Journal of the House - 17th Day - Thursday, March 5, 2009

A quorum was present.

Dean and Demmer were excused.

The Chief Clerk proceeded to read the Journal of the preceding day. Murdock moved that further reading of the Journal be dispensed with and that the Journal be approved as corrected by the Chief Clerk. The motion prevailed.

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There being no objection, the order of business advanced to Motions and Resolutions.

MOTIONS AND RESOLUTIONS

MOTION TO INVITE SENATE TO JOINT CONVENTION

Sertich moved that the Chief Clerk be instructed to invite the Senate by message to a Joint Convention to be held on Monday, March 9, 2009, at 1:15 p.m., in the chamber of the House of Representatives to elect members to the Board of Regents of the University of Minnesota. The motion prevailed.

There being no objection, the order of business reverted to Petitions and Communications.

PETITIONS AND COMMUNICATIONS

The following communications were received:

STATE OF MINNESOTA

OFFICE OF THE GOVERNOR

SAINT PAUL 55155

March 2, 2009

The Honorable Margaret Anderson Kelliher

Speaker of the House of Representatives

The State of Minnesota

Dear Speaker Kelliher:

Please be advised that I have received, approved, signed, and deposited in the Office of the Secretary of State the following House File:

H. F. No. 886, relating to the state budget; exempting allocation of general fund balance at end of fiscal year 2009; requiring governor's general fund budget to be balanced for fiscal years 2012 and 2013.

Sincerely,

Tim Pawlenty

Governor

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STATE OF MINNESOTA

OFFICE OF THE SECRETARY OF STATE

ST. PAUL 55155

The Honorable Margaret Anderson Kelliher

Speaker of the House of Representatives

The Honorable James P. Metzen

President of the Senate

I have the honor to inform you that the following enrolled Act of the 2009 Session of the State Legislature has been received from the Office of the Governor and is deposited in the Office of the Secretary of State for preservation, pursuant to the State Constitution, Article IV, Section 23:

S. F.

No.

H. F.

No.

Session Laws

Chapter No.

Time and

Date Approved

2009

Date Filed

2009

886 5 4:05 p.m. March 2 March 2

Sincerely,

Mark Ritchie

Secretary of State

REPORTS OF STANDING COMMITTEES AND DIVISIONS

Pelowski from the Committee on State and Local Government Operations Reform, Technology and Elections to which was referred:

H. F. No. 8, A bill for an act relating to state government; establishing the Minnesota False Claims Act; assessing penalties; proposing coding for new law as Minnesota Statutes, chapter 15C.

Reported the same back with the following amendments:

Page 3, after line 13, insert:

"(d) Except for conduct described in paragraph (a), clause (7), a person is not liable under this section for mere inadvertence or mistake with respect to activities involving a false or fraudulent claim."

Page 4, delete lines 5 to 8 and insert:

"(1) against the legislature, the judiciary, an executive department of the state, or a political subdivision, and their members or employees;"

Page 5, line 24, delete everything after the period and insert "If the attorney general so intervenes, the attorney general subsequently has primary responsibility for conducting the action."

Page 5, delete lines 25 and 26

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Page 7, delete lines 1 and 2

Page 7, line 3, delete "(d)" and insert "(c)"

Page 7, line 23, after the period, insert "For recoveries whose distribution is governed by federal code or rule, the basis for calculating the portion of the recovery the person is entitled to receive shall not include such amounts reserved for distribution to the federal government or designated in their use by such federal code or rule."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Finance.

The report was adopted.

Lieder from the Transportation Finance and Policy Division to which was referred:

H. F. No. 85, A bill for an act relating to traffic regulations; authorizing mounting global positioning systems on windshields; amending Minnesota Statutes 2008, section 169.71, subdivision 1.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Hilstrom from the Committee on Public Safety Policy and Oversight to which was referred:

H. F. No. 116, A bill for an act relating to pupil transportation; modifying qualifications for type III school bus drivers; amending Minnesota Statutes 2008, section 171.02, subdivision 2b.

Reported the same back with the recommendation that the bill pass and be re-referred to the Committee on Finance.

The report was adopted.

Carlson from the Committee on Finance to which was referred:

H. F. No. 121, A bill for an act relating to highways; designating the Clearwater County Veterans Memorial Highway; amending Minnesota Statutes 2008, section 161.14, by adding a subdivision.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 2008, section 161.139, is amended to read:

161.139 HIGHWAY DESIGNATION COSTS.

The commissioner shall not adopt a design or erect a sign to mark or memorialize a highway or bridge, pursuant to designation by the legislature ~~on or after January 1, 1996~~, unless the commissioner is assured of the availability of funds from nonstate sources sufficient to pay all costs related to designing, erecting, and maintaining the signs. The commissioner may remove a sign that marks or memorializes a highway or bridge as designated by the legislature if:

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(1) the sign requires maintenance, repair, or replacement;

(2) the commissioner has made a reasonable effort to obtain funds for maintenance, repair, or replacement from nonstate sources; and

(3) the funds obtained under clause (2) are insufficient to pay all related costs.

Sec. 2. Minnesota Statutes 2008, section 161.14, is amended by adding a subdivision to read:

Subd. 62. Clearwater County Veterans Memorial Highway. (a) The following described route is designated the "Clearwater County Veterans Memorial Highway": that portion of Legislative Route No. 168, marked on the effective date of this section as Trunk Highway 200, from its intersection with Clearwater County State-Aid Highway 39 to its intersection with Legislative Route No. 169, marked on the effective date of this section as Trunk Highway 92; and that portion of Route No. 169 to its intersection with Clearwater County State-Aid Highway 5.

(b) The commissioner shall adopt a suitable marking design to mark this highway and erect appropriate signs, subject to section 161.139."

Delete the title and insert:

"A bill for an act relating to highways; modifying provision governing memorial signs erected on designated highways; designating the Clearwater County Veterans Memorial Highway; amending Minnesota Statutes 2008, sections 161.139; 161.14, by adding a subdivision."

With the recommendation that when so amended the bill pass.

The report was adopted.

Mullery from the Committee on Civil Justice to which was referred:

H. F. No. 130, A bill for an act relating to public safety; prohibiting predatory offenders required to register from accessing and using social networking Web sites; amending Minnesota Statutes 2008, sections 243.166, subdivisions 1a, 4; 244.05, subdivision 6.

Reported the same back with the following amendments:

Page 5, line 2, after "for" insert a colon

Page 5, line 3, delete the comma and insert a semicolon and after "program" insert a comma

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Public Safety Policy and Oversight.

The report was adopted.

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Hilstrom from the Committee on Public Safety Policy and Oversight to which was referred:

H. F. No. 161, A bill for an act relating to health; establishing a medical response unit reimbursement pilot program; funding emergency medical services programs; appropriating money.

Reported the same back with the recommendation that the bill pass and be re-referred to the Committee on Finance.

The report was adopted.

Hilstrom from the Committee on Public Safety Policy and Oversight to which was referred:

H. F. No. 166, A bill for an act relating to consumer protection; prohibiting retail sales of toys that have been recalled for safety reasons; proposing coding for new law in Minnesota Statutes, chapter 325F.

Reported the same back with the recommendation that the bill pass and be re-referred to the Committee on Civil Justice.

The report was adopted.

Mullery from the Committee on Civil Justice to which was referred:

H. F. No. 211, A bill for an act relating to civil actions; statutory housing warranties; regulating recovery for breaches; amending Minnesota Statutes 2008, section 327A.05.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Thissen from the Committee on Health Care and Human Services Policy and Oversight to which was referred:

H. F. No. 326, A bill for an act relating to public health; protecting the health of children; prohibiting bisphenol-A in products for young children; proposing coding for new law in Minnesota Statutes, chapter 325F.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. [325F.172] DEFINITIONS.

Subdivision 1. Scope. For the purposes of sections 325F.172 to 325F.175, the following terms have the meanings given them.

Subd. 2. Child. "Child" means a person under three years of age.

Subd. 3. Children's product. (a) "Children's product" means a product, including containers used to contain infant formulas, designed or intended by a manufacturer to be used by a child:

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(1) as a toy;

(2) to facilitate feeding; or

(3) to be introduced into, or otherwise applied to, the human body or any part thereof, including any article used as a component of such a product.

(b) "Children's product" does not include:

(1) a "device" as defined in the Federal Food, Drug, and Cosmetic Act, United States Code, title 21, section 321, paragraph (h); or

(2) a container containing a food or beverage, except that a container containing infant formula is a "children's product."

Subd. 4. Container. "Container" means an airtight metal, glass, or plastic container or a container composed of a combination of these materials that contains a food or beverage.

Subd. 5. Infant formula. "Infant formula" has the meaning given in the Federal Food, Drug, and Cosmetic Act, United States Code, title 21, section 321, paragraph (z).

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. [325F.173] BISPHENOL-A IN CHILDREN'S PRODUCTS.

(a) By January 1, 2010, no manufacturer may sell or offer for sale in this state a children's product that contains bisphenol-A, except that a manufacturer of infant formula sold in a container is not required to comply with this section until January 1, 2013.

(b) This section does not apply to sale of a used children's product.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 3. [325F.174] REPLACEMENT CHEMICALS.

A manufacturer may not sell or offer for sale in Minnesota a children's product that, as a direct result of the prohibition in section 325F.173, contains a chemical that is:

(1) classified as "known to be a human carcinogen" or "reasonably anticipated to be a human carcinogen" in the most recent Report on Carcinogens published by the National Toxicology Program in the United States Department of Health and Human Services; or

(2) identified by the federal Environmental Protection Agency as causing birth defects, hormone disruption, or harm to reproduction or development.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 4. [325F.175] PARTICIPATION IN INTERSTATE CLEARINGHOUSE.

The Pollution Control Agency may participate in the establishment and implementation of a multistate clearinghouse to identify children's products containing bisphenol-A and to evaluate safer alternatives that may be substituted for that chemical.

EFFECTIVE DATE. This section is effective the day following final enactment."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Commerce and Labor.

The report was adopted.

Atkins from the Committee on Commerce and Labor to which was referred:

H. F. No. 403, A bill for an act relating to environment; requiring plastic yard waste bags to be compostable; establishing biodegradable standard for certain plastics; providing civil penalties; amending Minnesota Statutes 2008, section 115A.931; proposing coding for new law in Minnesota Statutes, chapter 325E.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 2008, section 115A.931, is amended to read:

115A.931 YARD WASTE PROHIBITION.

(a) Except as authorized by the agency, in the metropolitan area after January 1, 1990, and outside the metropolitan area after January 1, 1992, a person may not place yard waste:

(1) in mixed municipal solid waste;

(2) in a disposal facility; or

(3) in a resource recovery facility except for the purposes of reuse, composting, or cocomposting.

(b) [Renumbered 115A.03, subd 38]

(c) On or after January 1, 2010, a person may not place yard waste or source-separated compostable materials generated in a metropolitan county in a plastic bag delivered to a transfer station or yard waste compost facility unless the bag meets all the specifications in ASTM Standard Specification for Compostable Plastics (D6400). For purposes of this paragraph, "metropolitan county" has the meaning given in section 473.121, subdivision 4, and "ASTM" has the meaning given in section 296A.01, subdivision 6.

