivision 1, is amended to read:

Subdivision 1.

Fees other than examination fees.

In addition to the fees and charges provided for examinations, the following fees must be paid to the commissioner for deposit in the general fund:

(a) by township mutual fire insurance companies:

(1) for filing certificate of incorporation $25 and amendments thereto, $10;

(2) for filing annual statements, $15;

(3) for each annual certificate of authority, $15;

(4) for filing bylaws $25 and amendments thereto, $10;

(b) by other domestic and foreign companies including fraternals and reciprocal exchanges:

(1) for filing an application for an initial certification of authority to be admitted to transact business in this state, $1,500;

(2) for filing certified copy of certificate of articles of incorporation, $100;

(3) for filing annual statement, deleted text begin $225deleted text end new text begin $300new text end ;

(4) for filing certified copy of amendment to certificate or articles of incorporation, $100;

(5) for filing bylaws, $75 or amendments thereto, $75;

(6) for each company's certificate of authority, deleted text begin $575deleted text end new text begin $750new text end , annually;

(c) the following general fees apply:

(1) for each certificate, including certified copy of certificate of authority, renewal, valuation of life policies, corporate condition or qualification, $25;

(2) for each copy of paper on file in the commissioner's office 50 cents per page, and $2.50 for certifying the same;

(3) for license to procure insurance in unadmitted foreign companies, $575;

(4) for valuing the policies of life insurance companies, deleted text begin one centdeleted text end new text begin two centsnew text end per $1,000 of insurance so valued, provided that the fee shall not exceed deleted text begin $13,000deleted text end new text begin $26,000new text end per year for any company. The commissioner may, in lieu of a valuation of the policies of any foreign life insurance company admitted, or applying for admission, to do business in this state, accept a certificate of valuation from the company's own actuary or from the commissioner of insurance of the state or territory in which the company is domiciled;

(5) for receiving and filing certificates of policies by the company's actuary, or by the commissioner of insurance of any other state or territory, $50;

(6) for each appointment of an agent filed with the commissioner, $30;

(7) for filing forms, rates, and compliance certifications under section 60A.315, $140 per filing, or $125 per filing when submitted via electronic filing system. Filing fees may be paid on a quarterly basis in response to an invoice. Billing and payment may be made electronically;

(8) for annual renewal of surplus lines insurer license, deleted text begin $300deleted text end new text begin $400new text end .

The commissioner shall adopt rules to define filings that are subject to a fee.

Sec. 4.

Minnesota Statutes 2022, section 61A.031, is amended to read:

61A.031 SUICIDE PROVISIONS.

new text begin (a) new text end The sanity or insanity of a person shall not be a factor in determining whether a person committed suicide within the terms of an individual or group life insurance policy regulating the payment of benefits in the event of the insured's suicide. This deleted text begin sectiondeleted text end new text begin paragraphnew text end shall not be construed to alter present law but is intended to clarify present law.

new text begin (b) A life insurance policy or certificate issued or delivered in this state may exclude or restrict liability for any death benefit in the event the insured dies as a result of suicide within one year from the date of the issue of the policy or certificate. Any exclusion or restriction shall be clearly stated in the policy or certificate. Any life insurance policy or certificate which contains any exclusion or restriction under this paragraph shall also provide that in the event any death benefit is denied because the insured dies as a result of suicide within one year from the date of issue of the policy or certificate, the insurer shall refund all premiums paid for coverage providing the denied death benefit on the insured. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to policies issued on or after that date. new text end

Sec. 5.

Minnesota Statutes 2022, section 61A.60, subdivision 3, is amended to read:

Subd. 3.

Definitions.

The following definitions must appear on the back of the notice forms provided in subdivisions 1 and 2:

DEFINITIONS

PREMIUMS: Premiums are the payments you make in exchange for an insurance policy or annuity contract. They are unlike deposits in a savings or investment program, because if you drop the policy or contract, you might get back less than you paid in.

CASH SURRENDER VALUE: This is the amount of money you can get in cash if you surrender your life insurance policy or annuity. If there is a policy loan, the cash surrender value is the difference between the cash value printed in the policy and the loan value. Not all policies have cash surrender values.

LAPSE: A life insurance policy may lapse when you do not pay the premiums within the grace period. If you had a cash surrender value, the insurer might change your policy to as much extended term insurance or paid-up insurance as the cash surrender value will buy. Sometimes the policy lets the insurer borrow from the cash surrender value to pay the premiums.

SURRENDER: You surrender a life insurance policy when you either let it lapse or tell the company you want to drop it. Whenever a policy has a cash surrender value, you can get it in cash if you return the policy to the company with a written request. Most insurers will also let you exchange the cash value of the policy for paid-up or extended term insurance.

CONVERT TO PAID-UP INSURANCE: This means you use your cash surrender value to change your insurance to a paid-up policy with the same insurer. The death benefit generally will be lower than under the old policy, but you will not have to pay any more premiums.

PLACE ON EXTENDED TERM: This means you use your cash surrender value to change your insurance to term insurance with the same insurer. In this case, the net death benefit will be the same as before. However, you will only be covered for a specified period of time stated in the policy.

BORROW POLICY LOAN VALUES: If your life insurance policy has a cash surrender value, you can almost always borrow all or part of it from the insurer. Interest will be charged according to the terms of the policy, and if the loan with unpaid interest ever exceeds the cash surrender value, your policy will be surrendered. If you die, the amount of the loan and any unpaid interest due will be subtracted from the death benefits.

EVIDENCE OF INSURABILITY: This means proof that you are an acceptable risk. You have to meet the insurer's standards regarding age, health, occupation, etc., to be eligible for coverage.

INCONTESTABLE CLAUSE: This says that after two years, depending on the policy or insurer, the life insurer will not resist a claim because you made a false or incomplete statement when you applied for the policy. For the early years, though, if there are wrong answers on the application and the insurer finds out about them, the insurer can deny a claim as if the policy had never existed.

SUICIDE CLAUSE: This says that if you deleted text begin commitdeleted text end new text begin completenew text end suicide after being insured for less than deleted text begin two yearsdeleted text end new text begin one yearnew text end , depending on the policy and insurer, your beneficiaries will receive only a refund of the premiums that were paid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to policies issued on or after that date. new text end

Sec. 6.

Minnesota Statutes 2022, section 62A.152, subdivision 3, is amended to read:

Subd. 3.

Provider discrimination prohibited.

All group policies and group subscriber contracts that provide benefits for mental or nervous disorder treatments in a hospital must provide direct reimbursement for those services new text begin at a hospital or psychiatric residential treatment facility new text end if performed by a mental health professional qualified according to section 245I.04, subdivision 2, to the extent that the services and treatment are within the scope of mental health professional licensure.

This subdivision is intended to provide payment of benefits for mental or nervous disorder treatments performed by a licensed mental health professional in a hospital new text begin or psychiatric residential treatment facility new text end and is not intended to change or add benefits for those services provided in policies or contracts to which this subdivision applies.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to health plans offered, issued, or renewed on or after that date. new text end

Sec. 7.

Minnesota Statutes 2022, section 62A.3099, is amended by adding a subdivision to read:

new text begin Subd. 18b. new text end

new text begin Open enrollment period. new text end

new text begin "Open enrollment period" means the time period described in Code of Federal Regulations, title 42, section 422.62, paragraph (a), clauses (2) to (4), as amended. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

Sec. 8.

Minnesota Statutes 2022, section 62A.31, subdivision 1, is amended to read:

Subdivision 1.

Policy requirements.

No individual or group policy, certificate, subscriber contract issued by a health service plan corporation regulated under chapter 62C, or other evidence of accident and health insurance the effect or purpose of which is to supplement Medicare coverage, including to supplement coverage under Medicare Advantage plans established under Medicare Part C, issued or delivered in this state or offered to a resident of this state shall be sold or issued to an individual covered by Medicare unless the requirements in subdivisions 1a to deleted text begin 1vdeleted text end new text begin 1wnew text end are met.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

Sec. 9.

Minnesota Statutes 2022, section 62A.31, subdivision 1f, is amended to read:

Subd. 1f.

Suspension based on entitlement to medical assistance.

(a) The policy or certificate must provide that benefits and premiums under the policy or certificate shall be suspended for any period that may be provided by federal regulation at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to this assistance.

(b) If suspension occurs and if the policyholder or certificate holder loses entitlement to this medical assistance, the policy or certificate shall be automatically reinstated, effective as of the date of termination of this entitlement, if the policyholder or certificate holder provides notice of loss of the entitlement within 90 days after the date of the loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.

(c) The policy must provide that upon reinstatement (1) there is no deleted text begin additionaldeleted text end waiting period with respect to treatment of preexisting conditions, (2) coverage is provided which is substantially equivalent to coverage in effect before the date of the suspension. If the suspended policy provided coverage for outpatient prescription drugs, reinstitution of the policy for Medicare Part D enrollees must be without coverage for outpatient prescription drugs and must otherwise provide coverage substantially equivalent to the coverage in effect before the date of suspension, and (3) premiums are classified on terms that are at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had coverage not been suspended.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

Sec. 10.

Minnesota Statutes 2022, section 62A.31, subdivision 1h, is amended to read:

Subd. 1h.

Limitations on denials, conditions, and pricing of coverage.

No health carrier issuing Medicare-related coverage in this state may impose preexisting condition limitations or otherwise deny or condition the issuance or effectiveness of any such coverage available for sale in this state, nor may it discriminate in the pricing of such coverage, because of the health status, claims experience, receipt of health care, medical condition, or age of an applicant where an application for such coverage is submittednew text begin : (1)new text end prior to or during the six-month period beginning with the first day of the month in which an individual first enrolled for benefits under Medicare Part Bnew text begin ; or (2) during the open enrollment periodnew text end . This subdivision applies to each Medicare-related coverage offered by a health carrier regardless of whether the individual has attained the age of 65 years. If an individual who is enrolled in Medicare Part B due to disability status is involuntarily disenrolled due to loss of disability status, the individual is eligible for another six-month enrollment period provided under this subdivision beginning the first day of the month in which the individual later becomes eligible for and enrolls again in Medicare Part Bnew text begin and during the open enrollment periodnew text end . An individual who is or was previously enrolled in Medicare Part B due to disability status is eligible for another six-month enrollment period under this subdivision beginning the first day of the month in which the individual has attained the age of 65 years and either maintains enrollment in, or enrolls again in, Medicare Part Bnew text begin and during the open enrollment periodnew text end . If an individual enrolled in Medicare Part B voluntarily disenrolls from Medicare Part B because the individual becomes enrolled under an employee welfare benefit plan, the individual is eligible for another six-month enrollment period, as provided in this subdivision, beginning the first day of the month in which the individual later becomes eligible for and enrolls again in Medicare Part Bnew text begin and during the open enrollment periodnew text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

Sec. 11.

Minnesota Statutes 2022, section 62A.31, subdivision 1p, is amended to read:

Subd. 1p.

Renewal or continuation provisions.

Medicare supplement policies and certificates shall include a renewal or continuation provision. The language or specifications of the provision shall be consistent with the type of contract issued. The provision shall be appropriately captioned and shall appear on the first page of the policy or certificate, and shall include any reservation by the issuer of the right to change premiums. Except for riders or endorsements by which the issuer effectuates a request made in writing by the insured, exercises a specifically reserved right under a Medicare supplement policy or certificate, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all riders or endorsements added to a Medicare supplement policy or certificate after the date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy or certificate shall require a signed acceptance by the insured. After the date of policy or certificate issue, a rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy or certificate term shall be agreed to in writing and signed by the insured, unless the benefits are required by the minimum standards for Medicare supplement policies or if the increased benefits or coverage is required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy, declaration page, or certificate. deleted text begin If a Medicare supplement policy or certificate contains limitations with respect to preexisting conditions, the limitations shall appear as a separate paragraph of the policy or certificate and be labeled as "preexisting condition limitations."deleted text end

Issuers of accident and sickness policies or certificates that provide hospital or medical expense coverage on an expense incurred or indemnity basis to persons eligible for Medicare shall provide to those applicants a "Guide to Health Insurance for People with Medicare" in the form developed by the Centers for Medicare and Medicaid Services and in a type size no smaller than 12-point type. Delivery of the guide must be made whether or not such policies or certificates are advertised, solicited, or issued as Medicare supplement policies or certificates as defined in this section and section 62A.3099. Except in the case of direct response issuers, delivery of the guide must be made to the applicant at the time of application, and acknowledgment of receipt of the guide must be obtained by the issuer. Direct response issuers shall deliver the guide to the applicant upon request, but no later than the time at which the policy is delivered.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

Sec. 12.

Minnesota Statutes 2022, section 62A.31, subdivision 1u, is amended to read:

Subd. 1u.

Guaranteed issue for eligible persons.

(a)(1) Eligible persons are those individuals described in paragraph (b) who seek to enroll under the policy during the period specified in paragraph (c) and who submit evidence of the date of termination or disenrollment described in paragraph (b), or of the date of Medicare Part D enrollment, with the application for a Medicare supplement policy.

(2) With respect to eligible persons, an issuer shall not: deny or condition the issuance or effectiveness of a Medicare supplement policy described in paragraph (c) that is offered and is available for issuance to new enrollees by the issuer; discriminate in the pricing of such a Medicare supplement policy because of health status, claims experience, receipt of health care, medical condition, or age; or impose an exclusion of benefits based upon a preexisting condition under such a Medicare supplement policy.

(b) An eligible person is an individual described in any of the following:

(1) the individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare; and the plan terminates, or the plan ceases to provide all such supplemental health benefits to the individual;

(2) the individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under section 1894 of the federal Social Security Act, and there are circumstances similar to those described in this clause that would permit discontinuance of the individual's enrollment with the provider if the individual were enrolled in a Medicare Advantage plan:

(i) the organization's or plan's certification under Medicare Part C has been terminated or the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;

(ii) the individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the secretary, but not including termination of the individual's enrollment on the basis described in section 1851(g)(3)(B) of the federal Social Security Act, United States Code, title 42, section 1395w-21(g)(3)(b) (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under section 1856 of the federal Social Security Act, United States Code, title 42, section 1395w-26), or the plan is terminated for all individuals within a residence area;

(iii) the individual demonstrates, in accordance with guidelines established by the Secretary, that:

(A) the organization offering the plan substantially violated a material provision of the organization's contract in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards; or

(B) the organization, or agent or other entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual; or

(iv) the individual meets such other exceptional conditions as the secretary may provide;

(3)(i) the individual is enrolled with:

(A) an eligible organization under a contract under section 1876 of the federal Social Security Act, United States Code, title 42, section 1395mm (Medicare cost);

(B) a similar organization operating under demonstration project authority, effective for periods before April 1, 1999;

(C) an organization under an agreement under section 1833(a)(1)(A) of the federal Social Security Act, United States Code, title 42, section 1395l(a)(1)(A) (health care prepayment plan); or

(D) an organization under a Medicare Select policy under section 62A.318 or the similar law of another state; and

(ii) the enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under clause (2);

(4) the individual is enrolled under a Medicare supplement policy, and the enrollment ceases because:

(i)(A) of the insolvency of the issuer or bankruptcy of the nonissuer organization; or

(B) of other involuntary termination of coverage or enrollment under the policy;

(ii) the issuer of the policy substantially violated a material provision of the policy; or

(iii) the issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual;

(5)(i) the individual was enrolled under a Medicare supplement policy and terminates that enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C; any eligible organization under a contract under section 1876 of the federal Social Security Act, United States Code, title 42, section 1395mm (Medicare cost); any similar organization operating under demonstration project authority; any PACE provider under section 1894 of the federal Social Security Act, or a Medicare Select policy under section 62A.318 or the similar law of another state; and

(ii) the subsequent enrollment under item (i) is terminated by the enrollee during any period within the first 12 months of the subsequent enrollment during which the enrollee is permitted to terminate the subsequent enrollment under section 1851(e) of the federal Social Security Act;

(6) the individual, upon first enrolling for benefits under Medicare Part B, enrolls in a Medicare Advantage plan under Medicare Part C, or with a PACE provider under section 1894 of the federal Social Security Act, and disenrolls from the plan by not later than 12 months after the effective date of enrollment; deleted text begin ordeleted text end

(7) the individual enrolls in a Medicare Part D plan during the initial Part D enrollment period, as defined under United States Code, title 42, section 1395ss(v)(6)(D), and, at the time of enrollment in Part D, was enrolled under a Medicare supplement policy that covers outpatient prescription drugs and the individual terminates enrollment in the Medicare supplement policy and submits evidence of enrollment in Medicare Part D along with the application for a policy described in paragraph (e), clause (4)deleted text begin .deleted text end new text begin ; ornew text end

new text begin (8) the individual was enrolled in a state public program and is losing coverage due to the unwinding of the Medicaid continuous enrollment conditions, as provided by Code of Federal Regulations, title 45, section 155.420(d)(9) and (d)(1), and Public Law 117-328, section 5131 (2022). new text end

(c)(1) In the case of an individual described in paragraph (b), clause (1), the guaranteed issue period begins on the later of: (i) the date the individual receives a notice of termination or cessation of all supplemental health benefits or, if a notice is not received, notice that a claim has been denied because of a termination or cessation; or (ii) the date that the applicable coverage terminates or ceases; and ends 63 days after the later of those two dates.

(2) In the case of an individual described in paragraph (b), clause (2), (3), (5), or (6), whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated.

(3) In the case of an individual described in paragraph (b), clause (4), item (i), the guaranteed issue period begins on the earlier of: (i) the date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice if any; and (ii) the date that the applicable coverage is terminated, and ends on the date that is 63 days after the date the coverage is terminated.

(4) In the case of an individual described in paragraph (b), clause (2), (4), (5), or (6), who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date.

(5) In the case of an individual described in paragraph (b), clause (7), the guaranteed issue period begins on the date the individual receives notice pursuant to section 1882(v)(2)(B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Part D enrollment period and ends on the date that is 63 days after the effective date of the individual's coverage under Medicare Part D.

(6) In the case of an individual described in paragraph (b) but not described in this paragraph, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date.

new text begin (7) For all individuals described in paragraph (b), the open enrollment period is a guaranteed issue period. new text end

(d)(1) In the case of an individual described in paragraph (b), clause (5), or deemed to be so described, pursuant to this paragraph, whose enrollment with an organization or provider described in paragraph (b), clause (5), item (i), is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with another such organization or provider, the subsequent enrollment is deemed to be an initial enrollment described in paragraph (b), clause (5).

(2) In the case of an individual described in paragraph (b), clause (6), or deemed to be so described, pursuant to this paragraph, whose enrollment with a plan or in a program described in paragraph (b), clause (6), is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment is deemed to be an initial enrollment described in paragraph (b), clause (6).

(3) For purposes of paragraph (b), clauses (5) and (6), no enrollment of an individual with an organization or provider described in paragraph (b), clause (5), item (i), or with a plan or in a program described in paragraph (b), clause (6), may be deemed to be an initial enrollment under this paragraph after the two-year period beginning on the date on which the individual first enrolled with the organization, provider, plan, or program.

(e) The Medicare supplement policy to which eligible persons are entitled under:

(1) paragraph (b), clauses (1) to (4), is any Medicare supplement policy that has a benefit package consisting of the basic Medicare supplement plan described in section 62A.316, paragraph (a), plus any combination of the three optional riders described in section 62A.316, paragraph (b), clauses (1) to (3), offered by any issuer;

(2) paragraph (b), clause (5), is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, any policy described in clause (1) offered by any issuer, except that after December 31, 2005, if the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, a Medicare supplement policy to which the individual is entitled under paragraph (b), clause (5), is:

(i) the policy available from the same issuer but modified to remove outpatient prescription drug coverage; or

(ii) at the election of the policyholder, a policy described in clause (4), except that the policy may be one that is offered and available for issuance to new enrollees that is offered by any issuer;

(3) paragraph (b), clause (6), is any Medicare supplement policy offered by any issuer;

(4) paragraph (b), clause (7), is a Medicare supplement policy that has a benefit package classified as a basic plan under section 62A.316 if the enrollee's existing Medicare supplement policy is a basic plan or, if the enrollee's existing Medicare supplement policy is an extended basic plan under section 62A.315, a basic or extended basic plan at the option of the enrollee, provided that the policy is offered and is available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with outpatient prescription drug coverage. The issuer must permit the enrollee to retain all optional benefits contained in the enrollee's existing coverage, other than outpatient prescription drugs, subject to the provision that the coverage be offered and available for issuance to new enrollees by the same issuer.

(f)(1) At the time of an event described in paragraph (b), because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of the individual's rights under this subdivision, and of the obligations of issuers of Medicare supplement policies under paragraph (a). The notice must be communicated contemporaneously with the notification of termination.

(2) At the time of an event described in paragraph (b), because of which an individual ceases enrollment under a contract or agreement, policy, or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of the individual's rights under this subdivision, and of the obligations of issuers of Medicare supplement policies under paragraph (a). The notice must be communicated within ten working days of the issuer receiving notification of disenrollment.

(g) Reference in this subdivision to a situation in which, or to a basis upon which, an individual's coverage has been terminated does not provide authority under the laws of this state for the termination in that situation or upon that basis.

(h) An individual's rights under this subdivision are in addition to, and do not modify or limit, the individual's rights under subdivision 1h.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

Sec. 13.

Minnesota Statutes 2022, section 62A.31, is amended by adding a subdivision to read:

new text begin Subd. 1w. new text end

new text begin Open enrollment. new text end

new text begin A medicare supplement policy or certificate must not be sold or issued to an eligible individual outside of the time periods described in subdivision 1u. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

Sec. 14.

Minnesota Statutes 2022, section 62A.31, subdivision 4, is amended to read:

Subd. 4.

Prohibited policy provisions.

(a) A Medicare supplement policy or certificate in force in the state shall not contain benefits that duplicate benefits provided by Medicare or contain exclusions on coverage that are more restrictive than those of Medicare. Duplication of benefits is permitted to the extent permitted under subdivision 1s, paragraph (a), for benefits provided by Medicare Part D.

(b) No Medicare supplement policy or certificate may use waivers to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditionsdeleted text begin , except as permitted under subdivision 1bdeleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

Sec. 15.

Minnesota Statutes 2022, section 62A.44, subdivision 2, is amended to read:

Subd. 2.

Questions.

(a) Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another Medicare supplement or other health insurance policy or certificate in force or whether a Medicare supplement policy or certificate is intended to replace any other accident and sickness policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent containing the questions and statements may be used.

"(1) You do not need more than one Medicare supplement policy or certificate.

(2) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.

(3) You may be eligible for benefits under Medicaid and may not need a Medicare supplement policy or certificate.

(4) The benefits and premiums under your Medicare supplement policy or certificate can be suspended, if requested, during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your policy or certificate will be reinstated if requested within 90 days of losing Medicaid eligibility.

(5) Counseling services may be available in Minnesota to provide advice concerning medical assistance through state Medicaid, Qualified Medicare Beneficiaries (QMBs), and Specified Low-Income Medicare Beneficiaries (SLMBs).

To the best of your knowledge:

(1) Do you have another Medicare supplement policy or certificate in force?

(a) If so, with which company?

(b) If so, do you intend to replace your current Medicare supplement policy with this policy or certificate?

(2) Do you have any other health insurance policies that provide benefits which this Medicare supplement policy or certificate would duplicate?

(a) If so, please name the company.

(b) What kind of policy?

(3) Are you covered for medical assistance through the state Medicaid program? If so, which of the following programs provides coverage for you?

(a) Specified Low-Income Medicare Beneficiary (SLMB),

(b) Qualified Medicare Beneficiary (QMB), or

(c) full Medicaid Beneficiary?"

(b) Agents shall list any other health insurance policies they have sold to the applicant.

(1) List policies sold that are still in force.

(2) List policies sold in the past five years that are no longer in force.

(c) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant, and acknowledged by the insurer, shall be returned to the applicant by the insurer on delivery of the policy or certificate.

(d) Upon determining that a sale will involve replacement of Medicare supplement coverage, any issuer, other than a direct response issuer, or its agent, shall furnish the applicant, before issuance or delivery of the Medicare supplement policy or certificate, a notice regarding replacement of Medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except where the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy or certificate the notice regarding replacement of Medicare supplement coverage.

(e) The notice required by paragraph (d) for an issuer shall be provided in substantially the following form in no less than 12-point type:

"NOTICE TO APPLICANT REGARDING REPLACEMENT

OF MEDICARE SUPPLEMENT INSURANCE

(Insurance company's name and address)

SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to terminate existing Medicare supplement insurance and replace it with a policy or certificate to be issued by (Company Name) Insurance Company. Your new policy or certificate will provide 30 days within which you may decide without cost whether you desire to keep the policy or certificate.

You should review this new coverage carefully. Compare it with all accident and sickness coverage you now have. If, after due consideration, you find that purchase of this Medicare supplement coverage is a wise decision you should terminate your present Medicare supplement policy. You should evaluate the need for other accident and sickness coverage you have that may duplicate this policy.

STATEMENT TO APPLICANT BY ISSUER, AGENT, (BROKER OR OTHER REPRESENTATIVE): I have reviewed your current medical or health insurance coverage. To the best of my knowledge this Medicare supplement policy will not duplicate your existing Medicare supplement policy because you intend to terminate the existing Medicare supplement policy. The replacement policy or certificate is being purchased for the following reason(s) (check one):

. Additional benefits
. No change in benefits, but lower premiums
. Fewer benefits and lower premiums
. Other (please specify)
.
.
.

deleted text begin (1) Health conditions which you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy or certificate. This could result in denial or delay of a claim for benefits under the new policy or certificate, whereas a similar claim might have been payable under your present policy or certificate. deleted text end

deleted text begin (2) State law provides that your replacement policy or certificate may not contain new preexisting conditions, waiting periods, elimination periods, or probationary periods. The insurer will waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods in the new policy (or coverage) for similar benefits to the extent the time was spent (depleted) under the original policy or certificate. deleted text end

deleted text begin (3) If you still wish to terminate your present policy or certificate and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical and health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy or certificate had never been in force. After the application has been completed and before you sign it, review it carefully to be certain that all information has been properly recorded. (If the policy or certificate is guaranteed issue, this paragraph need not appear.) deleted text end

Do not cancel your present policy or certificate until you have received your new policy or certificate and you are sure that you want to keep it.

.
(Signature of Agent, Broker, or Other Representative)*
.
(Typed Name and Address of Issuer, Agent, or Broker)
.
(Date)
.
(Applicant's Signature)
.
(Date)

*Signature not required for direct response sales."

deleted text begin (f) Paragraph (e), clauses (1) and (2), of the replacement notice (applicable to preexisting conditions) may be deleted by an issuer if the replacement does not involve application of a new preexisting condition limitation. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

Sec. 16.

Minnesota Statutes 2022, section 62D.02, is amended by adding a subdivision to read:

new text begin Subd. 17. new text end

new text begin Preventive items and services. new text end

new text begin "Preventive items and services" has the meaning given in section 62Q.46, subdivision 1, paragraph (a). new text end

Sec. 17.

Minnesota Statutes 2022, section 62D.095, subdivision 2, is amended to read:

Subd. 2.

Co-payments.

A health maintenance contract may impose a co-payment and coinsurance consistent with the provisions of the Affordable Care Act as defined under section 62A.011, subdivision 1anew text begin , and for items and services that are not preventive items and servicesnew text end .

Sec. 18.

Minnesota Statutes 2022, section 62D.095, subdivision 3, is amended to read:

Subd. 3.

Deductibles.

A health maintenance contract deleted text begin maydeleted text end new text begin must notnew text end impose a deductible deleted text begin consistent with the provisions of the Affordable Care Act as defined under section 62A.011, subdivision 1adeleted text end new text begin for preventive items and servicesnew text end .

Sec. 19.

Minnesota Statutes 2022, section 62D.095, subdivision 5, is amended to read:

Subd. 5.

Exceptions.

deleted text begin Nodeleted text end Co-payments or deductibles deleted text begin maydeleted text end new text begin must notnew text end be imposed on preventive deleted text begin health caredeleted text end new text begin items andnew text end services deleted text begin consistent with the provisions of the Affordable Care Act as defined under section 62A.011, subdivision 1adeleted text end .

Sec. 20.

Minnesota Statutes 2022, section 62J.26, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

new text begin (a) new text end For purposes of this section, the following terms have the meanings given unless the context otherwise requires:

(1) "commissioner" means the commissioner of commerce;

(2) "enrollee" has the meaning given in section 62Q.01, subdivision 2b;

(3) "health plan" means a health plan as defined in section 62A.011, subdivision 3, but includes coverage listed in clauses (7) and (10) of that definition;

(4) "mandated health benefit proposal" or "proposal" means a proposal that would statutorily require a health plan company to do the following:

(i) provide coverage or increase the amount of coverage for the treatment of a particular disease, condition, or other health care need;

(ii) provide coverage or increase the amount of coverage of a particular type of health care treatment or service or of equipment, supplies, or drugs used in connection with a health care treatment or service;

(iii) provide coverage for care delivered by a specific type of provider;

(iv) require a particular benefit design or impose conditions on cost-sharing for:

(A) the treatment of a particular disease, condition, or other health care need;

(B) a particular type of health care treatment or service; or

(C) the provision of medical equipment, supplies, or a prescription drug used in connection with treating a particular disease, condition, or other health care need; or

(v) impose limits or conditions on a contract between a health plan company and a health care provider.

new text begin (b) new text end "Mandated health benefit proposal" does not include health benefit proposalsnew text begin :new text end

new text begin (1)new text end amending the scope of practice of a licensed health care professionaldeleted text begin .deleted text end new text begin ; ornew text end

new text begin (2) that make state law consistent with federal law. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 21.

Minnesota Statutes 2022, section 62J.26, subdivision 2, is amended to read:

Subd. 2.

Evaluation process and content.

(a) The commissioner, in consultation with the commissioners of health and management and budget, must evaluate all mandated health benefit proposals as provided under subdivision 3.

(b) The purpose of the evaluation is to provide the legislature with a complete and timely analysis of all ramifications of any mandated health benefit proposal. The evaluation must include, in addition to other relevant information, the following to the extent applicable:

(1) scientific and medical information on the mandated health benefit proposal, on the potential for harm or benefit to the patient, and on the comparative benefit or harm from alternative forms of treatment, and must include the results of at least one professionally accepted and controlled trial comparing the medical consequences of the proposed therapy, alternative therapy, and no therapy;

(2) public health, economic, and fiscal impacts of the mandated health benefit proposal on persons receiving health services in Minnesota, on the relative cost-effectiveness of the proposal, and on the health care system in general;

(3) the extent to which the treatment, service, equipment, or drug is generally utilized by a significant portion of the population;

(4) the extent to which insurance coverage for the mandated health benefit proposal is already generally available;

(5) the extent to which the mandated health benefit proposal, by health plan category, would apply to the benefits offered to the health plan's enrollees;

(6) the extent to which the mandated health benefit proposal will increase or decrease the cost of the treatment, service, equipment, or drug;

(7) the extent to which the mandated health benefit proposal may increase enrollee premiums; and

(8) if the proposal applies to a qualified health plan as defined in section 62A.011, subdivision 7, the cost to the state to defray the cost of the mandated health benefit proposal using commercial market reimbursement rates in accordance with Code of Federal Regulations, title 45, section deleted text begin 155.70deleted text end new text begin 155.170new text end .

(c) The commissioner shall consider actuarial analysis done by health plan companies and any other proponent or opponent of the mandated health benefit proposal in determining the cost of the proposal.

(d) The commissioner must summarize the nature and quality of available information on these issues, and, if possible, must provide preliminary information to the public. The commissioner may conduct research on these issues or may determine that existing research is sufficient to meet the informational needs of the legislature. The commissioner may seek the assistance and advice of researchers, community leaders, or other persons or organizations with relevant expertise.new text begin The commissioner must provide the public with at least 45 days' notice when requesting information pursuant to this section. The commissioner must notify the chief authors of a bill when a request for information is issued.new text end

new text begin (e) Information submitted to the commissioner pursuant to this section that meets the definition of trade secret information, as defined in section 13.37, subdivision 1, paragraph (b), is nonpublic data. new text end

Sec. 22.

new text begin [62J.841] DEFINITIONS. new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections 62J.841 to 62J.845, the following definitions apply. new text end

new text begin Subd. 2. new text end

new text begin Consumer Price Index. new text end

new text begin "Consumer Price Index" means the Consumer Price Index, Annual Average, for All Urban Consumers, CPI-U: U.S. City Average, All Items, reported by the United States Department of Labor, Bureau of Labor Statistics, or its successor or, if the index is discontinued, an equivalent index reported by a federal authority or, if no such index is reported, "Consumer Price Index" means a comparable index chosen by the Bureau of Labor Statistics. new text end

new text begin Subd. 3. new text end

new text begin Generic or off-patent drug. new text end

new text begin "Generic or off-patent drug" means any prescription drug for which any exclusive marketing rights granted under the Federal Food, Drug, and Cosmetic Act, section 351 of the federal Public Health Service Act, and federal patent law have expired, including any drug-device combination product for the delivery of a generic drug. new text end

new text begin Subd. 4. new text end

new text begin Manufacturer. new text end

new text begin "Manufacturer" has the meaning given in section 151.01, subdivision 14a, but does not include an entity that must be licensed solely because the entity repackages or relabels drugs. new text end

new text begin Subd. 5. new text end

new text begin Prescription drug. new text end

new text begin "Prescription drug" means a drug for human use subject to United States Code, title 21, section 353(b)(1). new text end

new text begin Subd. 6. new text end

new text begin Wholesale acquisition cost. new text end

new text begin "Wholesale acquisition cost" has the meaning provided in United States Code, title 42, section 1395w-3a. new text end

new text begin Subd. 7. new text end

new text begin Wholesale distributor. new text end

new text begin "Wholesale distributor" has the meaning provided in section 151.441, subdivision 14. new text end

Sec. 23.

new text begin [62J.842] EXCESSIVE PRICE INCREASES PROHIBITED. new text end

new text begin Subdivision 1. new text end

new text begin Prohibition. new text end

new text begin No manufacturer shall impose, or cause to be imposed, an excessive price increase, whether directly or through a wholesale distributor, pharmacy, or similar intermediary, on the sale of any generic or off-patent drug sold, dispensed, or delivered to any consumer in the state. new text end

new text begin Subd. 2. new text end

new text begin Excessive price increase. new text end

new text begin A price increase is excessive for purposes of this section when: new text end

new text begin (1) the price increase, adjusted for inflation utilizing the Consumer Price Index, exceeds: new text end

new text begin (i) 15 percent of the wholesale acquisition cost over the immediately preceding calendar year; or new text end

new text begin (ii) 40 percent of the wholesale acquisition cost over the immediately preceding three calendar years; and new text end

new text begin (2) the price increase, adjusted for inflation utilizing the Consumer Price Index, exceeds $30 for: new text end

new text begin (i) a 30-day supply of the drug; or new text end

new text begin (ii) a course of treatment lasting less than 30 days. new text end

new text begin Subd. 3. new text end

new text begin Exemption. new text end

new text begin It is not a violation of this section for a wholesale distributor or pharmacy to increase the price of a generic or off-patent drug if the price increase is directly attributable to additional costs for the drug imposed on the wholesale distributor or pharmacy by the manufacturer of the drug. new text end

Sec. 24.

new text begin [62J.843] REGISTERED AGENT AND OFFICE WITHIN THE STATE. new text end

new text begin Any manufacturer that sells, distributes, delivers, or offers for sale any generic or off-patent drug in the state must maintain a registered agent and office within the state. new text end

Sec. 25.

new text begin [62J.844] ENFORCEMENT. new text end

new text begin Subdivision 1. new text end

new text begin Notification. new text end

new text begin (a) The commissioner of health shall notify the manufacturer of a generic or off-patent drug and the attorney general of any price increase that the commissioner believes may violate section 62J.842. new text end

new text begin (b) The commissioner of management and budget and any other state agency that provides or purchases a pharmacy benefit except the Department of Human Services, and any entity under contract with a state agency to provide a pharmacy benefit other than an entity under contract with the Department of Human Services, may notify the manufacturer of a generic or off-patent drug and the attorney general of any price increase that the commissioner or entity believes may violate section 62J.842. new text end

new text begin Subd. 2. new text end

new text begin Submission of drug cost statement and other information by manufacturer; investigation by attorney general. new text end

new text begin (a) Within 45 days of receiving a notice under subdivision 1, the manufacturer of the generic or off-patent drug shall submit a drug cost statement to the attorney general. The statement must: new text end

new text begin (1) itemize the cost components related to production of the drug; new text end

new text begin (2) identify the circumstances and timing of any increase in materials or manufacturing costs that caused any increase during the preceding calendar year, or preceding three calendar years as applicable, in the price of the drug; and new text end

new text begin (3) provide any other information that the manufacturer believes to be relevant to a determination of whether a violation of section 62J.842 has occurred. new text end

new text begin (b) The attorney general may investigate whether a violation of section 62J.842 has occurred, in accordance with section 8.31, subdivision 2. new text end

new text begin Subd. 3. new text end

new text begin Petition to court. new text end

new text begin (a) On petition of the attorney general, a court may issue an order: new text end

new text begin (1) compelling the manufacturer of a generic or off-patent drug to: new text end

new text begin (i) provide the drug cost statement required under subdivision 2, paragraph (a); and new text end

new text begin (ii) answer interrogatories, produce records or documents, or be examined under oath, as required by the attorney general under subdivision 2, paragraph (b); new text end

new text begin (2) restraining or enjoining a violation of sections 62J.841 to 62J.845, including issuing an order requiring that drug prices be restored to levels that comply with section 62J.842; new text end

new text begin (3) requiring the manufacturer to provide an accounting to the attorney general of all revenues resulting from a violation of section 62J.842; new text end

new text begin (4) requiring the manufacturer to repay to all Minnesota consumers, including any third-party payers, any money acquired as a result of a price increase that violates section 62J.842; new text end

new text begin (5) notwithstanding section 16A.151, requiring that all revenues generated from a violation of section 62J.842 be remitted to the state and deposited into a special fund, to be used for initiatives to reduce the cost to consumers of acquiring prescription drugs, if a manufacturer is unable to determine the individual transactions necessary to provide the repayments described in clause (4); new text end

new text begin (6) imposing a civil penalty of up to $10,000 per day for each violation of section 62J.842; new text end

new text begin (7) providing for the attorney general's recovery of costs and disbursements incurred in bringing an action against a manufacturer found in violation of section 62J.842, including the costs of investigation and reasonable attorney's fees; and new text end

new text begin (8) providing any other appropriate relief, including any other equitable relief as determined by the court. new text end

new text begin (b) For purposes of paragraph (a), clause (6), every individual transaction in violation of section 62J.842 is considered a separate violation. new text end

new text begin Subd. 4. new text end

new text begin Private right of action. new text end

new text begin Any action brought pursuant to section 8.31, subdivision 3a, by a person injured by a violation of section 62J.842 is for the benefit of the public. new text end

Sec. 26.

new text begin [62J.845] PROHIBITION ON WITHDRAWAL OF GENERIC OR OFF-PATENT DRUGS FOR SALE. new text end

new text begin Subdivision 1. new text end

new text begin Prohibition. new text end

new text begin A manufacturer of a generic or off-patent drug is prohibited from withdrawing that drug from sale or distribution within this state for the purpose of avoiding the prohibition on excessive price increases under section 62J.842. new text end

new text begin Subd. 2. new text end

new text begin Notice to board and attorney general. new text end

new text begin Any manufacturer that intends to withdraw a generic or off-patent drug from sale or distribution within the state shall provide a written notice of withdrawal to the attorney general at least 90 days prior to the withdrawal. new text end

new text begin Subd. 3. new text end

new text begin Financial penalty. new text end

new text begin The attorney general shall assess a penalty of $500,000 on any manufacturer of a generic or off-patent drug that the attorney general determines has failed to comply with the requirements of this section. new text end

Sec. 27.

new text begin [62J.846] SEVERABILITY. new text end

new text begin If any provision of sections 62J.841 to 62J.845 or the application thereof to any person or circumstance is held invalid for any reason in a court of competent jurisdiction, the invalidity does not affect other provisions or any other application of sections 62J.841 to 62J.845 that can be given effect without the invalid provision or application. new text end

Sec. 28.

