Anderson, R., was excused.

Macklin was excused until 3:25 p.m.

The Chief Clerk proceeded to read the Journals of the preceding days. Pellow moved that further reading of the Journals be suspended and that the Journals be approved as corrected by the Chief Clerk. The motion prevailed.

S. F. No. 347 and H. F. No. 448, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Kelley moved that the rules be so far suspended that S. F. No. 347 be substituted for H. F. No. 448 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 732 and H. F. No. 1185, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Smith moved that the rules be so far suspended that S. F. No. 732 be substituted for H. F. No. 1185 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 1199 and H. F. No. 575, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Erhardt moved that the rules be so far suspended that S. F. No. 1199 be substituted for H. F. No. 575 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 1444 and H. F. No. 1582, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Rukavina moved that the rules be so far suspended that S. F. No. 1444 be substituted for H. F. No. 1582 and that the House File be indefinitely postponed. The motion prevailed.

Carruthers moved that the House recess subject to the call of the Chair. The motion prevailed.

The House reconvened and was called to order by the Speaker.

Carruthers from the Committee on Rules and Legislative Administration to which was referred:

H. F. No. 1844, A bill for an act proposing an amendment to the Minnesota Constitution, article XIII, section 1; prohibiting financing of certain education costs with property taxes.

Reported the same back with the following amendments:

Page 1, line 17, after the first "used" insert "to fund facilities and equipment and" and delete the second "used"

Page 1, line 23, delete "public school" and delete "be entirely" and insert "for public schools come"

Page 2, after line 1, insert:

"Sec. 3. Minnesota Statutes 1994, section 270.52, is amended to read:

270.52 [COSTS OF MAKING ASSESSMENTS.]

The cost of making any assessment provided in sections 270.41 to 270.53 shall be charged to the assessment district involved. The county auditor shall certify the costs incurred to the appropriate governing body not later than

September August 1 of each year, and if unpaid as of October 10 September 1, the county auditor shall levy a tax upon the taxable property of such taxing district sufficient to pay such costs. The amount so collected shall be credited to the general revenue fund of the county.

Sec. 4. [EFFECTIVE DATE.]

If the amendment proposed by section 1 is adopted by the voters, the amendment is effective July 1, 1998."

Delete the title and insert:

"A bill for an act to taxation; proposing an amendment to the Minnesota Constitution, article XIII, section 1; prohibiting financing of certain education costs with property taxes; changing the date for certification and payment of certain costs for purposes of property tax levies; amending Minnesota Statutes 1994, section 270.52."

With the recommendation that when so amended the bill pass.

The report was adopted.

Trimble from the Committee on Regulated Industries and Energy to which was referred:

H. F. No. 1867, A bill for an act relating to the organization of state government; abolishing the department of public service; transferring its duties to other agencies; amending Minnesota Statutes 1994, sections 8.33; 15.01; 116C.03, subdivision 2; 216A.01; 216A.035; 216A.036; 216A.04; 216A.05, by adding a subdivision; 216A.07; 216A.085; 216A.095; 216B.02, subdivision 7, and by adding subdivisions; 216B.16, subdivision 2; 216B.162, subdivision 7; 216B.241, subdivisions 1 and 2; 216B.62; 216B.64; 216B.65; 216C.01, subdivisions 2, 3, and by adding a subdivision; 216C.10; 216C.37, subdivision 1; 237.02; 237.075, subdivision 2; 237.295; 237.30; 239.01; and 239.05, subdivisions 6c, 7a, and 8; proposing coding for new law in Minnesota Statutes, chapter 216C; repealing Minnesota Statutes 1994, sections 216A.06; 216B.02, subdivision 8; and 237.69, subdivision 3.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. [DEPARTMENT OF PUBLIC SERVICE ABOLISHED; RESPONSIBILITIES TRANSFERRED.]

Subdivision 1. [DEPARTMENT ABOLISHED; RESPONSIBILITIES TRANSFERRED.] The department of public service is abolished. The responsibilities held by the department are transferred to the public utilities agency, unless otherwise specified in this act. Except as otherwise provided by this act, the responsibilities of the department must be transferred under Minnesota Statutes, section 15.039. For the purposes of this act, "responsibilities" means the powers, duties, rights, obligations, rules, court actions, contracts, records, property of every description, unexpended funds, personnel, and authority imposed by law of the department of public service.

Subd. 2. [SPECIFIC POSITIONS ABOLISHED.] The following positions in the department of public service are not transferred to a receiving agency and are specifically abolished:

(1) commissioner;

(2) deputy commissioner;

(3) assistant commissioner; and

(4) executive assistant.

Subd. 3. [ATTORNEY GENERAL.] The responsibility for intervention as a party in all public utility and telecommunications matters before the public utilities commission is transferred to the attorney general's office.

Subd. 4. [RULES.] All rules adopted by the department of public service before the effective date of this section become rules of the public utilities agency.

Sec. 2. [UNIFIED REGULATORY AND ADMINISTRATIVE STRUCTURE.]

By October 15, 1995, the commissioner of the department of public service and the chair of the public utilities commission shall jointly submit to the legislature a plan for a unified regulatory and administrative structure incorporating the remaining functions and responsibilities of the department of public service and public utilities commission. The plan shall provide for:

(1) the transfer of the public utilities commission to the public utilities agency;

(2) an administrative structure which will provide for the greatest possible independence of the public utilities commission within the public utilities agency;

(3) the assignment to the public utilities commission of such duties and responsibilities as are quasi-judicial in nature;

(4) the joint provision of, administrative and support services including, but not limited to, personnel, purchasing, budgeting, information systems, and other such services;

(5) a reduction in staffing levels, from the existing staff of both the department and the commission, to achieve the expected savings from the unified structure;

(6) a recommendation for changes in the statutory provisions, and recodification of such provisions in chapter 216E, regarding the department and the commission necessary to carry out the policies of this act, including the identification of obsolete, redundant, or unnecessary functions that are currently required of the department or the commission; and

(7) recommendations regarding the appropriate number of commissioners on the public utilities commission within the agency.

Sec. 3. [216E.01] [THE PUBLIC UTILITIES AGENCY.]

There is hereby created and established the public utilities agency, which shall have and possess all of the rights and powers and perform all of the duties vested in it by this chapter.

Sec. 4. [EFFECTIVE DATE.]

Sections 1 and 3 are effective on July 1, 1996. Section 2 is effective on the day following final enactment."

Delete the title and insert:

"A bill for an act relating to agencies of state government; abolishing the department of public service; establishing a successor agency; proposing coding for new law as Minnesota Statutes, chapter 216E."

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

The report was adopted.

Carruthers from the Committee on Rules and Legislative Administration to which was referred:

S. F. No. 752, A bill for an act relating to telecommunications; allowing for alternative regulation of telephone companies for a limited period; authorizing rulemaking to promote fair and reasonable competition for local exchange service; making technical changes; amending Minnesota Statutes 1994, sections 237.01, subdivision 6; 237.035; 237.09; 237.16; and 237.461, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 237.

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

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 1077, A bill for an act relating to health; MinnesotaCare; establishing requirements for integrated service networks; modifying requirements for health plan companies; establishing the standard health coverage; repealing the regulated all-payer option; modifying universal coverage and insurance reform provisions; expanding eligibility for the MinnesotaCare program; establishing a senior prescription drug discount program; extending the health care commission and regional coordinating boards; making technical changes; modifying data collection provisions; providing for participation in a federal waiver related to MinnesotaCare and medical assistance; regulating health provider cooperatives; modifying the health provider tax; appropriating money; amending Minnesota Statutes 1994, sections 13.99, by adding a subdivision; 60A.02, by adding a subdivision; 60B.02; 60B.03, subdivision 2; 60G.01, subdivisions 2, 4, and 5; 62A.10, subdivisions 1 and 2; 62A.65, subdivisions 5 and 8; 62D.02, subdivision 8; 62D.042, subdivision 2; 62D.11, subdivision 1; 62D.181, subdivisions 2, 3, 6, and 9; 62D.19; 62E.141; 62H.04; 62H.08; 62J.017; 62J.04, subdivisions 1a and 3; 62J.05, subdivisions 2 and 9; 62J.06; 62J.09, subdivisions 1, 1a, 6, and 8; 62J.152, subdivision 5; 62J.17, subdivisions 2, 4a, 6a, and by adding a subdivision; 62J.212; 62J.37; 62J.38; 62J.40; 62J.41, subdivisions 1 and 2; 62J.48; 62J.54; 62J.55; 62J.58; 62L.02, subdivisions 11, 16, 24, and 26; 62L.03, subdivisions 3, 4, and 5; 62L.09, subdivision 1; 62L.12, subdivision 2; 62L.17, by adding a subdivision; 62L.18, subdivision 2; 62M.07; 62M.09, subdivision 5; 62M.10, by adding a subdivision; 62N.02, by adding subdivisions; 62N.04; 62N.10, by adding a subdivision; 62N.11, subdivision 1; 62N.13; 62N.14, subdivision 3; 62N.25, subdivision 2; 62P.04, subdivision 3; 62P.05, by adding a subdivision; 62Q.01, subdivisions 2, 3, 4, and by adding subdivisions; 62Q.03, subdivisions 1, 6, 7, 8, 9, 10, and by adding subdivisions; 62Q.07, subdivisions 1 and 2; 62Q.09, subdivision 3; 62Q.11; 62Q.165; 62Q.17, subdivisions 2, 8, and by adding a subdivision; 62Q.18; 62Q.19; 62Q.25; 62Q.30; 62Q.41; 62R.03, subdivision 3; 72A.20, by adding subdivisions; 72A.201, by adding a subdivision; 136A.1355, subdivisions 3 and 5; 136A.1356, subdivisions 3 and 4; 144.1464, subdivisions 2, 3, and 4; 144.147, subdivision 1; 144.1484, subdivision 1; 144.1486, subdivision 4; 144.1487, subdivision 1; 144.1488, subdivisions 1 and 4; 144.1489, subdivisions 1, 3, and 4; 144.1490; 144.1491, subdivision 2; 144.801, by adding a subdivision; 144.804, subdivision 1; 151.48; 214.16, subdivisions 2 and 3; 256.9352, subdivision 3; 256.9353, subdivisions 1 and 3; 256.9354, subdivisions 1, 4, 5, and by adding a subdivision; 256.9355, subdivision 2; 256.9357, subdivisions 1, 2, and 3; 256.9358, by adding a subdivision; 256.9363, subdivision 5; 256B.037, subdivisions 1, 3, 4, and by adding subdivisions; 256B.04, by adding a subdivision; 256B.055, by adding a subdivision; 256B.057, by adding subdivisions; 256B.0625, subdivision 30; 256B.69, subdivisions 2 and 4; 270.101, subdivision 1; 295.50, subdivisions 3, 4, and 10a; 295.52, by adding a subdivision; 295.53, subdivisions 1, 3, and 4; 295.55, subdivision 4; 295.57; and 295.582; Laws 1990, chapter 591, article 4, section 9; Laws 1993, chapter 224, article 4, section 40; Laws 1993, First Special Session chapter 1, article 8, section 30, subdivision 2; Laws 1994, chapter 624, article 5, section 7; chapter 625, article 5, sections 5, subdivision 1; and 10, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 60A; 62J; 62L; 62N; 62Q; 62R; 137; 144; 256; 256B; and 295; repealing Minnesota Statutes 1994, sections 62J.045; 62J.07, subdivision 4; 62J.09, subdivision 1a; 62J.152, subdivision 6; 62J.19; 62J.30; 62J.31; 62J.32; 62J.33; 62J.34; 62J.35; 62J.41, subdivisions 3 and 4; 62J.44; 62J.45; 62J.65; 62L.08, subdivision 7a; 62N.34; 62P.01; 62P.02; 62P.03; 62P.07; 62P.09; 62P.11; 62P.13; 62P.15; 62P.17; 62P.19; 62P.21; 62P.23; 62P.25; 62P.27; 62P.29; 62P.31; 62P.33; 62Q.03, subdivisions 2, 3, 4, 5, and 11; 62Q.18, subdivisions 2, 3, 4, 5, 6, 8, and 9; 62Q.21; 62Q.27; 144.1488, subdivision 2; 148.236; and 256.9353, subdivisions 4 and 5; Laws 1993, chapter 247, article 1, sections 12, 13, 14, 15, 18, and 19; and Minnesota Rules, part 4685.1700, subpart 1, item D.

Reported the same back with the following amendments:

Page 33, line 25, delete everything after "must" and insert "treat the complaint and information related to it as required under sections 72A.549 to 72A.505."

Page 39, line 24, delete "(a)"

Page 40, delete lines 7 to 31

Page 41, line 4, delete "The"

Page 41, delete lines 5 and 6

Page 47, line 30, delete the first "applicable" and insert "required under chapters 62A, 62C, 62D, and 62L"

Page 48, after line 15, insert:

"Sec. 31. [62Q.28] [OPTION FOR NO COVERAGE OF ABORTION.]

Each health plan company that issues a health plan in this state shall make available to the policyholder or contract holder at least one health plan that does not cover abortion services.

Sec. 32. [62Q.43] [GEOGRAPHIC ACCESS.]

Subdivision 1. [CLOSED-PANEL HEALTH PLAN.] For purposes of this section, "closed-panel health plan" means a health plan as defined in section 62Q.01 that requires an enrollee to receive all or a majority of primary care services from a specific clinic or physician designated by the enrollee that is within the health plan company's clinic or physician network.

Subd. 2. [ACCESS REQUIREMENT.] Every closed-panel health plan must allow enrollees who are full-time students under the age of 25 years to change their designated clinic or physician at least once per month, as long as the clinic or physician is part of the health plan company's statewide clinic or physician network. A health plan company shall not charge enrollees who choose this option higher premiums or cost-sharing than would otherwise apply to enrollees who do not choose this option. A health plan company may require enrollees to provide 15 days written notice of intent to change their designated clinic or physician.

Sec. 33. [62Q.45] [COVERAGE FOR OUT-OF-AREA PRIMARY CARE.]

Subdivision 1. [STUDY.] The commissioner of health shall develop methods to allow enrollees of managed care organizations to obtain primary care health services outside of the service area of their managed care organization, from health care providers who are employed by or under contract with another managed care organization. The commissioner shall make recommendations on: (1) whether this out-of-area primary care coverage should be available to students and/or other enrollees without additional premium charges or cost-sharing; (2) methods to coordinate the services provided by different managed care organizations; (3) methods to manage the quality of care provided by different managed care organizations and monitor health care outcomes; (4) methods to reimburse managed care organizations for care provided to enrollees of other managed care organizations; and (5) other issues relevant to the design and administration of out-of-area primary care coverage. The commissioner shall present recommendations to the legislature by January 15, 1996.

Subd. 2. [DEFINITION.] For purposes of this section, "managed care organization" means: (1) a health maintenance organization operating under chapter 62D; (2) a community integrated service network as defined under section 62N.02, subdivision 4a; (3) an integrated service network as defined under section 62N.02, subdivision 8; or (4) an insurance company licensed under chapter 60A, nonprofit health service plan corporation operating under chapter 62C, fraternal benefit society operating under chapter 64B, or any other health plan company, to the extent that it covers health care services delivered to Minnesota residents through a preferred provider organization or a network of selected providers."

Page 50, line 17, delete "31" and insert "34"

Page 50, after line 17, insert:

"Section 32 is effective July 1, 1995, and applies to closed-panel health plans offered, sold, issued, or renewed on or after that date."

Pages 56 and 57, delete sections 8 and 9

Page 58, delete section 13

Page 108, line 31, delete "eligible for" and insert "enrolled in"

Page 108, line 36, delete "(a)"

Page 109, delete lines 4 to 11

Page 115, line 12, delete "statement" and insert "return"

Page 176, after line 36, insert:

"Sec. 49. [ALTERNATIVE LICENSING MODEL FOR RURAL HOSPITALS.]

The commissioner of health, through the office of rural health and primary care, shall conduct a study of rural health care access needs and present recommendations on the need for an alternative licensing model for rural hospitals. In conducting this study, the commissioner shall consult regularly with the rural health advisory committee

and the regional coordinating boards. The commissioner shall apply for federal and private-sector grants and seek other nonstate sources of funding to supplement state funds appropriated for this study.

The study must first examine:

(1) the projected demographics of rural populations;

(2) access to emergency care, obstetrics, and other traditional hospital-based services;

(3) access issues related to transportation;

(4) health care needs of different regions of the state, including those areas where access to care may be threatened by the financial instability of local hospitals; and

(5) other factors related to access to rural health care and hospital-based services.

Based upon this examination of access to health care in rural areas, the commissioner shall evaluate the need for and the feasibility of implementing an alternative licensing model for rural hospitals. This evaluation must consider:

(1) the goals of an alternative licensing model;

(2) federal and state regulatory barriers and options for reconfiguring traditional hospital-based health care services; and

(3) the feasibility of implementing an alternative licensing model, including the potential for integration with integrated networks and likelihood of obtaining a Medicare waiver and other necessary federal law changes.

If the commissioner determines that a need for an alternative licensing model exists and implementation is feasible, the commissioner shall identify changes needed in federal and state law, and develop draft legislation for a Minnesota-specific alternative licensing model.

The commissioner shall present a preliminary report to the legislature by February 1, 1996. This preliminary report must summarize rural access needs and present initial recommendations on the need for an alternative licensing model for rural hospitals. The commissioner shall present a final report to the legislature by December 15, 1996. This final report must include detailed recommendations related to a Minnesota-specific alternative model, and draft legislation necessary to implement these recommendations.

Sec. 50. [STUDY OF REGULATORY BARRIERS.]

The rural health advisory committee, in consultation with the regional coordination boards, shall examine federal and state regulatory barriers that limit rural access to care or limit the ability of rural health care providers to provide care efficiently, without improving the quality of care. The commissioner of health shall provide staff and technical assistance to the advisory committee and the regional coordinating boards. The commissioner shall apply for federal and private-sector grants and seek other nonstate sources of funding to supplement state funds appropriated for this study. The barriers to be studied must include, but are not limited to:

(1) requirements for emergency room staffing that increase hospital costs and limit access to care;

(2) limits on the ability of nurses to prescribe and administer prescription drugs under a physician's supervision in emergency situations;

(3) state and federal inspection and regulatory requirements that are duplicative and increase administrative costs;

(4) physician supervision requirements that limit the use of physician assistants; and

(5) the requirement that a hospital and its attached nursing home have separate directors of nursing.

The advisory committee shall present recommendations for eliminating these and other regulatory barriers to the commissioner of health by December 1, 1995. The commissioner of health shall consider these recommendations, and shall present recommendations and draft legislation to the legislature on any needed changes in state and federal regulatory requirements, by February 1, 1996."

Page 204, line 17, after "paragraph" insert "takes effect only if the Minnesota health care reform waiver is approved by the federal government, and"

Page 214, delete line 15 and insert:

"Access Fund $116,134,000 $180,792,000$296,926,000"

Page 214, delete line 19 and insert:

"Access Fund $101,988,000 $167,217,000$269,205,000

[FEDERAL RECEIPTS FOR ADMINISTRATION.] Receipts received as a result of federal participation pertaining to administrative costs of the Minnesota Health Care Reform Waiver shall be deposited as a nondedicated revenue to the Health Care Access Fund, while receipts received as a result of federal participation pertaining to grants shall be deposited to the federal fund and shall offset health care access funds for payments to providers.

[SENIOR DRUG PROGRAM ADMINISTRATION.] Fees for the senior drug discount program are appropriated to and may be retained by the commissioner in the health care access fund for the purpose of administration of enrollment for the program."