(d) A person who immediately empties a plastic bag containing yard waste or source-separated compostable materials delivered to a transfer station or yard waste compost facility and removes the plastic bag from the transfer station or yard waste compost facility is exempt from paragraph (c).

(e) A city of the first class with an organized collection system for collecting solid waste is exempt from paragraph (c) until January 1, 2013.

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Sec. 2. [325E.046] STANDARDS FOR LABELING PLASTIC BAGS.

Subdivision 1. Biodegradable label. A person may not offer for sale in this state a plastic bag labeled "biodegradable," "degradable," or any form of those terms, or in any way imply that the bag will chemically decompose into innocuous elements in a reasonably short period of time in a landfill, composting, or other terrestrial environment unless a scientifically based standard for biodegradability is developed and the bags are certified as meeting the standard.

Subd. 2. Compostable label. A person may not offer for sale in this state a plastic bag labeled "compostable" unless, at the time of sale, the bag meets the ASTM Standard Specification for Compostable Plastics (D6400). Each bag must be labeled to reflect that it meets the standard. For purposes of this subdivision, "ASTM" has the meaning given in section 296A.01, subdivision 6.

Subd. 3. Enforcement; civil penalty; injunctive relief. (a) A person who violates subdivision 1 is subject to a civil penalty of $100 for each violation up to a maximum of $5,000 and may be enjoined from such violations.

(b) The attorney general may bring an action in the name of the state in a court of competent jurisdiction for recovery of civil penalties or for injunctive relief as provided in this subdivision. The attorney general may accept an assurance of discontinuance of acts in violation of subdivision 1 in the manner provided in section 8.31, subdivision 2b.

Sec. 3. EFFECTIVE DATE.

Sections 1 and 2 are effective January 1, 2010."

Delete the title and insert:

"A bill for an act relating to environment; requiring plastic yard waste bags to be compostable; establishing biodegradable and compostable standards for certain plastics; providing civil penalties; amending Minnesota Statutes 2008, section 115A.931; proposing coding for new law in Minnesota Statutes, chapter 325E."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Civil Justice.

The report was adopted.

Thissen from the Committee on Health Care and Human Services Policy and Oversight to which was referred:

H. F. No. 419, A bill for an act relating to health; modifying the Lead Poisoning Prevention Act; amending Minnesota Statutes 2008, sections 144.9501, subdivision 9; 144.9503, subdivision 2.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 2008, section 144.9504, is amended by adding a subdivision to read:

Subd. 12. Clinical follow-up to elevated blood lead level. (a) When a child's blood lead level exceeds five micrograms of lead per deciliter of blood, the child's health care provider must provide the following services:

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(1) a follow-up venous blood test for the child three months after the original blood lead level screening;

(2) a venous blood test for each child under the age of five years living in the same residence as the child; and

(3) family education as to potential sources of lead and ways to avoid exposure.

(b) For purposes of this subdivision, "health care provider" means an individual licensed by a health-related licensing board as defined in section 214.01, subdivision 2, who has the authority, within the individual's scope of practice, to provide a venous blood test."

Delete the title and insert:

"A bill for an act relating to health; requiring follow-up testing and education if a child's blood lead level exceeds a certain amount; amending Minnesota Statutes 2008, section 144.9504, by adding a subdivision."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Finance.

The report was adopted.

Thissen from the Committee on Health Care and Human Services Policy and Oversight to which was referred:

H. F. No. 444, A bill for an act relating to health; modifying the state's suicide prevention plan; amending Minnesota Statutes 2008, section 145.56, subdivisions 1, 2.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Thissen from the Committee on Health Care and Human Services Policy and Oversight to which was referred:

H. F. No. 448, A bill for an act relating to public safety; allowing emergency 911 systems to include referral to mental health crisis teams; amending Minnesota Statutes 2008, sections 403.03; 403.05, subdivision 1.

Reported the same back with the following amendments:

Page 1, delete section 2

Correct the title numbers accordingly

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Commerce and Labor.

The report was adopted.

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Thissen from the Committee on Health Care and Human Services Policy and Oversight to which was referred:

H. F. No. 449, A bill for an act relating to public safety; peace officers; establishing crisis intervention team grants; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 626.

Reported the same back with the following amendments:

Page 1, line 7, delete "public safety" and insert "human services"

Page 1, line 9, delete everything after the period

Page 1, delete lines 10 to 14

Page 2, line 8, delete "public safety" and insert "human services"

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Finance.

The report was adopted.

Pelowski from the Committee on State and Local Government Operations Reform, Technology and Elections to which was referred:

H. F. No. 456, A bill for an act relating to state government; allowing the Indian Affairs Council to conduct meetings by telephone or by electronic means; amending Minnesota Statutes 2008, section 3.922, by adding a subdivision.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. [13D.015] MEETINGS BY TELEPHONE OR OTHER ELECTRONIC MEANS.

Subdivision 1. Application. This section applies to:

(1) a state agency, board, commission, or department, and a statewide public pension plan defined in section 356A.01, subdivision 24; and

(2) a committee, subcommittee, board, department, or commission of an entity listed in clause (1).

Subd. 2. Conditions. An entity listed in subdivision 1 may conduct a meeting governed by this section and section 13D.01, subdivisions 1, 2, 4, and 5, by telephone or other electronic means so long as the following conditions are met:

(1) all members of the entity participating in the meeting, wherever their physical location, can hear one another and can hear all discussion and testimony;

(2) members of the public present at the regular meeting location of the entity can hear all discussion and all votes of members of the entity and participate in testimony;

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(3) at least one member of the entity is physically present at the regular meeting location; and

(4) all votes are conducted by roll call, so each member's vote on each issue can be identified and recorded.

Subd. 3. Quorum; participation. Each member of the entity participating in a meeting by telephone or other electronic means is considered present at the meeting for purposes of determining a quorum and participating in all proceedings.

Subd. 4. Monitoring from remote site; costs. If telephone or another electronic means is used to conduct a meeting, the entity, to the extent practical, shall allow a person to monitor the meeting electronically from a remote location. The entity may require the person making a connection to pay for documented marginal costs that the entity incurs as a result of the additional connection.

Subd. 5. Notice. If telephone or another electronic means is used to conduct a regular, special, or emergency meeting, the entity shall provide notice of the regular meeting location, of the fact that some members may participate by electronic means, and of the provisions of subdivision 4. The timing and method of providing notice is governed by section 13D.04."

Delete the title and insert:

"A bill for an act relating to state government; allowing state agencies to conduct meetings by telephone or by electronic means; proposing coding for new law in Minnesota Statutes, chapter 13D."

With the recommendation that when so amended the bill pass.

The report was adopted.

Atkins from the Committee on Commerce and Labor to which was referred:

H. F. No. 549, A bill for an act relating to commerce; regulating debt management and debt settlement services; amending Minnesota Statutes 2008, sections 332A.02, subdivisions 5, 8, 9, 10, 13, by adding a subdivision; 332A.04, subdivision 6; 332A.08; 332A.10; 332A.11, subdivision 2; 332A.14; proposing coding for new law as Minnesota Statutes, chapter 332B.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 2008, section 45.011, subdivision 1, is amended to read:

Subdivision 1. Scope. As used in chapters 45 to 83, 155A, 332, 332A, 332B, 345, and 359, and sections 325D.30 to 325D.42, 326B.802 to 326B.885, and 386.61 to 386.78, unless the context indicates otherwise, the terms defined in this section have the meanings given them.

Sec. 2. Minnesota Statutes 2008, section 46.04, subdivision 1, is amended to read:

Subdivision 1. General. The commissioner of commerce, referred to in chapters 46 to 59A, and ~~chapter~~ 332A, and 332B as the commissioner, is vested with all the powers, authority, and privileges which, prior to the enactment of Laws 1909, chapter 201, were conferred by law upon the public examiner, and shall take over all duties in

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relation to state banks, savings banks, trust companies, savings associations, and other financial institutions within the state which, prior to the enactment of chapter 201, were imposed upon the public examiner. The commissioner of commerce shall exercise a constant supervision, either personally or through the examiners herein provided for, over the books and affairs of all state banks, savings banks, trust companies, savings associations, credit unions, industrial loan and thrift companies, and other financial institutions doing business within this state; and shall, through examiners, examine each financial institution at least once every 24 calendar months. In satisfying this examination requirement, the commissioner may accept reports of examination prepared by a federal agency having comparable supervisory powers and examination procedures. With the exception of industrial loan and thrift companies which do not have deposit liabilities and licensed regulated lenders, it shall be the principal purpose of these examinations to inspect and verify the assets and liabilities of each and so far investigate the character and value of the assets of each institution as to determine with reasonable certainty that the values are correctly carried on its books. Assets and liabilities shall be verified in accordance with methods of procedure which the commissioner may determine to be adequate to carry out the intentions of this section. It shall be the further purpose of these examinations to assess the adequacy of capital protection and the capacity of the institution to meet usual and reasonably anticipated deposit withdrawals and other cash commitments without resorting to excessive borrowing or sale of assets at a significant loss, and to investigate each institution's compliance with applicable laws and rules. Based on the examination findings, the commissioner shall make a determination as to whether the institution is being operated in a safe and sound manner. None of the above provisions limits the commissioner in making additional examinations as deemed necessary or advisable. The commissioner shall investigate the methods of operation and conduct of these institutions and their systems of accounting, to ascertain whether these methods and systems are in accordance with law and sound banking principles. The commissioner may make requirements as to records as deemed necessary to facilitate the carrying out of the commissioner's duties and to properly protect the public interest. The commissioner may examine, or cause to be examined by these examiners, on oath, any officer, director, trustee, owner, agent, clerk, customer, or depositor of any financial institution touching the affairs and business thereof, and may issue, or cause to be issued by the examiners, subpoenas, and administer, or cause to be administered by the examiners, oaths. In case of any refusal to obey any subpoena issued under the commissioner's direction, the refusal may at once be reported to the district court of the district in which the bank or other financial institution is located, and this court shall enforce obedience to these subpoenas in the manner provided by law for enforcing obedience to subpoenas of the court. In all matters relating to official duties, the commissioner of commerce has the power possessed by courts of law to issue subpoenas and cause them to be served and enforced, and all officers, directors, trustees, and employees of state banks, savings banks, trust companies, savings associations, and other financial institutions within the state, and all persons having dealings with or knowledge of the affairs or methods of these institutions, shall afford reasonable facilities for these examinations, make returns and reports to the commissioner of commerce as the commissioner may require; attend and answer, under oath, the commissioner's lawful inquiries; produce and exhibit any books, accounts, documents, and property as the commissioner may desire to inspect, and in all things aid the commissioner in the performance of duties.

Sec. 3. Minnesota Statutes 2008, section 46.05, is amended to read:

46.05 SUPERVISION OVER FINANCIAL INSTITUTIONS.

Every state bank, savings bank, trust company, savings association, debt management services provider, debt settlement services provider, and other financial institutions shall be at all times under the supervision and subject to the control of the commissioner of commerce. If, and whenever in the performance of duties, the commissioner finds it necessary to make a special investigation of any financial institution under the commissioner's supervision, and other than a complete examination, the commissioner shall make a charge therefor to include only the necessary costs thereof. Such a fee shall be payable to the commissioner on the commissioner's making a request for payment.