new text begin [62J.85] CITATION. new text end

new text begin Sections 62J.85 to 62J.95 may be cited as the "Prescription Drug Affordability Act." new text end

Sec. 29.

new text begin [62J.86] DEFINITIONS. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of sections 62J.85 to 62J.95, the following terms have the meanings given. new text end

new text begin Subd. 2. new text end

new text begin Advisory council. new text end

new text begin "Advisory council" means the Prescription Drug Affordability Advisory Council established under section 62J.88. new text end

new text begin Subd. 3. new text end

new text begin Biologic. new text end

new text begin "Biologic" means a drug that is produced or distributed in accordance with a biologics license application approved under Code of Federal Regulations, title 42, section 447.502. new text end

new text begin Subd. 4. new text end

new text begin Biosimilar. new text end

new text begin "Biosimilar" has the meaning provided in section 62J.84, subdivision 2, paragraph (b). new text end

new text begin Subd. 5. new text end

new text begin Board. new text end

new text begin "Board" means the Prescription Drug Affordability Board established under section 62J.87. new text end

new text begin Subd. 6. new text end

new text begin Brand name drug. new text end

new text begin "Brand name drug" means a drug that is produced or distributed pursuant to: new text end

new text begin (1) a new drug application approved under United States Code, title 21, section 355(c), except for a generic drug as defined under Code of Federal Regulations, title 42, section 447.502; or new text end

new text begin (2) a biologics license application approved under United States Code, title 45, section 262(a)(c). new text end

new text begin Subd. 7. new text end

new text begin Generic drug. new text end

new text begin "Generic drug" has the meaning provided in section 62J.84, subdivision 2, paragraph (e). new text end

new text begin Subd. 8. new text end

new text begin Group purchaser. new text end

new text begin "Group purchaser" has the meaning given in section 62J.03, subdivision 6, and includes pharmacy benefit managers, as defined in section 62W.02, subdivision 15. new text end

new text begin Subd. 9. new text end

new text begin Manufacturer. new text end

new text begin "Manufacturer" means an entity that: new text end

new text begin (1) engages in the manufacture of a prescription drug product or enters into a lease with another manufacturer to market and distribute a prescription drug product under the entity's own name; and new text end

new text begin (2) sets or changes the wholesale acquisition cost of the prescription drug product it manufacturers or markets. new text end

new text begin Subd. 10. new text end

new text begin Prescription drug product. new text end

new text begin "Prescription drug product" means a brand name drug, a generic drug, a biologic, or a biosimilar. new text end

new text begin Subd. 11. new text end

new text begin Wholesale acquisition cost or WAC. new text end

new text begin "Wholesale acquisition cost" or "WAC" has the meaning given in United States Code, title 42, section 1395W-3a(c)(6)(B). new text end

Sec. 30.

new text begin [62J.87] PRESCRIPTION DRUG AFFORDABILITY BOARD. new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The commissioner of commerce shall establish the Prescription Drug Affordability Board, which shall be governed as a board under section 15.012, paragraph (a), to protect consumers, state and local governments, health plan companies, providers, pharmacies, and other health care system stakeholders from unaffordable costs of certain prescription drugs. new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The Prescription Drug Affordability Board consists of nine members appointed as follows: new text end

new text begin (1) seven voting members appointed by the governor; new text end

new text begin (2) one nonvoting member appointed by the majority leader of the senate; and new text end

new text begin (3) one nonvoting member appointed by the speaker of the house. new text end

new text begin (b) All members appointed must have knowledge and demonstrated expertise in pharmaceutical economics and finance or health care economics and finance. A member must not be an employee of, a board member of, or a consultant to a manufacturer or trade association for manufacturers, or a pharmacy benefit manager or trade association for pharmacy benefit managers. new text end

new text begin (c) Initial appointments must be made by January 1, 2024. new text end

new text begin Subd. 3. new text end

new text begin Terms. new text end

new text begin (a) Board appointees shall serve four-year terms, except that initial appointees shall serve staggered terms of two, three, or four years as determined by lot by the secretary of state. A board member shall serve no more than two consecutive terms. new text end

new text begin (b) A board member may resign at any time by giving written notice to the board. new text end

new text begin Subd. 4. new text end

new text begin Chair; other officers. new text end

new text begin (a) The governor shall designate an acting chair from the members appointed by the governor. new text end

new text begin (b) The board shall elect a chair to replace the acting chair at the first meeting of the board by a majority of the members. The chair shall serve for one year. new text end

new text begin (c) The board shall elect a vice-chair and other officers from its membership as it deems necessary. new text end

new text begin Subd. 5. new text end

new text begin Staff; technical assistance. new text end

new text begin (a) The board shall hire an executive director and other staff, who shall serve in the unclassified service. The executive director must have knowledge and demonstrated expertise in pharmacoeconomics, pharmacology, health policy, health services research, medicine, or a related field or discipline. new text end

new text begin (b) The commissioner of health shall provide technical assistance to the board. The board may also employ or contract for professional and technical assistance as the board deems necessary to perform the board's duties. new text end

new text begin (c) The attorney general shall provide legal services to the board. new text end

new text begin Subd. 6. new text end

new text begin Compensation. new text end

new text begin The board members shall not receive compensation but may receive reimbursement for expenses as authorized under section 15.059, subdivision 3. new text end

new text begin Subd. 7. new text end

new text begin Meetings. new text end

new text begin (a) Meetings of the board are subject to chapter 13D. The board shall meet publicly at least every three months to review prescription drug product information submitted to the board under section 62J.90. If there are no pending submissions, the chair of the board may cancel or postpone the required meeting. The board may meet in closed session when reviewing proprietary information, as determined under the standards developed in accordance with section 62J.91, subdivision 3. new text end

new text begin (b) The board shall announce each public meeting at least three weeks prior to the scheduled date of the meeting. Any materials for the meeting shall be made public at least two weeks prior to the scheduled date of the meeting. new text end

new text begin (c) At each public meeting, the board shall provide the opportunity for comments from the public, including the opportunity for written comments to be submitted to the board prior to a decision by the board. new text end

Sec. 31.

new text begin [62J.88] PRESCRIPTION DRUG AFFORDABILITY ADVISORY COUNCIL. new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The governor shall appoint a 18-member stakeholder advisory council to provide advice to the board on drug cost issues and to represent stakeholders' views. The governor shall appoint the members of the advisory council based on the members' knowledge and demonstrated expertise in one or more of the following areas: the pharmaceutical business; practice of medicine; patient perspectives; health care cost trends and drivers; clinical and health services research; and the health care marketplace. new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin The council's membership shall consist of the following: new text end

new text begin (1) two members representing patients and health care consumers; new text end

new text begin (2) two members representing health care providers; new text end

new text begin (3) one member representing health plan companies; new text end

new text begin (4) two members representing employers, with one member representing large employers and one member representing small employers; new text end

new text begin (5) one member representing government employee benefit plans; new text end

new text begin (6) one member representing pharmaceutical manufacturers; new text end

new text begin (7) one member who is a health services clinical researcher; new text end

new text begin (8) one member who is a pharmacologist; new text end

new text begin (9) one member representing the commissioner of health with expertise in health economics; new text end

new text begin (10) one member representing pharmaceutical wholesalers; new text end

new text begin (11) one member representing pharmacy benefit managers; new text end

new text begin (12) one member from the Rare Disease Advisory Council; new text end

new text begin (13) one member representing generic drug manufacturers; new text end

new text begin (14) one member representing pharmaceutical distributors; and new text end

new text begin (15) one member who is an oncologist who is not employed by, under contract with, or otherwise affiliated with a hospital. new text end

new text begin Subd. 3. new text end

new text begin Terms. new text end

new text begin (a) The initial appointments to the advisory council must be made by January 1, 2024. The initial appointed advisory council members shall serve staggered terms of two, three, or four years, determined by lot by the secretary of state. Following the initial appointments, the advisory council members shall serve four-year terms. new text end

new text begin (b) Removal and vacancies of advisory council members shall be governed by section 15.059. new text end

new text begin Subd. 4. new text end

new text begin Compensation. new text end

new text begin Advisory council members may be compensated according to section 15.059, except that those advisory council members designated in subdivision 2, clauses (10) to (15), must not be compensated. new text end

new text begin Subd. 5. new text end

new text begin Meetings. new text end

new text begin Meetings of the advisory council are subject to chapter 13D. The advisory council shall meet publicly at least every three months to advise the board on drug cost issues related to the prescription drug product information submitted to the board under section 62J.90. new text end

new text begin Subd. 6. new text end

new text begin Exemption. new text end

new text begin Notwithstanding section 15.059, the advisory council shall not expire. new text end

Sec. 32.

new text begin [62J.89] CONFLICTS OF INTEREST. new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For purposes of this section, "conflict of interest" means a financial or personal association that has the potential to bias or have the appearance of biasing a person's decisions in matters related to the board, the advisory council, or in the conduct of the board's or council's activities. A conflict of interest includes any instance in which a person, a person's immediate family member, including a spouse, parent, child, or other legal dependent, or an in-law of any of the preceding individuals, has received or could receive a direct or indirect financial benefit of any amount deriving from the result or findings of a decision or determination of the board. For purposes of this section, a financial benefit includes honoraria, fees, stock, the value of the member's, immediate family member's, or in-law's stock holdings, and any direct financial benefit deriving from the finding of a review conducted under sections 62J.85 to 62J.95. Ownership of securities is not a conflict of interest if the securities are: (1) part of a diversified mutual or exchange traded fund; or (2) in a tax-deferred or tax-exempt retirement account that is administered by an independent trustee. new text end

new text begin Subd. 2. new text end

new text begin General. new text end

new text begin (a) Prior to the acceptance of an appointment or employment, or prior to entering into a contractual agreement, a board or advisory council member, board staff member, or third-party contractor must disclose to the appointing authority or the board any conflicts of interest. The information disclosed must include the type, nature, and magnitude of the interests involved. new text end

new text begin (b) A board member, board staff member, or third-party contractor with a conflict of interest with regard to any prescription drug product under review must recuse themselves from any discussion, review, decision, or determination made by the board relating to the prescription drug product. new text end

new text begin (c) Any conflict of interest must be disclosed in advance of the first meeting after the conflict is identified or within five days after the conflict is identified, whichever is earlier. new text end

new text begin Subd. 3. new text end

new text begin Prohibitions. new text end

new text begin Board members, board staff, or third-party contractors are prohibited from accepting gifts, bequeaths, or donations of services or property that raise the specter of a conflict of interest or have the appearance of injecting bias into the activities of the board. new text end

Sec. 33.

new text begin [62J.90] PRESCRIPTION DRUG PRICE INFORMATION; DECISION TO CONDUCT COST REVIEW. new text end

new text begin Subdivision 1. new text end

new text begin Drug price information from the commissioner of health and other sources. new text end

new text begin (a) The commissioner of health shall provide to the board the information reported to the commissioner by drug manufacturers under section 62J.84, subdivisions 3, 4, and 5. The commissioner shall provide this information to the board within 30 days of the date the information is received from drug manufacturers. new text end

new text begin (b) The board may subscribe to one or more prescription drug pricing files, such as Medispan or FirstDatabank, or as otherwise determined by the board. new text end

new text begin Subd. 2. new text end

new text begin Identification of certain prescription drug products. new text end

new text begin (a) The board, in consultation with the advisory council, shall identify selected prescription drug products based on the following criteria: new text end

new text begin (1) brand name drugs or biologics for which the WAC increases by more than 15 percent or by more than $3,000 during any 12-month period or course of treatment if less than 12 months, after adjusting for changes in the consumer price index (CPI); new text end

new text begin (2) brand name drugs or biologics with a WAC of $60,000 or more per calendar year or per course of treatment; new text end

new text begin (3) biosimilar drugs that have a WAC that is not at least 20 percent lower than the referenced brand name biologic at the time the biosimilar is introduced; and new text end

new text begin (4) generic drugs for which the WAC: new text end

new text begin (i) is $100 or more, after adjusting for changes in the CPI, for: new text end

new text begin (A) a 30-day supply; new text end

new text begin (B) a course of treatment lasting less than 30 days; or new text end

new text begin (C) one unit of the drug, if the labeling approved by the Food and Drug Administration does not recommend a finite dosage; and new text end

new text begin (ii) increased by 200 percent or more during the immediate preceding 12-month period, as determined by the difference between the resulting WAC and the average WAC reported over the preceding 12 months, after adjusting for changes in the CPI. new text end

new text begin The board is not required to identify all prescription drug products that meet the criteria in this paragraph. new text end

new text begin (b) The board, in consultation with the advisory council and the commissioner of health, may identify prescription drug products not described in paragraph (a) that may impose costs that create significant affordability challenges for the state health care system or for patients, including but not limited to drugs to address public health emergencies. new text end

new text begin (c) The board shall make available to the public the names and related price information of the prescription drug products identified under this subdivision, with the exception of information determined by the board to be proprietary under the standards developed by the board under section 62J.91, subdivision 3, and information provided by the commissioner of health classified as not public data under section 13.02, subdivision 8a, or as trade secret information under section 13.37, subdivision 1, paragraph (b), or as trade secret information under the Defend Trade Secrets Act of 2016, United States Code, title 18, section 1836, as amended. new text end

new text begin Subd. 3. new text end

new text begin Determination to proceed with review. new text end

new text begin (a) The board may initiate a cost review of a prescription drug product identified by the board under this section. new text end

new text begin (b) The board shall consider requests by the public for the board to proceed with a cost review of any prescription drug product identified under this section. new text end

new text begin (c) If there is no consensus among the members of the board on whether to initiate a cost review of a prescription drug product, any member of the board may request a vote to determine whether to review the cost of the prescription drug product. new text end

Sec. 34.

new text begin [62J.91] PRESCRIPTION DRUG PRODUCT REVIEWS. new text end

new text begin Subdivision 1. new text end

new text begin General. new text end

new text begin Once a decision by the board has been made to proceed with a cost review of a prescription drug product, the board shall conduct the review and make a determination as to whether appropriate utilization of the prescription drug under review, based on utilization that is consistent with the United States Food and Drug Administration (FDA) label or standard medical practice, has led or will lead to affordability challenges for the state health care system or for patients. new text end

new text begin Subd. 2. new text end

new text begin Review considerations. new text end

new text begin In reviewing the cost of a prescription drug product, the board may consider the following factors: new text end

new text begin (1) the price at which the prescription drug product has been and will be sold in the state; new text end

new text begin (2) manufacturer monetary price concessions, discounts, or rebates, and drug-specific patient assistance; new text end

new text begin (3) the price of therapeutic alternatives; new text end

new text begin (4) the cost to group purchasers based on patient access consistent with the FDA-labeled indications and standard medical practice; new text end

new text begin (5) measures of patient access, including cost-sharing and other metrics; new text end

new text begin (6) the extent to which the attorney general or a court has determined that a price increase for a generic or off-patent prescription drug product was excessive under sections 62J.842 and 62J.844; new text end

new text begin (7) any information a manufacturer chooses to provide; and new text end

new text begin (8) any other factors as determined by the board. new text end

new text begin Subd. 3. new text end

new text begin Public data; proprietary information. new text end

new text begin (a) Any submission made to the board related to a drug cost review must be made available to the public with the exception of information determined by the board to be proprietary and information provided by the commissioner of health classified as not public data under section 13.02, subdivision 8a, or as trade secret information under section 13.37, subdivision 1, paragraph (b), or as trade secret information under the Defend Trade Secrets Act of 2016, United States Code, title 18, section 1836, as amended. new text end

new text begin (b) The board shall establish the standards for the information to be considered proprietary under paragraph (a) and section 62J.90, subdivision 2, including standards for heightened consideration of proprietary information for submissions for a cost review of a drug that is not yet approved by the FDA. new text end

new text begin (c) Prior to the board establishing the standards under paragraph (b), the public shall be provided notice and the opportunity to submit comments. new text end

new text begin (d) The establishment of standards under this subdivision is exempt from the rulemaking requirements under chapter 14, and section 14.386 does not apply. new text end

Sec. 35.

new text begin [62J.92] DETERMINATIONS; COMPLIANCE; REMEDIES. new text end

new text begin Subdivision 1. new text end

new text begin Upper payment limit. new text end

new text begin (a) In the event the board finds that the spending on a prescription drug product reviewed under section 62J.91 creates an affordability challenge for the state health care system or for patients, the board shall establish an upper payment limit after considering: new text end

new text begin (1) extraordinary supply costs, if applicable; new text end

new text begin (2) the range of prices at which the drug is sold in the United States according to one or more pricing files accessed under section 62J.90, subdivision 1, and the range at which pharmacies are reimbursed in Canada; and new text end

new text begin (3) any other relevant pricing and administrative cost information for the drug. new text end

new text begin (b) An upper payment limit applies to all purchases of, and payer reimbursements for, a prescription drug that is dispensed or administered to individuals in the state in person, by mail, or by other means, and for which an upper payment limit has been established. new text end

new text begin (c) In determining whether a drug creates an affordability challenge or determining an upper payment limit amount, the board may not use cost-effectiveness analyses that include the cost-per-quality adjusted life year or similar measure to identify subpopulations for which a treatment would be less cost-effective due to severity of illness, age, or pre-existing disability. For any treatment that extends life, if the board uses cost-effectiveness results, it must use results that weigh the value of all additional lifetime gained equally for all patients no matter their severity of illness, age, or pre-existing disability. new text end

new text begin Subd. 2. new text end

new text begin Implementation and administration of the upper payment limit. new text end

new text begin (a) An upper payment limit may take effect no sooner than 120 days following the date of its public release by the board. new text end

new text begin (b) When setting an upper payment limit for a drug subject to the Medicare maximum fair price under United States Code, title 42, section 1191(c), the board shall set the upper payment limit at the Medicare maximum fair price. new text end

new text begin (c) Health plan companies and pharmacy benefit managers shall report annually to the board, in the form and manner specified by the board, on how cost savings resulting from the establishment of an upper payment limit have been used by the health plan company or pharmacy benefit manager to benefit enrollees, including but not limited to reducing enrollee cost-sharing. new text end

new text begin Subd. 3. new text end

new text begin Noncompliance. new text end

new text begin (a) The board shall, and other persons may, notify the Office of the Attorney General of a potential failure by an entity subject to an upper payment limit to comply with that limit. new text end

new text begin (b) If the Office of the Attorney General finds that an entity was noncompliant with the upper payment limit requirements, the attorney general may pursue remedies consistent with chapter 8 or appropriate criminal charges if there is evidence of intentional profiteering. new text end

new text begin (c) An entity who obtains price concessions from a drug manufacturer that result in a lower net cost to the stakeholder than the upper payment limit established by the board is not considered noncompliant. new text end

new text begin (d) The Office of the Attorney General may provide guidance to stakeholders concerning activities that could be considered noncompliant. new text end

new text begin Subd. 4. new text end

new text begin Appeals. new text end

new text begin (a) Persons affected by a decision of the board may request an appeal of the board's decision within 30 days of the date of the decision. The board shall hear the appeal and render a decision within 60 days of the hearing. new text end

new text begin (b) All appeal decisions are subject to judicial review in accordance with chapter 14. new text end

Sec. 36.

new text begin [62J.93] REPORTS. new text end

new text begin Beginning March 1, 2024, and each March 1 thereafter, the board shall submit a report to the governor and legislature on general price trends for prescription drug products and the number of prescription drug products that were subject to the board's cost review and analysis, including the result of any analysis as well as the number and disposition of appeals and judicial reviews. new text end

Sec. 37.

new text begin [62J.94] ERISA PLANS AND MEDICARE DRUG PLANS. new text end

new text begin (a) Nothing in sections 62J.85 to 62J.95 shall be construed to require ERISA plans or Medicare Part D plans to comply with decisions of the board. ERISA plans or Medicare Part D plans are free to choose to exceed the upper payment limit established by the board under section 62J.92. new text end

new text begin (b) Providers who dispense and administer drugs in the state must bill all payers no more than the upper payment limit without regard to whether an ERISA plan or Medicare Part D plan chooses to reimburse the provider in an amount greater than the upper payment limit established by the board. new text end

new text begin (c) For purposes of this section, an ERISA plan or group health plan is an employee welfare benefit plan established by or maintained by an employer or an employee organization, or both, that provides employer sponsored health coverage to employees and the employee's dependents and is subject to the Employee Retirement Income Security Act of 1974 (ERISA). new text end

Sec. 38.

new text begin [62J.95] SEVERABILITY. new text end

new text begin If any provision of sections 62J.85 to 62J.94 or the application thereof to any person or circumstance is held invalid for any reason in a court of competent jurisdiction, the invalidity does not affect other provisions or any other application of sections 62J.85 to 62J.94 that can be given effect without the invalid provision or application. new text end

Sec. 39.

Minnesota Statutes 2022, section 62K.10, subdivision 4, is amended to read:

Subd. 4.

Network adequacy.

new text begin (a) new text end Each designated provider network must include a sufficient number and type of providers, including providers that specialize in mental health and substance use disorder services, to ensure that covered services are available to all enrollees without unreasonable delay. In determining network adequacy, the commissioner of health shall consider availability of services, including the following:

(1) primary care physician services are available and accessible 24 hours per day, seven days per week, within the network area;

(2) a sufficient number of primary care physicians have hospital admitting privileges at one or more participating hospitals within the network area so that necessary admissions are made on a timely basis consistent with generally accepted practice parameters;

(3) specialty physician service is available through the network or contract arrangement;

(4) mental health and substance use disorder treatment providersnew text begin , including but not limited to psychiatric residential treatment facilities,new text end are available and accessible through the network or contract arrangement;

(5) to the extent that primary care services are provided through primary care providers other than physicians, and to the extent permitted under applicable scope of practice in state law for a given provider, these services shall be available and accessible; and

(6) the network has available, either directly or through arrangements, appropriate and sufficient personnel, physical resources, and equipment to meet the projected needs of enrollees for covered health care services.

new text begin (b) The commissioner must determine network sufficiency in a manner that is consistent with the requirements of this section and may establish sufficiency by referencing any reasonable criteria, which may include but is not limited to: new text end

new text begin (1) provider-covered person ratios by specialty; new text end

new text begin (2) primary care professional-covered person ratios; new text end

new text begin (3) geographic accessibility of providers; new text end

new text begin (4) geographic variation and population dispersion; new text end

new text begin (5) waiting times for an appointment with participating providers; new text end

new text begin (6) hours of operation; new text end

new text begin (7) the ability of the network to meet the needs of covered persons, which may include: new text end

new text begin (i) low-income persons; new text end

new text begin (ii) children and adults with serious, chronic, or complex health conditions, physical disabilities, or mental illness; or new text end

new text begin (iii) persons with limited English proficiency and persons from underserved communities; new text end

new text begin (8) other health care service delivery system options, including telemedicine or telehealth, mobile clinics, centers of excellence, and other ways of delivering care; and new text end

new text begin (9) the volume of technological and specialty care services available to serve the needs of covered persons that need technologically advanced or specialty care services. new text end

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to paragraph (a) is effective July 1, 2023. Paragraph (b) is effective January 1, 2025, and applies to health plans offered, issued, or renewed on or after that date. new text end

Sec. 40.

Minnesota Statutes 2022, section 62Q.096, is amended to read:

62Q.096 CREDENTIALING OF PROVIDERS.

new text begin (a) new text end If a health plan company has initially credentialed, as providers in its provider network, individual providers employed by or under contract with an entity that:

(1) is authorized to bill under section 256B.0625, subdivision 5;

(2) is a mental health clinic certified under section 245I.20;

(3) is designated an essential community provider under section 62Q.19; and

(4) is under contract with the health plan company to provide mental health services, the health plan company must continue to credential at least the same number of providers from that entity, as long as those providers meet the health plan company's credentialing standards.

new text begin (b) In order to ensure timely access by patients to mental health services, between July 1, 2023, and June 30, 2025, a health plan company must credential and enter into a contract for mental health services with any provider of mental health services that: new text end

new text begin (1) meets the health plan company's credential requirements. For purposes of credentialing under this paragraph, a health plan company may waive credentialing requirements that are not directly related to quality of care in order to ensure patient access to providers from underserved communities or to providers in rural areas; new text end

new text begin (2) seeks to receive a credential from the health plan company; new text end

new text begin (3) agrees to the health plan company's contract terms. The contract shall include payment rates that are usual and customary for the services provided; new text end

new text begin (4) is accepting new patients; and new text end

new text begin (5) is not already under a contract with the health plan company under a separate tax identification number or, if already under a contract with the health plan company, has provided notice to the health plan company of termination of the existing contract. new text end

new text begin (c) new text end A health plan company shall not refuse to credential these providers on the grounds that their provider network hasnew text begin :new text end

new text begin (1)new text end a sufficient number of providers of that typenew text begin , including but not limited to the provider types identified in paragraph (a); ornew text end

new text begin (2) a sufficient number of providers of mental health services in the aggregatenew text end .

Sec. 41.

Minnesota Statutes 2022, section 62Q.19, subdivision 1, is amended to read:

Subdivision 1.

Designation.

(a) The commissioner shall designate essential community providers. The criteria for essential community provider designation shall be the following:

(1) a demonstrated ability to integrate applicable supportive and stabilizing services with medical care for uninsured persons and high-risk and special needs populations, underserved, and other special needs populations; and

(2) a commitment to serve low-income and underserved populations by meeting the following requirements:

(i) has nonprofit status in accordance with chapter 317A;

(ii) has tax-exempt status in accordance with the Internal Revenue Service Code, section 501(c)(3);

(iii) charges for services on a sliding fee schedule based on current poverty income guidelines; and

(iv) does not restrict access or services because of a client's financial limitation;

(3) status as a local government unit as defined in section 62D.02, subdivision 11, a hospital district created or reorganized under sections 447.31 to 447.37, an Indian Tribal government, an Indian health service unit, or a community health board as defined in chapter 145A;

(4) a former state hospital that specializes in the treatment of cerebral palsy, spina bifida, epilepsy, closed head injuries, specialized orthopedic problems, and other disabling conditions;

(5) a sole community hospital. For these rural hospitals, the essential community provider designation applies to all health services provided, including both inpatient and outpatient services. For purposes of this section, "sole community hospital" means a rural hospital that:

(i) is eligible to be classified as a sole community hospital according to Code of Federal Regulations, title 42, section 412.92, or is located in a community with a population of less than 5,000 and located more than 25 miles from a like hospital currently providing acute short-term services;

(ii) has experienced net operating income losses in two of the previous three most recent consecutive hospital fiscal years for which audited financial information is available; and

(iii) consists of 40 or fewer licensed beds;

(6) a birth center licensed under section 144.615; deleted text begin ordeleted text end

(7) a hospital and affiliated specialty clinics that predominantly serve patients who are under 21 years of age and meet the following criteria:

(i) provide intensive specialty pediatric services that are routinely provided in fewer than five hospitals in the state; and

(ii) serve children from at least one-half of the counties in the statedeleted text begin .deleted text end new text begin ; ornew text end

new text begin (8) a psychiatric residential treatment facility, as defined in section 256B.0625, subdivision 45a, paragraph (b), that is certified by the commissioner of health and licensed by the commissioner of human services. new text end

(b) Prior to designation, the commissioner shall publish the names of all applicants in the State Register. The public shall have 30 days from the date of publication to submit written comments to the commissioner on the application. No designation shall be made by the commissioner until the 30-day period has expired.

(c) The commissioner may designate an eligible provider as an essential community provider for all the services offered by that provider or for specific services designated by the commissioner.

(d) For the purpose of this subdivision, supportive and stabilizing services include at a minimum, transportation, child care, cultural, and linguistic services where appropriate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to health plans offered, issued, or renewed on or after that date. new text end

Sec. 42.

Minnesota Statutes 2022, section 62Q.46, subdivision 1, is amended to read:

Subdivision 1.

Coverage for preventive items and services.

(a) "Preventive items and services" has the meaning specified in the Affordable Care Act.new text begin Preventive items and services includes:new text end

new text begin (1) evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force with respect to the individual involved; new text end

new text begin (2) immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved. For purposes of this clause, a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention is considered in effect after the recommendation has been adopted by the Director of the Centers for Disease Control and Prevention, and a recommendation is considered to be for routine use if the recommendation is listed on the Immunization Schedules of the Centers for Disease Control and Prevention; new text end

new text begin (3) with respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration; new text end

new text begin (4) with respect to women, additional preventive care and screenings that are not listed with a rating of A or B by the United States Preventive Services Task Force but that are provided for in comprehensive guidelines supported by the Health Resources and Services Administration; new text end

new text begin (5) all contraceptive methods established in guidelines published by the United States Food and Drug Administration; new text end

new text begin (6) screenings for human immunodeficiency virus for: new text end

new text begin (i) all individuals at least 15 years of age but less than 65 years of age; and new text end

new text begin (ii) all other individuals with increased risk of human immunodeficiency virus infection according to guidance from the Centers for Disease Control; new text end

new text begin (7) all preexposure prophylaxis when used for the prevention or treatment of human immunodeficiency virus, including but not limited to all preexposure prophylaxis, as defined in any guidance by the United States Preventive Services Task Force or the Centers for Disease Control, including the June 11, 2019, Preexposure Prophylaxis for the Prevention of HIV Infection United States Preventive Services Task Force Recommendation Statement; and new text end

new text begin (8) all postexposure prophylaxis when used for the prevention or treatment of human immunodeficiency virus, including but not limited to all postexposure prophylaxis as defined in any guidance by the United States Preventive Services Task Force or the Centers for Disease Control. new text end

(b) A health plan company must provide coverage for preventive items and services at a participating provider without imposing cost-sharing requirements, including a deductible, coinsurance, or co-payment. Nothing in this section prohibits a health plan company that has a network of providers from excluding coverage or imposing cost-sharing requirements for preventive items or services that are delivered by an out-of-network provider.

(c) A health plan company is not required to provide coverage for any items or services specified in any recommendation or guideline described in paragraph (a) if the recommendation or guideline is no longer included as a preventive item or service as defined in paragraph (a). Annually, a health plan company must determine whether any additional items or services must be covered without cost-sharing requirements or whether any items or services are no longer required to be covered.

(d) Nothing in this section prevents a health plan company from using reasonable medical management techniques to determine the frequency, method, treatment, or setting for a preventive item or service to the extent not specified in the recommendation or guideline.

(e) This section does not apply to grandfathered plans.

(f) This section does not apply to plans offered by the Minnesota Comprehensive Health Association.

Sec. 43.

Minnesota Statutes 2022, section 62Q.46, subdivision 3, is amended to read:

Subd. 3.

Additional services not prohibited.

Nothing in this section prohibits a health plan company from providing coverage for preventive items and services in addition to those specified deleted text begin in the Affordable Care Actdeleted text end new text begin under subdivision 1, paragraph (a)new text end , or from denying coverage for preventive items and services that are not recommended as preventive items and servicesnew text begin specifiednew text end under deleted text begin the Affordable Care Actdeleted text end new text begin subdivision 1, paragraph (a)new text end . A health plan company may impose cost-sharing requirements for a treatment not described deleted text begin in the Affordable Care Actdeleted text end new text begin under subdivision 1, paragraph (a),new text end even if the treatment results from a preventive item or service described deleted text begin in the Affordable Care Actdeleted text end new text begin under subdivision 1, paragraph (a)new text end .

Sec. 44.

new text begin [62Q.465] MENTAL HEALTH PARITY AND SUBSTANCE ABUSE ACCOUNTABILITY OFFICE. new text end

new text begin (a) The Mental Health Parity and Substance Abuse Accountability Office is established within the Department of Commerce to create and execute effective strategies for implementing the requirements under: new text end

new text begin (1) section 62Q.47; new text end

new text begin (2) the federal Mental Health Parity Act of 1996, Public Law 104-204; new text end

new text begin (3) the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, Public Law 110-343, division C, sections 511 and 512; new text end

new text begin (4) the Affordable Care Act, as defined under section 62A.011, subdivision 1a; and new text end

new text begin (5) amendments made to, and federal guidance or regulations issued or adopted under, the acts listed under clauses (2) to (4). new text end

new text begin (b) The office may oversee compliance reviews, conduct and lead stakeholder engagement, review consumer and provider complaints, and serve as a resource for ensuring health plan compliance with mental health and substance abuse requirements. new text end

Sec. 45.

Minnesota Statutes 2022, section 62Q.47, is amended to read:

62Q.47 ALCOHOLISM, MENTAL HEALTH, AND CHEMICAL DEPENDENCY SERVICES.

(a) All health plans, as defined in section 62Q.01, that provide coverage for alcoholism, mental health, or chemical dependency services, must comply with the requirements of this section.

(b) Cost-sharing requirements and benefit or service limitations for outpatient mental health and outpatient chemical dependency and alcoholism services, except for persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to 9530.6655, must not place a greater financial burden on the insured or enrollee, or be more restrictive than those requirements and limitations for outpatient medical services.

(c) Cost-sharing requirements and benefit or service limitations for inpatient hospital mental health new text begin services, psychiatric residential treatment facility services, new text end and inpatient hospital and residential chemical dependency and alcoholism services, except for persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to 9530.6655, must not place a greater financial burden on the insured or enrollee, or be more restrictive than those requirements and limitations for inpatient hospital medical services.

(d) A health plan company must not impose an NQTL with respect to mental health and substance use disorders in any classification of benefits unless, under the terms of the health plan as written and in operation, any processes, strategies, evidentiary standards, or other factors used in applying the NQTL to mental health and substance use disorders in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the NQTL with respect to medical and surgical benefits in the same classification.

(e) All health plans must meet the requirements of the federal Mental Health Parity Act of 1996, Public Law 104-204; Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008; the Affordable Care Act; and any amendments to, and federal guidance or regulations issued under, those acts.

(f) The commissioner may require information from health plan companies to confirm that mental health parity is being implemented by the health plan company. Information required may include comparisons between mental health and substance use disorder treatment and other medical conditions, including a comparison of prior authorization requirements, drug formulary design, claim denials, rehabilitation services, and other information the commissioner deems appropriate.

(g) Regardless of the health care provider's professional license, if the service provided is consistent with the provider's scope of practice and the health plan company's credentialing and contracting provisions, mental health therapy visits and medication maintenance visits shall be considered primary care visits for the purpose of applying any enrollee cost-sharing requirements imposed under the enrollee's health plan.

new text begin (h) All health plan companies offering health plans that provide coverage for alcoholism, mental health, or chemical dependency benefits shall provide reimbursement for the benefits delivered through the psychiatric Collaborative Care Model, which must include the following Current Procedural Terminology or Healthcare Common Procedure Coding System billing codes: new text end

new text begin (1) 99492; new text end

new text begin (2) 99493; new text end

new text begin (3) 99494; new text end

new text begin (4) G2214; and new text end

new text begin (5) G0512. new text end

new text begin This paragraph does not apply to managed care plans or county-based purchasing plans when the plan provides coverage to public health care program enrollees under chapter 256B or 256L. new text end

new text begin (i) The commissioner of commerce shall update the list of codes in paragraph (h) if any alterations or additions to the billing codes for the psychiatric Collaborative Care Model are made. new text end

new text begin (j) "Psychiatric Collaborative Care Model" means the evidence-based, integrated behavioral health service delivery method described at Federal Register, volume 81, page 80230, which includes a formal collaborative arrangement among a primary care team consisting of a primary care provider, a care manager, and a psychiatric consultant, and includes but is not limited to the following elements: new text end

new text begin (1) care directed by the primary care team; new text end

new text begin (2) structured care management; new text end

new text begin (3) regular assessments of clinical status using validated tools; and new text end

new text begin (4) modification of treatment as appropriate. new text end

deleted text begin (h)deleted text end new text begin (k)new text end By June 1 of each year, beginning June 1, 2021, the commissioner of commerce, in consultation with the commissioner of health, shall submit a report on compliance and oversight to the chairs and ranking minority members of the legislative committees with jurisdiction over health and commerce. The report must:

(1) describe the commissioner's process for reviewing health plan company compliance with United States Code, title 42, section 18031(j), any federal regulations or guidance relating to compliance and oversight, and compliance with this section and section 62Q.53;

(2) identify any enforcement actions taken by either commissioner during the preceding 12-month period regarding compliance with parity for mental health and substance use disorders benefits under state and federal law, summarizing the results of any market conduct examinations. The summary must include: (i) the number of formal enforcement actions taken; (ii) the benefit classifications examined in each enforcement action; and (iii) the subject matter of each enforcement action, including quantitative and nonquantitative treatment limitations;

(3) detail any corrective action taken by either commissioner to ensure health plan company compliance with this section, section 62Q.53, and United States Code, title 42, section 18031(j); and

(4) describe the information provided by either commissioner to the public about alcoholism, mental health, or chemical dependency parity protections under state and federal law.

The report must be written in nontechnical, readily understandable language and must be made available to the public by, among other means as the commissioners find appropriate, posting the report on department websites. Individually identifiable information must be excluded from the report, consistent with state and federal privacy protections.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to health plans offered, issued, or renewed on or after that date. new text end

Sec. 46.

new text begin [62Q.481] COST-SHARING FOR PRESCRIPTION DRUGS AND RELATED MEDICAL SUPPLIES TO TREAT CHRONIC DISEASE. new text end

new text begin Subdivision 1. new text end

new text begin Cost-sharing limits. new text end

new text begin (a) A health plan must limit the amount of any enrollee cost-sharing for prescription drugs prescribed to treat a chronic disease to no more than: (1) $25 per one-month supply for each prescription drug, regardless of the amount or type of medication required to fill the prescription; and (2) $50 per month in total for all related medical supplies. The cost-sharing limit for related medical supplies does not increase with the number of chronic diseases for which an enrollee is treated. Coverage under this section shall not be subject to any deductible. new text end

new text begin (b) If application of this section before an enrollee has met the enrollee's plan deductible results in: (1) health savings account ineligibility under United States Code, title 26, section 223; or (2) catastrophic health plan ineligibility under United States Code, title 42, section 18022(e), this section applies to the specific prescription drug or related medical supply only after the enrollee has met the enrollee's plan deductible. new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following definitions apply. new text end

new text begin (b) "Chronic disease" means diabetes, asthma, and allergies requiring the use of epinephrine auto-injectors. new text end

new text begin (c) "Cost-sharing" means co-payments and coinsurance. new text end

new text begin (d) "Related medical supplies" means syringes, insulin pens, insulin pumps, test strips, glucometers, continuous glucose monitors, epinephrine auto-injectors, asthma inhalers, and other medical supply items necessary to effectively and appropriately treat a chronic disease or administer a prescription drug prescribed to treat a chronic disease. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to health plans offered, issued, or renewed on or after that date. new text end

Sec. 47.

Minnesota Statutes 2022, section 62Q.735, subdivision 1, is amended to read:

Subdivision 1.

Contract disclosure.

(a) Before requiring a health care provider to sign a contract, a health plan company shall give to the provider a complete copy of the proposed contract, including:

(1) all attachments and exhibits;

(2) operating manuals;

(3) a general description of the health plan company's health service coding guidelines and requirement for procedures and diagnoses with modifiers, and multiple procedures; and

(4) all guidelines and treatment parameters incorporated or referenced in the contract.

(b) The health plan company shall make available to the provider the fee schedule or a method or process that allows the provider to determine the fee schedule for each health care service to be provided under the contract.

(c) deleted text begin Notwithstanding paragraph (b), a health plan company that is a dental plan organization, as defined in section 62Q.76, shall disclose information related to the individual contracted provider's expected reimbursement from the dental plan organization.deleted text end Nothing in this section requires a dental plan organization to disclose the plan's aggregate maximum allowable fee table used to determine other providers' fees. The contracted provider must not release this information in any way that would violate any state or federal antitrust law.

Sec. 48.

Minnesota Statutes 2022, section 62Q.735, subdivision 5, is amended to read:

Subd. 5.

Fee schedules.

deleted text begin (a)deleted text end A health plan company shall provide, upon request, any additional fees or fee schedules relevant to the particular provider's practice beyond those provided with the renewal documents for the next contract year to all participating providers, excluding claims paid under the pharmacy benefit. Health plan companies may fulfill the requirements of this section by making the full fee schedules available through a secure web portal for contracted providers.

deleted text begin (b) A dental organization may satisfy paragraph (a) by complying with section 62Q.735, subdivision 1, paragraph (c). deleted text end

Sec. 49.

