1.1                          A bill for an act 
  1.2             relating to commerce; providing enforcement authority 
  1.3             for the commissioner; regulating service of process; 
  1.4             excluding hair braiding from the practice of 
  1.5             cosmetology; regulating residential building 
  1.6             contractors and remodelers; providing criminal 
  1.7             penalties; amending Minnesota Statutes 1998, sections 
  1.8             45.027, subdivisions 6 and 7; 45.028, subdivision 2; 
  1.9             80A.15, subdivision 2; 155A.03, subdivision 2, and by 
  1.10            adding a subdivision; 326.83, subdivision 18; 326.89, 
  1.11            subdivision 3; 326.94, subdivision 2; and 332.37; 
  1.12            repealing Minnesota Statutes 1998, section 326.89, 
  1.13            subdivision 3a. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1998, section 45.027, 
  1.16  subdivision 6, is amended to read: 
  1.17     Subd. 6.  [VIOLATIONS AND PENALTIES.] The commissioner may 
  1.18  impose a civil penalty not to exceed $2,000 $10,000 per 
  1.19  violation upon a person who violates any law, rule, or order 
  1.20  related to the duties and responsibilities entrusted to the 
  1.21  commissioner unless a different penalty is specified.  
  1.22     Sec. 2.  Minnesota Statutes 1998, section 45.027, 
  1.23  subdivision 7, is amended to read: 
  1.24     Subd. 7.  [ACTIONS AGAINST LICENSEES.] (a) In addition to 
  1.25  any other actions authorized by this section, the commissioner 
  1.26  may, by order, deny, suspend, or revoke the authority or license 
  1.27  of a person subject to the duties and responsibilities entrusted 
  1.28  to the commissioner, as described under section 45.011, 
  1.29  subdivision 4, or censure that person if the commissioner finds 
  2.1   that: 
  2.2      (1) the order is in the public interest; and 
  2.3      (2) the person has violated any law, rule, or order related 
  2.4   to the duties and responsibilities entrusted to the 
  2.5   commissioner; or 
  2.6      (3) the person has provided false, misleading, or 
  2.7   incomplete information to the commissioner or has refused to 
  2.8   allow a reasonable inspection of records or premises; or 
  2.9      (4) the person has engaged in an act or practice, whether 
  2.10  or not the act or practice directly involves the business for 
  2.11  which the person is licensed or authorized, which demonstrates 
  2.12  that the applicant or licensee is untrustworthy, financially 
  2.13  irresponsible, or otherwise incompetent or unqualified to act 
  2.14  under the authority or license granted by the commissioner. 
  2.15     (b) The commissioner shall issue an order requiring a 
  2.16  licensee or applicant for a license to show cause why the 
  2.17  license should not be revoked or suspended, or the licensee 
  2.18  censured, or the application denied.  The order must be 
  2.19  calculated to give reasonable notice of the time and place for a 
  2.20  hearing on the action, and must state the reasons for the entry 
  2.21  of the order.  The commissioner may, by order, summarily suspend 
  2.22  a license pending final determination of an order to show cause. 
  2.23  If a license is suspended pending final determination of an 
  2.24  order to show cause, a hearing on the merits must be held within 
  2.25  30 days of the issuance of the order of suspension.  All 
  2.26  hearings must be conducted according to chapter 14.  After the 
  2.27  hearing, the commissioner shall enter an order disposing of the 
  2.28  matter as the facts require.  If the licensee or applicant fails 
  2.29  to appear at a hearing after having been duly notified of it, 
  2.30  the person is considered in default, and the proceeding may be 
  2.31  determined against the licensee or applicant upon consideration 
  2.32  of the order to show cause, the allegations of which may be 
  2.33  considered true.  The summary suspension or summary revocation 
  2.34  procedures does not apply to action by the commissioner against 
  2.35  the certificate of authority of an insurer authorized to do 
  2.36  business in Minnesota.  