Page 214, after line 26, insert:

"[REGIONAL STAFF SUPPORT.] Of this appropriation, $150,000 in fiscal year 1996 and $150,000 in fiscal year 1997 are for the purpose of contracting for staff support for regional coordinating boards as authorized under Minnesota Statutes, section 62J.09, subdivision 6a. The regional coordinating board staff support provided under this appropriation shall not include staff from a health care provider organization or institution. No contract entered into under this authority shall exceed $30,000 per year."

Page 214, line 27, delete "R-1" and insert "PHYSICIAN SUBSTITUTE DEMONSTRATION PROJECT EVALUATION"

Page 214, line 36, delete "R-2" and insert "1-800 PHONE LINE"

Page 214, line 45, delete "R-3" and insert "HEALTH COVERAGE DEMONSTRATION GRANT"

Page 215, line 3, delete "R-4" and insert "LINC PROGRAM"

Page 215, line 16, delete "R-5" and insert "COMPARATIVE PERFORMANCE MEASURES"

Page 215, line 24, delete "R-6" and insert "ELECTRONIC DATA INTERCHANGE"

Page 215, line 32, delete "R-7" and insert "DATA PRIVACY AND DISCLOSURE PROCEDURES"

Page 215, line 43, delete "R-8" and insert "AHEC GRANT"

Page 215, line 57, delete "R-9" and insert "PHYSICIAN SUBSTITUTE DEMONSTRATION PROJECT"

Page 216, line 6, delete "R-10" and insert "PRIMARY CARE TRAINING INITIATIVE"

Page 216, line 16, delete "R-11" and insert "INDIGENT DENTAL CARE"

Page 216, line 25, delete "R-12" and insert "UMD MEDICAL SCHOOL PLANNING"

Page 216, delete lines 33 to 36

Page 216, line 37, delete "6" and insert "5"

Page 216, line 40, delete "R-13" and insert "MINNESOTACARE TAX STUDY"

Page 216, line 48, delete "7" and insert "6"

Page 216, line 51, delete "8" and insert "7"

Page 216, line 54, delete "R-14" and insert "MINNESOTACARE ADMINISTRATION EVALUATION"

Renumber the sections in sequence and correct internal references

Correct the subdivision and section totals and the summaries by fund accordingly

Amend the title accordingly

With the recommendation that when so amended the bill pass.

April 25, 1995

I, the undersigned, being a minority of the Committee on Ways and Means recommend that H. F. No. 1077 do pass with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. Minnesota Statutes 1994, section 62A.65, subdivision 3, is amended to read:

Subd. 3. [PREMIUM RATE RESTRICTIONS.] No individual health plan may be offered, sold, issued, or renewed to a Minnesota resident unless the premium rate charged is determined in accordance with the following requirements:

(a) Premium rates must be no more than 25 percent above and no more than 25 percent below the index rate charged to individuals for the same or similar coverage, adjusted pro rata for rating periods of less than one year. The premium variations permitted by this paragraph must be based only upon health status, claims experience, and occupation. For purposes of this paragraph, health status includes refraining from tobacco use or other actuarially valid lifestyle factors associated with good health, provided that the lifestyle factor and its effect upon premium rates have been determined by the commissioner to be actuarially valid and have been approved by the commissioner. Variations permitted under this paragraph must not be based upon age or applied differently at different ages. This paragraph does not prohibit use of a constant percentage adjustment for factors permitted to be used under this paragraph.

(b) Premium rates may vary based upon the ages of covered persons only as provided in this paragraph. In addition to the variation permitted under paragraph (a), each health carrier may use an additional premium variation based upon age of up to plus or minus 50 percent of the index rate.

(c) A health carrier may request approval by the commissioner to establish no more than three geographic regions and to establish separate index rates for each region, provided that the index rates do not vary between any two regions by more than 20 percent. Health carriers that do not do business in the Minneapolis/St. Paul metropolitan area may request approval for no more than two geographic regions, and clauses (2) and (3) do not apply to approval of requests made by those health carriers. The commissioner may grant approval if the following conditions are met:

(1) the geographic regions must be applied uniformly by the health carrier;

(2) one geographic region must be based on the Minneapolis/St. Paul metropolitan area;

(3) for each geographic region that is rural, the index rate for that region must not exceed the index rate for the Minneapolis/St. Paul metropolitan area; and

(4) the health carrier provides actuarial justification acceptable to the commissioner for the proposed geographic variations in index rates, establishing that the variations are based upon differences in the cost to the health carrier of providing coverage.

(d) Health carriers may use rate cells and must file with the commissioner the rate cells they use. Rate cells must be based upon the number of adults or children covered under the policy and may reflect the availability of Medicare coverage. The rates for different rate cells must not in any way reflect generalized differences in expected costs between principal insureds and their spouses.

(e) In developing its index rates and premiums for a health plan, a health carrier shall take into account only the following factors:

(1) actuarially valid differences in rating factors permitted under paragraphs (a) and (b); and

(2) actuarially valid geographic variations if approved by the commissioner as provided in paragraph (c).

(f) All premium variations must be justified in initial rate filings and upon request of the commissioner in rate revision filings. All rate variations are subject to approval by the commissioner.

(g) The loss ratio must comply with the section 62A.021 requirements for individual health plans.

(h) The rates must not be approved, unless the commissioner has determined that the rates are reasonable. In determining reasonableness, the commissioner shall consider the growth rates applied under section 62J.04, subdivision 1, paragraph (b), to the calendar year or years that the proposed premium rate would be in effect, actuarially valid changes in risks associated with the enrollee populations, and actuarially valid changes as a result of statutory changes in Laws 1992, chapter 549.

Sec. 2. Minnesota Statutes 1994, section 62A.65, subdivision 7, is amended to read:

Subd. 7. [SHORT-TERM COVERAGE.] (a) For purposes of this section, "short-term coverage" means an individual health plan that:

(1) is issued to provide coverage for a period of 185 days or less, except that the health plan may permit coverage to continue until the end of a period of hospitalization for a condition for which the covered person was hospitalized on the day that coverage would otherwise have ended;

(2) is nonrenewable, provided that the health carrier may provide coverage for one or more subsequent periods that satisfy clause (1), if the total of the periods of coverage do not exceed a total of 185 days out of any 365-day period, plus any additional days covered as a result of hospitalization on the day that a period of coverage would otherwise have ended;

(3) does not cover any preexisting conditions, including ones that originated during a previous identical policy or contract with the same health carrier where coverage was continuous between the previous and the current policy or contract; and

(4) is available with an immediate effective date without underwriting upon receipt of a completed application indicating eligibility under the health carrier's eligibility requirements, provided that coverage that includes optional benefits may be offered on a basis that does not meet this requirement.

(b) Short-term coverage is not subject to subdivisions 2 and 5. Short-term coverage may exclude as a preexisting condition any injury, illness, or condition for which the covered person had medical treatment, symptoms, or any manifestations before the effective date of the coverage, but dependent children born or placed for adoption during the policy period must not be subject to this provision.

(c) Notwithstanding subdivision 3, and section 62A.021, a health carrier may combine short-term coverage with its most commonly sold individual qualified plan, as defined in section 62E.02, other than short-term coverage, for purposes of complying with the loss ratio requirement.

(d) The 185 day coverage limitation provided in paragraph (a) applies to the total number of days of short-term coverage that covers a person, regardless of the number of policies, contracts, or health carriers that provide the coverage. A written application for short-term coverage must ask the applicant whether the applicant has been covered by short-term coverage by any health carrier within the 365 days immediately preceding the effective date of the coverage being applied for. Short-term coverage issued in violation of the 185-day limitation is valid until the end of its term and does not lose its status as short-term coverage, in spite of the violation. A health carrier that knowingly issues short-term coverage in violation of the 185-day limitation is subject to the administrative penalties otherwise available to the commissioner of commerce or the commissioner of health, as appropriate.

(e) (d) Time spent under short-term coverage counts as time spent under a preexisting condition limitation for purposes of group or individual health plans, other than short-term coverage, subsequently issued to that person, or to cover that person, by any health carrier, if the person maintains continuous coverage as defined in section 62L.02. Short-term coverage is a health plan and is qualifying coverage as defined in section 62L.02. Notwithstanding any other law to the contrary, a health carrier is not required under any circumstances to provide a person covered by short-term coverage the right to obtain coverage on a guaranteed issue basis under another health plan offered by the health carrier, as a result of the person's enrollment in short-term coverage.

Sec. 3. Minnesota Statutes 1994, section 62J.04, subdivision 3, is amended to read:

Subd. 3. [COST CONTAINMENT DUTIES.] After obtaining the advice and recommendations of the Minnesota health care commission, the commissioner shall:

(1) establish statewide and regional limits on growth in total health care spending under this section, monitor regional and statewide compliance with the spending limits, and take action to achieve compliance to the extent authorized by the legislature;

(2) divide the state into no fewer than four regions, with one of those regions being the Minneapolis/St. Paul metropolitan statistical area but excluding Chisago, Isanti, Wright, and Sherburne counties, for purposes of fostering the development of regional health planning and coordination of health care delivery among regional health care systems and working to achieve spending limits;

(3) (2) provide technical assistance to regional coordinating boards;

(4) (3) monitor the quality of health care throughout the state, conduct consumer satisfaction surveys, and take action as necessary to ensure an appropriate level of quality;

(5) (4) issue recommendations regarding uniform billing forms, uniform electronic billing procedures and data interchanges, patient identification cards, and other uniform claims and administrative procedures for health care providers and private and public sector payers. In developing the recommendations, the commissioner shall review the work of the work group on electronic data interchange (WEDI) and the American National Standards Institute (ANSI) at the national level, and the work being done at the state and local level. The commissioner may adopt rules requiring the use of the Uniform Bill 82/92 form, the National Council of Prescription Drug Providers (NCPDP) 3.2 electronic version, the Health Care Financing Administration 1500 form, or other standardized forms or procedures;

(6) undertake health planning responsibilities as provided in section 62J.15;

(7) monitor and promote the development and implementation of practice parameters;

(8) (5) authorize, fund, or promote research and experimentation on new technologies and health care procedures;

(9) (6) designate referral centers for specialized and high-cost procedures and treatment and establish minimum standards and requirements for particular procedures or treatment;

(10) (7) within the limits of appropriations for these purposes, administer or contract for statewide consumer education and wellness programs that will improve the health of Minnesotans and increase individual responsibility relating to personal health and the delivery of health care services, undertake prevention programs including initiatives to improve birth outcomes, expand childhood immunization efforts, and provide start-up grants for worksite wellness programs;

(11) (8) administer the data analysis unit; and

(12) (9) undertake other activities to monitor and oversee the delivery of health care services in Minnesota with the goal of improving affordability, quality, and accessibility of health care for all Minnesotans.

Sec. 4. Minnesota Statutes 1994, section 62J.045, subdivision 3, is amended to read:

Subd. 3. [COST ALLOCATION FOR EDUCATION AND RESEARCH.] By January 1, 1994, the commissioner of health, in consultation with the health care commission and the health technology advisory committee, shall:

(1) develop mechanisms to gather data and to identify the annual cost of medical education and research conducted by hospitals, medical centers, or health maintenance organizations;

(2) determine a percentage of the annual rate of growth established under section 62J.04 to be allocated for the cost of education and research and develop a method to assess the percentage from each group purchaser;

(3) develop mechanisms to collect the assessment from group purchasers to be deposited in a separate education and research fund; and

(4) (3) develop a method to allocate the education and research fund to specific health care providers.

Sec. 5. Minnesota Statutes 1994, section 62J.06, is amended to read:

62J.06 [IMMUNITY FROM LIABILITY.]

No member of the Minnesota health care commission established under section 62J.05, regional coordinating boards established under section 62J.09, health planning advisory committee established under section 62J.15, or data collection advisory committee established under section 62J.30, or practice parameter advisory committee established under section 62J.32 shall be held civilly or criminally liable for an act or omission by that person if the act or omission was in good faith and within the scope of the member's responsibilities under this chapter.

Sec. 6. Minnesota Statutes 1994, section 62J.09, subdivision 1a, is amended to read:

Subd. 1a. [DUTIES RELATED TO COST CONTAINMENT.] (a) [ALLOCATION OF REGIONAL SPENDING LIMITS.] Regional coordinating boards may advise the commissioner regarding allocation of annual regional limits on the rate of growth for providers in the regulated all-payer option in order to:

(1) achieve communitywide and regional public health goals consistent with those established by the commissioner; and

(2) promote access to and equitable reimbursement of preventive and primary care providers.

(b) [TECHNICAL ASSISTANCE.] Regional coordinating boards, in cooperation with the commissioner, shall provide technical assistance to parties interested in establishing or operating a community integrated service network or integrated service network within the region. This assistance must complement assistance provided by the commissioner under section 62N.23.

Sec. 7. Minnesota Statutes 1994, section 62J.17, subdivision 1, is amended to read:

Subdivision 1. [PURPOSE.] To ensure access to affordable health care services for all Minnesotans it is necessary to restrain the rate of growth in health care costs. An important factor believed to contribute to escalating costs may be the purchase of costly new medical equipment, major capital expenditures, and the addition of new specialized services. After spending limits are established under section 62J.04, providers, patients, and communities will have the opportunity to decide for themselves whether they can afford capital expenditures or new equipment or specialized services within the constraints of a spending limit. In this environment, the state's role in reviewing these spending commitments can be more limited. However, during the interim period until spending targets are established, It is important to prevent unrestrained major spending commitments that will contribute further to the escalation of health care costs and make future cost containment efforts more difficult. In addition, it is essential to protect against the possibility that the legislature's expression of its attempt to control health care costs may lead a provider to make major spending commitments before targets or other cost containment constraints are fully

implemented because the provider recognizes that the spending commitment may not be considered appropriate, needed, or affordable within the context of a fixed budget for health care spending. Therefore, the legislature finds that a requirement for reporting health care expenditures is necessary.

Sec. 8. Minnesota Statutes 1994, section 62J.22, is amended to read:

62J.22 [PARTICIPATION OF FEDERAL PROGRAMS.]

The commissioner of health shall seek the full participation of federal health care programs under this chapter, including Medicare, medical assistance, veterans administration programs, and other federal programs. The commissioner of human services shall under the direction of the health care commission submit waiver requests and take other action necessary to obtain federal approval to allow participation of the medical assistance program. Other state agencies shall provide assistance at the request of the commission. If federal approval is not given for one or more federal programs, data on the amount of health care spending that is collected under section 62J.04 shall be adjusted so that state and regional spending limits take into account the failure of the federal program to participate.

Sec. 9. Minnesota Statutes 1994, section 62J.30, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For purposes of sections 62J.30 to 62J.34 62J.33, the following definitions apply:

(a) "Practice parameter" means a statement intended to guide the clinical decision making of health care providers and patients that is supported by the results of appropriately designed outcomes research studies or that has been approved by the federal agency for health care policy and research or adopted for use by the American Medical Association, the National Medical Association, a member board of the American Board of Medical Specialties, a board approved by the American Osteopathic Association, a college or board approved by the Royal College of Physicians and Surgeons of Canada, a national health professional board or association, or a board approved by the American Dental Association.

(b) "Outcomes research" means research designed to identify and analyze the outcomes and costs of alternative interventions for a given clinical condition, in order to determine the most appropriate and cost-effective means to prevent, diagnose, treat, or manage the condition, or in order to develop and test methods for reducing inappropriate or unnecessary variations in the type and frequency of interventions.

Sec. 10. Minnesota Statutes 1994, section 62J.30, subdivision 3, is amended to read:

Subd. 3. [GENERAL DUTIES; IMPLEMENTATION DATE.] The commissioner, through the data analysis unit, shall:

(1) conduct applied research using existing and newly established health care databases, and promote applications based on existing research;

(2) establish the condition-specific database required under section 62J.31;

(3) develop and implement data collection procedures to ensure a high level of cooperation from health care providers and health carriers, as defined in section 62L.02, subdivision 16;

(4) work closely with health carriers and health care providers to promote improvements in health care efficiency and effectiveness;

(5) participate as a partner or sponsor of private sector initiatives that promote publicly disseminated applied research on health care delivery, outcomes, costs, quality, and management;

(6) provide technical assistance to health plan and health care purchasers, as required by section 62J.33; and

(7) develop outcome-based practice parameters as required under section 62J.34; and

(8) provide technical assistance as needed to the health planning advisory committee and the regional coordinating boards.

Sec. 11. Minnesota Statutes 1994, section 62J.30, subdivision 6, is amended to read:

Subd. 6. [DATA COLLECTION PROCEDURES.] The data analysis unit shall collect data from health care providers, and health carriers, and individuals in the most cost-effective manner, which does not unduly burden them. The unit may require health care providers and health carriers to collect and provide all aggregate summaries of

patient health records and claim files as long as these summaries do not identify individual patients, and cooperate in other ways with the data collection process. The unit may also require health care providers and health carriers to provide mailing lists of patients who have consented to release of data. The commissioner shall require all health care providers, group purchasers, and state agencies to use a standard patient identifier and a standard identifier for providers and health plans when reporting data under this chapter. The data analysis unit must code patient identifiers to prevent identification and to enable release of otherwise private data to researchers, providers, and group purchasers in a manner consistent with chapter 13 and section 144.335.

Sec. 12. Minnesota Statutes 1994, section 62J.30, subdivision 7, is amended to read:

Subd. 7. [DATA CLASSIFICATION SUMMARY DATA; RULEMAKING.] (a) Data collected through the large-scale database initiatives of the data analysis unit required by section 62J.31 that identify individual patients or providers are private data on individuals. Data not on individuals are nonpublic data. The commissioner may release private data on individuals and nonpublic data to researchers affiliated with university research centers or departments who are conducting research on health outcomes, practice parameters, and medical practice style; researchers working under contract with the commissioner; and individuals purchasing health care services for health carriers and groups. The commissioner shall require any person or organization receiving under this subdivision either private data on individuals or nonpublic data to sign an agreement to maintain the data that it receives according to the statutory provisions applicable to the data. The agreement shall not limit the preparation and dissemination of summary data as permitted under section 13.05, subdivision 7. To the extent reasonably possible, release of private, confidential, or nonpublic data under this chapter shall be made without releasing data that identifies patients and should instead be released using the identification numbers required by subdivision 6.

(b) Summary data derived from data collected through the large-scale database initiatives of the data analysis unit may be provided under section 13.05, subdivision 7, and may be released in studies produced by the commissioner.

(c) (b) The commissioner shall adopt rules to establish criteria and procedures to govern access to and the use of data collected through the initiatives of the data analysis unit.

Sec. 13. Minnesota Statutes 1994, section 62J.30, subdivision 10, is amended to read:

Subd. 10. [CONTRACTS AND GRANTS.] To carry out the duties assigned in sections 62J.30 to 62J.34 62J.33, the commissioner may contract with or provide grants to private sector entities. Any contract or grant must require the private sector entity to maintain the data which it receives according to the statutory provisions applicable to the data.

Sec. 14. Minnesota Statutes 1994, section 62J.30, subdivision 11, is amended to read:

Subd. 11. [RULEMAKING.] The commissioner may adopt permanent and emergency rules to implement sections 62J.30 to 62J.34 62J.33.

Sec. 15. Minnesota Statutes 1994, section 62J.30, is amended by adding a subdivision to read:

Subd. 12. [PROHIBITION ON COLLECTING INDIVIDUAL LEVEL DATA.] In implementing the data collection initiatives authorized under this chapter, the commissioner, and the data institute established under section 62J.45, shall not collect individual or encounter level data, or any data that identify specific patients or individuals. The commissioner and the data institute may collect aggregate data on individuals and encounters, as long as the data do not identify specific patients or individuals.