Minnesota Statutes 2022, section 62Q.76, is amended by adding a subdivision to read:

new text begin Subd. 9. new text end

new text begin Third party. new text end

new text begin "Third party" means a person or entity that enters into a contract with a dental organization or with another third party to gain access to the dental care services or contractual discounts under a dental provider contract. Third party does not include an enrollee of a dental organization or an employer or other group for whom the dental organization provides administrative services. new text end

Sec. 50.

Minnesota Statutes 2022, section 62Q.78, is amended by adding a subdivision to read:

new text begin Subd. 7. new text end

new text begin Method of payments. new text end

new text begin A dental provider contract must include a method of payment for dental care services in which no fees associated with the method of payment, including credit card fees and fees related to payment in the form of digital or virtual currency, are incurred by the dentist or dental clinic. Any fees that may be incurred from a payment must be disclosed to a dentist prior to entering into or renewing a dental provider contract. For purposes of this section, fees related to a provider's electronic claims processing vendor, financial institution, or other vendor used by a provider to facilitate the submission of claims are excluded. new text end

Sec. 51.

Minnesota Statutes 2022, section 62Q.78, is amended by adding a subdivision to read:

new text begin Subd. 8. new text end

new text begin Network leasing. new text end

new text begin (a) A dental organization may grant a third party access to a dental provider contract or a provider's dental care services or contractual discounts provided pursuant to a dental provider contract if, at the time the dental provider contract is entered into or renewed, the dental organization allows a dentist to choose not to participate in third-party access to the dental provider contract, without any penalty to the dentist. The third-party access provision of the dental provider contract must be clearly identified. A dental organization must not grant a third party access to the dental provider contract of any dentist who does not participate in third-party access to the dental provider contract. new text end

new text begin (b) Notwithstanding paragraph (a), if a dental organization exists solely for the purpose of recruiting dentists for dental provider contracts that establish a network to be leased to third parties, the dentist waives the right to choose whether to participate in third-party access. new text end

new text begin (c) A dental organization may grant a third party access to a dental provider contract, or a dentist's dental care services or contractual discounts under a dental provider contract, if the following requirements are met: new text end

new text begin (1) the dental organization lists all third parties that may have access to the dental provider contract on the dental organization's website, which must be updated at least once every 90 days; new text end

new text begin (2) the dental provider contract states that the dental organization may enter into an agreement with a third party that would allow the third party to obtain the dental organization's rights and responsibilities as if the third party were the dental organization, and the dentist chose to participate in third-party access at the time the dental provider contract was entered into; and new text end

new text begin (3) the third party accessing the dental provider contract agrees to comply with all applicable terms of the dental provider contract. new text end

new text begin (d) A dentist is not bound by and is not required to perform dental care services under a dental provider contract granted to a third party in violation of this section. new text end

new text begin (e) This subdivision does not apply when: new text end

new text begin (1) the dental provider contract is for dental services provided under a public health plan program, including but not limited to medical assistance, MinnesotaCare, Medicare, or Medicare Advantage; or new text end

new text begin (2) access to a dental provider contract is granted to a dental organization, an entity operating in accordance with the same brand licensee program as the dental organization or other entity, or to an entity that is an affiliate of the dental organization, provided the entity agrees to substantially similar terms and conditions as the originating dental provider contract between the dental organization and the dentist or dental clinic. A list of the dental organization's affiliates must be posted on the dental organization's website. new text end

Sec. 52.

Minnesota Statutes 2022, section 62Q.81, subdivision 4, is amended to read:

Subd. 4.

Essential health benefits; definition.

For purposes of this section, "essential health benefits" has the meaning given under section 1302(b) of the Affordable Care Act and includes:

(1) ambulatory patient services;

(2) emergency services;

(3) hospitalization;

(4) laboratory services;

(5) maternity and newborn care;

(6) mental health and substance use disorder services, including behavioral health treatment;

(7) pediatric services, including oral and vision care;

(8) prescription drugs;

(9) preventive and wellness services and chronic disease management;

(10) rehabilitative and habilitative services and devices; and

(11) additional essential health benefits included in the EHB-benchmark plan, as defined under the Affordable Care Actnew text begin , and preventive items and services, as defined under section 62Q.46, subdivision 1, paragraph (a)new text end .

Sec. 53.

Minnesota Statutes 2022, section 62Q.81, is amended by adding a subdivision to read:

new text begin Subd. 7. new text end

new text begin Standard plans. new text end

new text begin (a) A health plan company that offers individual health plans must ensure that no less than one individual health plan at each level of coverage described in subdivision 1, paragraph (b), clause (3), that the health plan company offers in each geographic rating area the health plan company serves conforms to the standard plan parameters determined by the commissioner under paragraph (e). new text end

new text begin (b) An individual health plan offered under this subdivision must be: new text end

new text begin (1) clearly and appropriately labeled as standard plans to aid the purchaser in the selection process; new text end

new text begin (2) marketed as standard plans and in the same manner as other individual health plans offered by the health plan company; and new text end

new text begin (3) offered for purchase to any individual. new text end

new text begin (c) This subdivision does not apply to catastrophic plans, grandfathered plans, small group health plans, large group health plans, health savings accounts, qualified high deductible health benefit plans, limited health benefit plans, or short-term limited-duration health insurance policies. new text end

new text begin (d) Health plan companies must meet the requirements in this subdivision separately for plans offered through MNsure under chapter 62V and plans offered outside of MNsure. new text end

new text begin (e) The commissioner of commerce, in consultation with the commissioner of health, must annually determine standard plan parameters, including but not limited to cost-sharing structure and covered benefits, that comprise a standard plan in Minnesota. new text end

new text begin (f) Notwithstanding section 62A.65, subdivision 2, a health plan company may discontinue offering a health plan under this subdivision if, three years after the date the plan is initially offered, the plan has fewer than 75 enrollees. A health plan company discontinuing a health plan under this paragraph may discontinue a health plan that has fewer than 75 enrollees if it: new text end

new text begin (1) provides notice of the plan's discontinuation in writing, in a form prescribed by the commissioner, to each enrollee of the plan at least 90 calendar days before the date the coverage is discontinued; new text end

new text begin (2) offers on a guaranteed issue basis to each enrollee the option to purchase an individual health plan currently being offered by the health plan company for individuals in that geographic rating area. An enrollee who does not select an option shall be automatically enrolled in the individual health plan closest in actuarial value to the enrollee's current plan; and new text end

new text begin (3) acts uniformly without regard to any health status-related factor of an enrollee or an enrollee's dependents who may become eligible for coverage. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025, and applies to individual health plans offered, issued, or renewed on or after that date. new text end

Sec. 54.

new text begin [62W.15] CLINICIAN-ADMINISTERED DRUGS. new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin (a) For purposes of this section, the following definition applies. new text end

new text begin (b) "Clinician-administered drug" means an outpatient prescription drug other than a vaccine that: new text end

new text begin (1) cannot reasonably be self-administered by the enrollee to whom the drug is prescribed or by an individual assisting the enrollee with self-administration; and new text end

new text begin (2) is typically administered: new text end

new text begin (i) by a health care provider authorized to administer the drug, including when acting under a physician's delegation and supervision; and new text end

new text begin (ii) in a physician's office, hospital outpatient infusion center, or other clinical setting. new text end

new text begin Subd. 2. new text end

new text begin Safety and care requirements for clinician-administered drugs. new text end

new text begin (a) A specialty pharmacy that ships a clinician-administered drug to a health care provider or pharmacy must: new text end

new text begin (1) comply with all federal laws regulating the shipment of drugs, including but not limited to the U.S. Pharmacopeia General Chapter 800; new text end

new text begin (2) in response to questions from a health care provider or pharmacy, provide access to a pharmacist or nurse employed by the specialty pharmacy 24 hours a day, 7 days a week; new text end

new text begin (3) allow an enrollee and health care provider to request a refill of a clinician-administered drug on behalf of an enrollee, in accordance with the pharmacy benefit manager or health carrier's utilization review procedures; and new text end

new text begin (4) adhere to the track and trace requirements, as defined by the federal Drug Supply Chain Security Act, United States Code, title 21, section 360eee, et seq., for a clinician-administered drug that needs to be compounded or manipulated. new text end

new text begin (b) For any clinician-administered drug dispensed by a specialty pharmacy selected by the pharmacy benefit manager or health carrier, the requesting health care provider or their designee must provide the requested date, approximate time, and place of delivery of a clinician-administered drug at least five business days before the date of delivery. The specialty pharmacy must require a signature upon receipt of the shipment when shipped to a health care provider. new text end

new text begin (c) A pharmacy benefit manager or health carrier who requires dispensing of a clinician-administered drug through a specialty pharmacy shall establish and disclose a process which allows the health care provider or pharmacy to appeal and have exceptions to the use of a specialty pharmacy when: new text end

new text begin (1) a drug is not delivered as specified in paragraph (b); or new text end

new text begin (2) an attending health care provider reasonably believes an enrollee may experience immediate and irreparable harm without the immediate, onetime use of clinician-administered drug that a health care provider or pharmacy has in stock. new text end

new text begin (d) A pharmacy benefit manager or health carrier shall not require a specialty pharmacy to dispense a clinician-administered drug directly to an enrollee with the intention that the enrollee will transport the clinician-administered drug to a health care provider for administration. new text end

new text begin (e) A pharmacy benefit manager, health carrier, health care provider, or pharmacist shall not require and may not deny the use of a home infusion or infusion site external to the enrollee's provider office or clinic to administer a clinician-administered drug when requested by an enrollee and such services are covered by the health plan and are available and clinically appropriate as determined by the health care provider and delivered in accordance with state law. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to health plans offered, issued, or renewed on or after that date. new text end

Sec. 55.

new text begin [65A.298] HOMEOWNER'S INSURANCE; FORTIFIED PROGRAM STANDARDS. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section the following term has the meaning given. new text end

new text begin (b) "Insurable property" means a residential property designated as meeting Fortified program standards that include a hail supplement as administered by the Insurance Institute for Business and Home Safety (IBHS). new text end

new text begin Subd. 2. new text end

new text begin Fortified new property. new text end

new text begin (a) An insurer must provide a premium discount or an insurance rate reduction to an owner who builds or locates a new insurable property in Minnesota. new text end

new text begin (b) An owner of insurable property claiming a premium discount or rate reduction under this subdivision must submit and maintain a certificate issued by IBHS showing proof of compliance with the Fortified program standards to the insurer prior to receiving the premium discount or rate reduction. At the time of policy renewal an insurer may require evidence that the issued certificate remains in good standing. new text end

new text begin Subd. 3. new text end

new text begin Fortified existing property. new text end

new text begin (a) An insurer must provide a premium discount or insurance rate reduction to an owner who retrofits an existing property to meet the requirements to be an insurable property in Minnesota. new text end

new text begin (b) An owner of insurable property claiming a premium discount or rate reduction under this subdivision must submit a certificate issued by IBHS showing proof of compliance with the Fortified program standards to the insurer prior to receiving the premium discount or rate reduction. new text end

new text begin Subd. 4. new text end

new text begin Insurers. new text end

new text begin (a) A participating insurer must submit to the commissioner actuarially justified rates and a rating plan for a person who builds or locates a new insurable property in Minnesota. new text end

new text begin (b) A participating insurer must submit to the commissioner actuarially justified rates and a rating plan for a person who retrofits an existing property to meet the requirements to be an insurable property. new text end

new text begin (c) A participating insurer may offer, in addition to the premium discount and insurance rate reductions required under subdivisions 2 and 3, more generous mitigation adjustments to an owner of insurable property. new text end

new text begin (d) Any premium discount, rate reduction, or mitigation adjustment offered by an insurer under this section applies only to policies that include wind coverage and may be applied to: (1) only the portion of the premium for wind coverage; or (2) the total premium, if the insurer does not separate the premium for wind coverage in the insurer's rate filing. new text end

new text begin (e) A rate and rating plan submitted to the commissioner under this section must not be used until 60 days after the rate and rating plan has been filed with the commissioner, unless the commissioner approves the rate and rating plan before that time. A rating plan, rating classification, and territories applicable to insurance written by a participating insurer and any related statistics are subject to chapter 70A. When the commissioner is evaluating rate and rating plans submitted under this section, the commissioner must evaluate: new text end

new text begin (i) evidence of cost savings directly attributable to the Fortified program standards as administered by IBHS; and new text end

new text begin (ii) whether the cost savings are passed along in full to qualified policyholders. new text end

new text begin (f) A participating insurer must resubmit a rate and rating plan at least once every five years following the initial submission under this section. new text end

new text begin (g) The commissioner may annually publish the premium savings that policyholders experience pursuant to this section. new text end

new text begin (h) An insurer must provide the commissioner with all requested information necessary for the commissioner to meet the requirements of this subdivision. new text end

Sec. 56.

new text begin [65A.299] STRENGTHEN MINNESOTA HOMES PROGRAM. new text end

new text begin Subdivision 1. new text end

new text begin Short title. new text end

new text begin This section may be cited as the "Strengthen Minnesota Homes Act." new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this subdivision have the meanings given. new text end

new text begin (b) "Insurable property" has the meaning given in section 65A.298, subdivision 1. new text end

new text begin (c) "Program" means the Strengthen Minnesota Homes program established under this section. new text end

new text begin Subd. 3. new text end

new text begin Program established; purpose, permitted activities. new text end

new text begin The Strengthen Minnesota Homes program is established within the Department of Commerce. The purpose of the program is to provide grants to retrofit insurable property to resist loss due to common perils, including but not limited to tornadoes or other catastrophic windstorm events. new text end

new text begin Subd. 4. new text end

new text begin Strengthen Minnesota homes account; appropriation. new text end

new text begin (a) A strengthen Minnesota homes account is created as a separate account in the special revenue fund of the state treasury. The account consists of money provided by law and any other money donated, allotted, transferred, or otherwise provided to the account. Earnings, including interest, dividends, and any other earnings arising from assets of the account, must be credited to the account. Money remaining in the account at the end of a fiscal year does not cancel to the general fund and remains in the account until expended. The commissioner must manage the account. new text end

new text begin (b) Money in the account is appropriated to the commissioner to pay for (1) grants issued under the program, and (2) the reasonable costs incurred by the commissioner to administer the program. new text end

new text begin Subd. 5. new text end

new text begin Use of grants. new text end

new text begin (a) A grant under this section must be used to retrofit an insurable property. new text end

new text begin (b) Grant money provided under this section must not be used for maintenance or repairs, but may be used in conjunction with repairs or reconstruction necessitated by damage from wind or hail. new text end

new text begin (c) A project funded by a grant under this section must be completed within three months of the date the grant is approved. Failure to complete the project in a timely manner may result in forfeiture of the grant. new text end

new text begin Subd. 6. new text end

new text begin Applicant eligibility. new text end

new text begin The commissioner must develop (1) administrative procedures to implement this section, and (2) criteria used to determine whether an applicant is eligible for a grant under this section. new text end

new text begin Subd. 7. new text end

new text begin Contractor eligibility; conflicts of interest. new text end

new text begin (a) To be eligible to work as a contractor on a project funded by a grant under this section, the contractor must meet all of the following program requirements and must maintain a current copy of all certificates, licenses, and proof of insurance coverage with the program office. The eligible contractor must: new text end

new text begin (1) hold a valid residential building contractor and residential remodeler license issued by the commissioner of labor and industry; new text end

new text begin (2) not be subject to disciplinary action by the commissioner of labor and industry; new text end

new text begin (3) hold any other valid state or jurisdictional business license or work permits required by law; new text end

new text begin (4) possess an in-force general liability policy with $1,000,000 in liability coverage; new text end

new text begin (5) possess an in-force workers compensation policy; new text end

new text begin (6) possess a certificate of compliance from the commissioner of revenue; new text end

new text begin (7) successfully complete the Fortified Roof for High Wind and Hail training provided by the IBHS and maintain an active certification. The training may be offered as separate courses; new text end

new text begin (8) agree to the terms and successfully register as a vendor with the commissioner of management and budget and receive direct deposit of payment for mitigation work performed under the program; new text end

new text begin (9) maintain Internet access and keep a valid email address on file with the program and remain active in the commissioner of management and budget's vendor and supplier portal while working on the program; new text end

new text begin (10) maintain an active email address for the communication with the program; new text end

new text begin (11) successfully complete the program training; and new text end

new text begin (12) agree to follow program procedures and rules established under this section and by the commissioner. new text end

new text begin (b) An eligible contractor must not have a financial interest, other than payment on behalf of the homeowner, in any project for which the eligible contractor performs work toward a fortified designation under the program. An eligible contractor is prohibited from acting as the evaluator for a fortified designation on any project funded by the program. An eligible contractor must report to the commissioner regarding any potential conflict of interest before work commences on any job funded by the program. new text end

new text begin Subd. 8. new text end

new text begin Evaluator eligibility; conflicts of interest. new text end

new text begin (a) To be eligible to work on the program as an evaluator, the evaluator must meet all program eligibility requirements and must submit to the commissioner and maintain a copy of all current certificates and licenses. The evaluator must: new text end

new text begin (1) be in good standing with IBHS and maintain an active certification as a fortified home evaluator for high wind and hail or a successor certification; new text end

new text begin (2) possess a Minnesota business license and be registered with the secretary of state; and new text end

new text begin (3) successfully complete the program training. new text end

new text begin (b) An evaluator must not have a financial interest in any project that the evaluator inspects for designation purposes for the program. An evaluator must not be an eligible contractor or supplier of any material, product, or system installed in any home that the evaluator inspects for designation purposes for the program. An evaluator must not be a sales agent for any home being designated for the program. An evaluator must inform the commissioner of any potential conflict of interest impacting the evaluator's participation in the program. new text end

new text begin Subd. 9. new text end

new text begin Grant approval; allocation. new text end

new text begin (a) The commissioner must review all applications for completeness and must perform appropriate audits to verify (1) the accuracy of the information on the application, and (2) that the applicant meets all eligibility rules. All verified applicants must be placed in the order the application was received. Grants must be awarded on a first-come, first-served basis, subject to availability of money for the program. new text end

new text begin (b) When a grant is approved, an approval letter must be sent to the applicant. new text end

new text begin (c) An eligible contractor is prohibited from beginning work until a grant is approved. new text end

new text begin (d) In order to assure equitable distribution of grants in proportion to the income demographics in counties where the program is made available, grant applications must be accepted on a first-come, first-served basis. The commissioner may establish pilot projects as needed to establish a sustainable program distribution system in any geographic area within Minnesota. new text end

new text begin Subd. 10. new text end

new text begin Grant award process; release of grant money. new text end

new text begin (a) After a grant application is approved, the eligible contractor selected by the homeowner may begin the mitigation work. new text end

new text begin (b) Once the mitigation work is completed, the eligible contractor must submit a copy of the signed contract to the commissioner, along with an invoice seeking payment and an affidavit stating the fortified standards were met by the work. new text end

new text begin (c) The IBHS evaluator must conduct all required evaluations, including a required interim inspection during construction and the final inspection, and must confirm that the work was completed according to the mitigation specifications. new text end

new text begin (d) Grant money must be released on behalf of an approved applicant only after a fortified designation certificate has been issued for the home. The program or another designated entity must, on behalf of the homeowner, directly pay the eligible contractor that performed the mitigation work. The program or the program's designated entity must pay the eligible contractor the costs covered by the grant. The homeowner must pay the eligible contractor for the remaining cost after receiving an IBHS fortified certificate. new text end

new text begin (e) The program must confirm that the homeowner's insurer provides the appropriate premium discount. new text end

new text begin (f) The program must conduct random reinspections to detect any fraud and must submit any irregularities to the attorney general. new text end

new text begin Subd. 11. new text end

new text begin Limitations. new text end

new text begin (a) This section does not create an entitlement for property owners or obligate the state of Minnesota to pay for residential property in Minnesota to be inspected or retrofitted. The program under this section is subject to legislative appropriations, the receipt of federal grants or money, or the receipt of other sources of grants or money. The department may obtain grants or other money from the federal government or other funding sources to support and enhance program activities. new text end

new text begin (b) All mitigation under this section is contingent upon securing all required local permits and applicable inspections to comply with local building codes and applicable Fortified program standards. A mitigation project receiving a grant under this section is subject to random reinspection at a later date. new text end

Sec. 57.

new text begin [65A.303] HOMEOWNER'S LIABILITY INSURANCE; DOGS. new text end

new text begin Subdivision 1. new text end

new text begin Discrimination prohibited. new text end

new text begin An insurer writing homeowner's insurance for property is prohibited from (1) refusing to issue or renew an insurance policy or contract, or (2) canceling an insurance policy or contract based solely on the fact that the homeowner harbors or owns one dog of a specific breed or mixture of breeds. new text end

new text begin Subd. 2. new text end

new text begin Exception. new text end

new text begin (a) Subdivision 1 does not prohibit an insurer from (1) refusing to issue or renew an insurance policy or contract, (2) canceling an insurance policy or contract, or (3) imposing a reasonably increased premium or rate for an insurance policy or contract based on a dog meeting the criteria of a dangerous dog or potentially dangerous dog under section 347.50, or based on sound underwriting and actuarial principles that are reasonably related to actual or anticipated loss experience. new text end

new text begin (b) Subdivision 1 does not prohibit an insurer from (1) refusing to issue or renew an insurance policy or contract, (2) canceling an insurance policy or contract, or (3) imposing a reasonably increased premium or rate for an insurance policy or contract if the dog has a history of causing bodily injury or if the dog owner has a history of owning other animals who caused bodily injury. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective April 1, 2024, and applies to insurance policies and contracts offered, issued, or sold after that date. new text end

Sec. 58.

Minnesota Statutes 2022, section 65B.49, is amended by adding a subdivision to read:

new text begin Subd. 10. new text end

new text begin Time limitations. new text end

new text begin (a) Unless expressly provided for in this chapter, a plan of reparation security must conform to the six-year time limitation provided under section 541.05, subdivision 1, clause (1). new text end

new text begin (b) The time limitation for commencing a cause of action relating to underinsured motorist coverage under subdivision 3a is four years from the date of accrual. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023, and applies to contracts issued or renewed on or after that date. new text end

Sec. 59.

Minnesota Statutes 2022, section 151.071, subdivision 1, is amended to read:

Subdivision 1.

Forms of disciplinary action.

When the board finds that a licensee, registrant, or applicant has engaged in conduct prohibited under subdivision 2, it may do one or more of the following:

(1) deny the issuance of a license or registration;

(2) refuse to renew a license or registration;

(3) revoke the license or registration;

(4) suspend the license or registration;

(5) impose limitations, conditions, or both on the license or registration, including but not limited to: the limitation of practice to designated settings; the limitation of the scope of practice within designated settings; the imposition of retraining or rehabilitation requirements; the requirement of practice under supervision; the requirement of participation in a diversion program such as that established pursuant to section 214.31 or the conditioning of continued practice on demonstration of knowledge or skills by appropriate examination or other review of skill and competence;

(6) impose a civil penalty not exceeding $10,000 for each separate violation,new text begin except that a civil penalty not exceeding $25,000 may be imposed for each separate violation of section 62J.842,new text end the amount of the civil penalty to be fixed so as to deprive a licensee or registrant of any economic advantage gained by reason of the violation, to discourage similar violations by the licensee or registrant or any other licensee or registrant, or to reimburse the board for the cost of the investigation and proceeding, including but not limited to, fees paid for services provided by the Office of Administrative Hearings, legal and investigative services provided by the Office of the Attorney General, court reporters, witnesses, reproduction of records, board members' per diem compensation, board staff time, and travel costs and expenses incurred by board staff and board members; and

(7) reprimand the licensee or registrant.

Sec. 60.

Minnesota Statutes 2022, section 151.071, subdivision 2, is amended to read:

Subd. 2.

Grounds for disciplinary action.

The following conduct is prohibited and is grounds for disciplinary action:

(1) failure to demonstrate the qualifications or satisfy the requirements for a license or registration contained in this chapter or the rules of the board. The burden of proof is on the applicant to demonstrate such qualifications or satisfaction of such requirements;

(2) obtaining a license by fraud or by misleading the board in any way during the application process or obtaining a license by cheating, or attempting to subvert the licensing examination process. Conduct that subverts or attempts to subvert the licensing examination process includes, but is not limited to: (i) conduct that violates the security of the examination materials, such as removing examination materials from the examination room or having unauthorized possession of any portion of a future, current, or previously administered licensing examination; (ii) conduct that violates the standard of test administration, such as communicating with another examinee during administration of the examination, copying another examinee's answers, permitting another examinee to copy one's answers, or possessing unauthorized materials; or (iii) impersonating an examinee or permitting an impersonator to take the examination on one's own behalf;

(3) for a pharmacist, pharmacy technician, pharmacist intern, applicant for a pharmacist or pharmacy license, or applicant for a pharmacy technician or pharmacist intern registration, conviction of a felony reasonably related to the practice of pharmacy. Conviction as used in this subdivision includes a conviction of an offense that if committed in this state would be deemed a felony without regard to its designation elsewhere, or a criminal proceeding where a finding or verdict of guilt is made or returned but the adjudication of guilt is either withheld or not entered thereon. The board may delay the issuance of a new license or registration if the applicant has been charged with a felony until the matter has been adjudicated;

(4) for a facility, other than a pharmacy, licensed or registered by the board, if an owner or applicant is convicted of a felony reasonably related to the operation of the facility. The board may delay the issuance of a new license or registration if the owner or applicant has been charged with a felony until the matter has been adjudicated;

(5) for a controlled substance researcher, conviction of a felony reasonably related to controlled substances or to the practice of the researcher's profession. The board may delay the issuance of a registration if the applicant has been charged with a felony until the matter has been adjudicated;

(6) disciplinary action taken by another state or by one of this state's health licensing agencies:

(i) revocation, suspension, restriction, limitation, or other disciplinary action against a license or registration in another state or jurisdiction, failure to report to the board that charges or allegations regarding the person's license or registration have been brought in another state or jurisdiction, or having been refused a license or registration by any other state or jurisdiction. The board may delay the issuance of a new license or registration if an investigation or disciplinary action is pending in another state or jurisdiction until the investigation or action has been dismissed or otherwise resolved; and

(ii) revocation, suspension, restriction, limitation, or other disciplinary action against a license or registration issued by another of this state's health licensing agencies, failure to report to the board that charges regarding the person's license or registration have been brought by another of this state's health licensing agencies, or having been refused a license or registration by another of this state's health licensing agencies. The board may delay the issuance of a new license or registration if a disciplinary action is pending before another of this state's health licensing agencies until the action has been dismissed or otherwise resolved;

(7) for a pharmacist, pharmacy, pharmacy technician, or pharmacist intern, violation of any order of the board, of any of the provisions of this chapter or any rules of the board or violation of any federal, state, or local law or rule reasonably pertaining to the practice of pharmacy;

(8) for a facility, other than a pharmacy, licensed by the board, violations of any order of the board, of any of the provisions of this chapter or the rules of the board or violation of any federal, state, or local law relating to the operation of the facility;

(9) engaging in any unethical conduct; conduct likely to deceive, defraud, or harm the public, or demonstrating a willful or careless disregard for the health, welfare, or safety of a patient; or pharmacy practice that is professionally incompetent, in that it may create unnecessary danger to any patient's life, health, or safety, in any of which cases, proof of actual injury need not be established;

(10) aiding or abetting an unlicensed person in the practice of pharmacy, except that it is not a violation of this clause for a pharmacist to supervise a properly registered pharmacy technician or pharmacist intern if that person is performing duties allowed by this chapter or the rules of the board;

(11) for an individual licensed or registered by the board, adjudication as mentally ill or developmentally disabled, or as a chemically dependent person, a person dangerous to the public, a sexually dangerous person, or a person who has a sexual psychopathic personality, by a court of competent jurisdiction, within or without this state. Such adjudication shall automatically suspend a license for the duration thereof unless the board orders otherwise;

(12) for a pharmacist or pharmacy intern, engaging in unprofessional conduct as specified in the board's rules. In the case of a pharmacy technician, engaging in conduct specified in board rules that would be unprofessional if it were engaged in by a pharmacist or pharmacist intern or performing duties specifically reserved for pharmacists under this chapter or the rules of the board;

(13) for a pharmacy, operation of the pharmacy without a pharmacist present and on duty except as allowed by a variance approved by the board;

(14) for a pharmacist, the inability to practice pharmacy with reasonable skill and safety to patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type of material or as a result of any mental or physical condition, including deterioration through the aging process or loss of motor skills. In the case of registered pharmacy technicians, pharmacist interns, or controlled substance researchers, the inability to carry out duties allowed under this chapter or the rules of the board with reasonable skill and safety to patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type of material or as a result of any mental or physical condition, including deterioration through the aging process or loss of motor skills;

(15) for a pharmacist, pharmacy, pharmacist intern, pharmacy technician, medical gas dispenser, or controlled substance researcher, revealing a privileged communication from or relating to a patient except when otherwise required or permitted by law;

(16) for a pharmacist or pharmacy, improper management of patient records, including failure to maintain adequate patient records, to comply with a patient's request made pursuant to sections 144.291 to 144.298, or to furnish a patient record or report required by law;

(17) fee splitting, including without limitation:

(i) paying, offering to pay, receiving, or agreeing to receive, a commission, rebate, kickback, or other form of remuneration, directly or indirectly, for the referral of patients;

(ii) referring a patient to any health care provider as defined in sections 144.291 to 144.298 in which the licensee or registrant has a financial or economic interest as defined in section 144.6521, subdivision 3, unless the licensee or registrant has disclosed the licensee's or registrant's financial or economic interest in accordance with section 144.6521; and

(iii) any arrangement through which a pharmacy, in which the prescribing practitioner does not have a significant ownership interest, fills a prescription drug order and the prescribing practitioner is involved in any manner, directly or indirectly, in setting the price for the filled prescription that is charged to the patient, the patient's insurer or pharmacy benefit manager, or other person paying for the prescription or, in the case of veterinary patients, the price for the filled prescription that is charged to the client or other person paying for the prescription, except that a veterinarian and a pharmacy may enter into such an arrangement provided that the client or other person paying for the prescription is notified, in writing and with each prescription dispensed, about the arrangement, unless such arrangement involves pharmacy services provided for livestock, poultry, and agricultural production systems, in which case client notification would not be required;

(18) engaging in abusive or fraudulent billing practices, including violations of the federal Medicare and Medicaid laws or state medical assistance laws or rules;

(19) engaging in conduct with a patient that is sexual or may reasonably be interpreted by the patient as sexual, or in any verbal behavior that is seductive or sexually demeaning to a patient;

(20) failure to make reports as required by section 151.072 or to cooperate with an investigation of the board as required by section 151.074;

(21) knowingly providing false or misleading information that is directly related to the care of a patient unless done for an accepted therapeutic purpose such as the dispensing and administration of a placebo;

(22) aiding suicide or aiding attempted suicide in violation of section 609.215 as established by any of the following:

(i) a copy of the record of criminal conviction or plea of guilty for a felony in violation of section 609.215, subdivision 1 or 2;

(ii) a copy of the record of a judgment of contempt of court for violating an injunction issued under section 609.215, subdivision 4;

(iii) a copy of the record of a judgment assessing damages under section 609.215, subdivision 5; or

(iv) a finding by the board that the person violated section 609.215, subdivision 1 or 2. The board must investigate any complaint of a violation of section 609.215, subdivision 1 or 2;

(23) for a pharmacist, practice of pharmacy under a lapsed or nonrenewed license. For a pharmacist intern, pharmacy technician, or controlled substance researcher, performing duties permitted to such individuals by this chapter or the rules of the board under a lapsed or nonrenewed registration. For a facility required to be licensed under this chapter, operation of the facility under a lapsed or nonrenewed license or registration; deleted text begin anddeleted text end

(24) for a pharmacist, pharmacist intern, or pharmacy technician, termination or discharge from the health professionals services program for reasons other than the satisfactory completion of the programdeleted text begin .deleted text end new text begin ; andnew text end

new text begin (25) for a manufacturer, a violation of section 62J.842 or 62J.845. new text end

Sec. 61.

Minnesota Statutes 2022, section 256B.0631, subdivision 1, is amended to read:

Subdivision 1.

Cost-sharing.

(a) Except as provided in subdivision 2, the medical assistance benefit plan shall include the following cost-sharing for all recipientsdeleted text begin , effective for services provided on or after September 1, 2011deleted text end :

(1) $3 per nonpreventive visit, except as provided in paragraph (b). For purposes of this subdivision, a visit means an episode of service which is required because of a recipient's symptoms, diagnosis, or established illness, and which is delivered in an ambulatory setting by a physician or physician assistant, chiropractor, podiatrist, nurse midwife, advanced practice nurse, audiologist, optician, or optometrist;

(2) $3.50 for nonemergency visits to a hospital-based emergency room, except that this co-payment shall be increased to $20 upon federal approval;

(3) $3 per brand-name drug prescription, $1 per generic drug prescription, and $1 per prescription for a brand-name multisource drug listed in preferred status on the preferred drug list, subject to a $12 per month maximum for prescription drug co-payments. No co-payments shall apply to antipsychotic drugs when used for the treatment of mental illness;

(4) a family deductible equal to $2.75 per month per family and adjusted annually by the percentage increase in the medical care component of the CPI-U for the period of September to September of the preceding calendar year, rounded to the next higher five-cent increment; deleted text begin anddeleted text end

(5) total monthly cost-sharing must not exceed five percent of family income. For purposes of this paragraph, family income is the total earned and unearned income of the individual and the individual's spouse, if the spouse is enrolled in medical assistance and also subject to the five percent limit on cost-sharing. This paragraph does not apply to premiums charged to individuals described under section 256B.057, subdivision 9deleted text begin .deleted text end new text begin ; andnew text end

new text begin (6) cost-sharing for prescription drugs and related medical supplies to treat chronic disease must comply with the requirements of section 62Q.481. new text end

(b) Recipients of medical assistance are responsible for all co-payments and deductibles in this subdivision.

(c) Notwithstanding paragraph (b), the commissioner, through the contracting process under sections 256B.69 and 256B.692, may allow managed care plans and county-based purchasing plans to waive the family deductible under paragraph (a), clause (4). The value of the family deductible shall not be included in the capitation payment to managed care plans and county-based purchasing plans. Managed care plans and county-based purchasing plans shall certify annually to the commissioner the dollar value of the family deductible.

(d) Notwithstanding paragraph (b), the commissioner may waive the collection of the family deductible described under paragraph (a), clause (4), from individuals and allow long-term care and waivered service providers to assume responsibility for payment.

(e) Notwithstanding paragraph (b), the commissioner, through the contracting process under section 256B.0756 shall allow the pilot program in Hennepin County to waive co-payments. The value of the co-payments shall not be included in the capitation payment amount to the integrated health care delivery networks under the pilot program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024. new text end

Sec. 62.

Minnesota Statutes 2022, section 256B.69, subdivision 5a, is amended to read:

Subd. 5a.

Managed care contracts.

(a) Managed care contracts under this section and section 256L.12 shall be entered into or renewed on a calendar year basis. The commissioner may issue separate contracts with requirements specific to services to medical assistance recipients age 65 and older.

(b) A prepaid health plan providing covered health services for eligible persons pursuant to chapters 256B and 256L is responsible for complying with the terms of its contract with the commissioner. Requirements applicable to managed care programs under chapters 256B and 256L established after the effective date of a contract with the commissioner take effect when the contract is next issued or renewed.

(c) The commissioner shall withhold five percent of managed care plan payments under this section and county-based purchasing plan payments under section 256B.692 for the prepaid medical assistance program pending completion of performance targets. Each performance target must be quantifiable, objective, measurable, and reasonably attainable, except in the case of a performance target based on a federal or state law or rule. Criteria for assessment of each performance target must be outlined in writing prior to the contract effective date. Clinical or utilization performance targets and their related criteria must consider evidence-based research and reasonable interventions when available or applicable to the populations served, and must be developed with input from external clinical experts and stakeholders, including managed care plans, county-based purchasing plans, and providers. The managed care or county-based purchasing plan must demonstrate, to the commissioner's satisfaction, that the data submitted regarding attainment of the performance target is accurate. The commissioner shall periodically change the administrative measures used as performance targets in order to improve plan performance across a broader range of administrative services. The performance targets must include measurement of plan efforts to contain spending on health care services and administrative activities. The commissioner may adopt plan-specific performance targets that take into account factors affecting only one plan, including characteristics of the plan's enrollee population. The withheld funds must be returned no sooner than July of the following year if performance targets in the contract are achieved. The commissioner may exclude special demonstration projects under subdivision 23.

(d) The commissioner shall require that managed care plans:

(1) use the assessment and authorization processes, forms, timelines, standards, documentation, and data reporting requirements, protocols, billing processes, and policies consistent with medical assistance fee-for-service or the Department of Human Services contract requirements for all personal care assistance services under section 256B.0659 and community first services and supports under section 256B.85; deleted text begin anddeleted text end

(2) by January 30 of each year that follows a rate increase for any aspect of services under section 256B.0659 or 256B.85, inform the commissioner and the chairs and ranking minority members of the legislative committees with jurisdiction over rates determined under section 256B.851 of the amount of the rate increase that is paid to each personal care assistance provider agency with which the plan has a contractdeleted text begin .deleted text end new text begin ; andnew text end

new text begin (3) use a six-month timely filing standard and provide an exemption to the timely filing timeliness for the resubmission of claims where there has been a denial, request for more information, or system issue. new text end

(e) Effective for services rendered on or after January 1, 2012, the commissioner shall include as part of the performance targets described in paragraph (c) a reduction in the health plan's emergency department utilization rate for medical assistance and MinnesotaCare enrollees, as determined by the commissioner. For 2012, the reduction shall be based on the health plan's utilization in 2009. To earn the return of the withhold each subsequent year, the managed care plan or county-based purchasing plan must achieve a qualifying reduction of no less than ten percent of the plan's emergency department utilization rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, compared to the previous measurement year until the final performance target is reached. When measuring performance, the commissioner must consider the difference in health risk in a managed care or county-based purchasing plan's membership in the baseline year compared to the measurement year, and work with the managed care or county-based purchasing plan to account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if the managed care plan or county-based purchasing plan demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate was achieved. The commissioner shall structure the withhold so that the commissioner returns a portion of the withheld funds in amounts commensurate with achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph shall continue for each consecutive contract period until the plan's emergency room utilization rate for state health care program enrollees is reduced by 25 percent of the plan's emergency room utilization rate for medical assistance and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate with the health plans in meeting this performance target and shall accept payment withholds that may be returned to the hospitals if the performance target is achieved.

(f) Effective for services rendered on or after January 1, 2012, the commissioner shall include as part of the performance targets described in paragraph (c) a reduction in the plan's hospitalization admission rate for medical assistance and MinnesotaCare enrollees, as determined by the commissioner. To earn the return of the withhold each year, the managed care plan or county-based purchasing plan must achieve a qualifying reduction of no less than five percent of the plan's hospital admission rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, compared to the previous calendar year until the final performance target is reached. When measuring performance, the commissioner must consider the difference in health risk in a managed care or county-based purchasing plan's membership in the baseline year compared to the measurement year, and work with the managed care or county-based purchasing plan to account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if the managed care plan or county-based purchasing plan demonstrates to the satisfaction of the commissioner that this reduction in the hospitalization rate was achieved. The commissioner shall structure the withhold so that the commissioner returns a portion of the withheld funds in amounts commensurate with achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph shall continue until there is a 25 percent reduction in the hospital admission rate compared to the hospital admission rates in calendar year 2011, as determined by the commissioner. The hospital admissions in this performance target do not include the admissions applicable to the subsequent hospital admission performance target under paragraph (g). Hospitals shall cooperate with the plans in meeting this performance target and shall accept payment withholds that may be returned to the hospitals if the performance target is achieved.