  3.1      Except for information classified as confidential under 
  3.2   sections 60A.03, subdivision 9; 60A.031; 60A.93; and 60D.22, the 
  3.3   commissioner may make any data otherwise classified as private 
  3.4   or confidential pursuant to this section accessible to an 
  3.5   appropriate person or agency if the commissioner determines that 
  3.6   the access will aid the law enforcement process, promote public 
  3.7   health or safety, or dispel widespread rumor or unrest.  If the 
  3.8   commissioner determines that private or confidential information 
  3.9   should be disclosed, the commissioner shall notify the attorney 
  3.10  general as to the information to be disclosed, the purpose of 
  3.11  the disclosure, and the need for the disclosure.  The attorney 
  3.12  general shall review the commissioner's determination.  If the 
  3.13  attorney general believes that the commissioner's determination 
  3.14  does not satisfy the purpose and intent of this provision, the 
  3.15  attorney general shall advise the commissioner in writing that 
  3.16  the information may not be disclosed.  If the attorney general 
  3.17  believes the commissioner's determination satisfies the purpose 
  3.18  and intent of this provision, the attorney general shall advise 
  3.19  the commissioner in writing, accordingly. 
  3.20     After disclosing information pursuant to this provision, 
  3.21  the commissioner shall advise the chairs of the senate and house 
  3.22  of representatives judiciary committees of the disclosure and 
  3.23  the basis for it. 
  3.24     Sec. 3.  Minnesota Statutes 1998, section 45.028, 
  3.25  subdivision 2, is amended to read: 
  3.26     Subd. 2.  [HOW MADE.] Service of process under this section 
  3.27  may be made by leaving a copy of the process in the office of 
  3.28  the commissioner, or by sending a copy of the process to the 
  3.29  commissioner by certified mail, and is not effective unless:  (1)
  3.30  the plaintiff, who may be the commissioner in an action or 
  3.31  proceeding instituted by the commissioner, sends notice of the 
  3.32  service and a copy of the process by certified mail to the 
  3.33  defendant or respondent at the last known address; and (2) the 
  3.34  plaintiff's affidavit of compliance is filed in the action or 
  3.35  proceeding on or before the return day of the process, if any, 
  3.36  or within further time as the court allows.  
  4.1      Sec. 4.  Minnesota Statutes 1998, section 80A.15, 
  4.2   subdivision 2, is amended to read: 
  4.3      Subd. 2.  The following transactions are exempted from 
  4.4   sections 80A.08 and 80A.16: 
  4.5      (a) Any sales, whether or not effected through a 
  4.6   broker-dealer, provided that: 
  4.7      (1) no person shall make more than ten sales of securities 
  4.8   of the same issuer pursuant to this exemption, exclusive of 
  4.9   sales according to clause (2), during any period of 12 
  4.10  consecutive months; provided further, that in the case of sales 
  4.11  by an issuer, except sales of securities registered under the 
  4.12  Securities Act of 1933 or exempted by section 3(b) of that act, 
  4.13  (i) the seller reasonably believes that all buyers are 
  4.14  purchasing for investment, and (ii) the securities are not 
  4.15  advertised for sale to the general public in newspapers or other 
  4.16  publications of general circulation or otherwise, or by radio, 
  4.17  television, electronic means or similar communications media, or 
  4.18  through a program of general solicitation by means of mail or 
  4.19  telephone; and 
  4.20     (2) no issuer shall make more than 25 sales of its 
  4.21  securities according to this exemption, exclusive of sales 
  4.22  pursuant to clause (1), during any period of 12 consecutive 
  4.23  months; provided further, that the issuer meets the conditions 
  4.24  in clause (1) and, in addition meets the following additional 
  4.25  conditions:  (i) files with the commissioner, ten days before a 
  4.26  sale according to this clause, a statement of issuer on a form 
  4.27  prescribed by the commissioner; and (ii) no commission or other 
  4.28  remuneration is paid or given directly or indirectly for 
  4.29  soliciting any prospective buyers in this state in connection 
  4.30  with a sale according to this clause except reasonable and 
  4.31  customary commissions paid by the issuer to a broker-dealer 
  4.32  licensed under this chapter. 
  4.33     (b) Any nonissuer distribution of an outstanding security 
  4.34  if (1) either Moody's, Fitch's, or Standard & Poor's Securities 
  4.35  Manuals, or other recognized manuals approved by the 
  4.36  commissioner contains the names of the issuer's officers and 
  5.1   directors, a balance sheet of the issuer as of a date not more 
  5.2   than 18 months prior to the date of the sale, and a profit and 
  5.3   loss statement for the fiscal year preceding the date of the 
  5.4   balance sheet, and (2) the issuer or its predecessor has been in 
  5.5   active, continuous business operation for the five-year period 
  5.6   next preceding the date of sale, and (3) if the security has a 
  5.7   fixed maturity or fixed interest or dividend provision, the 
  5.8   issuer has not, within the three preceding fiscal years, 
  5.9   defaulted in payment of principal, interest, or dividends on the 
  5.10  securities. 
