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

CHAPTER 384--S.F.No. 2839
An act
relating to state government; regulating various licensees and other
entities; regulating various insurance coverages and practices; modifying
definitions, informational requirements, continuing education requirements,
information reporting requirements, and notice requirements; making various
housekeeping, technical, and clarifying changes; authorizing certain flexible
benefit health plans; regulating insurance continuation provisions for local
government employees; regulating securities; reorganizing and modifying
various provisions relating to real estate brokers, salespersons, and closing
agents; modifying the membership requirements of, and appointment authority
to, the real estate appraiser advisory board; regulating certain workers'
compensation self-insurers; modifying the eligibility criteria for a University
Promise Scholarship; authorizing and conditioning the issuance of certain
on-sale liquor licenses; modifying certain lien notices; requiring a certain study;
amending Minnesota Statutes 2008, sections 45.0112; 60A.031, subdivision
4; 60A.084; 60A.204; 60A.36, by adding a subdivision; 60K.31, subdivision
10; 61A.092, subdivision 3; 62A.046, subdivision 6, by adding a subdivision;
62A.17, subdivision 5; 62A.3099, subdivision 17; 62A.65, subdivision 2;
62E.02, subdivision 15; 62E.14, subdivision 4c; 62L.05, subdivision 4;
62S.24, subdivision 8; 62S.266, subdivision 4; 62S.29, subdivision 1; 72A.08,
subdivision 4; 72A.12, subdivision 4; 72A.20, subdivisions 10, 36, 37; 72A.492,
subdivision 2; 72A.51, subdivision 2; 72B.01; 72B.08, subdivision 8; 79A.03,
subdivision 8; 79A.06, subdivision 5; 79A.21, subdivision 3; 80A.41; 80A.46;
80A.65, subdivision 6; 82.17, subdivision 15, by adding subdivisions; 82.19;
82.21, subdivision 2; 82.24, subdivision 3; 82.29, subdivisions 4, 5, 8; 82.31,
subdivisions 1, 2; 82.33, subdivisions 1, 2, by adding a subdivision; 82.34,
subdivisions 1, 2, 4, 5, 13; 82.39; 82.41, subdivisions 1, 2, by adding a
subdivision; 82.45, subdivision 3, by adding subdivisions; 82.48, subdivisions
2, 3; 82B.05, as amended; 82B.06; 82B.14; 326.3382, subdivision 3; 326B.33,
subdivision 16; 326B.46, by adding a subdivision; 326B.56, subdivision 2;
326B.86, subdivision 2; 326B.921, subdivision 6; 327B.04, subdivision 4;
332.34; 340A.409, subdivision 1; 471.61, subdivision 2b; 514.20; Minnesota
Statutes 2009 Supplement, sections 45.027, subdivision 1; 45.30, subdivision
4; 60A.39, subdivisions 1, 4, 5; 60A.9572, subdivision 6; 60K.361; 62A.3099,
subdivision 18; 65A.29, subdivision 13; 72B.03, subdivision 2; 72B.045,
subdivision 1; 72B.06; 82.31, subdivision 4; 82.32; 137.0225; 326B.46,
subdivision 2; 340A.404, subdivision 4a; Laws 2007, chapter 147, article 12,
section 14; proposing coding for new law in Minnesota Statutes, chapters 62L;
82; 137; 332; repealing Minnesota Statutes 2008, sections 62L.056; 72B.04;
82.19, subdivision 3; 82.22, subdivisions 1, 6, 7, 8, 9; 82.31, subdivision 6;
82.34, subdivision 16; 82.41, subdivisions 3, 7; 332.31, subdivision 7; 332.335;
Minnesota Statutes 2009 Supplement, sections 65B.133, subdivision 3; 72B.02,
subdivision 11.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

    Section 1. Minnesota Statutes 2008, section 45.0112, is amended to read:
45.0112 STREET AND E-MAIL ADDRESSES REQUIRED.
Licensees or applicants for licenses issued by the commissioner shall provide to the
commissioner a residence telephone number, a street address where the licensee actually
resides, and a street address where the licensee's business is physically located, and a
current e-mail address for business use. A post office box address is not sufficient to
satisfy this requirement. The individual shall notify the department of any change in street
address, e-mail address for business use, or residence telephone number within ten days.

    Sec. 2. Minnesota Statutes 2009 Supplement, section 45.027, subdivision 1, is
amended to read:
    Subdivision 1. General powers. In connection with the duties and responsibilities
entrusted to the commissioner, and Laws 1993, chapter 361, section 2, the commissioner
of commerce may:
(1) make public or private investigations within or without this state as the
commissioner considers necessary to determine whether any person has violated or is
about to violate any law, rule, or order related to the duties and responsibilities entrusted
to the commissioner;
(2) require or permit any person to file a statement in writing, under oath or otherwise
as the commissioner determines, as to all the facts and circumstances concerning the
matter being investigated;
(3) hold hearings, upon reasonable notice, in respect to any matter arising out of the
duties and responsibilities entrusted to the commissioner;
(4) conduct investigations and hold hearings for the purpose of compiling
information related to the duties and responsibilities entrusted to the commissioner;
(5) examine the books, accounts, records, and files of every licensee, and of every
person who is engaged in any activity regulated; the commissioner or a designated
representative shall have free access during normal business hours to the offices and
places of business of the person, and to all books, accounts, papers, records, files, safes,
and vaults maintained in the place of business;
(6) publish information which is contained in any order issued by the commissioner;
(7) require any person subject to duties and responsibilities entrusted to the
commissioner, to report all sales or transactions that are regulated. The reports must
be made within ten days after the commissioner has ordered the report. The report is
accessible only to the respondent and other governmental agencies unless otherwise
ordered by a court of competent jurisdiction; and
(8) assess a licensee natural person or entity subject to the jurisdiction of the
commissioner the necessary expenses of the investigation performed by the department
when an investigation is made by order of the commissioner. The cost of the investigation
shall be determined by the commissioner and is based on the salary cost of investigators
or assistants and at an average rate per day or fraction thereof so as to provide for the
total cost of the investigation. All money collected must be deposited into the general
fund. A natural person licensed under chapter 60K or 82 shall not be charged costs of
an investigation if the investigation results in no finding of a violation. This clause
does not apply to a natural person or entity already subject to the assessment provisions
of sections 60A.03 and 60A.031.

    Sec. 3. Minnesota Statutes 2009 Supplement, section 45.30, subdivision 4, is amended
to read:
    Subd. 4. Credit earned. (a) Upon completion of approved courses, students must
earn one hour of continuing education credit for each hour approved by the commissioner.
Continuing education courses must be attended in their entirety in order to receive credit
for the number of approved hours.
(b) Qualified instructors will earn three hours of continuing education credit for
each classroom hour of approved instruction that they deliver (1) independently, or (2)
as part of a team presentation in a course of two hours or less, if they attend the course
in its entirety. For licensees other than appraisers, no more than half of the continuing
education hours required for renewal of a license may be earned as a qualified instructor at
the rate of three hours of continuing education credit for each classroom hour of approved
instruction. For licensed appraisers, no more than one-half of the continuing education
hours required for renewal of a license may be earned as a qualified instructor. No credit
will be earned if the licensee has previously obtained credit for the same course as either
a student or instructor during the same licensing period.
(c) A licensee must not receive credit for more than eight hours of continuing
education in one day.

    Sec. 4. Minnesota Statutes 2008, section 60A.031, subdivision 4, is amended to read:
    Subd. 4. Examination report; foreign and domestic companies. (a) The
commissioner shall make a full and true report of every examination conducted pursuant
to this chapter, which shall include (1) a statement of findings of fact relating to the
financial status and other matters ascertained from the books, papers, records, documents,
and other evidence obtained by investigation and examination or ascertained from
the testimony of officers, agents, or other persons examined under oath concerning the
business, affairs, assets, obligations, ability to fulfill obligations, and compliance with
all the provisions of the law of the company, applicant, organization, or person subject
to this chapter and (2) a summary of important points noted in the report, conclusions,
recommendations and suggestions as may reasonably be warranted from the facts so
ascertained in the examinations. The report of examination shall be verified by the oath
of the examiner in charge thereof, and shall be prima facie evidence in any action or
proceedings in the name of the state against the company, applicant, organization, or
person upon the facts stated therein.
(b) No later than 60 days following completion of the examination, the examiner
in charge shall file with the department a verified written report of examination under
oath. Upon receipt of the verified report, the department shall transmit the report to the
company examined, together with a notice which provides the company examined with a
reasonable opportunity of not more than 30 days to make a written submission or rebuttal
with respect to matters contained in the examination report.
(c) Within 30 days of the end of the period allowed for the receipt of written
submissions or rebuttals, the commissioner shall fully consider and review the report,
together with the written submissions or rebuttals and the relevant portions of the
examiner's workpapers and enter an order:
(1) adopting the examination report as filed or with modification or corrections. If
the examination report reveals that the company is operating in violation of any law, rule,
or prior order of the commissioner, the commissioner may order the company to take any
action the commissioner considers necessary and appropriate to cure the violation;
(2) rejecting the examination report with directions to the examiners to reopen the
examination for purposes of obtaining additional data, documentation, or information,
and refiling the report as required under paragraph (b); or
(3) calling for an investigatory hearing with no less than 20 days' notice to the
company for purposes of obtaining additional documentation, data, information, and
testimony.
(d)(1) All orders entered under paragraph (c), clause (1), must be accompanied by
findings and conclusions resulting from the commissioner's consideration and review of
the examination report, relevant examiner workpapers, and any written submissions or
rebuttals. The order is a final administrative decision and may be appealed as provided
under chapter 14. The order must be served upon the company by certified mail, together
with a copy of the adopted examination report. Within 30 days of the issuance of the
adopted report, the company shall file affidavits executed by each of its directors stating
under oath that they have received a copy of the adopted report and related orders.
(2) A hearing conducted under paragraph (c), clause (3), by the commissioner or
authorized representative, must be conducted as a nonadversarial confidential investigatory
proceeding as necessary for the resolution of inconsistencies, discrepancies, or disputed
issues apparent upon the face of the filed examination report or raised by or as a result of
the commissioner's review of relevant workpapers or by the written submission or rebuttal
of the company. Within 20 days of the conclusion of the hearing, the commissioner shall
enter an order as required under paragraph (c), clause (1).
(3) The commissioner shall not appoint an examiner as an authorized representative
to conduct the hearing. The hearing must proceed expeditiously. Discovery by the
company is limited to the examiner's workpapers which tend to substantiate assertions in a
written submission or rebuttal. The commissioner or the commissioner's representative
may issue subpoenas for the attendance of witnesses or the production of documents
considered relevant to the investigation whether under the control of the department, the
company, or other persons. The documents produced must be included in the record.
Testimony taken by the commissioner or the commissioner's representative must be under
oath and preserved for the record.
This section does not require the department to disclose information or records
which would indicate or show the existence or content of an investigation or activity of a
criminal justice agency.
(4) The hearing must proceed with the commissioner or the commissioner's
representative posing questions to the persons subpoenaed. Thereafter, the company and
the department may present testimony relevant to the investigation. Cross-examination
may be conducted only by the commissioner or the commissioner's representative. The
company and the department shall be permitted to make closing statements and may
be represented by counsel of their choice.
(e)(1) Upon the adoption of the examination report under paragraph (c), clause (1),
the commissioner shall continue to hold the content of the examination report as private
and confidential information for a period of 30 days except as otherwise provided in
paragraph (b). Thereafter, the commissioner may open the report for public inspection if a
court of competent jurisdiction has not stayed its publication.
(2) Nothing contained in this subdivision prevents or shall be construed as
prohibiting the commissioner from disclosing the content of an examination report,
preliminary examination report or results, or any matter relating to the reports, to the
Commerce Department or the insurance department of another state or country, or to law
enforcement officials of this or another state or agency of the federal government at any
time, if the agency or office receiving the report or matters relating to the report agrees in
writing to hold it confidential and in a manner consistent with this subdivision.
(3) If the commissioner determines that regulatory action is appropriate as a result of
an examination, the commissioner may initiate proceedings or actions as provided by law.
(f) All working papers, recorded information, documents and copies thereof
produced by, obtained by, or disclosed to the commissioner or any other person in the
course of an examination made under this subdivision, or in the course of market analysis,
must be given confidential treatment and are not subject to subpoena and may not be made
public by the commissioner or any other person, except to the extent provided in paragraph
(e). Access may also be granted to the National Association of Insurance Commissioners
(NAIC), the National Association of Securities Dealers Financial Industry Regulatory
Authority, and any national securities association registered under the Securities Exchange
Act of 1934. The parties must agree in writing prior to receiving the information to
provide to it the same confidential treatment as required by this section, unless the prior
written consent of the company to which it pertains has been obtained. For purposes of
this section, "market analysis" means a process whereby market conduct surveillance
personnel collect and analyze information from filed schedules, surveys, required reports,
such as the NAIC Market Conduct Annual Statement, or other sources in order to develop
a baseline profile of an insurer, review the operation or activity of an insurer, or to
identify patterns or practices of insurers licensed to do business in this state that deviate
significantly from the norm or that may pose a potential risk to the insurance consumer.

    Sec. 5. Minnesota Statutes 2008, section 60A.084, is amended to read:
60A.084 NOTIFICATION ON GROUP POLICIES.
An employer providing life or health benefits may not change benefits, limit
coverage, or otherwise restrict participation until the certificate holder or enrollee has
been notified of any changes, limitations, or restrictions. Notice in a format which
meets the requirements of the Employee Retirement Income Security Act, United States
Code Annotated, title 29, sections 1001 to 1461, United States Department of Labor is
satisfactory for compliance with this section.

    Sec. 6. Minnesota Statutes 2008, section 60A.204, is amended to read:
60A.204 ADDITIONAL CHARGES AND FEES AND COMMISSIONS.
    Subdivision 1. Placement fees. A surplus lines licensee may charge, in addition to
the premium charged by an eligible or ineligible surplus lines insurer, a fee to cover the
cost incurred in the placement of the policy which exceeds $25, but only to the extent that
the actual additional cost incurred for services performed by persons or entities unrelated
to the licensee exceeds that amount.
    Subd. 2. Regulation of fees. A surplus lines licensee may charge a fee charged
pursuant to subdivision 1 shall and commission, in addition to the premium, that is not be
excessive or discriminatory. The licensee shall maintain complete documentation of all
fees and commissions charged. Those fees shall not be included as part of the premium for
purposes of the computation of the premium taxes.
    Subd. 3. Commission charges. Notwithstanding the provisions of subdivision 1, a
licensee may add a commission charge if the insurer quotes a rate net of commission and
the commission is not excessive or discriminatory.

    Sec. 7. Minnesota Statutes 2008, section 60A.36, is amended by adding a subdivision
to read:
    Subd. 2a. Third-party notices. An insurer shall provide notice to a third party if:
(1) the policyholder has, separately from the certificate, notified the insurer of the
identity of the third party; and
(2) the third party is a licensing authority authorized by statute to receive the notice or
a state, city, or county governmental unit on whose behalf the insured is providing services.

    Sec. 8. Minnesota Statutes 2009 Supplement, section 60A.39, subdivision 1, is
amended to read:
    Subdivision 1. Issuance. A licensed insurer or insurance producer may provide to a
third party a certificate of insurance which documents insurance coverage. The purpose of
For the purposes of this chapter, a certificate of insurance is to provide a document that
provides evidence of property or liability insurance coverage and the amount of insurance
issued, and does not convey any contractual rights to the certificate holder.

    Sec. 9. Minnesota Statutes 2009 Supplement, section 60A.39, subdivision 4, is
amended to read:
    Subd. 4. Cancellation notice. A certificate provided to a third party must not
provide for notice of cancellation that exceeds the statutory notice of cancellation provided
to the policyholder or a period of notice specified in the policy.

    Sec. 10. Minnesota Statutes 2009 Supplement, section 60A.39, subdivision 5, is
amended to read:
    Subd. 5. Filing. An insurer not using the standard ACORD or ISO form "Certificate
of Insurance" shall file with the commissioner, prior to its use, the form of certificate or
memorandum of insurance coverage that will be used a similar alternative "Certificate
of Insurance" covering the same information for use by the insurer. Filed forms may not
be amended at the request of a third party.
EFFECTIVE DATE.This section is effective January 1, 2011.

    Sec. 11. Minnesota Statutes 2009 Supplement, section 60A.9572, subdivision 6,
is amended to read:
    Subd. 6. Disclosures. The applicant shall provide information on forms required
by the commissioner. The commissioner shall have authority, at any time, to require
the applicant to fully disclose the identity of all stockholders who hold more than ten
percent of the shares of the company, partners, officers, members, and employees, and
the commissioner may, in the exercise of the commissioner's discretion, refuse to issue a
license in the name of a legal entity if not satisfied that any officer, employee, stockholder,
partner, or member of the legal entity who may materially influence the applicant's
conduct meets the standards of sections 60A.957 to 60A.9585.

    Sec. 12. Minnesota Statutes 2008, section 60K.31, subdivision 10, is amended to read:
    Subd. 10. Limited lines insurance. "Limited lines insurance" means those lines
of insurance defined in section 60K.38, subdivision 1, paragraph (c), or any other line of
insurance that the commissioner considers necessary to recognize for the purposes of
complying with section 60K.39, subdivision 5 6.

    Sec. 13. Minnesota Statutes 2009 Supplement, section 60K.361, is amended to read:
60K.361 INSURANCE EDUCATION.
    (a) Prelicense education must consist of 20 hours of education per line of authority.
    (b) The first ten hours course must be include an introduction to insurance and
insurance-related concepts covering all of the major lines of authority except variable life
and variable annuities. The course must consist of the following:
    (1) rules, regulations, and law;
    (2) basic fundamentals of insurance;
    (3) property:
    (i) types of policies;
    (ii) policy provisions;
    (iii) perils, exclusions, deductibles, and liability; and
    (iv) evaluating needs;
    (4) casualty:
    (i) types of policies;
    (ii) policy provisions;
    (iii) perils, exclusions, deductibles, and liability; and
    (iv) evaluating needs;
    (5) life:
    (i) types of policies;
    (ii) policy provisions; and
    (iii) group insurance; and
    (6) accident and health:
    (i) types of policies;
    (ii) policy provisions; and
    (iii) group insurance.
    (c) The second ten hours of insurance prelicense education must be composed of
Courses that cover a specific major line of authority and consist of must include the
following:
    (1) life:
    (i) types of life insurance policies; and
    (ii) Minnesota laws, rules, and regulations pertinent to life insurance;
    (2) accident and health:
    (i) types of health insurance policies; and
    (ii) Minnesota laws, rules, and regulations pertinent to accident and health insurance;
    (3) property:
    (i) personal lines;
    (ii) commercial lines; and
    (iii) Minnesota laws, rules, and regulations pertinent to property insurance.
    (4) casualty:
    (i) personal lines;
    (ii) commercial lines; and
    (iii) Minnesota laws, rules, and regulations pertinent to casualty insurance; and
    (5) personal lines:
    (i) types of property/casualty personal lines insurance policies; and
    (ii) Minnesota laws, rules, and regulations pertinent to property/casualty personal
lines insurance.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 14. Minnesota Statutes 2008, section 61A.092, subdivision 3, is amended to read:
    Subd. 3. Notice of options. Upon termination of or layoff from employment
of a covered employee, the employer shall inform the employee within 14 days after
termination or layoff of:
(1) the employee's right to elect to continue the coverage;
(2) the amount the employee must pay monthly to the employer to retain the
coverage;
(3) the manner in which and the office of the employer to which the payment to
the employer must be made; and
(4) the time by which the payments to the employer must be made to retain coverage.
The employee has 60 days within which to elect coverage. The 60-day period shall
begin to run on the date coverage would otherwise terminate or on the date upon which
notice of the right to coverage is received, whichever is later.
If the covered employee or covered dependent dies during the 60-day election period
and before the covered employee makes an election to continue or reject continuation,
then the covered employee will be considered to have elected continuation of coverage.
The beneficiary previously selected by the former employee or covered dependent would
then be entitled to a death benefit equal to the amount of insurance that could have been
continued less any unpaid premium owing as of the date of death.
Notice must be in writing and sent by first class mail to the employee's last known
address which the employee has provided to the employer.
A notice in substantially the following form is sufficient: "As a terminated or laid
off employee, the law authorizes you to maintain your group insurance benefits, in an
amount equal to the amount of insurance in effect on the date you terminated or were laid
off from employment, for a period of up to 18 months. To do so, you must notify your
former employer within 60 days of your receipt of this notice that you intend to retain this
coverage and must make a monthly payment of $............ at ............. by the ............. of
each month."