(g) Effective for services rendered on or after January 1, 2012, the commissioner shall include as part of the performance targets described in paragraph (c) a reduction in the plan's hospitalization admission rates for subsequent hospitalizations within 30 days of a previous hospitalization of a patient regardless of the reason, for medical assistance and MinnesotaCare enrollees, as determined by the commissioner. To earn the return of the withhold each year, the managed care plan or county-based purchasing plan must achieve a qualifying reduction of the subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, of no less than five percent compared to the previous calendar year until the final performance target is reached.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if the managed care plan or county-based purchasing plan demonstrates to the satisfaction of the commissioner that a qualifying reduction in the subsequent hospitalization rate was achieved. The commissioner shall structure the withhold so that the commissioner returns a portion of the withheld funds in amounts commensurate with achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph must continue for each consecutive contract period until the plan's subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, is reduced by 25 percent of the plan's subsequent hospitalization rate for calendar year 2011. Hospitals shall cooperate with the plans in meeting this performance target and shall accept payment withholds that must be returned to the hospitals if the performance target is achieved.

(h) Effective for services rendered on or after January 1, 2013, through December 31, 2013, the commissioner shall withhold 4.5 percent of managed care plan payments under this section and county-based purchasing plan payments under section 256B.692 for the prepaid medical assistance program. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following year. The commissioner may exclude special demonstration projects under subdivision 23.

(i) Effective for services rendered on or after January 1, 2014, the commissioner shall withhold three percent of managed care plan payments under this section and county-based purchasing plan payments under section 256B.692 for the prepaid medical assistance program. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following year. The commissioner may exclude special demonstration projects under subdivision 23.

(j) A managed care plan or a county-based purchasing plan under section 256B.692 may include as admitted assets under section 62D.044 any amount withheld under this section that is reasonably expected to be returned.

(k) Contracts between the commissioner and a prepaid health plan are exempt from the set-aside and preference provisions of section 16C.16, subdivisions 6, paragraph (a), and 7.

(l) The return of the withhold under paragraphs (h) and (i) is not subject to the requirements of paragraph (c).

(m) Managed care plans and county-based purchasing plans shall maintain current and fully executed agreements for all subcontractors, including bargaining groups, for administrative services that are expensed to the state's public health care programs. Subcontractor agreements determined to be material, as defined by the commissioner after taking into account state contracting and relevant statutory requirements, must be in the form of a written instrument or electronic document containing the elements of offer, acceptance, consideration, payment terms, scope, duration of the contract, and how the subcontractor services relate to state public health care programs. Upon request, the commissioner shall have access to all subcontractor documentation under this paragraph. Nothing in this paragraph shall allow release of information that is nonpublic data pursuant to section 13.02.

Sec. 63.

Minnesota Statutes 2022, section 256L.03, subdivision 5, is amended to read:

Subd. 5.

Cost-sharing.

(a) Co-payments, coinsurance, and deductibles do not apply to children under the age of 21 and to American Indians as defined in Code of Federal Regulations, title 42, section 600.5.

(b) The commissioner shall adjust co-payments, coinsurance, and deductibles for covered services in a manner sufficient to maintain the actuarial value of the benefit to 94 percent. The cost-sharing changes described in this paragraph do not apply to eligible recipients or services exempt from cost-sharing under state law. The cost-sharing changes described in this paragraph shall not be implemented prior to January 1, 2016.

(c) The cost-sharing changes authorized under paragraph (b) must satisfy the requirements for cost-sharing under the Basic Health Program as set forth in Code of Federal Regulations, title 42, sections 600.510 and 600.520.

new text begin (d) Cost-sharing for prescription drugs and related medical supplies to treat chronic disease must comply with the requirements of section 62Q.481. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024. new text end

Sec. 64.

new text begin AUTOMOTIVE SELF-INSURANCE; RULES AMENDMENT; EXPEDITED RULEMAKING. new text end

new text begin Subdivision 1. new text end

new text begin Self-insurance working capital condition. new text end

new text begin The commissioner of commerce must amend Minnesota Rules, part 2770.6500, subpart 2, item B, subitem (5), to require the commissioner's grant of self-insurance authority to an applicant to be based on the applicant's net working capital in lieu of the applicant's net funds flow. new text end

new text begin Subd. 2. new text end

new text begin Commissioner discretion to grant self-insurance authority. new text end

new text begin The commissioner of commerce must amend Minnesota Rules, part 2770.6500, subpart 2, item D, to, notwithstanding any other provision of Minnesota Rules, part 2770.6500, permit the commissioner to grant self-insurance authority to an applicant that is not a political subdivision and that has not had positive net income or positive working capital in at least three years of the last five-year period if the applicant's working capital, debt structure, profitability, and overall financial integrity of the applicant and its parent company, if one exists, demonstrate a continuing ability of the applicant to satisfy any financial obligations that have been and might be incurred under the no-fault act. new text end

new text begin Subd. 3. new text end

new text begin Working capital. new text end

new text begin The commissioner of commerce must define working capital for the purposes of Minnesota Rules, part 2770.6500. new text end

new text begin Subd. 4. new text end

new text begin Commissioner discretion to revoke self-insurance authority. new text end

new text begin The commissioner of commerce must amend Minnesota Rules, part 2770.7300, to permit, in lieu of require, the commissioner to revoke a self-insurer's authorization to self-insure based on the commissioner's determinations under Minnesota Rules, part 2770.7300, items A and B. new text end

new text begin Subd. 5. new text end

new text begin Expedited rulemaking authorized. new text end

new text begin The commissioner of commerce may use the expedited rulemaking process under Minnesota Statutes, section 14.389, to amend rules under this section. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 65.

new text begin EVALUATION OF EXISTING STATUTORY HEALTH BENEFIT MANDATES. new text end

new text begin Subdivision 1. new text end

new text begin Evaluation process and content. new text end

new text begin Beginning August 1, 2023, and annually thereafter for the next five calendar years, the commissioner of commerce shall conduct an evaluation of the economic cost and health benefits of one state-required benefit included in Minnesota's EHB-benchmark plan, as defined in Code of Federal Regulations, title 45, section 156.20. The mandated benefit to be studied each year must be chosen from a list developed by the chairs of the house of representatives and senate commerce committees, in consultation with the ranking minority members of the house of representatives and senate commerce committees. The chairs and ranking minority members of the house of representatives and senate commerce committees must agree upon and inform the commissioner of at least one mandate to be reviewed for the period between August 1, 2023, and August 1, 2024. The commissioner shall consult with the commissioner of health and clinical and actuarial experts to assist in the evaluation and synthesis of available evidence. The commissioner may obtain public input as part of the evaluation. At a minimum, the evaluation must consider the following: new text end

new text begin (1) cost for services; new text end

new text begin (2) the share of Minnesotans' health insurance premiums that are tied to each current mandated benefit; new text end

new text begin (3) utilization of services; new text end

new text begin (4) contribution to individual and public health; new text end

new text begin (5) extent to which the mandate conforms with existing standards of care in terms of appropriateness or evidence-based medicine; new text end

new text begin (6) the historical context in which the mandate was enacted, including how the mandate interacts with other required benefits; and new text end

new text begin (7) other relevant criteria of effectiveness and efficacy as determined by the commissioner in consultation with the commissioner of health. new text end

new text begin Subd. 2. new text end

new text begin Report to legislature. new text end

new text begin The commissioner must submit a written report on the evaluation to the chairs and ranking minority members of the legislative committees with jurisdiction over health insurance policy and finance no later than 180 days after the commissioner receives notification from a chair, as required under Minnesota Statutes, section 62J.26, subdivision 3. new text end

Sec. 66.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2022, section 62A.31, subdivisions 1b and 1i, new text end new text begin are repealed. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to policies offered, issued, or renewed on or after that date. new text end

ARTICLE 3

FINANCIAL INSTITUTIONS

Section 1.

Minnesota Statutes 2022, section 46.131, subdivision 11, is amended to read:

Subd. 11.

Financial institutions account; appropriation.

(a) The financial institutions account is created as a separate account in the special revenue fund. Earnings, including interest, dividends, and any other earnings arising from account assets, must be credited to the account.

(b) The account consists of funds received from assessments under subdivision 7, examination fees under subdivision 8, and funds received pursuant to subdivision 10 and the following provisions: sections 46.04; 46.041; 46.048, subdivision 1; 47.101; 47.54, subdivision 1; 47.60, subdivision 3; 47.62, subdivision 4; 48.61, subdivision 7, paragraph (b); 49.36, subdivision 1; 52.203; deleted text begin 53B.09; 53B.11, subdivision 1;deleted text end new text begin 53B.38; 53B.41; 53B.43;new text end 53C.02; 56.02; 58.10; 58A.045, subdivision 2; 59A.03; 216C.437, subdivision 12; 332A.04; and 332B.04.

(c) Funds in the account are annually appropriated to the commissioner of commerce for activities under this section.

Sec. 2.

Minnesota Statutes 2022, section 47.0153, subdivision 1, is amended to read:

Subdivision 1.

Emergency closings.

When the officers of a financial institution are of the opinion that an emergency exists, or is impending, which affects, or may affect, a financial institution's offices, they shall have the authority, in the reasonable exercise of their discretion, to determine not to open any of its offices on any business day or, if having opened, to close an office during the continuation of the emergency, even if the commissioner does not issue a proclamation of emergency. The office closed shall remain closed until the time that the officers determine the emergency has ended, and for the further time reasonably necessary to reopen. No financial institution office shall remain closed for more than 48 consecutive hoursnew text begin in a Monday through Friday periodnew text end , excluding other legal holidays, without the prior approval of the commissioner.

Sec. 3.

Minnesota Statutes 2022, 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, deleted text begin 47.60,deleted text end 48.153, 48.185, 48.195, 59A.01 to 59A.15, 334.01, 334.011, 334.012, 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, 334.022, 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.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 4.

Minnesota Statutes 2022, section 47.60, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section, the terms defined have the meanings given them:

(a) "Consumer small loan" is a loan transaction in which cash is advanced to a borrower for the borrower's own personal, family, or household purpose. A consumer small loan is a short-term, unsecured loan to be repaid in a single installment. The cash advance of a consumer small loan is equal to or less than $350. A consumer small loan includes an indebtedness evidenced by but not limited to a promissory note or agreement to defer the presentation of a personal check for a fee.

(b) "Consumer small loan lender" is a financial institution as defined in section 47.59 or a business entity registered with the commissioner and engaged in the business of making consumer small loans.

new text begin (c) "Annual percentage rate" means a measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the consumer to the amount and timing of payments made. Annual percentage interest rate includes all interest, finance charges, and fees. The annual percentage rate must be determined in accordance with either the actuarial method or the United States Rule method. new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 5.

Minnesota Statutes 2022, section 47.60, subdivision 2, is amended to read:

Subd. 2.

Authorization, terms, conditions, and prohibitions.

(a) In deleted text begin lieu of the interest, finance charges, or fees in any other lawdeleted text end new text begin connection with a consumer small loannew text end , a consumer small loan lender may charge deleted text begin the following:deleted text end new text begin an annual percentage rate of up to 50 percent. No other charges or payments are permitted or may be received by the lender in connection with a consumer small loan.new text end

deleted text begin (1) on any amount up to and including $50, a charge of $5.50 may be added; deleted text end

deleted text begin (2) on amounts in excess of $50, but not more than $100, a charge may be added equal to ten percent of the loan proceeds plus a $5 administrative fee; deleted text end

deleted text begin (3) on amounts in excess of $100, but not more than $250, a charge may be added equal to seven percent of the loan proceeds with a minimum of $10 plus a $5 administrative fee; deleted text end

deleted text begin (4) for amounts in excess of $250 and not greater than the maximum in subdivision 1, paragraph (a), a charge may be added equal to six percent of the loan proceeds with a minimum of $17.50 plus a $5 administrative fee. deleted text end

(b) The term of a loan made under this section shall be for no more than 30 calendar days.

(c) After maturity, the contract rate must not exceed 2.75 percent per month of the remaining loan proceeds after the maturity date calculated at a rate of 1/30 of the monthly rate in the contract for each calendar day the balance is outstanding.

(d) No insurance charges or other charges must be permitted to be charged, collected, or imposed on a consumer small loan except as authorized in this section.

(e) On a loan transaction in which cash is advanced in exchange for a personal check, a return check charge may be charged as authorized by section 604.113, subdivision 2, paragraph (a). The civil penalty provisions of section 604.113, subdivision 2, paragraph (b), may not be demanded or assessed against the borrower.

(f) A loan made under this section must not be repaid by the proceeds of another loan made under this section by the same lender or related interest. The proceeds from a loan made under this section must not be applied to another loan from the same lender or related interest. No loan to a single borrower made pursuant to this section shall be split or divided and no single borrower shall have outstanding more than one loan with the result of collecting a higher charge than permitted by this section or in an aggregate amount of principal exceed at any one time the maximum of $350.

new text begin (g) A loan made under this section with an annual percentage rate that exceeds 36 percent must comply with section 47.603. new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 6.

Minnesota Statutes 2022, section 47.60, is amended by adding a subdivision to read:

new text begin Subd. 8. new text end

new text begin No evasion. new text end

new text begin (a) A person must not engage in any device, subterfuge, or pretense to evade the requirements of this section, including but not limited to: new text end

new text begin (1) making loans disguised as a personal property sale and leaseback transaction; new text end

new text begin (2) disguising loan proceeds as a cash rebate for the pretextual installment sale of goods or services; or new text end

new text begin (3) making, offering, assisting, or arranging for a debtor to obtain a loan with a greater rate or amount of interest, consideration, charge, or payment than is permitted by this section through any method, including mail, telephone, Internet, or any electronic means, regardless of whether a person has a physical location in Minnesota. new text end

new text begin (b) A person is a consumer small loan lender subject to the requirements of this section notwithstanding the fact that a person purports to act as an agent or service provider, or acts in another capacity for another person that is not subject to this section, if a person: new text end

new text begin (1) directly or indirectly holds, acquires, or maintains the predominant economic interest, risk, or reward in a loan or lending business; or new text end

new text begin (2) both: (i) markets, solicits, brokers, arranges, or facilitates a loan; and (ii) holds or holds the right, requirement, or first right of refusal to acquire loans, receivables, or other direct or interest in a loan. new text end

new text begin (c) A person is a consumer small loan lender subject to the requirements of this section if the totality of the circumstances indicate that a person is a lender and the transaction is structured to evade the requirements of this section. Circumstances that weigh in favor of a person being a lender in a transaction include but are not limited to instances where a person: new text end

new text begin (1) indemnifies, insures, or protects a person not subject to this section from any costs or risks related to a loan; new text end

new text begin (2) predominantly designs, controls, or operates lending activity; new text end

new text begin (3) holds the trademark or intellectual property rights in the brand, underwriting system, or other core aspects of a lending business; or new text end

new text begin (4) purports to act as an agent or service provider, or acts in another capacity, for a person not subject to this section while acting directly as a lender in one or more states. new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 7.

Minnesota Statutes 2022, section 47.601, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of this section, the terms defined in this subdivision have the meanings given.

new text begin (b) "Annual percentage rate" has the meaning given in section 47.60, subdivision 1. new text end

deleted text begin (b)deleted text end new text begin (c)new text end "Borrower" means an individual who obtains a consumer short-term loan primarily for personal, family, or household purposes.

deleted text begin (c)deleted text end new text begin (d)new text end "Commissioner" means the commissioner of commerce.

deleted text begin (d)deleted text end new text begin (e)new text end "Consumer short-term loan" means a loan to a borrower which has a principal amount, or an advance on a credit limit, of deleted text begin $1,000deleted text end new text begin $1,300new text end or less and requires a minimum payment within 60 days of loan origination or credit advance of more than 25 percent of the principal balance or credit advance. For the purposes of this section, each new advance of money to a borrower under a consumer short-term loan agreement constitutes a new consumer short-term loan. A "consumer short-term loan" does not include any transaction made under chapter 325J or a loan made by a consumer short-term lender where, in the event of default on the loan, the sole recourse for recovery of the amount owed, other than a lawsuit for damages for the debt, is to proceed against physical goods pledged by the borrower as collateral for the loan.

deleted text begin (e)deleted text end new text begin (f)new text end "Consumer short-term lender" means an individual or entity engaged in the business of making or arranging consumer short-term loans, other than a state or federally chartered bank, savings bank, or credit union.new text begin For the purposes of this paragraph, arranging consumer short-term loans includes but is not limited to any substantial involvement in facilitating, marketing, lead-generating, underwriting, servicing, or collecting consumer short-term loans.new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 8.

Minnesota Statutes 2022, section 47.601, subdivision 2, is amended to read:

Subd. 2.

Consumer short-term loan contract.

(a) No contract or agreement between a consumer short-term loan lender and a borrower residing in Minnesota may contain the following:

(1) a provision selecting a law other than Minnesota law under which the contract is construed or enforced;

(2) a provision choosing a forum for dispute resolution other than the state of Minnesota; or

(3) a provision limiting class actions against a consumer short-term lender for violations of subdivision 3 or for making consumer short-term loans:

(i) without a required license issued by the commissioner; or

(ii) in which interest rates, fees, charges, or loan amounts exceed those allowable under section deleted text begin 47.59, subdivision 6, ordeleted text end 47.60, subdivision 2deleted text begin , other than by de minimis amounts if no pattern or practice existsdeleted text end .

(b) Any provision prohibited by paragraph (a) is void and unenforceable.

(c) A consumer short-term loan lender must furnish a copy of the written loan contract to each borrower. The contract and disclosures must be written in the language in which the loan was negotiated with the borrower and must contain:

(1) the name; address, which may not be a post office box; and telephone number of the lender making the consumer short-term loan;

(2) the name and title of the individual employee or representative who signs the contract on behalf of the lender;

(3) an itemization of the fees and interest charges to be paid by the borrower;

(4) in bold, 24-point type, the annual percentage rate as computed under United States Code, chapter 15, section 1606; and

(5) a description of the borrower's payment obligations under the loan.

(d) The holder or assignee of a check or other instrument evidencing an obligation of a borrower in connection with a consumer short-term loan takes the instrument subject to all claims by and defenses of the borrower against the consumer short-term lender.

new text begin (e) In connection with a consumer short-term loan, a consumer short-term loan lender may charge an annual percentage rate of up to 50 percent. No other charges or payments are permitted or may be received by the lender in connection with a consumer short-term loan. new text end

new text begin (f) A loan made under this section with an annual percentage rate that exceeds 36 percent must comply with section 47.603. new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 9.

Minnesota Statutes 2022, section 47.601, is amended by adding a subdivision to read:

new text begin Subd. 5a. new text end

new text begin No evasion. new text end

new text begin (a) A person must not engage in any device, subterfuge, or pretense to evade the requirements of this section, including but not limited to: new text end

new text begin (1) making loans disguised as a personal property sale and leaseback transaction; new text end

new text begin (2) disguising loan proceeds as a cash rebate for the pretextual installment sale of goods or services; or new text end

new text begin (3) making, offering, assisting, or arranging for a debtor to obtain a loan with a greater rate or amount of interest, consideration, charge, or payment than is permitted by this section through any method, including mail, telephone, Internet, or any electronic means, regardless of whether a person has a physical location in Minnesota. new text end

new text begin (b) A person is a consumer short-term loan lender subject to the requirements of this section notwithstanding the fact that a person purports to act as an agent or service provider, or acts in another capacity for another person that is not subject to this section, if a person: new text end

new text begin (1) directly or indirectly holds, acquires, or maintains the predominant economic interest, risk, or reward in a loan or lending business; or new text end

new text begin (2) both: (i) markets, solicits, brokers, arranges, or facilitates a loan; and (ii) holds or holds the right, requirement, or first right of refusal to acquire loans, receivables, or other direct or interest in a loan. new text end

new text begin (c) A person is a consumer short-term loan lender subject to the requirements of this section if the totality of the circumstances indicate that a person is a lender and the transaction is structured to evade the requirements of this section. Circumstances that weigh in favor of a person being a lender in a transaction include but are not limited to instances where a person: new text end

new text begin (1) indemnifies, insures, or protects a person not subject to this section from any costs or risks related to a loan; new text end

new text begin (2) predominantly designs, controls, or operates lending activity; new text end

new text begin (3) holds the trademark or intellectual property rights in the brand, underwriting system, or other core aspects of a lending business; or new text end

new text begin (4) purports to act as an agent or service provider, or acts in another capacity, for a person not subject to this section while acting directly as a lender in one or more states. new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 10.

Minnesota Statutes 2022, section 47.601, subdivision 6, is amended to read:

Subd. 6.

Penalties for violation; private right of action.

(a) Except for a "bona fide error" as set forth under United States Code, chapter 15, section 1640, subsection (c), an individual or entity who violates subdivision 2 deleted text begin ordeleted text end new text begin ,new text end 3new text begin , or 5anew text end is liable to the borrower for:

(1) all money collected or received in connection with the loan;

(2) actual, incidental, and consequential damages;

(3) statutory damages of up to $1,000 per violation;

(4) costs, disbursements, and reasonable attorney fees; and

(5) injunctive relief.

(b) In addition to the remedies provided in paragraph (a), a loan is void, and the borrower is not obligated to pay any amounts owing if the loan is made:

(1) by a consumer short-term lender who has not obtained an applicable license from the commissioner;

(2) in violation of any provision of subdivision 2 or 3; or

(3) in which interest, fees, charges, or loan amounts exceed the interest, fees, charges, or loan amounts allowable under deleted text begin sections 47.59, subdivision 6, anddeleted text end new text begin sectionnew text end 47.60, subdivision 2.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 11.

new text begin [47.603] ABILITY TO REPAY ANALYSIS. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the meanings given. new text end

new text begin (b) "Annual percentage rate" has the meaning given in section 47.60, subdivision 1. new text end

new text begin (c) "Basic living expenses" means expenditures, other than payments for major financial obligations, that a borrower makes for goods and services that are necessary to maintain: (1) the borrower's health, welfare, and ability to produce income; and (2) the health and welfare of the members of the borrower's household who are financially dependent on the borrower. new text end

new text begin (d) "Borrower" means an individual who seeks to obtain a payday loan or a payday advance. new text end

new text begin (e) "Consumer credit report" means a consumer report, as defined in section 603(d) of the Fair Credit Reporting Act, United States Code, title 15, section 1681a(d), obtained from a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, as defined in section 603(p) of the Fair Credit Reporting Act, United States Code, title 15, section 1681a(p). new text end

new text begin (f) "Debt-to-income ratio" means the ratio, expressed as a percentage, comparing (1) the sum of the debt amounts that the lender projects will be payable by the borrower, including major financial obligations, outstanding loans other than the payday loan, the payday loan payment, all other debt obligations, and basic living expenses, to (2) the net income that the lender projects the borrower will receive during the loan period. new text end

new text begin (g) "Major financial obligations" means the sum of: new text end

new text begin (1) a borrower's housing expense; new text end

new text begin (2) outstanding loans, including any other payday loans or payday advances; and new text end

new text begin (3) all other debt obligations, including without limitation child support and alimony obligations. new text end

new text begin (h) "Net income" means the total amount of income received by the borrower during the loan period, as demonstrated by documentation evidencing proof of income. new text end

new text begin (i) "Payday lender" means a consumer small lender under section 47.60 or consumer short-term lender under section 47.601. new text end

new text begin (j) "Payday loan" means a consumer small loan under section 47.60 or a consumer short-term loan under section 47.601. new text end

new text begin (k) "Payday advance" means a consumer small loan under section 47.60 or a consumer short-term loan under section 47.601 that is offered under a line of credit. new text end

new text begin (l) "Payday loan payment" means the total payment due for the payday loan at the end of the payday loan period. Payday loan payment includes all principal, interest, charges, and fees. new text end

new text begin Subd. 2. new text end

new text begin Applicability. new text end

new text begin This section applies to all payday loans with an annual percentage rate that exceeds 36 percent. new text end

new text begin Subd. 3. new text end

new text begin Ability to repay determination required. new text end

new text begin A payday lender must not make a payday loan or permit a borrower to obtain a payday advance unless the lender first determines, based on an analysis that complies with subdivision 5, that the borrower has the ability to make the payday loan payment when the payday loan payment comes due at the end of the loan period. For purposes of this subdivision, each payday advance constitutes a new loan and requires a new ability to repay determination. new text end

new text begin Subd. 4. new text end

new text begin Ability to repay; borrower information determination required. new text end

new text begin (a) To conduct an ability to repay analysis, a payday lender must first obtain commercially reasonable documented evidence of the borrower's net income, major financial obligations, and basic living expenses. To the extent documentation is not available for any of the borrower's basic living expenses, the lender may reasonably rely on a written, signed statement by the borrower indicating the specific basic living expenses. new text end

new text begin (b) If the payday lender obtains a borrower's consumer credit report, there is a presumption that a payday lender has obtained commercially reasonable documented evidence of: new text end

new text begin (1) outstanding loans other than the payday loan or payday advance; and new text end

new text begin (2) all other debt obligations, without limitation, except for child support and alimony obligations. new text end

new text begin (c) For a borrower's required payments under child support or alimony obligations, the lender must obtain a consumer credit report. If the report does not include a child support or spousal maintenance obligation, as applicable, the lender may reasonably rely on a written, signed statement by the borrower indicating the child support payment or spousal maintenance payments, as applicable. new text end

new text begin Subd. 5. new text end

new text begin Ability to pay analysis; determination of ability to pay. new text end

new text begin (a) A payday lender's determination of a borrower's ability to repay a payday loan or payday advance must be based on the calculation of the borrower's debt-to-income ratio for the loan period. new text end

new text begin (b) A payday lender's ability to repay determination is reasonable if, based on the calculated debt-to-income ratio for the loan period, the borrower can make payments for all major financial obligations, make all payments under the loan, and meet basic living expenses during the period ending 30 days after repayment of the loan. new text end

new text begin Subd. 6. new text end

new text begin Violations. new text end

new text begin A payday lender that fails to comply with this section is subject to: (1) the penalties and enforcement under section 47.601, subdivisions 6 and 7; and (2) revocation of a filing or license, as provided under section 47.60, subdivision 3, or section 45.027, subdivision 7. new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective January 1, 2024, and applies to payday loans and payday advances originated on or after that date. new text end

Sec. 12.

new text begin [48.591] CLIMATE RISK DISCLOSURE SURVEY. new text end

new text begin Subdivision 1. new text end

new text begin Requirement. new text end

new text begin By July 30 each year, a banking institution with more than $1,000,000,000 in assets must submit a completed climate risk disclosure survey to the commissioner. The commissioner must provide the form used to submit a climate risk disclosure survey. new text end

new text begin Subd. 2. new text end

new text begin Data. new text end

new text begin Data submitted to the commissioner under this section are public, except that trade secret information is nonpublic under section 13.37. new text end

Sec. 13.

new text begin [52.065] CLIMATE RISK DISCLOSURE SURVEY. new text end

new text begin Subdivision 1. new text end

new text begin Requirement. new text end

new text begin By July 30 each year, a credit union with more than $1,000,000,000 in assets must submit a completed climate risk disclosure survey to the commissioner. The commissioner must provide the form used to submit a climate risk disclosure survey. new text end

new text begin Subd. 2. new text end

new text begin Data. new text end

new text begin Data submitted to the commissioner under this section are public, except that trade secret information is nonpublic under section 13.37. new text end

Sec. 14.

Minnesota Statutes 2022, section 53.04, subdivision 3a, is amended to read:

Subd. 3a.

Loans.

(a) The right to make loans, secured or unsecured, at the rates and on the terms and other conditions permitted under chapters 47 and 334. Loans made under this authority must be in amounts in compliance with section 53.05, clause (7). A licensee making a loan under this chapter secured by a lien on real estate shall comply with the requirements of section 47.20, subdivision 8.new text begin A licensee making a loan that is a consumer small loan, as defined in section 47.60, subdivision 1, paragraph (a), must comply with section 47.60. A licensee making a loan that is a consumer short-term loan, as defined in section 47.601, subdivision 1, paragraph (d), must comply with section 47.601.new text end

(b) Loans made under this subdivision may be secured by real or personal property, or both. If the proceeds of a loan secured by a first lien on the borrower's primary residence are used to finance the purchase of the borrower's primary residence, the loan must comply with the provisions of section 47.20.

(c) An agency or instrumentality of the United States government or a corporation otherwise created by an act of the United States Congress or a lender approved or certified by the secretary of housing and urban development, or approved or certified by the administrator of veterans affairs, or approved or certified by the administrator of the Farmers Home Administration, or approved or certified by the Federal Home Loan Mortgage Corporation, or approved or certified by the Federal National Mortgage Association, that engages in the business of purchasing or taking assignments of mortgage loans and undertakes direct collection of payments from or enforcement of rights against borrowers arising from mortgage loans, is not required to obtain a certificate of authorization under this chapter in order to purchase or take assignments of mortgage loans from persons holding a certificate of authorization under this chapter.

(d) This subdivision does not authorize an industrial loan and thrift company to make loans under an overdraft checking plan.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 15.

new text begin [53B.28] DEFINITIONS. new text end

new text begin Subdivision 1. new text end

new text begin Terms. new text end

new text begin For the purposes of this chapter, the terms defined in this section have the meanings given them. new text end

new text begin Subd. 2. new text end

new text begin Acting in concert. new text end

new text begin "Acting in concert" means persons knowingly acting together with a common goal of jointly acquiring control of a licensee, whether or not pursuant to an express agreement. new text end

new text begin Subd. 3. new text end

new text begin Authorized delegate. new text end

new text begin "Authorized delegate" means a person a licensee designates to engage in money transmission on behalf of the licensee. new text end

new text begin Subd. 4. new text end

new text begin Average daily money transmission liability. new text end

new text begin "Average daily money transmission liability" means the amount of the licensee's outstanding money transmission obligations in Minnesota at the end of each day in a given period of time, added together, and divided by the total number of days in the given period of time. For purposes of calculating average daily money transmission liability under this chapter for any licensee required to do so, the given period of time shall be the quarters ending March 31, June 30, September 30, and December 31. new text end

new text begin Subd. 5. new text end

new text begin Bank Secrecy Act. new text end

new text begin "Bank Secrecy Act" means the Bank Secrecy Act under United States Code, title 31, section 5311, et seq., and the Bank Secrecy Act's implementing regulations, as amended and recodified from time to time. new text end

new text begin Subd. 6. new text end

new text begin Closed loop stored value. new text end

new text begin "Closed loop stored value" means stored value that is redeemable by the issuer only for a good or service provided by the issuer, the issuer's affiliate, the issuer's franchisees, or an affiliate of the issuer's franchisees, except to the extent required by applicable law to be redeemable in cash for the good or service's cash value. new text end

new text begin Subd. 7. new text end

new text begin Control. new text end

new text begin "Control" means: new text end

new text begin (1) the power to vote, directly or indirectly, at least 25 percent of the outstanding voting shares or voting interests of a licensee or person in control of a licensee; new text end

new text begin (2) the power to elect or appoint a majority of key individuals or executive officers, managers, directors, trustees, or other persons exercising managerial authority of a person in control of a licensee; or new text end

new text begin (3) the power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee. new text end

new text begin Subd. 8. new text end

new text begin Eligible rating. new text end

new text begin "Eligible rating" means a credit rating of any of the three highest rating categories provided by an eligible rating service, whereby each category may include rating category modifiers such as "plus" or "minus" or the equivalent for any other eligible rating service. Long-term credit ratings are deemed eligible if the rating is equal to A- or higher or the equivalent from any other eligible rating service. Short-term credit ratings are deemed eligible if the rating is equal to or higher than A-2 or SP-2 by S&P, or the equivalent from any other eligible rating service. In the event that ratings differ among eligible rating services, the highest rating shall apply when determining whether a security bears an eligible rating. new text end

new text begin Subd. 9. new text end

new text begin Eligible rating service. new text end

new text begin "Eligible rating service" means any Nationally Recognized Statistical Rating Organization (NRSRO), as defined by the United States Securities and Exchange Commission and any other organization designated by the commissioner by rule or order. new text end

new text begin Subd. 10. new text end

new text begin Federally insured depository financial institution. new text end

new text begin "Federally insured depository financial institution" means a bank, credit union, savings and loan association, trust company, savings association, savings bank, industrial bank, or industrial loan company organized under the laws of the United States or any state of the United States, when the bank, credit union, savings and loan association, trust company, savings association, savings bank, industrial bank, or industrial loan company has federally insured deposits. new text end

new text begin Subd. 11. new text end

new text begin In Minnesota. new text end

new text begin "In Minnesota" means at a physical location within the state of Minnesota for a transaction requested in person. For a transaction requested electronically or by telephone, the provider of money transmission may determine if the person requesting the transaction is in Minnesota by relying on other information provided by the person regarding the location of the individual's residential address or a business entity's principal place of business or other physical address location, and any records associated with the person that the provider of money transmission may have that indicate the location, including but not limited to an address associated with an account. new text end

new text begin Subd. 12. new text end

new text begin Individual. new text end

new text begin "Individual" means a natural person. new text end

new text begin Subd. 13. new text end

new text begin Key individual. new text end

new text begin "Key individual" means any individual ultimately responsible for establishing or directing policies and procedures of the licensee, including but not limited to as an executive officer, manager, director, or trustee. new text end

new text begin Subd. 14. new text end

new text begin Licensee. new text end

new text begin "Licensee" means a person licensed under this chapter. new text end

new text begin Subd. 15. new text end

new text begin Material litigation. new text end

new text begin "Material litigation" means litigation that, according to United States generally accepted accounting principles, is significant to a person's financial health and would be required to be disclosed in the person's annual audited financial statements, report to shareholders, or similar records. new text end

new text begin Subd. 16. new text end

new text begin Money. new text end

new text begin "Money" means a medium of exchange that is authorized or adopted by the United States or a foreign government. Money includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments. new text end

new text begin Subd. 17. new text end

new text begin Monetary value. new text end

new text begin "Monetary value" means a medium of exchange, whether or not redeemable in money. new text end

new text begin Subd. 18. new text end

new text begin Money transmission. new text end

new text begin (a) "Money transmission" means: new text end

new text begin (1) selling or issuing payment instruments to a person located in this state; new text end

new text begin (2) selling or issuing stored value to a person located in this state; or new text end

new text begin (3) receiving money for transmission from a person located in this state. new text end

new text begin (b) Money includes payroll processing services. Money does not include the provision solely of online or telecommunications services or network access. new text end

new text begin Subd. 19. new text end

new text begin Money services business accredited state or MSB accredited state. new text end

new text begin "Money services businesses accredited state" or "MSB accredited state" means a state agency that is accredited by the Conference of State Bank Supervisors and Money Transmitter Regulators Association for money transmission licensing and supervision. new text end

new text begin Subd. 20. new text end

new text begin Multistate licensing process. new text end

new text begin "Multistate licensing process" means any agreement entered into by and among state regulators relating to coordinated processing of applications for money transmission licenses, applications for the acquisition of control of a licensee, control determinations, or notice and information requirements for a change of key individuals. new text end

new text begin Subd. 21. new text end

new text begin NMLS. new text end

new text begin "NMLS" means the Nationwide Multistate Licensing System and Registry developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and owned and operated by the State Regulatory Registry, LLC, or any successor or affiliated entity, for the licensing and registration of persons in financial services industries. new text end

new text begin Subd. 22. new text end

new text begin Outstanding money transmission obligations. new text end

new text begin (a) "Outstanding money transmission obligations" must be established and extinguished in accordance with applicable state law and means: new text end

new text begin (1) any payment instrument or stored value issued or sold by the licensee to a person located in the United States or reported as sold by an authorized delegate of the licensee to a person that is located in the United States that has not yet been paid or refunded by or for the licensee, or escheated in accordance with applicable abandoned property laws; or new text end

new text begin (2) any money received for transmission by the licensee or an authorized delegate in the United States from a person located in the United States that has not been received by the payee or refunded to the sender, or escheated in accordance with applicable abandoned property laws. new text end

new text begin (b) For purposes of this subdivision, "in the United States" includes, to the extent applicable, a person in any state, territory, or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico; or a U.S. military installation that is located in a foreign country. new text end

new text begin Subd. 23. new text end

new text begin Passive investor. new text end

new text begin "Passive investor" means a person that: new text end

new text begin (1) does not have the power to elect a majority of key individuals or executive officers, managers, directors, trustees, or other persons exercising managerial authority of a person in control of a licensee; new text end

new text begin (2) is not employed by and does not have any managerial duties of the licensee or person in control of a licensee; new text end

new text begin (3) does not have the power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee; and new text end

new text begin (4) attests to clauses (1), (2), and (3), in a form and in a medium prescribed by the commissioner, or commits to the passivity characteristics under clauses (1), (2), and (3) in a written document. new text end

new text begin Subd. 24. new text end

new text begin Payment instrument. new text end

new text begin (a) "Payment instrument" means a written or electronic check, draft, money order, traveler's check, or other written or electronic instrument for the transmission or payment of money or monetary value, whether or not negotiable. new text end

new text begin (b) Payment instrument does not include stored value or any instrument that is: (1) redeemable by the issuer only for goods or services provided by the issuer, the issuer's affiliate, the issuer's franchisees, or an affiliate of the issuer's franchisees, except to the extent required by applicable law to be redeemable in cash for its cash value; or (2) not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program. new text end

new text begin Subd. 25. new text end

new text begin Payroll processing services. new text end

new text begin "Payroll processing services" means receiving money for transmission pursuant to a contract with a person to deliver wages or salaries, make payment of payroll taxes to state and federal agencies, make payments relating to employee benefit plans, or make distributions of other authorized deductions from wages or salaries. The term payroll processing services does not include an employer performing payroll processing services on the employer's own behalf or on behalf of the employer's affiliate, or a professional employment organization subject to regulation under other applicable state law. new text end

new text begin Subd. 26. new text end

new text begin Person. new text end

new text begin "Person" means any individual, general partnership, limited partnership, limited liability company, corporation, trust, association, joint stock corporation, or other corporate entity identified by the commissioner. new text end

new text begin Subd. 27. new text end

new text begin Receiving money for transmission or money received for transmission. new text end

new text begin "Receiving money for transmission" or "money received for transmission" means receiving money or monetary value in the United States for transmission within or outside the United States by electronic or other means. new text end

new text begin Subd. 28. new text end

new text begin Stored value. new text end

new text begin (a) "Stored value" means monetary value representing a claim against the issuer evidenced by an electronic or digital record, and that is intended and accepted for use as a means of redemption for money or monetary value, or payment for goods or services. Stored value includes but is not limited to prepaid access, as defined under Code of Federal Regulations, title 31, part 1010.100, as amended or recodified from time to time. new text end

new text begin (b) Notwithstanding this subdivision, stored value does not include: (1) a payment instrument or closed loop stored value; or (2) stored value not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program. new text end

new text begin Subd. 29. new text end

new text begin Tangible net worth. new text end

new text begin "Tangible net worth" means the aggregate assets of a licensee excluding all intangible assets, less liabilities, as determined in accordance with United States generally accepted accounting principles. new text end

Sec. 16.