Sec. 16. Minnesota Statutes 1994, section 62J.31, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The data analysis unit shall establish a large-scale database for a limited number of health conditions. This initiative must meet the requirements of this section and section 62J.30, subdivision 12.

Sec. 17. Minnesota Statutes 1994, section 62J.35, subdivision 1, is amended to read:

Subdivision 1. [DATA COLLECTION BY COMMISSIONER.] For purposes of forecasting rates of growth in health care spending and setting limits under section 62J.04, subdivisions 1 and 1a, the commissioner may collect from health care providers data on patient revenues and health care spending received during a time period specified by the commissioner. The commissioner may also collect data on health care revenues and spending from group purchasers

of health care. Health care providers and group purchasers doing business in the state shall provide the data requested by the commissioner at the times and in the form specified by the commissioner. Professional licensing boards and state agencies responsible for licensing, registering, or regulating providers shall cooperate fully with the commissioner in achieving compliance with the reporting requirements.

Sec. 18. Minnesota Statutes 1994, section 62J.45, subdivision 1, is amended to read:

Subdivision 1. [STATEMENT OF PURPOSE.] It is the intention of the legislature to create a public-private mechanism for the collection of health care costs, quality, and outcome data, to the extent administratively efficient and effective. This integrated data system will provide clear, usable information on the cost, quality, and structure of health care services in Minnesota.

The health reform initiatives being implemented rely heavily on the availability of valid, objective data that currently are collected in many forms within the health care industry. Data collection needs cannot be efficiently met by undertaking separate data collection efforts.

The data institute created in this section will be a partnership between the commissioner of health and a board of directors representing health carriers and other group purchasers, health care providers, and consumers. These entities will work together to establish a centralized cost and quality data system that will be used by the public and private sectors. The data collection advisory committee and the practice parameter advisory committee shall provide assistance to the institute through the commissioner of health.

Sec. 19. Minnesota Statutes 1994, section 62J.45, subdivision 2, is amended to read:

Subd. 2. [DEFINITIONS.] For purposes of this section, the following definitions apply.

(a) "Board" means the board of directors of the data institute.

(b) "Encounter level data" means data related to the utilization of health care services by, and the provision of health care services to individual patients, enrollees, or insureds, including claims data, abstracts of medical records, and data from patient interviews and patient surveys.

(c) "Health carrier" has the definition provided in section 62A.011, subdivision 2.

Sec. 20. Minnesota Statutes 1994, section 62J.45, subdivision 4, is amended to read:

Subd. 4. [DATA COLLECTION PLAN.] The commissioner, in consultation with the board of the institute and the data collection advisory committee, shall develop and implement a plan that:

(1) provides data collection objectives, strategies, priorities, cost estimates, administrative and operational guidelines, and implementation timelines for the data institute; and

(2) identifies the encounter level data needed for the commissioner to carry out the duties assigned in this chapter.

The plan must take into consideration existing data sources and data sources that can easily be made uniform for linkages to other data sets.

This plan shall be prepared by October 31, 1993.

Sec. 21. Minnesota Statutes 1994, section 62J.45, subdivision 5, is amended to read:

Subd. 5. [COMMISSIONER'S DUTIES.] (a) The commissioner shall establish a public/private data institute in conjunction with health care providers, health carriers and other group purchasers, and consumers, to collect and process encounter level data that are required to be submitted to the commissioner under this chapter. The commissioner shall not collect encounter level data from individual health care providers until standardized forms and procedures are available. The commissioner shall establish a board of directors comprised of members of the public and private sector to provide oversight for the administration and operation of the institute. The commissioner and the board shall comply with section 62J.30, subdivision 12.

(b) Until the data institute is operational, the commissioner may collect encounter level data required to be submitted under this chapter.

(c) The commissioner, with the advice of the board, shall establish policies for the disclosure of data to consumers, purchasers, providers, integrated service networks, and plans for their use in analysis to meet the goals of this chapter, as well as for the public disclosure of data to other interested parties. The disclosure policies shall ensure that consumers, purchasers, providers, integrated service networks, and plans have access to institute data for use in analysis to meet the goals of this chapter at the same time that data is provided to the data analysis unit in the department of health.

(d) (c) The commissioner, with the advice of the board, may require those requesting data from the institute to contribute toward the cost of data collection through the payments of fees. Entities supplying data to the institute shall not be charged more than the actual transaction cost of providing the data requested.

(e) (d) The commissioner may intervene in the direct operation of the institute, if this is necessary in the judgment of the commissioner to accomplish the institute's duties. If the commissioner intends to depart from the advice and recommendations of the board, the commissioner shall inform the board of the intended departure, provide the board with a written explanation of the reasons for the departure, and give the board the opportunity to comment on the departure.

Sec. 22. Minnesota Statutes 1994, section 62J.45, subdivision 10, is amended to read:

Subd. 10. [DATA COLLECTION.] The commissioner, in consultation with the data institute board, may select a vendor to:

(1) collect the encounter level data required to be submitted by group purchasers under sections 62J.38 and 62J.42, state agencies under section 62J.40, and health care providers under sections 62J.41 and 62J.42, using, to the greatest extent possible, standardized forms and procedures;

(2) collect the encounter level data required for the initiatives of the data analysis unit, under sections 62J.30 to 62J.34 62J.33, using, to the greatest extent possible, standardized forms and procedures;

(3) process the data collected to ensure validity, consistency, accuracy, and completeness, and as appropriate, merge data collected from different sources;

(4) provide unaggregated, encounter level data to the data analysis unit within the department of health; and

(5) carry out other duties assigned in this section.

Sec. 23. Minnesota Statutes 1994, section 62J.48, is amended to read:

62J.48 [CRITERIA FOR REIMBURSEMENT.]

All ambulance services licensed under section 144.802 are eligible for reimbursement under the integrated service network system and the regulated all-payer option. The commissioner shall require community integrated service networks, and integrated service networks, and all-payer insurers to adopt the following reimbursement policies.

(1) All scheduled or prearranged air and ground ambulance transports must be reimbursed if requested by an attending physician or nurse, and, if the person is an enrollee in an integrated service network or community integrated service network, if approved by a designated representative of an integrated service network or a community service network who is immediately available on a 24-hour basis. The designated representative must be a registered nurse or a physician assistant with at least three years of critical care or trauma experience, or a licensed physician.

(2) Reimbursement must be provided for all emergency ambulance calls in which a patient is transported or medical treatment rendered.

(3) Special transportation services must not be billed or reimbursed if the patient needs medical attention immediately before transportation.

Sec. 24. Minnesota Statutes 1994, section 62J.65, is amended to read:

62J.65 [EXEMPTION.]

Patient revenues derived from non-Minnesota patients are exempt from the regulated all-payer system and Medicare balance billing prohibition under section 62J.25.

Sec. 25. Minnesota Statutes 1994, section 62L.08, subdivision 8, is amended to read:

Subd. 8. [FILING REQUIREMENT.] No later than July 1, 1993, and each year thereafter, a health carrier that offers, sells, issues, or renews a health benefit plan for small employers shall file with the commissioner the index rates and must demonstrate that all rates shall be within the rating restrictions defined in this chapter. Such demonstration must include the allowable range of rates from the index rates and a description of how the health carrier intends to use demographic factors including case characteristics in calculating the premium rates. The rates shall not be approved, unless the commissioner has determined that the rates are reasonable. In determining reasonableness, the commissioner shall consider the growth rates applied under section 62J.04, subdivision 1, paragraph (b), to the calendar year or years that the proposed premium rate would be in effect, actuarially valid changes in risk associated with the enrollee population, and actuarially valid changes as a result of statutory changes in Laws 1992, chapter 549. For premium rates proposed to go into effect between July 1, 1993 and December 31, 1993, the pertinent growth rate is the growth rate applied under section 62J.04, subdivision 1, paragraph (b), to calendar year 1994.

Sec. 26. Minnesota Statutes 1994, section 62N.05, subdivision 2, is amended to read:

Subd. 2. [REQUIREMENTS.] The commissioner shall include in the rules requirements that will ensure that the annual rate of growth of an integrated service network's aggregate total revenues received from purchasers and enrollees, after adjustments for changes in population size and risk, does not exceed the growth limit established in section 62J.04. A network's aggregate total revenues for purposes of these growth limits are net of the contributions, surcharges, taxes, and assessments listed in section 62P.04, subdivision 2, that the network pays. The commissioner may include in the rules the following:

(1) requirements for licensure, including a fee for initial application and an annual fee for renewal;

(2) quality standards;

(3) requirements for availability and comprehensiveness of services;

(4) requirements regarding the defined population to be served by an integrated service network;

(5) requirements for open enrollment;

(6) provisions for incentives for networks to accept as enrollees individuals who have high risks for needing health care services and individuals and groups with special needs;

(7) prohibitions against disenrolling individuals or groups with high risks or special needs;

(8) requirements that an integrated service network provide to its enrollees information on coverage, including any limitations on coverage, deductibles and copayments, optional services available and the price or prices of those services, any restrictions on emergency services and services provided outside of the network's service area, any responsibilities enrollees have, and describing how an enrollee can use the network's enrollee complaint resolution system;

(9) requirements for financial solvency and stability;

(10) a deposit requirement;

(11) financial reporting and examination requirements;

(12) limits on copayments and deductibles;

(13) mechanisms to prevent and remedy unfair competition;

(14) provisions to reduce or eliminate undesirable barriers to the formation of new integrated service networks;

(15) requirements for maintenance and reporting of information on costs, prices, revenues, volume of services, and outcomes and quality of services;

(16) a provision allowing an integrated service network to set credentialing standards for practitioners employed by or under contract with the network;

(17) a requirement that an integrated service network employ or contract with practitioners and other health care providers, and minimum requirements for those contracts if the commissioner deems requirements to be necessary to ensure that each network will be able to control expenditures and revenues or to protect enrollees and potential enrollees;

(18) provisions regarding liability for medical malpractice;

(19) provisions regarding permissible and impermissible underwriting criteria applicable to the standard set of benefits;

(20) a method or methods to facilitate and encourage appropriate provision of services by midlevel practitioners and pharmacists;

(21) a method or methods to assure that all integrated service networks are subject to the same regulatory requirements. All health carriers, including health maintenance organizations, insurers, and nonprofit health service plan corporations shall be regulated under the same rules, to the extent that the health carrier is operating an integrated service network or is a participating entity in an integrated service network;

(22) provisions for appropriate risk adjusters or other methods to prevent or compensate for adverse selection of enrollees into or out of an integrated service network; and

(23) rules prescribing standard measures and methods by which integrated service networks shall determine and disclose their prices, copayments, deductibles, out-of-pocket limits, enrollee satisfaction levels, and anticipated loss ratios.

Sec. 27. Minnesota Statutes 1994, section 62N.06, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZED ENTITIES.] (a) An integrated service network may be organized as a separate nonprofit corporation under chapter 302A, 317A, or 319A, or as a cooperative under chapter 308A.

(b) A nonprofit health carrier, as defined in section 62A.011, may establish and operate one or more integrated service networks without forming a separate corporation or cooperative, but only if all of the following conditions are met:

(i) an existing contract between the health carrier and a health care provider, for a term of less than seven years, that does not explicitly mention the provider's relationship within an integrated service network, or a future integrated service network, does not bind the health carrier or provider as applied to integrated service network services, except with the mutual consent of the health carrier and provider. This clause does not apply to contracts between a health carrier and its salaried employees;

(ii) the health carrier shall not apply toward the net worth, working capital, or deposit requirements of this chapter any assets used to satisfy net worth, working capital, deposit, or other financial requirements under any other chapter of Minnesota law;

(iii) the health carrier shall not include in its premiums for health coverage provided under any other chapter of Minnesota law, an assessment or surcharge relating to net worth, working capital, or deposit requirements imposed upon the integrated service network under this chapter; and

(iv) the health carrier shall not include in its premiums for integrated service network coverage under this chapter an assessment or surcharge relating to net worth working capital or deposit requirements imposed upon health coverage offered under any other chapter of Minnesota law.

Sec. 28. Minnesota Statutes 1994, section 62N.25, subdivision 5, is amended to read:

Subd. 5. [BENEFITS.] Community integrated service networks must offer the health maintenance organization benefit set, as defined in chapter 62D, and other laws applicable to entities regulated under chapter 62D, except that the community integrated service network may impose a deductible, not to exceed $1,000 per person per year, provided that out-of-pocket expenses on covered services do not exceed $3,000 per person or $5,000 per family per year without limit. The deductible must not apply to preventive health services as described in Minnesota Rules, part 4685.0801, subpart 8. Community networks and chemical dependency facilities under contract with a community network shall use the assessment criteria in Minnesota Rules, parts 9530.6600 to 9530.6660, when assessing enrollees for chemical dependency treatment.

Sec. 29. Minnesota Statutes 1994, section 62N.25, subdivision 7, is amended to read:

Subd. 7. [EXEMPTIONS FROM EXISTING REQUIREMENTS.] Community integrated service networks are exempt from the following requirements applicable to health maintenance organizations:

(1) conducting focused studies under Minnesota Rules, part 4685.1125;

(2) preparing and filing, as a condition of licensure, a written quality assurance plan, and annually filing such a plan and a work plan, under Minnesota Rules, parts 4685.1110 and 4685.1130;

(3) maintaining statistics under Minnesota Rules, part 4685.1200;

(4) filing provider contract forms under sections 62D.03, subdivision 4, and 62D.08, subdivision 1;

(5) reporting any changes in the address of a network provider or length of a provider contract or additions to the provider network to the commissioner within ten days under section 62D.08, subdivision 5. Community networks must report such information to the commissioner on a quarterly basis. Community networks that fail to make the required quarterly filing are subject to the penalties set forth in section 62D.08, subdivision 5; and

(6) preparing and filing, as a condition of licensure, a marketing plan, and annually filing a marketing plan, under sections 62D.03, subdivision 4, paragraph (l), and 62D.08, subdivision 1; and

(7) being a nonprofit corporation or local governmental unit as required in section 62D.02, subdivision 4. A community network may instead be any type of entity permitted to operate an integrated service network under section 62N.06, subdivision 1.

Sec. 30. Minnesota Statutes 1994, section 62N.381, subdivision 2, is amended to read:

Subd. 2. [RANGE OF RATES.] The reimbursement rate negotiated for a contract period must not be more than 20 percent above or below the individual ambulance service's current customary charges, plus the a rate of growth allowed under section 62J.04, subdivision 1 determined by the commissioner. If the network and ambulance service cannot agree on a reimbursement rate, each party shall submit their rate proposal along with supportive data to the commissioner.

Sec. 31. Minnesota Statutes 1994, section 62Q.01, subdivision 3, is amended to read:

Subd. 3. [HEALTH PLAN.] "Health plan" means a health plan as defined in section 62A.011 or a policy, contract, or certificate issued by a community integrated service network; or an integrated service network; or an all-payer insurer as defined in section 62P.02.

Sec. 32. Minnesota Statutes 1994, section 62Q.01, subdivision 4, is amended to read:

Subd. 4. [HEALTH PLAN COMPANY.] "Health plan company" means:

(1) a health carrier as defined under section 62A.011, subdivision 2;

(2) an integrated service network as defined under section 62N.02, subdivision 8; or

(3) an all-payer insurer as defined under section 62P.02; or

(4) a community integrated service network as defined under section 62N.02, subdivision 4a.

Sec. 33. Minnesota Statutes 1994, section 62Q.165, is amended to read:

62Q.165 [UNIVERSAL COVERAGE.]

It is the commitment of the state to achieve universal health coverage for all Minnesotans by July 1, 1997. Universal coverage is achieved when every Minnesotan has access to health care and the ability to pay for it. In order to achieve this commitment, the following goals must be met:

(1) every Minnesotan shall have health coverage and shall contribute to the costs of coverage based on ability to pay;

(2) no Minnesotan shall be denied coverage or forced to pay more because of health status;

(3) quality health care services must be accessible to all Minnesotans;

(4) all health care purchasers must be placed on an equal footing in the health care marketplace; and

(5) a comprehensive and affordable health plan must be available to all Minnesotans.

It is the goal of the state to:

(1) achieve universal coverage through private market reforms;

(2) create private market incentives so Minnesotans have a financially secure funding source from which to pay health care expenditures;

(3) empower consumers to make educated choices in the health care market; and

(4) encourage the development of an efficient marketplace which will contain costs through healthy competition.

Sec. 34. Minnesota Statutes 1994, section 62Q.18, subdivision 7, is amended to read:

Subd. 7. [PORTABILITY OF COVERAGE.] (a) Effective July 1, 1997, no health plan company shall offer, sell, issue, or renew any group or individual health plan that does not provide for guaranteed issue, with full credit for previous qualifying coverage against any preexisting condition limitation that would otherwise apply under subdivision 5. No health plan shall be subject to any other type of underwriting restriction.

(b) Effective July 1, 1995, no health plan company shall offer, sell, issue, or renew any group or individual health plan that does not, with respect to individuals who maintain continuous coverage and whose immediately preceding qualifying coverage is a health plan issued by medical assistance under chapter 256B, general assistance medical care under chapter 256D, or the MinnesotaCare program established under section 256.9352,

(1) make coverage available on a guaranteed issue basis; and

(2) give full credit for previous continuous coverage against any applicable preexisting condition limitation or exclusion.

(c) Paragraph (b) applies to individuals whose immediately preceding qualifying coverage is medical assistance under chapter 256B, general assistance medical care under chapter 256D, or the MinnesotaCare program established under section 256.9352, only if the individual has disenrolled from the public program or will disenroll upon issuance of the new coverage. Paragraph (b) does not apply if the public program uses or will use public funds to pay the premiums for an individual who remains or will remain enrolled in the public program. No public funds may be used to purchase private coverage available under this paragraph. This paragraph does not prohibit public payment of premiums to continue private sector coverage originally obtained prior to enrollment in the public program, where otherwise permitted by state or federal law. Portability coverage under this paragraph is subject to the provisions of section 62A.65, subdivision 5, clause (b).

(d) Effective July 1, 1994, no health plan company shall offer, sell, issue, or renew any group health plan that does not, with respect to individuals who maintain continuous coverage and who qualify under the group's eligibility requirements:

(1) make coverage available on a guaranteed issue basis; and

(2) give full credit for previous continuous coverage against any applicable preexisting condition limitation or exclusion.

To the extent that this paragraph subdivision conflicts with chapter 62L, with respect to small employers as defined in section 62L.02, chapter 62L governs, regardless of whether the group sponsor is a small employer as defined in section 62L.02. This subdivision is subject to the provisions of chapter 62L regarding eligible employees and late entrants.

Sec. 35. Minnesota Statutes 1994, section 62Q.30, is amended to read:

62Q.30 [EXPEDITED FACT FINDING AND DISPUTE RESOLUTION PROCESS.]

The commissioner shall establish an expedited fact finding and dispute resolution process to assist enrollees of integrated service networks and all-payer insurers community integrated service networks with contested treatment, coverage, and service issues to be in effect July 1, 1997. The commissioner may order an integrated service network or an all-payer insurer to provide or pay for a service that is within the universal standard benefits set. If the disputed issue relates to whether a service is appropriate and necessary, the commissioner shall issue an order only after consulting with appropriate experts knowledgeable, trained, and practicing in the area in dispute, reviewing pertinent literature, and considering the availability of satisfactory alternatives. The commissioner shall take steps including but not limited to fining, suspending, or revoking the license of an integrated service network or an all-payer insurer a community integrated service network that is the subject of repeated orders by the commissioner that suggests a pattern of inappropriate underutilization.

Sec. 36. Minnesota Statutes 1994, section 62Q.41, is amended to read:

62Q.41 [ANNUAL IMPLEMENTATION REPORT.]