  5.11     (c) The execution of any orders by a licensed broker-dealer 
  5.12  for the purchase or sale of any security, pursuant to an 
  5.13  unsolicited offer to purchase or sell; provided that the 
  5.14  broker-dealer acts as agent for the purchaser or seller, and has 
  5.15  no direct material interest in the sale or distribution of the 
  5.16  security, receives no commission, profit, or other compensation 
  5.17  from any source other than the purchaser and seller and delivers 
  5.18  to the purchaser and seller written confirmation of the 
  5.19  transaction which clearly itemizes the commission, or other 
  5.20  compensation. 
  5.21     (d) Any nonissuer sale of notes or bonds secured by a 
  5.22  mortgage lien if the entire mortgage, together with all notes or 
  5.23  bonds secured thereby, is sold to a single purchaser at a single 
  5.24  sale. 
  5.25     (e) Any judicial sale, exchange, or issuance of securities 
  5.26  made pursuant to an order of a court of competent jurisdiction. 
  5.27     (f) The sale, by a pledge holder, of a security pledged in 
  5.28  good faith as collateral for a bona fide debt. 
  5.29     (g) Any offer or sale to a bank, savings institution, trust 
  5.30  company, insurance company, investment company as defined in the 
  5.31  Investment Company Act of 1940, or other financial institution 
  5.32  or institutional buyer, or to a broker-dealer, whether the 
  5.33  purchaser is acting for itself or in some fiduciary capacity. 
  5.34     (h) An offer or sale of securities by an issuer made in 
  5.35  reliance on the exemptions provided by Rule 505 or 506 of 
  5.36  Regulation D promulgated by the Securities and Exchange 
  6.1   Commission, Code of Federal Regulations, title 17, sections 
  6.2   230.501 to 230.508, subject to the conditions and definitions 
  6.3   provided by Rules 501 to 503 of Regulation D, if the offer and 
  6.4   sale also satisfies the conditions and limitations in clauses 
  6.5   (1) to (10). 
  6.6      (1) The exemption under this paragraph is not available for 
  6.7   the securities of an issuer if any of the persons described in 
  6.8   Rule 252(c) to (f) of Regulation A promulgated by the Securities 
  6.9   and Exchange Commission, Code of Federal Regulations, title 17, 
  6.10  sections 230.251 to 230.263:  
  6.11     (i) has filed a registration statement that is the subject 
  6.12  of a currently effective order entered against the issuer, its 
  6.13  officers, directors, general partners, controlling persons, or 
  6.14  affiliates, according to any state's law within five years 
  6.15  before the filing of the notice required under clause (5), 
  6.16  denying effectiveness to, or suspending or revoking the 
  6.17  effectiveness of, the registration statement; 
  6.18     (ii) has been convicted, within five years before the 
  6.19  filing of the notice required under clause (5), of a felony or 
  6.20  misdemeanor in connection with the offer, sale, or purchase of a 
  6.21  security or franchise, or a felony involving fraud or deceit, 
  6.22  including but not limited to forgery, embezzlement, obtaining 
  6.23  money under false pretenses, larceny, or conspiracy to defraud; 
  6.24     (iii) is subject to an effective administrative order or 
  6.25  judgment entered by a state securities administrator within five 
  6.26  years before the filing of the notice required under clause (5), 
  6.27  that prohibits, denies, or revokes the use of an exemption from 
  6.28  securities registration, that prohibits the transaction of 
  6.29  business by the person as a broker-dealer or agent, or that is 
  6.30  based on fraud, deceit, an untrue statement of a material fact, 
  6.31  or an omission to state a material fact; or 
  6.32     (iv) is subject to an order, judgment, or decree of a court 
  6.33  entered within five years before the filing of the notice 
  6.34  required under clause (5), temporarily, preliminarily, or 
  6.35  permanently restraining or enjoining the person from engaging in 
  6.36  or continuing any conduct or practice in connection with the 
  7.1   offer, sale, or purchase of a security, or the making of a false 
  7.2   filing with a state. 