    Sec. 15. Minnesota Statutes 2008, section 62A.046, subdivision 6, is amended to read:
    Subd. 6. Coordination of benefits. Insurers, vendors of risk management
services, nonprofit health service plan corporations, fraternals, and health maintenance
organizations may coordinate benefits to prohibit greater than 100 percent coverage when
an insured, subscriber, or enrollee is covered by both an individual and a group contract
providing coverage for hospital and medical treatment or expenses. Benefits coordinated
under this paragraph must provide for 100 percent coverage of an insured, subscriber,
or enrollee. To the extent appropriate, all coordination of benefits provisions currently
applicable by law or rule to insurers, vendors of risk management services, nonprofit
health service plan corporations, fraternals, and health maintenance organizations, shall
apply to coordination of benefits between individual and group contracts, except that the
group contract shall always be the primary plan. Notwithstanding the definition of "plan"
in Minnesota Rules, part 2742.0200, subpart 2, and in Minnesota Rules, part 4685.0910,
subpart 7, an individual contract must coordinate benefits with a group contract under this
subdivision consistent with applicable coordination of benefit rules. When a covered
person's other coverage is Medicare or TRICARE, a health plan company must determine
primacy and coordinate benefits in accordance with the Medicare Secondary Payor or
TRICARE provisions of federal law. This paragraph does not apply to specified accident,
hospital indemnity, specified disease, or other limited benefit insurance policies.

    Sec. 16. Minnesota Statutes 2008, section 62A.046, is amended by adding a
subdivision to read:
    Subd. 7. High-deductible health plans. If a health carrier is advised by a covered
person that all health plans covering the person are high-deductible health plans and
the person intends to contribute to a health savings account established in accordance
with section 223 of the Internal Revenue Code of 1986, the primary high-deductible
health plan's deductible is not an allowable expense, except for any health care expense
incurred that may not be subject to the deductible as described in section 223(c)(2)(C) of
the Internal Revenue Code of 1986.

    Sec. 17. Minnesota Statutes 2008, section 62A.17, subdivision 5, is amended to read:
    Subd. 5. Notice of options. Upon the termination of or lay off from employment of
an eligible employee, the employer shall inform the employee within ten 14 days after
termination or lay off of:
(a) (1) the right to elect to continue the coverage;
(b) (2) the amount the employee must pay monthly to the employer to retain the
coverage;
(c) (3) the manner in which and the office of the employer to which the payment to
the employer must be made; and
(d) (4) the time by which the payments to the employer must be made to retain
coverage.
If the policy, contract, or health care plan is administered by a trust, the employer is
relieved of the obligation imposed by clauses (a) (1) to (d) (4). The trust shall inform the
employee of the information required by clauses (a) (1) to (d) (4).
The employee shall have 60 days within which to elect coverage. The 60-day period
shall begin to run on the date plan coverage would otherwise terminate or on the date upon
which notice of the right to coverage is received, whichever is later.
Notice must be in writing and sent by first class mail to the employee's last known
address which the employee has provided the employer or trust.
A notice in substantially the following form shall be sufficient: "As a terminated or
laid off employee, the law authorizes you to maintain your group medical insurance for
a period of up to 18 months. To do so you must notify your former employer within 60
days of your receipt of this notice that you intend to retain this coverage and must make a
monthly payment of $.......... to ........... at .......... by the ............... of each month."

    Sec. 18. Minnesota Statutes 2008, section 62A.3099, subdivision 17, is amended to
read:
    Subd. 17. Medicare-related coverage. "Medicare-related coverage" means a
policy, contract, or certificate issued as a supplement to Medicare, regulated under
sections 62A.3099 to 62A.44, including Medicare select coverage; policies, contracts,
or certificates that supplement Medicare issued by health maintenance organizations; or
policies, contracts, or certificates governed by section 1833 (known as "cost" or "HCPP"
contracts) or 1876 (known as "TEFRA" or "risk" "Cost" contracts) of the federal Social
Security Act, United States Code, title 42, section 1395, et seq., as amended; or Section
4001 of the Balanced Budget Act of 1997 (BBA)(Public Law 105-33), Sections 1851 to
1859 of the Social Security Act establishing Part C of the Medicare program, known as
the "Medicare Advantage program."
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 19. Minnesota Statutes 2009 Supplement, section 62A.3099, subdivision 18,
is amended to read:
    Subd. 18. Medicare supplement policy or certificate. "Medicare supplement
policy or certificate" means a group or individual policy of accident and sickness insurance
or a subscriber contract of hospital and medical service associations or health maintenance
organizations, other than those policies or certificates covered by section 1833 1876 of the
federal Social Security Act, United States Code, title 42, section 1395, et seq., or an issued
policy under a demonstration project specified under amendments to the federal Social
Security Act, which is advertised, marketed, or designed primarily as a supplement to
reimbursements under Medicare for the hospital, medical, or surgical expenses of persons
eligible for Medicare or as a supplement to Medicare Advantage plans established under
Medicare Part C. "Medicare supplement policy" does not include Medicare Advantage
plans established under Medicare Part C, outpatient prescription drug plans established
under Medicare Part D, or any health care prepayment plan that provides benefits under an
agreement under section 1833(a)(1)(A) of the Social Security Act, or any policy issued to
an employer or employers or to the trustee of a fund established by an employer where
only employees or retirees, and dependents of employees or retirees, are eligible for
coverage, or any policy issued to a labor union or similar employee organization.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 20. Minnesota Statutes 2008, section 62A.65, subdivision 2, is amended to read:
    Subd. 2. Guaranteed renewal. No individual health plan may be offered, sold,
issued, or renewed to a Minnesota resident unless the health plan provides that the plan
is guaranteed renewable at a premium rate that does not take into account the claims
experience or any change in the health status of any covered person that occurred after
the initial issuance of the health plan to the person. The premium rate upon renewal
must also otherwise comply with this section. A health carrier must not refuse to renew
an individual health plan prior to enrollment in Medicare Parts A and B, except for
nonpayment of premiums, fraud, or misrepresentation.

    Sec. 21. Minnesota Statutes 2008, section 62E.02, subdivision 15, is amended to read:
    Subd. 15. Medicare. "Medicare" means part A and part B of the United States
Social Security Act, title XVIII, as amended, United States Code, title 42, sections 1394, et
seq. the Health Insurance for the Aged Act, title XVIII of the Social Security Amendments
of 1965, United States Code, title 42, sections 1395 to 1395hhh, as amended, or title I,
part I, of Public Law 89-97, as amended.

    Sec. 22. Minnesota Statutes 2008, section 62E.14, subdivision 4c, is amended to read:
    Subd. 4c. Waiver of preexisting conditions for persons whose coverage is
terminated or who exceed the maximum lifetime benefit. (a) A Minnesota resident
may enroll in the comprehensive health plan with a waiver of the preexisting condition
limitation described in subdivision 3 if that persons's application for coverage is received
by the writing carrier no later than 90 days after termination of prior coverage and if the
termination is for reasons other than fraud or nonpayment of premiums.
For purposes of this paragraph, termination of prior coverage includes exceeding the
maximum lifetime benefit of existing coverage.
Coverage in the comprehensive health plan is effective on the date of termination
of prior coverage. The availability of conversion rights does not affect a person's rights
under this paragraph.
This section does not apply to prior coverage provided under policies designed
primarily to provide coverage payable on a per diem, fixed indemnity, or nonexpense
incurred basis, or policies providing only accident coverage.
(b) An eligible individual, as defined under the Health Insurance Portability and
Accountability Act (HIPAA), United States Code, chapter 42, section 300gg-41(b) may
enroll in the comprehensive health insurance plan with a waiver of the preexisting
condition limitation described in subdivision 3 and a waiver of the evidence of rejection or
similar events described in subdivision 1, clause (c). The eligible individual must apply
for enrollment under this paragraph by submitting a substantially complete application
that is received by the writing carrier no later than 63 days after termination of prior
coverage, and coverage under the comprehensive health insurance plan is effective as
of the date of receipt of the complete application. The six-month durational residency
requirement provided in section 62E.02, subdivision 13, does not apply with respect to
eligibility for enrollment under this paragraph, but the applicant must be a Minnesota
resident as of the date that the application was received by the writing carrier. A person's
eligibility to enroll under this paragraph does not affect the person's eligibility to enroll
under any other provision.
(c) A qualifying individual, as defined in the Internal Revenue Code of 1986, section
35(e)(2)(B), who is eligible under the Federal Trade Act of 2002 for the credit Health
Coverage Tax Credit (HCTC) for health insurance costs under the Internal Revenue Code
of 1986, section 35, may enroll in the comprehensive health insurance plan with a waiver
of the preexisting condition limitation described in subdivision 3, and without presenting
evidence of rejection or similar requirements described in subdivision 1, paragraph (c).
The six-month durational residency requirement provided in section 62E.02, subdivision
13
, does not apply with respect to eligibility for enrollment under this paragraph, but the
applicant must be a Minnesota resident as of the date of application. A person's eligibility
to enroll under this paragraph does not affect the person's eligibility to enroll under any
other provision. This paragraph is intended solely to meet the minimum requirements
necessary to qualify the comprehensive health insurance plan as qualified health coverage
under the Internal Revenue Code of 1986, section 35(e)(2).

    Sec. 23. Minnesota Statutes 2008, section 62L.05, subdivision 4, is amended to read:
    Subd. 4. Benefits. The medical services and supplies listed in this subdivision are
the benefits that must be covered by the small employer plans described in subdivisions
2 and 3. Benefits under this subdivision may be provided through the managed care
procedures practiced by health carriers:
(1) inpatient and outpatient hospital services, excluding services provided for the
diagnosis, care, or treatment of chemical dependency or a mental illness or condition,
other than those conditions specified in clauses (10), and (11), and (12). The health
care services required to be covered under this clause must also be covered if rendered
in a nonhospital environment, on the same basis as coverage provided for those same
treatments or services if rendered in a hospital, provided, however, that this sentence must
not be interpreted as expanding the types or extent of services covered;
(2) physician, chiropractor, and nurse practitioner services for the diagnosis or
treatment of illnesses, injuries, or conditions;
(3) diagnostic x-rays and laboratory tests;
(4) ground transportation provided by a licensed ambulance service to the nearest
facility qualified to treat the condition, or as otherwise required by the health carrier;
(5) services of a home health agency if the services qualify as reimbursable services
under Medicare;
(6) services of a private duty registered nurse if medically necessary, as determined
by the health carrier;
(7) the rental or purchase, as appropriate, of durable medical equipment, other than
eyeglasses and hearing aids, unless coverage is required under section 62Q.675;
(8) child health supervision services up to age 18, as defined in section 62A.047;
(9) maternity and prenatal care services, as defined in sections 62A.041 and 62A.047;
(10) inpatient hospital and outpatient services for the diagnosis and treatment of
certain mental illnesses or conditions, as defined by the International Classification of
Diseases-Clinical Modification (ICD-9-CM), seventh edition (1990) and as classified
as ICD-9 codes 295 to 299; and
(11) ten hours per year of outpatient mental health diagnosis or treatment for
illnesses or conditions not described in clause (10);
(12) 60 hours per year of outpatient treatment of chemical dependency; and
(13) (11) 50 percent of eligible charges for prescription drugs, up to a separate
annual maximum out-of-pocket expense of $1,000 per individual for prescription drugs,
and 100 percent of eligible charges thereafter.

    Sec. 24. [62Q.188] FLEXIBLE BENEFITS PLANS.
    Subdivision 1. Definitions. For the purposes of this section, the terms used in this
section have the meanings defined in section 62Q.01, except that "health plan" includes
individual coverage and group coverage for employer plans with up to 100 employees.
    Subd. 2. Flexible benefits plan. Notwithstanding any provision of this chapter,
chapter 363A, or any other law to the contrary, a health plan company may offer, sell,
issue, and renew a health plan that is a flexible benefits plan under this section if the
following requirements are satisfied:
(1) the health plan must be offered in compliance with the laws of this state, except
as otherwise permitted in this section;
(2) the health plan must be designed to enable covered persons to better manage
costs and coverage options through the use of co-pays, deductibles, and other cost-sharing
arrangements;
(3) the health plan may modify or exclude any or all coverages of benefits that
would otherwise be required by law, except for maternity benefits and other benefits
required under federal law;
(4) each health plan and plan's premiums must be approved by the commissioner
of health or commerce, whichever is appropriate under section 62Q.01, subdivision 2,
but neither commissioner may disapprove a plan on the grounds of a modification or
exclusion permitted under clause (3); and
(5) prior to the sale of the health plan, the purchaser must be given a written list of
the coverages otherwise required by law that are modified or excluded in the health plan.
The list must include a description of each coverage in the list and indicate whether the
coverage is modified or excluded. If coverage is modified, the list must describe the
modification. The list may, but is not required to, also list any or all coverages otherwise
required by law that are included in the health plan and indicate that they are included.
The health plan company must require that a copy of this written list be provided, prior
to the effective date of the health plan, to each enrollee or employee who is eligible for
health coverage under the plan.
    Subd. 3. Employer health plan. An employer may provide a health plan permitted
under this section to its employees, the employees' dependents, and other persons eligible
for coverage under the employer's plan, notwithstanding chapter 363A or any other law
to the contrary.
EFFECTIVE DATE.This section is effective January 1, 2012.

    Sec. 25. Minnesota Statutes 2008, section 62S.24, subdivision 8, is amended to read:
    Subd. 8. Exchange for long-term care partnership policy; addition of policy
rider. (a) If authorized by federal law or a federal waiver is granted With respect to the
long-term care partnership program referenced in section 256B.0571, issuers of long-term
care policies may voluntarily exchange a current long-term care insurance policy for a
long-term care partnership policy that meets the requirements of Public Law 109-171,
section 6021, after the effective date of the state plan amendment implementing the
partnership program in this state. The exchange may be in the form of: (1) an amendment
or rider; or (2) a disclosure statement indicating that the coverage is now partnership
qualified.
(b) If authorized by federal law or a federal waiver is granted With respect to the
long-term care partnership program referenced in section 256B.0571, allowing to allow an
existing long-term care insurance policy to qualify as a partnership policy by addition of a
policy rider or amendment or disclosure statement, the issuer of the policy is authorized to
add the rider or amendment or disclosure statement to the policy after the effective date of
the state plan amendment implementing the partnership program in this state.
(c) The commissioner, in cooperation with the commissioner of human services,
shall pursue any federal law changes or waivers necessary to allow the implementation
of paragraphs (a) and (b).

    Sec. 26. Minnesota Statutes 2008, section 62S.266, subdivision 4, is amended to read:
    Subd. 4. Contingent benefit upon lapse. (a) After rejection of the offer required
under subdivision 2, for individual and group policies without nonforfeiture benefits
issued after July 1, 2001, the insurer shall provide a contingent benefit upon lapse.
    (b) If a group policyholder elects to make the nonforfeiture benefit an option to
the certificate holder, a certificate shall provide either the nonforfeiture benefit or the
contingent benefit upon lapse.
    (c) The contingent benefit on lapse must be triggered every time an insurer increases
the premium rates to a level which results in a cumulative increase of the annual premium
equal to or exceeding the percentage of the insured's initial annual premium based on
the insured's issue age provided in this paragraph, and the policy or certificate lapses
within 120 days of the due date of the premium increase. Unless otherwise required,
policyholders shall be notified at least 30 days prior to the due date of the premium
reflecting the rate increase.

Triggers for a Substantial Premium Increase


Issue Age
Percent Increase Over
Initial Premium

29 and Under
200

30-34
190

35-39
170

40-44
150

45-49
130

50-54
110

55-59
90

60
70

61
66

62
62

63
58

64
54

65
50

66
48

67
46

68
44

69
42

70
40

71
38

72
36

73
34

74
32

75
30

76
28

77
26

78
24

79
22

80
20

81
19

82
18

83
17

84
16

85
15

86
14

87
13

88
12

89
11

90 and over
10
    (d) A contingent benefit on lapse must also be triggered for policies with a fixed
or limited premium paying period every time an insurer increases the premium rates to a
level that results in a cumulative increase of the annual premium equal to or exceeding the
percentage of the insured's initial annual premium set forth below based on the insured's
issue age, the policy or certificate lapses within 120 days of the due date of the premium
so increased, and the ratio in paragraph (e) (f), clause (2), is 40 percent or more. Unless
otherwise required, policyholders shall be notified at least 30 days prior to the due date of
the premium reflecting the rate increase.

Triggers for a Substantial Premium Increase

Issue Age
Percent Increase Over Initial Premium

Under 65
50%

65-80
30%

Over 80
10%
    This provision shall be in addition to the contingent benefit provided by paragraph
(c) and where both are triggered, the benefit provided must be at the option of the insured.
    (e) On or before the effective date of a substantial premium increase as defined in
paragraph (c), the insurer shall:
    (1) offer to reduce policy benefits provided by the current coverage without the
requirement of additional underwriting so that required premium payments are not
increased;
    (2) offer to convert the coverage to a paid-up status with a shortened benefit period
according to the terms of subdivision 5. This option may be elected at any time during the
120-day period referenced in paragraph (c); and
    (3) notify the policyholder or certificate holder that a default or lapse at any time
during the 120-day period referenced in paragraph (c) is deemed to be the election of
the offer to convert in clause (2).
    (f) On or before the effective date of a substantial premium increase as defined in
paragraph (d), the insurer shall:
    (1) offer to reduce policy benefits provided by the current coverage without the
requirement of additional underwriting so that required premium payments are not
increased;
    (2) offer to convert the coverage to a paid-up status where the amount payable for
each benefit is 90 percent of the amount payable in effect immediately prior to lapse times
the ratio of the number of completed months of paid premiums divided by the number of
months in the premium paying period. This option may be elected at any time during the
120-day period referenced in paragraph (d); and
    (3) notify the policyholder or certificate holder that a default or lapse at any time
during the 120-day period referenced in paragraph (d) shall be deemed to be the election
of the offer to convert in clause (2) if the ratio is 40 percent or more.

    Sec. 27. Minnesota Statutes 2008, section 62S.29, subdivision 1, is amended to read:
    Subdivision 1. Requirements. An insurer or other entity marketing long-term care
insurance coverage in this state, directly or through its producers, shall:
(1) establish marketing procedures and agent training requirements to assure that
any marketing activities, including any comparison of policies by its agents or other
producers, are fair and accurate;
(2) establish marketing procedures to assure excessive insurance is not sold or issued;
(3) display prominently by type, stamp, or other appropriate means, on the first page
of the outline of coverage and policy, the following:
"Notice to buyer: This policy may not cover all of the costs associated with
long-term care incurred by the buyer during the period of coverage. The buyer is advised
to review carefully all policy limitations.";
(4) provide copies of the disclosure forms required in section 62S.081, subdivision
4, to the applicant;
(5) inquire and otherwise make every reasonable effort to identify whether a
prospective applicant or enrollee for long-term care insurance already has long-term care
insurance and the types and amounts of the insurance;
(6) establish auditable procedures for verifying compliance with this subdivision;
(7) if applicable, provide written notice to the prospective policyholder and
certificate holder, at solicitation, that a senior insurance counseling program approved by
the commissioner, the Senior LinkAge Line, is available and the name, address, and
telephone number of the program;
(8) use the terms "noncancelable" or "level premium" only when the policy or
certificate conforms to section 62S.14; and
(9) provide an explanation of contingent benefit upon lapse provided for in section
62S.266.

    Sec. 28. Minnesota Statutes 2009 Supplement, section 65A.29, subdivision 13, is
amended to read:
    Subd. 13. Notice of possible cancellation. (a) A written notice must be provided
to all applicants for homeowners' insurance, at the time the application is submitted,
containing the following language in bold print: "THE INSURER MAY ELECT
TO CANCEL COVERAGE AT ANY TIME DURING THE FIRST 60 59 DAYS
FOLLOWING ISSUANCE OF THE COVERAGE FOR ANY REASON WHICH IS
NOT SPECIFICALLY PROHIBITED BY STATUTE."
(b) If the insurer provides the notice on the insurer's Web site, the insurer or agent
may advise the applicant orally or in writing of its availability for review on the insurer's
Web site in lieu of providing a written notice, if the insurer advises the applicant of the
availability of a written notice upon the applicant's request. The insurer shall provide the
notice in writing if requested by the applicant. An oral notice shall be presumed delivered
if the agent or insurer makes a contemporaneous notation in the applicant's record of
the notice having been delivered or if the insurer or agent retains an audio recording of
the notification provided to the applicant.