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Sec. 4. Minnesota Statutes 2008, section 46.131, subdivision 2, is amended to read:

Subd. 2. Assessment authority. Each bank, trust company, savings bank, savings association, regulated lender, industrial loan and thrift company, credit union, motor vehicle sales finance company, debt management services provider, debt settlement services provider, and insurance premium finance company organized under the laws of this state or required to be administered by the commissioner of commerce shall pay into the state treasury its proportionate share of the cost of maintaining the Department of Commerce.

Sec. 5. Minnesota Statutes 2008, section 325E.311, subdivision 6, is amended to read:

Subd. 6. Telephone solicitation. "Telephone solicitation" means any voice communication over a telephone line for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, whether the communication is made by a live operator, through the use of an automatic dialing-announcing device as defined in section 325E.26, subdivision 2, or by other means. Telephone solicitation does not include communications:

(1) to any residential subscriber with that subscriber's prior express invitation or permission; or

(2) by or on behalf of any person or entity with whom a residential subscriber has a prior or current business or personal relationship.

Telephone solicitation also does not include communications if the caller is identified by a caller identification service and the call is:

(i) by or on behalf of an organization that is identified as a nonprofit organization under state or federal law, unless the organization is a debt management services provider defined in section 332A.02 or a debt settlement services provider defined in section 332B.02;

(ii) by a person soliciting without the intent to complete, and who does not in fact complete, the sales presentation during the call, but who will complete the sales presentation at a later face-to-face meeting between the solicitor who makes the call and the prospective purchaser; or

(iii) by a political party as defined under section 200.02, subdivision 6.

Sec. 6. Minnesota Statutes 2008, section 332A.02, is amended by adding a subdivision to read:

Subd. 2a. Advertise. "Advertise" means to solicit business through any means or medium.

Sec. 7. Minnesota Statutes 2008, section 332A.02, subdivision 5, is amended to read:

Subd. 5. Controlling or affiliated party. "Controlling or affiliated party" means any person or entity that controls or is controlled, directly or indirectly ~~controlling, controlled by~~, or is under common control with another person. Controlling or affiliated party includes, but is not limited to, employees, officers, independent contractors, corporations, partnerships, and limited liability corporations.

Sec. 8. Minnesota Statutes 2008, section 332A.02, subdivision 8, is amended to read:

Subd. 8. Debt management services provider. "Debt management services provider" means any person offering or providing debt management services to a debtor domiciled in this state, regardless of whether or not a fee is charged for the services and regardless of whether the person maintains a physical presence in the state. This term includes any person to whom duties under a debt management services agreement or debt management services plan are delegated, and does not include services performed by the following when engaged in the regular course of their respective businesses and professions:

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(1) attorneys at law, escrow agents, accountants, broker-dealers in securities;

(2) state or national banks, trust companies, savings associations, title insurance companies, insurance companies, and all other lending institutions duly authorized to transact business in Minnesota~~, provided no fee is charged for the service~~;

(3) persons who, as employees on a regular salary or wage of an employer not engaged in the business of debt management, perform credit services for their employer;

(4) public officers acting in their official capacities and persons acting as a debt management services provider pursuant to court order;

(5) any person while performing services incidental to the dissolution, winding up, or liquidation of a partnership, corporation, or other business enterprise;

(6) the state, its political subdivisions, public agencies, and their employees;

(7) ~~credit unions and~~ collection agencies, provided ~~no fee is charged for the service~~ that the services are provided to a creditor;

(8) "qualified organizations" designated as representative payees for purposes of the Social Security and Supplemental Security Income Representative Payee System and the federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508;

(9) accelerated mortgage payment providers. "Accelerated mortgage payment providers" are persons who, after satisfying the requirements of sections 332.30 to 332.303, receive funds to make mortgage payments to a lender or lenders, on behalf of mortgagors, in order to exceed regularly scheduled minimum payment obligations under the terms of the indebtedness. The term does not include: (i) persons or entities described in clauses (1) to (8); (ii) mortgage lenders or servicers, industrial loan and thrift companies, or regulated lenders under chapter 56; or (iii) persons authorized to make loans under section 47.20, subdivision 1. For purposes of this clause and sections 332.30 to 332.303, "lender" means the original lender or that lender's assignee, whichever is the current mortgage holder;

(10) trustees, guardians, and conservators; ~~and~~

(11) debt settlement services providers.; and

(12) credit unions.

Sec. 9. Minnesota Statutes 2008, section 332A.02, subdivision 9, is amended to read:

Subd. 9. Debt management services. "Debt management services" means the provision of any ~~one or more of the following~~ services ~~in connection with debt incurred primarily for personal, family, or household services:~~

~~(1) managing the financial affairs of an individual by distributing income or money to the individual's creditors;~~

~~(2) receiving funds for the purpose of distributing the funds among creditors in payment or partial payment of obligations of a debtor; or~~

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~~(3) adjusting, prorating, pooling, or liquidating the indebtedness of a debtor~~ whereby a debt management services provider assists in managing the financial affairs of a debtor by distributing periodic payments to the debtor's creditors from funds that the debt management services provider receives from the debtor and where the primary purpose of the services is to effect repayment of debt incurred primarily for personal, family, or household services.

Any person so engaged or holding out as so engaged is deemed to be engaged in the provision of debt management services regardless of whether or not a fee is charged for such services.

Sec. 10. Minnesota Statutes 2008, section 332A.02, subdivision 10, is amended to read:

Subd. 10. Debtor. "Debtor" means the person for whom the debt ~~prorating service is~~ management services are performed.

Sec. 11. Minnesota Statutes 2008, section 332A.02, subdivision 13, is amended to read:

Subd. 13. Debt settlement services provider. "Debt settlement services provider" means any person engaging in or holding out as engaging in the business of negotiating, adjusting, or settling debt incurred primarily for personal, family, or household purposes without holding or receiving the debtor's funds or personal property and without paying the debtor's funds to, or distributing the debtor's property among, creditors has the meaning given in section 332B.02, subdivision 10. The term shall not include persons listed in subdivision 8, clauses (1) to (10).

Sec. 12. Minnesota Statutes 2008, section 332A.04, subdivision 6, is amended to read:

Subd. 6. Right of action on bond. If the registrant has failed to account to a debtor or distribute to the debtor's creditors the amounts required by this chapter ~~and~~, or has failed to perform any of the services promised in the debt management services agreement ~~between the debtor and registrant~~, the registrant is in default. The debtor or the debtor's legal representative or receiver, the commissioner, or the attorney general, shall have, in addition to all other legal remedies, a right of action in the name of the debtor on the bond or the security given under this section, for loss suffered by the debtor, not exceeding the face amount of the bond or security, and without the necessity of joining the registrant in the suit or action based on the default.

Sec. 13. Minnesota Statutes 2008, section 332A.08, is amended to read:

332A.08 DENIAL OF REGISTRATION.

The commissioner, with notice to the applicant by certified mail sent to the address listed on the application, may deny an application for a registration upon finding that the applicant:

(1) has submitted an application required under section 332A.04 that contains incorrect, misleading, incomplete, or materially untrue information. An application is incomplete if it does not include all the information required in section 332A.04;

(2) has failed to pay any fee or pay or maintain any bond required by this chapter, or failed to comply with any order, decision, or finding of the commissioner made under and within the authority of this chapter;

(3) has violated any provision of this chapter or any rule or direction lawfully made by the commissioner under and within the authority of this chapter;

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(4) or any controlling or affiliated party has ever been convicted of a crime or found civilly liable for an offense involving moral turpitude, including forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any other similar offense or violation, or any violation of a federal or state law or regulation in connection with activities relating to the rendition of debt management services or any consumer fraud, false advertising, deceptive trade practices, or similar consumer protection law;

(5) has had a registration or license previously revoked or suspended in this state or any other state or the applicant or licensee has been permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the debt management services provider business; or any controlling or affiliated party has been an officer, director, manager, or shareholder owning more than a ten percent interest in a debt management services provider whose registration has previously been revoked or suspended in this state or any other state, or who has been permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the debt management services provider business;

(6) has made any false statement or representation to the commissioner;

(7) is insolvent;

(8) refuses to fully comply with an investigation or examination of the debt management services provider by the commissioner;

(9) has improperly withheld, misappropriated, or converted any money or properties received in the course of doing business;

(10) has failed to have a trust account with an actual cash balance equal to or greater than the sum of the escrow balances of each debtor's account;

(11) has defaulted in making payments to creditors on behalf of debtors as required by agreements between the provider and debtor; or

(12) has used fraudulent, coercive, or dishonest practices, or demonstrated incompetence, untrustworthiness, or financial irresponsibility in this state or elsewhere; or

(13) has been shown to have engaged in a pattern of failing to perform the services promised.

Sec. 14. Minnesota Statutes 2008, section 332A.10, is amended to read:

332A.10 WRITTEN DEBT MANAGEMENT SERVICES AGREEMENT.

Subdivision 1. Written agreement required. (a) A debt management services provider may not perform any debt management services or receive any money related to a debt management services plan until the provider has obtained a debt management services agreement that contains all terms of the agreement between the debt management services provider and the debtor.

(b) A debt management services agreement must:

(1) be in writing, dated, and signed by the debt management services provider and the debtor;

(2) conspicuously indicate whether or not the debt management services provider is registered with the Minnesota Department of Commerce and include any registration number; and

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(3) be written in the debtor's primary language if the debt management services provider advertised in that language.

Subd. 2. Actions prior to written agreement. No person may provide debt management services for a debtor or execute a debt management services agreement unless the person first has:

(1) provided the debtor individualized counseling and educational information that, at a minimum, addresses managing household finances, managing credit and debt, budgeting, and personal savings strategies;

(2) prepared in writing and provided to the debtor, in a form that the debtor may keep, an individualized financial analysis and a proposed debt management services plan listing the debtor's known debts with specific recommendations regarding actions the debtor should take to reduce or eliminate the amount of the debts, including written disclosure that debt management services are not suitable for all debtors and that there are other ways, including bankruptcy, to deal with indebtedness;

(3) made a determination supported by an individualized financial analysis that the debtor can reasonably meet the requirements of the proposed debt management services plan and that there is a net tangible benefit to the debtor of entering into the proposed debt management services plan; ~~and~~

(4) prepared, in a form the debtor may keep, a written list identifying all known creditors of the debtor that the provider reasonably expects to participate in the plan and the creditors, including secured creditors, that the provider reasonably expects not to participate; and

(5) disclosed, in addition to the written disclosure on the agreement required under subdivision 1, whether or not the debt management services provider is registered with the Minnesota Department of Commerce and any registration number.

Subd. 3. Required ~~terms~~ provisions. (a) Each debt management services agreement must contain the following ~~terms~~ provisions, which must be disclosed prominently and clearly in bold print on the front page of the agreement, segregated by bold lines from all other information on the page:

(1) the origination fee amount to be paid by the debtor and whether all or a portion of the ~~initial~~ origination fee ~~amount~~ is refundable or nonrefundable;

(2) the monthly fee amount or percentage to be paid by the debtor; and

(3) the total amount of fees reasonably anticipated to be paid by the debtor over the term of the agreement.