  7.3      A disqualification under paragraph (h) involving a 
  7.4   broker-dealer or agent is waived if the broker-dealer or agent 
  7.5   is or continues to be licensed in the state in which the 
  7.6   administrative order or judgment was entered against the person 
  7.7   or if the broker-dealer or agent is or continues to be licensed 
  7.8   in this state as a broker-dealer or agent after notifying the 
  7.9   commissioner of the act or event causing disqualification. 
  7.10     The commissioner may waive a disqualification under 
  7.11  paragraph (h) upon a showing of good cause that it is not 
  7.12  necessary under the circumstances that use of the exemption be 
  7.13  denied. 
  7.14     A disqualification under paragraph (h) may be waived if the 
  7.15  state securities administrator or agency of the state that 
  7.16  created the basis for disqualification has determined, upon a 
  7.17  showing of good cause, that it is not necessary under the 
  7.18  circumstances that an exemption from registration of securities 
  7.19  under the state's laws be denied. 
  7.20     It is a defense to a violation of paragraph (h) based upon 
  7.21  a disqualification if the issuer sustains the burden of proof to 
  7.22  establish that the issuer did not know, and in the exercise of 
  7.23  reasonable care could not have known, that a disqualification 
  7.24  under paragraph (h) existed. 
  7.25     (2) This exemption must not be available to an issuer with 
  7.26  respect to a transaction that, although in technical compliance 
  7.27  with this exemption, is part of a plan or scheme to evade 
  7.28  registration or the conditions or limitations explicitly stated 
  7.29  in paragraph (h). 
  7.30     (3) No commission, finder's fee, or other remuneration 
  7.31  shall be paid or given, directly or indirectly, for soliciting a 
  7.32  prospective purchaser, unless the recipient is appropriately 
  7.33  licensed, or exempt from licensure, in this state as a 
  7.34  broker-dealer. 
  7.35     (4) Nothing in this exemption is intended to or should be 
  7.36  in any way construed as relieving issuers or persons acting on 
  8.1   behalf of issuers from providing disclosure to prospective 
  8.2   investors adequate to satisfy the antifraud provisions of the 
  8.3   securities law of Minnesota.  
  8.4      (5) The issuer shall file with the commissioner a notice on 
  8.5   form D as adopted by the Securities and Exchange Commission 
  8.6   according to Regulation D, Code of Federal Regulations, title 
  8.7   17, section 230.502.  The notice must be filed not later than 15 
  8.8   days after the first sale in this state of securities in an 
  8.9   offering under this exemption.  Every notice on form D must be 
  8.10  manually signed by a person duly authorized by the issuer and 
  8.11  must be accompanied by a consent to service of process on a form 
  8.12  prescribed by the commissioner.  
  8.13     (6) A failure to comply with a term, condition, or 
  8.14  requirement of paragraph (h) will not result in loss of the 
  8.15  exemption for an offer or sale to a particular individual or 
  8.16  entity if the person relying on the exemption shows that:  (i) 
  8.17  the failure to comply did not pertain to a term, condition, or 
  8.18  requirement directly intended to protect that particular 
  8.19  individual or entity, and the failure to comply was 
  8.20  insignificant with respect to the offering as a whole; and (ii) 
  8.21  a good faith and reasonable attempt was made to comply with all 
  8.22  applicable terms, conditions, and requirements of paragraph (h), 
  8.23  except that, where an exemption is established only through 
  8.24  reliance upon this provision, the failure to comply shall 
  8.25  nonetheless constitute a violation of section 80A.08 and be 
  8.26  actionable by the commissioner.  
  8.27     (7) The issuer, upon request by the commissioner, shall, 
  8.28  within ten days of the request, furnish to the commissioner a 
  8.29  copy of any and all information, documents, or materials 
  8.30  furnished to investors or offerees in connection with the offer 
  8.31  and sale according to paragraph (h).  
  8.32     (8) Neither compliance nor attempted compliance with the 
  8.33  exemption provided by paragraph (h), nor the absence of an 
  8.34  objection or order by the commissioner with respect to an offer 
  8.35  or sale of securities undertaken according to this exemption, 
  8.36  shall be considered to be a waiver of a condition of the 
  9.1   exemption or considered to be a confirmation by the commissioner 
  9.2   of the availability of this exemption.  