    Sec. 29. Minnesota Statutes 2008, section 72A.08, subdivision 4, is amended to read:
    Subd. 4. Exceptions. (a) The provisions of this section shall not apply to any policy
procured by officers, agents, subagents, employees, intermediaries, or representatives
wholly and solely upon property of which they are, respectively, the owner at the time of
procuring the policy, where the officers, agents, subagents, employees, intermediaries, or
representatives are, and have been for more than six months prior to the issuing of the
policy, regularly employed by, or connected with, the company or association issuing the
policy; and any life insurance company doing business in this state may issue industrial
policies of life or endowment insurance, with or without annuities, with special rates of
premiums less than the usual rates of premiums for these policies, to members of labor
organizations, credit unions, lodges, beneficial societies, or similar organizations, or
employees of one employer, who, through their secretary or employer, may take out
insurance in an aggregate of not less than 50 members and pay their premiums through
the secretary or employer.
(b) A promotional advertising item of $25 or less or a gift of $25 or less per year
is not a rebate if the receipt of the item or gift is not conditioned upon purchase of an
insurance policy or product.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 30. Minnesota Statutes 2008, section 72A.12, subdivision 4, is amended to read:
    Subd. 4. Discrimination; rebates. (a) No life insurance company doing business in
this state shall make or permit any distinction or discrimination in favor of individuals
between insurants of the same class and equal expectation of life in the amount or
payment of premiums or rates charged for policies of life or endowment insurance,
or in the dividends or other benefits payable thereon, or in any other of the terms and
conditions of the contracts it makes; nor shall any such company or agent thereof make
any contract of insurance or agreement as to such contract other than as plainly expressed
in the policy issued thereon; nor shall any such company or any officer, agent, solicitor,
or representative thereof pay, allow or give, or offer to pay, allow or give, directly or
indirectly, as inducement to insurance, any rebate of premium payable on the policy, or
any special favor or advantage in the dividends or other benefits to accrue thereon or any
paid employment or contract for services of any kind, or any valuable consideration or
inducement whatever not specified in the policy contract of insurance.
Any violation of the provisions of this subdivision shall be a misdemeanor and
punishable as such.
(b) A promotional advertising item of $25 or less or a gift of $25 or less per year
is not a rebate if the receipt of the item or gift is not conditioned upon purchase of an
insurance policy or product.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 31. Minnesota Statutes 2008, section 72A.20, subdivision 10, is amended to read:
    Subd. 10. Rebates. (a) Except as otherwise expressly provided by law, knowingly
permitting or offering to make or making any contract of life insurance, annuity, or
accident and health insurance, or agreement as to such contract, other than as plainly
expressed in the contract issued thereon, or paying or allowing or giving, or offering to
pay, allow, or give, directly or indirectly, as inducement to such insurance or annuity, any
rebate of premiums payable on the contract, or any special favor or advantage in the
dividends or other benefits thereon, or any valuable consideration or inducement whatever
not specified in the contract; or giving or selling or purchasing, or offering to give, sell,
or purchase, as inducement to such insurance or annuity, or in connection therewith,
any stocks, bonds, or other securities of any insurance company or other corporation,
association, or partnership, or any dividends or profits accrued thereon, or anything
of value whatsoever not specified in the contract, shall constitute an unfair method of
competition and an unfair and deceptive act or practice.
(b) A promotional advertising item of $25 or less or a gift of $25 or less per year
is not a rebate if the receipt of the item or gift is not conditioned upon purchase of an
insurance policy or product.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 32. Minnesota Statutes 2008, section 72A.20, subdivision 36, is amended to read:
    Subd. 36. Limitations on the use of credit information. (a) No insurer or group of
affiliated insurers may reject, cancel, or nonrenew a policy of private passenger motor
vehicle insurance as defined under section 65B.01 or a policy of homeowner's insurance
as defined under section 65A.27, for any person in whole or in part on the basis of credit
information, including a credit reporting product known as a "credit score" or "insurance
score," without consideration and inclusion of any other applicable underwriting factor.
(b) If credit information, credit scoring, or insurance scoring is to be used in
underwriting, the insurer must disclose to the consumer that credit information will be
obtained and used as part of the insurance underwriting process.
(c) Insurance inquiries and non-consumer-initiated inquiries must not be used as part
of the credit scoring or insurance scoring process.
(d) If a credit score, insurance score, or other credit information relating to a
consumer, with respect to the types of insurance referred to in paragraph (a), is adversely
impacted or cannot be generated because of the absence of a credit history, the insurer
must exclude the use of credit as a factor in the decision to reject, cancel, or nonrenew.
(e) Insurers must upon the request of a policyholder reevaluate the policyholder's
score. Any change in premium resulting from the reevaluation must be effective upon
the renewal of the policy. An insurer is not required to reevaluate a policyholder's score
pursuant to this paragraph more than twice in any given calendar year.
(f) Insurers must upon request of the applicant or policyholder provide reasonable
underwriting exceptions based upon prior credit histories for persons whose credit
information is unduly influenced by expenses related to a catastrophic injury or illness,
temporary loss of employment, or the death of an immediate family member. The insurer
may require reasonable documentation of these events prior to granting an exception.
(g) A credit scoring or insurance scoring methodology must not be used by an
insurer if the credit scoring or insurance scoring methodology incorporates the gender,
race, nationality, or religion of an insured or applicant.
(h) Insurers that employ a credit scoring or insurance scoring system in underwriting
of coverage described in paragraph (a) must have on file with the commissioner:
(1) the insurer's credit scoring or insurance scoring methodology; and
(2) information that supports the insurer's use of a credit score or insurance score as
an underwriting criterion.
(i) Insurers described in paragraph (g) (h) shall file the required information with the
commissioner within 120 days of August 1, 2002, or prior to implementation of a credit
scoring or insurance scoring system by the insurer, if that date is later.
(j) Information provided by, or on behalf of, an insurer to the commissioner under
this subdivision is trade secret information under section 13.37.

    Sec. 33. Minnesota Statutes 2008, section 72A.20, subdivision 37, is amended to read:
    Subd. 37. Electronic transmission of required information. (a) A health carrier,
as defined in section 62A.011, subdivision 2, is not in violation of this chapter for
electronically transmitting or electronically making available information otherwise
required to be delivered in writing under chapters 62A to 62Q and 72A to an enrollee as
defined in section 62Q.01, subdivision 2a, or to a health plan as defined in paragraph (b),
and with the requirements of those chapters if the following conditions are met:
(1) the health carrier informs the group policyholder or the enrollee or both that
electronic transmission or access is available and, at the discretion of the health carrier, the
enrollee is given one of the following options:
(i) electronic transmission or access will occur only if the group policyholder or the
enrollee or both affirmatively requests to the health carrier that the required information
be electronically transmitted or available and a record of that request is retained by the
health carrier; or
(ii) electronic transmission or access will automatically occur if the group
policyholder or the enrollee or both has not opted out of that manner of transmission by
request to the health carrier and requested that the information be provided in writing. If
the group policyholder or the enrollee or both opts out of electronic transmission, a record
of that request must be retained by the health carrier;
(2) the group policyholder or the enrollee or both is allowed to withdraw the request
at any time;
(3) if the information transmitted electronically contains individually identifiable
data, it must be transmitted to a secured mailbox. If the information made available
electronically contains individually identifiable data, it must be made available at a
password-protected secured Web site;
(4) the group policyholder or the enrollee or both is provided a customer service
number on the enrollee's member card that may be called to request a written copy of
the document; and
(5) the electronic transmission or electronic availability meets all other requirements
of this chapter including, but not limited to, size of the typeface and any required time
frames for distribution.
(b) For the purpose of this section, "health plan" means a health plan as defined
in section 62A.011 or a policy of accident and sickness insurance as defined in section
62A.01.

    Sec. 34. Minnesota Statutes 2008, section 72A.492, subdivision 2, is amended to read:
    Subd. 2. Covered persons. The rights granted by sections 72A.49 to 72A.505
extend to:
(1) a person who is a resident of this state and is the subject of information collected,
received, or maintained in connection with an insurance transaction; and
(2) a person who is a resident of this state and engages in or seeks to engage in
an insurance transaction.

    Sec. 35. Minnesota Statutes 2008, section 72A.51, subdivision 2, is amended to read:
    Subd. 2. Return of policy or contract; notice. Any individual person may cancel
an individual policy of insurance against loss or damage by reason of the sickness of the
assured or the assured's dependents, a nonprofit health service plan contract providing
benefits for hospital, surgical and medical care, a health maintenance organization
subscriber contract, or a policy of insurance authorized by section 60A.06, subdivision 1,
clause (4), except Medicare-related coverage as defined in section 62A.3099, subdivision
17, and long-term care insurance as defined in section 62S.01, subdivision 18, by
returning the policy or contract and by giving written notice of cancellation any time
before midnight of the tenth day following the date of purchase. Notice of cancellation
may be given personally or by mail. The policy or contract may be returned personally or
by mail. If by mail, the notice or return of the policy or contract is effective upon being
postmarked, properly addressed and postage prepaid.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 36. Minnesota Statutes 2008, section 72B.01, is amended to read:
72B.01 PURPOSE AND SCOPE.
It is the purpose of sections 72B.01 to 72B.14 to provide high quality service to
insureds and insurance claimants in the state of Minnesota by providing for well trained
adjusters and persons engaged in soliciting business for adjusters, who are qualified to deal
with the public in the interest of a fair resolution of insurance claims. Sections 72B.01 to
72B.14 shall apply to all adjusters, and adjusters' solicitors, except as specifically stated to
the contrary; but nothing in sections 72B.01 to 72B.14 shall apply to:
(a) An attorney at law who is licensed or otherwise allowed to practice law in this
state and who does not hold out to be an adjuster, or adjuster's solicitor.
(b) A licensed agent of an authorized insurer who adjusts losses for such insurer
solely under policies issued by the agent or the agent's agency or on which the agent is the
agent of record, provided the agent receives no extra compensation for such services.
(c) Personnel of township mutual companies.
(d) Adjusters for crop hail and farm windstorm damage claims who are on the staff
of companies covering such risks.
(e) Persons who process life insurance annuity contract or accident and health
insurance claims.
(f) Persons processing or adjusting wet marine or inland transportation claims or
losses.

    Sec. 37. Minnesota Statutes 2009 Supplement, section 72B.03, subdivision 2, is
amended to read:
    Subd. 2. Classes of licenses. (a) Unless denied licensure pursuant to section 72B.08,
persons who have met the requirements of section 72B.04 72B.041 must be issued an
adjuster license. There shall be four classes of licenses, as follows:
(1) independent adjuster's license;
(2) public adjuster's license;
(3) public adjuster solicitor's license; and
(4) crop hail adjuster's license.
(b) An independent adjuster and a public adjuster may qualify for a license in one or
more of the following lines of authority:
(1) property and casualty; or
(2) workers' compensation; or
(3) crop.
(c) Any person holding a license pursuant to this section is not required to hold any
other independent adjuster, public adjuster, insurance, or self-insurance administrator
license in this state pursuant to section 60A.23, subdivision 8, or any other provision,
provided that the person does not act as an adjuster with respect to life, health, or annuity
insurance, other than disability insurance.
(d) An adjuster license remains in effect unless probated, suspended, revoked, or
refused as long as the fee set forth in section 72B.04, subdivision 10 72B.041, subdivision
9, is paid and all other requirements for license renewal are met by the due date, otherwise,
the license expires.
(e) An adjuster whose license expires may, within 12 months of the renewal date,
be reissued an adjuster license upon receipt of the renewal request, as prescribed by the
commissioner; however, a penalty in the amount of double the unpaid renewal fee is
required to reissue the expired license.
(f) An adjuster who is unable to comply with license renewal procedures and
requirements due to military service, long-term medical disability, or some other
extenuating circumstance may request a waiver of same and a waiver of any examination
requirement, fine, or other sanction imposed for failure to comply with renewal procedures.
(g) An adjuster is subject to sections 72A.17 to 72A.32.
(h) The adjuster must inform the commissioner by any means acceptable of any
change in resident or business addresses for the home state or in legal name within 30
days of the change.
(i) The license must contain the licensee's name, address, and personal identification
number; the dates of issuance and expiration; and any other information the commissioner
deems necessary.
(j) In order to assist in the performance of the commissioner's duties, the
commissioner may contract with nongovernmental entities, including the National
Association of Insurance Commissioners, its affiliates, or its subsidiaries, to perform any
ministerial functions related to licensing that the commissioner may deem appropriate,
including the collection of fees and data.

    Sec. 38. Minnesota Statutes 2009 Supplement, section 72B.045, subdivision 1, is
amended to read:
    Subdivision 1. Requirement. An individual who holds an independent or public
adjuster license and who is not exempt under this section must satisfactorily complete
a minimum of 24 hours of continuing education courses, of which three hours must
be in ethics, reported to the commissioner on a biennial basis in conjunction with the
individual's license renewal cycle.

    Sec. 39. Minnesota Statutes 2009 Supplement, section 72B.06, is amended to read:
72B.06 CATASTROPHE OR EMERGENCY SITUATIONS.
(a) In the event of a declared catastrophe or the occurrence of an emergency
situation, For purposes of this chapter, a catastrophe exists when, due to a specific,
infrequent, and sudden natural or man-made disaster or phenomenon, there have arisen
losses to property in Minnesota that are covered by insurance, and the losses are so
numerous and severe that resolution of claims related to such covered property losses will
not occur expeditiously without the licensing of emergency independent adjusters due to
the magnitude of the catastrophic damage. A failure of claims to be resolved expeditiously
shall exist upon an insurer's filing with the department a written statement that one of the
following conditions exists: (1) the insurer expects to incur at least 500 claims as a result
of the event; or (2) the magnitude of the event is expected to generate twice the mean
number of claims for one month for the affected area. Such written statement may be
sent electronically to the commissioner. An insurer must notify the commissioner via an
application for registration of each individual independent adjuster not already licensed in
the state where the catastrophe has been declared or an emergency situation has occurred
Minnesota, that will act as an emergency independent adjuster on behalf of the insurer
pursuant to paragraph (b).
(b) A person who is otherwise qualified to adjust claims, but not already licensed in
the state where the catastrophe has been declared or an emergency situation has occurred
Minnesota, may act as an emergency independent adjuster and adjust claims, if, within
five days of deployment to adjust claims arising from the declared catastrophe or the
occurrence of an emergency situation, the insurer or the independent adjuster's employer,
in the notification required by paragraph (a), notifies the commissioner by providing the
following information in a format prescribed by the commissioner:
(1) the name of the individual;
(2) the Social Security number of the individual;
(3) the name of the insurer the independent adjuster will represent;
(4) the effective date of the contract between the insurer and independent adjuster or
the independent adjuster's employer;
(5) the catastrophe, emergency situation, or loss control number;
(6) the catastrophe or emergency situation event name; and
(7) other information the commissioner deems necessary.
(c) An emergency independent adjuster's license or registration remains in force for
the period of time established by the commissioner 180 days; such license or registration
shall be effective for all catastrophes described in paragraph (a), clauses (1) and (2). Such
license or registration may be extended for 180 days.
The commissioner may summarily suspend or revoke the right of any person
adjusting in this state under the authority of this section to continue to adjust in this state,
if the commissioner finds that that person has engaged in any of the practices forbidden
to a licensed adjuster under sections 72B.01 to 72B.14. Notice of such suspension or
revocation may be given personally or by mail sent to the temporary address stated in the
registration and to the insurer or independent adjusting firm company who submitted the
independent adjuster information.

    Sec. 40. Minnesota Statutes 2008, section 72B.08, subdivision 8, is amended to read:
    Subd. 8. Bond. In the case of any licensee or permit holder who has had a license or
permit suspended or revoked or whose license renewal has been prohibited by a lawful
order of the commissioner, the commissioner may condition the issuance of a new license
on the filing of a surety bond in an amount not to exceed $10,000, made and conditioned in
accordance with the requirements of section 72B.04, subdivision 4 72B.041, subdivision
3, relating to public adjusters' bonds. Nothing in this subdivision shall reduce or alter the
bonding requirements for a public adjuster.

    Sec. 41. Minnesota Statutes 2008, section 79A.03, subdivision 8, is amended to read:
    Subd. 8. Processing application. The commissioner shall grant or deny the group's
application to self-insure within 60 days after a complete application has been filed,
provided that the time may be extended for an additional 30 days upon 15 days' prior
notice to the applicant. The commissioner shall grant approval for self-insurance upon
a determination that the financial ability of the self-insurer's group is sufficient to fulfill
all joint and several obligations of the member companies that may arise under chapter
176 or this chapter; the gross annual premium of the group members is at least $300,000
150 percent of the WCRA minimum retention in effect at the time of the application; the
group has established a fund pursuant to Minnesota Rules, parts 2780.4100 to 2780.5000;
the group has contracted with a licensed workers' compensation service company to
administer its program; and the required securities or surety bond shall be on deposit prior
to the effective date of coverage for any member. Approval shall be effective until revoked
by order of the commissioner or until the employer members of the group become insured.
EFFECTIVE DATE.This section is effective August 1, 2010, and applies to
applications processed on or after that date, but not to self-insured groups existing as of
that date.

    Sec. 42. Minnesota Statutes 2008, section 79A.06, subdivision 5, is amended to read:
    Subd. 5. Private employers who have ceased to be self-insured. (a) Private
employers who have ceased to be private self-insurers shall discharge their continuing
obligations to secure the payment of compensation which is accrued during the period of
self-insurance, for purposes of Laws 1988, chapter 674, sections 1 to 21, by compliance
with all of the following obligations of current certificate holders:
    (1) Filing reports with the commissioner to carry out the requirements of this chapter;
    (2) Depositing and maintaining a security deposit for accrued liability for the
payment of any compensation which may become due, pursuant to chapter 176. However,
if a private employer who has ceased to be a private self-insurer purchases an insurance
policy from an insurer authorized to transact workers' compensation insurance in this state
which provides coverage of all claims for compensation arising out of injuries occurring
during the entire period the employer was self-insured, whether or not reported during
that period, the policy will:
    (i) discharge the obligation of the employer to maintain a security deposit for the
payment of the claims covered under the policy;
    (ii) discharge any obligation which the self-insurers' security fund has or may have
for payment of all claims for compensation arising out of injuries occurring during the
period the employer was self-insured, whether or not reported during that period; and
    (iii) discharge the obligations of the employer to pay any future assessments to
the self-insurers' security fund; provided, however, that a member that terminates its
self-insurance authority on or after August 1, 2010, shall be liable for an assessment under
paragraph (b). The actuarial opinion shall not take into consideration any transfer of the
member's liabilities to an insurance policy if the member obtains a replacement policy as
described in this subdivision within one year of the date of terminating its self-insurance.
    A private employer who has ceased to be a private self-insurer may instead buy an
insurance policy described above, except that it covers only a portion of the period of time
during which the private employer was self-insured; purchase of such a policy discharges
any obligation that the self-insurers' security fund has or may have for payment of all
claims for compensation arising out of injuries occurring during the period for which the
policy provides coverage, whether or not reported during that period.
    A policy described in this clause may not be issued by an insurer unless it has
previously been approved as to form and substance by the commissioner; and
    (3) Paying within 30 days all assessments of which notice is sent by the security
fund, for a period of seven years from the last day its certificate of self-insurance was in
effect. Thereafter, the private employer who has ceased to be a private self-insurer may
either: (i) continue to pay within 30 days all assessments of which notice is sent by the
security fund until it has no incurred liabilities for the payment of compensation arising
out of injuries during the period of self-insurance; or (ii) pay the security fund a cash
payment equal to four percent of the net present value of all remaining incurred liabilities
for the payment of compensation under sections 176.101 and 176.111 as certified by a
member of the casualty actuarial society. Assessments shall be based on the benefits paid
by the employer during the calendar year immediately preceding the calendar year in
which the employer's right to self-insure is terminated or withdrawn.
    (b) With respect to a self-insurer who terminates its self-insurance authority after
April 1, 1998, that member shall obtain and file with the commissioner an actuarial
opinion of its outstanding liabilities as determined by an associate or fellow of the
Casualty Actuarial Society within 120 days of the date of its termination. If the actuarial
opinion is not timely filed, the self-insurers' security fund may, at its discretion, engage
the services of an actuary for this purpose. The expense of this actuarial opinion must
be assessed against and be the obligation of the self-insurer. The commissioner may
issue a certificate of default against the self-insurer for failure to pay this assessment
to the self-insurers' security fund as provided by section 79A.04, subdivision 9. The
opinion must separate liability for indemnity benefits from liability from medical benefits,
and must may discount each liabilities up to four percent per annum to net present
value. Within 30 60 days after notification of approval of the actuarial opinion by the
commissioner, the exiting member shall pay to the security fund an amount equal to 120
percent of that discounted outstanding indemnity liability, multiplied by the greater of the
average annualized assessment rate since inception of the security fund or the annual
rate at the time of the most recent assessment before termination determined as follows:
a percentage will be determined by dividing the security fund's members' deficit as
determined by the most recent audited financial statement of the security fund by the total
actuarial liability of all members of the security fund as calculated by the commissioner
within 30 days of the exit date of the member. This quotient will then be multiplied by
that exiting member's total future liability as contained in the exiting member's actuarial
opinion. If the payment is not made within 30 days of the notification, interest on it at the
rate prescribed by section 549.09 must be paid by the former member to the security fund
until the principal amount is paid in full.
    (c) A former member who terminated its self-insurance authority before April 1,
1998, who has paid assessments to the self-insurers' security fund for seven years, and
whose annualized assessment is $15,000 or less, may buy out of its outstanding liabilities
to the self-insurers' security fund by an amount calculated as follows: 1.35 multiplied by
the indemnity case reserves at the time of the calculation, multiplied by the then current
self-insurers' security fund annualized assessment rate.
    (d) A former member who terminated its self-insurance authority before April 1,
1998, and who is paying assessments within the first seven years after ceasing to be
self-insured under paragraph (a), clause (3), may elect to buy out its outstanding liabilities
to the self-insurers' security fund by obtaining and filing with the commissioner an
actuarial opinion of its outstanding liabilities as determined by an associate or fellow of
the Casualty Actuarial Society. The opinion must separate liability for indemnity benefits
from liability for medical benefits, and must discount each up to four percent per annum to
net present value. Within 30 days after notification of approval of the actuarial opinion
by the commissioner, the member shall pay to the security fund an amount equal to 120
percent of that discounted outstanding indemnity liability, multiplied by the greater of the
average annualized assessment rate since inception of the security fund or the annual rate
at the time of the most recent assessment.
    (e) A former member who has paid the security fund according to paragraphs (b) to
(d) and subsequently receives authority from the commissioner to again self-insure shall be
assessed under section 79A.12, subdivision 2, only on indemnity benefits paid on injuries
that occurred after the former member received authority to self-insure again; provided
that the member furnishes verified data regarding those benefits to the security fund.
    (f) In addition to proceedings to establish liabilities and penalties otherwise
provided, a failure to comply may be the subject of a proceeding before the commissioner.
An appeal from the commissioner's determination may be taken pursuant to the contested
case procedures of chapter 14 within 30 days of the commissioner's written determination.
    Any current or past member of the self-insurers' security fund is subject to service of
process on any claim arising out of chapter 176 or this chapter in the manner provided by
section 5.25, or as otherwise provided by law. The issuance of a certificate to self-insure
to the private self-insured employer shall be deemed to be the agreement that any process
which is served in accordance with this section shall be of the same legal force and effect
as if served personally within this state.
EFFECTIVE DATE.This section is effective August 1, 2010, and applies to
terminations of self-insurance authority that become effective on or after that date.