new text begin [53B.29] EXEMPTIONS. new text end

new text begin This chapter does not apply to: new text end

new text begin (1) an operator of a payment system, to the extent the operator of a payment system provides processing, clearing, or settlement services between or among persons exempted by this section or licensees in connection with wire transfers, credit card transactions, debit card transactions, stored-value transactions, automated clearing house transfers, or similar funds transfers; new text end

new text begin (2) a person appointed as an agent of a payee to collect and process a payment from a payor to the payee for goods or services, other than money transmission itself, provided to the payor by the payee, provided that: new text end

new text begin (i) there exists a written agreement between the payee and the agent directing the agent to collect and process payments from payors on the payee's behalf; new text end

new text begin (ii) the payee holds the agent out to the public as accepting payments for goods or services on the payee's behalf; and new text end

new text begin (iii) payment for the goods and services is treated as received by the payee upon receipt by the agent so that the payor's obligation is extinguished and there is no risk of loss to the payor if the agent fails to remit the funds to the payee; new text end

new text begin (3) a person that acts as an intermediary by processing payments between an entity that has directly incurred an outstanding money transmission obligation to a sender, and the sender's designated recipient, provided that the entity: new text end

new text begin (i) is properly licensed or exempt from licensing requirements under this chapter; new text end

new text begin (ii) provides a receipt, electronic record, or other written confirmation to the sender identifying the entity as the provider of money transmission in the transaction; and new text end

new text begin (iii) bears sole responsibility to satisfy the outstanding money transmission obligation to the sender, including the obligation to make the sender whole in connection with any failure to transmit the funds to the sender's designated recipient; new text end

new text begin (4) the United States; a department, agency, or instrumentality of the United States; or an agent of the United States; new text end

new text begin (5) money transmission by the United States Postal Service or by an agent of the United States Postal Service; new text end

new text begin (6) a state; county; city; any other governmental agency, governmental subdivision, or instrumentality of a state; or the state's agent; new text end

new text begin (7) a federally insured depository financial institution; bank holding company; office of an international banking corporation; foreign bank that establishes a federal branch pursuant to the International Bank Act, United States Code, title 12, section 3102, as amended or recodified from time to time; corporation organized pursuant to the Bank Service Corporation Act, United States Code, title 12, sections 1861 to 1867, as amended or recodified from time to time; or corporation organized under the Edge Act, United States Code, title 12, sections 611 to 633, as amended or recodified from time to time; new text end

new text begin (8) electronic funds transfer of governmental benefits for a federal, state, county, or governmental agency by a contractor on behalf of the United States or a department, agency, or instrumentality thereof, or on behalf of a state or governmental subdivision, agency, or instrumentality thereof; new text end

new text begin (9) a board of trade designated as a contract market under the federal Commodity Exchange Act, United States Code, title 7, sections 1 to 25, as amended or recodified from time to time; or a person that in the ordinary course of business provides clearance and settlement services for a board of trade to the extent of its operation as or for a board; new text end

new text begin (10) a registered futures commission merchant under the federal commodities laws, to the extent of the registered futures commission merchant's operation as a merchant; new text end

new text begin (11) a person registered as a securities broker-dealer under federal or state securities laws, to the extent of the person's operation as a securities broker-dealer; new text end

new text begin (12) an individual employed by a licensee, authorized delegate, or any person exempted from the licensing requirements under this chapter when acting within the scope of employment and under the supervision of the licensee, authorized delegate, or exempted person as an employee and not as an independent contractor; new text end

new text begin (13) a person expressly appointed as a third-party service provider to or agent of an entity exempt under clause (7), solely to the extent that: new text end

new text begin (i) the service provider or agent is engaging in money transmission on behalf of and pursuant to a written agreement with the exempt entity that sets forth the specific functions that the service provider or agent is to perform; and new text end

new text begin (ii) the exempt entity assumes all risk of loss and all legal responsibility for satisfying the outstanding money transmission obligations owed to purchasers and holders of the outstanding money transmission obligations upon receipt of the purchaser's or holder's money or monetary value by the service provider or agent; or new text end

new text begin (14) a person exempt by regulation or order if the commissioner finds that (i) the exemption is in the public interest, and (ii) the regulation of the person is not necessary for the purposes of this chapter. new text end

Sec. 17.

new text begin [53B.30] AUTHORITY TO REQUIRE DEMONSTRATION OF EXEMPTION. new text end

new text begin The commissioner may require any person that claims to be exempt from licensing under section 53B.29 to provide to the commissioner information and documentation that demonstrates the person qualifies for any claimed exemption. new text end

Sec. 18.

new text begin [53B.31] IMPLEMENTATION. new text end

new text begin Subdivision 1. new text end

new text begin General authority. new text end

new text begin In order to carry out the purposes of this chapter, the commissioner may, subject to section 53B.32, paragraphs (a) and (b): new text end

new text begin (1) enter into agreements or relationships with other government officials or federal and state regulatory agencies and regulatory associations in order to (i) improve efficiencies and reduce regulatory burden by standardizing methods or procedures, and (ii) share resources, records, or related information obtained under this chapter; new text end

new text begin (2) use, hire, contract, or employ analytical systems, methods, or software to examine or investigate any person subject to this chapter; new text end

new text begin (3) accept from other state or federal government agencies or officials any licensing, examination, or investigation reports made by the other state or federal government agencies or officials; and new text end

new text begin (4) accept audit reports made by an independent certified public accountant or other qualified third-party auditor for an applicant or licensee and incorporate the audit report in any report of examination or investigation. new text end

new text begin Subd. 2. new text end

new text begin Administrative authority. new text end

new text begin The commissioner is granted broad administrative authority to: (1) administer, interpret, and enforce this chapter; (2) adopt regulations to implement this chapter; and (3) recover the costs incurred to administer and enforce this chapter by imposing and collecting proportionate and equitable fees and costs associated with applications, examinations, investigations, and other actions required to achieve the purpose of this chapter. new text end

Sec. 19.

new text begin [53B.32] CONFIDENTIALITY. new text end

new text begin (a) All information or reports obtained by the commissioner contained in or related to an examination that is prepared by, on behalf of, or for the use of the commissioner are confidential and are not subject to disclosure under section 46.07. new text end

new text begin (b) The commissioner may disclose information not otherwise subject to disclosure under paragraph (a) to representatives of state or federal agencies pursuant to section 53B.31, subdivision 1. new text end

new text begin (c) This section does not prohibit the commissioner from disclosing to the public a list of all licensees or the aggregated financial or transactional data concerning those licensees. new text end

Sec. 20.

new text begin [53B.33] SUPERVISION. new text end

new text begin (a) The commissioner may conduct an examination or investigation of a licensee or authorized delegate or otherwise take independent action authorized by this chapter, or by a rule adopted or order issued under this chapter, as reasonably necessary or appropriate to administer and enforce this chapter, rules implementing this chapter, and other applicable law, including the Bank Secrecy Act and the USA PATRIOT Act, Public Law 107-56. The commissioner may: new text end

new text begin (1) conduct an examination either on site or off site as the commissioner may reasonably require; new text end

new text begin (2) conduct an examination in conjunction with an examination conducted by representatives of other state agencies or agencies of another state or of the federal government; new text end

new text begin (3) accept the examination report of another state agency or an agency of another state or of the federal government, or a report prepared by an independent accounting firm, which on being accepted is considered for all purposes as an official report of the commissioner; and new text end

new text begin (4) summon and examine under oath a key individual or employee of a licensee or authorized delegate and require the person to produce records regarding any matter related to the condition and business of the licensee or authorized delegate. new text end

new text begin (b) A licensee or authorized delegate must provide, and the commissioner has full and complete access to, all records the commissioner may reasonably require to conduct a complete examination. The records must be provided at the location and in the format specified by the commissioner. The commissioner may use multistate record production standards and examination procedures when the standards reasonably achieve the requirements of this paragraph. new text end

new text begin (c) Unless otherwise directed by the commissioner, a licensee must pay all costs reasonably incurred in connection with an examination of the licensee or the licensee's authorized delegates. new text end

Sec. 21.

new text begin [53B.34] NETWORKED SUPERVISION. new text end

new text begin (a) To efficiently and effectively administer and enforce this chapter and to minimize regulatory burden, the commissioner is authorized to participate in multistate supervisory processes established between states and coordinated through the Conference of State Bank Supervisors, the Money Transmitter Regulators Association, and the affiliates and successors of the Conference of State Bank Supervisors and the Money Transmitter Regulators Association for all licensees that hold licenses in this state and other states. As a participant in multistate supervision, the commissioner may: new text end

new text begin (1) cooperate, coordinate, and share information with other state and federal regulators in accordance with section 53B.32; new text end

new text begin (2) enter into written cooperation, coordination, or information-sharing contracts or agreements with organizations the membership of which is made up of state or federal governmental agencies; and new text end

new text begin (3) cooperate, coordinate, and share information with organizations the membership of which is made up of state or federal governmental agencies, provided that the organizations agree in writing to maintain the confidentiality and security of the shared information in accordance with section 53B.32. new text end

new text begin (b) The commissioner is prohibited from waiving, and nothing in this section constitutes a waiver of, the commissioner's authority to conduct an examination or investigation or otherwise take independent action authorized by this chapter, or a rule adopted or order issued under this chapter, to enforce compliance with applicable state or federal law. new text end

new text begin (c) A joint examination or investigation, or acceptance of an examination or investigation report, does not waive an examination fee provided for in this chapter. new text end

Sec. 22.

new text begin [53B.35] RELATIONSHIP TO FEDERAL LAW. new text end

new text begin (a) In the event state money transmission jurisdiction is conditioned on a federal law, any inconsistencies between a provision of this chapter and the federal law governing money transmission is governed by the applicable federal law to the extent of the inconsistency. new text end

new text begin (b) In the event of any inconsistencies between this chapter and a federal law that governs pursuant to paragraph (a), the commissioner may provide interpretive guidance that: new text end

new text begin (1) identifies the inconsistency; and new text end

new text begin (2) identifies the appropriate means of compliance with federal law. new text end

Sec. 23.

new text begin [53B.36] LICENSE REQUIRED. new text end

new text begin (a) A person is prohibited from engaging in the business of money transmission, or advertising, soliciting, or representing that the person provides money transmission, unless the person is licensed under this chapter. new text end

new text begin (b) Paragraph (a) does not apply to: new text end

new text begin (1) a person that is an authorized delegate of a person licensed under this chapter acting within the scope of authority conferred by a written contract with the licensee; or new text end

new text begin (2) a person that is exempt under section 53B.29 and does not engage in money transmission outside the scope of the exemption. new text end

new text begin (c) A license issued under section 53B.40 is not transferable or assignable. new text end

Sec. 24.

new text begin [53B.37] CONSISTENT STATE LICENSING. new text end

new text begin (a) To establish consistent licensing between Minnesota and other states, the commissioner is authorized to: new text end

new text begin (1) implement all licensing provisions of this chapter in a manner that is consistent with (i) other states that have adopted substantially similar licensing requirements, or (ii) multistate licensing processes; and new text end

new text begin (2) participate in nationwide protocols for licensing cooperation and coordination among state regulators, provided that the protocols are consistent with this chapter. new text end

new text begin (b) In order to fulfill the purposes of this chapter, the commissioner is authorized to establish relationships or contracts with NMLS or other entities designated by NMLS to enable the commissioner to: new text end

new text begin (1) collect and maintain records; new text end

new text begin (2) coordinate multistate licensing processes and supervision processes; new text end

new text begin (3) process fees; and new text end

new text begin (4) facilitate communication between the commissioner and licensees or other persons subject to this chapter. new text end

new text begin (c) The commissioner is authorized to use NMLS for all aspects of licensing in accordance with this chapter, including but not limited to license applications, applications for acquisitions of control, surety bonds, reporting, criminal history background checks, credit checks, fee processing, and examinations. new text end

new text begin (d) The commissioner is authorized to use NMLS forms, processes, and functions in accordance with this chapter. If NMLS does not provide functionality, forms, or processes for a requirement under this chapter, the commissioner is authorized to implement the requirements in a manner that facilitates uniformity with respect to licensing, supervision, reporting, and regulation of licensees which are licensed in multiple jurisdictions. new text end

new text begin (e) For the purpose of participating in the NMLS registry, the commissioner is authorized to, by rule or order: (1) waive or modify, in whole or in part, any or all of the requirements; and (2) establish new requirements as reasonably necessary to participate in the NMLS registry. new text end

Sec. 25.

new text begin [53B.38] APPLICATION FOR LICENSE. new text end

new text begin (a) An applicant for a license must apply in a form and in a medium as prescribed by the commissioner. The application must state or contain, as applicable: new text end

new text begin (1) the legal name and residential and business addresses of the applicant and any fictitious or trade name used by the applicant in conducting business; new text end

new text begin (2) a list of any criminal convictions of the applicant and any material litigation in which the applicant has been involved in the ten-year period next preceding the submission of the application; new text end

new text begin (3) a description of any money transmission previously provided by the applicant and the money transmission that the applicant seeks to provide in this state; new text end

new text begin (4) a list of the applicant's proposed authorized delegates and the locations in this state where the applicant and the applicant's authorized delegates propose to engage in money transmission; new text end

new text begin (5) a list of other states in which the applicant is licensed to engage in money transmission and any license revocations, suspensions, or other disciplinary action taken against the applicant in another state; new text end

new text begin (6) information concerning any bankruptcy or receivership proceedings affecting the licensee or a person in control of a licensee; new text end

new text begin (7) a sample form of contract for authorized delegates, if applicable; new text end

new text begin (8) a sample form of payment instrument or stored value, as applicable; new text end

new text begin (9) the name and address of any federally insured depository financial institution through which the applicant plans to conduct money transmission; and new text end

new text begin (10) any other information the commissioner or NMLS reasonably requires with respect to the applicant. new text end

new text begin (b) If an applicant is a corporation, limited liability company, partnership, or other legal entity, the applicant must also provide: new text end

new text begin (1) the date of the applicant's incorporation or formation and state or country of incorporation or formation; new text end

new text begin (2) if applicable, a certificate of good standing from the state or country in which the applicant is incorporated or formed; new text end

new text begin (3) a brief description of the structure or organization of the applicant, including any parents or subsidiaries of the applicant, and whether any parents or subsidiaries are publicly traded; new text end

new text begin (4) the legal name, any fictitious or trade name, all business and residential addresses, and the employment, as applicable, in the ten-year period next preceding the submission of the application of each key individual and person in control of the applicant; new text end

new text begin (5) a list of any criminal convictions and material litigation in which a person in control of the applicant that is not an individual has been involved in the ten-year period preceding the submission of the application; new text end

new text begin (6) a copy of audited financial statements of the applicant for the most recent fiscal year and for the two-year period next preceding the submission of the application or, if the commissioner deems acceptable, certified unaudited financial statements for the most recent fiscal year or other period acceptable to the commissioner; new text end

new text begin (7) a certified copy of unaudited financial statements of the applicant for the most recent fiscal quarter; new text end

new text begin (8) if the applicant is a publicly traded corporation, a copy of the most recent report filed with the United States Securities and Exchange Commission under section 13 of the federal Securities Exchange Act of 1934, United States Code, title 15, section 78m, as amended or recodified from time to time; new text end

new text begin (9) if the applicant is a wholly owned subsidiary of: new text end

new text begin (i) a corporation publicly traded in the United States, a copy of audited financial statements for the parent corporation for the most recent fiscal year or a copy of the parent corporation's most recent report filed under section 13 of the Securities Exchange Act of 1934, United States Code, title 15, section 78m, as amended or recodified from time to time; or new text end

new text begin (ii) a corporation publicly traded outside the United States, a copy of similar documentation filed with the regulator of the parent corporation's domicile outside the United States; new text end

new text begin (10) the name and address of the applicant's registered agent in this state; and new text end

new text begin (11) any other information the commissioner reasonably requires with respect to the applicant. new text end

new text begin (c) A nonrefundable application fee of $4,000 must accompany an application for a license under this section. new text end

new text begin (d) The commissioner may: (1) waive one or more requirements of paragraphs (a) and (b); or (2) permit an applicant to submit other information in lieu of the required information. new text end

Sec. 26.

new text begin [53B.39] INFORMATION REQUIREMENTS; CERTAIN INDIVIDUALS. new text end

new text begin Subdivision 1. new text end

new text begin Individuals with or seeking control. new text end

new text begin Any individual in control of a licensee or applicant, any individual that seeks to acquire control of a licensee, and each key individual must furnish to the commissioner through NMLS: new text end

new text begin (1) the individual's fingerprints for submission to the Federal Bureau of Investigation and the commissioner for a national criminal history background check, unless the person currently resides outside of the United States and has resided outside of the United States for the last ten years; and new text end

new text begin (2) personal history and business experience in a form and in a medium prescribed by the commissioner, to obtain: new text end

new text begin (i) an independent credit report from a consumer reporting agency; new text end

new text begin (ii) information related to any criminal convictions or pending charges; and new text end

new text begin (iii) information related to any regulatory or administrative action and any civil litigation involving claims of fraud, misrepresentation, conversion, mismanagement of funds, breach of fiduciary duty, or breach of contract. new text end

new text begin Subd. 2. new text end

new text begin Individuals having resided outside the United States. new text end

new text begin (a) If an individual has resided outside of the United States at any time in the last ten years, the individual must also provide an investigative background report prepared by an independent search firm that meets the requirements of this subdivision. new text end

new text begin (b) At a minimum, the search firm must: new text end

new text begin (1) demonstrate that the search firm has sufficient knowledge, resources, and employs accepted and reasonable methodologies to conduct the research of the background report; and new text end

new text begin (2) not be affiliated with or have an interest with the individual the search firm is researching. new text end

new text begin (c) At a minimum, the investigative background report must be written in English and must contain: new text end

new text begin (1) if available in the individual's current jurisdiction of residency, a comprehensive credit report, or any equivalent information obtained or generated by the independent search firm to accomplish a credit report, including a search of the court data in the countries, provinces, states, cities, towns, and contiguous areas where the individual resided and worked; new text end

new text begin (2) criminal records information for the past ten years, including but not limited to felonies, misdemeanors, or similar convictions for violations of law in the countries, provinces, states, cities, towns, and contiguous areas where the individual resided and worked; new text end

new text begin (3) employment history; new text end

new text begin (4) media history, including an electronic search of national and local publications, wire services, and business applications; and new text end

new text begin (5) financial services-related regulatory history, including but not limited to money transmission, securities, banking, consumer finance, insurance, and mortgage-related industries. new text end

Sec. 27.

new text begin [53B.40] LICENSE ISSUANCE. new text end

new text begin (a) When an application for an original license under this chapter includes all of the items and addresses all of the matters that are required, the application is complete and the commissioner must promptly notify the applicant in a record of the date on which the application is determined to be complete. new text end

new text begin (b) The commissioner's determination that an application is complete and accepted for processing means only that the application, on the application's face, appears to include all of the items, including the criminal background check response from the Federal Bureau of Investigation, and address all of the matters that are required. The commissioner's determination that an application is complete is not an assessment of the substance of the application or of the sufficiency of the information provided. new text end

new text begin (c) When an application is filed and considered complete under this section, the commissioner must investigate the applicant's financial condition and responsibility, financial and business experience, character, and general fitness. The commissioner may conduct an investigation of the applicant, the reasonable cost of which the applicant must pay. The commissioner must issue a license to an applicant under this section if the commissioner finds: new text end

new text begin (1) the applicant has complied with sections 53B.38 and 53B.39; and new text end

new text begin (2) the financial condition and responsibility; financial and business experience, competence, character, and general fitness of the applicant; and the competence, experience, character, and general fitness of the key individuals and persons in control of the applicant indicate that it is in the interest of the public to permit the applicant to engage in money transmission. new text end

new text begin (d) If an applicant avails itself of or is otherwise subject to a multistate licensing process: new text end

new text begin (1) the commissioner is authorized to accept the investigation results of a lead investigative state for the purposes of paragraph (c); or new text end

new text begin (2) if Minnesota is a lead investigative state, the commissioner is authorized to investigate the applicant pursuant to paragraph (c) and the time frames established by agreement through the multistate licensing process, provided that the time frame complies with the application review period provided under paragraph (e). new text end

new text begin (e) The commissioner must approve or deny the application within 120 days after the date the application is deemed complete. If the application is not approved or denied within 120 days after the completion date, the application is approved and the license takes effect on the first business day after the 120-day period expires. new text end

new text begin (f) The commissioner must issue a formal written notice of the denial of a license application within 30 days of the date the decision to deny the application is made. The commissioner must set forth in the notice of denial the specific reasons for the denial of the application. An applicant whose application is denied by the commissioner under this paragraph may appeal within 30 days of the date the written notice of the denial is received. The commissioner must set a hearing date that is not later than 60 days after service of the response, unless a later date is set with the consent of the denied applicant. new text end

new text begin (g) The initial license term begins on the day the application is approved. The license expires on December 31 of the year in which the license term began, unless the initial license date is between November 1 and December 31, in which case the initial license term runs through December 31 of the following year. If a license is approved between November 1 and December 31, the applicant is subject to the renewal fee under section 53B.31, paragraph (a). new text end

Sec. 28.

new text begin [53B.41] LICENSE RENEWAL. new text end

new text begin (a) A license under this chapter must be renewed annually. An annual renewal fee of $2,500 must be paid no more than 60 days before the license expires. The renewal term is a period of one year and begins on January 1 each year after the initial license term. The renewal term expires on December 31 of the year the renewal term begins. new text end

new text begin (b) A licensee must submit a renewal report with the renewal fee, in a form and in a medium prescribed by the commissioner. The renewal report must state or contain a description of each material change in information submitted by the licensee in the licensee's original license application that has not been previously reported to the commissioner. new text end

new text begin (c) The commissioner may grant an extension of the renewal date for good cause. new text end

new text begin (d) The commissioner is authorized to use the NMLS to process license renewals, provided that the NMLS functionality is consistent with this section. new text end

Sec. 29.

new text begin [53B.42] MAINTENANCE OF LICENSE. new text end

new text begin (a) If a licensee does not continue to meet the qualifications or satisfy the requirements that apply to an applicant for a new money transmission license, the commissioner may suspend or revoke the licensee's license in accordance with the procedures established by this chapter or other applicable state law for license suspension or revocation. new text end

new text begin (b) An applicant for a money transmission license must demonstrate that the applicant meets or will meet, and a money transmission licensee must at all times meet, the requirements in sections 53B.59 to 53B.61. new text end

Sec. 30.

new text begin [53B.43] ACQUISITION OF CONTROL. new text end

new text begin (a) Any person, or group of persons acting in concert, seeking to acquire control of a licensee must obtain the commissioner's written approval before acquiring control. An individual is not deemed to acquire control of a licensee and is not subject to these acquisition of control provisions when that individual becomes a key individual in the ordinary course of business. new text end

new text begin (b) For the purpose of this section, a person is presumed to exercise a controlling influence when the person holds the power to vote, directly or indirectly, at least ten percent of the outstanding voting shares or voting interests of a licensee or person in control of a licensee. A person presumed to exercise a controlling influence as defined by this subdivision can rebut the presumption of control if the person is a passive investor. new text end

new text begin (c) For purposes of determining the percentage of a person controlled by any other person, the person's interest must be aggregated with the interest of any other immediate family member, including the person's spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and any other person who shares the person's home. new text end

new text begin (d) A person, or group of persons acting in concert, seeking to acquire control of a licensee must, in cooperation with the licensee: new text end

new text begin (1) submit an application in a form and in a medium prescribed by the commissioner; and new text end

new text begin (2) submit a nonrefundable fee of $4,000 with the request for approval. new text end

new text begin (e) Upon request, the commissioner may permit a licensee or the person, or group of persons acting in concert, to submit some or all information required by the commissioner pursuant to paragraph (d), clause (1), without using NMLS. new text end

new text begin (f) The application required by paragraph (d), clause (1), must include information required by section 53B.39 for any new key individuals that have not previously completed the requirements of section 53B.39 for a licensee. new text end

new text begin (g) When an application for acquisition of control under this section appears to include all of the items and address all of the matters that are required, the application is considered complete and the commissioner must promptly notify the applicant in a record of the date on which the application was determined to be complete. new text end

new text begin (h) The commissioner must approve or deny the application within 60 days after the completion date. If the application is not approved or denied within 60 days after the completion date, the application is approved and the person, or group of persons acting in concert, are not prohibited from acquiring control. The commissioner may extend the application period for good cause. new text end

new text begin (i) The commissioner's determination that an application is complete and is accepted for processing means only that the application, on the application's face, appears to include all of the items and address all of the matters that are required. The commissioner's determination that an application is complete is not an assessment of the application's substance or of the sufficiency of the information provided. new text end

new text begin (j) When an application is filed and considered complete under paragraph (g), the commissioner must investigate the financial condition and responsibility; the financial and business experience; character; and the general fitness of the person, or group of persons acting in concert, seeking to acquire control. The commissioner must approve an acquisition of control under this section if the commissioner finds: new text end

new text begin (1) the requirements of paragraphs (d) and (f) have been met, as applicable; and new text end

new text begin (2) the financial condition and responsibility, financial and business experience, competence, character, and general fitness of the person, or group of persons acting in concert, seeking to acquire control; and the competence, experience, character, and general fitness of the key individuals and persons that control the licensee after the acquisition of control indicate that it is in the interest of the public to permit the person, or group of persons acting in concert, to control the licensee. new text end

new text begin (k) If an applicant avails itself of or is otherwise subject to a multistate licensing process: new text end

new text begin (1) the commissioner is authorized to accept the investigation results of a lead investigative state for the purposes of paragraph (j); or new text end

new text begin (2) if Minnesota is a lead investigative state, the commissioner is authorized to investigate the applicant under paragraph (j) and consistent with the time frames established by agreement through the multistate licensing process. new text end

new text begin (l) The commissioner must issue a formal written notice of the denial of an application to acquire control. The commissioner must set forth in the notice of denial the specific reasons the application was denied. An applicant whose application is denied by the commissioner under this paragraph may appeal the denial within 30 days of the date the written notice of the denial is received. Chapter 14 applies to appeals under this paragraph. new text end

new text begin (m) Paragraphs (a) and (d) do not apply to: new text end

new text begin (1) a person that acts as a proxy for the sole purpose of voting at a designated meeting of the shareholders or holders of voting shares or voting interests of a licensee or a person in control of a licensee; new text end

new text begin (2) a person that acquires control of a licensee by devise or descent; new text end

new text begin (3) a person that acquires control of a licensee as a personal representative, custodian, guardian, conservator, or trustee, or as an officer appointed by a court of competent jurisdiction or by operation of law; new text end

new text begin (4) a person that is exempt under section 53B.29, clause (7); new text end

new text begin (5) a person that the commissioner determines is not subject to paragraph (a), based on the public interest; new text end

new text begin (6) a public offering of securities of a licensee or a person in control of a licensee; or new text end

new text begin (7) an internal reorganization of a person controlling the licensee, where the ultimate person controlling the licensee remains the same. new text end

new text begin (n) A person identified in paragraph (m), clause (2), (3), (4), or (6), that is cooperating with the licensee must notify the commissioner within 15 days of the date the acquisition of control occurs. new text end

new text begin (o) Paragraphs (a) and (d) do not apply to a person that has complied with and received approval to engage in money transmission under this chapter, or that was identified as a person in control in a prior application filed with and approved by the commissioner or by another state pursuant to a multistate licensing process, provided that: new text end

new text begin (1) the person has not had a license revoked or suspended or controlled a licensee that has had a license revoked or suspended while the person was in control of the licensee in the previous five years; new text end

new text begin (2) if the person is a licensee, the person is well managed and has received at least a satisfactory rating for compliance at the person's most recent examination by an MSB-accredited state if a rating was given; new text end

new text begin (3) the licensee to be acquired is projected to meet the requirements of sections 53B.59 to 53B.61 after the acquisition of control is completed, and if the person acquiring control is a licensee, the acquiring licensee is also projected to meet the requirements of sections 53B.59 to 53B.61 after the acquisition of control is completed; new text end

new text begin (4) the licensee to be acquired does not implement any material changes to the acquired licensee's business plan as a result of the acquisition of control, and if the person acquiring control is a licensee, the acquiring licensee does not implement any material changes to the acquiring licensee's business plan as a result of the acquisition of control; and new text end

new text begin (5) the person provides notice of the acquisition in cooperation with the licensee and attests to clauses (1), (2), (3), and (4) in a form and in a medium prescribed by the commissioner. new text end

new text begin (p) If the notice under paragraph (o), clause (5), is not disapproved within 30 days after the date on which the notice was determined to be complete, the notice is deemed approved. new text end

new text begin (q) Before filing an application for approval to acquire control of a licensee, a person may request in writing a determination from the commissioner as to whether the person would be considered a person in control of a licensee upon consummation of a proposed transaction. If the commissioner determines that the person would not be a person in control of a licensee, the proposed person and transaction is not subject to paragraphs (a) and (d). new text end

new text begin (r) If a multistate licensing process includes a determination pursuant to paragraph (q) and an applicant avails itself or is otherwise subject to the multistate licensing process: new text end

new text begin (1) the commissioner is authorized to accept the control determination of a lead investigative state with sufficient staffing, expertise, and minimum standards for the purposes of paragraph (q); or new text end

new text begin (2) if Minnesota is a lead investigative state, the commissioner is authorized to investigate the applicant under paragraph (q) and consistent with the time frames established by agreement through the multistate licensing process. new text end

Sec. 31.

new text begin [53B.44] CHANGE OF KEY INDIVIDUALS; NOTICE AND INFORMATION REQUIREMENTS. new text end

new text begin (a) A licensee that adds or replaces any key individual must: new text end

new text begin (1) provide notice, in a manner prescribed by the commissioner, within 15 days after the effective date of the key individual's appointment; and new text end

new text begin (2) provide the information required under section 53B.39 within 45 days of the effective date of the key individual's appointment. new text end

new text begin (b) Within 90 days of the date on which the notice provided under section 53B.44, paragraph (a), was determined to be complete, the commissioner may issue a notice of disapproval of a key individual if the commissioner finds that the competence, business experience, character, or integrity of the individual is not in the best interests of the public or the customers of the licensee. new text end

new text begin (c) A notice of disapproval must contain a statement of the basis for disapproval and must be sent to the licensee and the disapproved individual. A licensee may appeal a notice of disapproval pursuant to chapter 14 within 30 days of the date the notice of disapproval is received. new text end

new text begin (d) If the notice provided under paragraph (a) is not disapproved within 90 days after the date on which the notice was determined to be complete, the key individual is deemed approved. new text end

new text begin (e) If a multistate licensing process includes a key individual notice review and disapproval process under this section and the licensee avails itself of or is otherwise subject to the multistate licensing process: new text end

new text begin (1) the commissioner is authorized to accept the determination of another state if the investigating state has sufficient staffing, expertise, and minimum standards for the purposes of this section; or new text end

new text begin (2) if Minnesota is a lead investigative state, the commissioner is authorized to investigate the applicant under paragraph (b) and the time frames established by agreement through the multistate licensing process. new text end

Sec. 32.

new text begin [53B.45] REPORT OF CONDITION. new text end

new text begin (a) Each licensee must submit a report of condition within 45 days of the end of the calendar quarter, or within any extended time the commissioner prescribes. new text end

new text begin (b) The report of condition must include: new text end

new text begin (1) financial information at the licensee level; new text end

new text begin (2) nationwide and state-specific money transmission transaction information in every jurisdiction in the United States where the licensee is licensed to engage in money transmission; new text end

new text begin (3) a permissible investments report; new text end

new text begin (4) transaction destination country reporting for money received for transmission, if applicable; and new text end

new text begin (5) any other information the commissioner reasonably requires with respect to the licensee. new text end

new text begin (c) The commissioner is authorized to use NMLS to submit the report required under paragraph (a). new text end

new text begin (d) The information required by paragraph (b), clause (4), must only be included in a report of condition submitted within 45 days of the end of the fourth calendar quarter. new text end

Sec. 33.

new text begin [53B.46] AUDITED FINANCIAL STATEMENTS. new text end

new text begin (a) Each licensee must, within 90 days after the end of each fiscal year, or within any extended time the commissioner prescribes, file with the commissioner: new text end

new text begin (1) an audited financial statement of the licensee for the fiscal year prepared in accordance with United States generally accepted accounting principles; and new text end

new text begin (2) any other information the commissioner may reasonably require. new text end

new text begin (b) The audited financial statements must be prepared by an independent certified public accountant or independent public accountant who is satisfactory to the commissioner. new text end

new text begin (c) The audited financial statements must include or be accompanied by a certificate of opinion prepared by the independent certified public accountant or independent public accountant that is satisfactory in form and content to the commissioner. If the certificate or opinion is qualified, the commissioner may order the licensee to take any action the commissioner finds necessary to enable the independent or certified public accountant or independent public accountant to remove the qualification. new text end

Sec. 34.

new text begin [53B.47] AUTHORIZED DELEGATE REPORTING. new text end

new text begin (a) Each licensee must submit a report of authorized delegates within 45 days of the end of the calendar quarter. The commissioner is authorized to use NMLS to submit the report required by this paragraph, provided that the functionality is consistent with the requirements of this section. new text end

new text begin (b) The authorized delegate report must include, at a minimum, each authorized delegate's: new text end

new text begin (1) company legal name; new text end

new text begin (2) taxpayer employer identification number; new text end

new text begin (3) principal provider identifier; new text end

new text begin (4) physical address; new text end

new text begin (5) mailing address; new text end

new text begin (6) any business conducted in other states; new text end

new text begin (7) any fictitious or trade name; new text end

new text begin (8) contact person name, telephone number, and email; new text end

new text begin (9) start date as the licensee's authorized delegate; new text end

new text begin (10) end date acting as the licensee's authorized delegate, if applicable; new text end

new text begin (11) court orders under section 53B.53; and new text end

new text begin (12) any other information the commissioner reasonably requires with respect to the authorized delegate. new text end

Sec. 35.

new text begin [53B.48] REPORTS OF CERTAIN EVENTS. new text end

new text begin (a) A licensee must file a report with the commissioner within ten business days after the licensee has reason to know any of the following events has occurred: new text end

new text begin (1) a petition by or against the licensee under the United States Bankruptcy Code, United States Code, title 11, sections 101 to 110, as amended or recodified from time to time, for bankruptcy or reorganization has been filed; new text end

new text begin (2) a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for the licensee's dissolution or reorganization, or the making of a general assignment for the benefit of the licensee's creditors has been filed; or new text end

new text begin (3) a proceeding to revoke or suspend the licensee's license in a state or country in which the licensee engages in business or is licensed has been commenced. new text end

new text begin (b) A licensee must file a report with the commissioner within ten business days after the licensee has reason to know any of the following events has occurred: new text end

new text begin (1) the licensee or a key individual or person in control of the licensee is charged with or convicted of a felony related to money transmission activities; or new text end

new text begin (2) an authorized delegate is charged with or convicted of a felony related to money transmission activities. new text end

Sec. 36.

new text begin [53B.49] BANK SECRECY ACT REPORTS. new text end

new text begin A licensee and an authorized delegate must file all reports required by federal currency reporting, record keeping, and suspicious activity reporting requirements as set forth in the Bank Secrecy Act and other federal and state laws pertaining to money laundering. A licensee and authorized delegate that timely files with the appropriate federal agency a complete and accurate report required under this section is deemed to comply with the requirements of this section. new text end

Sec. 37.

new text begin [53B.50] RECORDS. new text end

new text begin (a) A licensee must maintain the following records, for purposes of determining the licensee's compliance with this chapter, for at least three years: new text end

new text begin (1) a record of each outstanding money transmission obligation sold; new text end

new text begin (2) a general ledger posted at least monthly containing all asset, liability, capital, income, and expense accounts; new text end

new text begin (3) bank statements and bank reconciliation records; new text end

new text begin (4) records of outstanding money transmission obligations; new text end

new text begin (5) records of each outstanding money transmission obligation paid within the three-year period; new text end

new text begin (6) a list of the last known names and addresses of all of the licensee's authorized delegates; and new text end

new text begin (7) any other records the commissioner reasonably requires by administrative rule. new text end

new text begin (b) The items specified in paragraph (a) may be maintained in any form of record. new text end

new text begin (c) The records specified in paragraph (a) may be maintained outside of Minnesota if the records are made accessible to the commissioner upon seven business-days' notice that is sent in a record. new text end

new text begin (d) All records maintained by the licensee as required under paragraphs (a) to (c) are open to inspection by the commissioner under section 53B.33, paragraph (a). new text end

Sec. 38.

new text begin [53B.51] RELATIONSHIP BETWEEN LICENSEE AND AUTHORIZED DELEGATE. new text end

new text begin (a) For purposes of this section, "remit" means to make direct payments of money to (1) a licensee, or (2) a licensee's representative authorized to receive money or to deposit money in a bank in an account specified by the licensee. new text end

new text begin (b) Before a licensee is authorized to conduct business through an authorized delegate or allows a person to act as the licensee's authorized delegate, the licensee must: new text end

new text begin (1) adopt, and update as necessary, written policies and procedures reasonably designed to ensure that the licensee's authorized delegates comply with applicable state and federal law; new text end

new text begin (2) enter into a written contract that complies with paragraph (d); and new text end

new text begin (3) conduct a reasonable risk-based background investigation sufficient for the licensee to determine whether the authorized delegate has complied and will likely comply with applicable state and federal law. new text end

new text begin (c) An authorized delegate must operate in full compliance with this chapter. new text end

new text begin (d) The written contract required by paragraph (b) must be signed by the licensee and the authorized delegate. The written contract must, at a minimum: new text end

new text begin (1) appoint the person signing the contract as the licensee's authorized delegate with the authority to conduct money transmission on behalf of the licensee; new text end

new text begin (2) set forth the nature and scope of the relationship between the licensee and the authorized delegate and the respective rights and responsibilities of the parties; new text end

new text begin (3) require the authorized delegate to agree to fully comply with all applicable state and federal laws, rules, and regulations pertaining to money transmission, including this chapter and regulations implementing this chapter, relevant provisions of the Bank Secrecy Act and the USA PATRIOT Act, Public Law 107-56; new text end

new text begin (4) require the authorized delegate to remit and handle money and monetary value in accordance with the terms of the contract between the licensee and the authorized delegate; new text end

new text begin (5) impose a trust on money and monetary value net of fees received for money transmission for the benefit of the licensee; new text end

new text begin (6) require the authorized delegate to prepare and maintain records as required by this chapter or administrative rules implementing this chapter, or as reasonably requested by the commissioner; new text end

new text begin (7) acknowledge that the authorized delegate consents to examination or investigation by the commissioner; new text end

new text begin (8) state that the licensee is subject to regulation by the commissioner and that as part of that regulation the commissioner may (1) suspend or revoke an authorized delegate designation, or (2) require the licensee to terminate an authorized delegate designation; and new text end

new text begin (9) acknowledge receipt of the written policies and procedures required under paragraph (b), clause (1). new text end

new text begin (e) If the licensee's license is suspended, revoked, surrendered, or expired, within five business days the licensee must provide documentation to the commissioner that the licensee has notified all applicable authorized delegates of the licensee whose names are in a record filed with the commissioner of the suspension, revocation, surrender, or expiration of a license. Upon suspension, revocation, surrender, or expiration of a license, applicable authorized delegates must immediately cease to provide money transmission as an authorized delegate of the licensee. new text end

new text begin (f) An authorized delegate of a licensee holds in trust for the benefit of the licensee all money net of fees received from money transmission. If an authorized delegate commingles any funds received from money transmission with other funds or property owned or controlled by the authorized delegate, all commingled funds and other property are considered held in trust in favor of the licensee in an amount equal to the amount of money net of fees received from money transmission. new text end

new text begin (g) An authorized delegate is prohibited from using a subdelegate to conduct money transmission on behalf of a licensee. new text end

Sec. 39.

new text begin [53B.52] UNAUTHORIZED ACTIVITIES. new text end

new text begin A person is prohibited from engaging in the business of money transmission on behalf of a person not licensed under this chapter or not exempt under sections 53B.29 and 53B.30. A person that engages in the business of money transmission on behalf of a person that is not licensed under this chapter or not exempt under sections 53B.29 and 53B.30 provides money transmission to the same extent as if the person were a licensee, and is jointly and severally liable with the unlicensed or nonexempt person. new text end

Sec. 40.

new text begin [53B.53] PROHIBITED AUTHORIZED DELEGATES. new text end

new text begin (a) The district court in an action brought by a licensee has jurisdiction to grant appropriate equitable or legal relief, including without limitation prohibiting the authorized delegate from directly or indirectly acting as an authorized delegate for any licensee in Minnesota and the payment of restitution, damages, or other monetary relief, if the district court finds that an authorized delegate failed to remit money in accordance with the written contract required by section 53B.51, paragraph (b), or as otherwise directed by the licensee or required by law. new text end

new text begin (b) If the district court issues an order prohibiting a person from acting as an authorized delegate for any licensee under paragraph (a), the licensee that brought the action must report the order to the commissioner within 30 days of the date of the order and must report the order through NMLS within 90 days of the date of the order. new text end

Sec. 41.

new text begin [53B.54] TIMELY TRANSMISSION. new text end

new text begin (a) Every licensee must forward all money received for transmission in accordance with the terms of the agreement between the licensee and the sender, unless the licensee has a reasonable belief or a reasonable basis to believe that the sender may be a victim of fraud or that a crime or violation of law, rule, or regulation has occurred, is occurring, or may occur. new text end

new text begin (b) If a licensee fails to forward money received for transmission as provided under this section, the licensee must respond to inquiries by the sender with the reason for the failure, unless providing a response would violate a state or federal law, rule, or regulation. new text end

Sec. 42.