(b) Each debt management services agreement must also contain the following:

(1) a disclosure that if the amount of debt owed is increased by interest, late fees, over the limit fees, and other amounts imposed by the creditors, the length of the debt management services agreement will be extended and remain in force and that the total dollar charges agreed upon may increase at the rate agreed upon in the original contract agreement;

(2) a prominent statement describing the terms upon which the debtor may cancel the contract as set forth in section 332A.11;

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(3) a detailed description of all services to be performed by the debt management services provider for the debtor;

(4) the debt management services provider's refund policy; and

(5) the debt management services provider's principal business address and the name and address of its agent in this state authorized to receive service of process.

Subd. 4. Prohibited terms. The following terms shall not be included in the debt management services agreement:

(1) a hold harmless clause;

(2) a confession of judgment, or a power of attorney to confess judgment against the debtor or appear as the debtor in any judicial proceeding;

(3) a waiver of the right to a jury trial, if applicable, in any action brought by or against a debtor;

(4) an assignment of or an order for payment of wages or other compensation for services;

(5) a provision in which the debtor agrees not to assert any claim or defense arising out of the debt management services agreement;

(6) a waiver of any provision of this chapter or a release of any obligation required to be performed on the part of the debt management services provider; or

(7) a mandatory arbitration or choice of law clause.

Subd. 5. New debt management services agreements; modification of existing agreements. (a) Separate and additional debt management services agreements that comply with this chapter may be entered into by the debt management services provider and the debtor provided that no additional ~~initial~~ origination fee may be charged by the debt management services provider.

(b) Any modification of an existing debt management services agreement, including any increase in the number or amount of debts included in the debt management ~~service~~ services agreement, must be in writing and signed by both parties, except that the signature of the debtor is not required if:

(1) a creditor is added to or deleted from a debt management services agreement at the request of the debtor or a debtor voluntarily increases the amount of a payment, provided the debt management services provider must provide an updated payment schedule to the debtor within seven days; or

(2) the payment amount to a creditor in the agreement increases by $10 or less and the total payment amount to all creditors increases a total of $20 or less as a result of incorrect or incomplete information provided by the debtor regarding the amount of debt owed a creditor, provided the debt management services provider must notify the debtor of the increase within seven days.

No fees, charges, or other consideration may be demanded from the debtor for the modification, other than an increase in the amount of the monthly maintenance fee established in the original debt management services agreement.

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Sec. 15. Minnesota Statutes 2008, section 332A.11, subdivision 2, is amended to read:

Subd. 2. Notice of debtor's right to cancel. A debt management services agreement must contain, on its face, in an easily readable ~~typeface~~ type immediately adjacent to the space for signature by the debtor, the following notice: "Right To Cancel: You have the right to cancel this contract at any time on ten days' written notice."

Sec. 16. Minnesota Statutes 2008, section 332A.14, is amended to read:

332A.14 PROHIBITIONS.

~~A registrant~~ (a) No debt management services provider shall ~~not~~:

(1) purchase from a creditor any obligation of a debtor;

(2) use, threaten to use, seek to have used, or seek to have threatened the use of any legal process, including but not limited to garnishment and repossession of personal property, against any debtor while the debt management services agreement between the registrant and the debtor remains executory;

(3) advise, counsel, or encourage a debtor to stop paying a creditor ~~until a debt management services plan is in place~~, or imply, infer, encourage, or in any other way indicate, that it is advisable to stop paying a creditor;

(4) sanction or condone the act by a debtor of ceasing payments or imply, infer, or in any manner indicate that the act of ceasing payments is advisable or beneficial to the debtor;

~~(4)~~ (5) require as a condition of performing debt management services the purchase of any services, stock, insurance, commodity, or other property or any interest therein either by the debtor or the registrant;

~~(5)~~ (6) compromise any debts unless the prior written approval of the debtor has been obtained to such compromise and unless such compromise inures solely to the benefit of the debtor;

~~(6)~~ (7) receive from any debtor as security or in payment of any fee a promissory note or other promise to pay or any mortgage or other security, whether as to real or personal property;

~~(7)~~ (8) lend money or provide credit to any debtor if any interest or fee is charged, or directly or indirectly collect any fee for referring, advising, procuring, arranging, or assisting a consumer in obtaining any extension of credit or other debtor service from a lender or debt management services provider;

~~(8)~~ (9) structure a debt management services agreement that would result in negative amortization of any debt in the plan;

~~(9)~~ (10) engage in any unfair, deceptive, or unconscionable act or practice in connection with any service provided to any debtor;

~~(10)~~ (11) offer, pay, or give any material cash fee, gift, bonus, premium, reward, or other compensation to any person for referring any prospective customer to the registrant or for enrolling a debtor in a debt management services plan, or provide any other incentives for employees or agents of the debt management services provider to induce debtors to enter into a debt management services plan;

~~(11)~~ (12) receive any cash, fee, gift, bonus, premium, reward, or other compensation from any person other than the debtor or a person on the debtor's behalf in connection with activities as a registrant, provided that this paragraph does not apply to a registrant which is a bona fide nonprofit corporation duly organized under chapter 317A or under the similar laws of another state;

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~~(12)~~ (13) enter into a contract with a debtor unless a thorough written budget analysis indicates that the debtor can reasonably meet the requirements of the financial adjustment plan and will be benefited by the plan;

~~(13)~~ (14) in any way charge or purport to charge or provide any debtor credit insurance in conjunction with any contract or agreement involved in the debt management services plan;

~~(14)~~ (15) operate or employ a person who is an employee or owner of a collection agency or process-serving business; or

~~(15)~~ (16) solicit, demand, collect, require, or attempt to require payment of a sum that the registrant states, discloses, or advertises to be a voluntary contribution to a debt management services provider or designee from the debtor.

Sec. 17. [332B.02] DEFINITIONS.

Subdivision 1. Scope. Unless a different meaning is clearly indicated by the context, for the purposes of this chapter, the terms defined in this section have the meanings given them.

Subd. 2. Advertise. "Advertise" means to solicit business through any means or medium.

Subd. 3. Aggregate debt. "Aggregate debt" means the total of principal and interest that is owed by the debtor to the creditors at the time of execution of the debt settlement agreement.

Subd. 4. Attorney general. "Attorney general" means the attorney general of the state of Minnesota.

Subd. 5. Commissioner. "Commissioner" means the commissioner of commerce.

Subd. 6. Controlling or affiliated party. "Controlling or affiliated party" means any person or entity that controls or is controlled, directly or indirectly, or is under common control with another person. Controlling or affiliated party includes, but is not limited to, employees, officers, independent contractors, corporations, partnerships, and limited liability corporations.

Subd. 7. Debt settlement services. "Debt settlement services" means any one or more of the following activities:

(1) offering to provide advice, or offering to act or acting as an intermediary between a debtor and one or more of the debtor's creditors, where the primary purpose of the advice or action is to obtain a settlement for less than the full amount of debt, whether in principal, interest, fees, or other charges, incurred primarily for personal, family, or household purposes including, but not limited to, offering debt negotiation, debt reduction, or debt relief services; or

(2) advising, encouraging, assisting, or counseling a debtor to accumulate funds in an account for future payment of a reduced amount of debt to one or more of the debtor's creditors.

Any person so engaged or holding out as so engaged is deemed to be engaged in the provision of debt settlement services, regardless of whether or not a fee is charged for such services.

Subd. 8. Debt settlement services agreement. "Debt settlement services agreement" means the written contract between the debt settlement services provider and the debtor.

Subd. 9. Debt settlement services plan. "Debt settlement services plan" means the debtor's individualized package of debt settlement services set forth in the debt settlement services agreement.

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Subd. 10. Debt settlement services provider. "Debt settlement services provider" means any person offering or providing debt settlement services to a debtor domiciled in this state, regardless of whether or not a fee is charged for the services and regardless of whether the person maintains a physical presence in the state. The term includes any person to whom duties under a debt management agreement or debt management plan are delegated.

Subd. 11. Person. "Person" means an individual, firm, partnership, association, or corporation.

Sec. 18. [332B.03] REQUIREMENT OF REGISTRATION.

On or after August 1, 2009, it is unlawful for any person, whether or not located in this state, to operate as a debt settlement services provider or provide debt settlement services including, but not limited to, offering, advertising, or executing or causing to be executed any debt settlement services or debt settlement services agreement, except as authorized by law, without first becoming registered as provided in this chapter. Debt settlement services providers may continue to provide debt settlement services without complying with this chapter to those debtors who entered into a contract to participate in a debt settlement services plan prior to August 1, 2009, but may not enter into a debt settlement services agreement with a debt on or after August 1, 2009, without complying with this chapter.

Sec. 19. [332B.04] REGISTRATION.

Subdivision 1. Form. Application for registration to operate as a debt settlement services provider in this state must be made in writing to the commissioner, under oath, in the form prescribed by the commissioner, and must contain:

(1) the full name of each principal of the entity applying;

(2) the address, which must not be a post office box, and the telephone number and, if applicable, the e-mail address, of the applicant;

(3) consent to the jurisdiction of the courts of this state;

(4) the name and address of the registered agent authorized to accept service of process on behalf of the applicant or appointment of the commissioner as the applicant's agent for purposes of accepting service of process;

(5) disclosure of:

(i) whether any controlling or affiliated party has ever been convicted of a crime or found civilly liable for an offense involving moral turpitude, including forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any other similar offense or violation, or any violation of a federal or state law or regulation in connection with activities relating to the rendition of debt settlement services or involving any consumer fraud, false advertising, deceptive trade practices, or similar consumer protection law;

(ii) any judgments, private or public litigation, tax liens, written complaints, administrative actions, or investigations by any government agency against the applicant or any officer, director, manager, or shareholder owning more than five percent interest in the applicant, unresolved or otherwise, filed or otherwise commenced within the preceding ten years;

(iii) whether the applicant or any person employed by the applicant has had a record of having defaulted in the payment of money collected for others, including the discharge of debts through bankruptcy proceedings; and

(iv) whether the applicant's license or registration to provide debt settlement services in any other state has ever been revoked or suspended;

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(6) a copy of the applicant's standard debt settlement services agreement that the applicant intends to execute with debtors;

(7) proof of accreditation; and

(8) any other information and material as the commissioner may require.

The commissioner may, for good cause shown, temporarily waive any requirement of this subdivision.

Subd. 2. Term and scope of registration. A registration is effective until 11:59 p.m. on December 31 of the year for which the application for registration is filed or until it is surrendered by the registrant or revoked or suspended by the commissioner. The registration is limited solely to the business of providing debt settlement services.

Subd. 3. Fees; bond. An applicant for registration as a debt settlement services provider must comply with the requirements of section 332A.04, subdivisions 3, 4, and 5.

Subd. 4. Right of action on bond. If the registrant has failed to account to a debtor, or has failed to perform any of the services promised, the registrant is in default. The debtor or the debtor's legal representative or receiver, the commissioner, or the attorney general, shall have, in addition to all other legal remedies, a right of action in the name of the debtor on the bond or the security given under this section, for loss suffered by the debtor, not exceeding the face amount of the bond or security, and without the necessity of joining the registrant in the suit or action based on the default.

Subd. 5. Registrant list. The commissioner must maintain a list of registered debt settlement services providers. The list must be made available to the public in written form upon request and on the Department of Commerce Web site.