    Sec. 43. Minnesota Statutes 2008, section 79A.21, subdivision 3, is amended to read:
    Subd. 3. Approval. The commissioner shall approve an application for
self-insurance upon a determination that all of the following conditions are met:
(1) a completed application and all required documents have been submitted to
the commissioner;
(2) the financial ability of the commercial self-insurance group is sufficient to fulfill
all obligations that may arise under this chapter or chapter 176;
(3) the annual premium of the commercial self-insurance group to be charged to
initial members is at least $400,000 150 percent of the WCRA minimum retention in
effect at the time of the application;
(4) the commercial self-insurance group has contracted with a service company to
administer its program; and
(5) the required securities or surety bond shall be on deposit prior to the effective
date of coverage for the commercial self-insurance group.
EFFECTIVE DATE.This section is effective August 1, 2010, and applies to
applications processed on or after that date, but not to self-insured groups existing as of
that date.

    Sec. 44. Minnesota Statutes 2008, section 80A.41, is amended to read:
80A.41 SECTION 102; DEFINITIONS.
    In this chapter, unless the context otherwise requires:
(1) "Accredited investor" means an accredited investor as the term is defined in Rule
501(a) of Regulation D adopted pursuant to the Securities Act of 1933.
    (2) "Administrator" means the commissioner of commerce.
    (3) "Agent" means an individual, other than a broker-dealer, who represents a
broker-dealer in effecting or attempting to effect purchases or sales of securities or
represents an issuer in effecting or attempting to effect purchases or sales of the issuer's
securities. But a partner, officer, or director of a broker-dealer or issuer, or an individual
having a similar status or performing similar functions is an agent only if the individual
otherwise comes within the term. The term does not include an individual excluded by
rule adopted or order issued under this chapter.
    (4) "Bank" means:
    (A) a banking institution organized under the laws of the United States;
    (B) a member bank of the Federal Reserve System;
    (C) any other banking institution, whether incorporated or not, doing business
under the laws of a state or of the United States, a substantial portion of the business
of which consists of receiving deposits or exercising fiduciary powers similar to those
permitted to be exercised by national banks under the authority of the Comptroller of the
Currency pursuant to Section 1 of Public Law 87-722 (12 U.S.C. Section 92a), and which
is supervised and examined by a state or federal agency having supervision over banks,
and which is not operated for the purpose of evading this chapter; and
    (D) a receiver, conservator, or other liquidating agent of any institution or firm
included in subparagraph (A), (B), or (C).
    (5) "Broker-dealer" means a person engaged in the business of effecting transactions
in securities for the account of others or for the person's own account. The term does
not include:
    (A) an agent;
    (B) an issuer;
    (C) a depository institution; provided such activities are conducted in accordance
with such rules as may be adopted by the administrator;
    (D) an international banking institution; or
    (E) a person excluded by rule adopted or order issued under this chapter.
    (6) "Depository institution" means:
    (A) a bank; or
    (B) a savings institution, trust company, credit union, or similar institution that
is organized or chartered under the laws of a state or of the United States, authorized
to receive deposits, and supervised and examined by an official or agency of a state or
the United States if its deposits or share accounts are insured to the maximum amount
authorized by statute by the Federal Deposit Insurance Corporation, the National Credit
Union Share Insurance Fund, or a successor authorized by federal law. The term does
not include:
    (i) an insurance company or other organization primarily engaged in the business
of insurance;
    (ii) a Morris Plan bank; or
    (iii) an industrial loan company that is not an "insured depository institution" as
defined in section 3(c)(2) of the Federal Deposit Insurance Act, United States Code, title
12, section 1813(c)(2), or any successor federal statute.
    (7) "Federal covered investment adviser" means a person registered under the
Investment Advisers Act of 1940.
    (8) "Federal covered security" means a security that is, or upon completion of a
transaction will be, a covered security under Section 18(b) of the Securities Act of 1933
(15 U.S.C. Section 77r(b)) or rules or regulations adopted pursuant to that provision.
    (9) "Filing" means the receipt under this chapter of a record by the administrator or
a designee of the administrator.
    (10) "Fraud," "deceit," and "defraud" are not limited to common law deceit.
    (11) "Guaranteed" means guaranteed as to payment of all principal and all interest.
    (12) "Institutional investor" means any of the following, whether acting for itself or
for others in a fiduciary capacity:
    (A) a depository institution or international banking institution;
    (B) an insurance company;
    (C) a separate account of an insurance company;
    (D) an investment company as defined in the Investment Company Act of 1940;
    (E) a broker-dealer registered under the Securities Exchange Act of 1934;
    (F) an employee pension, profit-sharing, or benefit plan if the plan has total assets
in excess of $10,000,000 or its investment decisions are made by a named fiduciary, as
defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer
registered under the Securities Exchange Act of 1934, an investment adviser registered
or exempt from registration under the Investment Advisers Act of 1940, an investment
adviser registered under this chapter, a depository institution, or an insurance company;
    (G) a plan established and maintained by a state, a political subdivision of a state, or
an agency or instrumentality of a state or a political subdivision of a state for the benefit
of its employees, if the plan has total assets in excess of $10,000,000 or its investment
decisions are made by a duly designated public official or by a named fiduciary, as
defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer
registered under the Securities Exchange Act of 1934, an investment adviser registered
or exempt from registration under the Investment Advisers Act of 1940, an investment
adviser registered under this chapter, a depository institution, or an insurance company;
    (H) a trust, if it has total assets in excess of $10,000,000, its trustee is a depository
institution, and its participants are exclusively plans of the types identified in subparagraph
(F) or (G), regardless of the size of their assets, except a trust that includes as participants
self-directed individual retirement accounts or similar self-directed plans;
    (I) an organization described in Section 501(c)(3) of the Internal Revenue Code (26
U.S.C. Section 501(c)(3)), corporation, Massachusetts trust or similar business trust,
limited liability company, or partnership, not formed for the specific purpose of acquiring
the securities offered, with total assets in excess of $10,000,000;
    (J) a small business investment company licensed by the Small Business
Administration under Section 301(c) of the Small Business Investment Act of 1958 (15
U.S.C. Section 681(c)) with total assets in excess of $10,000,000;
    (K) a private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(22)) with total assets
in excess of $10,000,000;
    (L) a federal covered investment adviser acting for its own account;
    (M) a "qualified institutional buyer" as defined in Rule 144A(a)(1), other than Rule
144A(a)(1)(i)(H), adopted under the Securities Act of 1933 (17 C.F.R. 230.144A);
    (N) a "major U.S. institutional investor" as defined in Rule 15a-6(b)(4)(i) adopted
under the Securities Exchange Act of 1934 (17 C.F.R. 240.15a-6);
    (O) any other person, other than an individual, of institutional character with total
assets in excess of $10,000,000 not organized for the specific purpose of evading this
chapter; or
    (P) any other person specified by rule adopted or order issued under this chapter;
    (13) "Insurance company" means a company organized as an insurance company
whose primary business is writing insurance or reinsuring risks underwritten by insurance
companies and which is subject to supervision by the insurance commissioner or a similar
official or agency of a state.
    (14) "Insured" means insured as to payment of all principal and all interest.
    (15) "International banking institution" means an international financial institution
of which the United States is a member and whose securities are exempt from registration
under the Securities Act of 1933.
    (16) "Investment adviser" means a person that, for compensation, engages in the
business of advising others, either directly or through publications or writings, as to the
value of securities or the advisability of investing in, purchasing, or selling securities or
that, for compensation and as a part of a regular business, issues or promulgates analyses
or reports concerning securities. The term includes a financial planner or other person
that, as an integral component of other financially related services, provides investment
advice to others for compensation as part of a business or that holds itself out as providing
investment advice to others for compensation. The term does not include:
    (A) an investment adviser representative;
    (B) a lawyer, accountant, engineer, or teacher whose performance of investment
advice is solely incidental to the practice of the person's profession;
    (C) a broker-dealer or its agents whose performance of investment advice is solely
incidental to the conduct of business as a broker-dealer and that does not receive special
compensation for the investment advice;
    (D) a publisher of a bona fide newspaper, news magazine, or business or financial
publication of general and regular circulation;
    (E) a federal covered investment adviser;
    (F) a bank or savings institution;
    (G) any other person that is excluded by the Investment Advisers Act of 1940 from
the definition of investment adviser; or
    (H) any other person excluded by rule adopted or order issued under this chapter.
    (17) "Investment adviser representative" means an individual employed by or
associated with an investment adviser or federal covered investment adviser and who
makes any recommendations or otherwise gives investment advice regarding securities,
manages accounts or portfolios of clients, determines which recommendation or advice
regarding securities should be given, provides investment advice or holds herself or
himself out as providing investment advice, receives compensation to solicit, offer, or
negotiate for the sale of or for selling investment advice, or supervises employees who
perform any of the foregoing. The term does not include an individual who:
    (A) performs only clerical or ministerial acts;
    (B) is an agent whose performance of investment advice is solely incidental to
the individual acting as an agent and who does not receive special compensation for
investment advisory services;
    (C) is employed by or associated with a federal covered investment adviser, unless
the individual has a "place of business" in this state as that term is defined by rule adopted
under Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a)
and is
    (i) an "investment adviser representative" as that term is defined by rule adopted
under Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a); or
    (ii) not a "supervised person" as that term is defined in Section 202(a)(25) of the
Investment Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(25)); or
    (D) is excluded by rule adopted or order issued under this chapter.
    (18) "Issuer" means a person that issues or proposes to issue a security, subject to
the following:
    (A) The issuer of a voting trust certificate, collateral trust certificate, certificate of
deposit for a security, or share in an investment company without a board of directors or
individuals performing similar functions is the person performing the acts and assuming
the duties of depositor or manager pursuant to the trust or other agreement or instrument
under which the security is issued.
    (B) The issuer of an equipment trust certificate or similar security serving the same
purpose is the person by which the property is or will be used or to which the property
or equipment is or will be leased or conditionally sold or that is otherwise contractually
responsible for assuring payment of the certificate.
    (C) The issuer of a fractional undivided interest in an oil, gas, or other mineral lease
or in payments out of production under a lease, right, or royalty is the owner of an interest
in the lease or in payments out of production under a lease, right, or royalty, whether
whole or fractional, that creates fractional interests for the purpose of sale.
    (19) "Nonissuer transaction" or "nonissuer distribution" means a transaction or
distribution not directly or indirectly for the benefit of the issuer.
    (20) "Offer to purchase" includes an attempt or offer to obtain, or solicitation of an
offer to sell, a security or interest in a security for value. The term does not include a
tender offer that is subject to Section 14(d) of the Securities Exchange Act of 1934 (15
U.S.C. Section 78n(d)).
    (21) "Person" means an individual; corporation; business trust; estate; trust;
partnership; limited liability company; association; joint venture; government;
governmental subdivision, agency, or instrumentality; public corporation; or any other
legal or commercial entity.
    (22) "Place of business" of a broker-dealer, an investment adviser, or a federal
covered investment adviser means:
    (A) an office at which the broker-dealer, investment adviser, or federal covered
investment adviser regularly provides brokerage or investment advice or solicits, meets
with, or otherwise communicates with customers or clients; or
    (B) any other location that is held out to the general public as a location at which
the broker-dealer, investment adviser, or federal covered investment adviser provides
brokerage or investment advice or solicits, meets with, or otherwise communicates with
customers or clients.
    (23) "Predecessor Act" means Minnesota Statutes 2002, sections 80A.01 to 80A.31.
    (24) "Price amendment" means the amendment to a registration statement filed under
the Securities Act of 1933 or, if an amendment is not filed, the prospectus or prospectus
supplement filed under the Securities Act of 1933 that includes a statement of the offering
price, underwriting and selling discounts or commissions, amount of proceeds, conversion
rates, call prices, and other matters dependent upon the offering price.
    (25) "Principal place of business" of a broker-dealer or an investment adviser means
the executive office of the broker-dealer or investment adviser from which the officers,
partners, or managers of the broker-dealer or investment adviser direct, control, and
coordinate the activities of the broker-dealer or investment adviser.
    (26) Only for purposes of calculating the number of purchasers under section
80A.46(1) and 80A.46(14), "purchaser" does not include:
    (A) any relative, spouse, or relative of the spouse of a purchaser who has the same
principal residence as the purchaser;
    (B) any trust or estate in which a purchaser and any of the persons related to him as
specified in Regulation D, Rule 501(e)(1)(i) or (e)(1)(ii) collectively have more than 50
percent of the beneficial interest (excluding contingent interests);
    (C) any corporation or other organization of which a purchaser and any of the
persons related to the purchaser as specified in Regulation D, Rule 501(e)(1)(i) or
(e)(1)(ii) collectively are beneficial owners of more than 50 percent of the equity securities
(excluding directors' qualifying shares) or equity interests; and
    (D) any accredited investor.
    A corporation, partnership, or other entity must be counted as one purchaser. If,
however, that entity is organized for the specific purpose of acquiring the securities offered
and is not an accredited investor, then each beneficial owner of equity securities or equity
interests in the entity shall count as a separate purchaser for all provisions of Regulation
D, except to the extent provided in Regulation D, Rule 501(e)(1).
    A noncontributory employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 shall be counted as one purchaser
where the trustee makes all investment decisions for the plan.
    (27) "Record," except in the phrases "of record," "official record," and "public
record," means information that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable form.
    (28) "Sale" includes every contract of sale, contract to sell, or disposition of, a
security or interest in a security for value, and "offer to sell" includes every attempt or
offer to dispose of, or solicitation of an offer to purchase, a security or interest in a
security for value.
    (A) A security given or delivered with, or as a bonus on account of, any purchase of
securities or any other thing is considered to constitute part of the subject of the purchase
and to have been offered and sold for value.
    (B) A gift of assessable stock is considered to involve an offer and sale.
    (C) A sale or offer of a warrant or right to purchase or subscribe to another security
of the same or another issuer and a sale or offer of a security that gives the holder a present
or future right or privilege to convert the security into another security of the same or
another issuer, are each considered to include an offer of the other security.
    (29) "Securities and Exchange Commission" means the United States Securities and
Exchange Commission.
    (30) "Security" means a note; stock; treasury stock; security future; bond; debenture;
evidence of indebtedness; certificate of interest or participation in a profit-sharing
agreement; collateral trust certificate; preorganization certificate or subscription;
transferable share; investment contract; voting trust certificate; certificate of deposit for a
security; fractional undivided interest in oil, gas, or other mineral rights; put, call, straddle,
option, or privilege on a security, certificate of deposit, or group or index of securities,
including an interest therein or based on the value thereof; put, call, straddle, option, or
privilege entered into on a national securities exchange relating to foreign currency; or,
in general, an interest or instrument commonly known as a "security"; or a certificate of
interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or
warrant or right to subscribe to or purchase, any of the foregoing. The term:
    (A) includes both a certificated and an uncertificated security;
    (B) does not include an insurance or endowment policy or annuity contract under
which an insurance company promises to pay a fixed or variable sum of money either in a
lump sum or periodically for life or other specified period;
    (C) does not include an interest in a contributory or noncontributory pension or
welfare plan subject to the Employee Retirement Income Security Act of 1974;
    (D) includes as an "investment contract," among other contracts, an interest in
a limited partnership and a limited liability company and an investment in a viatical
settlement or similar agreement; and
    (E) does not include any equity interest of a closely held corporation or other entity
with not more than 35 holders of the equity interest of such entity offered or sold pursuant
to a transaction in which 100 percent of the equity interest of such entity is sold as a means
to effect the sale of the business of the entity if the transaction has been negotiated on
behalf of all purchasers and if all purchasers have access to inside information regarding
the entity before consummating the transaction.
    (31) "Self-regulatory organization" means a national securities exchange registered
under the Securities Exchange Act of 1934, a national securities association of
broker-dealers registered under the Securities Exchange Act of 1934, a clearing agency
registered under the Securities Exchange Act of 1934, or the Municipal Securities
Rulemaking Board established under the Securities Exchange Act of 1934.
    (32) "Sign" means, with present intent to authenticate or adopt a record:
    (A) to execute or adopt a tangible symbol; or
    (B) to attach or logically associate with the record an electronic symbol, sound,
or process.
    (33) "State" means a state of the United States, the District of Columbia, Puerto
Rico, the United States Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States.
    (34) "Associated with" with respect to a person means any partner, officer, director,
or manager of such person or any person occupying a similar status or performing
similar functions or any person directly or indirectly controlling, controlled by, or in
common control with, such person, but does not include a person whose primary duties
are ministerial or clerical.