new text begin [53B.55] REFUNDS. new text end

new text begin (a) This section does not apply to: new text end

new text begin (1) money received for transmission that is subject to the federal remittance rule under Code of Federal Regulations, title 12, part 1005, subpart B, as amended or recodified from time to time; or new text end

new text begin (2) money received for transmission pursuant to a written agreement between the licensee and payee to process payments for goods or services provided by the payee. new text end

new text begin (b) A licensee must refund to the sender within ten days of the date the licensee receives the sender's written request for a refund of any and all money received for transmission, unless: new text end

new text begin (1) the money has been forwarded within ten days of the date on which the money was received for transmission; new text end

new text begin (2) instructions have been given committing an equivalent amount of money to the person designated by the sender within ten days of the date on which the money was received for transmission; new text end

new text begin (3) the agreement between the licensee and the sender instructs the licensee to forward the money at a time that is beyond ten days of the date on which the money was received for transmission. If money has not been forwarded in accordance with the terms of the agreement between the licensee and the sender, the licensee must issue a refund in accordance with the other provisions of this section; or new text end

new text begin (4) the refund is requested for a transaction that the licensee has not completed based on a reasonable belief or a reasonable basis to believe that a crime or violation of law, rule, or regulation has occurred, is occurring, or may occur. new text end

new text begin (c) A refund request does not enable the licensee to identify: new text end

new text begin (1) the sender's name and address or telephone number; or new text end

new text begin (2) the particular transaction to be refunded in the event the sender has multiple transactions outstanding. new text end

Sec. 43.

new text begin [53B.56] RECEIPTS. new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For purposes of this section, "receipt" means a paper receipt, electronic record, or other written confirmation. new text end

new text begin Subd. 2. new text end

new text begin Exemption. new text end

new text begin This section does not apply to: new text end

new text begin (1) money received for transmission that is subject to the federal remittance rule under Code of Federal Regulations, title 12, part 1005, subpart B, as amended or recodified from time to time; new text end

new text begin (2) money received for transmission that is not primarily for personal, family, or household purposes; new text end

new text begin (3) money received for transmission pursuant to a written agreement between the licensee and payee to process payments for goods or services provided by the payee; or new text end

new text begin (4) payroll processing services. new text end

new text begin Subd. 3. new text end

new text begin Transaction types; receipts form. new text end

new text begin For a transaction conducted in person, the receipt may be provided electronically if the sender requests or agrees to receive an electronic receipt. For a transaction conducted electronically or by telephone, a receipt may be provided electronically. All electronic receipts must be provided in a retainable form. new text end

new text begin Subd. 4. new text end

new text begin Receipts required. new text end

new text begin (a) Every licensee or the licensee's authorized delegate must provide the sender a receipt for money received for transmission. new text end

new text begin (b) The receipt must contain, as applicable: new text end

new text begin (1) the name of the sender; new text end

new text begin (2) the name of the designated recipient; new text end

new text begin (3) the date of the transaction; new text end

new text begin (4) the unique transaction or identification number; new text end

new text begin (5) the name of the licensee, NMLS Unique ID, the licensee's business address, and the licensee's customer service telephone number; new text end

new text begin (6) the transaction amount, expressed in United States dollars; new text end

new text begin (7) any fee the licensee charges the sender for the transaction; and new text end

new text begin (8) any taxes the licensee collects from the sender for the transaction. new text end

new text begin (c) The receipt required by this section must be provided in (1) English, and (2) the language principally used by the licensee or authorized delegate to advertise, solicit, or negotiate, either orally or in writing, for a transaction conducted in person, electronically, or by telephone, if the language principally used is a language other than English. new text end

Sec. 44.

new text begin [53B.57] NOTICE. new text end

new text begin Every licensee or authorized delegate must include on a receipt or disclose on the licensee's website or mobile application the name and telephone number of the department and a statement that the licensee's customers can contact the department with questions or complaints about the licensee's money transmission services. new text end

Sec. 45.

new text begin [53B.58] PAYROLL PROCESSING SERVICES; DISCLOSURES. new text end

new text begin (a) A licensee that provides payroll processing services must: new text end

new text begin (1) issue reports to clients detailing client payroll obligations in advance of the payroll funds being deducted from an account; and new text end

new text begin (2) make available worker pay stubs or an equivalent statement to workers. new text end

new text begin (b) Paragraph (a) does not apply to a licensee providing payroll processing services if the licensee's client designates the intended recipients to the licensee and is responsible for providing the disclosures required by paragraph (a), clause (2). new text end

Sec. 46.

new text begin [53B.59] NET WORTH. new text end

new text begin (a) A licensee under this chapter must maintain at all times a tangible net worth that is the greater of: (1) $100,000; or (2) three percent of total assets for the first $100,000,000; two percent of additional assets between $100,000,000 to $1,000,000,000; and one-half percent of additional assets over $1,000,000,000. new text end

new text begin (b) Tangible net worth must be demonstrated in the initial application by the applicant's most recent audited or unaudited financial statements under section 53B.38, paragraph (b), clause (6). new text end

new text begin (c) Notwithstanding paragraphs (a) and (b), the commissioner has the authority, for good cause shown, to exempt any applicant or licensee in-part or in whole from the requirements of this section. new text end

Sec. 47.

new text begin [53B.60] SURETY BOND. new text end

new text begin (a) An applicant for a money transmission license must provide, and a licensee must at all times maintain (1) security consisting of a surety bond in a form satisfactory to the commissioner, or (2) with the commissioner's approval, a deposit instead of a bond in accordance with this section. new text end

new text begin (b) The amount of the required security under this section is: new text end

new text begin (1) the greater of (i) $100,000, or (ii) an amount equal to one hundred percent of the licensee's average daily money transmission liability in Minnesota, calculated for the most recently completed three-month period, up to a maximum of $500,000; or new text end

new text begin (2) in the event that the licensee's tangible net worth exceeds ten percent of total assets, the licensee must maintain a surety bond of $100,000. new text end

new text begin (c) A licensee that maintains a bond in the maximum amount provided for in paragraph (b), clause (1) or (2), as applicable, is not required to calculate the licensee's average daily money transmission liability in Minnesota for purposes of this section. new text end

new text begin (d) A licensee may exceed the maximum required bond amount pursuant to section 53B.62, paragraph (a), clause (5). new text end

new text begin (e) The security device remains effective until cancellation, which may occur only after 30 days' written notice to the commissioner. Cancellation does not affect the rights of any claimant for any liability incurred or accrued during the period for which the bond was in force. new text end

new text begin (f) The security device must remain in place for no longer than five years after the licensee ceases money transmission operations in Minnesota. Notwithstanding this paragraph, the commissioner may permit the security device to be reduced or eliminated before that time to the extent that the amount of the licensee's payment instruments outstanding in Minnesota are reduced. The commissioner may also permit a licensee to substitute a letter of credit or other form of security device acceptable to the commissioner for the security device in place at the time the licensee ceases money transmission operations in Minnesota. new text end

Sec. 48.

new text begin [53B.61] MAINTENANCE OF PERMISSIBLE INVESTMENTS. new text end

new text begin (a) A licensee must maintain at all times permissible investments that have a market value computed in accordance with United States generally accepted accounting principles of not less than the aggregate amount of all of the licensee's outstanding money transmission obligations. new text end

new text begin (b) Except for permissible investments enumerated in section 53B.62, paragraph (a), the commissioner may by administrative rule or order, with respect to any licensee, limit the extent to which a specific investment maintained by a licensee within a class of permissible investments may be considered a permissible investment, if the specific investment represents undue risk to customers not reflected in the market value of investments. new text end

new text begin (c) Permissible investments, even if commingled with other assets of the licensee, are held in trust for the benefit of the purchasers and holders of the licensee's outstanding money transmission obligations in the event of insolvency; the filing of a petition by or against the licensee under the United States Bankruptcy Code, United States Code, title 11, sections 101 to 110, as amended or recodified from time to time, for bankruptcy or reorganization; the filing of a petition by or against the licensee for receivership; the commencement of any other judicial or administrative proceeding for the licensee's dissolution or reorganization; or in the event of an action by a creditor against the licensee who is not a beneficiary of this statutory trust. No permissible investments impressed with a trust pursuant to this paragraph are subject to attachment, levy of execution, or sequestration by order of any court, except for a beneficiary of the statutory trust. new text end

new text begin (d) Upon the establishment of a statutory trust in accordance with paragraph (c), or when any funds are drawn on a letter of credit pursuant to section 53B.62, paragraph (a), clause (4), the commissioner must notify the applicable regulator of each state in which the licensee is licensed to engage in money transmission, if any, of the establishment of the trust or the funds drawn on the letter of credit, as applicable. Notice is deemed satisfied if performed pursuant to a multistate agreement or through NMLS. Funds drawn on a letter of credit, and any other permissible investments held in trust for the benefit of the purchasers and holders of the licensee's outstanding money transmission obligations, are deemed held in trust for the benefit of the purchasers and holders of the licensee's outstanding money transmission obligations on a pro rata and equitable basis in accordance with statutes pursuant to which permissible investments are required to be held in Minnesota and other states, as defined by a substantially similar statute in the other state. Any statutory trust established under this section terminates upon extinguishment of all of the licensee's outstanding money transmission obligations. new text end

new text begin (e) The commissioner may by rule or by order allow other types of investments that the commissioner determines are of sufficient liquidity and quality to be a permissible investment. The commissioner is authorized to participate in efforts with other state regulators to determine that other types of investments are of sufficient liquidity and quality to be a permissible investment. new text end

Sec. 49.

new text begin [53B.62] PERMISSIBLE INVESTMENTS. new text end

new text begin Subdivision 1. new text end

new text begin Certain investments permissible. new text end

new text begin The following investments are permissible under section 53B.61: new text end

new text begin (1) cash, including demand deposits, savings deposits, and funds in accounts held for the benefit of the licensee's customers in a federally insured depository financial institution; and cash equivalents, including ACH items in transit to the licensee and ACH items or international wires in transit to a payee, cash in transit via armored car, cash in smart safes, cash in licensee-owned locations, debit card or credit card funded transmission receivables owed by any bank, or money market mutual funds rated AAA or the equivalent from any eligible rating service; new text end

new text begin (2) certificates of deposit or senior debt obligations of an insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act, United States Code, title 12, section 1813, as amended or recodified from time to time, or as defined under the federal Credit Union Act, United States Code, title 12, section 1781, as amended or recodified from time to time; new text end

new text begin (3) an obligation of the United States or a commission, agency, or instrumentality thereof; an obligation that is guaranteed fully as to principal and interest by the United States; or an obligation of a state or a governmental subdivision, agency, or instrumentality thereof; new text end

new text begin (4) the full drawable amount of an irrevocable standby letter of credit, for which the stated beneficiary is the commissioner, that stipulates that the beneficiary need only draw a sight draft under the letter of credit and present the sight draft to obtain funds up to the letter of credit amount within seven days of presentation of the items required by subdivision 2, paragraph (c); and new text end

new text begin (5) one hundred percent of the surety bond or deposit provided for under section 53B.60 that exceeds the average daily money transmission liability in Minnesota. new text end

new text begin Subd. 2. new text end

new text begin Letter of credit; requirements. new text end

new text begin (a) A letter of credit under subdivision 1, clause (4), must: new text end

new text begin (1) be issued by a federally insured depository financial institution, a foreign bank that is authorized under federal law to maintain a federal agency or federal branch office in a state or states, or a foreign bank that is authorized under state law to maintain a branch in a state that: (i) bears an eligible rating or whose parent company bears an eligible rating; and (ii) is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks, credit unions, and trust companies; new text end

new text begin (2) be irrevocable, unconditional, and indicate that it is not subject to any condition or qualifications outside of the letter of credit; new text end

new text begin (3) not contain reference to any other agreements, documents, or entities, or otherwise provide for any security interest in the licensee; and new text end

new text begin (4) contain an issue date and expiration date, and expressly provide for automatic extension without a written amendment, for an additional period of one year from the present or each future expiration date, unless the issuer of the letter of credit notifies the commissioner in writing by certified or registered mail or courier mail or other receipted means, at least 60 days before any expiration date, that the irrevocable letter of credit will not be extended. new text end

new text begin (b) In the event of any notice of expiration or nonextension of a letter of credit issued under paragraph (a), clause (4), the licensee must demonstrate to the satisfaction of the commissioner, 15 days before the letter or credit's expiration, that the licensee maintains and will maintain permissible investments in accordance with section 53B.61, paragraph (a), upon the expiration of the letter of credit. If the licensee is not able to do so, the commissioner may draw on the letter of credit in an amount up to the amount necessary to meet the licensee's requirements to maintain permissible investments in accordance with section 53B.61, paragraph (a). Any draw under this paragraph must be offset against the licensee's outstanding money transmission obligations. The drawn funds must be held in trust by the commissioner or the commissioner's designated agent, to the extent authorized by law, as agent for the benefit of the purchasers and holders of the licensee's outstanding money transmission obligations. new text end

new text begin (c) The letter of credit must provide that the issuer of the letter of credit must honor, at sight, a presentation made by the beneficiary to the issuer of the following documents on or before the expiration date of the letter of credit: new text end

new text begin (1) the original letter of credit, including any amendments; and new text end

new text begin (2) a written statement from the beneficiary stating that any of the following events have occurred: new text end

new text begin (i) the filing of a petition by or against the licensee under the United States Bankruptcy Code, United States Code, title 11, sections 101 to 110, as amended or recodified from time to time, for bankruptcy or reorganization; new text end

new text begin (ii) the filing of a petition by or against the licensee for receivership, or the commencement of any other judicial or administrative proceeding for the licensee's dissolution or reorganization; new text end

new text begin (iii) the seizure of assets of a licensee by a commissioner of any other state pursuant to an emergency order issued in accordance with applicable law, on the basis of an action, violation, or condition that has caused or is likely to cause the insolvency of the licensee; or new text end

new text begin (iv) the beneficiary has received notice of expiration or nonextension of a letter of credit and the licensee failed to demonstrate to the satisfaction of the beneficiary that the licensee will maintain permissible investments in accordance with section 53B.61, paragraph (a), upon the expiration or nonextension of the letter of credit. new text end

new text begin (d) The commissioner may designate an agent to serve on the commissioner's behalf as beneficiary to a letter of credit, provided the agent and letter of credit meet requirements the commissioner establishes. The commissioner's agent may serve as agent for multiple licensing authorities for a single irrevocable letter of credit if the proceeds of the drawable amount for the purposes of subdivision 1, clause (4), and this subdivision are assigned to the commissioner. new text end

new text begin (e) The commissioner is authorized to participate in multistate processes designed to facilitate the issuance and administration of letters of credit, including but not limited to services provided by the NMLS and State Regulatory Registry, LLC. new text end

new text begin Subd. 3. new text end

new text begin Other permissible investments. new text end

new text begin Unless the commissioner by administrative rule or order otherwise permits an investment to exceed the limit set forth in this subdivision, the following investments are permissible under section 53B.61 to the extent specified: new text end

new text begin (1) receivables that are payable to a licensee from its authorized delegates in the ordinary course of business that are less than seven days old, up to 50 percent of the aggregate value of the licensee's total permissible investments; new text end

new text begin (2) of the receivables permissible under clause (1), receivables that are payable to a licensee from a single authorized delegate in the ordinary course of business may not exceed ten percent of the aggregate value of the licensee's total permissible investments; new text end

new text begin (3) the following investments are permissible up to 20 percent per category and combined up to 50 percent of the aggregate value of the licensee's total permissible investments: new text end

new text begin (i) a short-term investment of up to six months bearing an eligible rating; new text end

new text begin (ii) commercial paper bearing an eligible rating; new text end

new text begin (iii) a bill, note, bond, or debenture bearing an eligible rating; new text end

new text begin (iv) United States tri-party repurchase agreements collateralized at 100 percent or more with United States government or agency securities, municipal bonds, or other securities bearing an eligible rating; new text end

new text begin (v) money market mutual funds rated less than "AAA" and equal to or higher than "A-" by S&P, or the equivalent from any other eligible rating service; and new text end

new text begin (vi) a mutual fund or other investment fund composed solely and exclusively of one or more permissible investments listed in subdivision 1, clauses (1) to (3); and new text end

new text begin (4) cash, including demand deposits, savings deposits, and funds in accounts held for the benefit of the licensee's customers, at foreign depository institutions are permissible up to ten percent of the aggregate value of the licensee's total permissible investments, if the licensee has received a satisfactory rating in the licensee's most recent examination and the foreign depository institution: new text end

new text begin (i) has an eligible rating; new text end

new text begin (ii) is registered under the Foreign Account Tax Compliance Act, Public Law 111-147; new text end

new text begin (iii) is not located in any country subject to sanctions from the Office of Foreign Asset Control; and new text end

new text begin (iv) is not located in a high-risk or noncooperative jurisdiction, as designated by the Financial Action Task Force. new text end

Sec. 50.

new text begin [53B.63] SUSPENSION; REVOCATION. new text end

new text begin (a) The commissioner may suspend or revoke a license or order a licensee to revoke the designation of an authorized delegate if: new text end

new text begin (1) the licensee violates this chapter, or an administrative rule adopted or an order issued under this chapter; new text end

new text begin (2) the licensee does not cooperate with an examination or investigation conducted by the commissioner; new text end

new text begin (3) the licensee engages in fraud, intentional misrepresentation, or gross negligence; new text end

new text begin (4) an authorized delegate is convicted of a violation of a state or federal statute prohibiting money laundering, or violates an administrative rule adopted or an order issued under this chapter, as a result of the licensee's willful misconduct or willful blindness; new text end

new text begin (5) the competence, experience, character, or general fitness of the licensee, authorized delegate, person in control of a licensee, key individual, or responsible person of the authorized delegate indicates that it is not in the public interest to permit the person to provide money transmission; new text end

new text begin (6) the licensee engages in an unsafe or unsound practice; new text end

new text begin (7) the licensee is insolvent, suspends payment of the licensee's obligations, or makes a general assignment for the benefit of the licensee's creditors; or new text end

new text begin (8) the licensee does not remove an authorized delegate after the commissioner issues and serves upon the licensee a final order that includes a finding that the authorized delegate has violated this chapter. new text end

new text begin (b) When determining whether a licensee is engaging in an unsafe or unsound practice, the commissioner may consider the size and condition of the licensee's money transmission, the magnitude of the loss, the gravity of the violation of this chapter, and the previous conduct of the person involved. new text end

Sec. 51.

new text begin [53B.64] AUTHORIZED DELEGATES; SUSPENSION AND REVOCATION. new text end

new text begin (a) The commissioner may issue an order suspending or revoking the designation of an authorized delegate if the commissioner finds: new text end

new text begin (1) the authorized delegate violated this chapter, or an administrative rule adopted or an order issued under this chapter; new text end

new text begin (2) the authorized delegate did not cooperate with an examination or investigation conducted by the commissioner; new text end

new text begin (3) the authorized delegate engaged in fraud, intentional misrepresentation, or gross negligence; new text end

new text begin (4) the authorized delegate is convicted of a violation of a state or federal anti-money laundering statute; new text end

new text begin (5) the competence, experience, character, or general fitness of the authorized delegate or a person in control of the authorized delegate indicates that it is not in the public interest to permit the authorized delegate to provide money transmission; or new text end

new text begin (6) the authorized delegate is engaging in an unsafe or unsound practice. new text end

new text begin (b) When determining whether an authorized delegate is engaging in an unsafe or unsound practice, the commissioner may consider the size and condition of the authorized delegate's provision of money transmission, the magnitude of the loss, the gravity of the violation of this chapter, or an administrative rule adopted or order issued under this chapter, and the previous conduct of the authorized delegate. new text end

new text begin (c) An authorized delegate may apply for relief from a suspension or revocation of designation as an authorized delegate in the same manner as a licensee. new text end

Sec. 52.

new text begin [53B.65] ENFORCEMENT. new text end

new text begin Section 45.027 applies to this chapter. new text end

Sec. 53.

new text begin [53B.66] CRIMINAL PENALTIES. new text end

new text begin (a) A person who intentionally makes a false statement, misrepresentation, or false certification in a record filed or required to be maintained under this chapter or that intentionally makes a false entry or omits a material entry in a record filed or required to be maintained under this chapter is guilty of a felony. new text end

new text begin (b) A person who knowingly engages in an activity for which a license is required under this chapter without being licensed under this chapter, and who receives more than $1,000 in compensation within a 30-day period from the activity, is guilty of a felony. new text end

new text begin (c) A person who knowingly engages in an activity for which a license is required under this chapter without being licensed under this chapter, and who receives more than $500 but less than $1,000 in compensation within a 30-day period from the activity, is guilty of a gross misdemeanor. new text end

new text begin (d) A person who knowingly engages in an activity for which a license is required under this chapter without being licensed under this chapter, and who receives no more than $500 in compensation within a 30-day period from the activity, is guilty of a misdemeanor. new text end

Sec. 54.

new text begin [53B.67] SEVERABILITY. new text end

new text begin If any provision of this chapter or the chapter's application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application. new text end

Sec. 55.

new text begin [53B.68] TRANSITION PERIOD. new text end

new text begin (a) A person licensed in Minnesota to engage in the business of money transmission is not subject to the provisions of this chapter to the extent that this chapter's provisions conflict with current law or establish new requirements not imposed under current law until the licensee renews the licensee's current license or for five months after the effective date of this chapter, whichever is later. new text end

new text begin (b) Notwithstanding paragraph (a), a licensee is only required to amend the licensee's authorized delegate contracts for contracts entered into or amended after the effective date or the completion of any transition period contemplated under paragraph (a). Nothing in this section limits an authorized delegate's obligations to operate in full compliance with this chapter, as required under section 53B.51, paragraph (c). new text end

Sec. 56.

new text begin [53B.69] DEFINITIONS. new text end

new text begin Subdivision 1. new text end

new text begin Terms. new text end

new text begin For purposes of sections 53B.70 to 53B.74, the following terms have the meaning given them. new text end

new text begin Subd. 2. new text end

new text begin Control of virtual currency. new text end

new text begin "Control of virtual currency," when used in reference to a transaction or relationship involving virtual currency, means the power to execute unilaterally or prevent indefinitely a virtual currency transaction. new text end

new text begin Subd. 3. new text end

new text begin Exchange. new text end

new text begin "Exchange," used as a verb, means to assume control of virtual currency from or on behalf of a person, at least momentarily, to sell, trade, or convert: new text end

new text begin (1) virtual currency for money, bank credit, or one or more forms of virtual currency; or new text end

new text begin (2) money or bank credit for one or more forms of virtual currency. new text end

new text begin Subd. 4. new text end

new text begin Transfer. new text end

new text begin "Transfer" means to assume control of virtual currency from or on behalf of a person and to: new text end

new text begin (1) credit the virtual currency to the account of another person; new text end

new text begin (2) move the virtual currency from one account of a person to another account of the same person; or new text end

new text begin (3) relinquish control of virtual currency to another person. new text end

new text begin Subd. 5. new text end

new text begin United States dollar equivalent of virtual currency. new text end

new text begin "United States dollar equivalent of virtual currency" means the equivalent value of a particular virtual currency in United States dollars shown on a virtual-currency exchange based in the United States for a particular date or period specified in this chapter. new text end

new text begin Subd. 6. new text end

new text begin Virtual currency. new text end

new text begin (a) "Virtual currency" means a digital representation of value that: new text end

new text begin (1) is used as a medium of exchange, unit of account, or store of value; and new text end

new text begin (2) is not money, whether or not denominated in money. new text end

new text begin (b) Virtual currency does not include: new text end

new text begin (1) a transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for money, bank credit, or virtual currency; or new text end

new text begin (2) a digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform. new text end

new text begin Subd. 7. new text end

new text begin Virtual-currency administration. new text end

new text begin "Virtual-currency administration" means issuing virtual currency with the authority to redeem the currency for money, bank credit, or other virtual currency. new text end

new text begin Subd. 8. new text end

new text begin Virtual-currency business activity. new text end

new text begin "Virtual-currency business activity" means: new text end

new text begin (1) exchanging, transferring, or storing virtual currency or engaging in virtual-currency administration, whether directly or through an agreement with a virtual-currency control-services vendor; new text end

new text begin (2) holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals; or new text end

new text begin (3) exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games for: new text end

new text begin (i) virtual currency offered by or on behalf of the same publisher from which the original digital representation of value was received; or new text end

new text begin (ii) money or bank credit outside the online game, game platform, or family of games offered by or on behalf of the same publisher from which the original digital representation of value was received. new text end

new text begin Subd. 9. new text end

new text begin Virtual-currency control-services vendor. new text end

new text begin "Virtual-currency control-services vendor" means a person that has control of virtual currency solely under an agreement with a person that, on behalf of another person, assumes control of virtual currency. new text end

Sec. 57.

new text begin [53B.70] SCOPE. new text end

new text begin (a) Sections 53B.71 to 53B.74 do not apply to the exchange, transfer, or storage of virtual currency or to virtual-currency administration to the extent the Electronic Fund Transfer Act of 1978, United States Code, title 15, sections 1693 to 1693r, as amended or recodified from time to time; the Securities Exchange Act of 1934, United States Code, title 15, sections 78a to 78oo, as amended or recodified from time to time; the Commodities Exchange Act of 1936, United States Code, title 7, sections 1 to 27f, as amended or recodified from time to time; or chapter 80A govern the activity. new text end

new text begin (b) Sections 53B.71 to 53B.74 do not apply to activity by: new text end

new text begin (1) a person that: new text end

new text begin (i) contributes only connectivity software or computing power to a decentralized virtual currency, or to a protocol governing transfer of the digital representation of value; new text end

new text begin (ii) provides only data storage or security services for a business engaged in virtual-currency business activity and does not otherwise engage in virtual-currency business activity on behalf of another person; or new text end

new text begin (iii) provides only to a person otherwise exempt from this chapter virtual currency as one or more enterprise solutions used solely among each other and has no agreement or relationship with a person that is an end-user of virtual currency; new text end

new text begin (2) a person using virtual currency, including creating, investing, buying or selling, or obtaining virtual currency as payment for the purchase or sale of goods or services, solely: new text end

new text begin (i) on the person's own behalf; new text end

new text begin (ii) for personal, family, or household purposes; or new text end

new text begin (iii) for academic purposes; new text end

new text begin (3) a person whose virtual-currency business activity with or on behalf of persons is reasonably expected to be valued, in the aggregate, on an annual basis at $5,000 or less, measured by the United States dollar equivalent of virtual currency; new text end

new text begin (4) an attorney to the extent of providing escrow services to a person; new text end

new text begin (5) a title insurance company to the extent of providing escrow services to a person; or new text end

new text begin (6) a securities intermediary, as defined under section 336.8-102(14), or a commodity intermediary, as defined under section 336.9-102(17), that: new text end

new text begin (i) does not engage in the ordinary course of business in virtual-currency business activity with or on behalf of a person in addition to maintaining securities accounts or commodities accounts and is regulated as a securities intermediary or commodity intermediary under federal law, law of Minnesota other than this chapter, or law of another state; and new text end

new text begin (ii) affords a person protections comparable to those set forth under section 53B.37. new text end

new text begin (c) Sections 53B.71 to 53B.74 do not apply to a secured creditor, as defined under sections 336.9-101 to 336.9-809 or to a creditor with a judicial lien or lien arising by operation of law on collateral that is virtual currency, if the virtual-currency business activity of the creditor is limited to enforcement of the security interest in compliance with sections 336.9-101 to 336.9-809 or lien in compliance with the law applicable to the lien. new text end

new text begin (d) Sections 53B.71 to 53B.74 do not apply to a virtual-currency control-services vendor. new text end

new text begin (e) Sections 53B.71 to 53B.74 do not apply to a person that: new text end

new text begin (1) does not receive compensation from a person to: new text end

new text begin (i) provide virtual-currency products or services; or new text end

new text begin (ii) conduct virtual-currency business activity; or new text end

new text begin (2) is engaged in testing products or services with the person's own money. new text end

new text begin (f) The commissioner may determine that a person or class of persons, given facts particular to the person or class, should be exempt from this chapter, whether the person or class is covered by requirements imposed under federal law on a money-service business. new text end

Sec. 58.

new text begin [53B.71] VIRTUAL CURRENCY BUSINESS ACTIVITY; CONDITIONS PRECEDENT. new text end

new text begin (a) A person may not engage in virtual-currency business activity, or hold itself out as being able to engage in virtual-currency business activity, with or on behalf of another person unless the person is: new text end

new text begin (1) licensed in Minnesota by the commissioner under section 53B.40; or new text end

new text begin (2) exempt from licensing under section 53B.29. new text end

new text begin (b) A person that is licensed to engage in virtual-currency business activity is engaged in the business of money transmission and is subject to the requirements of this chapter. new text end

Sec. 59.

new text begin [53B.72] REQUIRED DISCLOSURES. new text end

new text begin (a) A licensee that engages in virtual currency business activity must provide to a person who uses the licensee's products or services the disclosures required by paragraph (b) and any additional disclosure the commissioner by administrative rule determines reasonably necessary to protect persons. The commissioner must determine by administrative rule the time and form required for disclosure. A disclosure required by this section must be made separately from any other information provided by the licensee and in a clear and conspicuous manner in a record the person may keep. A licensee may propose for the commissioner's approval alternate disclosures as more appropriate for the licensee's virtual-currency business activity with or on behalf of persons. new text end

new text begin (b) Before establishing a relationship with a person, a licensee must disclose, to the extent applicable to the virtual-currency business activity the licensee undertakes with the person: new text end

new text begin (1) a schedule of fees and charges the licensee may assess, the manner by which fees and charges are calculated if the fees and charges are not set in advance and disclosed, and the timing of the fees and charges; new text end

new text begin (2) whether the product or service provided by the licensee is covered by: new text end

new text begin (i) a form of insurance or is otherwise guaranteed against loss by an agency of the United States: new text end

new text begin (A) up to the full United States dollar equivalent of virtual currency purchased from the licensee or for control of virtual currency by the licensee as of the date of the placement or purchase, including the maximum amount provided by insurance under the Federal Deposit Insurance Corporation or otherwise available from the Securities Investor Protection Corporation; or new text end

new text begin (B) if not provided at the full United States dollar equivalent of virtual currency purchased from the licensee or for control of virtual currency by the licensee, the maximum amount of coverage for each person expressed in the United States dollar equivalent of the virtual currency; or new text end

new text begin (ii) private insurance against theft or loss, including cyber theft or theft by other means; new text end

new text begin (3) the irrevocability of a transfer or exchange and any exception to irrevocability; new text end

new text begin (4) a description of: new text end

new text begin (i) liability for an unauthorized, mistaken, or accidental transfer or exchange; new text end

new text begin (ii) the person's responsibility to provide notice to the licensee of the transfer or exchange; new text end

new text begin (iii) the basis for any recovery by the person from the licensee; new text end

new text begin (iv) general error-resolution rights applicable to the transfer or exchange; and new text end

new text begin (v) the method for the person to update the person's contact information with the licensee; new text end

new text begin (5) that the date or time when the transfer or exchange is made and the person's account is debited may differ from the date or time when the person initiates the instruction to make the transfer or exchange; new text end

new text begin (6) whether the person has a right to stop a preauthorized payment or revoke authorization for a transfer, and the procedure to initiate a stop-payment order or revoke authorization for a subsequent transfer; new text end

new text begin (7) the person's right to receive a receipt, trade ticket, or other evidence of the transfer or exchange; new text end

new text begin (8) the person's right to at least 30 days' prior notice of a change in the licensee's fee schedule, other terms and conditions of operating the licensee's virtual-currency business activity with the person, and the policies applicable to the person's account; and new text end

new text begin (9) that virtual currency is not money. new text end

new text begin (c) Except as otherwise provided in paragraph (d), at the conclusion of a virtual-currency transaction with or on behalf of a person, a licensee must provide the person a confirmation in a record. The record must contain: new text end

new text begin (1) the name and contact information of the licensee, including information the person may need to ask a question or file a complaint; new text end

new text begin (2) the type, value, date, precise time, and amount of the transaction; and new text end

new text begin (3) the fee charged for the transaction, including any charge for conversion of virtual currency to money, bank credit, or other virtual currency. new text end

new text begin (d) If a licensee discloses that it provides a daily confirmation in the initial disclosure under paragraph (c), the licensee may elect to provide a single, daily confirmation for all transactions with or on behalf of a person on that day instead of a per-transaction confirmation. new text end

Sec. 60.

new text begin [53B.73] PROPERTY INTERESTS AND ENTITLEMENTS TO VIRTUAL CURRENCY. new text end

new text begin (a) A licensee that has control of virtual currency for one or more persons must maintain control of virtual currency in each type of virtual currency sufficient to satisfy the aggregate entitlements of the persons to the type of virtual currency. new text end

new text begin (b) If a licensee violates paragraph (a), the property interests of the persons in the virtual currency are pro rata property interests in the type of virtual currency to which the persons are entitled, without regard to the time the persons became entitled to the virtual currency or the licensee obtained control of the virtual currency. new text end

new text begin (c) The virtual currency referred to in this section is: new text end

new text begin (1) held for the persons entitled to the virtual currency; new text end

new text begin (2) not property of the licensee; new text end

new text begin (3) not subject to the claims of creditors of the licensee; and new text end

new text begin (4) a permissible investment under this chapter. new text end

Sec. 61.

new text begin [53B.74] VIRTUAL CURRENCY BUSINESS ACTIVITIES; ADDITIONAL REQUIREMENTS. new text end

new text begin (a) A licensee engaged in virtual currency business activities may include virtual currency in the licensee's calculation of tangible net worth, by measuring the average value of the virtual currency in United States dollar equivalent over the prior six months, excluding control of virtual currency for a person entitled to the protections under section 53B.73. new text end

new text begin (b) A licensee must maintain, for all virtual-currency business activity with or on behalf of a person five years after the date of the activity, a record of: new text end

new text begin (1) each of the licensee's transactions with or on behalf of the person, or for the licensee's account in Minnesota, including: new text end

new text begin (i) the identity of the person; new text end

new text begin (ii) the form of the transaction; new text end

new text begin (iii) the amount, date, and payment instructions given by the person; and new text end

new text begin (iv) the account number, name, and United States Postal Service address of the person, and, to the extent feasible, other parties to the transaction; new text end

new text begin (2) the aggregate number of transactions and aggregate value of transactions by the licensee with or on behalf of the person and for the licensee's account in this state, expressed in the United States dollar equivalent of the virtual currency for the previous 12 calendar months; new text end

new text begin (3) each transaction in which the licensee exchanges one form of virtual currency for money or another form of virtual currency with or on behalf of the person; new text end

new text begin (4) a general ledger posted at least monthly that lists all of the licensee's assets, liabilities, capital, income, and expenses; new text end

new text begin (5) each business-call report the licensee is required to create or provide to the department or NMLS; new text end

new text begin (6) bank statements and bank reconciliation records for the licensee and the name, account number, and United States Postal Service address of each bank the licensee uses to conduct virtual-currency business activity with or on behalf of the person; new text end

new text begin (7) a report of any dispute with the person; and new text end

new text begin (8) a report of any virtual-currency business activity transaction with or on behalf of a person which the licensee was unable to complete. new text end

new text begin (c) A licensee must maintain records required by paragraph (b) in a form that enables the commissioner to determine whether the licensee is in compliance with this chapter, any court order, and law of Minnesota other than this chapter. new text end

Sec. 62.

Minnesota Statutes 2022, section 56.131, subdivision 1, is amended to read:

Subdivision 1.

Interest rates and charges.

(a) On any loan in a principal amount not exceeding $100,000 or 15 percent of a Minnesota corporate licensee's capital stock and surplus as defined in section 53.015, if greater, a licensee may contract for and receive interest, finance charges, and other charges as provided in section 47.59.

new text begin (b) A licensee making a loan that is a consumer small loan, as defined in section 47.60, subdivision 1, paragraph (a), must comply with section 47.60. A licensee making a loan that is a consumer short-term loan, as defined in section 47.601, subdivision 1, paragraph (d), must comply with section 47.601. new text end

deleted text begin (b)deleted text end new text begin (c)new text end With respect to a loan secured by an interest in real estate, and having a maturity of more than 60 months, the original schedule of installment payments must fully amortize the principal and interest on the loan. The original schedule of installment payments for any other loan secured by an interest in real estate must provide for payment amounts that are sufficient to pay all interest scheduled to be due on the loan.

deleted text begin (c)deleted text end new text begin (d)new text end A licensee may contract for and collect a delinquency charge as provided for in section 47.59, subdivision 6, paragraph (a), clause (4).

deleted text begin (d)deleted text end new text begin (e)new text end A licensee may grant extensions, deferments, or conversions to interest-bearing as provided in section 47.59, subdivision 5.