Subd. 6. Renewal of registration. Each year, each registrant under the provisions of this chapter must not, more than 60 nor less than 30 days before its registration is to expire, apply to the commissioner for renewal of its registration on a form prescribed by the commissioner. The application must be signed by the registrant under penalty of perjury, contain current information on all matters required in the original application, and be accompanied by a payment of $250. The registrant must maintain a continuous surety bond that satisfies the requirements of section 332A.04, subdivision 4. The renewal is effective for one year. The commissioner may, for good cause shown, temporarily waive any requirement of this section.

Sec. 20. [332B.05] DENIAL, SUSPENSION, REVOCATION, OR NONRENEWAL OF REGISTRATION.

Subdivision 1. Denial. The commissioner, with notice to the applicant by certified mail sent to the address listed on the application, may deny an application for a registration for any of the reasons specified under section 332A.08.

Subd. 2. Suspension, revocation, or nonrenewal. The commissioner may suspend, revoke, or refuse to renew any registration issued under this chapter, or may levy a civil penalty under section 45.027, or any combination of actions, if the debt settlement services provider or any controlling or affiliated person has committed any act or omission for which the commissioner could have refused to issue an initial registration.

Subd. 3. Procedure. Suspension, revocation, or nonrenewal must be upon notice and under the conditions prescribed in section 332A.09, subdivision 1. Upon issuance of an order suspending, revoking, or refusing to renew a registration, the commissioner:

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(1) shall follow the procedure established in section 332A.09, subdivision 2; and

(2) may follow the procedure specified in section 332A.09, subdivision 3, concerning the appointment of a receiver for funds of sanctioned registrants.

Sec. 21. [332B.06] WRITTEN DEBT SETTLEMENT SERVICES AGREEMENT; DISCLOSURES; TRUST ACCOUNT.

Subdivision 1. Written agreement required. (a) A debt settlement services provider may not perform any debt settlement services until the provider has obtained a debt settlement services agreement that contains all terms of the agreement between the debt settlement services provider and the debtor.

(b) A debt settlement services agreement must:

(1) be in writing, dated, and signed by the debt settlement services provider and the debtor;

(2) conspicuously indicate whether or not the debt settlement services provider is registered with the Minnesota Department of Commerce and include any registration number; and

(3) be written in the debtor's primary language if the debt settlement services provider advertises in that language.

Subd. 2. Actions prior to executing a written agreement. No person may provide debt settlement services for a debtor or execute a debt settlement services agreement unless the person first has:

(1) provided the debtor individualized counseling that, at a minimum, addresses managing household finances, managing credit and debt, budgeting, personal savings strategies, and a detailed description of all the various ways to reduce or eliminate the debt, which must, at a minimum, include bankruptcy; and

(2) prepared in writing and provided to the debtor, in a form the debtor may keep, an individualized financial analysis of the debtor's financial circumstances, including income and liabilities, and made a determination supported by the individualized financial analysis that:

(i) the debt settlement plan proposed for addressing the debt is suitable for the individual debtor;

(ii) the debtor can reasonably meet the requirements of the proposed debt settlement services plan; and

(iii) there is a net tangible benefit to the debtor of entering into the proposed debt settlement services plan.

Subd. 3. Disclosures. (a) A person offering to provide or providing debt settlement services must disclose both orally and in writing:

(1) whether or not the person is registered with the Minnesota Department of Commerce and any registration number; and

(2) that no fees may be charged until all the services promised are performed.

(b) No person may provide debt settlement services unless the person first has provided, both orally and in writing, on a single sheet of paper, separate from any other document or writing, the following verbatim notice:

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WARNING

We CANNOT GUARANTEE that you will successfully reduce or eliminate your debt.

You SHOULD NOT stop paying your creditors.

Fees, interest, and other charges will continue to mount up during the (insert number) months this plan is in effect.

Even if you sign up for this service:

● YOUR WAGES OR BANK ACCOUNT MAY STILL BE GARNISHED.

● YOU MAY STILL BE CONTACTED BY CREDITORS.

● YOU MAY STILL BE SUED BY CREDITORS for the money you owe.

Even if we do settle your debt, YOU MAY STILL HAVE TO PAY TAXES on the amount forgiven.

Your credit rating may be adversely affected.

(c) The heading, "WARNING," must be in bold, underlined, 28-point type, and the remaining text must be in 14-point type, with a double space between each statement.

(d) The disclosure and notice required under this subdivision must be provided in the debtor's primary language if the debt settlement provider advertises in that language.

Subd. 4. Required information. (a) Each debt settlement services agreement must contain the following information, which must be disclosed prominently and clearly in bold print on the front page of the agreement, segregated by bold lines from all other information on the page:

(1) the origination fee amount to be paid by the debtor and whether all or part of the origination fee is refundable or nonrefundable; and

(2) the service fee formula and the total amount of service fees reasonably anticipated to be paid by the debtor over the term of the agreement.

(b) Each debt settlement services agreement must also contain the following:

(1) a prominent statement describing the terms upon which the debtor may cancel the contract as set forth in section 332B.07;

(2) a detailed description of all services to be performed by the debt settlement services provider for the debtor;

(3) the debt settlement services provider's refund policy;

(4) the debt settlement services provider's principal business address, which must not be a post office box, and the name and address of its agent in this state authorized to receive service of process; and

(5) the name of each creditor the debtor has listed and the aggregate debt owed to each creditor that will be the subject of settlement.

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Subd. 5. Prohibited terms. A debt settlement services agreement may not contain any of the terms prohibited under section 332A.10, subdivision 4.

Subd. 6. New debt settlement services agreements; modifications of existing agreements. (a) Separate and additional debt settlement services agreements that comply with this chapter may be entered into by the debt settlement services provider and the debtor, provided that no additional origination fee may be charged by the debt settlement services provider.

(b) Any modification of an existing debt settlement services agreement, including any increase in the number or amount of debts included in the debt settlement services agreement, must be in writing and signed by both parties. No fee may be charged to modify an existing agreement.

Subd. 7. Payments held in trust. If the registrant holds funds for the debtor, the registrant must maintain a separate trust account and deposit in the account all payments received from the moment that the funds are available, except that the registrant may commingle the payment with the registrant's own property or funds, but only to the extent necessary to ensure the maintenance of a minimum balance if the financial institution at which the trust account is held requires a minimum balance to avoid the assessment of fees or penalties for failure to maintain a minimum balance. All disbursements, whether to the debtor or to the creditors of the debtor, or to the registrant, must be made from such account.

Sec. 22. [332B.07] RIGHT TO CANCEL.

Subdivision 1. Debtor's right to cancel. (a) A debtor has the right to cancel a debt settlement services agreement without cause at any time upon ten days' written notice to the debt settlement services provider.

(b) In the event of cancellation, the debt settlement services provider must, within ten days of the cancellation, notify the debtor's creditors of the cancellation and provide a refund of all funds paid by or for the debtor to the debt settlement services provider, except for the origination fee specified in section 332B.09, subdivision 1.

Subd. 2. Notice of debtor's right to cancel. A debt settlement services agreement must contain, on its face, in an easily readable type immediately adjacent to the space for signature by the debtor, the following notice: "Right to Cancel: You have the right to cancel this contract at any time on ten days' written notice."

Subd. 3. Automatic termination. Upon the payment of all listed or settled debts and fees, the debt settlement services agreement must automatically terminate, and all unexpended funds paid by or for the debtor to the debt settlement services provider must be immediately returned to the debtor.

Subd. 4. Debt settlement services provider's right to cancel. (a) A debt settlement services provider may cancel a debt settlement services agreement with good cause upon 30 days' written notice to the debtor.

(b) Within ten days after the cancellation, the debt settlement services provider must:

(1) notify the debtor's creditors of the cancellation; and

(2) return to the debtor all funds paid by or for the debtor to the debt settlement provider, except for the origination fee specified in section 332B.09, subdivision 1.

Sec. 23. [332B.08] BOOKS, RECORDS, AND INFORMATION.

Subdivision 1. Records retention; annual report. Every registrant must keep, and use in the registrant's business, such books, accounts, and records, including electronic records, as will enable the commissioner to determine whether the registrant is complying with this chapter and the rules, orders, and directives adopted by the

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commissioner under this chapter. Every registrant must preserve such books, accounts, and records for at least six years after making the final entry on any transaction recorded therein. Examinations of the books, records, and method of operations conducted under the supervision of the commissioner shall be done at the cost of the registrant. The cost must be assessed as determined under section 46.131.

Subd. 2. Annual report. On or before March 15 of each calendar year, each registrant must file a report with the commissioner containing such information as the commissioner may require about the preceding calendar year. The report must be in a form the commissioner prescribes.

Subd. 3. Statements to debtors. (a) Each registrant must:

(1) maintain and make available records and accounts that will enable each debtor to ascertain the amounts paid to the creditors of the debtor. A statement showing amounts received from the debtor, disbursements to each creditor, amounts that any creditor has agreed to as payment in full for any debt owed the creditor by the debtor, charges deducted by the registrant, and other information as the commissioner may prescribe, must be furnished by the registrant to the debtor at least monthly and, in addition, upon any cancellation or termination of the contract;

(2) include in the statement furnished to debtors a list of all activities conducted pursuant to the contract, including the number and description of communications with each creditor during the reporting period; and

(3) prepare and retain in the file of each debtor a written analysis of the debtor's income and expenses to substantiate that the plan of payment is feasible and practicable.

(b) Each debtor must have reasonable access, without cost, by electronic or other means, to information in the registrant's files applicable to the debtor. These statements, records, and accounts must otherwise remain confidential, except for duly authorized state and government officials, the commissioner, the attorney general, the debtor, and the debtor's representative and designees.

Sec. 24. [332B.09] FEES, PAYMENTS, AND CONSENT OF CREDITORS.

Subdivision 1. Origination fee. A debt settlement services provider may charge a nonrefundable origination fee of not more than $50.

Subd. 2. Service fee. In addition to the origination fee under subdivision 1, a debt settlement services provider may charge a service fee equal to five percent of the savings actually negotiated by the debt settlement services provider. No other fees may be charged. The savings shall be calculated as the difference between the aggregate debt that is stated in the debt settlement services agreement at the time of its execution and total amount that the debtor actually pays to settle all the debts stated in the debt settlement services agreement, provided that only savings resulting from concessions actually negotiated by the debt settlement services provider may be counted.

Subd. 3. Collection of fees. No debt settlement services provider may claim, demand, charge, collect, or receive any compensation until after the debt settlement service provider has fully performed each and every service the provider has contracted to perform or represented would be performed.

Subd. 4. Consent of creditors. Before providing any services, a debt settlement services provider must obtain the written consent of all creditors that agree to participate in the debt settlement services plan set forth in the debt management services agreement. The debt settlement services provider must notify the debtor within ten days after any failure to obtain the required consent of any creditor and of the debtor's right to cancel the agreement without penalty. If not all creditors listed in the debt settlement services agreement have consented to participate in the debt settlement services plan, the debt settlement services provider must obtain the written authorization from the debtor to proceed with the debt settlement services agreement without the participation of all listed creditors.

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Subd. 5. Withdrawal of creditor. Whenever a creditor withdraws from a debt settlement services plan, the debt settlement services provider must promptly notify the debtor of the withdrawal, identify the creditor, and inform the debtor of the right to cancel the debt settlement services agreement. In no case may this notice be provided more than 15 days after the debt settlement services provider learns of the creditor's decision to withdraw from a plan.

