Commerce law includes establishing homeowners’ association ombudsperson

A new common interest community ombudsperson position will be created within the Department of Commerce to assist unit owners, unit owners’ tenants and associations in understanding their rights and facilitate the resolution of disputes between unit owners and associations.

It is one provision in the omnibus commerce law that also funds parts of state government, and has policy provisions including those that relate to Medicare, free water, keys and PFAs.

Rep. Kaohly Vang Her (DFL-St. Paul) and Sen. Matt Klein (DFL-Mendota Heights) sponsor the law that takes effect July 1, 2025, unless noted.

2025 Special Session: SSHF4*/SSSF4/CH4

Funding

The new law will allocate $39.35 million to the Department of Commerce from the General Fund in fiscal year 2026 and $40 million in fiscal year 2027. This includes $347,000 annually for the common interest community ombudsperson beginning in fiscal year 2026.

The department will receive $815,000 annually from the Workers’ Compensation Fund and $2.16 million in fiscal year 2026 and $2.09 million in fiscal year 2027 from special revenue.

It will also fund reinsurance with a $145 million transfer from the Health Care Access Fund to the premium security plan account in fiscal year 2026 and an assessment on group health carriers during benefit year 2027 for which they can receive a tax credit.

The Office of Cannabis Management will receive $33.44 million and $36.35 million in respective fiscal years. And, effective June 15, 2025, a $1 million fiscal year 2025 appropriation for community renewal grant usage is extended to June 30, 2026. (Art. 1, Secs. 2-4; Art. 6, Secs. 4, 7, 14)

Changes for consumers

The new law will provide some exceptions to Minnesota’s lead and cadmium ban that takes effect July 1, 2025.

Keys containing lead that are imported, manufactured, sold, distributed or offered for use before July 1, 2028, will be exempt. The same is true for keys containing lead equal to or less than 1.5% by total weight that are imported, manufactured, sold, distributed or offered for use after July 1, 2028. Professional artist materials, including oil-based paints, water-based paints, pastels, pigments, ceramic glazes, markers and encaustics, and ink pens and mechanical pencils will also be exempt. This is effective June 15, 2025. (Art. 7, Secs. 27-28)

At a ticketed event with at least 100 attendees, a place of entertainment will be required to provide access to free water and allow attendees to bring factory-sealed bottled water or an empty water bottle to access potable water. Limits can be placed on the types and sizes of allowable bottles. A place of entertainment will not be required to allow water in an exhibit, gallery or presentation space where beverages are prohibited if water is available outside the space. (Art. 7, Sec. 30)

Effective June 15, 2025, a task force is created to evaluate and provide recommendations on insurance affordability of single-family housing, common interest communities and multifamily rental housing. The recommendations are intended to strengthen and stabilize the homeowners and commercial property insurance industry. A report is due to the Commerce and Employment and Economic Development departments, Minnesota Housing Finance Agency, and the Legislature by Feb. 15, 2026. (Art. 3, Sec. 20)

Insurance

The new law will require automobile and homeowner insurers to provide a copy of the current policy to the policyholder within 21 days of receiving a request. This is limited to once per policy period.

It will also require surplus line brokers to provide notice on the policy that the insured may be eligible for FAIR plan coverage; allow a health carrier to refuse to renew an individual health plan under certain circumstances, including the enrollee moving out of the carrier’s area of operation or the policy is discontinued; and allow a health carrier to discontinue an individual health plan if notification and purchase option requirements are met. (Art. 3; Secs. 2, 4-5, 18)

Medicare supplement insurance

Effective Aug. 1, 2026, the new law will require a policy to cover preexisting conditions if the insured meets statutory requirements; prohibit insurers from applying a preexisting condition treatment waiting period for reinstated policies to a qualified enrollee; prohibit an insurer from applying a preexisting condition limitation if the applicant enrolls during open enrollment, is 65-70 years old, is applying for the first time and meets statutory requirements.

The law will allow individuals ages 65 to 70 to enroll in a Medicare supplement policy outside of their initial open enrollment period without medical underwriting or preexisting condition limitations. This, too, takes effect Aug. 1, 2026. (Art. 5, Secs. 1-9)

Financial institutions

Among changes for financial institutions is they will be permitted to give notice and close a deposit account of an account holder who has harassed the financial institution’s staff or customers.

Additionally, the new law will:

• exempt loans meeting the Federal Qualified Mortgage standards under the Code of Federal Regulations from service charge limitations;

• allow a mortgage loan lender to give notice of a default either by first-class mail, email or other electronic communication;

• allow a safe deposit lease to renew automatically and allow the consumer to terminate the lease at any time; and

• amend the requirements for an additional broker’s license and add that a broker must have at least 20% ownership interest in each business entity for which the broker may hold a broker’s license. (Art. 2, Secs. 2, 4-5, 7, 9).

Consumer protection policy

In addition to the common interest community ombudsperson, the law will:

• increase the transfer fee from $25 to $65 for a registered agent who has terminated employment with a broker-dealer;

• require a registered investment adviser representative who has terminated employment with one investment adviser to pay a $50 transfer fee before beginning employment with another investment adviser;

• require a private fund advisor to pay a $100 filing fee when filing an initial or renewal notice required under the state’s investment adviser registration requirement;

• effective June 15, 2025, prohibit a manufacturer, distributor or factory branch from requiring a new car dealer to refrain from participating in an auto show; and allow a new car dealer to participate in an auto show outside the county where the dealer maintains a licensed location under certain conditions;

• state that a retail seller of electricity to recharge an electric vehicle battery isn’t in violation of the state’s exclusive service right statute if the electricity was provided by the utility serving the charging station location;

• require retail electric vehicle supply equipment to be inspected annually;

• allow a phone company or telecommunications carrier to petition the Public Utilities Commission for approval of a customer transition plan to discontinue telecommunications service in an area where customers have access to one or more providers for the service provided by the phone company or telecommunications carrier, effective July 1, 2026;

• allow a gas station to have one storage tank for nonoxygenated motor sports racing fuel and require the pump to have a sign stating that it’s for use in off-highway motor sports engines only; and

• exempt class B firefighting foam used in fixed firefighting systems in an airport hangar from the state’s PFAs ban until Jan. 1, 2028. (Art. 7, Secs. 8-9, 11, 13, 15, 17, 22-23, 29)

SF1360* / HF0739 / CH4