  9.3      (9) The commissioner may, by rule or order, increase the 
  9.4   number of purchasers or waive any other condition of this 
  9.5   exemption.  
  9.6      (10) The determination whether offers and sales made in 
  9.7   reliance on the exemption set forth in paragraph (h) shall be 
  9.8   integrated with offers and sales according to other paragraphs 
  9.9   of this subdivision shall be made according to the integration 
  9.10  standard set forth in Rule 502 of Regulation D promulgated by 
  9.11  the Securities and Exchange Commission, Code of Federal 
  9.12  Regulations, title 17, section 230.502.  If not subject to 
  9.13  integration according to that rule, offers and sales according 
  9.14  to paragraph (h) shall not otherwise be integrated with offers 
  9.15  and sales according to other exemptions set forth in this 
  9.16  subdivision. 
  9.17     (i) Any offer (but not a sale) of a security for which a 
  9.18  registration statement has been filed under sections 80A.01 to 
  9.19  80A.31, if no stop order or refusal order is in effect and no 
  9.20  public proceeding or examination looking toward an order is 
  9.21  pending; and any offer of a security if the sale of the security 
  9.22  is or would be exempt under this section.  The commissioner may 
  9.23  by rule exempt offers (but not sales) of securities for which a 
  9.24  registration statement has been filed as the commissioner deems 
  9.25  appropriate, consistent with the purposes of sections 80A.01 to 
  9.26  80A.31. 
  9.27     (j) The offer and sale by a cooperative organized under 
  9.28  chapter 308A or under the laws of another state, of its 
  9.29  securities when the securities are offered and sold only to its 
  9.30  members, or when the purchase of the securities is necessary or 
  9.31  incidental to establishing membership in the cooperative, or 
  9.32  when such securities are issued as patronage dividends.  This 
  9.33  paragraph applies to a cooperative organized under the laws of 
  9.34  another state only if the cooperative has filed with the 
  9.35  commissioner a consent to service of process under section 
  9.36  80A.27, subdivision 7, and has, not less than ten days prior to 
 10.1   the issuance or delivery, furnished the commissioner with a 
 10.2   written general description of the transaction and any other 
 10.3   information that the commissioner requires by rule or otherwise. 
 10.4   This exemption only applies when the issuing cooperative is 
 10.5   seeking to raise up to $1,000,000. 
 10.6      (l) The issuance and delivery of any securities of one 
 10.7   corporation to another corporation or its security holders in 
 10.8   connection with a merger, exchange of shares, or transfer of 
 10.9   assets whereby the approval of stockholders of the other 
 10.10  corporation is required to be obtained, provided, that the 
 10.11  commissioner has been furnished with a general description of 
 10.12  the transaction and with other information as the commissioner 
 10.13  by rule prescribes not less than ten days prior to the issuance 
 10.14  and delivery. 
 10.15     (m) Any transaction between the issuer or other person on 
 10.16  whose behalf the offering is made and an underwriter or among 
 10.17  underwriters. 
 10.18     (n) The distribution by a corporation of its or other 
 10.19  securities to its own security holders as a stock dividend or as 
 10.20  a dividend from earnings or surplus or as a liquidating 
 10.21  distribution; or upon conversion of an outstanding convertible 
 10.22  security; or pursuant to a stock split or reverse stock split. 
 10.23     (o) Any offer or sale of securities by an affiliate of the 
 10.24  issuer thereof if:  (1) a registration statement is in effect 
 10.25  with respect to securities of the same class of the issuer and 
 10.26  (2) the offer or sale has been exempted from registration by 
 10.27  rule or order of the commissioner.  
 10.28     (p) Any transaction pursuant to an offer to existing 
 10.29  security holders of the issuer, including persons who at the 
 10.30  time of the transaction are holders of convertible securities, 
 10.31  nontransferable warrants, or transferable warrants exercisable 
 10.32  within not more than 90 days of their issuance, if:  (1) no 
 10.33  commission or other remuneration (other than a standby 
 10.34  commission) is paid or given directly or indirectly for 
 10.35  soliciting any security holder in this state; and (2) the 
 10.36  commissioner has been furnished with a general description of 
 11.1   the transaction and with other information as the commissioner 
 11.2   may by rule prescribe no less than ten days prior to the 
 11.3   transaction. 