    Sec. 45. Minnesota Statutes 2008, section 80A.46, is amended to read:
80A.46 SECTION 202; EXEMPT TRANSACTIONS.
    The following transactions are exempt from the requirements of sections 80A.49
through 80A.54 and 80A.71:
    (1) isolated nonissuer transactions, consisting of sale to not more than ten purchasers
in Minnesota during any period of 12 consecutive months, whether effected by or through
a broker-dealer or not;
    (2) a nonissuer transaction by or through a broker-dealer registered, or exempt from
registration under this chapter, and a resale transaction by a sponsor of a unit investment
trust registered under the Investment Company Act of 1940, in a security of a class that
has been outstanding in the hands of the public for at least 90 days, if, at the date of
the transaction:
    (A) the issuer of the security is engaged in business, the issuer is not in the
organizational stage or in bankruptcy or receivership, and the issuer is not a blank check,
blind pool, or shell company that has no specific business plan or purpose or has indicated
that its primary business plan is to engage in a merger or combination of the business with,
or an acquisition of, an unidentified person;
    (B) the security is sold at a price reasonably related to its current market price;
    (C) the security does not constitute the whole or part of an unsold allotment to, or
a subscription or participation by, the broker-dealer as an underwriter of the security
or a redistribution;
    (D) a nationally recognized securities manual or its electronic equivalent designated
by rule adopted or order issued under this chapter or a record filed with the Securities and
Exchange Commission that is publicly available contains:
    (i) a description of the business and operations of the issuer;
    (ii) the names of the issuer's executive officers and the names of the issuer's
directors, if any;
    (iii) an audited balance sheet of the issuer as of a date within 18 months before the
date of the transaction or, in the case of a reorganization or merger when the parties to
the reorganization or merger each had an audited balance sheet, a pro forma balance
sheet for the combined organization; and
    (iv) an audited income statement for each of the issuer's two immediately previous
fiscal years or for the period of existence of the issuer, whichever is shorter, or, in the case
of a reorganization or merger when each party to the reorganization or merger had audited
income statements, a pro forma income statement; and
    (E) any one of the following requirements is met:
    (i) the issuer of the security has a class of equity securities listed on a national
securities exchange registered under Section 6 of the Securities Exchange Act of 1934
or designated for trading on the National Association of Securities Dealers Automated
Quotation System;
    (ii) the issuer of the security is a unit investment trust registered under the Investment
Company Act of 1940;
    (iii) the issuer of the security, including its predecessors, has been engaged in
continuous business for at least three years; or
    (iv) the issuer of the security has total assets of at least $2,000,000 based on an
audited balance sheet as of a date within 18 months before the date of the transaction or, in
the case of a reorganization or merger when the parties to the reorganization or merger
each had such an audited balance sheet, a pro forma balance sheet for the combined
organization;
    (3) a nonissuer transaction by or through a broker-dealer registered or exempt from
registration under this chapter in a security of a foreign issuer that is a margin security
defined in regulations or rules adopted by the Board of Governors of the Federal Reserve
System;
    (4) a nonissuer transaction by or through a broker-dealer registered or exempt
from registration under this chapter in an outstanding security if the guarantor of the
security files reports with the Securities and Exchange Commission under the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C.
Sections 78m or 78o(d));
    (5) a nonissuer transaction by or through a broker-dealer registered or exempt from
registration under this chapter in a security that:
    (A) is rated at the time of the transaction by a nationally recognized statistical rating
organization in one of its four highest rating categories; or
    (B) has a fixed maturity or a fixed interest or dividend, if:
    (i) a default has not occurred during the current fiscal year or within the three
previous fiscal years or during the existence of the issuer and any predecessor if less than
three fiscal years, in the payment of principal, interest, or dividends on the security; and
    (ii) the issuer is engaged in business, is not in the organizational stage or in
bankruptcy or receivership, and is not and has not been within the previous 12 months a
blank check, blind pool, or shell company that has no specific business plan or purpose or
has indicated that its primary business plan is to engage in a merger or combination of the
business with, or an acquisition of, an unidentified person;
    (6) a nonissuer transaction by or through a broker-dealer registered or exempt from
registration under this chapter effecting an unsolicited order or offer to purchase;
    (7) a nonissuer transaction executed by a bona fide pledgee without the purpose
of evading this chapter;
    (8) a nonissuer transaction by a federal covered investment adviser with investments
under management in excess of $100,000,000 acting in the exercise of discretionary
authority in a signed record for the account of others;
    (9) a transaction in a security, whether or not the security or transaction is otherwise
exempt, in exchange for one or more bona fide outstanding securities, claims, or property
interests, or partly in such exchange and partly for cash, if the terms and conditions of
the issuance and exchange or the delivery and exchange and the fairness of the terms and
conditions have been approved by the administrator after a hearing;
    (10) a transaction between the issuer or other person on whose behalf the offering is
made and an underwriter, or among underwriters;
    (11) a transaction in a note, bond, debenture, or other evidence of indebtedness
secured by a mortgage or other security agreement if:
    (A) the note, bond, debenture, or other evidence of indebtedness is offered and sold
with the mortgage or other security agreement as a unit;
    (B) a general solicitation or general advertisement of the transaction is not made; and
    (C) a commission or other remuneration is not paid or given, directly or indirectly, to
a person not registered under this chapter as a broker-dealer or as an agent;
    (12) a transaction by an executor, administrator of an estate, sheriff, marshal,
receiver, trustee in bankruptcy, guardian, or conservator;
    (13) a sale or offer to sell to:
    (A) an institutional investor;
    (B) an accredited investor;
    (C) a federal covered investment adviser; or
    (D) any other person exempted by rule adopted or order issued under this chapter;
    (14) a sale or an offer to sell securities by an issuer, if the transaction is part of
a single issue in which:
    (A) not more than 35 purchasers are present in this state during any 12 consecutive
months, other than those designated in paragraph (13);
    (B) a general solicitation or general advertising is not made in connection with
the offer to sell or sale of the securities;
    (C) a commission or other remuneration is not paid or given, directly or indirectly, to
a person other than a broker-dealer registered under this chapter or an agent registered
under this chapter for soliciting a prospective purchaser in this state; and
    (D) the issuer reasonably believes that all the purchasers in this state, other than
those designated in paragraph (13), are purchasing for investment.
Any issuer selling to purchasers in this state in reliance on this clause (14) exemption
must provide to the administrator notice of the transaction by filing a statement of issuer
form as adopted by rule. Notice must be filed at least ten days in advance of any sale or
such shorter period as permitted by the administrator. However, an issuer who makes sales
to ten or fewer purchasers in Minnesota during any period of 12 consecutive months is not
required to provide this notice;
    (15) a transaction under an offer to existing security holders of the issuer, including
persons that at the date of the transaction are holders of convertible securities, options,
or warrants, if a commission or other remuneration, other than a standby commission, is
not paid or given, directly or indirectly, for soliciting a security holder in this state. The
person making the offer and effecting the transaction must provide to the administrator
notice of the transaction by filing a written description of the transaction. Notice must be
filed at least ten days in advance of any transaction or such shorter period as permitted by
the administrator;
    (16) an offer to sell, but not a sale, of a security not exempt from registration under
the Securities Act of 1933 if:
    (A) a registration or offering statement or similar record as required under the
Securities Act of 1933 has been filed, but is not effective, or the offer is made in compliance
with Rule 165 adopted under the Securities Act of 1933 (17 C.F.R. 230.165); and
    (B) a stop order of which the offeror is aware has not been issued against the offeror
by the administrator or the Securities and Exchange Commission, and an audit, inspection,
or proceeding that is public and that may culminate in a stop order is not known by the
offeror to be pending;
    (17) an offer to sell, but not a sale, of a security exempt from registration under the
Securities Act of 1933 if:
    (A) a registration statement has been filed under this chapter, but is not effective;
    (B) a solicitation of interest is provided in a record to offerees in compliance with a
rule adopted by the administrator under this chapter; and
    (C) a stop order of which the offeror is aware has not been issued by the administrator
under this chapter and an audit, inspection, or proceeding that may culminate in a stop
order is not known by the offeror to be pending;
    (18) a transaction involving the distribution of the securities of an issuer to the
security holders of another person in connection with a merger, consolidation, exchange
of securities, sale of assets, or other reorganization to which the issuer, or its parent
or subsidiary and the other person, or its parent or subsidiary, are parties. The person
distributing the issuer's securities must provide to the administrator notice of the
transaction by filing a written description of the transaction along with a consent to service
of process complying with section 80A.88. Notice must be filed at least ten days in
advance of any transaction or such shorter period as permitted by the administrator;
    (19) a rescission offer, sale, or purchase under section 80A.77;. The person making
the rescission offer must provide to the administrator notice of the transaction by filing a
written description of the transaction and a copy of the record that must be delivered to the
offeree under section 80A.77. Notice must be filed at least ten days in advance of any
rescission offer under section 80A.77 or a shorter period as permitted by the administrator;
    (20) an offer or sale of a security to a person not a resident of this state and not
present in this state if the offer or sale does not constitute a violation of the laws of the
state or foreign jurisdiction in which the offeree or purchaser is present and is not part of
an unlawful plan or scheme to evade this chapter;
    (21) employees' stock purchase, savings, option, profit-sharing, pension, or
similar employees' benefit plan, including any securities, plan interests, and guarantees
issued under a compensatory benefit plan or compensation contract, contained in a
record, established by the issuer, its parents, its majority-owned subsidiaries, or the
majority-owned subsidiaries of the issuer's parent for the participation of their employees
including offers or sales of such securities to:
    (A) directors; general partners; trustees, if the issuer is a business trust; officers;
consultants; and advisors;
    (B) family members who acquire such securities from those persons through gifts or
domestic relations orders;
    (C) former employees, directors, general partners, trustees, officers, consultants, and
advisors if those individuals were employed by or providing services to the issuer when
the securities were offered; and
    (D) insurance agents who are exclusive insurance agents of the issuer, or the issuer's
subsidiaries or parents, or who derive more than 50 percent of their annual income from
those organizations.
A person establishing an employee benefit plan under the exemption in this clause
(21) must provide to the administrator notice of the transaction by filing a written
description of the transaction along with a consent to service of process complying with
section 80A.88. Notice must be filed at least ten days in advance of any transaction or
such shorter period as permitted by the administrator;
    (22) a transaction involving:
    (A) a stock dividend or equivalent equity distribution, whether the corporation or
other business organization distributing the dividend or equivalent equity distribution is
the issuer or not, if nothing of value is given by stockholders or other equity holders for
the dividend or equivalent equity distribution other than the surrender of a right to a cash
or property dividend if each stockholder or other equity holder may elect to take the
dividend or equivalent equity distribution in cash, property, or stock;
    (B) an act incident to a judicially approved reorganization in which a security is
issued in exchange for one or more outstanding securities, claims, or property interests, or
partly in such exchange and partly for cash; or
    (C) the solicitation of tenders of securities by an offeror in a tender offer in
compliance with Rule 162 adopted under the Securities Act of 1933 (17 C.F.R. 230.162);
    (23) a nonissuer transaction in an outstanding security by or through a broker-dealer
registered or exempt from registration under this chapter, if the issuer is a reporting
issuer in a foreign jurisdiction designated by this paragraph or by rule adopted or order
issued under this chapter; has been subject to continuous reporting requirements in the
foreign jurisdiction for not less than 180 days before the transaction; and the security is
listed on the foreign jurisdiction's securities exchange that has been designated by this
paragraph or by rule adopted or order issued under this chapter, or is a security of the same
issuer that is of senior or substantially equal rank to the listed security or is a warrant or
right to purchase or subscribe to any of the foregoing. For purposes of this paragraph,
Canada, together with its provinces and territories, is a designated foreign jurisdiction
and The Toronto Stock Exchange, Inc., is a designated securities exchange. After an
administrative hearing in compliance with chapter 14, the administrator, by rule adopted
or order issued under this chapter, may revoke the designation of a securities exchange
under this paragraph, if the administrator finds that revocation is necessary or appropriate
in the public interest and for the protection of investors;
    (24) any transaction effected by or through a Canadian broker-dealer exempted from
broker-dealer registration pursuant to section 80A.56(b)(3); or
    (25)(A) the offer and sale by a cooperative organized under chapter 308A, or
under the laws of another state, of its securities when the securities are offered and sold
only to its members, or when the purchase of the securities is necessary or incidental to
establishing membership in the cooperative, or when the securities are issued as patronage
dividends. This paragraph applies to a cooperative organized under chapter 308A, or under
the laws of another state, only if the cooperative has filed with the administrator a consent
to service of process under section 80A.88 and has, not less than ten days before the
issuance or delivery, furnished the administrator with a written general description of the
transaction and any other information that the administrator requires by rule or otherwise;
    (B) the offer and sale by a cooperative organized under chapter 308B of its securities
when the securities are offered and sold to its existing members or when the purchase of the
securities is necessary or incidental to establishing patron membership in the cooperative,
or when such securities are issued as patronage dividends. The administrator has the
power to define "patron membership" for purposes of this paragraph. This paragraph
applies to securities, other than securities issued as patronage dividends, only when:
    (i) the issuer, before the completion of the sale of the securities, provides each
offeree or purchaser disclosure materials that, to the extent material to an understanding of
the issuer, its business, and the securities being offered, substantially meet the disclosure
conditions and limitations found in rule 502(b) of Regulation D promulgated by the
Securities and Exchange Commission, Code of Federal Regulations, title 17, section
230.502; and
    (ii) within 15 days after the completion of the first sale in each offering completed in
reliance upon this exemption, the cooperative has filed with the administrator a consent to
service of process under section 80A.88 (or has previously filed such a consent), and has
furnished the administrator with a written general description of the transaction and any
other information that the administrator requires by rule or otherwise; and
(C) a cooperative may, at or about the same time as offers or sales are being
completed in reliance upon the exemptions from registration found in this subpart and as
part of a common plan of financing, offer or sell its securities in reliance upon any other
exemption from registration available under this chapter. The offer or sale of securities in
reliance upon the exemptions found in this subpart will not be considered or deemed a part
of or be integrated with any offer or sale of securities conducted by the cooperative in
reliance upon any other exemption from registration available under this chapter, nor will
offers or sales of securities by the cooperative in reliance upon any other exemption from
registration available under this chapter be considered or deemed a part of or be integrated
with any offer or sale conducted by the cooperative in reliance upon this paragraph.

    Sec. 46. Minnesota Statutes 2008, section 80A.65, subdivision 6, is amended to read:
    Subd. 6. Rescission offer filing fee. The filing of a rescission offer under section
80A.77 80A.46(19), shall be accompanied by the fees as calculated in subdivision 1.

    Sec. 47. Minnesota Statutes 2008, section 82.17, is amended by adding a subdivision
to read:
    Subd. 1a. Brokerage; business entity. "Brokerage" or "business entity" means a
corporation, partnership, limited liability company, limited liability partnership, or other
business structure that holds a real estate broker license.

    Sec. 48. Minnesota Statutes 2008, section 82.17, subdivision 15, is amended to read:
    Subd. 15. Protective list. "Protective list" means the written list of names and
addresses of prospective purchasers buyers with whom a licensee has negotiated the sale
or rental of the property or to whom a licensee has exhibited the property before the
expiration of the listing agreement. For the purposes of this subdivision, "property" means
the property that is the subject of the listing agreement in question.

    Sec. 49. Minnesota Statutes 2008, section 82.17, is amended by adding a subdivision
to read:
    Subd. 20a. Responsible person. "Responsible person" means a natural person that
is an officer of a corporation, a partner of a partnership, a general partner of a limited
liability partnership, or a manager of a limited liability company.

    Sec. 50. Minnesota Statutes 2008, section 82.19, is amended to read:
82.19 COMPENSATION.
    Subdivision 1. Licensee to receive only from broker. A licensee shall not
accept a commission, compensation, referral fee, or other valuable consideration for the
performance of any acts requiring a real estate license from any person except the real
estate broker to whom the licensee is licensed or to whom the licensee was licensed at the
time of the transaction.
    Subd. 1a. Commission-splitting, rebates, referral fee, and fees. (a) In connection
with a real estate or business opportunity transaction, a real estate broker or real estate
salesperson shall not offer, pay, or give, and a person shall not accept, any compensation
or other thing of value from a real estate broker or real estate salesperson by way of
commission-splitting, rebate, referral fees, finder's fees, or otherwise.
(b) This subdivision does not apply to transactions:
(1) between a licensed real estate broker or salesperson and the parties to the
transaction;
(2) among persons licensed as provided in this chapter;
(3) between a licensed real estate broker or salesperson and persons from other
jurisdictions similarly licensed in that jurisdiction;
(4) involving timeshare or other recreational lands where the amount offered or paid
does not exceed $150, and payment is not conditioned upon any sale but is made merely
for providing the referral and the person paying the fee is bound by any representations
made by the person receiving the fee; and
(5) involving a person who receives a referral fee from a person or an agent of a
person licensed under this section, provided that in any 12-month period, no recipient may
earn more than the value of one month's rent, that the recipient is a resident of the property
or has lived there within 60 days of the payment of the fee, and that the person paying the
fee is bound by any representations made by the recipient of the fee.
    Subd. 2. Undisclosed compensation. A licensee shall not accept, give, or charge
any undisclosed compensation or realize any direct or indirect remuneration that inures to
the benefit of the licensee on an expenditure made for a principal.
    Subd. 2a. Sharing of compensation with other brokers. The seller may, in
the listing agreement, authorize the seller's broker to disburse part of the broker's
compensation to other brokers, including the buyer's brokers solely representing the buyer.
    Subd. 3. Limitation on broker when transaction not completed. When the owner
fails or is unable to consummate a real estate transaction, through no fault of the purchaser,
the listing broker may not claim any portion of any trust funds deposited with the broker
by the purchaser, absent a separate agreement with the purchaser.
    Subd. 3a. Directing payment of compensation. A licensed real estate broker
or salesperson may assign or direct that commissions or other compensation earned in
connection with a real estate or business opportunity transaction be paid to a corporation,
limited liability company, or sole proprietorship of which the licensed real estate broker
or salesperson is the sole owner.
    Subd. 3b. Closing agent fee. A real estate closing agent may not charge a fee for
closing services to a borrower, and a borrower may not be required to pay such a fee at
settlement, if the fee was not previously disclosed in writing at least one business day
before the settlement. This disclosure requirement is satisfied if a disclosure is made or
an estimate given under section 507.45.

    Sec. 51. Minnesota Statutes 2008, section 82.21, subdivision 2, is amended to read:
    Subd. 2. Listing agreements. (a) Requirement. Licensees shall obtain a signed
listing agreement or other signed written authorization from the owner of real property or
from another person authorized to offer the property for sale or lease before advertising to
the general public that the real property is available for sale or lease.
For the purposes of this section "advertising" includes placing a sign on the owner's
property that indicates that the property is being offered for sale or lease.
(b) Contents. All listing agreements must be in writing and must include:
(1) a definite expiration date;
(2) a description of the real property involved;
(3) the list price and any terms required by the seller;
(4) the amount of any compensation or commission or the basis for computing
the commission;
(5) a clear statement explaining the events or conditions that will entitle a broker to
a commission;
(6) a clear statement explaining if the agreement may be canceled and the terms
under which the agreement may be canceled;
(6) (7) information regarding an override clause, if applicable, including a statement
to the effect that the override clause will not be effective unless the licensee supplies the
seller with a protective list within 72 hours after the expiration of the listing agreement;
(7) (8) the following notice in not less than ten point boldface type immediately
preceding any provision of the listing agreement relating to compensation of the licensee:
"NOTICE: THE COMPENSATION FOR THE SALE, LEASE, RENTAL, OR
MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN
EACH INDIVIDUAL BROKER AND THE BROKER'S CLIENT.";
(8) (9) for residential property listings, the following "dual agency" disclosure
statement:
If a buyer represented by broker wishes to buy the seller's property, a dual agency
will be created. This means that broker will represent both the seller(s) and the buyer(s),
and owe the same duties to the buyer(s) that broker owes to the seller(s). This conflict
of interest will prohibit broker from advocating exclusively on the seller's behalf. Dual
agency will limit the level of representation broker can provide. If a dual agency should
arise, the seller(s) will need to agree that confidential information about price, terms, and
motivation will still be kept confidential unless the seller(s) instruct broker in writing to
disclose specific information about the seller(s). All other information will be shared.
Broker cannot act as a dual agent unless both the seller(s) and the buyer(s) agree to it. By
agreeing to a possible dual agency, the seller(s) will be giving up the right to exclusive
representation in an in-house transaction. However, if the seller(s) should decide not to
agree to a possible dual agency, and the seller(s) want broker to represent the seller(s), the
seller(s) may give up the opportunity to sell the property to buyers represented by broker.
Seller's Instructions to Broker
Having read and understood this information about dual agency, seller(s) now
instructs broker as follows:


.....
Seller(s) will agree to a dual agency representation and will consider
offers made by buyers represented by broker.


.....
Seller(s) will not agree to a dual agency representation and will not
consider offers made by buyers represented by broker.

.....
.....

Seller
Real Estate Company Name

.....
By:
.....

Seller
Salesperson

Date : ..... ;
(9) (10) a notice requiring the seller to indicate in writing whether it is acceptable to
the seller to have the licensee arrange for closing services or whether the seller wishes to
arrange for others to conduct the closing; and
(10) (11) for residential listings, a notice stating that after the expiration of the
listing agreement, the seller will not be obligated to pay the licensee a fee or commission
if the seller has executed another valid listing agreement pursuant to which the seller is
obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of
the real property in question. This notice may be used in the listing agreement for any
other type of real estate.
(c) Prohibited provisions. Except as otherwise provided in paragraph (d), clause
(2), licensees shall not include in a listing agreement a holdover clause, automatic
extension, or any similar provision, or an override clause the length of which is more than
six months after the expiration of the listing agreement.
(d) Override clauses. (1) Licensees shall not seek to enforce an override clause
unless a protective list has been furnished to the seller within 72 hours after the expiration
of the listing agreement.
(2) A listing agreement may contain an override clause of up to two years in length
when used in conjunction with the purchase or sale of a business. The length of the
override clause must be negotiable between the licensee and the seller of the business. The
protective list provided in connection with the override clause must include the written
acknowledgment of each party named on the protective list, that the business which is the
subject of the listing agreement was presented to that party by the licensee.
(e) Protective lists. A broker or salesperson has the burden of demonstrating that
each person on the protective list has, during the period of the listing agreement, either
made an affirmative showing of interest in the property by responding to an advertisement
or by contacting the broker or salesperson involved or has been physically shown the
property by the broker or salesperson. For the purpose of this section, the mere mailing or
other distribution by a licensee of literature setting forth information about the property in
question does not, of itself, constitute an affirmative showing of interest in the property on
the part of a subsequent purchaser.
For listings of nonresidential real property which do not contain the notice described
in paragraph (b), clause (10) (11), the protective list must contain the following notice in
boldface type:
"IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE
PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME
APPEARS ON THIS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS
TO BOTH BROKERS. IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK
COMPETENT ADVICE."