The commissioner of health, in consultation with the Minnesota health care commission, shall develop an annual implementation report to be submitted to the legislature each year beginning January 1, 1995, describing the progress and status of rule development and implementation of the integrated service network system and the regulated all-payer option, and providing recommendations for legislative changes that the commissioner determines may be needed.

Sec. 37. [62Q.42] [COMPARATIVE INFORMATION ON HEALTH PLAN COMPANIES.]

Health plan companies shall include with all bills and financial statements sent to enrollees a statement informing enrollees that information comparing the cost and quality of services of health plan companies is available through the information clearinghouse within the department of health. This statement must include the address and phone number of the information clearinghouse.

Sec. 38. [62Q.43] [NETWORK REIMBURSEMENT DIFFERENTIALS.]

Notwithstanding sections 62A.02 and 72A.20, subdivision 15, a health plan company may require from its enrollees different copayments, coinsurance, deductibles, out-of-pocket expense limitations, and other enrollee cost-sharing provisions, depending upon whether the enrollees receive covered goods and services within a network of providers employed by or under contract with the health plan company. The differences in the cost-sharing provisions are solely within the discretion of the health plan company, except as otherwise provided in section 62Q.095. This section also applies when a health plan company contracts to use a network of providers established by an entity other than the health plan company.

Sec. 39. [62Q.44] [DEDUCTIBLES WITHOUT LIMIT.]

Health plans offered, issued, or renewed on or after January 1, 1996, by a health plan company may include deductibles without limit.

Sec. 40. Minnesota Statutes 1994, section 256.9352, subdivision 3, is amended to read:

Subd. 3. [FINANCIAL MANAGEMENT.] (a) The commissioner shall manage spending for the MinnesotaCare program in a manner that maintains a minimum reserve equal to five percent of the expected cost of state premium subsidies. The commissioner must make a quarterly assessment of the expected expenditures for the covered services for the remainder of the current fiscal year and for the following two fiscal years. The estimated expenditure shall be compared to an estimate of the revenues that will be deposited in the health care access fund. Based on this comparison, and after consulting with the chairs of the house ways and means committee and the senate finance committee, and the legislative commission on health care access, the commissioner shall make adjustments as necessary to ensure that expenditures remain within the limits of available revenues. The adjustments the commissioner may use must be implemented in this order: first, stop enrollment of single adults and households without children; second, upon 45 days' notice, stop coverage of single adults and households without children already enrolled in the MinnesotaCare program; third, upon 90 days' notice, decrease the premium subsidy amounts

by ten percent for families with gross annual income above 200 percent of the federal poverty guidelines; fourth, upon 90 days' notice, decrease the premium subsidy amounts by ten percent for families with gross annual income at or below 200 percent; and fifth, require applicants to be uninsured for at least six months prior to eligibility in the MinnesotaCare program. If these measures are insufficient to limit the expenditures to the estimated amount of revenue, the commissioner may further limit enrollment or decrease premium subsidies.

The reserve referred to in this subdivision is appropriated to the commissioner but may only be used upon approval of the commissioner of finance, if estimated costs will exceed the forecasted amount of available revenues after all adjustments authorized under this subdivision have been made.

By February 1, 1995, the department of human services and the department of health shall develop a plan to adjust benefit levels, eligibility guidelines, or other steps necessary to ensure that expenditures for the MinnesotaCare program are contained within the two percent taxes imposed under section 295.52 and the gross premiums tax imposed under section 60A.15, subdivision 1, paragraph (e), for fiscal year 1997.

(b) Notwithstanding paragraph (a), the commissioner shall proceed with the enrollment of single adults and households without children in accordance with section 256.9354, subdivision 5, paragraph (a), even if the expenditures do not remain within the limits of available revenues through fiscal year 1997 to allow the departments of human services and health to develop the plan required under paragraph (a).

Sec. 41. Minnesota Statutes 1994, section 256.9352, is amended by adding a subdivision to read:

Subd. 5. [CHOICE OF PLAN.] The commissioner shall develop and offer to enrollees one or more higher cost-sharing MinnesotaCare plans. These plans must require a deductible, and higher copayments and coinsurance than those required under section 256.9353. The higher cost-sharing plans must in all other respects comply with the requirements of sections 256.9351 to 256.9362. The commissioner shall reduce the premiums paid by enrollees who choose to be covered under a higher cost-sharing plan. The premium reduction for each plan must reflect all of the cost savings that result from the cost-sharing requirements of the plan.

Sec. 42. Minnesota Statutes 1994, section 256.9354, subdivision 5, is amended to read:

Subd. 5. [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO CHILDREN.] (a) Beginning October 1, 1994, "eligible persons" shall include all individuals and households with no children who have gross family incomes that are equal to or less than 125 percent of the federal poverty guidelines and who are not eligible for medical assistance without a spenddown under chapter 256B.

(b) Beginning October 1, 1995, "eligible persons" means all individuals and families who are not eligible for medical assistance without a spenddown under chapter 256B.

(c) All eligible persons under paragraphs (a) and (b) this subdivision are eligible for coverage through the MinnesotaCare program but must pay a premium as determined under sections 256.9357 and 256.9358. Individuals and families whose income is greater than the limits established under section 256.9358 may not enroll in the MinnesotaCare program.

Sec. 43. [REPEALER; REGULATED ALL-PAYER OPTION.]

Subdivision 1. [RAPO CHAPTER; SHORT-TERM LIMITS.] Minnesota Statutes 1994, sections 62P.01; 62P.02; 62P.03; 62P.04; 62P.05; 62P.07; 62P.09; 62P.11; 62P.13; 62P.15; 62P.17; 62P.19; 62P.21; 62P.23; 62P.25; 62P.27; 62P.29; 62P.31; and 62P.33, are repealed.

Subd. 2. [RAPO TIMETABLE.] Minnesota Statutes 1994, section 62J.017, is repealed.

Subd. 3. [RAPO AND TECHNOLOGY EVALUATION.] Minnesota Statutes 1994, section 62J.152, is repealed.

Sec. 44. [REPEALER; OTHER MINNESOTACARE PROVISIONS.]

Subdivision 1. [GROWTH LIMITS.] Minnesota Statutes 1994, section 62J.04, subdivisions 1, 1a, 7, and 9, are repealed.

Subd. 2. [TECHNOLOGY ADVISORY COMMITTEE.] Minnesota Statutes 1994, sections 13.99, subdivision 19a; 62J.15; and 62J.156, are repealed.

Subd. 3. [PRACTICE PARAMETER ADVISORY COMMITTEE.] Minnesota Statutes 1994, section 62J.32, subdivision 4, is repealed.

Subd. 4. [PRACTICE PARAMETER INITIATIVES.] Minnesota Statutes 1994, section 62J.34, is repealed.

Subd. 5. [UNIQUE PATIENT IDENTIFICATION NUMBERS.] Minnesota Statutes 1994, section 62J.54, subdivision 4; and 62J.55, are repealed.

Subd. 6. [PROHIBITION ON EXCLUSIVE PROVIDER CONTRACTS.] Minnesota Statutes 1994, section 62Q.09, is repealed.

Subd. 7. [UNIVERSAL MANDATE AND RELATED INSURANCE REFORM.] Minnesota Statutes 1994, sections 62Q.18, subdivisions 2, 3, 4, 6, 8, and 9, are repealed effective the day following final enactment.

Subd. 8. [MINIMUM LOSS RATIOS.] Minnesota Statutes 1994, sections 62A.021; and 62L.08, subdivision 11, are repealed effective the day following final enactment.

Subd. 9. [REQUEST FOR ERISA EXEMPTION.] Laws 1992, chapter 549, article 3, section 19, is repealed effective the day following final enactment.

Subd. 10. [24-HOUR COVERAGE.] Laws 1994, chapter 625, article 5, section 7, is repealed effective the day following final enactment.

Sec. 45. [EFFECTIVE DATES.]

Section 37 (comparative information on health plan companies) is effective August 1, 1995. Section 39 (deductibles without limit) is effective January 1, 1996. All other sections are effective the day following final enactment.

Section 1. [62S.01] [CITATION.]

This article shall be known and may be cited as the "medical care savings account act."

Sec. 2. [62S.02] [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] For purposes of this chapter the terms defined in this section have the meanings given.

Subd. 2. [ACCOUNT ADMINISTRATOR.] "Account administrator" means any of the following:

(1) a health plan company as defined in section 62Q.01, subdivision 4;

(2) a third-party administrator licensed under section 60A.23, subdivision 8;

(3) a certified public accountant licensed to practice in this state under section 326.19;

(4) an attorney licensed to practice in this state; or

(5) an employer that participates in the medical care savings account program, but with respect only to the employer's own plan and the plans of related organizations as defined in sections 302A.011, 317A.011, and 322B.03. For purposes of this clause, a self-employed individual is not an employer.

Subd. 3. [CONTRIBUTOR.] "Contributor" means a participant, a dependent of a participant, or an employer, who contributes money into a medical care savings account. For purposes of this subdivision, a self-employed individual who has employees is an employer.

Subd. 4. [DEDUCTIBLE.] "Deductible" means the total deductible for a participant and all the dependents of that participant for a plan year.

Subd. 5. [DEPENDENT.] "Dependent" means a participant's spouse, unmarried child who is under the age of 19 years, unmarried child under the age of 25 years who is a full-time student as defined in section 62A.301, dependent child of any age who is handicapped and who meets the eligibility criteria in section 62A.14, subdivision 2, or any other person whom state or federal law requires to be treated as a dependent for purposes of health plans. For the purpose of this definition, a child includes a child for whom the participant or the participant's spouse has been appointed legal guardian.

Subd. 6. [ELIGIBLE EXPENSE.] "Eligible expense" means an expense incurred by an individual for medical, dental, or vision care as described in section 213(d) of the Internal Revenue Code of 1986, as amended. Eligible expense includes expenses incurred by an individual for services received from a physician, as defined in subdivision 10. Eligible expense includes expenses for long-term care as described in section 62A.46, subdivision 2, or premiums for a long-term care policy as defined under that section.

Subd. 7. [HIGHER DEDUCTIBLE.] "Higher deductible" means a deductible of not less than $1,000 and not more than $5,000 for calendar year 1995. The commissioner of commerce shall annually adjust this minimum and maximum to reflect changes in the Consumer Price Index for urban consumers (CPI-U). The adjustment must be issued no later than October 1 of each year and must be based upon the most recent index available as of September 1 of that year.

Subd. 8. [MEDICAL CARE SAVINGS ACCOUNT OR ACCOUNT.] "Medical care savings account" or "account" means an account established by an individual, or by an employer on behalf of an employee, as part of a medical care savings account plan.

Subd. 9. [MEDICAL CARE SAVINGS ACCOUNT PLAN OR PLAN.] "Medical care savings account plan" or "plan" means an arrangement that meets the requirements of this chapter, including the following:

(1) the purchase by an employer or individual of a qualified higher deductible health plan for the benefit of a participant and the participant's dependents;

(2) contribution to a medical care savings account by a contributor; and

(3) an account administrator to administer the medical care savings account from which payment of claims is made.

Subd. 10. [PHYSICIAN.] "Physician" means: (1) a doctor of medicine or osteopathy licensed under chapter 147; (2) a doctor of dental surgery or of dental medicine licensed under chapter 150A; (3) a doctor of podiatric medicine licensed under chapter 153; (4) an optometrist licensed under chapter 148; or (5) a chiropractor licensed under chapter 148.

Subd. 11. [PARTICIPANT.] "Participant" means an employed, self-employed, or nonemployed individual who: (1) has established a medical care savings account, or has had a medical care savings account established by an employer on the individual's behalf; and (2) participates in a medical care savings account plan.

Subd. 12. [QUALIFIED HIGHER DEDUCTIBLE HEALTH PLAN.] "Qualified higher deductible health plan" means a health plan, as defined in section 62A.011, that provides for payments for covered benefits that exceed a specified higher deductible and that is purchased by an employer or individual for the benefit of a participant under a medical care savings account plan.

Subd. 13. [SELF-EMPLOYED INDIVIDUAL.] "Self-employed individual" has the meaning given in section 401(c) of the Internal Revenue Code of 1986, as amended.

Sec. 3. [62S.03] [ESTABLISHMENT.]

Subdivision 1. [EMPLOYERS.] Beginning January 1, 1996, an employer, except as otherwise provided by law, contract, or collective bargaining agreement, may offer to employees a medical care savings account plan, subject to the requirements of this chapter. The plan must be on a calendar year basis. For purposes of this subdivision, a self-employed individual who has employees is an employer.

An employer that offers a medical care savings account plan shall inform all employees in writing, before making any contributions, of the federal tax status of contributions made under this chapter.

Subd. 2. [INDIVIDUALS.] For tax years beginning on or after January 1, 1996, an employed, self-employed, or nonemployed individual may establish a medical care savings account and participate in a medical care savings account plan, subject to the requirements of this chapter. A plan established by an individual must be on a calendar

year basis, unless the individual's tax year is not on a calendar year basis, in which case the plan year must correspond with the individual's tax year.

Subd. 3. [CONTRIBUTIONS INTO ACCOUNT.] A contributor may deposit into a medical care savings account, on behalf of a participant, all or part of the deductible of the qualified higher deductible health plan purchased.

Sec. 4. [62S.04] [ADMINISTRATION.]

Subdivision 1. [NOTIFICATION.] No later than 30 days after an account administrator begins to administer an account, and no later than November 1 of subsequent years, the administrator shall notify in writing each participant of the date of the last business day of the medical care savings account plan year.

Subd. 2. [USE OF FUNDS.] The account administrator shall use the funds held in a medical care savings account solely for the purpose of paying the eligible expenses of the participant or the participant's dependents. Funds held in a medical care savings account must not be used to cover eligible expenses of a participant or a participant's dependents that are otherwise covered under private coverage, including, but not limited to, expenses covered by an automobile insurance policy or self-insured plan, workers' compensation insurance policy or self-insured plan, or another health coverage policy, contract, or certificate.

Subd. 3. [REIMBURSEMENT.] Upon receipt of documentation of eligible expenses incurred by a participant in the plan year, the account administrator shall reimburse the participant from the participant's account for eligible expenses. Eligible expenses incurred during a plan year and not submitted to the account administrator during that plan year, or submitted to the plan administrator during that plan year but not reimbursed during that plan year, may be reimbursed by the account administrator in the subsequent plan year.

Subd. 4. [ADVANCE TO PARTICIPANT.] If an employer makes contributions to a participant's medical care savings account on a periodic installment basis, the employer shall advance to the participant, interest free, the amount necessary to cover eligible expenses incurred by the participant that exceed the amount in the participant's medical care savings account at the time the expense is incurred, if the participant agrees in writing to repay the advance from future installments. The total amount advanced by an employer during a tax year must not exceed the total to be contributed by the employer to the participant's medical care savings account during that plan year.

Subd. 5. [CARRYOVER.] Money remaining in a participant's medical care savings account at the end of a plan year remains in the account for the next plan year, and may be used to pay for future eligible expenses of the participant or the participant's dependents.

Subd. 6. [PARTICIPATION AT START OF PLAN YEAR.] Employers that offer a medical care savings account plan may, at their option, allow employees to begin participation only at the start of a plan year. Employers may offer alternative health care coverage to employees who become eligible for or choose to enroll in employee-sponsored health care coverage during the interim period before the start of a plan year.

Subd. 7. [INTEREST.] A medical care savings account may earn interest, to be credited to the account, but the principal balance of the account, including accrued interest, must not vary in any way based upon market conditions.

Sec. 5. [62S.05] [TAXATION OF WITHDRAWALS.]

Subdivision 1. [WITHDRAWALS FOR OTHER PURPOSES.] A participant may withdraw money from a medical care savings account for any purpose other than a purpose described in section 62S.04, subdivision 2, only on the last business day of the medical care savings account plan year. Money withdrawn under this subdivision is subject to taxation as income to the extent provided in section 290.01, subdivision 19a.

Subd. 2. [BANKRUPTCY.] The disbursement of any assets of a medical care savings account as a result of a filing for protection under the federal bankruptcy code, United States Code, title 11, sections 101 to 1330, as amended, by a participant or other person for whose benefit the account was established is not considered a withdrawal for purposes of this section. The disbursement is not subject to taxation under chapter 290.

Sec. 6. [62S.06] [CHANGES IN PARTICIPANT STATUS.]

Subdivision 1. [DEATH OF PARTICIPANT.] (a) For purposes of this subdivision, the following terms have the meanings given:

(1) "Designated beneficiary" means one or more individuals designated in a written document, signed by the participant and given to the employer or account administrator prior to the participant's death, in which the

participant designates the individuals to receive the account balance upon the death of the participant. The designation may designate a class of unnamed individuals, such as "my children" or "my spouse."

(2) "Successor" means a person or persons entitled to the account balance of a deceased participant under chapter 524 or 525, including but not limited to, a personal representative or a successor described in section 524.3-401 or 524.3-1201.

(b) If the participant dies, a designated beneficiary has priority over a successor with respect to paragraph (c).

(c) Upon the death of a participant, the account administrator shall distribute the principal and accumulated interest of the medical care savings account to the designated beneficiary or successor of the participant, unless the participant's designated beneficiary or successor requests the account administrator to continue to administer the medical care savings account. If this request is made, the account administrator shall retain the account balance for use by the designated beneficiary or successor for eligible expenses, including health plan continuation premiums, and withdrawals under section 62S.05 until the medical care savings account fund balance is exhausted. If the account balance is distributed to the designated beneficiary or successor of the participant, the funds are subject to taxation to the extent provided in section 290.01, subdivision 19a, unless the participant's designated beneficiary or successor deposits the account balance in another medical care savings account within 60 days of the distribution.

Subd. 2. [CHANGES IN EMPLOYMENT STATUS.] (a) If an employee who was a participant in an employer's medical care savings account plan is no longer employed by the employer, the employee may transfer the account to the administrator of a medical care savings account plan offered by the employee's new employer. The employee must notify the new administrator of the request for transfer within 60 days after the employee's final day of employment with the previous employer. An employer sponsoring a medical care savings account plan shall accept all requests for account transfers by new employees, if the request for a transfer is made within this 60-day period, regardless of whether the new employee is then otherwise eligible to participate in the new employer's plan. The new administrator must arrange with the former administrator for transfer of the account, and the former administrator must transfer the full account balance promptly. An amount transferred under this paragraph is not subject to taxation.

(b) If the employee does not request a transfer under paragraph (a), the employee may request in writing to the former employer's account administrator, no later than 60 days after the employee's final day of employment, that the account remain with that administrator. If the administrator rejects the employee's request, the former employer shall mail a check payable to the former employee, in the amount of the former employee's account balance, to the employee's last known address no later than 30 days after the expiration of the 60-day period, or 30 days after rejecting the request, whichever is earlier. That amount is subject to taxation to the extent provided under section 290.01, subdivision 19a, unless the employee establishes or becomes a participant in another medical care savings account and deposits the full amount received from the former employer in that account, within 60 days of receipt.

Sec. 7. [REQUIREMENTS; HEALTH PLAN COMPANIES.]

Subdivision 1. [HEALTH PLAN REQUIREMENTS.] A qualified higher deductible health plan used in connection with a medical care savings account plan must meet all requirements applicable to the health plan under state or federal law, including but not limited to, coverage of child health supervision services and prenatal services without a deductible, copayment, or other coinsurance or dollar limitation requirements, as required under section 62A.047.