 11.4      (q) Any nonissuer sales of any security, including a 
 11.5   revenue obligation, issued by the state of Minnesota or any of 
 11.6   its political or governmental subdivisions, municipalities, 
 11.7   governmental agencies, or instrumentalities. 
 11.8      (r) Any transaction as to which the commissioner by rule or 
 11.9   order finds that registration is not necessary in the public 
 11.10  interest and for the protection of investors. 
 11.11     (s) An offer or sale of a security issued in connection 
 11.12  with an employee's stock purchase, savings, option, profit 
 11.13  sharing, pension, or similar employee benefit plan, if the 
 11.14  following conditions are met:  
 11.15     (1) the issuer, its parent corporation or any of its 
 11.16  majority-owned subsidiaries offers or sells the security 
 11.17  according to a written benefit plan or written contract relating 
 11.18  to the compensation of the purchaser; and 
 11.19     (2) the class of securities offered according to the plan 
 11.20  or contract, or if an option or right to purchase a security, 
 11.21  the class of securities to be issued upon the exercise of the 
 11.22  option or right, is registered under section 12 of the 
 11.23  Securities Exchange Act of 1934, or is a class of securities 
 11.24  with respect to which the issuer files reports according to 
 11.25  section 15(d) of the Securities Exchange Act of 1934; or 
 11.26     (3) the issuer fully complies with the provisions of Rule 
 11.27  701 as adopted by the Securities and Exchange Commission, Code 
 11.28  of Federal Regulations, title 12, section 230.701. 
 11.29     The issuer shall file not less than ten days before the 
 11.30  transaction, a general description of the transaction and any 
 11.31  other information that the commissioner requires by rule or 
 11.32  otherwise or, if applicable, a Securities and Exchange Form S-8. 
 11.33  Annually, within 90 days after the end of the issuer's fiscal 
 11.34  year, the issuer shall file a notice as provided with the 
 11.35  commissioner. 
 11.36     (t) Any sale of a security of an issuer that is a pooled 
 12.1   income fund, a charitable remainder trust, or a charitable lead 
 12.2   trust that has a qualified charity as the only charitable 
 12.3   beneficiary. 
 12.4      (u) Any sale by a qualified charity of a security that is a 
 12.5   charitable gift annuity if the issuer has a net worth, otherwise 
 12.6   defined as unrestricted fund balance, of not less than $300,000 
 12.7   and either:  (1) has been in continuous operation for not less 
 12.8   than three years; or (2) is a successor or affiliate of a 
 12.9   qualified charity that has been in continuous operation for not 
 12.10  less than three years. 
 12.11     Sec. 5.  Minnesota Statutes 1998, section 155A.03, 
 12.12  subdivision 2, is amended to read: 
 12.13     Subd. 2.  [COSMETOLOGY.] "Cosmetology" is the practice of 
 12.14  personal services, for compensation, for the cosmetic care of 
 12.15  the hair, nails, and skin.  These services include cleaning, 
 12.16  conditioning, shaping, reinforcing, coloring and enhancing the 
 12.17  body surface in the areas of the head, scalp, face, arms, hands, 
 12.18  legs, and feet, except where these services are performed by a 
 12.19  licensed barber under chapter 154.  "Cosmetology" does not 
 12.20  include hair braiding as defined in subdivision 14. 
 12.21     Sec. 6.  Minnesota Statutes 1998, section 155A.03, is 
 12.22  amended by adding a subdivision to read: 
 12.23     Subd. 14.  [HAIR BRAIDING.] "Hair braiding" means a service 
 12.24  that results in tension on hair strands or roots by twisting, 
 12.25  wrapping, weaving, extending, locking, or braiding by hand or 
 12.26  mechanical device, provided that the service does not include 
 12.27  the application of dyes, reactive chemicals, or other 
 12.28  preparations to alter the color of the hair or to straighten, 
 12.29  curl, or alter the structure of the hair. 