    Sec. 52. Minnesota Statutes 2008, section 82.24, subdivision 3, is amended to read:
    Subd. 3. Broker payment consolidation. For all license renewal fees, recovery
fund renewal fees, and recovery fund assessments pursuant to this section and section
82.43, the broker must remit the fees or assessments for the company, broker, and all
salespersons licensed to the broker, in the form of a single check payment.

    Sec. 53. Minnesota Statutes 2008, section 82.29, subdivision 4, is amended to read:
    Subd. 4. Broker's examination. (a) The examination for a real estate broker's
license shall be more exacting than that for a real estate salesperson, and shall require a
higher degree of knowledge of the fundamentals of real estate practice and law.
(b) Every application for a broker's examination shall be accompanied by proof that
the applicant has had a minimum of two years of actual experience within the previous
five-year period prior to application as a licensed real estate salesperson in this or in
another state having comparable requirements or is, in the opinion of the commissioner,
otherwise or similarly qualified by reason of education or practical experience. The
applicant shall have completed educational requirements in accordance with subdivision 8.
(c) An applicant for a limited broker's license pursuant to section 82.34, subdivision
13
, shall not be required to have a minimum of two years of actual experience as a real
estate person in order to obtain a limited broker's license to act as principal only.

    Sec. 54. Minnesota Statutes 2008, section 82.29, subdivision 5, is amended to read:
    Subd. 5. Waivers. The commissioner may waive grant a waiver of the real estate
licensing experience requirement for the broker's examination to a qualified applicant for
a waiver.
(a) An A qualified applicant for a waiver shall provide evidence of is an individual
who:
(1) successful completion of a minimum of 90 quarter credits or 270 classroom
hours of real estate-related studies has a degree in real estate from an accredited college
or university;
(2) a minimum of five consecutive years of practical experience in real estate-related
areas is a licensed practicing attorney whose practice involves real estate law; or
(3) successful completion of 30 credits or 90 classroom hours and three consecutive
years of practical experience in real estate-related areas is a public officer whose official
duties involve real estate law or real estate transactions.
(b) A request for a waiver shall be submitted to the commissioner in writing on a
form prescribed by the commissioner and be accompanied by documents necessary to
evidence qualification as set forth in paragraph (a).
(c) The waiver will lapse if the applicant fails to successfully complete the broker's
examination within one year from the date of the granting of the waiver.

    Sec. 55. Minnesota Statutes 2008, section 82.29, subdivision 8, is amended to read:
    Subd. 8. Instruction; new licenses. (a) Every An applicant for a salesperson's
license shall be required to successfully complete a course of study in the real estate field
consisting of 30 hours of instruction approved by the commissioner before taking the
examination specified in subdivision 1. Every An applicant for a salesperson's license
shall be required to successfully complete an additional course of study in the real estate
field consisting of 60 hours of instruction approved by the commissioner, of which three
hours shall consist of training in state and federal fair housing laws, regulations, and
rules, and of which two hours must consist of training in laws and regulations on agency
representation and disclosure, before filing an application for the license. This subdivision
does not apply to salespeople licensed in Minnesota before July 1, 1969.
(b) An applicant for a broker's license must successfully complete a course of study
in the real estate field consisting of 30 hours of instruction approved by the commissioner,
of which three hours shall consist of training in state and federal fair housing laws,
regulations, and rules. The course must have been completed within 12 months prior to
the date of application for the broker's license.
(c) An applicant for a real estate closing agent's license must successfully complete
a course of study relating to closing services consisting of eight hours of instruction
approved by the commissioner.

    Sec. 56. Minnesota Statutes 2008, section 82.31, subdivision 1, is amended to read:
    Subdivision 1. Qualification of applicants. Every An applicant for a real estate
broker, or real estate salesperson, or real estate closing agent license shall be at least 18
years of age at the time of making application for said license.

    Sec. 57. Minnesota Statutes 2008, section 82.31, subdivision 2, is amended to read:
    Subd. 2. Application for license; contents. (a) Every An applicant for a license
as a real estate broker, or real estate salesperson, or closing agent shall make an
application in writing upon forms prepared and furnished the format prescribed by the
commissioner. Each The application shall be signed and sworn to by the applicant and
shall be accompanied by the license fee required by this chapter.
(b) Each application for a real estate broker license, or real estate salesperson
license, or real estate closing agent license shall contain such information as required
by the commissioner consistent with the administration of the provisions and purposes
of this chapter.
(c) Each The application for a real estate salesperson license shall give the applicant's
legal name, age, residence address, and the name and place of business of the real estate
broker on whose behalf the salesperson is to be acting.
(d) Each application for a real estate closing agent license shall give the applicant's
name, age, residence address, and the name and place of business of the closing agent.
(e) (d) The commissioner may require such further information as the commissioner
deems appropriate to administer the provisions and further the purposes of this chapter.
(f) Applicants (e) An applicant for a real estate salesperson license shall submit
to the commissioner, along with the application for licensure, a copy of the course
completion certificate for courses I, II, and III and passing examination results.

    Sec. 58. Minnesota Statutes 2009 Supplement, section 82.31, subdivision 4, is
amended to read:
    Subd. 4. Corporate and partnership Business entity; brokerage licenses.
(a) A corporation business entity applying for a license shall have at least one officer
responsible person individually licensed to act as broker for the corporation brokerage.
The corporation business entity broker's license shall extend no authority to act as broker
to any person other than the corporate business entity. Each officer responsible person
who intends to act as a broker shall obtain a license.
(b) A partnership business entity applying for a license shall have at least one partner
responsible person individually licensed to act as broker for the partnership business entity.
Each partner responsible person who intends to act as a broker shall obtain a license.
(c) Applications An application for a business entity license made by a corporation
shall be verified by the president and one other officer. Applications made by a partnership
shall be verified by at least two partners responsible persons for the business entity.
(d) Any partner or officer A responsible person who ceases to act as broker for
a partnership or corporation business entity shall notify the commissioner upon said
termination. The individual licenses of all salespersons acting on behalf of a corporation
or partnership, brokerage are automatically ineffective upon the revocation or suspension
of the license of the partnership or corporation brokerage. The commissioner may suspend
or revoke the license of an officer or partner a responsible person licensee without
suspending or revoking the license of the corporation or partnership business entity.
(e) The application of all officers responsible persons of a corporation or partners
in a partnership business entity who intend to act as a broker brokers on behalf of a
corporation or partnership business entity shall accompany the initial license application
of the corporation or partnership business entity. Officers or partners Responsible persons
intending to act as brokers subsequent to the licensing of the corporation or partnership
business entity shall procure an individual real estate broker's license prior to acting in the
capacity of a broker. No corporate officer, or partner, responsible person who maintains a
salesperson's license may exercise any authority over any trust account administered by
the broker nor may they be vested with any supervisory authority over the broker.
(f) The corporation or partnership business entity applicant shall make available
upon request, such records and data required by the commissioner for enforcement
of this chapter.
(g) The commissioner may require further information, as the commissioner deems
appropriate, to administer the provisions and further the purposes of this chapter.

    Sec. 59. Minnesota Statutes 2009 Supplement, section 82.32, is amended to read:
82.32 LICENSING: CONTINUING EDUCATION AND INSTRUCTION.
(a) All real estate salespersons and all real estate brokers shall be required to
successfully complete 30 hours of real estate continuing education, either as a student or
a lecturer, in courses of study approved by the commissioner, during the initial license
period and during each succeeding 24-month license period. At least 15 of the 30 credit
hours must be completed during the first 12 months of the 24-month licensing period.
Licensees may not claim credit for continuing education not actually completed as of the
date their report of continuing education compliance is filed.
(b) The commissioner may adopt rules defining the standards for course and
instructor approval, and may adopt rules for the proper administration of prelicense
instruction as required under section 82.29, subdivision 8, and continuing education as
required under this section and sections 82.29; 82.31, subdivisions subdivision 5 and 6;
82.33, subdivisions 1 and 4 to 6; and 82.44. The commissioner may not approve a course
which can be completed by the student at home or outside the classroom without the
supervision of an instructor except accredited courses using new delivery technology,
including interactive technology, and the Internet. The commissioner may approve
courses of study in the real estate field offered in educational institutions of higher learning
in this state or courses of study in the real estate field developed by and offered under
the auspices of the National Association of Realtors, its affiliates, or private real estate
schools. Courses in motivation, salesmanship, psychology, or time management shall not
be approved by the commissioner for continuing education credit. The commissioner may
approve courses in any other subjects, including, but not limited to, communication,
marketing, negotiation, and technology for continuing education credit.
(c) As part of the continuing education requirements of this section and sections
82.29; 82.31, subdivisions 5 and 6; 82.33, subdivisions 1 and 4 to 6; and 82.44, the
commissioner shall require that all real estate brokers and salespersons receive:
(1) at least one hour of training during each license period in courses in laws or
regulations on agency representation and disclosure; and
(2) at least one hour of training during each license period in courses in state and
federal fair housing laws, regulations, and rules, other antidiscrimination laws, or courses
designed to help licensees to meet the housing needs of immigrant and other underserved
populations.
Clauses (1) and (2) do not apply to real estate salespersons and real estate brokers
engaged solely in the commercial real estate business who file with the commissioner
a verification of this status along with the continuing education report required under
paragraph (a).
(d) The commissioner is authorized to establish a procedure for renewal of course
accreditation.
(e) Approved continuing education courses may be sponsored or offered by a broker
of a real estate company and may be held on the premises of a company licensed under
this chapter. All continuing education course offerings must be open to any interested
individuals. Access may be restricted by the education provider based on class size
only. Courses must not be approved if attendance is restricted to any particular group of
people. A broker must comply with all continuing education rules prescribed by the
commissioner. The commissioner shall not approve any prelicense instruction courses
offered by, sponsored by, or affiliated with any person or company licensed to engage in
the real estate business.
(f) Credit may not be earned if the licensee has previously obtained credit for the
same course as either a student or instructor during the same licensing period.
(g) The real estate education course completion certificate must be in the form set
forth by the commissioner. Students are responsible for maintaining copies of course
completion certificates.
(h) An approved prelicense 30-hour broker course may be used for continuing
education credit by a real estate salesperson or broker if the course is completed during
the appropriate licensing period.

    Sec. 60. Minnesota Statutes 2008, section 82.33, subdivision 1, is amended to read:
    Subdivision 1. Duration. No The renewal of a salesperson's license shall be is not
effective beyond a date two years after the granting of such the salesperson's license unless
the salesperson has furnished evidence of compliance with section 82.29, subdivision 8.
The commissioner shall cancel the license of any a salesperson who fails to comply with
section 82.29, subdivision 8. This subdivision shall not apply to salespeople licensed in
Minnesota prior to July 1, 1969.

    Sec. 61. Minnesota Statutes 2008, section 82.33, is amended by adding a subdivision
to read:
    Subd. 1a. Broker's responsibility. (a) A broker shall renew the license of each
eligible salesperson who is and will continue to be associated with the broker. For
the purposes of this subdivision, an eligible salesperson is one who has demonstrated
compliance with all renewal requirements before June 15 of the renewal year.
(b) When a broker does not intend to renew the license of an eligible salesperson
who is associated with the broker, the broker must notify the salesperson in writing 30
days before June 15 of the renewal year.
(c) When the broker responsible for the salesperson's license renewal does not renew
an eligible salesperson's license before the renewal deadline, the broker shall pay on the
salesperson's behalf any additional higher license fees that result.

    Sec. 62. Minnesota Statutes 2008, section 82.33, subdivision 2, is amended to read:
    Subd. 2. Timely renewals. Persons A person whose applications have application
for a license renewal has not been properly and timely filed and who have has not received
notice of denial approval of renewal are deemed to have been approved for renewal and
may not continue to transact business either as a real estate broker, salesperson, or closing
agent whether or not the renewed license has been received on or before July 1 after June
30 of the renewal year until approval of renewal is received. Application for renewal of a
license shall be deemed to have been is timely filed if received by the commissioner by, or
mailed with proper postage and postmarked by,:
(1) all requirements for renewal, including continuing education requirements,
have been completed by June 15 of the renewal year. Applications for renewal shall be
deemed properly filed if made; and
(2) the application is submitted before the renewal deadline in the manner
prescribed by the commissioner upon forms duly executed and sworn to, accompanied
by fees prescribed by this chapter, and contain containing any information which the
commissioner may require requires.

    Sec. 63. Minnesota Statutes 2008, section 82.34, subdivision 1, is amended to read:
    Subdivision 1. Generally. (a) The commissioner shall issue a license as a real estate
broker, or real estate salesperson, or closing agent to any person who qualifies for such
the license under the terms of this chapter.
(b) The commissioner is authorized to establish by rule a special license for real
estate brokers and real estate salespeople engaged solely in the rental or management of
an interest or estate in real estate, to prescribe qualifications for the license, and to issue
the license consistent with the terms of this chapter. This clause shall not be construed to
require those owners or managers or their agents or employees who are excluded by section
82.23, clause (d), from the definition of real estate broker, to obtain the special license.

    Sec. 64. Minnesota Statutes 2008, section 82.34, subdivision 2, is amended to read:
    Subd. 2. Additional broker's license. An individual who holds a broker's license
in his or her the broker's own name or for or on behalf of a corporation or partnership
business entity must be issued an additional broker's license only upon demonstrating:
(1) that the additional license is necessary in order to serve a legitimate business
purpose;
(2) that the broker will be capable of supervising all salespersons over whom he or
she the broker will have supervisory responsibility or, in the alternative, that the broker
will have no supervisory responsibilities under the additional license; and
(3) that the broker:
(i) has a substantial at least 51 percent ownership interest in each corporation or
partnership business entity for or on whose behalf he or she the broker holds or will
hold a broker's license.; or
(ii) is an elected or appointed officer, signing partner, or managing member of both
the business entity for which or on whose behalf the broker already holds a license, and
an affiliated business entity for which or on whose behalf the broker is applying for an
additional license.
The requirement of a substantial ownership interest does not apply where the broker
seeking the additional license or licenses is an officer of a corporation for or on whose
behalf the broker already holds a license and the broker is applying for the additional
license or licenses for or on behalf of an affiliated corporation or corporations of which he
or she is also an officer. For the purpose of this section and sections 82.31, subdivisions 1
to 4
; 82.33, subdivisions 1 to 3; 82.35, subdivision 2; and 82.39, "affiliated corporation
business entity" means a corporation which is directly or indirectly controlled business
entity that is majority-owned by the same persons as the corporation business entity for
which or on whose behalf the broker is already licensed to act.
For the purposes of this section and sections 82.31, subdivisions 1 to 4; 82.33,
subdivisions 1 to 3
; 82.35, subdivision 2; and 82.39, a legitimate business purpose
includes engaging in a different and specialized area of real estate or maintaining an
existing business name.

    Sec. 65. Minnesota Statutes 2008, section 82.34, subdivision 4, is amended to read:
    Subd. 4. Issuance of license; salesperson. A salesperson must be licensed to act
on behalf of a licensed broker and may not be licensed to act on behalf of more than
one broker in this state during the same period of time. The license of each real estate
salesperson shall be mailed to and remain in the possession of the licensed broker with
whom the salesperson is or is to be associated until canceled or until such licensee leaves
such broker.

    Sec. 66. Minnesota Statutes 2008, section 82.34, subdivision 5, is amended to read:
    Subd. 5. Effective date of license. Licenses A license renewed pursuant to this
chapter are is valid for a period of 24 months. New licenses A new license issued during a
24-month licensing period will expire on June 30 of the expiration year assigned to the
license. Implementation of the 24-month licensing program must be staggered so that
approximately one-half of the licenses will expire on June 30 of each even-numbered year
and the other one-half on June 30 of each odd-numbered year. Those licensees who will
receive a 12-month license on July 1, 1995, because of the staggered implementation
schedule will pay for the license a fee reduced by an amount equal to one-half the fee
for renewal of the license.

    Sec. 67. Minnesota Statutes 2008, section 82.34, subdivision 13, is amended to read:
    Subd. 13. Limited broker's license. (a) The commissioner shall have the authority
to issue a limited real estate broker's license authorizing the licensee to engage in
transactions as principal only. Such license shall be issued only after receipt of the
application described in section 82.31, subdivision 2, and payment of the fee prescribed
by section 82.24, subdivision 1. No salesperson may be licensed to act on behalf of an
individual holding a limited broker's license. An officer of a corporation or partner of a
partnership licensed as a limited broker may act on behalf of that corporation or partnership
without being subject to the licensing requirements. following limited activities:
(b) A limited broker's license shall also authorize the licensee to engage in
negotiation of mortgage loans, other than residential mortgage loans, as described in
section 82.17, subdivision 18, clause (b).
(1) the licensee to engage in transactions as principal only; or
(2) the licensee to engage in negotiations of mortgage loans, other than residential
mortgage loans, as described in section 82.17, subdivision 18, clause (b).
The license may be issued only after receipt of the application described in section
82.31, subdivision 2, and payment of the fee prescribed by section 82.24, subdivision 1. A
salesperson may not be licensed to act on behalf of an individual holding a limited broker's
license. A responsible person of a business entity licensed as a limited broker may act on
behalf of that business entity without being subject to the licensing requirements.

    Sec. 68. Minnesota Statutes 2008, section 82.39, is amended to read:
82.39 NOTICE TO COMMISSIONER.
    Subdivision 1. Notice Change of application information. Notice in writing
or in the format prescribed by the commissioner shall be given to the commissioner by
each a licensee of any change in of information contained in the license application on file
with the commissioner, including but not limited to personal name, trade name, address or
business location not later than ten days after such the change. The commissioner shall
issue a new license if required for the unexpired period.
    Subd. 2. Mandatory. Licensees The licensee shall notify the commissioner in
writing or in the format prescribed by the commissioner within ten days of the facts in
subdivisions 3 to 5.
    Subd. 3. Civil judgment. Licensees The licensee must notify the commissioner
in writing within ten days of a final adverse decision or order of a court, whether or not
the decision or order is appealed, regarding any proceeding in which the licensee was
named as a defendant, and which alleged fraud, misrepresentation, or the conversion of
funds, if the final adverse decision relates to the allegations of fraud, misrepresentation, or
the conversion of funds.
    Subd. 4. Disciplinary action. The licensee must notify the commissioner in writing
within ten days of the suspension or revocation of the licensee's real estate or other
occupational license issued by this state or another jurisdiction.
    Subd. 5. Criminal offense. The licensee must notify the commissioner in writing
within ten days if the licensee is charged with, adjudged guilty of, or enters a plea of
guilty or nolo contendere to a charge of any felony, or of any gross misdemeanor alleging
fraud, misrepresentation, conversion of funds, or a similar violation of any real estate
licensing law.

    Sec. 69. Minnesota Statutes 2008, section 82.41, subdivision 1, is amended to read:
    Subdivision 1. License required. No person shall act as a real estate broker,
or real estate salesperson, or real estate closing agent unless licensed as herein provided
in this section.

    Sec. 70. Minnesota Statutes 2008, section 82.41, subdivision 2, is amended to read:
    Subd. 2. Misrepresenting status as licensee. No persons shall advertise or
represent themselves to be real estate brokers, salespeople, or closing agents or real estate
salespersons unless licensed as herein provided in this section.

    Sec. 71. Minnesota Statutes 2008, section 82.41, is amended by adding a subdivision
to read:
    Subd. 3a. Limitation on broker when transaction not completed. When the
owner fails or is unable to consummate a real estate transaction, through no fault of the
purchaser, the listing broker may not claim any portion of any trust funds deposited with
the broker by the purchaser, absent a separate agreement with the purchaser.

    Sec. 72. Minnesota Statutes 2008, section 82.45, subdivision 3, is amended to read:
    Subd. 3. Retention. A licensed real estate broker shall retain for three six years
copies of all listings, buyer representation and facilitator services contracts, deposit
receipts, purchase money contracts, canceled checks, trust account records, and such
other documents as may reasonably be related to carrying on a real estate brokerage
business. The retention period shall run from the date of the closing of the transaction,
or from the date of the document if the document is not consummated. The following
documents need not be retained:
(1) agency disclosure forms provided to prospective buyers or sellers, where no
contractual relationship is subsequently created and no services are provided by the
licensee; and
(2) facilitator services contracts or buyer representation contracts entered into with
prospective buyers, where the prospective buyer abandons the contractual relationship
before any services have been provided by the licensee.