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective August 1, 2023, and applies to consumer small loans and consumer short-term loans originated on or after that date. new text end

Sec. 63.

new text begin [58.20] DEFINITIONS. new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of this section to section 58.23, the terms defined in this section have the meanings given. new text end

new text begin Subd. 2. new text end

new text begin Allowable assets for liquidity. new text end

new text begin "Allowable assets for liquidity" means assets that may be used to satisfy the liquidity requirements under section 58.22, including: new text end

new text begin (1) unrestricted cash and cash equivalents; and new text end

new text begin (2) unencumbered investment grade assets held for sale or trade, including agency mortgage-backed securities, obligations of government-sponsored enterprises, and United States Treasury obligations. new text end

new text begin Subd. 3. new text end

new text begin Board of directors. new text end

new text begin "Board of directors" means the formal body established by a covered institution that is responsible for corporate governance and compliance with sections 58.21 to 58.23. new text end

new text begin Subd. 4. new text end

new text begin Corporate governance. new text end

new text begin "Corporate governance" means the structure of the covered institution and how the covered institution is managed, including the corporate rules, policies, processes, and practices used to oversee and manage the covered institution. new text end

new text begin Subd. 5. new text end

new text begin Covered institution. new text end

new text begin "Covered institution" means a mortgage servicer that services or subservices for others at least 2,000 or more residential mortgage loans in the United States, excluding whole loans owned, and loans being interim serviced prior to sale as of the most recent calendar year end, reported on the NMLS mortgage call report. new text end

new text begin Subd. 6. new text end

new text begin External audit. new text end

new text begin "External audit" means the formal report, prepared by an independent certified public accountant, expressing an opinion on whether the financial statements are: new text end

new text begin (1) presented fairly, in all material aspects, in accordance with the applicable financial reporting framework; and new text end

new text begin (2) inclusive of an evaluation of the adequacy of a company's internal control structure. new text end

new text begin Subd. 7. new text end

new text begin Government-sponsored enterprises. new text end

new text begin "Government-sponsored enterprises" means the Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation. new text end

new text begin Subd. 8. new text end

new text begin Interim serviced prior to sale. new text end

new text begin "Interim serviced prior to sale" means the collection of a limited number of contractual mortgage payments immediately after origination on loans held for sale but no longer than a period of ninety days prior to the loans being sold into the secondary market. new text end

new text begin Subd. 9. new text end

new text begin Internal audit. new text end

new text begin "Internal audit" means the internal activity of performing independent and objective assurance and consulting to evaluate and improve the effectiveness of company operations, risk management, internal controls, and governance processes. new text end

new text begin Subd. 10. new text end

new text begin Mortgage-backed security. new text end

new text begin "Mortgage-backed security" means a financial instrument, often debt securities, collateralized by residential mortgages. new text end

new text begin Subd. 11. new text end

new text begin Mortgage call report. new text end

new text begin "Mortgage call report" means the quarterly or annual report of residential real estate loan origination, servicing, and financial information completed by companies licensed in NMLS. new text end

new text begin Subd. 12. new text end

new text begin Mortgage servicing rights. new text end

new text begin "Mortgage servicing rights" means the contractual right to service a residential mortgage loan on behalf of the owner of the associated mortgage in exchange for compensation specified in the servicing contract. new text end

new text begin Subd. 13. new text end

new text begin Mortgage servicing rights investor. new text end

new text begin "Mortgage servicing rights investor" or "master servicer" means an entity that (1) invests in and owns mortgage servicing rights; and (2) relies on subservicers to administer the loans on the mortgage servicing rights investor's behalf. new text end

new text begin Subd. 14. new text end

new text begin Nationwide Multistate Licensing System. new text end

new text begin "Nationwide Multistate Licensing System" or "NMLS" has the meaning given in section 58A.02, subdivision 8. new text end

new text begin Subd. 15. new text end

new text begin Operating liquidity. new text end

new text begin "Operating liquidity" means the money necessary for an entity to perform normal business operations, including payment of rent, salaries, interest expenses, and other typical expenses associated with operating the entity. new text end

new text begin Subd. 16. new text end

new text begin Residential mortgage loans serviced. new text end

new text begin "Residential mortgage loans serviced" means the specific portfolio or portfolios of residential mortgage loans for which a licensee is contractually responsible to the owner or owners of the mortgage loans for the defined servicing activities. new text end

new text begin Subd. 17. new text end

new text begin Reverse mortgage. new text end

new text begin "Reverse mortgage" has the meaning given in section 47.58, subdivision 1, paragraph (a). new text end

new text begin Subd. 18. new text end

new text begin Risk management assessment. new text end

new text begin "Risk management assessment" means the functional evaluations performed under the risk management program and the reports provided to the board of directors under the relevant governance protocol. new text end

new text begin Subd. 19. new text end

new text begin Risk management program. new text end

new text begin "Risk management program" means the policies and procedures designed to identify, measure, monitor, and mitigate risk commensurate with the covered institution's size and complexity. new text end

new text begin Subd. 20. new text end

new text begin Servicer. new text end

new text begin "Servicer" has the meaning given in section 58.02, subdivision 20. new text end

new text begin Subd. 21. new text end

new text begin Servicing liquidity. new text end

new text begin "Servicing liquidity" or "liquidity" means the financial resources necessary to manage liquidity risk arising from servicing functions required in acquiring and financing mortgage servicing rights; hedging costs, including margin calls, associated with the mortgage servicing rights asset and financing facilities; and advances or costs of advance financing for principal, interest, taxes, insurance, and any other servicing related advances. new text end

new text begin Subd. 22. new text end

new text begin Subservicer. new text end

new text begin "Subservicer" means the entity performing routine administration of residential mortgage loans as the agent of a servicer or mortgage servicing rights investor under the terms of a subservicing contract. new text end

new text begin Subd. 23. new text end

new text begin Subservicing for others. new text end

new text begin "Subservicing for others" means the contractual activities performed by subservicers on behalf of a servicer or mortgage servicing rights investor. new text end

new text begin Subd. 24. new text end

new text begin Tangible net worth. new text end

new text begin "Tangible net worth" means total equity less receivables due from related entities, less goodwill and other intangibles, less pledged assets. new text end

new text begin Subd. 25. new text end

new text begin Whole loans. new text end

new text begin "Whole loans" means a loan where a mortgage and the underlying credit risk is owned and held on a balance sheet of the entity possessing all ownership rights. new text end

Sec. 64.

new text begin [58.21] APPLICABILITY; EXCLUSIONS. new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin Sections 58.20 to 58.23 apply to covered institutions. For entities within a holding company or an affiliated group of companies, sections 58.20 to 58.23 apply at the covered institution level. new text end

new text begin Subd. 2. new text end

new text begin Exclusions. new text end

new text begin (a) Sections 58.20 to 58.23 do not apply to (1) persons exempt from licensing under sections 58.04 and 58.05, and (2) an institution of the Farm Credit System established and authorized in accordance with the Farm Credit Act of 1971, as amended, United States Code, title 12, section 2001 et seq. new text end

new text begin (b) Section 58.22 does not apply to (1) servicers that solely own or conduct reverse mortgage servicing, or (2) the reverse mortgage portfolio administered by a covered institution. new text end

Sec. 65.

new text begin [58.22] FINANCIAL CONDITION. new text end

new text begin Subdivision 1. new text end

new text begin Compliance required. new text end

new text begin A covered institution must maintain capital and liquidity in compliance with this section. new text end

new text begin Subd. 2. new text end

new text begin Generally accepted new text end new text begin accounting principles. new text end

new text begin For the purposes of complying with the capital and liquidity requirements of this section, all financial data must be determined in accordance with generally accepted accounting principles. new text end

new text begin Subd. 3. new text end

new text begin Federal Housing Finance Agency eligibility requirements; policies and procedures. new text end

new text begin (a) A covered institution that meets the Federal Housing Finance Agency eligibility requirements for enterprise single-family sellers and servicers with respect to capital, net worth ratio, and liquidity meets the requirements of subdivisions 1 and 2, regardless of whether the servicer is approved for government-sponsored enterprise servicing. new text end

new text begin (b) A covered institution must maintain written policies and procedures that implement the capital and servicing liquidity requirements of this section. The policies and procedures implemented pursuant to this paragraph must include a sustainable written methodology to satisfy the requirements of paragraph (a) and must be made available to the commissioner upon request. new text end

new text begin Subd. 4. new text end

new text begin Operating liquidity. new text end

new text begin (a) A covered institution must maintain sufficient allowable assets for liquidity, in addition to the amounts required for servicing liquidity, to cover normal business operations. new text end

new text begin (b) Covered institutions must have sound cash management and business operating plans that (1) match the complexity of the institution; and (2) ensure normal business operations. new text end

new text begin (c) Management must develop, establish, and implement plans, policies, and procedures to maintain operating liquidity sufficient for the ongoing needs of the covered institution. Plans, policies, and procedures implemented pursuant to this paragraph must contain sustainable, written methodologies to maintain sufficient operating liquidity and must be made available to the commissioner upon request. new text end

Sec. 66.

new text begin [58.23] CORPORATE GOVERNANCE. new text end

new text begin Subdivision 1. new text end

new text begin Board of directors required. new text end

new text begin A covered institution must establish and maintain a board of directors that is responsible for oversight of the covered institution. new text end

new text begin Subd. 2. new text end

new text begin Board of directors; alternative. new text end

new text begin If a covered institution has not received approval to service loans by a government-sponsored enterprise or the Government National Mortgage Association, or if a government-sponsored enterprise or the Government National Mortgage Association has granted approval for a board of directors alternative, the covered institution may establish a similar body constituted to exercise oversight and fulfill the responsibilities specified under subdivision 3. new text end

new text begin Subd. 3. new text end

new text begin Board of directors; responsibilities. new text end

new text begin The board of directors must: new text end

new text begin (1) establish a written corporate governance framework, including appropriate internal controls designed to monitor corporate governance and assess compliance with the corporate governance framework, and must make the corporate governance framework available to the commissioner upon request; new text end

new text begin (2) monitor and ensure the covered institution complies with (i) the corporate governance framework; and (ii) sections 58.20 to this section; and new text end

new text begin (3) perform accurate and timely regulatory reporting, including filing the mortgage call report. new text end

new text begin Subd. 4. new text end

new text begin Internal audit. new text end

new text begin The board of directors must establish internal audit requirements that (1) are appropriate for the size, complexity, and risk profile of the servicer; and (2) ensure appropriate independence to provide a reliable evaluation of the servicer's internal control structure, risk management, and governance. The board-established internal audit requirements and the results of internal audits must be made available to the commissioner upon request. new text end

new text begin Subd. 5. new text end

new text begin External audit. new text end

new text begin (a) A covered institution must receive an external audit, including audited financial statements and audit reports, that is conducted by an independent public accountant annually. The external audit must be made available to the commissioner upon request. new text end

new text begin (b) The external audit must include, at a minimum: new text end

new text begin (1) annual financial statements, including (i) a balance sheet; (ii) a statement of operations and income statement; and (iii) cash flows, including notes and supplemental schedules prepared in accordance with generally accepted accounting principles; new text end

new text begin (2) an assessment of the internal control structure; new text end

new text begin (3) a computation of tangible net worth; new text end

new text begin (4) validation of mortgage servicing rights valuation and reserve methodology, if applicable; new text end

new text begin (5) verification of adequate fidelity and errors and omissions insurance; and new text end

new text begin (6) testing of controls related to risk management activities, including compliance and stress testing, if applicable. new text end

new text begin Subd. 6. new text end

new text begin Risk management. new text end

new text begin (a) Under oversight by the board of directors, a covered institution must establish a risk management program that identifies, measures, monitors, and controls risk commensurate with the covered institution's size and complexity. The risk management program must have appropriate processes and models in place to measure, monitor, and mitigate financial risks and changes to the servicer's risk profile and assets being serviced. new text end

new text begin (b) The risk management program must be scaled to the size and complexity of the organization, including but not limited to: new text end

new text begin (1) the potential that a borrower or counterparty fails to perform on an obligation; new text end

new text begin (2) the potential that the servicer (i) is unable to meet the servicer's obligations as the obligations come due as a result of an inability to liquidate assets or obtain adequate funding; or (ii) cannot easily unwind or offset specific exposures; new text end

new text begin (3) the risk resulting from (i) inadequate or failed internal processes, people, and systems; or (ii) external events; new text end

new text begin (4) the risk to the servicer's condition resulting from adverse movements in market rates or prices; new text end

new text begin (5) the risk of regulatory sanctions, fines, penalties, or losses resulting from the failure to comply with laws, rules, regulations, or other supervisory requirements that apply to the servicer; new text end

new text begin (6) the potential that legal proceedings against the institution resulting in unenforceable contracts, lawsuits, legal sanctions, or adverse judgments can disrupt or otherwise negatively affect the servicer's operations or condition; and new text end

new text begin (7) the risk to earnings and capital arising from negative publicity regarding the servicer's business practices. new text end

new text begin Subd. 7. new text end

new text begin Risk management assessment. new text end

new text begin A covered institution must conduct a risk management assessment on an annual basis. The risk management assessment must conclude with a formal report to the board of directors and must be made available to the commissioner upon request. A covered institution must maintain evidence of risk management activities throughout the year and must include the evidence of risk management activities as part of the report. The risk management assessment must include issue findings and the response or action taken to address the issue findings. new text end

Sec. 67.

new text begin [58B.011] STUDENT LOAN ADVOCATE. new text end

new text begin Subdivision 1. new text end

new text begin Designation of a student loan advocate. new text end

new text begin The commissioner of commerce must designate a student loan advocate within the Department of Commerce to provide timely assistance to borrowers and to effectuate this chapter. new text end

new text begin Subd. 2. new text end

new text begin Duties. new text end

new text begin The student loan advocate has the following duties: new text end

new text begin (1) receive, review, and attempt to resolve complaints from borrowers, including but not limited to attempts to resolve borrower complaints in collaboration with institutions of higher education, student loan servicers, and any other participants in student loan lending; new text end

new text begin (2) compile and analyze data on borrower complaints received under clause (1); new text end

new text begin (3) help borrowers understand the rights and responsibilities under the terms of student loans; new text end

new text begin (4) provide information to the public, state agencies, legislators, and relevant stakeholders regarding the problems and concerns of borrowers; new text end

new text begin (5) make recommendations to resolve the problems of borrowers; new text end

new text begin (6) analyze and monitor the development and implementation of federal, state, and local laws, regulations, and policies relating to borrowers, and recommend any changes deemed necessary; new text end

new text begin (7) review the complete student loan history for any borrower who has provided written consent to conduct the review; new text end

new text begin (8) increase public awareness that the advocate is available to assist in resolving the student loan servicing concerns of potential and actual borrowers, institutions of higher education, student loan servicers, and any other participant in student loan lending; and new text end

new text begin (9) take other actions as necessary to fulfill the duties of the advocate, as provided under this section. new text end

new text begin Subd. 3. new text end

new text begin Student loan education course. new text end

new text begin The advocate must establish and maintain a borrower education course. The course must include educational presentations and materials regarding important topics in student loans, including but not limited to: new text end

new text begin (1) the meaning of important terminology used in student lending; new text end

new text begin (2) documentation requirements; new text end

new text begin (3) monthly payment obligations; new text end

new text begin (4) income-based repayment options; new text end

new text begin (5) the availability of state and federal loan forgiveness programs; and new text end

new text begin (6) disclosure requirements. new text end

new text begin Subd. 4. new text end

new text begin Reporting. new text end

new text begin By January 15 of each odd-numbered year, the advocate must report to the legislative committees with primary jurisdiction over commerce and higher education. The report must describe the advocate's implementation of this section, the outcomes achieved by the advocate during the previous two years, and recommendations to improve the regulation of student loan servicers. new text end

Sec. 68.

Minnesota Statutes 2022, section 80A.50, is amended to read:

80A.50 SECTION 302; FEDERAL COVERED SECURITIES; SMALL CORPORATE OFFERING REGISTRATION.

(a) Federal covered securities.

(1) Required filing of records. With respect to a federal covered security, as defined in Section 18(b)(2) of the Securities Act of 1933 (15 U.S.C. Section 77r(b)(2)), that is not otherwise exempt under sections 80A.45 through 80A.47, a rule adopted or order issued under this chapter may require the filing of any or all of the following records:

(A) before the initial offer of a federal covered security in this state, all records that are part of a federal registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933 and a consent to service of process complying with section 80A.88 signed by the issuer;

(B) after the initial offer of the federal covered security in this state, all records that are part of an amendment to a federal registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933; and

(C) to the extent necessary or appropriate to compute fees, a report of the value of the federal covered securities sold or offered to persons present in this state, if the sales data are not included in records filed with the Securities and Exchange Commission.

(2) Notice filing effectiveness and renewal. A notice filing under subsection (a) is effective for one year commencing on the later of the notice filing or the effectiveness of the offering filed with the Securities and Exchange Commission. On or before expiration, the issuer may renew a notice filing by filing a copy of those records filed by the issuer with the Securities and Exchange Commission that are required by rule or order under this chapter to be filed. A previously filed consent to service of process complying with section 80A.88 may be incorporated by reference in a renewal. A renewed notice filing becomes effective upon the expiration of the filing being renewed.

(3) Notice filings for federal covered securities under section 18(b)(4)(D). With respect to a security that is a federal covered security under Section 18(b)(4)(D) of the Securities Act of 1933 (15 U.S.C. Section 77r(b)(4)(D)), a rule under this chapter may require a notice filing by or on behalf of an issuer to include a copy of Form D, including the Appendix, as promulgated by the Securities and Exchange Commission, and a consent to service of process complying with section 80A.88 signed by the issuer not later than 15 days after the first sale of the federal covered security in this state.

(4) Stop orders. Except with respect to a federal security under Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. Section 77r(b)(1)), if the administrator finds that there is a failure to comply with a notice or fee requirement of this section, the administrator may issue a stop order suspending the offer and sale of a federal covered security in this state. If the deficiency is corrected, the stop order is void as of the time of its issuance and no penalty may be imposed by the administrator.

(b) Small corporation offering registration.

(1) Registration required. A security meeting the conditions set forth in this section may be registered as set forth in this section.

(2) Availability. Registration under this section is available only to the issuer of securities and not to an affiliate of the issuer or to any other person for resale of the issuer's securities. The issuer must be organized under the laws of one of the states or possessions of the United States. The securities offered must be exempt from registration under the Securities Act of 1933 pursuant to Rule 504 of Regulation D (15 U.S.C. Section 77c).

(3) Disqualification. Registration under this section is not available to any of the following issuers:

(A) an issuer subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934;

(B) an investment company;

(C) a development stage company that either has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies or other entity or person;

(D) an issuer if the issuer or any of its predecessors, officers, directors, governors, partners, ten percent stock or equity holders, promoters, or any selling agents of the securities to be offered, or any officer, director, governor, or partner of the selling agent:

(i) has filed a registration statement that is the subject of a currently effective registration stop order entered under a federal or state securities law within five years before the filing of the small corporate offering registration application;

(ii) has been convicted within five years before the filing of the small corporate offering registration application of a felony or misdemeanor in connection with the offer, purchase, or sale of a security or a felony involving fraud or deceit, including, but not limited to, forgery, embezzlement, obtaining money under false pretenses, larceny, or conspiracy to defraud;

(iii) is currently subject to a state administrative enforcement order or judgment entered by a state securities administrator or the Securities and Exchange Commission within five years before the filing of the small corporate offering registration application, or is subject to a federal or state administrative enforcement order or judgment in which fraud or deceit, including, but not limited to, making untrue statements of material facts or omitting to state material facts, was found and the order or judgment was entered within five years before the filing of the small corporate offering registration application;

(iv) is currently subject to an order, judgment, or decree of a court of competent jurisdiction temporarily restraining or enjoining, or is subject to an order, judgment, or decree of a court of competent jurisdiction permanently restraining or enjoining the party from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or involving the making of a false filing with a state or with the Securities and Exchange Commission entered within five years before the filing of the small corporate offering registration application; or

(v) is subject to a state's administrative enforcement order, or judgment that prohibits, denies, or revokes the use of an exemption for registration in connection with the offer, purchase, or sale of securities,

(I) except that clauses (i) to (iv) do not apply if the person subject to the disqualification is duly licensed or registered to conduct securities-related business in the state in which the administrative order or judgment was entered against the person or if the dealer employing the party is licensed or registered in this state and the form BD filed in this state discloses the order, conviction, judgment, or decree relating to the person, and

(II) except that the disqualification under this subdivision is automatically waived if the state securities administrator or federal agency that created the basis for disqualification determines upon a showing of good cause that it is not necessary under the circumstances to deny the registration.

(4) Filing and effectiveness of registration statement. A small corporate offering registration statement must be filed with the administrator. If no stop order is in effect and no proceeding is pending under section 80A.54, such registration statement shall become effective automatically at the close of business on the 20th day after filing of the registration statement or the last amendment of the registration statement or at such earlier time as the administrator may designate by rule or order. For the purposes of a nonissuer transaction, other than by an affiliate of the issuer, all outstanding securities of the same class identified in the small corporate offering registration statement as a security registered under this chapter are considered to be registered while the small corporate offering registration statement is effective. A small corporate offering registration statement is effective for one year after its effective date or for any longer period designated in an order under this chapter. A small corporate offering registration statement may be withdrawn only with the approval of the administrator.

(5) Contents of registration statement. A small corporate offering registration statement under this section shall be on Form U-7, including exhibits required by the instructions thereto, as adopted by the North American Securities Administrators Association, or such alternative form as may be designated by the administrator by rule or order and must include:

(A) a consent to service of process complying with section 80A.88;

(B) a statement of the type and amount of securities to be offered and the amount of securities to be offered in this state;

(C) a specimen or copy of the security being registered, unless the security is uncertificated, a copy of the issuer's articles of incorporation and bylaws or their substantial equivalents in effect, and a copy of any indenture or other instrument covering the security to be registered;

(D) a signed or conformed copy of an opinion of counsel concerning the legality of the securities being registered which states whether the securities, when sold, will be validly issued, fully paid, and nonassessable and, if debt securities, binding obligations of the issuer;

(E) the states (i) in which the securities are proposed to be offered; (ii) in which a registration statement or similar filing has been made in connection with the offering including information as to effectiveness of each such filing; and (iii) in which a stop order or similar proceeding has been entered or in which proceedings or actions seeking such an order are pending;

(F) a copy of the offering document proposed to be delivered to offerees; and

(G) a copy of any other pamphlet, circular, form letter, advertisement, or other sales literature intended as of the effective date to be used in connection with the offering and any solicitation of interest used in compliance with section 80A.46(17)(B).

(6) Copy to purchaser. A copy of the offering document as filed with the administrator must be delivered to each person purchasing the securities prior to sale of the securities to such person.

new text begin (c) Offering limit. Offers and sales of securities under a small corporate offering registration as set forth in this section are allowed up to the limit prescribed by Code of Federal Regulations, title 17, part 230.504(b)(2), as amended. new text end

Sec. 69.

new text begin [332.71] DEFINITIONS. new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 332.71 to 332.75, the definitions in this section have the meanings given them. new text end

new text begin Subd. 2. new text end

new text begin Coerced debt. new text end

new text begin (a) "Coerced debt" means all or a portion of debt in a debtor's name that has been incurred as a result of: new text end

new text begin (1) the use of the debtor's personal information without the debtor's knowledge, authorization, or consent; new text end

new text begin (2) the use or threat of force, intimidation, undue influence, harassment, fraud, deception, coercion, or other similar means against the debtor; or new text end

new text begin (3) economic abuse perpetrated against the debtor. new text end

new text begin (b) Coerced debt does not include secured debt. new text end

new text begin Subd. 3. new text end

new text begin Creditor. new text end

new text begin "Creditor" means a person, or the person's successor, assignee, or agent, claiming to own or have the right to collect a debt owed by the debtor. new text end

new text begin Subd. 4. new text end

new text begin Debtor. new text end

new text begin "Debtor" means a person who (1) is a victim of domestic abuse, harassment, or sex or labor trafficking, and (2) owes coerced debt. new text end

new text begin Subd. 5. new text end

new text begin Documentation. new text end

new text begin "Documentation" means a writing that identifies a debt or a portion of a debt as coerced debt, describes the circumstances under which the coerced debt was incurred, and takes the form of: new text end

new text begin (1) a police report; new text end

new text begin (2) a Federal Trade Commission identity theft report; new text end

new text begin (3) an order in a dissolution proceeding under chapter 518 that declares that one or more debts are coerced; or new text end

new text begin (4) a sworn written certification. new text end

new text begin Subd. 6. new text end

new text begin Domestic abuse. new text end

new text begin "Domestic abuse" has the meaning given in section 518B.01, subdivision 2. new text end

new text begin Subd. 7. new text end

new text begin Economic abuse. new text end

new text begin "Economic abuse" means behavior in the context of a domestic relationship that controls, restrains, restricts, impairs, or interferes with the ability of a victim of domestic abuse, harassment, or sex or labor trafficking to acquire, use, or maintain economic resources, including but not limited to: new text end

new text begin (1) withholding or restricting access to, or the acquisition of, money, assets, credit, or financial information; new text end

new text begin (2) interfering with the victim's ability to work and earn wages; or new text end

new text begin (3) exerting undue influence over a person's financial and economic behavior or decisions. new text end

new text begin Subd. 8. new text end

new text begin Harassment. new text end

new text begin "Harassment" has the meaning given in section 609.748. new text end

new text begin Subd. 9. new text end

new text begin Labor trafficking. new text end

new text begin "Labor trafficking" has the meaning given in section 609.281, subdivision 5. new text end

new text begin Subd. 10. new text end

new text begin Qualified third-party professional. new text end

new text begin "Qualified third-party professional" means: new text end

new text begin (1) a domestic abuse advocate, as defined under section 595.02, subdivision 1, paragraph (l); new text end

new text begin (2) a sexual assault counselor, as defined under section 595.02, subdivision 1, paragraph (k); new text end

new text begin (3) a licensed health care provider, mental health care provider, social worker, or marriage and family therapist; or new text end

new text begin (4) a nonprofit organization in Minnesota that provides direct assistance to victims of domestic abuse, sexual assault, or sex or labor trafficking. new text end

new text begin Subd. 11. new text end

new text begin Sex trafficking. new text end

new text begin "Sex trafficking" has the meaning given in section 609.321, subdivision 7a. new text end

new text begin Subd. 12. new text end

new text begin Sworn written certification. new text end

new text begin "Sworn written certification" means a statement by a qualified third-party professional in the following form: new text end

new text begin CERTIFICATION OF QUALIFIED THIRD-PARTY PROFESSIONAL new text end

new text begin I, .................... (name of qualified third-party professional), do hereby certify under penalty of perjury as follows: new text end

new text begin 1. I am a licensed health care provider, mental health care provider, social worker, marriage and family therapist, domestic abuse advocate, as that term is defined in Minnesota Statutes, section 595.02, subdivision 1, paragraph (l), or sexual assault counselor, as that term is defined in Minnesota Statutes, section 595.02, subdivision 1, paragraph (k), or a staff member of a nonprofit organization that provides direct assistance to victims of domestic abuse, sexual assault, or sex or labor trafficking, who has had in-person contact or face-to-face contact through an electronic medium with .................... (name of debtor). new text end

new text begin 2. Based on my professional interactions with the debtor and information presented to me in my professional capacity, I have a reasonable basis to believe .................... (name of debtor) is a victim of domestic abuse, harassment, sex trafficking or labor trafficking and has incurred all or a portion of debt that is coerced debt, as that term is defined in Minnesota Statutes, section 332.71, subdivision 2. new text end

new text begin 3. Based on my professional interactions with the debtor and on information presented to me, I have reason to believe that the circumstances under which the coerced debt was incurred are as follows: new text end

new text begin 4. The following debts or portions of the debts have been identified to me as coerced: new text end

new text begin I attest that the foregoing is true and correct. new text end

new text begin (Printed name of qualified third party) new text end

new text begin (Signature of qualified third party) new text end

new text begin (Business address and business telephone) new text end

new text begin (Date) new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to all debts incurred on or after that date. new text end

Sec. 70.

new text begin [332.72] COERCED DEBT PROHIBITED. new text end

new text begin A person is prohibited from causing another person to incur coerced debt. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to all debts incurred on or after that date. new text end

Sec. 71.

new text begin [332.73] NOTICE TO CREDITOR OF COERCED DEBT. new text end

new text begin Subdivision 1. new text end

new text begin Notification. new text end

new text begin (a) Before taking an affirmative action under section 332.74, a debtor must, by certified mail, notify a creditor that the debt or a portion of a debt on which the creditor demands payment is coerced debt and request that the creditor cease all collection activity on the coerced debt. The notification and request must be in writing and include documentation. The creditor, within 30 days of the date the notification and request is received, must notify the debtor in writing of the creditor's decision to either immediately cease all collection activity or continue to pursue collection. new text end

new text begin (b) If a creditor ceases collection but subsequently decides to resume collection activity, the creditor must notify the debtor ten days prior to the date the collection activity resumes. new text end

new text begin (c) A debtor must not proceed with an action under section 332.74 until the 30-day period provided under paragraph (a) has expired. new text end

new text begin Subd. 2. new text end

new text begin Sale or assignment of coerced debt. new text end

new text begin A creditor may sell or assign a debt for which the creditor has been notified is coerced debt to another party if the creditor selling or assigning the debt includes notification to the buyer or assignee that the debtor has asserted the debt is coerced debt. new text end

new text begin Subd. 3. new text end

new text begin No inference upon cessation of collection activity. new text end

new text begin The fact that a creditor ceases collection activity under this section or section 332.74 does not create an inference or presumption regarding the validity or invalidity of a debt for which a debtor is liable or not liable. The exercise or nonexercise of rights under this section is not a waiver of any other debtor or creditor rights or defenses. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to all debts incurred on or after that date. new text end

Sec. 72.

new text begin [332.74] DEBTOR REMEDIES. new text end

new text begin Subdivision 1. new text end

new text begin Right to petition for declaration and injunction. new text end

new text begin A debtor alleging violation of section 332.72 may petition for equitable relief in the district court in the county where the debtor lives or where the coerced debt was incurred. The petition must include: new text end

new text begin (1) the notice to the creditor required under section 332.73, subdivision 1; new text end

new text begin (2) consistent with Rule 11 of the Minnesota Rules of General Practice, information identifying (i) the account or accounts associated with the coerced debt, and (ii) the person in whose name the debt was incurred; and new text end

new text begin (3) the identity and, if known, contact information of the person who caused the debtor to incur coerced debt, unless the debtor signs a sworn statement that disclosing the information is likely to result in domestic abuse or other harm to the debtor, the debtor's children, parents, other relatives, or a family pet. new text end

new text begin Subd. 2. new text end

new text begin Procedural safeguards. new text end

new text begin The court must take appropriate steps necessary to prevent abuse of the debtor or to the debtor, the debtor's children, parents, other relatives, or a family pet. For purposes of this subdivision, appropriate steps include but are not limited to sealing the file, marking the file as confidential, redacting personally identifiable information about the debtor, and directing that any deposition or evidentiary hearing be conducted remotely. new text end

new text begin Subd. 3. new text end

new text begin Relief. new text end

new text begin (a) If a debtor shows by a preponderance of the evidence that the debtor has been aggrieved by a violation of section 332.72 and the debtor has incurred coerced debt, the debtor is entitled to one or more of the following: new text end

new text begin (1) a declaratory judgment that the debt or portion of a debt is coerced debt; new text end

new text begin (2) an injunction prohibiting the creditor from (i) holding or attempting to hold the debtor liable for the debt or portion of a debt, or (ii) enforcing a judgment related to the coerced debt; and new text end

new text begin (3) an order dismissing any cause of action brought by the creditor to enforce or collect the coerced debt from the debtor or, if only a portion of the debt is established as coerced debt, an order directing that the judgment, if any, in the action be amended to reflect only the portion of the debt that is not coerced debt. new text end

new text begin (b) If the court orders relief for the debtor under paragraph (a), the court, after the creditor's motion has been served by United States mail to the last known address of the person who violated section 332.72, shall issue a judgment in favor of the creditor against the person in the amount of the debt or a portion thereof. new text end

new text begin (c) This subdivision applies regardless of the judicial district in which the creditor's action or the debtor's petition was filed. new text end

new text begin Subd. 4. new text end

new text begin Affirmative defense. new text end

new text begin In an action against a debtor to satisfy a debt, it is an affirmative defense that the debtor incurred coerced debt. new text end

new text begin Subd. 5. new text end

new text begin Burden. new text end

new text begin In any affirmative action taken under subdivision 1 or any affirmative defense asserted in subdivision 4, the debtor bears the burden to show by a preponderance of the evidence that the debtor incurred coerced debt. There is a presumption that the debtor has incurred coerced debt if the person alleged to have caused the debtor to incur the coerced debt has been criminally convicted, entered a guilty plea, or entered an Alford plea under section 609.27, 609.282, 609.322, or 609.527. new text end

new text begin Subd. 6. new text end

new text begin Statute of limitations tolled. new text end

new text begin (a) The statute of limitations under section 541.05 is tolled during the pendency of a proceeding instituted under this section. new text end

new text begin (b) A creditor is prohibited from filing a collection action regarding a debt that is the subject of a proceeding instituted under this section while the proceeding is pending. new text end

new text begin (c) If a debtor commences a proceeding under this section while a collection action is pending against the debtor regarding a debt that is subject to the proceeding, the court must immediately stay the collection action pending the disposition of the proceeding under this section. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to all debts incurred on or after that date. new text end

Sec. 73.

new text begin [332.75] CREDITOR REMEDIES. new text end

new text begin Nothing in sections 332.71 to 332.74 diminishes the rights of a creditor to seek payment recovery for a coerced debt from the person who caused the debtor to incur the coerced debt. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to all debts incurred on or after that date. new text end

Sec. 74.

new text begin UNAUDITED FINANCIAL STATEMENTS; RULEMAKING. new text end

new text begin The commissioner of commerce shall amend Minnesota Rules, part 2876.3021, subpart 2, to remove the prohibition on use of unaudited financial statements if the aggregate amount of all previous sales of securities by the applicant, exclusive of debt financing with banks and similar commercial lenders, exceeds $1,000,000. The commissioner of commerce may use the good cause exemption under Minnesota Statutes, section 14.388, subdivision 1, clause (3), to amend the rule under this section, and Minnesota Statutes, section 14.386, does not apply except as provided under Minnesota Statutes, section 14.388. new text end

Sec. 75.

new text begin MINNESOTA COUNCIL ON ECONOMIC EDUCATION; GRANTS. new text end

new text begin (a) The grants provided under article 1, section 3, to the Minnesota Council on Economic Education must be used by the council to: new text end

new text begin (1) provide professional development to Minnesota teachers of courses or content related to personal finance or consumer protection for students in grades 9 through 12; new text end

new text begin (2) support the direct-to-student ancillary personal finance programs that Minnesota teachers supervise and coach or that the Minnesota Council on Economic Education delivers directly to students; and new text end

new text begin (3) provide support to geographically diverse affiliated higher education-based centers for economic education engaged in financial literacy education as it pertains to financial literacy education initiatives, including those based at Minnesota State University Mankato, St. Cloud State University, and St. Catherine University, as their work relates to activities in clauses (1) and (2). new text end

new text begin (b) The Minnesota Council on Economic Education must prepare and submit reports to the commissioner of education in the form and manner prescribed by the commissioner that: new text end

new text begin (1) describe the number and type of in-person and online teacher professional development opportunities provided by the Minnesota Council on Economic Education or its affiliated state centers; new text end

new text begin (2) list the content, length, and location of the programs; new text end

new text begin (3) identify the number of preservice and licensed teachers receiving professional development through each of these opportunities; new text end

new text begin (4) summarize evaluations of professional opportunities for teachers; and new text end

new text begin (5) list the number, types, and summary evaluations of the direct-to-student ancillary personal finance programs that are supported with funds from the grant. new text end

new text begin (c) By February 15 of each year following the receipt of a grant, the Minnesota Council on Economic Education must provide a mid-year report to the commissioner of education and, on August 15 of each year following receipt of a grant, the Minnesota Council on Economic Education must prepare a year-end report according to the requirements of paragraph (b). The reports must be prepared and filed according to Minnesota Statutes, section 3.195. The commissioner may request additional information as necessary. new text end

Sec. 76.

new text begin REPEALER. new text end

new text begin (a) new text end new text begin Minnesota Statutes 2022, sections 53B.01; 53B.02; 53B.03; 53B.04; 53B.05; 53B.06; 53B.07; 53B.08; 53B.09; 53B.10; 53B.11; 53B.12; 53B.13; 53B.14; 53B.15; 53B.16; 53B.17; 53B.18; 53B.19; 53B.20; 53B.21; 53B.22; 53B.23; 53B.24; 53B.25; 53B.26; and 53B.27, subdivisions 1, 2, 5, 6, and 7, new text end new text begin are repealed. new text end

new text begin (b) new text end new text begin Minnesota Statutes 2022, section 48.10, new text end new text begin is repealed. new text end

new text begin (c) new text end new text begin Minnesota Rules, parts 2675.2610, subparts 1, 3, and 4; 2675.2620, subparts 1, 2, 3, 4, and 5; and 2675.2630, subpart 3, new text end new text begin are repealed. new text end

ARTICLE 4

COMMERCIAL REGULATION AND CONSUMER PROTECTION

Section 1.

Minnesota Statutes 2022, section 53C.01, is amended by adding a subdivision to read:

new text begin Subd. 4a. new text end

new text begin Global positioning system starter interrupt device. new text end

new text begin "Global positioning system starter interrupt device" or "GPS starter interrupt device" means a device installed on a motor vehicle by a motor vehicle dealer that enables an individual who is not in possession of the motor vehicle to remotely disable the motor vehicle's ignition. GPS starter interrupt device includes a device commonly referred to as a fuel or ignition kill switch. new text end

Sec. 2.

Minnesota Statutes 2022, section 53C.01, subdivision 12c, is amended to read:

Subd. 12c.

Theft deterrent device.

"Theft deterrent device" means the following devices:

(1) a vehicle alarm system;

(2) a window etch product;

(3) a body part marking product;

(4) a steering lock;new text begin ornew text end

(5) a pedal or ignition lockdeleted text begin ; ordeleted text end

deleted text begin (6) a fuel or ignition kill switchdeleted text end .

Sec. 3.

Minnesota Statutes 2022, section 53C.08, subdivision 1a, is amended to read:

Subd. 1a.

Disclosures required.

Prior to the execution of a retail installment contract, the seller shall provide to a buyer, and obtain the buyer's signature on, a written disclosure that sets forth the following information:

(1) a description and the total price of all items sold in the following categories if the contract includes a charge for the item:

(i) a service contract;

(ii) an insurance product;

(iii) a debt cancellation agreement;

(iv) a theft deterrent device; or

(v) a surface protection product;

(2) new text begin whether a GPS starter interrupt device is installed on the motor vehicle, regardless of whether the contract includes a charge for the GPS starter interrupt device;new text end

new text begin (3) new text end the amount that would be calculated under the contract as the regular installment payment if charges for the items referenced under clause (1) are not included in the contract;

deleted text begin (3)deleted text end new text begin (4)new text end the amount that would be calculated under the contract as the regular installment payment if charges for the items referenced under clause (1) are included in the contract; and

deleted text begin (4)deleted text end new text begin (5)new text end the disclosures required under this subdivision must be in at least ten-point type and must be contained in a single document that is separate from the retail installment contract and any other vehicle purchase documents.

Sec. 4.

Minnesota Statutes 2022, section 80E.041, subdivision 4, is amended to read:

Subd. 4.

Retail rate for labor.

(a) Compensation for warranty labor must equal the dealer's effective nonwarranty labor rate multiplied by the time deleted text begin allowances recognized by the manufacturer to compensate its dealers for warranty workdeleted text end new text begin guide used by the dealer for nonwarranty customer-paid service repair ordersnew text end . new text begin If no time guide exists for a warranty repair, compensation for warranty labor must equal the dealer's effective nonwarranty labor rate multiplied by the time actually spent to complete the repair order and must not be less than the time charged to retail customers for the same or similar work performed.new text end The effective nonwarranty labor rate is determined by dividing the total customer labor charges for qualifying nonwarranty repairs in the repair orders submitted under subdivision 2 by the total number of labor hours that generated those sales. Compensation for warranty labor must include deleted text begin reasonabledeleted text end new text begin allnew text end diagnostic time for repairs performed under this sectionnew text begin , including but not limited to all time spent communicating with the manufacturer's technical assistance or external manufacturer source in order to provide a warranty repair, and must not be less than the time charged to retail customers for the same or similar work performednew text end .

(b) A manufacturer may disapprove a dealer's effective nonwarranty labor rate if:

(1) the disapproval is provided to the dealer in writing;

(2) the disapproval is sent to the dealer within 30 days of the submission of the effective nonwarranty labor rate by the dealer to the manufacturer;

(3) the disapproval includes a reasonable substantiation that the effective nonwarranty labor rate submission is inaccurate, incomplete, or unreasonable in light of a comparison to the retail rate charged by other similarly situated franchised motor vehicle dealers in a comparable geographic area in the state offering the same line-make vehicles; and

(4) the manufacturer proposes an adjustment of the effective nonwarranty labor rate.

(c) If a manufacturer fails to approve or disapprove the rate within this time period, the rate is approved. If a manufacturer disapproves a dealer's effective nonwarranty labor rate, and the dealer does not agree to the manufacturer's proposed adjustment, the parties shall use the manufacturer's internal dispute resolution procedure, if any, within a reasonable time after the dealer notifies the manufacturer of their failure to agree. If the manufacturer's internal dispute resolution procedure is unsuccessful, or if the procedure is not implemented within a reasonable time after the dealer notifies the manufacturer of their failure to agree, the dealer may use the civil remedies available under section 80E.17. A dealer must file a civil suit under section 80E.17, as permitted by this subdivision, within 60 days of receiving the manufacturer's proposed adjustment to the effective nonwarranty labor rate, or the conclusion of the manufacturer's internal dispute resolution procedure, whichever is later.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2023. new text end

Sec. 5.

Minnesota Statutes 2022, section 325D.01, subdivision 5, is amended to read:

Subd. 5.

Cost.

The term "cost," as applied to the wholesale or retail vendor, means:

(1) the actual current delivered invoice or replacement cost, whichever is lower, without deducting customary cash discounts, plus any excise or sales taxes imposed on such commodity, goods, wares or merchandise subsequent to the purchase thereof and prior to the resale thereof, plus the cost of doing business at that location by the vendor;

(2) where a manufacturer publishes a list price and discounts, in determining such "cost" the manufacturer's published list price then currently in effect, less the published trade discount but without deducting the customary cash discount, plus any excise or sales taxes imposed on such commodity, goods, wares or merchandise subsequent to the purchase thereof and prior to the resale thereof, plus the cost of doing business by the vendor shall be prima facie evidence of "cost";new text begin andnew text end

(3) for purposes of gasoline offered for sale by way of posted price or indicating meter by a retailer, at a retail location where gasoline is dispensed into passenger automobiles and trucks by the consumer, "cost" means new text begin either:new text end

new text begin (i) new text end the average terminal price on the day, at the terminal from which the most recent supply of gasoline delivered to the retail location was acquired, new text begin plus all applicable state and federal excise taxes and fees; ornew text end

new text begin (ii) the actual current delivered invoice or replacement cost of the gasoline, whichever is lower, new text end plus all applicable state and federal excise taxes and feesdeleted text begin , plus the lesser of six percent or eight centsdeleted text end .

Sec. 6.

Minnesota Statutes 2022, section 325D.44, subdivision 1, is amended to read:

Subdivision 1.

Acts constituting.