 12.30     Sec. 7.  Minnesota Statutes 1998, section 326.83, 
 12.31  subdivision 18, is amended to read: 
 12.32     Subd. 18.  [ROOFER.] "Roofer" means a person engaged in the 
 12.33  business of doing contracting, or offering to contract with an 
 12.34  owner, to complete work on residential real estate in roof 
 12.35  coverings, roof sheathing, roof weatherproofing and insulation, 
 12.36  and repair of roof systems, but not construction of new roof 
 13.1   systems. 
 13.2      Sec. 8.  Minnesota Statutes 1998, section 326.89, 
 13.3   subdivision 3, is amended to read: 
 13.4      Subd. 3.  [EXAMINATION.] (a) Each qualifying person must 
 13.5   satisfactorily complete a written examination for the type of 
 13.6   license requested.  The commissioner may establish the 
 13.7   examination qualifications, including related education 
 13.8   experience and education, the examination procedure, and the 
 13.9   examination for each licensing group.  The examination must 
 13.10  include at a minimum the following areas: 
 13.11     (1) appropriate knowledge of technical terms commonly used 
 13.12  and the knowledge of reference materials and code books to be 
 13.13  used for technical information; and 
 13.14     (2) understanding of the general principles of business 
 13.15  management and other pertinent state laws. 
 13.16     (b) Each examination must be designed for the specified 
 13.17  type of license requested.  The council shall advise the 
 13.18  commissioner on the grading, monitoring, and updating of 
 13.19  examinations. 
 13.20     (c) A person's passing examination results expire two years 
 13.21  from the examination date.  A person who passes the examination 
 13.22  but does not choose to apply to act as a qualifying person for a 
 13.23  licensee within two years from the examination date, must, upon 
 13.24  application provide: 
 13.25     (1) passing examination results within two years from the 
 13.26  date of application; or 
 13.27     (2) proof that the person has fulfilled the continuing 
 13.28  education requirements in section 326.87 in the manner required 
 13.29  for a qualifying person of a licensee for each license period 
 13.30  after the expiration of the examination results. 
 13.31     Sec. 9.  Minnesota Statutes 1998, section 326.94, 
 13.32  subdivision 2, is amended to read: 
 13.33     Subd. 2.  [INSURANCE.] Licensees must have public liability 
 13.34  insurance with limits of at least $100,000 per occurrence, which 
 13.35  must include at least $10,000 property damage coverage.  The 
 13.36  insurance must be written by an insurer licensed to do business 
 14.1   in this state.  The commissioner may increase the minimum amount 
 14.2   of insurance required for any licensee or class of licensees if 
 14.3   the commissioner considers it to be in the public interest and 
 14.4   necessary to protect the interests of Minnesota consumers. 
 14.5      Sec. 10.  Minnesota Statutes 1998, section 332.37, is 
 14.6   amended to read: 
 14.7      332.37 [PROHIBITED PRACTICES.] 
 14.8      No collection agency or collectors shall:  
 14.9      (1) in collection letters or publications, or in any 
 14.10  communication, oral or written threaten wage garnishment or 
 14.11  legal suit by a particular lawyer, unless it has actually 
 14.12  retained the lawyer; 
 14.13     (2) use or employ constables, sheriffs or any other officer 
 14.14  authorized to serve legal papers in connection with the 
 14.15  collection of a claim, except when performing their legally 
 14.16  authorized duties; 
 14.17     (3) use or threaten to use methods of collection which 
 14.18  violate Minnesota law; 
 14.19     (4) furnish legal advice or otherwise engage in the 
 14.20  practice of law or represent that it is competent to do so; 
 14.21     (5) communicate with debtors in a misleading or deceptive 
 14.22  manner by using the stationery of a lawyer, forms or instruments 
 14.23  which only lawyers are authorized to prepare, or instruments 
 14.24  which simulate the form and appearance of judicial process; 
 14.25     (6) exercise authority on behalf of a creditor to employ 
 14.26  the services of lawyers unless the creditor has specifically 
 14.27  authorized the agency in writing to do so and the agency's 
 14.28  course of conduct is at all times consistent with a true 
 14.29  relationship of attorney and client between the lawyer and the 
 14.30  creditor; 
 14.31     (7) publish or cause to be published any list of debtors 
 14.32  except for credit reporting purposes, use shame cards or shame 