    Sec. 73. Minnesota Statutes 2008, section 82.45, is amended by adding a subdivision
to read:
    Subd. 4. Storage. Storage of documents identified in subdivision 3 may be stored
by electronic means.

    Sec. 74. Minnesota Statutes 2008, section 82.45, is amended by adding a subdivision
to read:
    Subd. 5. Destruction. After the retention period specified in subdivision 3 has
elapsed and the broker no longer wishes to retain the documents, the broker must ensure
that the documents are disposed of according to the confidential record destruction
procedures of the Fair and Accurate Credit Transaction Act of 2003, Public Law 108-159.

    Sec. 75. Minnesota Statutes 2008, section 82.48, subdivision 2, is amended to read:
    Subd. 2. Penalty for noncompliance. The methods, acts, or practices set forth in
subdivisions 1 and 3 and sections 82.19; 82.22; 82.27; 82.31, subdivision 6; 82.37; and
82.41, subdivision 11, are standards of conduct governing the activities of real estate
brokers and salespersons. Failure to comply with these standards shall constitute grounds
for license denial, suspension, or revocation, or for censure of the licensee.

    Sec. 76. Minnesota Statutes 2008, section 82.48, subdivision 3, is amended to read:
    Subd. 3. Responsibilities of brokers. (a) Supervision of personnel. Brokers A
broker shall adequately supervise the activities of their the broker's salespersons and
employees. Supervision includes the ongoing monitoring of listing agreements, purchase
agreements, other real estate-related documents which are prepared or drafted by the
broker's salespersons or employees or which are otherwise received by the broker's office,
and the review of all trust account books and records. If an individual broker maintains
more than one place of business, each place of business shall be under the broker's direction
and supervision. If a partnership or corporate broker brokerage maintains more than one
place of business, each place of business shall be under the direction and supervision of an
individual broker licensed to act on behalf of the partnership or corporation brokerage.
The primary broker shall maintain records specifying the name of each broker
responsible for the direction and supervision of each place of business. If an individual
broker, who may be the primary broker, is responsible for supervising more than one
place of business, the primary broker shall, upon written request of the commissioner,
file a written statement specifying the procedures which have been established to ensure
that all salespersons and employees are adequately supervised. Designation of another
broker to supervise a place of business does not relieve the primary broker of the ultimate
responsibility for the actions of licensees.
(b) Preparation and safekeeping of documents. Brokers shall be A broker is
responsible for the preparation, custody, safety, and accuracy of all real estate contracts,
documents, and records, even though another person may be assigned these duties by
the broker.
(c) Documentation and resolution of complaints. Brokers A broker shall
investigate and attempt to resolve complaints made regarding the practices of any
individual licensed to them the broker and shall maintain, with respect to each individual
licensed to them the broker, a complaint file containing all material relating to any
complaints received in writing for a period of three years.
(d) Disclosure of listed property information. A broker may allow any unlicensed
person, who is authorized by the broker, to disclose any factual information pertaining
to the properties listed with the broker, if the factual information is provided to the
unlicensed person in written form by the broker representing or assisting the seller(s).

    Sec. 77. [82.52] ADVERTISING REQUIREMENTS.
A licensee shall identify himself or herself as either a broker or an agent salesperson
in any advertising for the purchase, sale, lease, exchange, mortgaging, transfer, or other
disposition of real property, whether the advertising pertains to the licensee's own property
or the property of others.
If a salesperson or broker is part of a team or group within the brokerage, the licensee
may include the team or group name in the advertising only under the following conditions:
(1) the inclusion of the team or group name is authorized by the primary broker of
the brokerage to which the salesperson or broker is licensed; and
(2) the real estate brokerage name is included and more prominently displayed than
the team or group name in the advertising.

    Sec. 78. [82.53] REAL ESTATE CLOSING AGENT LICENSING.
    Subdivision 1. Generally. The commissioner shall issue a license as a closing agent
to a person who qualifies for the license under the terms of this chapter.
    Subd. 2. Qualification of applicants. An applicant for a real estate closing agent
license must be at least 18 years of age at the time of making application for the license.
    Subd. 3. Application for license; contents. (a) An applicant for a real estate closing
agent license shall make an application in the format prescribed by the commissioner. The
application must be accompanied by the license fee required by this chapter.
(b) An application for a real estate closing agent license must contain the information
required by the commissioner consistent with this chapter.
(c) An application for a real estate closing agent license shall give the applicant's
legal name, age, residence address, and the name and place of business of the closing agent.
(d) The commissioner may require further information the commissioner considers
appropriate to administer this chapter.
    Subd. 4. Instruction. An applicant for a real estate closing agent's license must
successfully complete a course of study relating to closing services consisting of eight
hours of instruction approved by the commissioner.
    Subd. 5. Change of application information. The commissioner must be notified
in the format prescribed by the commissioner of a change of information contained in the
license application on file with the commissioner within ten days of the change.
    Subd. 6. Exemption. The following persons, when acting as closing agents, are
exempt from the requirements of sections 82.41 and 82.50 unless otherwise required
in this chapter:
(1) a direct employee of a title insurance company authorized to do business in this
state, or a direct employee of a title company, or a person who has an agency agreement
with a title insurance company or a title company in which the agent agrees to perform
closing services on the title insurance company's or title company's behalf and the title
insurance company or title company assumes responsibility for the actions of the agent as
if the agent were a direct employee of the title insurance company or title company;
(2) a licensed attorney or a direct employee of a licensed attorney;
(3) a licensed real estate broker or salesperson;
(4) a direct employee of a licensed real estate broker if the broker maintains all funds
received in connection with the closing services in the broker's trust account;
(5) a bank, trust company, savings association, credit union, industrial loan and thrift
company, regulated lender under chapter 56, public utility, or land mortgage or farm loan
association organized under the laws of this state or the United States, when engaged in
the transaction of businesses within the scope of its corporate powers as provided by law;
(6) a title insurance company authorized to do business in this state; and
(7) a title company that has a contractual agency relationship with a title insurance
company authorized to do business in this state, where the title insurance company
assumes responsibility for the actions of the title company and its employees or agents as
if they were employees or agents of the title insurance company.

    Sec. 79. [82.54] OTHER DISCLOSURE REQUIREMENTS.
    Subdivision 1. Agent of broker disclosure. A salesperson shall only conduct
business under the licensed name of and on behalf of the broker to whom the salesperson
is licensed. An individual broker shall only conduct business under the brokerage's
licensed name. A broker licensed to a business entity shall only conduct business under
the licensed business entity name. A licensee shall affirmatively disclose, before the
negotiation or consummation of any transaction, the licensed name of the brokerage under
whom the licensee is authorized to conduct business according to this section.
    Subd. 2. Financial interests or relative or business associate disclosure;
licensee. (a) Before the negotiation or consummation of any transaction, a licensee shall
affirmatively disclose to the owner of real property that the licensee is a real estate broker
or agent salesperson, and in what capacity the licensee is acting, if the licensee directly, or
indirectly through a third party, purchases for himself or herself or acquires, or intends to
acquire, any interest in, or any option to purchase, the owner's property.
(b) When a principal in the transaction is a licensee or a relative or business associate
of the licensee, that fact must be disclosed in writing.
    Subd. 3. Material facts. (a) A licensee shall disclose to a prospective purchaser
all material facts of which the licensee is aware, which could adversely and significantly
affect an ordinary purchaser's use or enjoyment of the property, or any intended use of the
property of which the licensee is aware.
    (b) It is not a material fact relating to real property offered for sale the fact or
suspicion that the property:
    (1) is or was occupied by an owner or occupant who is or was suspected
to be infected with human immunodeficiency virus or diagnosed with acquired
immunodeficiency syndrome;
    (2) was the site of a suicide, accidental death, natural death, or perceived paranormal
activity; or
    (3) is located in a neighborhood containing any adult family home, community-based
residential facility, or nursing home.
    (c) A licensee or employee of the licensee has no duty to disclose information
regarding an offender who is required to register under section 243.166, or about whom
notification is made under that section, if the broker or salesperson, in a timely manner,
provides a written notice that information about the predatory offender registry and
persons registered with the registry may be obtained by contacting local law enforcement
where the property is located or the Department of Corrections.
    (d) A licensee or employee of the licensee has no duty to disclose information
regarding airport zoning regulations if the broker or salesperson, in a timely manner,
provides a written notice that a copy of the airport zoning regulations as adopted can be
reviewed or obtained at the office of the county recorder where the zoned area is located.
    (e) A licensee is not required to disclose, except as otherwise provided in paragraph
(f), information relating to the physical condition of the property or any other information
relating to the real estate transaction, if a written report that discloses the information has
been prepared by a qualified third party and provided to the person. For the purposes of
this paragraph, "qualified third party" means a federal, state, or local governmental agency,
or any person whom the broker, salesperson, or a party to the real estate transaction
reasonably believes has the expertise necessary to meet the industry standards of practice
for the type of inspection or investigation that has been conducted by the third party
in order to prepare the written report and who is acceptable to the person to whom the
disclosure is being made.
    (f) A licensee shall disclose to the parties to a real estate transaction any facts known
by the broker or salesperson that contradict any information included in a written report
described in paragraph (e), if a copy of the report is provided to the licensee.
    (g) The limitation on disclosures in paragraphs (b) and (c) shall modify any common
law duties with respect to disclosure of material facts.
    Subd. 4. Nonperformance of party. If a licensee is put on notice by a party to a
real estate transaction that the party will not perform according to the terms of a purchase
agreement or other similar written agreement to convey real estate, the licensee shall
immediately disclose the fact of that party's intent not to perform to the other party or
parties to the transaction. The licensee shall, if reasonably possible, inform the party who
will not perform of the licensee's obligation to disclose this fact to the other party or
parties to the transaction before making the disclosure. The obligation required by this
section does not apply to notice of a party's inability to keep or fulfill any contingency to
which the real estate transaction has been made subject.

    Sec. 80. Minnesota Statutes 2008, section 82B.05, as amended by Laws 2009, chapter
63, section 62, is amended to read:
82B.05 REAL ESTATE APPRAISER ADVISORY BOARD.
    Subdivision 1. Members. The Real Estate Appraiser Advisory Board consists of
15 nine members appointed by the commissioner of commerce. Three of the members
must be public members, four must be consumers of appraisal services, of whom one
member must be employed in the financial lending industry, and eight six must be real
estate appraisers who are currently licensed in good standing, of whom not less than two
three members must be trainee real property appraisers, licensed real property appraisers,
or certified residential real property appraisers, not less than two and three members must
be certified general real property appraisers, and not less than. At least one member of the
board must be certified by the Appraisal Qualification Board of the Appraisal Foundation
to teach the Uniform Standards of Professional Appraisal Practice. The board is governed
by section 15.0575.
    Subd. 3. Terms. The term of office for members is three years.
Upon expiration of their terms, members of the board shall continue to hold office
until the appointment and qualification of their successors. No person may serve as a
member of the board for more than two consecutive terms. The commissioner may
remove a member for cause.
    Subd. 4. Practice of public members prohibited. The public members of the board
may not be engaged in the practice of real estate appraising.
    Subd. 5. Conduct of meetings. Places of regular board meetings must be decided
by the vote of members. Written notice must be given to each member of the time and
place of each meeting of the board at least ten days before the scheduled date of regular
board meetings. The board shall establish procedures for emergency board meetings and
other operational procedures, subject to the approval of the commissioner.
The members of the board shall elect a chair to preside at board meetings, a
vice-chair, and a secretary from among the members to preside at board meetings.
A quorum of the board is eight five members.
The board shall meet at least once every six three months as determined by a
majority vote of the members or a call of the commissioner.
    Subd. 6. Compensation. Each member of the board is entitled to a per diem
allowance of $35 for each meeting of the board at which the member is present and for each
day or substantial part of a day actually spent in the conduct of the business of the board,
plus all appropriate expenses unless a greater amount is authorized by section 15.0575.
    Subd. 7. Enforcement reports. The commissioner shall, on a regular basis, provide
the board with the commissioner's public enforcement data.
EFFECTIVE DATE.This section is effective January 1, 2011.

    Sec. 81. Minnesota Statutes 2008, section 82B.06, is amended to read:
82B.06 POWERS OF THE BOARD.
The board shall make recommendations to the commissioner as the commissioner
requests or at the board's own initiative on:
(1) rules with respect to each category of licensed real estate appraiser, the type of
educational experience, appraisal experience, and equivalent experience that will meet
the requirements of this chapter;
(2) examination specifications for each category of licensed real estate appraiser,
to assist in providing or obtaining appropriate examination questions and answers, and
procedures for grading examinations;
(3) rules with respect to each category of licensed real estate appraiser, the
continuing education requirements for the renewal of licensing that will meet the
requirements provided in this chapter;
(4) periodic review of the standards for the development and communication of
real estate appraisals provided in this chapter and rules explaining and interpreting the
standards; and
(5) other matters necessary in carrying out the provisions of this chapter.
EFFECTIVE DATE.This section is effective January 1, 2011.

    Sec. 82. Minnesota Statutes 2008, section 82B.14, is amended to read:
82B.14 EXPERIENCE REQUIREMENT.
(a) As a prerequisite for licensing as a licensed real property appraiser, an applicant
must present evidence satisfactory to the commissioner that the person has obtained 2,000
hours of experience in real property appraisal obtained in no fewer than 12 months.
As a prerequisite for licensing as a certified residential real property appraiser, an
applicant must present evidence satisfactory to the commissioner that the person has
obtained 2,500 hours of experience in real property appraisal obtained in no fewer than
24 months.
As a prerequisite for licensing as a certified general real property appraiser, an
applicant must present evidence satisfactory to the commissioner that the person has
obtained 3,000 hours of experience in real property appraisal obtained in no fewer than 30
months. At least 50 percent, or 1,500 hours, must be in nonresidential appraisal work.
(b) Each applicant for license under section 82B.11, subdivision 3, 4, or 5, shall
give under oath a detailed listing of the real estate appraisal reports or file memoranda
for which experience is claimed by the applicant. Upon request, the applicant shall make
available to the commissioner for examination, a sample of appraisal reports that the
applicant has prepared in the course of appraisal practice.
(c) Notwithstanding section 45.22, a college or university real estate course may be
approved retroactively by the commissioner for appraiser prelicense education credit if:
(1) the course was offered by a college or university physically located in Minnesota;
(2) the college or university was an approved education provider at the time the
course was offered;
(3) the commissioner's approval is made to the same extent in terms of courses and
hours and with the same time limits as those specified by the Appraiser Qualifications
Board.
(d) Applicants may not receive credit for experience accumulated while unlicensed,
if the experience is based on activities which required a license under this section.
(d) (e) Experience for all classifications must be obtained after January 30, 1989,
and must be USPAP compliant.

    Sec. 83. Minnesota Statutes 2009 Supplement, section 137.0225, is amended to read:
137.0225 UNIVERSITY PROMISE SCHOLARSHIP.
    The Board of Regents may establish a scholarship to help offset the impact of
rising tuition for Minnesota students from middle-income families. To be eligible for a
scholarship under this section, a student must be a Minnesota resident undergraduate
from a family that is not Pell Grant eligible with an annual adjusted gross income not
to exceed $100,000.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 84. [137.0226] SCHOLARSHIP FUNDING PROGRAM.
As a condition of a license for an arena or stadium location under section 340A.404,
subdivision 4a, paragraph (a), clause (3), the University of Minnesota shall deposit at
least 75 percent of the net revenue generated through the existence of this license for
scholarships under section 137.0225 for Minnesota resident men and women attending the
University of Minnesota.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 85. Minnesota Statutes 2008, section 326.3382, subdivision 3, is amended to read:
    Subd. 3. Proof of insurance. (a) No license may be issued to a private detective
or protective agent applicant until the applicant has complied with the requirements in
this subdivision.
(b) The applicant shall execute a surety bond to the state of Minnesota in the penal
sum of $10,000 and file it with the board. The surety bond must be executed by a
company authorized to do business in the state of Minnesota, must name the applicant as
principal, and must state that the applicant and each of the applicant's employees shall
faithfully observe all of the laws of Minnesota and of the United States and shall pay all
damages suffered by any person by reason of a violation of law by the applicant or by the
commission of any willful and malicious wrong by the applicant in the course of business.
(c) The applicant shall furnish proof, acceptable to the board, of the applicant's
ability to respond in damages for liability on account of accidents or wrongdoings arising
out of the ownership and operation of a private detective or protective agent business.
Compliance with paragraph (d), (e), or (f) is satisfactory proof of financial responsibility
for purposes of this paragraph.
(d) The applicant may file with the board a certificate of insurance demonstrating
coverage for general liability, completed operations, and personal injury. Personal injury
insurance must include coverage for:
(1) false arrest, detention, imprisonment, and malicious prosecution;
(2) libel, slander, defamation, and violation of rights of privacy; and
(3) wrongful entry, eviction, and other invasion of rights of private occupancy.
The certificate must provide that the insurance may not be modified or canceled
unless 30 days prior notice is given to the board. In the event of a policy cancellation,
the insurer will send notice to the board at the same time that a cancellation request is
received from or a notice is sent to the insured.
(e) The applicant may file with the board an annual net worth statement, signed
by a licensed certified public accountant, evidencing that the applicant has a net worth
of at least the following:
(1) for an applicant with no employees, $10,000;
(2) for an applicant with one to ten employees, $15,000;
(3) for an applicant with 11 to 25 employees, $25,000;
(4) for an applicant with 26 to 50 employees, $50,000; or
(5) for an applicant with 51 or more employees, $100,000.
Data indicating with which of the above requirements an applicant must comply is
public data. The contents of the net worth statement are private data on individuals or
nonpublic data, as defined in section 13.02.
(f) The applicant may file with the board an irrevocable letter of credit from a
financial institution acceptable to the board in the amount listed in the appropriate
category in paragraph (e).

    Sec. 86. Minnesota Statutes 2008, section 326B.33, subdivision 16, is amended to read:
    Subd. 16. Insurance required. Each contractor shall have and maintain in effect
general liability insurance, which includes premises and operations insurance and products
and completed operations insurance, with limits of at least $100,000 per occurrence,
$300,000 aggregate limit for bodily injury, and property damage insurance with limits of
at least $50,000 or a policy with a single limit for bodily injury and property damage of
$300,000 per occurrence and $300,000 aggregate limits. Such insurance shall be written
by an insurer licensed to do business in the state of Minnesota and each contractor shall
maintain on file with the commissioner a certificate evidencing such insurance which
provides that such insurance shall not be canceled without the insurer first giving 15
days written notice to the commissioner of such cancellation. In the event of a policy
cancellation, the insurer shall send written notice to the commissioner at the same time
that a cancellation request is received from or a notice is sent to the insured.

    Sec. 87. Minnesota Statutes 2009 Supplement, section 326B.46, subdivision 2, is
amended to read:
    Subd. 2. Bond; insurance. Any person contracting to do plumbing work must give
bond to the state in the amount of at least $25,000 for (1) all plumbing work entered
into within the state or (2) all plumbing work and subsurface sewage treatment work
entered into within the state. If the bond is for both plumbing work and subsurface sewage
treatment work, the bond must comply with the requirements of this section and section
115.56, subdivision 2, paragraph (e). The bond shall be for the benefit of persons injured
or suffering financial loss by reason of failure to comply with the requirements of the
State Plumbing Code and, if the bond is for both plumbing work and subsurface sewage
treatment work, financial loss by reason of failure to comply with the requirements of
sections 115.55 and 115.56. The bond shall be filed with the commissioner and shall be
written by a corporate surety licensed to do business in the state.
    In addition, each applicant for a master plumber license or restricted master plumber
license, or renewal thereof, shall provide evidence of public liability insurance, including
products liability insurance with limits of at least $50,000 per person and $100,000 per
occurrence and property damage insurance with limits of at least $10,000. The insurance
shall be written by an insurer licensed to do business in the state of Minnesota and
each licensed master plumber shall maintain on file with the commissioner a certificate
evidencing the insurance providing that the insurance shall not be canceled without the
insurer first giving 15 days written notice to the commissioner. The term of the insurance
shall be concurrent with the term of the license. In the event of a policy cancellation, the
insurer shall send written notice to the commissioner at the same time that a cancellation
request is received from or a notice is sent to the insured.