A person engages in a deceptive trade practice when, in the course of business, vocation, or occupation, the person:

(1) passes off goods or services as those of another;

(2) causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services;

(3) causes likelihood of confusion or of misunderstanding as to affiliation, connection, or association with, or certification by, another;

(4) uses deceptive representations or designations of geographic origin in connection with goods or services;

(5) represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that the person does not have;

(6) represents that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used, or secondhand;

(7) represents that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;

(8) disparages the goods, services, or business of another by false or misleading representation of fact;

(9) advertises goods or services with intent not to sell them as advertised;

(10) advertises goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;

(11) makes false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions;

(12) in attempting to collect delinquent accounts, implies or suggests that health care services will be withheld in an emergency situation; deleted text begin ordeleted text end

new text begin (13) engages in (i) unfair methods of competition, or (ii) unfair or unconscionable acts or practices; or new text end

deleted text begin (13)deleted text end new text begin (14)new text end engages in any other conduct which similarly creates a likelihood of confusion or of misunderstanding.

Sec. 7.

Minnesota Statutes 2022, section 325D.44, subdivision 2, is amended to read:

Subd. 2.

Proof.

new text begin (a) new text end In order to prevail in an action under sections 325D.43 to 325D.48, a complainant need not prove competition between the parties or actual confusion or misunderstanding.

new text begin (b) For purposes of subdivision 1, clause (13), the standard of proof provided under section 325F.69, subdivision 8, applies. new text end

Sec. 8.

Minnesota Statutes 2022, section 325D.71, is amended to read:

325D.71 UNLAWFUL GASOLINE SALES.

new text begin (a) new text end Any offer for sale of gasoline by a retailer by way of posted price or indicating meter that is below cost, as defined by section 325D.01, subdivision 5, clause (3), is a violation of section 325D.04, except that the criminal penalties in section 325D.071 do not apply. In addition to the penalties for violations and the remedies provided for injured parties set forth elsewhere in this chapter, the commissioner of commerce may use the authority under section 45.027 for the purpose of preventing violations of this section. A retailer who sells gasoline at the same or higher legally posted price of a competitor in the same market area, on the same day, is not in violation of this section.

new text begin (b) new text end A retailer who offers gasoline for sale at a price below cost as part of a promotion at an individual location for no more than three days in any calendar quarter is not in violation of this section.

new text begin (c) A retailer who offers gasoline for sale at a price below cost through the use of coupons, loyalty programs, membership-based pricing programs, or promotions or programs of similar import is not in violation of this section. new text end

Sec. 9.

Minnesota Statutes 2022, section 325E.31, is amended to read:

325E.31 REMEDIES.

new text begin (a) new text end A person who is found to have violated sections 325E.27 to 325E.30 is subject to the penalties and remedies, including a private right of action to recover damages, as provided in section 8.31.

new text begin (b) In addition to the penalties and remedies under paragraph (a), the attorney general is entitled to sue for and recover on behalf of the state a civil penalty from a person found to have violated sections 325E.27 to 325E.30. The court must determine the civil penalty amount, which must not exceed $50,000. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 10.

new text begin [325E.67] POST-LOSS ASSIGNMENT OF BENEFITS. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this subdivision have the meanings given. new text end

new text begin (b) "Residential contractor" means a residential roofer, as defined in section 326B.802, subdivision 14; a residential building contractor, as defined in section 326B.802, subdivision 11; or a residential remodeler, as defined in section 326B.802, subdivision 12. new text end

new text begin (c) "Residential real estate" means a new or existing building, including appurtenant structures, constructed for habitation by at least one family but no more than four families. new text end

new text begin Subd. 2. new text end

new text begin Post-loss assignment. new text end

new text begin A post-loss assignment of rights or benefits to a residential contractor under a property and casualty insurance policy insuring residential real estate must comply with the following: new text end

new text begin (1) the assignment must only authorize a residential contractor to be named as a copayee for the payment of benefits under a property and casualty insurance policy covering residential real estate; new text end

new text begin (2) the assignment must include all of the following: new text end

new text begin (i) an itemized description of the work to be performed; new text end

new text begin (ii) an itemized description of materials, labor, and fees for the work to be performed; and new text end

new text begin (iii) a total itemized amount to be paid for the work to be performed; new text end

new text begin (3) the assignment must include a statement that the residential contractor has made no assurances that the claimed loss is fully covered by an insurance contract and must include the following notice in capitalized 14-point type: new text end

new text begin "YOU ARE AGREEING TO ASSIGN CERTAIN RIGHTS YOU HAVE UNDER YOUR INSURANCE POLICY. THE ITEMIZED DESCRIPTION OF THE WORK PERFORMED, AS SET FORTH IN THIS ASSIGNMENT FORM, HAS NOT BEEN AGREED TO BY THE INSURER. PLEASE READ AND UNDERSTAND THIS DOCUMENT BEFORE SIGNING. THE INSURER MAY ONLY PAY FOR THE REASONABLE COST TO REPAIR OR REPLACE DAMAGED PROPERTY CAUSED BY A COVERED PERIL, SUBJECT TO THE TERMS OF THE POLICY."; new text end

new text begin (4) the named insured has the right to cancel the assignment within ten business days after receipt of the scope of work by the insurance company. The cancellation must be made in writing or a comparable digital format. Within ten business days of the date of the written cancellation, the residential contractor must tender to the named insured, the landowner, or the possessor of the real estate any payments, partial payments, or deposits that have been made by that person; new text end

new text begin (5) the assignment must include the following notice in capitalized 14-point type, located in the immediate proximity of the space reserved in the assignment for the signature of the named insured: new text end

new text begin "YOU MAY CANCEL THIS ASSIGNMENT WITHOUT PENALTY WITHIN TEN (10) BUSINESS DAYS FROM THE LATER OF THE DATE THE ASSIGNMENT IS EXECUTED OR THE DATE ON WHICH YOU RECEIVE A COPY OF THE EXECUTED ASSIGNMENT. YOU MUST CANCEL THE ASSIGNMENT IN WRITING AND THE CANCELLATION MUST BE DELIVERED TO [insert the name and address of residential contractor as provided by the residential contractor]. IF MAILED, THE CANCELLATION MUST BE POSTMARKED ON OR BEFORE THE TEN (10) BUSINESS DAY DEADLINE. IF YOU CANCEL THIS ASSIGNMENT, THE RESIDENTIAL CONTRACTOR HAS UP TO TEN (10) BUSINESS DAYS TO RETURN ANY PAYMENTS OR DEPOSITS YOU HAVE MADE."; new text end

new text begin (6) the assignment must not impair the interests of a mortgagee or other parties with any legal interests listed on the declarations page of the property and casualty insurance policy that is the subject of the assignment; and new text end

new text begin (7) the assignment must not prevent or inhibit an insurer from communicating with the named insured or mortgagee listed on the declarations page of the property and casualty insurance policy that is the subject of the assignment. new text end

new text begin Subd. 3. new text end

new text begin Other requirements. new text end

new text begin A residential contractor receiving the assignment described in subdivision 2 must: new text end

new text begin (1) deliver a copy of the assignment to the insurer of the residential real estate within five business days of the date the assignment is executed; new text end

new text begin (2) cooperate with the insurer of the residential real estate in an investigation into the claim by providing documents and records requested by the insurer and complying with the post-loss duties under the insurance policy; and new text end

new text begin (3) comply with section 325E.66. new text end

new text begin Subd. 4. new text end

new text begin Certain assignments void. new text end

new text begin A post-loss assignment of benefits entered into with a residential contractor that violates any provision of the federal Insured Homeowner's Protection Act of 1998, Public Law 105-216, as amended, is void. new text end

Sec. 11.

new text begin [325E.72] DIGITAL FAIR REPAIR. new text end

new text begin Subdivision 1. new text end

new text begin Short title. new text end

new text begin This act may be cited as the "Digital Fair Repair Act." new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have the meanings given. new text end

new text begin (b) "Authorized repair provider" means an individual or business who is unaffiliated with an original equipment manufacturer and who has: (1) an arrangement with the original equipment manufacturer, for a definite or indefinite period, under which the original equipment manufacturer grants to the individual or business a license to use a trade name, service mark, or other proprietary identifier to offer diagnostic, maintenance, or repair services for digital electronic equipment under the name of the original equipment manufacturer; or (2) an arrangement with the original equipment manufacturer to offer diagnostic, maintenance, or repair services for digital electronic equipment on behalf of the original equipment manufacturer. An original equipment manufacturer that offers diagnostic, maintenance, or repair services for the original equipment manufacturer's digital electronic equipment is considered an authorized repair provider with respect to the digital electronic equipment if the original equipment manufacturer does not have an arrangement described in this paragraph with an unaffiliated individual or business. new text end

new text begin (c) "Contractor" has the meaning given in section 326B.31, subdivision 14. new text end

new text begin (d) "Cybersecurity" means the practice of protecting networks, devices, and data from unauthorized access or criminal use and the practice of ensuring the confidentiality, integrity, and availability of information. new text end

new text begin (e) "Digital electronic equipment" or "equipment" means any hardware product that depends, in whole or in part, on digital electronics embedded in or attached to the product in order for the product to function, for which the original equipment manufacturer makes available tools, parts, or documentation to authorized repair providers. new text end

new text begin (f) "Documentation" means a manual, diagram, reporting output, service code description, schematic diagram, or similar information made available by an original equipment manufacturer to an authorized repair provider to facilitate diagnostic, maintenance, or repair services for digital electronic equipment. new text end

new text begin (g) "Embedded software" means any programmable instructions provided on firmware delivered with digital electronic equipment, or with a part for the equipment, in order to operate the equipment. Embedded software includes all relevant patches and fixes made by the manufacturer of the equipment or part in order to operate the equipment. new text end

new text begin (h) "Fair and reasonable terms" means, with respect to: new text end

new text begin (1) parts for digital electronic equipment offered by an original equipment manufacturer: new text end

new text begin (i) costs that are fair to both parties; and new text end

new text begin (ii) terms under which an original equipment manufacturer offers the part to an authorized repair provider and which: new text end

new text begin (A) is not conditioned on or imposing a substantial obligation to use or restrict the use of the part to diagnose, maintain, or repair digital electronic equipment sold, leased, or otherwise supplied by the original equipment manufacturer, including a condition that the owner or independent repair provider become an authorized repair provider of the original equipment manufacturer; or new text end

new text begin (B) a requirement that a part be registered, paired with, or approved by the original equipment manufacturer or an authorized repair provider before the part is operational or prohibit an original equipment manufacturer from imposing any additional cost or burden that is not reasonably necessary or is designed to be an impediment on the owner or independent repair provider; new text end

new text begin (2) tools, software, and documentation for digital electronic equipment offered by an original equipment manufacturer: new text end

new text begin (i) costs that are equivalent to the lowest actual cost for which the original equipment manufacturer offers the tool, software, or documentation to an authorized repair provider, including any discount, rebate, or other financial incentive offered to an authorized repair provider; and new text end

new text begin (ii) terms that are equivalent to the most favorable terms under which an original equipment manufacturer offers the tool, software, or documentation to an authorized repair provider, including the methods and timeliness of delivery of the tool, software, or documentation, do not impose on an owner or an independent repair provider: new text end

new text begin (A) a substantial obligation to use or restrict the use of the tool, software, or documentation to diagnose, maintain, or repair digital electronic equipment sold, leased, or otherwise supplied by the original equipment manufacturer, including a condition that the owner or independent repair provider become an authorized repair provider of the original equipment manufacturer; or new text end

new text begin (B) a requirement that a tool be registered, paired with, or approved by the original equipment manufacturer or an authorized repair provider before the part or tool is operational; and new text end

new text begin (3) documentation offered by an original equipment manufacturer: that the documentation is made available by the original equipment manufacturer at no charge, except that when the documentation is requested in physical printed form, a charge may be included for the reasonable actual costs of preparing and sending the copy. new text end

new text begin (i) "Independent repair provider" means an individual or business operating in Minnesota that: (1) does not have an arrangement described in paragraph (b) with an original equipment manufacturer; (2) is not affiliated with any individual or business that has an arrangement described in paragraph (b); and (3) is engaged in providing diagnostic, maintenance, or repair services for digital electronic equipment. An original equipment manufacturer or, with respect to the original equipment manufacturer, an individual or business that has an arrangement with the original equipment manufacturer or is affiliated with an individual or business that has an arrangement with that original equipment manufacturer, is considered an independent repair provider for purposes of the instances the original equipment manufacturer engages in diagnostic, maintenance, or repair services for digital electronic equipment that is not manufactured by or sold under the name of the original equipment manufacturer. new text end

new text begin (j) "Manufacturer of motor vehicle equipment" means a business engaged in the business of manufacturing or supplying components used to manufacture, maintain, or repair a motor vehicle. new text end

new text begin (k) "Motor vehicle" means a vehicle that is: (1) designed to transport persons or property on a street or highway; and (2) certified by the manufacturer under (i) all applicable federal safety and emissions standards, and (ii) all requirements for distribution and sale in the United States. Motor vehicle does not include a recreational vehicle or an auto home equipped for habitation. new text end

new text begin (l) "Motor vehicle dealer" means an individual or business that, in the ordinary course of business: (1) is engaged in the business of selling or leasing new motor vehicles to an individual or business pursuant to a franchise agreement; (2) has obtained a license under section 168.27; and (3) is engaged in providing diagnostic, maintenance, or repair services for motor vehicles or motor vehicle engines pursuant to a franchise agreement. new text end

new text begin (m) "Motor vehicle manufacturer" means a business engaged in the business of manufacturing or assembling new motor vehicles. new text end

new text begin (n) "Original equipment manufacturer" means any individual or business that, in the normal course of business, is engaged in the business of selling or leasing to any individual or business new digital electronic equipment manufactured by or on behalf of the original equipment manufacturer. new text end

new text begin (o) "Owner" means an individual or business that owns or leases digital electronic equipment purchased or used in Minnesota. new text end

new text begin (p) "Part" means any replacement part or assembly of parts, either new or used, made available by an original equipment manufacturer to authorized repair providers to facilitate the maintenance or repair of digital electronic equipment manufactured or sold by the original equipment manufacturer. new text end

new text begin (q) "Personally identifiable information" means any representation of information that permits the identity of an individual to whom the information applies to be reasonably inferred by either direct or indirect means. new text end

new text begin (r) "Tool" means any software program, hardware implement, or other apparatus used for diagnosis, maintenance, or repair of digital electronic equipment, including software or other mechanisms that provide, program, pair a part, calibrate functionality, or perform any other function required to repair the original equipment or part back to fully functional condition, including updates. new text end

new text begin (s) "Trade secret" has the meaning given in section 325C.01, subdivision 5. new text end

new text begin (t) "Video game console" means a computing device, such as a console machine, a handheld console device, or another device or system, and its components and peripherals, that is primarily used by consumers for playing video games but which is neither a general nor an all-purpose computer. A general or all-purpose computer includes but is not limited to a desktop computer, laptop, tablet, or cell phone. new text end

new text begin Subd. 3. new text end

new text begin Requirements. new text end

new text begin (a) For digital electronic equipment and parts for the equipment sold or used in Minnesota, an original equipment manufacturer must make available to any independent repair provider or to the owner of digital electronic equipment manufactured by or on behalf of, or sold by, the original equipment manufacturer, on fair and reasonable terms, documentation, parts, and tools, inclusive of any updates to information or embedded software, for diagnostic, maintenance, or repair purposes. Nothing in this section requires an original equipment manufacturer to make available a part, tools, or documentation if it is no longer available to the original equipment manufacturer. new text end

new text begin (b) Such parts, tools, and documentation shall be made available within 60 days after the first sale of the digital electronic equipment in Minnesota. new text end

new text begin Subd. 4. new text end

new text begin Enforcement by attorney general. new text end

new text begin A violation of this section is an unlawful practice under section 325D.44. All remedies, penalties, and authority granted to the attorney general under section 8.31 are available to the attorney general to enforce this section. new text end

new text begin Subd. 5. new text end

new text begin Limitations. new text end

new text begin (a) Nothing in this section requires an original equipment manufacturer to divulge a trade secret or license any intellectual property to an owner or an independent service provider, except as necessary to provide documentation, parts, and tools on fair and reasonable terms. new text end

new text begin (b) Nothing in this section alters the terms of any arrangement described in subdivision 2, paragraph (b), including but not limited to the performance or provision of warranty or recall repair work by an authorized repair provider on behalf of an original equipment manufacturer pursuant to the arrangement, in force between an authorized repair provider and an original equipment manufacturer. A provision in the terms of an arrangement described in subdivision 2, paragraph (b), that purports to waive, avoid, restrict, or limit the original equipment manufacturer's obligations to comply with this section is void and unenforceable. new text end

new text begin (c) Nothing in this section requires an original equipment manufacturer or an authorized repair provider to provide to an owner or independent repair provider access to information, other than documentation, that is provided by the original equipment manufacturer to an authorized repair provider pursuant to the terms of an arrangement described in subdivision 2, paragraph (b). new text end

new text begin (d) Nothing in this section requires an original equipment manufacturer or authorized repair provider to make available any parts, tools, or documentation for the purpose of making modifications to any digital electronic equipment. new text end

new text begin (e) Nothing in this section shall be construed to require the original equipment manufacturer to sell service parts if the service parts are no longer provided by the original equipment manufacturer or made available to authorized repair providers of the original equipment manufacturer. new text end

new text begin (f) Nothing in this section shall require an original manufacturer to make available special documentation, tools, and parts that would disable or override antitheft security measures set by the owner of the equipment without the owner's authorization. new text end

new text begin (g) Nothing in this section shall apply if the original equipment manufacturer provides equivalent or better, readily available replacement equipment at no charge to the customer. new text end

new text begin (h) Nothing in this section requires the original manufacturer to provide access to parts, tools, or documentation for work that is required to be done or supervised by an individual or contractor licensed under chapter 326B or with any individual or contractor who does not possess the relevant license required for that work. new text end

new text begin Subd. 6. new text end

new text begin Exclusions. new text end

new text begin (a) Nothing in this section applies to: (1) a motor vehicle manufacturer, manufacturer of motor vehicle equipment, or motor vehicle dealer acting in that capacity; or (2) any product or service of a motor vehicle manufacturer, manufacturer of motor vehicle equipment, or motor vehicle dealer acting in that capacity. new text end

new text begin (b) Nothing in this section applies to manufacturers or distributors of a medical device as defined in the Federal Food, Drug, and Cosmetic Act, United States Code, title 21, section 301 et seq., or a digital electronic product or software manufactured for use in a medical setting including diagnostic, monitoring, or control equipment or any product or service that the manufacturer or distributor of a medical device offers. new text end

new text begin (c) Nothing in this section applies to manufacturers, distributors, importers, or dealers of any off-road or nonroad equipment, including without limitation farm and utility tractors; farm implements; farm machinery; forestry equipment; industrial equipment; utility equipment; construction equipment; compact construction equipment; road-building equipment; electronic vehicle charging infrastructure equipment; mining equipment; turf, yard, and garden equipment; outdoor power equipment; portable generators; marine, all-terrain sports, and recreational vehicles, including without limitation racing vehicles; stand-alone or integrated stationary or mobile internal combustion engines; generator sets and fuel cell power; power tools; and any tools, technology, attachments, accessories, components, and repair parts for any of the foregoing. new text end

new text begin (d) Nothing in this section shall be construed to require any original equipment manufacturer or authorized repair provider to make available any parts, tools, or documentation required for the diagnosis, maintenance, or repair of a video game console and its components and peripherals. new text end

new text begin (e) Nothing in this section applies to an energy storage system, as defined in section 216B.2422, subdivision 1, paragraph (f). new text end

new text begin (f) Nothing in this section requires an original equipment manufacturer to make available parts, documentation, or tools related to cybersecurity, except as necessary for the repair or maintenance of equipment. Notwithstanding anything in this section to the contrary, an original equipment manufacturer is not required to make available parts, documentation, or tools related to cybersecurity which: (1) could reasonably give a recipient or third-party access to trade secret or personally identifiable information owned or possessed by an original equipment manufacturer for itself or on behalf of another person; (2) is protected from disclosure under other laws of this state; or (3) could reasonably be used to compromise cybersecurity or cybersecurity equipment. new text end

new text begin (g) Nothing in this section applies to information technology equipment that is intended for use in critical infrastructure, as defined in United States Code, title 42, section 5195c(e). new text end

new text begin Subd. 7. new text end

new text begin Liability, defenses, and warranties. new text end

new text begin No original equipment manufacturer or authorized repair provider shall be liable for any damage or injury caused to any digital electronic equipment, person, or property that occurs as a result of repair, diagnosis, maintenance, or modification performed by an independent repair provider or owner, including but not limited to any indirect, incidental, special, or consequential damages; any loss of data, privacy, or profits; or an inability to use, or reduced functionality of, the digital electronic equipment. new text end

new text begin Subd. 8. new text end

new text begin Applicability. new text end

new text begin This section applies to equipment sold on or after July 1, 2021. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024. new text end

Sec. 12.

new text begin [325E.80] ABNORMAL MARKET DISRUPTIONS; UNCONSCIONABLY EXCESSIVE PRICES. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this subdivision have the meanings given. new text end

new text begin (b) "Essential consumer good or service" means a good or service that is vital and necessary for the health, safety, and welfare of the public, including without limitation: food; water; fuel; gasoline; shelter; construction materials; transportation; health care services; pharmaceuticals; and medical, personal hygiene, sanitation, and cleaning supplies. new text end

new text begin (c) "Seller" means a manufacturer, supplier, wholesaler, distributor, or retail seller of goods and services. new text end

new text begin (d) "Unconscionably excessive price" means a price that represents a gross disparity compared to the seller's average price of an essential good or service, offered for sale or sold in the usual course of business, in the 60-day period before an abnormal market disruption is declared under subdivision 2. None of the following is an unconscionably excessive price: new text end

new text begin (1) a price that is substantially related to an increase in the cost of manufacturing, obtaining, replacing, providing, or selling a good or service; new text end

new text begin (2) a price that is no more than 25 percent above the seller's average price during the 60-day period before an abnormal market disruption is declared under subdivision 2; new text end

new text begin (3) a price that is consistent with the fluctuations in applicable commodity markets or seasonal fluctuations; or new text end

new text begin (4) a contract price, or the results of a price formula, that was established before an abnormal market disruption is declared under subdivision 2. new text end

new text begin Subd. 2. new text end

new text begin Abnormal market disruption. new text end

new text begin (a) The governor may by executive order declare an abnormal market disruption if, in the governor's sole determination, there has been or is likely to be a substantial and atypical change in the market for an essential consumer good or service caused by an event or circumstances that result in a declaration of a state of emergency by the governor. The governor may specify an effective period for a declaration under this section that is shorter than the effective period for the state of emergency declaration. new text end

new text begin (b) The governor's abnormal market disruption declaration must state that the declaration is activating this section and must specify the geographic area of Minnesota to which the declaration applies. new text end

new text begin (c) Unless an earlier date is specified by the governor, an abnormal market disruption declaration under this subdivision terminates 30 days after the date that the state of emergency for which it was activated ends. new text end

new text begin Subd. 3. new text end

new text begin Notice. new text end

new text begin Upon the implementation, renewal, limitation, or termination of an abnormal market disruption declaration made under subdivision 2: (1) the governor must immediately post notice on applicable government websites and provide notice to the media; and (2) the commissioner of commerce must provide notice directly to sellers by any practical means. new text end

new text begin Subd. 4. new text end

new text begin Prohibition. new text end

new text begin If the governor declares an abnormal market disruption, a person is prohibited from selling or offering to sell an essential consumer good or service for an amount that represents an unconscionably excessive price during the period in which the abnormal market disruption declaration is effective. new text end

new text begin Subd. 5. new text end

new text begin Prices and rates. new text end

new text begin Upon the occurrence of a weather event classified as a severe thunderstorm pursuant to the criteria established by the National Oceanic and Atmospheric Administration, a residential building contractor operating within the geographic region impacted by the weather event and repairing damage caused by the weather event shall not: new text end

new text begin (1) charge an unconscionably excessive price for labor in comparison to the market price charged for comparable services in the geographic region impacted by the weather event; or new text end

new text begin (2) charge an insurance company a rate that exceeds what the residential building contractor otherwise charges members of the general public. new text end

new text begin Subd. 6. new text end

new text begin Civil penalty. new text end

new text begin A person who is found to have violated this section is subject to a civil penalty of not more than $1,000 per sale or transaction, with a maximum penalty of $25,000 per day. No other penalties may be imposed for the same conduct regulated under this section. new text end

new text begin Subd. 7. new text end

new text begin Enforcement authority. new text end

new text begin (a) The attorney general may investigate and bring an action against a seller or residential building contractor for an alleged violation of this section. new text end

new text begin (b) Nothing in this section creates a private cause of action in favor of a person injured by a violation of this section. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 13.

Minnesota Statutes 2022, section 325F.662, subdivision 2, is amended to read:

Subd. 2.

Written warranty required.

(a) Every used motor vehicle sold by a dealer is covered by an express warranty which the dealer shall provide to the consumernew text begin in writingnew text end . At a minimum, the express warranty applies for the following terms:

(1) if the used motor vehicle has less than 36,000 miles, the warranty must remain in effect for at least 60 days or 2,500 miles, whichever comes first;

(2) if the used motor vehicle has 36,000 miles or more, but less than 75,000 miles, the warranty must remain in effect for at least 30 days or 1,000 miles, whichever comes firstnew text begin ; andnew text end

new text begin (3) unless the vehicle is sold by a new motor vehicle dealer, as defined in section 168.27, subdivision 2, if the used motor vehicle has 75,000 miles or more, but less than 200,000 miles, the warranty must remain in effect for at least 15 days or 500 miles, whichever comes firstnew text end .

(b) The express warranty must require the dealer, in the event of a malfunction, defect, or failure in a covered part, to repair or replace the covered part, or at the dealer's election, to accept return of the used motor vehicle from the consumer and provide a refund to the consumer.

(c) For used motor vehicles with less than 36,000 miles, the dealer's express warranty shall cover, at minimum, the following parts:

(1) with respect to the engine, all lubricated parts, intake manifolds, engine block, cylinder head, rotary engine housings, and ring gear;

(2) with respect to the transmission, the automatic transmission case, internal parts, and the torque converter; or, the manual transmission case, and the internal parts;

(3) with respect to the drive axle, the axle housings and internal parts, axle shafts, drive shafts and output shafts, and universal joints; but excluding the secondary drive axle on vehicles, other than passenger vans, mounted on a truck chassis;

(4) with respect to the brakes, the master cylinder, vacuum assist booster, wheel cylinders, hydraulic lines and fittings, and disc brakes calipers;

(5) with respect to the steering, the steering gear housing and all internal parts, power steering pump, valve body, piston, and rack;

(6) the water pump;

(7) the externally mounted mechanical fuel pump;

(8) the radiator;

(9) the alternator, generator, and starter.

(d) For used motor vehicles with 36,000 miles or more, but less than deleted text begin 75,000deleted text end new text begin 200,000new text end miles, the dealer's express warranty shall cover, at minimum, the following parts:

(1) with respect to the engine, all lubricated parts, intake manifolds, engine block, cylinder head, rotary engine housings, and ring gear;

(2) with respect to the transmission, the automatic transmission case, internal parts, and the torque converter; or, the manual transmission case, and internal parts;

(3) with respect to the drive axle, the axle housings and internal parts, axle shafts, drive shafts and output shafts, and universal joints; but excluding the secondary drive axle on vehicles, other than passenger vans, mounted on a truck chassis;

(4) with respect to the brakes, the master cylinder, vacuum assist booster, wheel cylinders, hydraulic lines and fittings, and disc brake calipers;

(5) with respect to the steering, the steering gear housing and all internal parts, power steering pump, valve body, and piston;

(6) the water pump;

(7) the externally mounted mechanical fuel pump.

(e)(1) A dealer's obligations under the express warranty remain in effect notwithstanding the fact that the warranty period has expired, if the consumer promptly notified the dealer of the malfunction, defect, or failure in the covered part within the specified warranty period and, within a reasonable time after notification, brings the vehicle or arranges with the dealer to have the vehicle brought to the dealer for inspection and repair.

(2) If a dealer does not have a repair facility, the dealer shall designate where the vehicle must be taken for inspection and repair.

(3) In the event the malfunction, defect, or failure in the covered part occurs at a location which makes it impossible or unreasonable to return the vehicle to the selling dealer, the consumer may have the repairs completed elsewhere with the consent of the selling dealer, which consent may not be unreasonably withheld.

(4) Notwithstanding the provisions of this paragraph, a consumer may have nonwarranty maintenance and nonwarranty repairs performed other than by the selling dealer and without the selling dealer's consent.

(f) Nothing in this section diminishes the obligations of a manufacturer under an express warranty issued by the manufacturer. The express warranties created by this section do not require a dealer to repair or replace a covered part if the repair or replacement is covered by a manufacturer's new car warranty, or the manufacturer otherwise agrees to repair or replace the part.

(g) The express warranties created by this section do not cover defects or repair problems which result from collision, abuse, negligence, or lack of adequate maintenance following sale to the consumer.

(h) The terms of the express warranty, including the duration of the warranty and the parts covered, must be fully, accurately, and conspicuously disclosed by the dealer on the front of the Buyers Guide.

Sec. 14.

Minnesota Statutes 2022, section 325F.662, subdivision 3, is amended to read:

Subd. 3.

Exclusions.

Notwithstanding the provisions of subdivision 2, a dealer is not required to provide an express warranty for a used motor vehicle:

(1) new text begin except for a used motor vehicle described in subdivision 2, paragraph (a), clause (3), new text end sold for a total cash sale price of less than $3,000, including the trade-in value of any vehicle traded in by the consumer, but excluding tax, license fees, registration fees, and finance charges;

(2) with an engine designed to use diesel fuel;

(3) with a gross weight, as defined in section 168.002, subdivision 13, in excess of 9,000 pounds;

(4) that has been custom-built or modified for show or for racing;

(5) new text begin except for a used motor vehicle described in subdivision 2, paragraph (a), clause (3), new text end that is eight years of age or older, as calculated from the first day in January of the designated model year of the vehicle;

(6) that has been produced by a manufacturer which has never manufactured more than 10,000 motor vehicles in any one year;

(7) that has deleted text begin 75,000deleted text end new text begin 200,000new text end miles or more at time of sale;

(8) that has not been manufactured in compliance with applicable federal emission standards in force at the time of manufacture as provided by the Clean Air Act, United States Code, title 42, sections 7401 through 7642, and regulations adopted pursuant thereto, and safety standards as provided by the National Traffic and Motor Safety Act, United States Code, title 15, sections 1381 through 1431, and regulations adopted pursuant thereto; or

(9) that has been issued a certificate of title that bears a "salvage" brand or stamp under section 168A.151.

Sec. 15.

Minnesota Statutes 2022, section 325F.6641, subdivision 2, is amended to read:

Subd. 2.

Disclosure requirements.

(a) If a motor vehicle dealer licensed under section 168.27 offers a vehicle for sale in the course of a sales presentation to any prospective buyer the dealer must provide a written disclosuredeleted text begin ,deleted text end and deleted text begin an oral disclosuredeleted text end new text begin ,new text end except for sales performed online, new text begin an oral disclosure new text end of:

(1) prior vehicle damage as required under subdivision 1;

(2) the existence or requirement of any title brand under section 168A.05, subdivision 3, 168A.151, 325F.6642, or 325F.665, subdivision 14, if the dealer has actual knowledge of the brand; and

(3) if a motor vehicle, which is part of a licensed motor vehicle dealer's inventory, has been submerged or flooded above the bottom dashboard while parked on the dealer's lot.

(b) If a person receives a flood disclosure as described in paragraph (a), clause (3), whether from a motor vehicle dealer or another seller, and subsequently offers that vehicle for sale, the person must provide the same disclosure to any prospective subsequent buyer.

(c) Written disclosure under this subdivision must be signed by the buyer and maintained in the motor vehicle dealer's sales file in the manner prescribed by the registrar of motor vehicles.

(d) The disclosure required in subdivision 1 must be made in substantially the following form: "To the best of my knowledge, this vehicle has ..... has not ..... sustained damage in excess of 80 percent actual cash value."

Sec. 16.

Minnesota Statutes 2022, section 325F.69, subdivision 1, is amended to read:

Subdivision 1.

Fraud, misrepresentation, deceptivenew text begin or unfairnew text end practices.

The act, use, or employment by any person of any fraud,new text begin unfair or unconscionable practice,new text end false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby, is enjoinable as provided in section 325F.70.

Sec. 17.

Minnesota Statutes 2022, section 325F.69, is amended by adding a subdivision to read:

new text begin Subd. 8. new text end

new text begin Unfair or unconscionable acts or practices; standard of proof. new text end

new text begin For purposes of this section, an unfair method of competition or an unfair or unconscionable act or practice is any method of competition, act, or practice that: (1) offends public policy as established by the statutes, rules, or common law of Minnesota; (2) is unethical, oppressive, or unscrupulous; or (3) is substantially injurious to consumers. new text end

Sec. 18.

new text begin [325F.995] GENETIC INFORMATION PRIVACY ACT. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the meanings given. new text end

new text begin (b) "Biological sample" means any material part of a human, discharge from a material part of a human, or derivative from a material part of a human, including but not limited to tissue, blood, urine, or saliva, that is known to contain deoxyribonucleic acid (DNA). new text end

new text begin (c) "Consumer" means an individual who is a Minnesota resident. new text end

new text begin (d) "Deidentified data" means data that cannot reasonably be used to infer information about, or otherwise be linked to, an identifiable consumer and that is subject to: new text end

new text begin (1) administrative and technical measures to ensure the data cannot be associated with a particular consumer; new text end

new text begin (2) public commitment by the company to (i) maintain and use data in deidentified form, and (ii) not attempt to reidentify the data; and new text end

new text begin (3) legally enforceable contractual obligations that prohibit any recipients of the data from attempting to reidentify the data. new text end

new text begin (e) "Direct-to-consumer genetic testing company" or "company" means an entity that: (1) offers consumer genetic testing products or services directly to consumers; or (2) collects, uses, or analyzes genetic data that was (i) collected via a direct-to-consumer genetic testing product or service, and (ii) provided to the company by a consumer. Direct-to-consumer genetic testing company does not include an entity that collects, uses, or analyzes genetic data or biological samples only in the context of research, as defined in Code of Federal Regulations, title 45, section 164.501, that is conducted in a manner that complies with the federal policy for the protection of human research subjects under Code of Federal Regulations, title 45, part 46; the Good Clinical Practice Guideline issued by the International Council for Harmonisation; or the United States Food and Drug Administration Policy for the Protection of Human Subjects under Code of Federal Regulations, title 21, parts 50 and 56. new text end

new text begin (f) "Express consent" means a consumer's affirmative written response to a clear, meaningful, and prominent written notice regarding the collection, use, or disclosure of genetic data for a specific purpose. Written notices and responses may be presented and captured electronically. new text end

new text begin (g) "Genetic data" means any data, regardless of the data's format, that concerns a consumer's genetic characteristics. Genetic data includes but is not limited to: new text end

new text begin (1) raw sequence data that results from sequencing a consumer's complete extracted DNA or a portion of the extracted DNA; new text end

new text begin (2) genotypic and phenotypic information that results from analyzing the raw sequence data; and new text end

new text begin (3) self-reported health information that a consumer submits to a company regarding the consumer's health conditions and that is (i) used for scientific research or product development, and (ii) analyzed in connection with the consumer's raw sequence data. new text end

new text begin Genetic data does not include deidentified data. new text end

new text begin (h) "Genetic testing" means any laboratory test of a consumer's complete DNA, regions of a consumer's DNA, chromosomes, genes, or gene products to determine the presence of genetic characteristics. new text end

new text begin (i) "Person" means an individual, partnership, corporation, association, business, business trust, sole proprietorship, other entity, or representative of an organization. new text end

new text begin (j) "Service provider" means a person that is involved in the collection, transportation, analysis of, or any other service in connection with a consumer's biological sample, extracted genetic material, or genetic data on behalf of the direct-to-consumer genetic testing company, or on behalf of any other person that collects, uses, maintains, or discloses biological samples, extracted genetic material, or genetic data collected or derived from a direct-to-consumer genetic testing product or service, or is directly provided by a consumer, or the delivery of the results of the analysis of the biological sample, extracted genetic material, or genetic data. new text end

new text begin Subd. 2. new text end

new text begin Disclosure and consent requirements. new text end

new text begin (a) To safeguard the privacy, confidentiality, security, and integrity of a consumer's genetic data, a direct-to-consumer genetic testing company must: new text end

new text begin (1) provide easily accessible, clear, and complete information regarding the company's policies and procedures governing the collection, use, maintenance, and disclosure of genetic data by making available to a consumer all of the following written in plain language: new text end

new text begin (i) a high-level privacy policy overview that includes basic, essential information about the company's collection, use, or disclosure of genetic data; new text end

new text begin (ii) a prominent, publicly available privacy notice that includes at a minimum information about the company's data collection, consent, use, access, disclosure, maintenance, transfer, security, retention, and deletion practices of genetic data; and new text end

new text begin (iii) information that clearly describes how to file a complaint alleging a violation of this section, pursuant to section 45.027; new text end

new text begin (2) obtain a consumer's express consent to collect, use, and disclose the consumer's genetic data, including at a minimum: new text end

new text begin (i) initial express consent that clearly (A) describes the uses of the genetic data collected through the genetic testing product service, and (B) specifies who has access to the test results and how the genetic data may be shared; new text end

new text begin (ii) separate express consent, which must include the name of the person receiving the information, for each transfer or disclosure of the consumer's genetic data or biological sample to any person other than the company's vendors and service providers; new text end

new text begin (iii) separate express consent for each use of genetic data or the biological sample that is beyond the primary purpose of the genetic testing product or service and inherent contextual uses; new text end

new text begin (iv) separate express consent to retain any biological sample provided by the consumer following completion of the initial testing service requested by the consumer; new text end

new text begin (v) informed consent in compliance with federal policy for the protection of human research subjects under Code of Federal Regulations, title 45, part 46, to transfer or disclose the consumer's genetic data to a third-party person for research purposes or research conducted under the control of the company for publication or generalizable knowledge purposes; and new text end

new text begin (vi) express consent for marketing by (A) the direct-to-consumer genetic testing company to a consumer based on the consumer's genetic data, or (B) a third party to a consumer based on the consumer having ordered or purchased a genetic testing product or service. For purposes of this clause, "marketing" does not include customized content or offers provided on the websites or through the applications or services provided by the direct-to-consumer genetic testing company with the first-party relationship to the customer; new text end

new text begin (3) not disclose genetic data to law enforcement or any other governmental agency without a consumer's express written consent, unless the disclosure is made pursuant to a valid search warrant or court order; new text end

new text begin (4) develop, implement, and maintain a comprehensive security program and measures to protect a consumer's genetic data against unauthorized access, use, or disclosure; and new text end

new text begin (5) provide a process for a consumer to: new text end

new text begin (i) access the consumer's genetic data; new text end

new text begin (ii) delete the consumer's account and genetic data; and new text end

new text begin (iii) request and obtain the destruction of the consumer's biological sample. new text end

new text begin (b) Notwithstanding any other provisions in this section, a direct-to-consumer genetic testing company is prohibited from disclosing a consumer's genetic data without the consumer's written consent to: (1) any entity offering health insurance, life insurance, disability insurance, or long-term care insurance; or (2) any employer of the consumer. Any consent under this paragraph must clearly identify the recipient of the consumer's genetic data proposed to be disclosed. new text end

new text begin (c) A company that is subject to the requirements described in paragraph (a), clause (2), shall provide effective mechanisms, without any unnecessary steps, for a consumer to revoke any consent of the consumer or all of the consumer's consents after a consent is given, including at least one mechanism which utilizes the primary medium through which the company communicates to the consumer. If a consumer revokes consent provided pursuant to paragraph (a), clause (2), the company shall honor the consumer's consent revocation as soon as practicable, but not later than 30 days after the consumer revokes consent. The company shall destroy a consumer's biological sample within 30 days of receipt of revocation of consent to store the sample. new text end

new text begin (d) A direct-to-consumer genetic testing company must provide a clear and complete notice to a consumer that the consumer's deidentified data may be shared with or disclosed to third parties for research purposes in accordance with Code of Federal Regulations, title 45, part 46. new text end

new text begin Subd. 3. new text end

new text begin Service provider agreements. new text end

new text begin (a) A contract between the company and a service provider must prohibit the service provider from retaining, using, or disclosing any biological sample, extracted genetic material, genetic data, or information regarding the identity of the consumer, including whether that consumer has solicited or r