Subd. 2. [SMALL EMPLOYER MARKET AND REINSURANCE PARTICIPATION.] A health plan company that serves as an account administrator or issues a qualified higher deductible health plan in connection with a medical care savings account sponsored by a small employer as defined under section 62L.02, subdivision 26, must:

(1) actively participate in the small employer market under chapter 62L, including the active marketing of qualified plans in that market as required under section 62E.04, subdivision 3, and 62L.04, subdivision 1; and

(2) be a member of the health coverage reinsurance association established in section 62L.13 and must not elect nonparticipation in that association under section 62L.17.

Subd. 3. [RISK ADJUSTMENT PARTICIPATION.] A health plan company that serves as an account administrator or issues a qualified higher deductible health plan in connection with a medical care savings account shall be a member of and participate in the risk adjustment association established in section 62Q.03. If that association offers members an option to elect not to participate in risk adjustment, the health plan company shall not elect not to participate.

Sec. 8. Minnesota Statutes 1994, section 290.01, subdivision 19a, is amended to read:

Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For individuals, estates, and trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political or governmental subdivision, municipality, or governmental agency or instrumentality of any state other than Minnesota exempt from federal income taxes under the Internal Revenue Code or any other federal statute, and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code, except the portion of the exempt-interest dividends derived from interest income on obligations of the state of Minnesota or its political or governmental subdivisions, municipalities, governmental agencies or instrumentalities, but only if the portion of the exempt-interest dividends from such Minnesota sources paid to all shareholders represents 95 percent or more of the exempt-interest dividends that are paid by the regulated investment company as defined in section 851(a) of the Internal Revenue Code, or the fund of the regulated investment company as defined in section 851(h) of the Internal Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal government described in section 7871(c) of the Internal Revenue Code shall be treated as interest income on obligations of the state in which the tribe is located;

(2) the amount of income taxes paid or accrued within the taxable year under this chapter and income taxes paid to any other state or to any province or territory of Canada, to the extent allowed as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not be more than the amount by which the itemized deductions as allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the disallowance of itemized deductions under section 68 of the Internal Revenue Code of 1986, income tax is the last itemized deduction disallowed;

(3) the capital gain amount of a lump sum distribution to which the special tax under section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law Number 99-514, applies; and

(4) the amount of income taxes paid or accrued within the taxable year under this chapter and income taxes paid to any other state or any province or territory of Canada, to the extent allowed as a deduction in determining federal adjusted gross income. For the purpose of this paragraph, income taxes do not include the taxes imposed by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; and

(5) a withdrawal from a medical care savings account under section 62S.05, subdivision 1, other than a withdrawal that qualifies under section 62S.05, subdivision 2.

Sec. 9. Minnesota Statutes 1994, section 290.01, subdivision 19b, is amended to read:

Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For individuals, estates, and trusts, there shall be subtracted from federal taxable income:

(1) interest income on obligations of any authority, commission, or instrumentality of the United States to the extent includable in taxable income for federal income tax purposes but exempt from state income tax under the laws of the United States;

(2) if included in federal taxable income, the amount of any overpayment of income tax to Minnesota or to any other state, for any previous taxable year, whether the amount is received as a refund or as a credit to another taxable year's income tax liability;

(3) the amount paid to others not to exceed $650 for each dependent in grades kindergarten to 6 and $1,000 for each dependent in grades 7 to 12, for tuition, textbooks, and transportation of each dependent in attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363. As used in this clause, "textbooks" includes books and other instructional materials and equipment used in elementary and secondary schools in teaching only those subjects legally and commonly taught in public elementary and secondary schools in this state. "Textbooks" does

not include instructional books and materials used in the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship, nor does it include books or materials for, or transportation to, extracurricular activities including sporting events, musical or dramatic events, speech activities, driver's education, or similar programs. In order to qualify for the subtraction under this clause the taxpayer must elect to itemize deductions under section 63(e) of the Internal Revenue Code;

(4) to the extent included in federal taxable income, distributions from a qualified governmental pension plan, an individual retirement account, simplified employee pension, or qualified plan covering a self-employed person that represent a return of contributions that were included in Minnesota gross income in the taxable year for which the contributions were made but were deducted or were not included in the computation of federal adjusted gross income. The distribution shall be allocated first to return of contributions until the contributions included in Minnesota gross income have been exhausted. This subtraction applies only to contributions made in a taxable year prior to 1985;

(5) income as provided under section 290.0802;

(6) the amount of unrecovered accelerated cost recovery system deductions allowed under subdivision 19g;

(7) to the extent included in federal adjusted gross income, income realized on disposition of property exempt from tax under section 290.491; and

(8) to the extent not deducted in determining federal taxable income, the amount paid for health insurance of self-employed individuals as determined under section 162(l) of the Internal Revenue Code, except that the 25 percent limit does not apply. If the taxpayer deducted insurance payments under section 213 of the Internal Revenue Code of 1986, the subtraction under this clause must be reduced by the lesser of:

(i) the total itemized deductions allowed under section 63(d) of the Internal Revenue Code, less state, local, and foreign income taxes deductible under section 164 of the Internal Revenue Code and the standard deduction under section 63(c) of the Internal Revenue Code; or

(ii) the lesser of (A) the amount of insurance qualifying as "medical care" under section 213(d) of the Internal Revenue Code to the extent not deducted under section 162(l) of the Internal Revenue Code or excluded from income or (B) the total amount deductible for medical care under section 213(a); and

(9) contributions to and investment income attributable to medical care savings accounts, as defined in section 62S.02.

Sec. 10. Minnesota Statutes 1994, section 290.01, subdivision 19d, is amended to read:

Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL TAXABLE INCOME.] For corporations, there shall be subtracted from federal taxable income after the increases provided in subdivision 19c:

(1) the amount of foreign dividend gross-up added to gross income for federal income tax purposes under section 78 of the Internal Revenue Code;

(2) the amount of salary expense not allowed for federal income tax purposes due to claiming the federal jobs credit under section 51 of the Internal Revenue Code;

(3) any dividend (not including any distribution in liquidation) paid within the taxable year by a national or state bank to the United States, or to any instrumentality of the United States exempt from federal income taxes, on the preferred stock of the bank owned by the United States or the instrumentality;

(4) amounts disallowed for intangible drilling costs due to differences between this chapter and the Internal Revenue Code in taxable years beginning before January 1, 1987, as follows:

(i) to the extent the disallowed costs are represented by physical property, an amount equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, subdivision 7, subject to the modifications contained in subdivision 19e; and

(ii) to the extent the disallowed costs are not represented by physical property, an amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 290.09, subdivision 8;

(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the Internal Revenue Code, except that:

(i) for capital losses incurred in taxable years beginning after December 31, 1986, capital loss carrybacks shall not be allowed;

(ii) for capital losses incurred in taxable years beginning after December 31, 1986, a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be allowed;

(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a capital loss carryback to each of the three taxable years preceding the loss year, subject to the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and

(iv) for capital losses incurred in taxable years beginning before January 1, 1987, a capital loss carryover to each of the five taxable years succeeding the loss year to the extent such loss was not used in a prior taxable year and subject to the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed;

(6) an amount for interest and expenses relating to income not taxable for federal income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 291 of the Internal Revenue Code in computing federal taxable income;

(7) in the case of mines, oil and gas wells, other natural deposits, and timber for which percentage depletion was disallowed pursuant to subdivision 19c, clause (11), a reasonable allowance for depletion based on actual cost. In the case of leases the deduction must be apportioned between the lessor and lessee in accordance with rules prescribed by the commissioner. In the case of property held in trust, the allowable deduction must be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the trust, or if there is no provision in the instrument, on the basis of the trust's income allocable to each;

(8) for certified pollution control facilities placed in service in a taxable year beginning before December 31, 1986, and for which amortization deductions were elected under section 169 of the Internal Revenue Code of 1954, as amended through December 31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, subdivision 7;

(9) the amount included in federal taxable income attributable to the credits provided in Minnesota Statutes 1986, section 273.1314, subdivision 9, or Minnesota Statutes, section 469.171, subdivision 6;

(10) amounts included in federal taxable income that are due to refunds of income, excise, or franchise taxes based on net income or related minimum taxes paid by the corporation to Minnesota, another state, a political subdivision of another state, the District of Columbia, or a foreign country or possession of the United States to the extent that the taxes were added to federal taxable income under section 290.01, subdivision 19c, clause (1), in a prior taxable year;

(11) the following percentage of royalties, fees, or other like income accrued or received from a foreign operating corporation or a foreign corporation which is part of the same unitary business as the receiving corporation:

Taxable Year

Beginning After ................. Percentage

December 31, 1988 ........... 50 percent

December 31, 1990 ........... 80 percent;

(12) income or gains from the business of mining as defined in section 290.05, subdivision 1, clause (a), that are not subject to Minnesota franchise tax;

(13) the amount of handicap access expenditures in the taxable year which are not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code of 1986;

(14) the amount of qualified research expenses not allowed for federal income tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that the amount exceeds the amount of the credit allowed under section 290.068; and

(15) the amount of salary expenses not allowed for federal income tax purposes due to claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code of 1986, as amended through December 31, 1993; and

(16) to the extent included in federal taxable income for the taxable year, investment income attributable to a medical care savings account, as defined in section 62S.02.

Sec. 11. [EFFECTIVE DATE.]

Sections 1 to 10 (medical savings accounts) are effective January 1, 1996, and apply to all tax years beginning on or after that date.

Section 1. [548.061] [NONECONOMIC LOSSES; LIMITATION; NEGLIGENCE OF A HEALTH CARE PROVIDER.]

(a) In any action for injury against a health care provider based on professional negligence, the injured plaintiff shall be entitled to recover noneconomic losses to compensate for pain, suffering, inconvenience, physical impairment, disfigurement, and other nonpecuniary damage.

(b) In no action shall the amount of damages for noneconomic losses exceed $1,000,000 for any injured plaintiff.

(c) For purposes of this section, "health care provider" means a physician, surgeon, dentist, or other health care professional or hospital, including all persons or entities providing health care as defined in section 145.61, subdivisions 2 and 4, or a certified health care professional employed by or providing services as an independent contractor in a hospital.

(d) This section does not apply to a claim or action based on a health care provider's intentional denial of health care, nutrition, or hydration that, in reasonable medical judgment, has a significant possibility of sustaining the life of a patient, against the will and express direction of the patient, or, if the patient is incompetent, against that of the patient's agent, proxy, or guardian.

Sec. 2. Minnesota Statutes 1994, section 549.01, is amended to read:

549.01 [AGREEMENT AS TO FEES OF ATTORNEY.]

Subdivision 1. [DEFINITIONS.] For purposes of this section:

(1) "health care provider" means a physician, surgeon, dentist, or other health care professional or hospital, including all persons or entities providing health care as defined in section 145.61, subdivisions 2 and 4, or a certified health care professional employed by or providing services as an independent contractor in a hospital; and

(2) "contingency fee" means any fee for professional legal services which is in whole or in part dependent upon the recovery of any amount of damages, whether through judgment or settlement.

Subd. 2. [FEES GENERALLY.] Other than as provided in subdivision 3, a party shall have an unrestricted right to agree with an attorney as to compensation for services, and the measure and mode thereof; but certain sums may be allowed to the prevailing party for expenses in an action, which are termed costs.

Subd. 3. [CONTINGENCY FEES; ACTIONS AGAINST A HEALTH CARE PROVIDER.] (a) An attorney shall not contract for or collect a contingency fee for representing any person seeking damages in connection with an action or claim for injury or damage against a health care provider based upon the person's alleged professional negligence in excess of the following limits:

(1) 40 percent of the first $50,000 recovered;

(2) 33-1/3 percent of the next $50,000 recovered;

(3) 20 percent of the next $400,000 recovered; and

(4) ten percent of any amount recovered above $500,000.

The limitations apply regardless of whether the recovery is by settlement, arbitration, or judgment, or whether the person for whom the recovery is made is a responsible adult, an infant, or a person of unsound mind.

(b) If the judgment, arbitration award, or settlement includes periodic or future payments of damages, the amount recovered for purposes of this section is the cost of the annuity or trust established to make the payments, or if there is no annuity or trust, the present value of the payments.

(c) This subdivision does not apply to a claim or action based on a health care provider's intentional denial of health care, nutrition, or hydration that, in reasonable medical judgment, has a significant possibility of sustaining the life of a patient, against the will and express direction of the patient, or, if the patient is incompetent, against that of the patient's agent, proxy, or guardian.

Subd. 4. [VIOLATION OF SECTION.] A fee contracted for in violation of this section is void and unenforceable. A claimant affected by a violation of this section may bring an action in the court in which the claim was or could have been brought, for damages in the amount of three times the fee improperly contracted for or collected, reasonable attorney fees, and other relief to which the person may be entitled.

Sec. 3. Minnesota Statutes 1994, section 595.02, subdivision 5, is amended to read:

Subd. 5. [WAIVER OF PRIVILEGE FOR HEALTH CARE PROVIDERS.] A party who commences an action or makes a claim for malpractice, error, mistake, or failure to cure, whether based on contract or tort, against a health care provider on the person's own behalf or in a representative capacity, waives in that action or claim any privilege existing under subdivision 1, paragraphs (d) and (g), as to any information or opinion in the possession of a health care provider who has examined or cared for the party or other person whose health or medical condition has been placed in controversy in the action or claim. This waiver must permit all parties to the action or claim, and their attorneys or authorized representatives, to informally discuss the information or opinion with the health care provider if the provider consents. Prior to an informal discussion with a health care provider, the defendant must mail written notice to the other party at least 15 days before the discussion. The plaintiff's attorney or authorized representative must have the opportunity to be present at any informal discussion. Appropriate medical authorizations permitting discussion must be provided by the party commencing the action upon request from any other party.

A health care provider may refuse to consent to the discussion but, in that event, the party seeking the information or opinion may take the deposition of the health care provider with respect to that information and opinion, without obtaining a prior court order.

For purposes of this subdivision, "health care provider" means a physician, surgeon, dentist, or other health care professional or hospital, including all persons or entities providing health care as defined in section 145.61, subdivisions 2 and 4, or a certified health care professional employed by or providing services as an independent contractor in a hospital.

Sec. 4. Minnesota Statutes 1994, section 604.02, is amended by adding a subdivision to read:

Subd. 4. [APPORTIONMENT OF DAMAGES; MEDICAL MALPRACTICE.] Notwithstanding subdivisions 1 to 3, for purposes of medical malpractice actions, when two or more persons are jointly liable, contributions to awards shall be in proportion to the percentage of fault attributable to each.

Sec. 5. Minnesota Statutes 1994, section 604.11, is amended by adding a subdivision to read:

Subd. 4. [PAYMENT OF ATTORNEY FEES OF PREVAILING PARTY.] In an action for medical malpractice, each prevailing party shall be reimbursed for its reasonable attorney fees and expenses by the nonprevailing party or parties. The amount of the reasonable attorney fees and expenses must be determined by agreement of the parties or by the court upon motion. This subdivision does not apply to a claim or action based on a health care provider's intentional denial of health care, nutrition, or hydration that, in reasonable medical judgment, has a significant possibility of sustaining the life of a patient, against the will and express direction of the patient, or, if the patient is incompetent, against that of the patient's agent, proxy, or guardian.

Sec. 6. [EFFECTIVE DATE.]

Sections 1 (noneconomic damage) and 4 (apportionment of damages) are effective the day following final enactment and apply to claims and causes of action arising on or after that date. Sections 2 (contingent fee limit), 3 (waiver of privilege), and 5 (payment of winner's attorney fees) are effective January 1, 1996, and apply to claims made and causes of action commenced on or after that date.

Section 1. [62L.055] [INDEX RATES FOR QUALIFIED ASSOCIATIONS.]

A separate index rate may be applied by a health carrier to each qualified association, provided that:

(1) the premium rate applied to participating small employer members of the qualified association is no more than 25 percent above and no more than 25 percent below the index rate applied to the qualified association, irrespective of when members applied for health coverage; and

(2) the index rate applied by a health carrier to a qualified association is no more than 20 percent above and no more than 20 percent below the index rate applied by the health carrier to any other qualified association or to any small employer.

Sec. 2. [145.87] [LEGISLATIVE FINDINGS ON BENEFITS OF BREAST-FEEDING.]

The legislature finds and declares that there is overwhelming evidence in the medical literature that babies be breast fed, unless medically contraindicated, in order to attain an optimal healthy start. Despite such evidence, nearly one-half of all new mothers are still choosing formula over breast-feeding before they leave the hospital.

The legislature further finds and declares that breast milk offers better nutrition, immunity, and digestion, and may raise a baby's IQ. In addition to other benefits such as improved mother-baby bonding, its encouragement has been established as a major goal of this decade by the World Health Organization and UNICEF. The social constraints of modern society militate against the choice of breast-feeding and lead new mothers with demanding time schedules to opt for formula feeding for reasons such as embarrassment and the fear of social ostracism.

The promotion of family values and infant health demand putting an end to the vicious cycle of embarrassment and ignorance that constricts women and men alike in the subject of breast-feeding and represents hostility to mothers and babies in our culture based on archaic and outdated moral taboos. Any genuine promotion of family values should encourage public acceptance of this most basic act of nurture between mother and baby, and no mother should be made to feel socially ostracized for breast-feeding her baby.

The legislature finally finds and declares that the breast-feeding of a baby is an important and basic act of nature which must be encouraged in the interests of maternal and child health and family values.

Sec. 3. [145.871] [BREAST-FEEDING.]

A mother may breast-feed her baby in any location, public or private, where the mother is otherwise authorized to be, irrespective of whether the nipple of the mother's breast is uncovered during or incidental to the breast-feeding.

Sec. 4. [145.872] [FACILITIES; BREAST-FEEDING POLICY.]

It is recommended that a facility providing maternity services or newborn infant care comply with the following requirements. The facility may:

(1) have a written breast-feeding policy;

(2) train all health care staff in the skills necessary to implement this policy;

(3) inform all pregnant women about the benefits and management of breast-feeding;

(4) help mothers who choose to breast-feed initiate breast-feeding within half an hour of birth;

(5) teach mothers who choose to breast-feed how to breast-feed and how to maintain lactation, even if separated from their infants;

(6) give newborn infants of mothers who choose to breast-feed no food or drink other than breast milk, unless medically indicated;

(7) practice "rooming in" by allowing mothers and infants to remain together 24 hours a day;

(8) encourage breast-feeding on demand for mothers who choose to breast-feed;

(9) give no artificial teats or pacifiers to breast-feeding infants; and

(10) encourage the establishment of breast-feeding support groups and refer mothers who choose to breast-feed to them on discharge from the hospital or clinic.

Sec. 5. Minnesota Statutes 1994, section 256.9353, subdivision 1, is amended to read:

Subdivision 1. [COVERED HEALTH SERVICES.] "Covered health services" means the health services reimbursed under chapter 256B, with the exception of inpatient hospital services, special education services, private duty nursing services, adult dental care services other than preventive services, orthodontic services, medical transportation services, personal care assistant and case management services, hospice care services, nursing home or intermediate care facilities services, inpatient mental health services, and chemical dependency services. Outpatient mental health services covered under the MinnesotaCare program are limited to diagnostic assessments, psychological testing, explanation of findings, medication management by a physician, day treatment, partial hospitalization, and individual, family, and group psychotherapy. MinnesotaCare shall not cover elective abortion services. An "elective abortion" means an abortion other than where, in the professional judgment of the attending physician, which is a medical judgment that would be made by a reasonably prudent physician, knowledgeable about the case and the treatment possibilities with respect to the medical conditions involved, the life of the female would be endangered or substantial and irreversible impairment of a major bodily function would result if the fetus were carried to term; where the pregnancy is the result of criminal sexual conduct in the first or second degree committed with force or violence, and the incident is reported within 48 hours after the victim becomes physically able to report the rape; or where the pregnancy is the result of incest and the incident and relative are reported to a valid law enforcement agency prior to the abortion. Covered health services shall be expanded as provided in this section.