 14.33  automobiles, advertise or threaten to advertise for sale any 
 14.34  claim as a means of forcing payment thereof, or use similar 
 14.35  devices or methods of intimidation; 
 14.36     (8) refuse to return any claim or claims and all valuable 
 15.1   papers deposited with a claim or claims upon written request of 
 15.2   the creditor, claimant or forwarder after tender of the amounts 
 15.3   due and owing to the agency within 30 days after the request; 
 15.4   refuse or intentionally fail to account to its clients for all 
 15.5   money collected within 30 days from the last day of the month in 
 15.6   which the same is collected; or, refuse or fail to furnish at 
 15.7   intervals of not less than 90 days upon written request of the 
 15.8   claimant or forwarder, a written report upon claims received 
 15.9   from the claimant or forwarder; 
 15.10     (9) operate under a name or in a manner which implies that 
 15.11  the agency is a branch of or associated with any department of 
 15.12  federal, state, county or local government or an agency thereof; 
 15.13     (10) commingle money collected for a customer with the 
 15.14  agency's operating funds or use any part of a customer's money 
 15.15  in the conduct of the agency's business; 
 15.16     (11) transact business or hold itself out as a debt 
 15.17  prorater, debt adjuster, or any person who settles, adjusts, 
 15.18  prorates, pools, liquidates or pays the indebtedness of a 
 15.19  debtor, unless there is no charge to the debtor, or the pooling 
 15.20  or liquidation is done pursuant to court order or under the 
 15.21  supervision of a creditor's committee; 
 15.22     (12) violate any of the provisions of the Fair Debt 
 15.23  Collection Practices Act of 1977 while attempting to collect on 
 15.24  any account, bill or other indebtedness; 
 15.25     (13) communicate with a debtor by use of a recorded message 
 15.26  utilizing an automatic dialing announcing device unless the 
 15.27  recorded message is immediately preceded by a live operator who 
 15.28  discloses prior to the message the name of the collection agency 
 15.29  and the fact the message intends to solicit payment and the 
 15.30  operator obtains the consent of the debtor to hearing the 
 15.31  message; 
 15.32     (14) in collection letters or publications, or in any 
 15.33  communication, oral or written, imply or suggest that health 
 15.34  care services will be withheld in an emergency situation; 
 15.35     (15) when a debtor has a listed telephone number, enlist 
 15.36  the aid of a neighbor or third party to request that the debtor 
 16.1   contact the licensee, except a person who resides with the 
 16.2   debtor or a third party with whom the debtor has authorized the 
 16.3   licensee to place the request.  This clause does not apply to a 
 16.4   call back message left at the debtor's place of employment which 
 16.5   is limited to the licensee's telephone and the collector's name; 
 16.6      (16) when attempting to collect a debt, fail to provide the 
 16.7   debtor with the full name of the collection agency as it appears 
 16.8   on its license; 
 16.9      (17) collect any money from a debtor that is not reported 
 16.10  to a creditor or fail to return any amount of overpayment from a 
 16.11  debtor to the debtor or to the state of Minnesota pursuant to 
 16.12  the requirements of chapter 345; 
 16.13     (18) accept currency or coin as payment for a debt without 
 16.14  issuing an original receipt to the debtor and maintain a 
 16.15  duplicate receipt in the debtor's payment records; or 
 16.16     (19) attempt to collect any amount of money from a debtor 
 16.17  or charge a fee to a creditor that is not authorized by 
 16.18  agreement with the client; 
 16.19     (20) falsify any collection agency documents with the 
 16.20  intent to deceive a debtor, creditor, or governmental agency; or 
 16.21     (19) (21) when initially contacting a Minnesota debtor by 
 16.22  mail, fail to include a disclosure on the contact notice, in a 
 16.23  type size or font which is equal to or larger than the largest 
 16.24  other type of type size or font used in the text of the notice.  
 16.25  The disclosure must state:  "This collection agency is licensed 
 16.26  by the Minnesota Department of Commerce." 
 16.27     Sec. 11.  [REPEALER.] 
 16.28     Minnesota Statutes 1998, section 326.89, subdivision 3a, is 
 16.29  repealed. 
 16.30     Sec. 12.  [EFFECTIVE DATES.] 
 16.31     Sections 1 to 3, 5 to 8, 10, and 11 are effective the day 
 16.32  following final enactment.  Sections 4 and 9 are effective 
 16.33  August 1, 1999.