Subd. 6. Timely notification of settlement. A debt settlement services provider must notify the debtor within 24 hours of settlement of a debt with a creditor.

Sec. 25. [332B.10] PROHIBITIONS.

No debt settlement services provider shall:

(1) engage in any activity, act, or omission prohibited under section 332A.14;

(2) enter into a debt settlement services agreement under which all debts listed will not be settled within 12 months;

(3) promise, guarantee, or directly or indirectly imply, infer, or in any manner represent that any debt will be settled prior to the presentation to the debtor of an offer by the creditors participating in the debt settlement plan to settle;

(4) misrepresent the timing of negotiations with creditors;

(5) imply, infer, or in any manner represent that:

(i) fees, interest, and other charges will not continue to accrue prior to the time debts are settled;

(ii) wages or bank accounts are not subject to garnishment;

(iii) creditors will not continue to contact the debtor;

(iv) the debtor is not subject to legal action; and

(v) the debtor will not be subject to tax consequences for the portion of any debts forgiven;

(6) execute a power of attorney or any other agreement, oral or written, express or implied, that extinguishes or limits the debtor's right at any time to contract or communicate with any creditor or the creditor's right at any time to communicate with the debtor;

(7) exercise or attempt to exercise a power of attorney after an individual has terminated an agreement;

(8) state, imply, infer, or, in any other manner, indicate that entering into a debt settlement services agreement or settling debts will either have no effect on, or improve, the debtor's credit, credit rating, and credit score;

(9) challenge a debt without the written consent of the debtor;

(10) make any false or misleading claim regarding a creditor's right to collect a debt;

(11) represent that the debt settlement services provider can negotiate better settlement terms with a creditor than the debtor alone can negotiate;

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(12) provide or offer to provide legal advice or legal services unless the person providing or offering to provide legal advice is licensed to practice law in the state;

(13) misrepresent that it is authorized or competent to furnish legal advice or perform legal services; and

(14) settle a debt or lead an individual to believe that a payment to a creditor is in settlement of a debt to the creditor unless, at the time of settlement, the individual receives a certification from the creditor that the payment is in full settlement of the debt.

Sec. 26. [332B.11] ADVERTISEMENT OF DEBT SETTLEMENT SERVICES PLAN.

No debt settlement services provider may engage in any activity proscribed by section 332A.16, or represent, claim, imply, or infer that secured debts may be settled.

Sec. 27. [332B.12] DEBT SETTLEMENT SERVICES AGREEMENT RESCISSION.

Any debtor has the right to rescind any debt settlement services agreement with a debt settlement services provider that commits a material violation of this chapter. On rescission, all fees paid to the debt settlement services provider or any other person other than creditors of the debtor must be returned to the debtor entering into the debt settlement services agreement within ten days of rescission of the debt settlement services agreement.

Sec. 28. [332B.13] ENFORCEMENT; REMEDIES.

Subdivision 1. Violation as deceptive practice. A violation of any of the provisions of this chapter is considered an unfair or deceptive trade practice under section 8.31, subdivision 1. A private right of action under section 8.31 by an aggrieved debtor is in the public interest.

Subd. 2. Private right of action. (a) A debt settlement provider who fails to comply with any of the provisions of this chapter is liable under this section in an individual action for the sum of:

(1) actual, incidental, and consequential damages sustained by the debtor as a result of the failure; and

(2) statutory damages of up to $5,000.

(b) A debt settlement provider who fails to comply with any of the provisions of this chapter is liable to the named plaintiffs under this section in a class action for the amount that each named plaintiff could recover under paragraph (a), clause (1), and to the other class members for such amount as the court may allow.

(1) the frequency, nature, and persistence of noncompliance;

(2) the extent to which the noncompliance was intentional; and

(3) in the case of a class action, the number of debtors adversely affected.

(d) A plaintiff or class successful in a legal or equitable action under this section is entitled to the costs of the action, plus reasonable attorney fees.

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Subd. 3. Injunctive relief. A debtor may sue a debt settlement services provider for temporary or permanent injunctive or other appropriate equitable relief to prevent violations of any provision of this chapter. A court must grant injunctive relief on a showing that the debt settlement services provider has violated any provision of this chapter, or in the case of a temporary injunction, on a showing that the debtor is likely to prevail on allegations that the debt settlement services provider violated any provision of this chapter.

Subd. 4. Remedies cumulative. The remedies provided in this section are cumulative and do not restrict any remedy that is otherwise available. The provisions of this chapter are not exclusive and are in addition to any other requirements, rights, remedies, and penalties provided by law.

Subd. 5. Public enforcement. The attorney general shall enforce this chapter under section 8.31.

Sec. 29. [332B.14] INVESTIGATIONS.

At any reasonable time, the commissioner may examine the books and records of every registrant and of any person engaged in the business of providing debt settlement services. The commissioner, once during any calendar year, may require the submission of an audit prepared by a certified public accountant of the books and records of each registrant. If the registrant has, within one year previous to the commissioner's demand, had an audit prepared for some other purpose, this audit may be submitted to satisfy the requirement of this section. The commissioner may investigate any complaint concerning violations of this chapter and may require the attendance and sworn testimony of witnesses and the production of documents."

Delete the title and insert:

"A bill for an act relating to commerce; regulating debt management and debt settlement services; amending Minnesota Statutes 2008, sections 45.011, subdivision 1; 46.04, subdivision 1; 46.05; 46.131, subdivision 2; 325E.311, subdivision 6; 332A.02, subdivisions 5, 8, 9, 10, 13, by adding a subdivision; 332A.04, subdivision 6; 332A.08; 332A.10; 332A.11, subdivision 2; 332A.14; proposing coding for new law as Minnesota Statutes, chapter 332B."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Civil Justice.

The report was adopted.

Hilstrom from the Committee on Public Safety Policy and Oversight to which was referred:

H. F. No. 622, A bill for an act relating to public safety; establishing a grant program to assist local law enforcement agencies to develop or expand lifesaver programs that locate lost or wandering persons who are mentally impaired; authorizing a task force; providing for rulemaking; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 299C.

Page 1, line 18, delete "transmitter" and insert "receiver"

Page 1, line 22, before "task" insert "voluntary lifesaver advisory"

Page 1, line 25, after "appoint" insert "at least"

Page 2, line 1, before the first "task" insert "voluntary"

Journal of the House - 17th Day - Thursday, March 5, 2009 - Top of Page 629

Page 2, line 4, before "task" insert "voluntary"

Page 2, line 16, before "advisory" insert "voluntary"

Page 2, line 17, delete the first "$......." and insert "$4,000" and delete the second "$......." and insert "$2,000"

Page 2, line 27, after the second comma, insert "receivers,"

Page 2, line 35, delete "appropriations" and insert "state money when appropriated"

Amend the title as follows:

Page 1, line 4, after "a" insert "voluntary advisory"

With the recommendation that when so amended the bill pass and be re-referred to the Committee on State and Local Government Operations Reform, Technology and Elections.

The report was adopted.

Pelowski from the Committee on State and Local Government Operations Reform, Technology and Elections to which was referred:

H. F. No. 653, A bill for an act relating to elections; city elections in cities of the first class; providing for election of certain council members elected by ward after reapportionment; amending Minnesota Statutes 2008, section 205.84, subdivision 1.

Reported the same back with the following amendments:

Page 1, after line 5, insert:

"Section 1. Minnesota Statutes 2008, section 204B.135, subdivision 1, is amended to read:

Subdivision 1. Cities with wards. Except as provided in this subdivision, a city that elects its council members by wards may not redistrict those wards before the legislature has been redistricted in a year ending in one or two. The wards must be redistricted within 60 days after the legislature has been redistricted or at least 19 weeks before the state primary election in the year ending in two, whichever is first.

In a city electing council members by wards in a year ending in one, if the legislature has not been redistricted by June 1 of that year, the ward boundaries must be reestablished no later than 14 days before the first day to file affidavits of candidacy for city council members. The ward boundaries may be modified after the legislature has been redistricted for the purpose of establishing precinct boundaries as provided in section 204B.14, subdivision 3, but no modification in ward boundaries may result in a change of the population of any ward of more than five percent, plus or minus.

Sec. 2. Minnesota Statutes 2008, section 204B.135, subdivision 3, is amended to read:

Subd. 3. Voters rights. (a) An eligible voter may apply to the district court for either a writ of mandamus requiring the redistricting of wards or local government election districts or to revise any plan adopted by the governing body responsible for redistricting of wards or local government election districts.

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(b) If a city adopts a ward redistricting plan at least 19 weeks before the primary in a year ending in two, an application for revision of the plan that seeks to affect elections held in the year ending in two must be filed with the district court within three weeks but no later than 18 weeks before the state primary election in the year ending in two, notwithstanding any charter provision. If a city adopts a ward redistricting plan less than 19 weeks before either the municipal primary in a year ending in one or before the state primary in a year ending in two, an application for revision of the plan that seeks to affect elections held in ~~the~~ that year ~~ending in two~~ must be filed with the district court no later than one week after the plan has been adopted, notwithstanding any charter provision.

(c) If a plan for redistricting of a local government election district is adopted at least 15 weeks before the state primary election in a year ending in two, an application for revision of the plan that seeks to affect elections held in the year ending in two must be filed with the district court within three weeks but no later than 14 weeks before the state primary election in the year ending in two. If a plan for redistricting of a local government election district is adopted less than 15 weeks before the state primary election in a year ending in two, an application for revision of the plan that seeks to affect elections held in the year ending in two must be filed with the district court no later than one week after the plan has been adopted.

Sec. 3. Minnesota Statutes 2008, section 204B.14, subdivision 3, is amended to read:

Subd. 3. Boundary changes; prohibitions; exception. Notwithstanding other law or charter provisions to the contrary, during the period from January 1 in any year ending in zero to the time when the legislature has been redistricted in a year ending in one or two, no changes may be made in the boundaries of any election precinct except as provided in this subdivision.

(a) If a city annexes an unincorporated area located in the same county as the city and adjacent to the corporate boundary, the annexed area may be included in an election precinct immediately adjacent to it.

(b) A municipality or county may establish new election precincts lying entirely within the boundaries of any existing precinct and shall assign names to the new precincts which include the name of the former precinct.

(c) Precinct boundaries in a city electing council members by wards may be reestablished within 14 days of the adoption of ward boundaries in a year ending in one, as provided in section 204B.135, subdivision 1.

(d) Precinct boundaries must be reestablished within 60 days of the time when the legislature has been redistricted, or at least 19 weeks before the state primary election in a year ending in two, whichever comes first. The adoption of reestablished precinct boundaries becomes effective on the date of the state primary election in the year ending in two.

Precincts must be arranged so that no precinct lies in more than one legislative or congressional district.

Sec. 4. Minnesota Statutes 2008, section 204B.14, subdivision 4, is amended to read:

Subd. 4. Boundary change procedure. Any change in the boundary of an election precinct shall be adopted at least 90 60 days before the date of the next election and, for the state primary and general election, no later than June 1 in the year of the state general election. The precinct boundary change shall not take effect until notice of the change has been posted in the office of the municipal clerk or county auditor for at least 60 42 days.