Sec. 6. Minnesota Statutes 1994, section 617.23, is amended to read:

617.23 [INDECENT EXPOSURE; PENALTIES.]

(a) Every person who shall willfully and lewdly expose the person's body, or the private parts thereof, in any public place, or in any place where others are present, or shall procure another to expose private parts, and every person who shall be guilty of any open or gross lewdness or lascivious behavior, or any public indecency other than hereinbefore specified, shall be guilty of a misdemeanor.

(b) A person is guilty of a gross misdemeanor if the person violates this section after having been previously convicted of violating this section, sections 609.342 to 609.3451, or a statute from another state in conformity with any of those sections.

(c) Notwithstanding any other provision of law, a woman may breast-feed in any public or private location where she is otherwise authorized to be, irrespective of whether the nipple of the mother's breast is uncovered during or incidental to the breast-feeding.

Sec. 7. [HEALTH COMMISSIONER; STUDIES AND REPORTS.]

Subdivision 1. [ALTERNATIVE LICENSING MODEL FOR RURAL HOSPITALS.] (a) The commissioner of health, through the office of rural health and primary care, shall conduct a study of rural health care access needs and present recommendations on the need for an alternative licensing model for rural hospitals. In conducting this study, the commissioner shall consult regularly with the rural health advisory committee and the regional coordinating boards.

The study must first examine:

(1) the projected demographics of rural populations;

(2) access to emergency care, obstetrics, and other traditional hospital-based services;

(3) access issues related to transportation;

(4) health care needs of different regions of the state, including those areas where access to care may be threatened by the financial instability of local hospitals; and

(5) other factors related to access to rural health care and hospital-based services.

(b) Based upon this examination of access to health care in rural areas, the commissioner shall evaluate the need for and the feasibility of implementing an alternative licensing model for rural hospitals. This evaluation must consider:

(1) the goals of an alternative licensing model;

(2) federal and state regulatory barriers and options for reconfiguring traditional hospital-based health care services; and

(3) the feasibility of implementing an alternative licensing model, including the potential for integration with integrated networks and likelihood of obtaining a Medicare waiver and other necessary federal law changes.

If the commissioner determines that a need for an alternative licensing model exists and implementation is feasible, the commissioner shall identify changes needed in federal and state law, and develop draft legislation for a Minnesota-specific alternative licensing model.

(c) The commissioner shall present a preliminary report to the legislature by February 1, 1996. This preliminary report must summarize rural access needs and present initial recommendations on the need for an alternative licensing model for rural hospitals. The commissioner shall present a final report to the legislature by December 15, 1996. This final report must include detailed recommendations related to a Minnesota-specific alternative model, and draft legislation necessary to implement these recommendations.

Subd. 2. [STUDY OF REGULATORY BARRIERS.] The rural health advisory committee, in consultation with the regional coordination boards, shall examine federal and state regulatory barriers that limit rural access to care or limit the ability of rural health care providers to provide care efficiently, without improving the quality of care. The commissioner of health shall provide staff and technical assistance to the advisory committee and the regional coordinating boards. The barriers to be studied must include, but are not limited to:

(1) requirements for emergency room staffing that increase hospital costs and limit access to care;

(2) limits on the ability of nurses to prescribe and administer prescription drugs under a physician's supervision in emergency situations;

(3) state and federal inspection and regulatory requirements that are duplicative and increase administrative costs;

(4) physician supervision requirements that limit the use of physician assistants; and

(5) the requirement that a hospital and its attached nursing home have separate directors of nursing.

The advisory committee shall present recommendations for eliminating these and other regulatory barriers to the commissioner of health by December 1, 1995. The commissioner of health shall consider these recommendations, and shall present recommendations and draft legislation to the legislature on any needed changes in state and federal regulatory requirements, by February 1, 1996.

Sec. 8. [HUMAN SERVICES COMMISSIONER: IMPLEMENTATION PLAN; REIMBURSEMENT USING RESOURCE BASED RELATIVE VALUE SCALE.]

The commissioner of human services shall develop an implementation plan to reimburse physicians and other medical assistance providers using a resource based relative value scale. The resource based relative value scale may incorporate elements of the Medicare resource based relative value scale, but must use a Minnesota specific multiplier. The commissioner shall present the implementation plan to the legislature by December 15, 1995.

Sec. 9. [COMMISSIONER OF ADMINISTRATION; MINNESOTACARE PROGRAM ADMINISTRATION RECOMMENDATIONS.]

The commissioner of administration shall study the potential effectiveness of contracting with a private sector third-party administrator to administer the MinnesotaCare program. The commissioner shall determine whether the use of a third-party administrator to determine enrollee eligibility and process provider claims will reduce state administrative costs, improve the accuracy and timeliness of eligibility determination and claims payment, and allow effective coordination of MinnesotaCare with the medical assistance program and county social service agencies. The commissioner shall present recommendations to the legislature by February 1, 1996.

Sec. 10. [EFFECTIVE DATE.]

This article is effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to health; modifying MinnesotaCare; prohibiting the collection of individual-level data; allowing for-profit integrated networks; modifying eligibility and premiums for the MinnesotaCare program; repealing the regulated all-payer option, growth limits, certain insurance provisions and other initiatives; authorizing and regulating medical care savings accounts; requiring malpractice reform; authorizing health carriers to apply index rates to qualified associations; recognizing the benefits of breast-feeding and eliminating criminal penalties; modifying the definition of covered health services in regard to abortion services; providing for certain studies, reports, and plans; amending Minnesota Statutes 1994, sections 62A.65, subdivisions 3 and 7; 62J.04, subdivision 3; 62J.045, subdivision 3; 62J.06; 62J.09, subdivision 1a; 62J.17, subdivision 1; 62J.22; 62J.30, subdivisions 1, 3, 6, 7, 10, 11, and by adding a subdivision; 62J.31, subdivision 1; 62J.35, subdivision 1; 62J.45, subdivisions 1, 2, 4, 5, and 10; 62J.48; 62J.65; 62L.08, subdivision 8; 62N.05, subdivision 2; 62N.06, subdivision 1; 62N.25, subdivisions 5 and 7; 62N.381, subdivision 2; 62Q.01, subdivisions 3 and 4; 62Q.165; 62Q.18, subdivision 7; 62Q.30; 62Q.41; 256.9352, subdivision 3, and by adding a subdivision; 256.9353, subdivision 1; 256.9354, subdivision 5; 290.01, subdivisions 19a, 19b, and 19d; 549.01; 595.02, subdivision 5; 604.02, by adding a subdivision; 604.11, by adding a subdivision; and 617.23; proposing coding for new law in Minnesota Statutes, chapters 62L; 62Q; 62S; 145; and 548; repealing Minnesota Statutes 1994, sections 13.99, subdivision 19a; 62A.021; 62J.017; 62J.04, subdivisions 1, 1a, 7, and 9; 62J.15; 62J.152; 62J.156; 62J.32, subdivision 4; 62J.34; 62J.54, subdivision 4; 62J.55; 62L.08, subdivision 11; 62P.01; 62P.02; 62P.03; 62P.04; 62P.05; 62P.07; 62P.09; 62P.11; 62P.13; 62P.15; 62P.17; 62P.19; 62P.21; 62P.23; 62P.25; 62P.27; 62P.29; 62P.31; 62P.33; 62Q.09; and 62Q.18, subdivisions 2, 3, 4, 6, 8, and 9; Laws 1992, chapter 549, article 3, section 19; Laws 1994, chapter 625, article 5, section 7."

Signed: Steve Sviggum

Sviggum moved that the Minority Report on H. F. No. 1077 be substituted for the Majority Report and that the Minority Report be now adopted.

A roll call was requested and properly seconded.

On the motion of Carruthers and on the demand of 10 members, a call of the House was ordered. The following members answered to their names:

Abrams       Frerichs     Kraus        Onnen        Solberg
Anderson, B. Garcia       Krinkie      Opatz        Stanek
Bakk         Girard       Larsen       Orenstein    Sviggum
Bertram      Goodno       Leighton     Orfield      Swenson, D.
Bettermann   Greenfield   Leppik       Osskopp      Swenson, H.
Bishop       Greiling     Lieder       Osthoff      Sykora
Boudreau     Haas         Lindner      Ostrom       Tomassoni
Bradley      Hackbarth    Long         Otremba      Tompkins
Broecker     Harder       Lourey       Ozment       Trimble
Carlson      Hasskamp     Luther       Paulsen      Tuma
Carruthers   Hausman      Lynch        Pawlenty     Tunheim
Clark        Holsten      Mahon        Pellow       Van Dellen
Commers      Hugoson      Mares        Perlt        Van Engen
Cooper       Huntley      Mariani      Peterson     Vickerman
Daggett      Jefferson    Marko        Pugh         Wagenius
Dauner       Johnson, A.  McCollum     Rest         Warkentin
Davids       Johnson, R.  McElroy      Rhodes       Weaver
Dawkins      Johnson, V.  McGuire      Rice         Wejcman
Dehler       Kahn         Molnau       Rostberg     Wenzel
Delmont      Kalis        Mulder       Rukavina     Winter
Dempsey      Kelley       Munger       Sarna        Wolf
Dorn         Kelso        Murphy       Schumacher   Sp.Anderson,I
Entenza      Knight       Ness         Seagren      
Erhardt      Knoblach     Olson, E.    Skoglund     
JOURNAL OF THE HOUSE - 50th Day - Top of Page 3432

Finseth      Koppendrayer Olson, M.    Smith        

Carruthers moved that the Minority Report on H. F. No. 1077 be laid on the table.

A roll call was requested and properly seconded.

The question was taken on the Carruthers motion and the roll was called. There were 69 yeas and 63 nays as follows:

Those who voted in the affirmative were:

Bakk         Greenfield   Kinkel       Olson, E.    Sarna
Bertram      Greiling     Leighton     Opatz        Schumacher
Brown        Hasskamp     Lieder       Orenstein    Simoneau
Carlson      Hausman      Long         Orfield      Skoglund
Carruthers   Huntley      Lourey       Osthoff      Solberg
Clark        Jaros        Luther       Ostrom       Tomassoni
Cooper       Jefferson    Mahon        Otremba      Trimble
Dauner       Jennings     Mariani      Pelowski     Tunheim
Dawkins      Johnson, A.  Marko        Perlt        Wagenius
Delmont      Johnson, R.  McCollum     Peterson     Wejcman
Dorn         Kahn         McGuire      Pugh         Wenzel
Entenza      Kalis        Milbert      Rest         Winter
Farrell      Kelley       Munger       Rice         Sp.Anderson,I
Garcia       Kelso        Murphy       Rukavina     

Abrams       Finseth      Kraus        Osskopp      Sykora
Anderson, B. Frerichs     Krinkie      Ozment       Tompkins
Bettermann   Girard       Larsen       Paulsen      Tuma
Bishop       Goodno       Leppik       Pawlenty     Van Dellen
Boudreau     Haas         Lindner      Pellow       Van Engen
Bradley      Hackbarth    Lynch        Rhodes       Vickerman
Broecker     Harder       Mares        Rostberg     Warkentin
Commers      Holsten      McElroy      Seagren      Weaver
Daggett      Hugoson      Molnau       Smith        Wolf
Davids       Johnson, V.  Mulder       Stanek       Worke
Dehler       Knight       Ness         Sviggum      Workman 
Dempsey      Knoblach     Olson, M.    Swenson, D.  
Erhardt      Koppendrayer Onnen        Swenson, H.  

The question recurred on the adoption of the Majority Report from the Committee on Ways and Means relating to H. F. No. 1077. The motion prevailed and the Majority Report on H. F. No. 1077 was adopted.

H. F. Nos. 1077 and 1844 were read for the second time.

S. F. Nos. 347, 732, 1199, 1444 and 752 were read for the second time.

The following House Files were introduced:

Rostberg; Jennings; Johnson, A.; Carlson and Hausman introduced:

H. F. No. 1884, A bill for an act relating to education; providing a grant for a pilot year-round school program in independent school district No. 911, Cambridge; appropriating money.

The bill was read for the first time and referred to the Committee on Education.

Wenzel introduced:

H. F. No. 1885, A bill for an act relating to health; providing a woman considering abortion the right to certain information before giving consent; proposing coding for new law in Minnesota Statutes, chapter 145.

The bill was read for the first time and referred to the Committee on Health and Human Services.

Wenzel introduced:

H. F. No. 1886, A bill for an act relating to health; requiring informed consent before an abortion; proposing coding for new law in Minnesota Statutes, chapter 145.

The bill was read for the first time and referred to the Committee on Health and Human Services.

Wenzel introduced:

H. F. No. 1887, A bill for an act relating to abortions; providing rules for informed consent; providing for certain civil damages; proposing coding for new law in Minnesota Statutes, chapter 145.

The bill was read for the first time and referred to the Committee on Health and Human Services.

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce that the Senate accedes to the request of the House for the appointment of a Conference Committee on the amendments adopted by the Senate to the following House File:

H. F. No. 323, A bill for an act relating to housing; making the landlord the bill payer and customer of record on utility accounts in single-metered multiunit residential buildings; amending Minnesota Statutes 1994, section 504.185, subdivision 1, and by adding a subdivision.

The Senate has appointed as such committee:

Mses. Johnson, J. B.; Anderson and Kiscaden.

Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate accedes to the request of the House for the appointment of a Conference Committee on the amendments adopted by the Senate to the following House File:

H. F. No. 413, A bill for an act relating to highways; designating the Veterans Memorial Highway; amending Minnesota Statutes 1994, section 161.14, by adding a subdivision.

The Senate has appointed as such committee:

Mr. Samuelson; Ms. Johnston and Mr. Chmielewski.

Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate accedes to the request of the House for the appointment of a Conference Committee on the amendments adopted by the Senate to the following House File:

H. F. No. 853, A bill for an act relating to the military; exempting the national guard and the department of military affairs from certain prohibitions concerning weapons; amending Minnesota Statutes 1994, section 609.66, subdivision 2.

The Senate has appointed as such committee:

Messrs. Betzold, Kelly and Limmer.

Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate accedes to the request of the House for the appointment of a Conference Committee on the amendments adopted by the Senate to the following House File:

H. F. No. 990, A bill for an act relating to consumer protection; providing warranties for new assistive devices; providing enforcement procedures; proposing coding for new law in Minnesota Statutes, chapter 325G.

The Senate has appointed as such committee:

Mses. Anderson; Flynn and Mr. Kleis.

Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate accedes to the request of the House for the appointment of a Conference Committee on the amendments adopted by the Senate to the following House File:

H. F. No. 1399, A bill for an act relating to crime; imposing penalties for assaulting a police horse while it is being used for law enforcement purposes; proposing coding for new law in Minnesota Statutes, chapter 609.

The Senate has appointed as such committee:

Mr. Solon; Ms. Ranum and Mr. Knutson.

Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 273, A bill for an act relating to motor vehicles; allowing license plates for collector vehicles to be transferred and reissued; imposing fees; amending Minnesota Statutes 1994, section 168.10, subdivisions 1a, 1b, 1c, 1d, 1h, and by adding a subdivision.

Patrick E. Flahaven, Secretary of the Senate

Pellow moved that the House concur in the Senate amendments to H. F. No. 273 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 273, A bill for an act relating to motor vehicles; allowing license plates for collector vehicles to be transferred and reissued; imposing fees; amending Minnesota Statutes 1994, section 168.10, subdivisions 1a, 1b, 1c, 1d, 1h, 3, and by adding a subdivision.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 130 yeas and 2 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Kraus        Opatz        Sviggum
Anderson, B. Garcia       Krinkie      Orenstein    Swenson, D.
Bakk         Girard       Larsen       Orfield      Swenson, H.
Bertram      Goodno       Leighton     Osskopp      Sykora
Bettermann   Greenfield   Leppik       Ostrom       Tomassoni
Bishop       Greiling     Lieder       Otremba      Tompkins
Boudreau     Haas         Lindner      Ozment       Trimble
Bradley      Hackbarth    Long         Paulsen      Tuma
Broecker     Harder       Lourey       Pawlenty     Tunheim
Brown        Hasskamp     Luther       Pellow       Van Dellen
Carlson      Hausman      Lynch        Pelowski     Van Engen
Carruthers   Holsten      Mahon        Perlt        Vickerman
Clark        Hugoson      Mares        Peterson     Wagenius
Commers      Huntley      Mariani      Pugh         Warkentin
Cooper       Jaros        Marko        Rest         Weaver
Daggett      Jefferson    McCollum     Rhodes       Wejcman
Dauner       Jennings     McElroy      Rice         Wenzel
Davids       Johnson, A.  McGuire      Rostberg     Winter
Dawkins      Johnson, R.  Milbert      Rukavina     Wolf
Dehler       Johnson, V.  Molnau       Sarna        Worke
Delmont      Kalis        Mulder       Schumacher   Workman
Dempsey      Kelley       Munger       Seagren      Sp.Anderson,I
Dorn         Kelso        Murphy       Simoneau     
Entenza      Kinkel       Ness         Skoglund     
JOURNAL OF THE HOUSE - 50th Day - Top of Page 3436

Erhardt      Knight       Olson, E.    Smith        
Farrell      Knoblach     Olson, M.    Solberg      
Finseth      Koppendrayer Onnen        Stanek       

Kahn         Osthoff                   

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 266, A bill for an act relating to peace officers; authorizing certain expenditures by a surviving spouse from a dependent child's share of a peace officer's survivor benefits; amending Minnesota Statutes 1994, section 299A.44.

Patrick E. Flahaven, Secretary of the Senate

Rest moved that the House concur in the Senate amendments to H. F. No. 266 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 266, A bill for an act relating to peace officers; authorizing certain expenditures by a surviving spouse from a dependent child's share of a peace officer's survivor benefits; amending Minnesota Statutes 1994, section 299A.44.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called.

Carruthers moved that those not voting be excused from voting. The motion prevailed.

There were 130 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Koppendrayer Opatz        Stanek
Anderson, B. Garcia       Kraus        Orenstein    Sviggum
Bakk         Girard       Krinkie      Orfield      Swenson, D.
Bertram      Goodno       Larsen       Osskopp      Swenson, H.
JOURNAL OF THE HOUSE - 50th Day - Top of Page 3437

Bettermann   Greenfield   Leighton     Osthoff      Sykora
Bishop       Greiling     Leppik       Ostrom       Tomassoni
Boudreau     Haas         Lieder       Otremba      Tompkins
Bradley      Hackbarth    Lindner      Ozment       Trimble
Broecker     Harder       Long         Paulsen      Tunheim
Brown        Hasskamp     Lourey       Pawlenty     Van Dellen
Carlson      Hausman      Luther       Pellow       Van Engen
Carruthers   Holsten      Lynch        Pelowski     Vickerman
Clark        Hugoson      Mahon        Perlt        Wagenius
Commers      Huntley      Mares        Peterson     Warkentin
Cooper       Jaros        Mariani      Pugh         Weaver
Daggett      Jefferson    Marko        Rest         Wejcman
Dauner       Jennings     McCollum     Rhodes       Wenzel
Davids       Johnson, A.  McElroy      Rice         Winter
Dawkins      Johnson, R.  McGuire      Rostberg     Wolf
Dehler       Johnson, V.  Milbert      Rukavina     Worke
Delmont      Kahn         Molnau       Sarna        Workman
Dempsey      Kalis        Mulder       Schumacher   Sp.Anderson,I
Dorn         Kelley       Munger       Seagren      
Entenza      Kelso        Murphy       Simoneau     
Erhardt      Kinkel       Ness         Skoglund     
Farrell      Knight       Olson, M.    Smith        
Finseth      Knoblach     Onnen        Solberg      

Carruthers moved that the call of the House be suspended. The motion prevailed and it was so ordered.