    Sec. 88. Minnesota Statutes 2008, section 326B.46, is amended by adding a
subdivision to read:
    Subd. 6. Well contractor exempt from licensing and bond; conditions. No
license, registration, or bond under sections 326B.42 to 326B.49 is required of a well
contractor or a limited well/boring contractor who is licensed and bonded under section
103I.525 or 103I.531 and is engaged in the work or business of installing (1) water service
pipe from a well to a pressure tank or a frost-free water hydrant with an antisiphon device
which is located entirely outside of a structure requiring potable water, or (2) a temporary
shut-off valve on a well water service pipe. For the purposes of this subdivision,
"temporary" means a time period not to exceed six months. This subdivision expires one
year after the date of enactment.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 89. Minnesota Statutes 2008, section 326B.56, subdivision 2, is amended to read:
    Subd. 2. Insurance. (a) Each applicant for a water conditioning contractor or
installer license or renewal thereof who is required by any political subdivision to
maintain insurance to obtain or maintain the license may comply with any political
subdivision's insurance requirement by maintaining the insurance described in paragraph
(b). No applicant for a water conditioning contractor or installer license who maintains the
insurance described in paragraph (b) shall be otherwise required to meet the insurance
requirements of any political subdivision.
    (b) The insurance shall provide coverage, including products liability coverage,
for all damages in connection with licensed work for which the licensee is liable, with
personal damage limits of at least $50,000 per person and $100,000 per occurrence and
property damage insurance with limits of at least $10,000. The insurance shall be written
by an insurer licensed to do business in this state and a certificate evidencing the insurance
shall be filed with the commissioner. The insurance must remain in effect at all times while
the application is pending and while the license is in effect. The insurance shall not be
canceled without the insurer first giving 15 days' written notice to the commissioner. In the
event of a policy cancellation, the insurer shall send written notice to the commissioner at
the same time that a cancellation request is received from or a notice is sent to the insured.

    Sec. 90. Minnesota Statutes 2008, section 326B.86, subdivision 2, is amended to read:
    Subd. 2. Insurance. Each licensee shall have and maintain in effect commercial
general liability insurance, which includes premises and operations insurance and products
and completed operations insurance, with limits of at least $100,000 per occurrence,
$300,000 aggregate limit for bodily injury, and property damage insurance with limits of
at least $25,000 or a policy with a single limit for bodily injury and property damage of
$300,000 per occurrence and $300,000 aggregate limits. The insurance must be written by
an insurer licensed to do business in this state. Each licensee shall maintain on file with
the commissioner a certificate evidencing the insurance which provides that the insurance
shall not be canceled without the insurer first giving 15 days' written notice of cancellation
to the commissioner. In the event of a policy cancellation, the insurer shall send written
notice to the commissioner at the same time that a cancellation request is received from or
a notice is sent to the insured. The commissioner may increase the minimum amount of
insurance required for any licensee or class of licensees if the commissioner considers it to
be in the public interest and necessary to protect the interests of Minnesota consumers.

    Sec. 91. Minnesota Statutes 2008, section 326B.921, subdivision 6, is amended to read:
    Subd. 6. Insurance. In addition to the bond described in subdivision 5, each
applicant for a high pressure pipefitting business license or renewal shall have in force
public liability insurance, including products liability insurance, with limits of at least
$100,000 per person and $300,000 per occurrence and property damage insurance with
limits of at least $50,000.
    The insurance must be kept in force for the entire term of the high pressure
pipefitting business license, and the license shall be suspended by the department if at any
time the insurance is not in force.
    The insurance must be written by an insurer licensed to do business in the state and
shall be in lieu of any other insurance required by any subdivision of government for high
pressure pipefitting. Each person holding a high pressure pipefitting business license shall
maintain on file with the department a certificate evidencing the insurance. Any purported
cancellation of insurance shall not be effective without the insurer first giving 30 days'
written notice to the department. In the event of a policy cancellation, the insurer shall
send written notice to the commissioner at the same time that a cancellation request is
received from or a notice is sent to the insured.

    Sec. 92. Minnesota Statutes 2008, section 327B.04, subdivision 4, is amended to read:
    Subd. 4. License prerequisites. No application shall be granted nor license issued
until the applicant proves to the commissioner that:
    (a) the applicant has a permanent, established place of business at each licensed
location. An "established place of business" means a permanent enclosed building other
than a residence, or a commercial office space, either owned by the applicant or leased by
the applicant for a term of at least one year, located in an area where zoning regulations
allow commercial activity, and where the books, records and files necessary to conduct
the business are kept and maintained. The owner of a licensed manufactured home park
who resides in or adjacent to the park may use the residence as the established place of
business required by this subdivision, unless prohibited by local zoning ordinance.
    If a license is granted, the licensee may use unimproved lots and premises for sale,
storage, and display of manufactured homes, if the licensee first notifies the commissioner
in writing;
    (b) if the applicant desires to sell, solicit or advertise the sale of new manufactured
homes, it has a bona fide contract or franchise in effect with a manufacturer or distributor
of the new manufactured home it proposes to deal in;
    (c) the applicant has secured: (1) a surety bond in the amount of $20,000 for each
agency and each subagency location that bears the applicant's name and the name under
which the applicant will be licensed and do business in this state. Each bond is for the
protection of consumer customers, and must be executed by the applicant as principal and
issued by a surety company admitted to do business in this state. Each bond shall be
exclusively for the purpose of reimbursing consumer customers and shall be conditioned
upon the faithful compliance by the applicant with all of the laws and rules of this state
pertaining to the applicant's business as a dealer or manufacturer, including sections
325D.44, 325F.67 and 325F.69, and upon the applicant's faithful performance of all its
legal obligations to consumer customers; and (2) a certificate of liability insurance in
the amount of $1,000,000 that provides aggregate coverage for the agency and each
subagency location. In the event of a policy cancellation, the insurer shall send written
notice to the commissioner at the same time that a cancellation request is received from
or a notice is sent to the insured;
    (d) the applicant has established a trust account as required by section 327B.08,
subdivision 3
, unless the applicant states in writing its intention to limit its business to
selling, offering for sale, soliciting or advertising the sale of new manufactured homes; and
    (e) the applicant has provided evidence of having had at least two years' prior
experience in the sale of manufactured homes, working for a licensed dealer.

    Sec. 93. [332.3351] EXEMPTION FROM LICENSURE.
A collection agency shall be exempt from the licensing and registration requirements
of this chapter if all of the following conditions are met:
(1) the agency is located in another state that regulates and licenses collection
agencies, but does not require a Minnesota collection agency to obtain a license to collect
debts in their state if the agency's collection activities are limited in the same manner;
(2) the agency's collection activities are limited to collecting debts not incurred in
this state from consumers located in this state; and
(3) the agency's collection activities in Minnesota are conducted by means of
interstate communications, including telephone, mail, electronic mail, or facsimile
transmission.
EFFECTIVE DATE.This section is effective January 1, 2011.

    Sec. 94. Minnesota Statutes 2008, section 332.34, is amended to read:
332.34 BOND.
The commissioner of commerce shall require each collection agency licensee to
annually file and maintain in force a corporate surety bond, in a form to be prescribed
by, and acceptable to, the commissioner, and in a sum of at least $20,000 $50,000 plus
an additional $5,000 for each $100,000 received by the collection agency from debtors
located in Minnesota during the previous calendar year, less commissions earned by the
collection agency on those collections for the previous calendar year. The total amount of
the bond shall not exceed $100,000. A collection agency may deposit cash in and with a
depository acceptable to the commissioner in an amount and in the manner prescribed and
approved by the commissioner in lieu of a bond.
EFFECTIVE DATE.This section is effective for bonds obtained or renewed after
January 1, 2011.

    Sec. 95. Minnesota Statutes 2009 Supplement, section 340A.404, subdivision 4a,
is amended to read:
    Subd. 4a. Publicly owned recreation; entertainment facilities. (a)
Notwithstanding any other law, local ordinance, or charter provision, the commissioner
may issue on-sale intoxicating liquor licenses:
    (1) to the state agency administratively responsible for, or to an entity holding a
concession or facility management contract with such agency for beverage sales at, the
premises of any Giants Ridge Recreation Area building or recreational improvement area
owned by the state in the city of Biwabik, St. Louis County;
    (2) to the state agency administratively responsible for, or to an entity holding a
concession or facility management contract with such agency for beverage sales at, the
premises of any Ironworld Discovery Center building or facility owned by the state at
Chisholm;
    (3) to the Board of Regents of the University of Minnesota for events at Northrop
Auditorium, the intercollegiate football stadium, or at no more than seven other locations
within the boundaries of the University of Minnesota, provided that the Board of Regents
has approved an application for a license for the specified location and provided that a
license for an arena or stadium location is void unless it requires the sale or service of
intoxicating liquor throughout the arena or stadium if intoxicating liquor is sold or served
anywhere in the arena or stadium in a public portion consisting of at least one-third of the
general seating of a stadium or arena. It is solely within the discretion of the Board of
Regents to choose the manner in which to carry out this condition; and
(4) to the Duluth Entertainment and Convention Center Authority for beverage
sales on the premises of the Duluth Entertainment and Convention Center Arena during
intercollegiate hockey games.
    The commissioner shall charge a fee for licenses issued under this subdivision in an
amount comparable to the fee for comparable licenses issued in surrounding cities.
    (b) No alcoholic beverage may be sold or served at TCF Bank Stadium unless the
Board of Regents holds an on-sale intoxicating liquor license for the stadium as provided
in paragraph (a), clause (3).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 96. Minnesota Statutes 2008, section 340A.409, subdivision 1, is amended to read:
    Subdivision 1. Insurance required. (a) No retail license may be issued, maintained
or renewed unless the applicant demonstrates proof of financial responsibility with regard
to liability imposed by section 340A.801. The issuing authority must submit to the
commissioner the applicant's proof of financial responsibility. This subdivision does not
prohibit a local unit of government from requiring higher insurance or bond coverages, or
a larger deposit of cash or securities. The minimum requirement for proof of financial
responsibility may be given by filing:
(1) a certificate that there is in effect for the license period an insurance policy
issued by an insurer required to be licensed under section 60A.07, subdivision 4, or by
an insurer recognized as an eligible surplus lines carrier pursuant to section 60A.206 or
pool providing at least $50,000 of coverage because of bodily injury to any one person in
any one occurrence, $100,000 because of bodily injury to two or more persons in any one
occurrence, $10,000 because of injury to or destruction of property of others in any one
occurrence, $50,000 for loss of means of support of any one person in any one occurrence,
and $100,000 for loss of means of support of two or more persons in any one occurrence;
(2) a bond of a surety company with minimum coverages as provided in clause (1); or
(3) a certificate of the commissioner of management and budget that the licensee
has deposited with the commissioner of management and budget $100,000 in cash or
securities which may legally be purchased by savings banks or for trust funds having a
market value of $100,000.
(b) This subdivision does not prohibit an insurer from providing the coverage
required by this subdivision in combination with other insurance coverage.
(c) An annual aggregate policy limit for dram shop insurance of not less than
$300,000 per policy year may be included in the policy provisions.
(d) A liability insurance policy required by this section must provide that it may
not be canceled for:
(1) any cause, except for nonpayment of premium, by either the insured or the
insurer unless the canceling party has first given 30 60 days' notice in writing to the
issuing authority insured of intent to cancel the policy; and
(2) nonpayment of premium unless the canceling party has first given ten days'
notice in writing to the issuing authority insured of intent to cancel the policy.; and
(3) in the event of a policy cancellation, the insurer will send notice to the issuing
authority at the same time that a cancellation request is received from or a notice is sent
to the insured.

    Sec. 97. Minnesota Statutes 2008, section 471.61, subdivision 2b, is amended to read:
    Subd. 2b. Insurance continuation. A unit of local government must allow a former
employee and the employee's dependents to continue to participate indefinitely in the
employer-sponsored hospital, medical, and dental insurance group that the employee
participated in immediately before retirement, under the following conditions:
(a) The continuation requirement of this subdivision applies only to a former
employee who is receiving a disability benefit or an annuity from a Minnesota public
pension plan other than a volunteer firefighter plan, or who has met age and service
requirements necessary to receive an annuity from such a plan.
(b) Until the former employee reaches age 65, the former employee and dependents
must be pooled in the same group as active employees for purposes of establishing
premiums and coverage for hospital, medical, and dental insurance. However, a former
employee under the age of 65 who is enrolled in Medicare Parts A and B due to the former
employee's disability and for whom Medicare's obligation to pay claims is primary, and
the former employee's dependents, must be pooled in the same group for purposes of this
paragraph as former employees who have reached age 65.
(c) A former employee may receive dependent coverage only if the employee
received dependent coverage immediately before leaving employment. This subdivision
does not require dependent coverage to continue after the death of the former employee.
For purposes of this subdivision, "dependent" has the same meaning for former employees
as it does for active employees in the unit of local government.
(d) Coverage for a former employee and dependents may not discriminate on the
basis of evidence of insurability or preexisting conditions unless identical conditions are
imposed on active employees in the group that the employee left.
(e) The former employee must pay the entire premium for continuation coverage,
except as otherwise provided in a collective bargaining agreement or personnel policy.
A unit of local government may discontinue coverage if a former employee fails to pay
the premium within the deadline provided for payment of premiums under federal law
governing insurance continuation.
(f) An employer must notify an employee before termination of employment of the
options available under this subdivision, and of the deadline for electing to continue
to participate.
(g) A former employee must notify the employer of intent to participate within
the deadline provided for notice of insurance continuation under federal law. A former
employee who does not elect to continue participation does not have a right to reenter
the employer's group insurance program.
(h) A former employee who initially selects dependent coverage may later drop
dependent coverage while retaining individual coverage. A former employee may not
drop individual coverage and retain dependent coverage.
(i) This subdivision does not limit rights granted to former employees under other
state or federal law, or under collective bargaining agreements or personnel plans.
(j) Unless otherwise provided by a collective bargaining agreement, if retired
employees were not permitted to remain in the active employee group prior to August
1, 1992, a public employer may assess active employees through payroll deduction for
all or part of the additional premium costs from the inclusion of retired employees in the
active employee group. This paragraph does not apply to employees covered by section
179A.03, subdivision 7.
(k) Notwithstanding section 179A.20, subdivision 2a, insurance continuation under
this subdivision may be provided for in a collective bargaining agreement or personnel
policy.
EFFECTIVE DATE.This section is effective August 1, 2010, and applies to
coverage in existence on or after that date.

    Sec. 98. Minnesota Statutes 2008, section 514.20, is amended to read:
514.20 SALE.
If any sum secured by such lien be not paid within 90 days after it becomes due, the
lienholder may sell the property and out of the proceeds of such sale there shall be paid,
first, the disbursements aforesaid; second, all charges against the property paid by such
person to any other person; and, third, the total indebtedness then secured by the lien. The
remainder, if any, shall be paid on demand to the owner or other person entitled thereto. If
the property subject to the lien is a motor vehicle registered in this state and subject to a
certificate of title, then the lienholder must provide written notice, by registered certified
mail, to all secured creditors listed on the certificate of title 45 days before the lienholder's
right to sell the motor vehicle is considered effective. The notice must state the name,
address, and telephone number of the lienholder, the amount of money owed, and the rate
at which storage charges, if any, are accruing. Costs for registered certified mail and
other reasonable costs related to complying with this notice provision constitute "lawful
charges" pursuant to section 514.19. Failure to comply with the notice provision in this
section renders any lien created by this chapter ineffective against any secured party listed
on the certificate of title of the motor vehicle involved.
EFFECTIVE DATE.This section is effective the day following final enactment,
and applies to notices mailed on or after that date, provided however that it is also
permissible to send notices under this section by registered mail prior to August 1, 2010,
and the costs of those notices are lawful charges under this section.

    Sec. 99. Laws 2007, chapter 147, article 12, section 14, is amended to read:
    Sec. 14. AGRICULTURAL COOPERATIVE HEALTH PLAN FOR
FARMERS.
    Subdivision 1. Pilot project requirements. Notwithstanding contrary provisions of
Minnesota Statutes, chapter 62H, the following apply to a joint self-insurance pilot project
administered by a trust sponsored by one or more agricultural cooperatives organized
under Minnesota Statutes, chapter 308A or 308B, or under a federal charter for the
purpose of offering health coverage to members of the cooperatives and their families,
provided the project satisfies the other requirements of Minnesota Statutes, chapter 62H:
    (1) Minnesota Statutes, section 62H.02, paragraph (b), does not apply;
    (2) the notice period required under Minnesota Statutes, section 62H.02, paragraph
(e), is 90 days;
    (3) a joint self-insurance plan may elect to treat the sale of a health plan to or for
an employer that has only one eligible employee who has not waived coverage as the
sale of an individual health plan as allowed under Minnesota Statutes, section 62L.02,
subdivision 26
;
    (4) Minnesota Statutes, section 297I.05, subdivision 12, paragraph (c), applies; and
    (5) the trust must pay the assessment for the Minnesota Comprehensive Health
Association as provided under Minnesota Statutes, section 62E.11.
    Subd. 2. Evaluation and renewal. The pilot project authorized under this section
is for a period of four years from the date of initial enrollment. The commissioner of
commerce shall grant an extension of four additional years if the trust provides evidence
that it remains in compliance with the requirements of this section and other applicable
laws and rules. If the commissioner determines that the operation of the trust has not
improved access, expanded health plan choices, or improved the affordability of health
coverage for farm families, or that it has significantly damaged access, choice, or
affordability for other consumers not enrolled in the trust, the commissioner shall provide
at least 180 days' advance written notice to the trust and to the chairs of the senate and
house finance and policy committees with jurisdiction over health and insurance of the
commissioner's intention not to renew the pilot project at the expiration of a four-year
period.
    Subd. 3. Use of surplus lines. Plans created under this section may use surplus lines
carriers to fulfill its obligations under Minnesota Statutes, chapter 62H.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 100. ON-SALE LICENSE; THEATRE L'HOMME DIEU.
Notwithstanding any law, ordinance, or charter provision to the contrary, Douglas
County may issue a wine and intoxicating malt liquor license to Theatre L'Homme Dieu.
The license authorizes sales on all days of the week to holders of tickets for performances
presented by the theater and to members of the nonprofit corporations holding the license
and to their guests.
EFFECTIVE DATE.This section is effective upon approval by the licensing
authority in the manner specified by Minnesota Statutes, section 645.021, subdivisions
2 and 3.

    Sec. 101. 2011 APPOINTMENTS TO REAL ESTATE APPRAISER ADVISORY
BOARD.
The terms of all members of the Real Estate Appraiser Advisory Board expire the
effective date of this section. The commissioner of commerce shall, as soon as practicable
after this date, appoint members to an initial term of office as follows: three years for one
consumer of appraisal services member, one certified residential real property appraiser
member, and one certified general real property appraiser member; two years for one
consumer of appraisal services member, one certified residential real property appraiser
member, and one certified general real property appraiser member; and one year for one
consumer of appraisal services member, one certified residential real property appraiser
member, and one certified general real property appraiser member.
Upon the expiration of the term of office established in this section, the successor
must be appointed pursuant to Minnesota Statutes, section 82B.05.
All provisions of Minnesota Statutes, section 82B.05, not inconsistent with this
section apply to the initial board appointed pursuant to this section.
EFFECTIVE DATE.This section is effective January 1, 2011.

    Sec. 102. COORDINATION OF BENEFITS STUDY.
The commissioner of commerce, in consultation with the commissioner of
health and health plan companies, shall consider the appropriateness of adopting the
National Association of Insurance Commissioners 2005 Coordination of Benefits Model
Regulation. The commissioner shall submit recommendations and draft legislation, if any,
needed to implement the recommendations, to the legislature by January 15, 2011.

    Sec. 103. SAUK RAPIDS; ON-SALE LICENSE.
Notwithstanding any other law, ordinance, or charter provision to the contrary,
the city of Sauk Rapids may issue an on-sale intoxicating liquor license, or an on-sale
3.2 percent malt liquor license, to the owner of an arena located on the Benton County
Fairgrounds or to an entity holding a concession contract with the owner for use on the
premises of that arena. Any license authorized by this section may be issued for space that
is not compact or contiguous, provided that all of the space is within the boundaries of the
arena and is included in the description of the licensed premises on the approved license
application. A license issued under this section authorizes sales on all days of the week
to persons attending activities or events at the arena. All other provisions of Minnesota
Statutes, chapter 340A not inconsistent with this section apply to the license authorized
under this section.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 104. REPEALER.
Minnesota Statutes 2008, sections 82.19, subdivision 3; 82.22, subdivisions 1, 6, 7,
8, and 9; 82.31, subdivision 6; 82.34, subdivision 16; 82.41, subdivisions 3 and 7; 332.31,
subdivision 7; and 332.335, are repealed.
Minnesota Statutes 2009 Supplement, section 65B.133, subdivision 3; and 72B.02,
subdivision 11, are repealed.
Minnesota Statutes 2008, section 72B.04, is repealed effective July 1, 2010.
Minnesota Statutes 2008, section 62L.056, is repealed effective January 1, 2012.
Presented to the governor May 18, 2010
Signed by the governor May 25, 2010, 11:32 a.m.

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