The county auditor must publish a notice illustrating or describing the congressional, legislative, and county commissioner district boundaries in the county in one or more qualified newspapers in the county at least 14 days prior to the first day to file affidavits of candidacy for the state general election in the year ending in two.

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Alternate dates for adopting changes in precinct boundaries, posting notices of boundary changes, and notifying voters affected by boundary changes pursuant to this subdivision, and procedures for coordinating precinct boundary changes with reestablishing local government election district boundaries may be established in the manner provided in the rules of the secretary of state."

Page 1, after line 18, insert:

"Sec. 6. Minnesota Statutes 2008, section 205.84, subdivision 2, is amended to read:

Subd. 2. Effective date. After the official certification of the federal decennial or special census, the governing body of the city shall either confirm the existing ward boundaries as conforming to the standards of subdivision 1 or redefine ward boundaries to conform to those standards as provided in section 204B.135, subdivision 1. If the governing body of the city fails to take either action within the time required, no further compensation shall be paid to the mayor or council member until the wards of the city are either reconfirmed or redefined as required by this section. An ordinance establishing new ward boundaries pursuant to section 204B.135, subdivision 1, becomes effective on the date of the state primary election in the year ending in two, except that new ward boundaries established by a municipality in a year ending in one are effective on the date of the municipal primary election in the year ending in one.

EFFECTIVE DATE. This section is effective the day following final enactment."

Page 1, line 20, delete "Section 1 is" and insert "Sections 1 to 5 are"

Renumber the sections in sequence

Amend the title as follows:

Page 1, delete lines 1 to 3 and insert:

"A bill for an act relating to elections; changing certain municipal precinct and ward boundary procedures and requirements;"

Correct the title numbers accordingly

With the recommendation that when so amended the bill pass.

The report was adopted.

Pelowski from the Committee on State and Local Government Operations Reform, Technology and Elections to which was referred:

H. F. No. 655, A bill for an act relating to elections; requiring an affidavit of candidacy to state the candidate's residence address and telephone number; prohibiting placement of a candidate on the ballot if residency requirements are not met; amending Minnesota Statutes 2008, section 204B.06, subdivision 1.

Reported the same back with the following amendments:

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Page 2, delete lines 1 to 12 and insert:

"(c) Except as provided in paragraph (f), an affidavit of candidacy must state the candidate's residence address and a telephone number where the candidate can be contacted. The form for the affidavit of candidacy must inform the candidate that the candidate's address must be classified as private data if the candidate prefers, and allow the candidate to indicate that preference. The address of a candidate who indicates this preference on an affidavit of candidacy is classified as private data on individuals as defined in section 13.02, subdivision 12.

(d) For an office whose residency requirement must be satisfied by the close of the filing period, a registered voter in this state may request in writing that the filing officer receiving the affidavit of candidacy review the address as provided in this paragraph, at any time up to one day after the last day for filing for office. If requested, the filing officer must determine whether the address provided in the affidavit of candidacy is represented by the office the candidate is seeking. If the filing officer determines that the address is not represented by the office, the filing officer must immediately notify the candidate and the candidate's name must be removed from the ballot for that office. A determination made by a filing officer under this paragraph is subject to judicial review under section 204B.44.

(e) Except as provided in paragraph (f), for an office whose residency requirement may be satisfied as of a date after filings close, a candidate who does not reside in the district at the time of filing must submit a separate affidavit stating the candidate's residence address and a telephone number where the candidate can be contacted. The affidavit must be submitted to the filing officer by the deadline for meeting the residency requirement.

(f) The requirements of paragraphs (c), (d), and (e) do not apply to affidavits of candidacy for a candidate for: (1) judicial office; (2) the office of county attorney; or (3) county sheriff."

Page 2, line 13, delete "(e)" and insert "(g)"

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Civil Justice.

The report was adopted.

Eken from the Committee on Environment Policy and Oversight to which was referred:

H. F. No. 690, A bill for an act relating to environment; enacting the Minnesota Clean Car Act; requiring decreased emission of criteria air pollutants and greenhouse gas pollution from new motor vehicles; requiring adoption of low emission standards for motor vehicles; providing for updates as necessary to comply with the federal Clean Air Act; requiring reports; requiring rulemaking; amending Minnesota Statutes 2008, section 168A.04, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 116.

Reported the same back with the following amendments:

Page 2, line 5, delete "to 2235" and insert ", 1956.8(g) and (h), 1960.1, 1961, 1961.1, 1962, 1962.1, 1965, 1968.2, 1968.5, 1976, 1978, 2035, 2037, 2038, 2039, 2040, 2046, 2109, 2111, 2112, 2113, 2114, 2115, 2116, 2117, 2118, 2119, 2120, 2122, 2123, 2124, 2125, 2126, 2127, 2128, 2129, 2130, 2131, 2132, 2133, 2135, 2141, 2142, 2143, 2144, 2145, 2146, 2147, 2148, 2149, 2235, and Appendix A to Article 2.1"

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Page 4, line 12, delete everything after "vehicle" and insert "program;"

With the recommendation that when so amended the bill pass and be re-referred to the Committee on State and Local Government Operations Reform, Technology and Elections.

The report was adopted.

Hilstrom from the Committee on Public Safety Policy and Oversight to which was referred:

H. F. No. 695, A bill for an act relating to marriage; clarifying and modifying certain terms and procedures; specifying forms; amending Minnesota Statutes 2008, sections 517.02; 517.03, subdivision 2; 517.04; 517.05; 517.06; 517.07; 517.08, subdivisions 1a, 1b; 517.10; 517.101; 517.13.

Reported the same back with the recommendation that the bill pass and be re-referred to the Committee on Civil Justice.

The report was adopted.

Otremba from the Committee on Agriculture, Rural Economies and Veterans Affairs to which was referred:

H. F. No. 797, A bill for an act relating to agriculture; clarifying that horses and other equines are livestock and raising them is an agricultural pursuit; proposing coding for new law in Minnesota Statutes, chapter 17.

Reported the same back with the following amendments:

Page 1, line 9, delete "Horses may be used for meat, hides, and animal by-products."

With the recommendation that when so amended the bill pass.

The report was adopted.

Atkins from the Committee on Commerce and Labor to which was referred:

H. F. No. 813, A bill for an act relating to labor and employment; regulating trucking industry classifications of employment; amending Minnesota Statutes 2008, section 268.035, subdivision 25b.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Otremba from the Committee on Agriculture, Rural Economies and Veterans Affairs to which was referred:

H. F. No. 841, A bill for an act relating to agriculture; eliminating the sunset of the farmer-lender mediation law; repealing Minnesota Statutes 2008, section 583.215.

Reported the same back with the following amendments:

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Page 1, delete section 1 and insert:

"Section 1. Minnesota Statutes 2008, section 583.215, is amended to read:

583.215 EXPIRATION.

~~(a)~~ Sections 336.9-601, subsections (h) and (i); 550.365; 559.209; 582.039; and 583.20 to 583.32, expire June 30, ~~2009~~ 2013.

~~(b) Laws 1986, chapter 398, article 1, section 18, as amended, is repealed.~~"

Delete the title and insert:

"A bill for an act relating to agriculture; extending the farmer-lender mediation law; amending Minnesota Statutes 2008, section 583.215."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Commerce and Labor.

The report was adopted.

Thissen from the Committee on Health Care and Human Services Policy and Oversight to which was referred:

H. F. No. 934, A bill for an act relating to human services; modifying provisions related to children aging out of foster care; amending Minnesota Statutes 2008, section 256B.055, by adding a subdivision.

Reported the same back with the following amendments:

Page 1, line 8, before the second "Foster" insert "(a)"

Page 1, after line 12, insert:

"(b) Pending federal approval of the state plan amendment to implement paragraph (a), the foster children must be covered by state-only funded medical assistance."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Finance.

The report was adopted.

Mariani from the Committee on K-12 Education Policy and Oversight to which was referred:

H. F. No. 935, A bill for an act relating to education; modifying charter school provisions; amending Minnesota Statutes 2008, sections 124D.10; 124D.11, subdivision 9.

Reported the same back with the following amendments:

Journal of the House - 17th Day - Thursday, March 5, 2009 - Top of Page 635

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 2008, section 124D.10, is amended to read:

124D.10 CHARTER SCHOOLS.

Subdivision 1. Purposes. (a) The purpose of this section is to:

(1) improve pupil learning and achievement;

(2) increase learning opportunities for pupils;

(3) encourage the use of different and innovative teaching methods;

(4) ~~require the measurement of~~ measure learning outcomes ~~and create~~ through the creation and use of different and innovative forms of measuring outcomes;

(5) establish new forms of accountability for schools; or

(6) create new professional opportunities for teachers, including the opportunity to be responsible for the learning program at the school site.

(b) This section does not provide a means to keep open a school that otherwise would be closed. Applicants in these circumstances bear the burden of proving that conversion to a charter school fulfills a purpose specified in this subdivision, independent of the school's closing.

Subd. 2. Applicability. This section applies only to charter schools formed and operated under this section.

~~Subd. 2a.~~ ~~Charter School Advisory Council.~~ (a) A Charter School Advisory Council is established under section 15.059 except that the term for each council member shall be three years. The advisory council is composed of seven members from throughout the state who have demonstrated experience with or interest in charter schools. The members of the council shall be appointed by the commissioner. The advisory council shall bring to the attention of the commissioner any matters related to charter schools that the council deems necessary and shall:

~~(1) encourage school boards to make full use of charter school opportunities;~~

~~(2) encourage the creation of innovative schools;~~

~~(3) provide leadership and support for charter school sponsors to increase the innovation in and the effectiveness, accountability, and fiscal soundness of charter schools;~~

~~(4) serve an ombudsman function in facilitating the operations of new and existing charter schools;~~

~~(5) promote timely financial management training for newly elected members of a charter school board of directors and ongoing training for other members of a charter school board of directors; and~~

~~(6) facilitate compliance with auditing and other reporting requirements. The advisory council shall refer all its proposals to the commissioner who shall provide time for reports from the council.~~

~~(b) The Charter School Advisory Council under this subdivision expires June 30, 2007.~~

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Subd. 3. ~~Sponsor~~ Authorizer. (a) For purposes of this section, the terms defined in this subdivision have the meanings given them.

"Application" to receive approval as an authorizer means the proposal an eligible authorizer submits to the commissioner under paragraph (c) before that authorizer is able to submit any affidavit to charter to a school.

"Application" to form a school under subdivision 4 means the charter school business plan a school developer submits to an authorizer for approval that documents the school developer's mission statement, school purposes, program design, financial plan, governance and management structure, and background and experience, plus any other information the authorizer requests. The application also shall include a "statement of assurances" of legal compliance prescribed by the commissioner.

"Affidavit" means a written statement the authorizer submits to the commissioner for approval under subdivision 4 attesting to its review and approval of a school charter.