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 1460, A bill for an act relating to government; modifying a budget report date for cities; eliminating certain budget publication requirements; amending Minnesota Statutes 1994, sections 6.745, subdivision 1; and 471.6965.

Patrick E. Flahaven, Secretary of the Senate

Greiling moved that the House concur in the Senate amendments to H. F. No. 1460 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 1460, A bill for an act relating to government; modifying a budget report date for cities; modifying certain budget publication requirements; amending Minnesota Statutes 1994, sections 6.745, subdivision 1; and 471.6965.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 131 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Koppendrayer Onnen        Stanek
Anderson, B. Garcia       Kraus        Opatz        Sviggum
Bakk         Girard       Krinkie      Orenstein    Swenson, D.
Bertram      Goodno       Larsen       Orfield      Swenson, H.
Bettermann   Greenfield   Leighton     Osskopp      Sykora
Bishop       Greiling     Leppik       Osthoff      Tomassoni
Boudreau     Haas         Lieder       Ostrom       Tompkins
Bradley      Hackbarth    Lindner      Otremba      Trimble
Broecker     Harder       Long         Ozment       Tuma
Brown        Hasskamp     Lourey       Paulsen      Tunheim
Carlson      Hausman      Luther       Pawlenty     Van Dellen
Carruthers   Holsten      Lynch        Pellow       Van Engen
Clark        Hugoson      Mahon        Pelowski     Vickerman
Commers      Huntley      Mares        Perlt        Wagenius
Cooper       Jaros        Mariani      Peterson     Warkentin
Daggett      Jefferson    Marko        Pugh         Weaver
Dauner       Jennings     McCollum     Rest         Wejcman
Davids       Johnson, A.  McElroy      Rhodes       Wenzel
Dawkins      Johnson, R.  McGuire      Rostberg     Winter
Dehler       Johnson, V.  Milbert      Rukavina     Wolf
Delmont      Kahn         Molnau       Sarna        Worke
Dempsey      Kalis        Mulder       Schumacher   Workman
Dorn         Kelley       Munger       Seagren      Sp.Anderson,I
Entenza      Kelso        Murphy       Simoneau     
Erhardt      Kinkel       Ness         Skoglund     
Farrell      Knight       Olson, E.    Smith        
Finseth      Knoblach     Olson, M.    Solberg      

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 1602, A bill for an act relating to health; establishing provisions for mobile health care providers; proposing coding for new law in Minnesota Statutes, chapter 144.

Patrick E. Flahaven, Secretary of the Senate

Greenfield moved that the House concur in the Senate amendments to H. F. No. 1602 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 1602, A bill for an act relating to health; establishing provisions for mobile health care providers; proposing coding for new law in Minnesota Statutes, chapter 144.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 121 yeas and 9 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Kraus        Orenstein    Swenson, D.
Anderson, B. Garcia       Larsen       Orfield      Swenson, H.
Bakk         Goodno       Leighton     Osthoff      Sykora
Bertram      Greenfield   Leppik       Ostrom       Tomassoni
Bettermann   Greiling     Lieder       Otremba      Tompkins
Bishop       Haas         Lindner      Ozment       Trimble
Boudreau     Hackbarth    Long         Paulsen      Tuma
Bradley      Harder       Lourey       Pawlenty     Tunheim
Broecker     Hasskamp     Luther       Pellow       Van Dellen
Brown        Hausman      Lynch        Pelowski     Van Engen
Carlson      Holsten      Mahon        Perlt        Vickerman
Carruthers   Huntley      Mares        Peterson     Wagenius
Clark        Jaros        Mariani      Pugh         Warkentin
Commers      Jefferson    Marko        Rest         Weaver
Cooper       Jennings     McCollum     Rhodes       Wejcman
Dauner       Johnson, A.  McElroy      Rostberg     Wenzel
Davids       Johnson, R.  McGuire      Rukavina     Winter
Dawkins      Johnson, V.  Milbert      Sarna        Wolf
Delmont      Kahn         Mulder       Schumacher   Worke
Dempsey      Kalis        Munger       Seagren      Workman
Dorn         Kelley       Murphy       Simoneau     Sp.Anderson,I
Entenza      Kelso        Ness         Skoglund     
Erhardt      Kinkel       Olson, E.    Smith        
Farrell      Knoblach     Onnen        Solberg      
Finseth      Koppendrayer Opatz        Stanek       

Dehler       Hugoson      Krinkie      Olson, M.    Sviggum 
Girard       Knight       Molnau       Osskopp      

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 331, A bill for an act relating to health; modifying provisions relating to access to patients and residents; amending Minnesota Statutes 1994, sections 144.651, subdivisions 21 and 26; and 253B.03, subdivisions 3 and 4.

Patrick E. Flahaven, Secretary of the Senate

Clark moved that the House concur in the Senate amendments to H. F. No. 331 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 331, A bill for an act relating to health; modifying provisions relating to access to patients and residents; amending Minnesota Statutes 1994, sections 144.6501, subdivisions 1 and 4; 144.651, subdivisions 21 and 26; and 253B.03, subdivisions 3 and 4.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 130 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Koppendrayer Onnen        Stanek
Anderson, B. Garcia       Kraus        Opatz        Sviggum
Bakk         Girard       Krinkie      Orenstein    Swenson, D.
Bertram      Goodno       Larsen       Orfield      Swenson, H.
Bettermann   Greenfield   Leighton     Osskopp      Sykora
Bishop       Greiling     Leppik       Osthoff      Tomassoni
Boudreau     Haas         Lieder       Ostrom       Tompkins
Bradley      Hackbarth    Lindner      Otremba      Trimble
Broecker     Harder       Long         Ozment       Tuma
Brown        Hasskamp     Lourey       Paulsen      Tunheim
Carlson      Hausman      Luther       Pawlenty     Van Dellen
Carruthers   Holsten      Lynch        Pelowski     Van Engen
Clark        Hugoson      Mahon        Perlt        Vickerman
Commers      Huntley      Mares        Peterson     Wagenius
Cooper       Jaros        Mariani      Pugh         Warkentin
Daggett      Jefferson    Marko        Rest         Weaver
Dauner       Jennings     McCollum     Rhodes       Wenzel
Davids       Johnson, A.  McElroy      Rice         Winter
Dawkins      Johnson, R.  McGuire      Rostberg     Wolf
Dehler       Johnson, V.  Milbert      Rukavina     Worke
Delmont      Kahn         Molnau       Sarna        Workman
Dempsey      Kalis        Mulder       Schumacher   Sp.Anderson,I
Dorn         Kelley       Munger       Seagren      
Entenza      Kelso        Murphy       Simoneau     
Erhardt      Kinkel       Ness         Skoglund     
Farrell      Knight       Olson, E.    Smith        
Finseth      Knoblach     Olson, M.    Solberg      

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 586, A bill for an act relating to motor vehicles; authorizing sale and disposal of unauthorized, abandoned, and junk vehicles by impound lots; amending Minnesota Statutes 1994, sections 168B.04; 168B.06; 168B.07, subdivision 1; 168B.08; 168B.09, subdivision 1; 168B.101; and 169.041, subdivisions 3, 4, and 6; proposing coding for new law in Minnesota Statutes, chapter 168B; repealing Minnesota Statutes 1994, sections 168B.02; and 168B.05.

Patrick E. Flahaven, Secretary of the Senate

Bertram moved that the House concur in the Senate amendments to H. F. No. 586 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 586, A bill for an act relating to motor vehicles; authorizing sale and disposal of unauthorized, abandoned, and junk vehicles by impound lots; amending Minnesota Statutes 1994, sections 168B.04; 168B.06; 168B.07,

subdivision 1; 168B.08; 168B.09, subdivision 1; 168B.101; and 169.041, subdivisions 3, 4, and 6; proposing coding for new law in Minnesota Statutes, chapter 168B; repealing Minnesota Statutes 1994, sections 168B.02; and 168B.05.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 110 yeas and 18 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Kraus        Orfield      Swenson, D.
Anderson, B. Garcia       Krinkie      Osskopp      Swenson, H.
Bertram      Girard       Larsen       Ostrom       Sykora
Bettermann   Goodno       Leighton     Otremba      Tompkins
Bishop       Greenfield   Leppik       Ozment       Tuma
Boudreau     Haas         Lieder       Paulsen      Tunheim
Bradley      Hackbarth    Lindner      Pawlenty     Van Dellen
Broecker     Harder       Lourey       Pellow       Van Engen
Brown        Holsten      Luther       Pelowski     Vickerman
Carlson      Hugoson      Lynch        Perlt        Wagenius
Carruthers   Huntley      Mahon        Peterson     Warkentin
Clark        Jaros        Mares        Pugh         Weaver
Commers      Jefferson    Mariani      Rest         Wejcman
Cooper       Jennings     Marko        Rhodes       Wenzel
Daggett      Johnson, A.  McGuire      Rostberg     Winter
Dauner       Johnson, R.  Milbert      Sarna        Worke
Davids       Kalis        Molnau       Schumacher   Workman
Dehler       Kelley       Mulder       Seagren      Sp.Anderson,I
Dempsey      Kelso        Munger       Skoglund     
Dorn         Kinkel       Murphy       Smith        
Entenza      Knight       Ness         Solberg      
Erhardt      Knoblach     Onnen        Stanek       
Finseth      Koppendrayer Opatz        Sviggum      

Bakk         Hasskamp     Long         Orenstein    Trimble
Dawkins      Hausman      McCollum     Osthoff      Wolf 
Farrell      Johnson, V.  McElroy      Rukavina     
Greiling     Kahn         Olson, M.    Tomassoni    

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 624, A bill for an act relating to public employees; providing a leave of absence for public employees who are candidates for elective office; proposing coding for new law in Minnesota Statutes, chapter 179A.

Patrick E. Flahaven, Secretary of the Senate

Ostrom moved that the House concur in the Senate amendments to H. F. No. 624 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 624, A bill for an act relating to public employees; providing a leave of absence for public employees who are candidates for elective office; proposing coding for new law in Minnesota Statutes, chapter 179A.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 78 yeas and 53 nays as follows:

Those who voted in the affirmative were:

Bakk         Greenfield   Kraus        Olson, E.    Schumacher
Bertram      Greiling     Leighton     Opatz        Simoneau
Bishop       Hackbarth    Lieder       Orenstein    Skoglund
Brown        Hausman      Long         Orfield      Smith
Carlson      Hugoson      Lourey       Osthoff      Solberg
Carruthers   Huntley      Luther       Ostrom       Swenson, D.
Clark        Jaros        Mahon        Otremba      Tomassoni
Cooper       Jefferson    Mares        Ozment       Trimble
Dauner       Jennings     Mariani      Pelowski     Tunheim
Dawkins      Johnson, A.  Marko        Perlt        Wagenius
Delmont      Johnson, R.  McCollum     Pugh         Wejcman
Dempsey      Kahn         McElroy      Rest         Wenzel
Dorn         Kalis        McGuire      Rice         Winter
Entenza      Kelley       Milbert      Rostberg     Sp.Anderson,I
Farrell      Kelso        Munger       Rukavina     
Garcia       Kinkel       Murphy       Sarna        

Abrams       Finseth      Koppendrayer Osskopp      Tuma
Anderson, B. Frerichs     Krinkie      Paulsen      Van Dellen
Bettermann   Girard       Larsen       Pellow       Van Engen
Boudreau     Goodno       Leppik       Peterson     Vickerman
Bradley      Haas         Lindner      Rhodes       Warkentin
Broecker     Harder       Lynch        Seagren      Weaver
Commers      Hasskamp     Molnau       Stanek       Wolf
Daggett      Holsten      Mulder       Sviggum      Worke
Davids       Johnson, V.  Ness         Swenson, H.  Workman 
Dehler       Knight       Olson, M.    Sykora       
Erhardt      Knoblach     Onnen        Tompkins     

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 694, A bill for an act relating to human services; modifying child care programs and county contribution; amending Minnesota Statutes 1994, section 256H.12, subdivision 3.

Patrick E. Flahaven, Secretary of the Senate

Huntley moved that the House concur in the Senate amendments to H. F. No. 694 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 694, A bill for an act relating to human services; modifying child care programs and county contribution; amending Minnesota Statutes 1994, section 256H.12, subdivision 3.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 130 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Kraus        Opatz        Sviggum
Anderson, B. Girard       Krinkie      Orenstein    Swenson, D.
Bakk         Goodno       Larsen       Orfield      Swenson, H.
Bertram      Greenfield   Leighton     Osskopp      Sykora
Bettermann   Greiling     Leppik       Osthoff      Tomassoni
Bishop       Haas         Lieder       Ostrom       Tompkins
Boudreau     Hackbarth    Lindner      Otremba      Trimble
Bradley      Harder       Long         Ozment       Tuma
Broecker     Hasskamp     Lourey       Paulsen      Tunheim
Brown        Hausman      Luther       Pawlenty     Van Dellen
Carlson      Holsten      Lynch        Pellow       Van Engen
Carruthers   Hugoson      Mahon        Pelowski     Vickerman
Clark        Huntley      Mares        Perlt        Wagenius
Commers      Jaros        Mariani      Peterson     Warkentin
Cooper       Jefferson    Marko        Pugh         Weaver
Daggett      Jennings     McCollum     Rest         Wejcman
Dauner       Johnson, A.  McElroy      Rhodes       Wenzel
Davids       Johnson, R.  McGuire      Rice         Winter
Dawkins      Johnson, V.  Milbert      Rostberg     Wolf
Dehler       Kahn         Molnau       Rukavina     Worke
Delmont      Kalis        Mulder       Sarna        Workman
JOURNAL OF THE HOUSE - 50th Day - Top of Page 3442

Dempsey      Kelley       Munger       Schumacher   Sp.Anderson,I
Dorn         Kelso        Murphy       Seagren      
Entenza      Kinkel       Ness         Skoglund     
Erhardt      Knight       Olson, E.    Smith        
Farrell      Knoblach     Olson, M.    Solberg      
Finseth      Koppendrayer Onnen        Stanek       

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 1132, A bill for an act relating to alcoholic beverages; providing restrictions on brewers who have retail on-sale licenses; imposing licensing and permitting requirements; requiring a license for charging for possession of alcoholic beverages; requiring a permit to allow consumption and display of all alcoholic beverages; authorizing additional licenses in Minneapolis; authorizing Clay and St. Louis counties to issue on-sale licenses; requiring a study of application of primary source law; defining home brewing equipment; listing items that may be sold in exclusive liquor stores; repealing requirement for permit for transportation of alcoholic beverages; amending Minnesota Statutes 1994, sections 340A.101, subdivision 10, and by adding a subdivision; 340A.301, subdivisions 6 and 7; 340A.401; 340A.404, subdivision 2; 340A.408, subdivision 2; 340A.412, by adding a subdivision; and 340A.414, subdivision 1; repealing Minnesota Statutes 1994, sections 340A.301, subdivision 10; and 340A.32.

Patrick E. Flahaven, Secretary of the Senate

Jennings moved that the House refuse to concur in the Senate amendments to H. F. No. 1132, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 365, A bill for an act relating to insurance; no-fault auto; regulating priorities of coverage for taxis; amending Minnesota Statutes 1994, section 65B.47, subdivision 1a.

Patrick E. Flahaven, Secretary of the Senate

Jennings moved that the House refuse to concur in the Senate amendments to H. F. No. 365, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 778, A bill for an act relating to human services; modifying certain asset and income requirements for medical assistance; modifying the verification requirements for Minnesota supplemental aid; amending Minnesota Statutes 1994, sections 256B.056, by adding subdivisions; and 256D.405, by adding a subdivision; repealing Minnesota Statutes 1994, section 256D.425, subdivision 3.

Patrick E. Flahaven, Secretary of the Senate

Orenstein moved that the House refuse to concur in the Senate amendments to H. F. No. 778, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 1159, A bill for an act relating to real property; authorizing municipalities to establish trust or escrow accounts for proceeds from losses arising from fire or explosion of certain insured real property; authorizing municipalities to utilize escrowed funds to secure, repair, or demolish damaged or destroyed structures; proposing coding for new law in Minnesota Statutes, chapter 65A.

Patrick E. Flahaven, Secretary of the Senate

Jefferson moved that the House refuse to concur in the Senate amendments to H. F. No. 1159, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 96, A bill for an act relating to insurance; health plans; prohibiting provisions that grant the health carrier a subrogation right, except where the covered person has been fully compensated from another source; proposing coding for new law in Minnesota Statutes, chapter 62A.

Patrick E. Flahaven, Secretary of the Senate

Bishop moved that the House refuse to concur in the Senate amendments to H. F. No. 96, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 1055, A bill for an act relating to waters; eliminating the position of board of water and soil resources secretary; increasing board members' compensation; duties of advisory committees; rule approval procedure;

guidelines for management plans; exemptions from review; appeals from rules, permit decisions, and orders; informal dispute resolution; assessment basis; amending Minnesota Statutes 1994, sections 103D.011, subdivision 21; 103D.101, subdivision 4; 103D.205, subdivisions 1 and 4; 103D.221, subdivision 2; 103D.255, subdivision 1; 103D.261, subdivision 1; 103D.271, subdivisions 2 and 4; 103D.305, subdivision 1; 103D.311, subdivision 4; 103D.315, subdivisions 1, 8, and 11; 103D.321, subdivision 2; 103D.331; 103D.335, subdivisions 5, 6, and 13; 103D.341, subdivision 2; 103D.351; 103D.401, subdivisions 1 and 2; 103D.405, subdivision 1; 103D.515, subdivision 4; 103D.531; 103D.535, subdivisions 1, 4, and 5; 103D.537; 103D.611, subdivisions 1, 4, and 5; 103D.621, subdivision 4; 103D.625, subdivisions 3 and 4; 103D.631, subdivision 2; 103D.635, subdivisions 1 and 3; 103D.705, subdivision 1; 103D.711, subdivision 2; 103D.715, subdivision 3; 103D.721, subdivision 2; 103D.741, subdivision 1; 103D.745, subdivisions 2 and 3; 103D.811, subdivisions 1 and 3; 103D.901, subdivisions 2, 4, and 5; 103D.905, subdivisions 3 and 5; 103D.921, subdivisions 1 and 3; and 103D.925; proposing coding for new law in Minnesota Statutes, chapter 103D.

Patrick E. Flahaven, Secretary of the Senate

Dauner moved that the House refuse to concur in the Senate amendments to H. F. No. 1055, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 536, A bill for an act relating to commerce; residential building contractors; regulating licensees; providing a clarification; amending Minnesota Statutes 1994, sections 326.83, subdivision 5, and by adding a subdivision; 326.84, subdivision 3; 326.91, subdivision 1; 326.95, subdivision 2; and 326.975, subdivision 1.

Patrick E. Flahaven, Secretary of the Senate

Entenza moved that the House refuse to concur in the Senate amendments to H. F. No. 536, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce that the Senate refuses to concur in the House amendments to the following Senate File:

S. F. No. 1670, A bill for an act relating to the organization and operation of state government; appropriating money for community development and certain agencies of state government, with certain conditions; establishing and modifying certain programs; providing for regulation of certain activities and practices; providing for accounts, assessments, and fees; requiring studies and reports; amending Minnesota Statutes 1994, sections 116J.873, subdivision 3, and by adding subdivisions; 116M.16, subdivision 2; 116M.18, subdivisions 4, 5, and by adding a subdivision; 116N.03, subdivision 2; 116N.08, subdivisions 5, 6, and by adding a subdivision; 124.85, by adding a subdivision; 175.171; 268A.01, subdivisions 4, 5, 6, 9, and 10; 268A.03; 268A.06, subdivision 1; 268A.07; 268A.08, subdivisions 1 and 2; 268A.13; 462A.201, subdivision 2; 462A.204, subdivision 1; and 462A.21, subdivisions 3b, 8b, 21, and by adding a subdivision; Laws 1994, chapter 643, section 19, subdivision 9; proposing coding for new law in Minnesota Statutes, chapters 178; 268A; and 462A; repealing Minnesota Statutes 1994, sections 116J.874, subdivision 6; 268A.01, subdivisions 7, 11, and 12; and 268A.09.