(b) The following organizations may authorize one or more charter schools:

(1) a school board; intermediate school district school board; education district organized under sections 123A.15 to 123A.19;

(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code of 1986, excluding a nonpublic sectarian or religious institution, any person other than a natural person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the nonpublic sectarian or religious institution, and any other charitable organization under this clause that in the federal IRS Form 1023, Part IV, describes activities indicating a religious purpose, that:

(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on Foundations,;

(ii) is registered with the attorney general's office~~, and~~;

(iii) reports an end-of-year fund balance of at least $2,000,000; and

(iv) is incorporated in the state of Minnesota;

(3) a Minnesota private college, notwithstanding clause (2), that grants two- or four-year degrees and is registered with the Minnesota Office of Higher Education under chapter 136A; community college, state university, or technical college, governed by the Board of Trustees of the Minnesota State Colleges and Universities; or the University of Minnesota ~~may sponsor one or more charter schools.~~; or

~~(b)~~ (4) a nonprofit corporation subject to chapter 317A, described in section 317A.905, and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code of 1986, may ~~sponsor~~ authorize one or more charter schools if the charter school has operated for at least three years under a different ~~sponsor~~ authorizer and if the nonprofit corporation has existed for at least 25 years.

(c) An eligible authorizer under this subdivision must apply to the commissioner for approval as an authorizer before submitting any affidavit to the commissioner to charter a school. The application for approval as a charter school authorizer must demonstrate the applicant's ability to implement the procedures and satisfy the criteria for chartering a school under this section. The commissioner must approve or disapprove an application within 60 business days of the application deadline. If the commissioner disapproves the application, the commissioner must notify the applicant of the deficiencies and the applicant then has 20 business days to address the deficiencies to the commissioner's satisfaction. Failing to address the deficiencies to the commissioner's satisfaction makes an applicant ineligible to be an authorizer. The commissioner, in establishing criteria for approval, must consider the applicant's:

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(1) capacity and infrastructure;

(2) application criteria and process;

(3) contracting process;

(4) ongoing oversight and evaluation processes; and

(5) renewal criteria and processes.

A disapproved applicant under this paragraph may resubmit an application during a future application period.

(d) The authorizer must participate in ongoing department-approved training.

(e) An authorizer that chartered a school before August 1, 2009, must apply by June 30, 2012, to the commissioner for approval under paragraph (c) to continue as an authorizer under this section. For purposes of this paragraph, an authorizer that fails to submit a timely application is ineligible to charter a school.

(f) The commissioner shall review an authorizer's performance at least once every five years in a manner and form determined by the commissioner, and may review an authorizer's performance more frequently at the commissioner's own initiative or at the request of a charter school developer, operator, board member, or other interested party. The commissioner, after completing the review, shall transmit a report with findings to the authorizer. If, consistent with this section, the commissioner finds that an authorizer has not performed satisfactorily, the commissioner may subject the authorizer to corrective action, which may include terminating the contract with the board of a school it chartered. The commissioner must notify the authorizer in writing of any findings that may subject the authorizer to corrective action and the authorizer then has 15 business days to request an informal hearing before the commissioner takes corrective action.

(g) The commissioner may take corrective action against an authorizer, including terminating an authorizer's eligibility to charter a school for:

(1) failing to satisfy the criteria under which the commissioner approved the authorizer;

(2) failing to perform satisfactorily as an approved authorizer; or

(3) violating a term of the chartering contract between the authorizer and charter school board.

Subd. 4. Formation of school. (a) ~~A sponsor~~ An authorizer, after receiving an application from a school developer, may ~~authorize~~ charter a licensed teacher under section 122A.18, subdivision 1, or a group of individuals that includes one or more licensed teachers under section 122A.18, subdivision 1, to operate a ~~charter~~ school subject to the commissioner's approval ~~by the commissioner~~ of the authorizer's affidavit under paragraph (b). ~~A board must vote on charter school application for sponsorship no later than 90 days after receiving the application.~~ The school must be organized and operated as a cooperative under chapter 308A or nonprofit corporation under chapter 317A and the provisions under the applicable chapter shall apply to the school except as provided in this section.

An authorizer must not locate a newly chartered school or relocate an existing charter school within (i) a one-mile radius of a public school site that a school board closed under section 123B.51, (ii) the boundaries of a school district newly consolidated under section 123A.48, or (iii) the boundaries of a dissolved school district under section 123A.46 for at least 36 months from the date the school board acted to close the school, or consolidate or dissolve the school district unless the school board of the school district in which the charter school would be located gives the authorizer written approval to do so.

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Notwithstanding sections 465.717 and 465.719, a school district, subject to this section and section 124D.11, may create a corporation for the purpose of ~~creating~~ establishing a charter school.

(b) Before the operators may ~~form~~ establish and operate a school, the ~~sponsor~~ authorizer must file an affidavit with the commissioner stating its intent to ~~authorize a~~ charter a school. An authorizer must file a separate affidavit for each school it intends to charter. The affidavit must state the terms and conditions under which the ~~sponsor~~ authorizer would ~~authorize a~~ charter a school and how the ~~sponsor~~ authorizer intends to oversee the fiscal and student performance of the charter school and to comply with the terms of the written contract between the ~~sponsor~~ authorizer and the charter school board of directors under subdivision 6. The commissioner must approve or disapprove the ~~sponsor's proposed authorization~~ authorizer's affidavit within 90 60 business days of receipt of the affidavit. If the commissioner disapproves the affidavit, the commissioner shall notify the authorizer of the deficiencies in the affidavit and the authorizer then has 20 business days to address the deficiencies. If the authorizer does not address deficiencies to the commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain commissioner approval precludes ~~a sponsor~~ an authorizer from ~~authorizing~~ chartering the ~~charter~~ school that ~~was~~ is the subject of ~~the~~ this affidavit.

(c) The authorizer may prevent an approved charter school from opening for operation if, among other grounds, the charter school violates this section or does not meet the ready-to-open standards that are part of the authorizer's oversight and evaluation process or are stipulated in the charter school contract.

(d) The operators authorized to organize and operate a school, before entering into a contract or other agreement for professional or other services, goods, or facilities, must incorporate as a cooperative under chapter 308A or as a nonprofit corporation under chapter 317A and must establish a board of directors composed of at least five members who are not related parties until a timely election for members of the ongoing charter school board of directors is held according to the school's articles and bylaws under paragraph (f). A charter school board of directors must be composed of at least five members who are not related parties. ~~Any~~ Staff members ~~who are~~ employed at the school, including teachers providing instruction under a contract with a cooperative, and all parents or legal guardians of children enrolled in the school ~~may participate in the election for~~ are the voters eligible to elect the members of the school's board of directors. Licensed teachers employed at the school, including teachers providing instruction under a contract with a cooperative, must be a majority of the members of the board of directors before the school completes its third year of operation, unless the commissioner waives the requirement for a majority of licensed teachers on the board. A charter school must notify eligible voters of the school board election dates at least 30 days before the election. Board of director meetings must comply with chapter 13D.

~~(d)~~ (e) Upon the request of an individual, the charter school must make available in a timely fashion the minutes of meetings of the board of directors, and of members and committees having any board-delegated authority; financial statements showing all operations and transactions affecting income, surplus, and deficit during the school's last annual accounting period; and a balance sheet summarizing assets and liabilities on the closing date of the accounting period. A charter school also must post on its official Web site information identifying its authorizer and indicate how to contact that authorizer and include that same information about its authorizer in other school materials that it makes available to the public.

(f) Every charter school board member shall attend department-approved training on board governance, the board's role and responsibilities, employment policies and practices, and financial management. A board member who does not complete the required training within 12 months of being seated on the board is ineligible to continue to serve as a board member.

(g) The ongoing board must be elected before the school completes its third year of operation. The board of directors shall be (i) a teacher majority board made up of licensed teachers employed at the school or (ii) a board having at least 20 percent of its members as licensed teachers employed at the school and must include charter school parents or guardians and interested community members. Licensed teachers employed by the school, or

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those providing instruction under a contract with a cooperative, may be members of the board of directors. The chief financial officer and chief administrator are nonvoting board members. Board bylaws shall outline the internal process and procedures for changing the board's governance model. A board may change its governance model only with approval from the authorizer and a voting majority of the board of directors and the licensed teachers employed at the school, including teachers providing instruction under a contract with a cooperative.

(h) The granting or renewal of a charter by ~~a sponsoring entity~~ an authorizer must not be conditioned upon the bargaining unit status of the employees of the school.

~~(e) A sponsor~~ (i) The granting or renewal of a charter school by an authorizer must not be contingent on the charter school being required to contract, lease, or purchase services from the authorizer. Any potential contract, lease, or purchase of service from an authorizer must be disclosed to the commissioner, accepted through an open bidding process, and be a separate contract from the charter contract. The school must document the open bidding process. An authorizer must not enter into a contract to provide management and financial services for a school that it authorizes, unless the school documents that it received at least two competitive bids.

(j) The charter school shall not offer any services or goods of value to students, parents, or guardians as an inducement, term, or condition of enrolling a student in a charter school.

(k) An authorizer may ~~authorize~~ permit the ~~operators~~ board of directors of a charter school to expand the operation of the charter school to additional sites or to add additional grades at the school beyond those described in the ~~sponsor's application~~ authorizer's original affidavit as approved by the commissioner only after submitting a supplemental ~~application~~ affidavit for approval to the commissioner in a form and manner prescribed by the commissioner. The supplemental ~~application~~ affidavit must ~~provide evidence~~ show that:

(1) the expansion of proposed by the charter school is supported by need and projected enrollment;

(2) the charter school expansion is warranted, at a minimum, by longitudinal data demonstrating students' improved academic performance and growth on statewide assessments under chapter 120B;

~~(2)~~ (3) the charter school is fiscally sound and has the financial capacity to implement the proposed expansion; and

~~(3)~~ (4) the ~~sponsor supports the~~ authorizer finds that the charter school has the management capacity to carry out its expansion~~; and~~.

~~(4) the building of the additional site meets all health and safety requirements to be eligible for lease aid.~~

(f) The commissioner annually must provide timely financial management training to newly elected members of a charter school board of directors and ongoing training to other members of a charter school board of directors. Training must address ways to:

~~(1) proactively assess opportunities for a charter school to maximize all available revenue sources;~~

~~(2) establish and maintain complete, auditable records for the charter school;~~

~~(3) establish proper filing techniques;~~

~~(4) document formal actions of the charter school, including meetings of the charter school board of directors;~~

~~(5) properly manage and retain charter school and student records;~~

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~~(6) comply with state and federal payroll record-keeping requirements; and~~

~~(7) address other similar factors that facilitate establishing and maintaining complete records on the charter school's operations.~~

(l) The commissioner shall have 30 business days to review and comment on the supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies in the supplemental affidavit and the authorizer then has 30 business days to address, to the commissioner's satisfaction, any deficiencies in the supplemental affidavit. The school may not expand grades or add sites until the commissioner has reviewed and commented on the supplemental affidavit. The commissioner's approval or disapproval of a supplemental affidavit is final.

Subd. 4a. Conflict of interest. (a) ~~A member of a charter school board of directors~~ An individual is prohibited from serving as a member of the charter school board of directors ~~or as~~ if the individual, an immediate family member, or the individual's partner is an owner, employee or agent of or a contractor with a for-profit or nonprofit entity with whom the charter school contracts, directly or indirectly, for professional services, goods, or facilities. A violation of this prohibition renders a contract voidable at the option of the commissioner or the charter school board of directors. A member of a charter school board of directors who violates this prohibition ~~shall be~~ is individually liable to the charter school for any damage caused by the violation.

(b) No member of the board of directors, employe