The Senate respectfully requests that a Conference Committee be appointed thereon. The Senate has appointed as such committee:

Messrs. Kroening; Novak; Chandler; Ms. Johnson, J. B., and Mr. Dille.

Said Senate File is herewith transmitted to the House with the request that the House appoint a like committee.

Patrick E. Flahaven, Secretary of the Senate

Rice moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 5 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 1670. The motion prevailed.

Mr. Speaker:

I hereby announce that the Senate refuses to concur in the House amendments to the following Senate File:

S. F. No. 106, A bill for an act relating to the organization and operation of state government; appropriating money for environmental, natural resource, and agricultural purposes; modifying provisions relating to disposition of certain revenues from state trust lands, sales of software, agricultural and environmental loans, food handlers, ethanol and oxygenated fuels, the citizen's council on Voyageurs National Park, local recreation grants, zoo admission charges, watercraft surcharge, water information, well sealing grants, pollution control agency fees, sale of tax-forfeited lands, and payments in lieu of taxes; establishing the Passing on the Farm Center; establishing special critical habitat license plates; authorizing establishment of a shooting area in Sand Dunes State Forest; prohibiting the adoption or enforcement of water quality standards that are not necessary to comply with federal law; abolishing the harmful substance compensation board and account; extending performance reporting requirements; providing for easements across state trails in certain circumstances; amending Minnesota Statutes 1994, sections 15.91, subdivision 1; 16A.125; 16B.405, subdivision 2; 17.117, subdivisions 2, 4, 6, 7, 8, 9, 10, 11, 14, 16, and by adding subdivisions; 28A.03; 28A.08; 41A.09, by adding subdivisions; 41B.02, subdivision 20; 41B.043, subdivisions 1b, 2, and 3; 41B.045, subdivision 2; 41B.046, subdivision 1, and by adding a subdivision; 84.631; 84.943, subdivision 3; 84B.11, subdivision 1; 85.015, by adding a subdivision; 85.019; 85A.02, subdivision 17; 86.72, subdivision 1; 86B.415, subdivision 7; 92.46, subdivision 1; 93.22; 97A.531, subdivision 1; 103A.43; 103F.725, subdivision 1a; 103H.151, by adding a subdivision; 103I.331, subdivision 4; 115.03, subdivision 5; 115A.03, subdivision 29; 115A.908, subdivision 3; 115B.20, subdivision 1; 115B.25, subdivision 1a; 115B.26, subdivision 2; 115B.41, subdivision 1; 115B.42; 115C.03, subdivision 9; 116.07, subdivision 4d, and by adding a subdivision; 116.12, subdivision 1; 116.96, subdivision 5; 116C.69, subdivision 3; 116P.11; 239.791, subdivision 8; 282.01, subdivisions 2 and 3; 282.011, subdivision 1; 282.02; 282.04, subdivision 1; 296.02, by adding a subdivision; 446A.07, subdivision 8; 446A.071, subdivision 2; 473.845, subdivision 2; 477A.11, subdivision 4; 477A.12; and 477A.14; proposing coding for new law in Minnesota Statutes, chapters 17; 28A; 89; 116; and 168; repealing Minnesota Statutes 1994, sections 28A.08, subdivision 2; 41A.09, subdivisions 2, 3, and 5; 97A.531, subdivisions 2, 3, 4, 5, and 6; 115B.26, subdivision 1; 239.791, subdivisions 4, 5, 6, and 9; 282.018; 296.02, subdivision 7; 325E.0951, subdivision 5; and 446A.071, subdivision 7; Laws 1993, chapter 172, section 10.

The Senate respectfully requests that a Conference Committee be appointed thereon. The Senate has appointed as such committee:

Messrs. Morse; Lessard; Finn; Ms. Olson and Mr. Laidig.

Said Senate File is herewith transmitted to the House with the request that the House appoint a like committee.

Patrick E. Flahaven, Secretary of the Senate

Brown moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 5 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 106. The motion prevailed.

Mr. Speaker:

I hereby announce that the Senate refuses to concur in the House amendments to the following Senate File:

S. F. No. 1678, A bill for an act relating to the organization and operation of state government; appropriating money for the general legislative and administrative expenses of state government; providing for the transfer of certain money in the state treasury; fixing and limiting the amount of fees, penalties, and other costs to be collected in certain cases; amending Minnesota Statutes 1994, sections 3.9741, subdivision 2; 5.14; 15.50, subdivision 2; 15.91, subdivision 2; 16B.39, by adding a subdivision; 16B.42, subdivision 3; 16B.88, subdivisions 1, 2, 3, and 4; 126A.01; 126A.02; 126A.04; 197.05; 240A.08; 309.501, by adding a subdivision; and 349A.08, subdivision 5; Laws 1993, chapter 224, article 12, section 33; proposing coding for new law in Minnesota Statutes, chapters 16B; and 43A.

The Senate respectfully requests that a Conference Committee be appointed thereon. The Senate has appointed as such committee:

Messrs. Cohen, Merriam, Riveness, Frederickson and Metzen.

Said Senate File is herewith transmitted to the House with the request that the House appoint a like committee.

Patrick E. Flahaven, Secretary of the Senate

Rukavina moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 5 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 1678. The motion prevailed.

Mr. Speaker:

I hereby announce the adoption by the Senate of the following Senate Concurrent Resolution, herewith transmitted:

Senate Concurrent Resolution No. 9, A senate concurrent resolution providing for a Joint Convention of the Senate and the House of Representatives to elect members of the Board of Regents of the University of Minnesota.

Patrick E. Flahaven, Secretary of the Senate

Carruthers moved that the rules be so far suspended that Senate Concurrent Resolution No. 9 be now considered and be placed upon its adoption. The motion prevailed.

A Senate concurrent resolution providing for a Joint Convention of the Senate and the House of Representatives to elect members of the Board of Regents of the University of Minnesota.

Be It Resolved by the Senate of the State of Minnesota, the House of Representatives concurring:

The Senate and House of Representatives shall meet in Joint Convention on Wednesday, May 3, 1995, at 12:00 noon, in the Chamber of the House of Representatives to elect members to the Board of Regents of the University of Minnesota.

Carruthers moved that Senate Concurrent Resolution No. 9 be now adopted. The motion prevailed and Senate Concurrent Resolution No. 9 was adopted.

Mr. Speaker:

I hereby announce the passage by the Senate of the following Senate Files, herewith transmitted:

S. F. Nos. 1180, 1120, 1395, 273, 1037, 440 and 258.

Patrick E. Flahaven, Secretary of the Senate

S. F. No. 1180, A bill for an act relating to natural resources; off-highway motorcycles; all-terrain vehicles; reciprocal agreements; migratory game birds; fish house identification; fish taken in Canada; exotic species; shooting ranges; powers of enforcement officers; collector snowmobiles; disabled hunters; providing penalties; amending Minnesota Statutes 1994, sections 18.317; 84.796; 84.81, by adding a subdivision; 84.82, by adding a subdivision; 84.92, subdivision 8; 84.968, subdivision 1; 84.9691; 84.9692, subdivisions 1, 2, and by adding a subdivision; 86B.401, subdivision 11; 97A.045, by adding a subdivision; 97A.205; 97A.215, subdivision 1; 97A.401, subdivision 3; 97A.531, subdivision 1; 97B.055, subdivision 3; 97B.731, subdivision 1; 97C.355, subdivision 2; and Laws 1994, chapter 623, article 1, section 45; proposing coding for new law in Minnesota Statutes, chapter 18; proposing coding for new law as Minnesota Statutes, chapter 87A; repealing Minnesota Statutes 1994, sections 97A.531, subdivisions 2, 3, 4, 5, and 6; and 97C.505, subdivision 4.

The bill was read for the first time and referred to the Committee on Ways and Means.

S. F. No. 1120, A bill for an act relating to gambling; creating a special account for money received by the gambling control board as reimbursement for costs of testing pull-tab dispensing devices; appropriating money in the account to the board for that purpose; amending Minnesota Statutes 1994, section 349.151, subdivision 4b.

The bill was read for the first time and referred to the Committee on Governmental Operations.

S. F. No. 1395, A bill for an act relating to state obligations; authorizing listing of state obligations; amending Minnesota Statutes 1994, section 16A.672, by adding a subdivision.

The bill was read for the first time and referred to the Committee on Capital Investment.

S. F. No. 273, A bill for an act relating to water; providing for the classification of water supply systems and wastewater treatment facilities and certification of operators by the department of health and the pollution control agency; appropriating money; amending Minnesota Statutes 1994, sections 115.71, subdivisions 1, 4, 8, 10, and by adding subdivisions; 115.72; 115.73; 115.75; 115.76; 115.77; and 144.99, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 115; repealing Minnesota Statutes 1994, sections 115.71, subdivisions 2, 3, and 3a; 115.74; 115.78; 115.79; 115.80; and 115.82.

The bill was read for the first time and referred to the Committee on Ways and Means.

S. F. No. 1037, A bill for an act relating to workers' compensation; repealing the sunset of the targeted industry fund for loggers.

The bill was read for the first time and referred to the Committee on Labor-Management Relations.

S. F. No. 440, A bill for an act relating to insurance; regulating coverages, notice provisions, enforcement provisions, and licensees; the comprehensive health association; increasing the lifetime benefit limit; making technical changes; providing for certain breast cancer coverage; prohibiting certain rate differentials within the same town or city; amending Minnesota Statutes 1994, sections 60A.06, subdivision 3; 60A.085; 60A.111, subdivision 2; 60A.124; 60A.23, subdivision 8; 60A.26; 60A.951, subdivisions 2 and 5; 60A.954, subdivision 1; 60K.03, subdivision 7; 60K.14, subdivision 1; 61A.03, subdivision 1; 61A.071; 61A.092, subdivisions 3 and 6; 61B.28, subdivisions 8 and 9; 62A.042; 62A.135; 62A.136; 62A.14; 62A.141; 62A.31, subdivisions 1h and 1i; 62A.46, subdivision 2, and by adding a subdivision; 62A.48, subdivisions 1 and 2; 62A.50, subdivision 3; 62C.14, subdivisions 5 and 14; 62E.02, subdivision 7; 62E.12; 62F.02, subdivision 2; 62I.09, subdivision 2; 62L.02, subdivision 16; 62L.03, subdivision 5; 65A.01, by adding a subdivision; 65B.06, subdivision 3; 65B.08, subdivision 1; 65B.09, subdivision 1; 65B.10, subdivision 3; 65B.61, subdivision 1; 72A.20, subdivisions 13, 23, and by adding a subdivision; 72B.05; 79.251, subdivision 5, and by adding a subdivision; 79.34, subdivision 2; 79.35; 79A.01, by adding a subdivision; 79A.02, subdivision 4; 79A.03, by adding

a subdivision; 176.181, subdivision 2; 299F.053, subdivision 2; and 515A.3-112; proposing coding for new law in Minnesota Statutes, chapters 60A; and 62A; repealing Minnesota Statutes 1994, sections 61A.072, subdivision 3; and 65B.07, subdivision 5.

The bill was read for the first time and referred to the Committee on Rules and Legislative Administration.

S. F. No. 258, A bill for an act relating to occupations and professions; board of medical practice; providing for the registration of physician assistants by the board of medical practice; providing for rulemaking; providing penalties; amending Minnesota Statutes 1994, sections 116J.70, subdivision 2a; 136A.1356, subdivision 1; 144.335, subdivision 1; 148B.60, subdivision 3; 151.01, subdivision 23; 151.37, subdivision 2a; 214.23, subdivision 1; and 604A.01, subdivision 2; proposing coding for new law as Minnesota Statutes, chapter 147A; repealing Minnesota Statutes 1994, sections 147.34; 147.35; and 147.36; Minnesota Rules, parts 5600.2600; 5600.2605; 5600.2610; 5600.2615; 5600.2620; 5600.2625; 5600.2630; 5600.2635; 5600.2640; 5600.2645; 5600.2650; 5600.2655; 5600.2660; 5600.2665; and 5600.2670.

The bill was read for the first time.

Kelley moved that S. F. No. 258 and H. F. No. 452, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

Pursuant to rule 1.10, Solberg requested immediate consideration of S. F. No. 1110.

S. F. No. 1110 was reported to the House.

Greenfield moved to amend S. F. No. 1110, the unofficial engrossment, as follows:

Page 377, delete section 41

The motion prevailed and the amendment was adopted.

Cooper moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 54, after line 8, insert:

"Sec. 31. [HEALTH AND HUMAN SERVICES GENERAL STATEMENT OF POLICY.]

It is the policy of the state of Minnesota that health and human services programs shall be of the highest quality and value and promote fairness. As such, the legislature and governor will apply the following principles, to as great an extent as possible, when developing and reviewing health and human services programs:

(1) where feasible, these programs will provide funds directly to people rather than to funding institutions, agencies, or service providers;

(2) public subsidies will be targeted to people and jurisdictions and other recipients based on need;

(3) where possible, competition will be used as a tool to align institutional self-interest with the public's interest;

(4) subsidies to service providers that mask the cost of public services will be minimized. The prices of public goods as reflected in taxes and other revenues will, to as great an extent as possible, reflect the true costs of providing those goods;

(5) where feasible, spending reforms will attempt to meet public responsibilities through nongovernmental entities with which people already have relationships of mutual obligation; and

(6) spending reforms will give preference to investment-type spending over consumption-type spending and stress the importance of long-term economic growth and the development of physical and human capital."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Cooper amendment and the roll was called. There were 126 yeas and 2 nays as follows:

Those who voted in the affirmative were:

Abrams       Girard       Kraus        Opatz        Sviggum
Anderson, B. Goodno       Krinkie      Orenstein    Swenson, D.
Bakk         Greenfield   Larsen       Orfield      Swenson, H.
Bertram      Greiling     Leighton     Osskopp      Sykora
Bettermann   Haas         Leppik       Osthoff      Tomassoni
Bishop       Hackbarth    Lieder       Otremba      Tompkins
Boudreau     Harder       Lindner      Ozment       Trimble
Bradley      Hasskamp     Long         Paulsen      Tuma
Broecker     Hausman      Lourey       Pawlenty     Tunheim
Carlson      Holsten      Luther       Pellow       Van Dellen
Carruthers   Hugoson      Lynch        Pelowski     Van Engen
Clark        Huntley      Mares        Perlt        Vickerman
Commers      Jaros        Mariani      Peterson     Wagenius
Cooper       Jefferson    Marko        Pugh         Warkentin
Daggett      Jennings     McCollum     Rest         Weaver
Dauner       Johnson, A.  McElroy      Rhodes       Wejcman
Davids       Johnson, R.  McGuire      Rice         Wenzel
Dehler       Johnson, V.  Milbert      Rostberg     Winter
Dempsey      Kahn         Molnau       Rukavina     Wolf
Dorn         Kalis        Mulder       Sarna        Worke
Entenza      Kelley       Munger       Schumacher   Workman
Erhardt      Kelso        Murphy       Simoneau     Sp.Anderson,I
Farrell      Kinkel       Ness         Skoglund     
Finseth      Knight       Olson, E.    Smith        
Frerichs     Knoblach     Olson, M.    Solberg      
Garcia       Koppendrayer Onnen        Stanek       

Dawkins      Ostrom                    

Greenfield moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 315, after line 31, insert:

"Sec. 30. [256B.434] [CONTRACTUAL ALTERNATIVE PAYMENT SYSTEM AFTER JULY 1, 1996.]

Subdivision 1. [ALTERNATIVE PAYMENT SYSTEM ESTABLISHED.] (a) For rate years beginning on or after July 1, 1996, the commissioner shall contract with up to ten nursing facilities to provide services at a standard rate with outcome incentives.

(b) The commissioner shall contract with facilities with a proven history of quality care and a demonstrated commitment to contracting with managed care plans. The commissioner may refuse to enter into a contract under this section with a nursing facility that has a substantiated record of excessive licensure fines or sanctions or fraudulent cost reports.

(c) For nursing facilities under contract under this section, the standard rate for rate years beginning on or after July 1, 1996, is the payment rate in effect on June 30 of the prior rate year plus a 12-month inflation adjustment. The index for the inflation adjustment must be based on the change in the Consumer Price Index-All Items (United States

city average) (CPI-U) forecasted by Data Resources Inc., as forecasted in the fourth quarter of the calendar year preceding the rate year. The inflation adjustment must be based on the 12-month period from the midpoint of the previous rate year to the midpoint of the rate year for which the rate is being determined.

(d) Facilities which do not achieve the stated outcomes in any quarter may be required to refund all or a portion of the incentive payments.

(e) The commissioner shall develop additional incentive-based payments of up to five percent above the standard rate for specified outcomes. The specified outcomes must be measurable and shall be based on criteria to be developed by the commissioner during fiscal year 1996. The commissioner may establish various levels of achievement within an outcome. Once the outcomes are established, the commissioner shall assign various levels of payment associated with achieving the outcome. In establishing the specified outcomes and the related criteria, the commissioner shall consider the following state policy objectives:

(1) a reduction in the number of case mix A admissions;

(2) a shortened length of stay;

(3) improved results of a uniform consumer satisfaction survey;

(4) the achievement of no major licensure or certification deficiencies;

(5) the delicensure and decertification of a portion of the nursing facilities bed complement; or

(6) any other outcomes the commissioner finds desirable.

Subd. 2. [EXPIRATION.] The expiration date of all contracts entered into under this section is June 30, 2000.

Subd. 3. [EXEMPTIONS.] To the extent permitted by federal law, the commissioner may negotiate contract terms with facilities reimbursed under this section including modifying and simplifying current cost-reporting methodology.

Subd. 4. [CONSUMER PROTECTION.] As a condition of entering into a contract under this section, a nursing facility must agree to establish, in addition to any other consumer protections required by law, resident grievance procedures that are substantially similar to those required of health plan vendors participating in the prepaid medical assistance program under section 256B.69, subdivision 6, paragraph (a), clause (4). The commissioner may also require nursing facilities to establish expedited grievance procedures to resolve complaints made by short-stay residents. The facility must notify its resident council of its intent to enter into a contract and must consult with the council regarding any changes in operation expected as a result of the contract."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

Vickerman moved to amend the Greenfield amendment to S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 1, line 8, delete "ten" and insert "twenty"

Page 1, line 10, after the period, insert "One-half of the nursing facilities under contract must be located in rural areas of the state, and one-half in urban areas of the state. For purposes of this requirement, "rural" means an area of the state outside the seven metropolitan counties, as defined in section 473.121, subdivision 4."

The motion prevailed and the amendment to the amendment was adopted.

The question recurred on the Greenfield amendment, as amended, to S. F. No. 1110, the unofficial engrossment, as amended. The motion prevailed and the amendment, as amended, was adopted.

Huntley moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 269, line 18, after "hospitals" insert "and physician clinics"

The motion prevailed and the amendment was adopted.

Ness and Worke moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 337, after line 30, insert:

"Sec. 42. [REDUCTION IN NURSING FACILITY ADMINISTRATIVE COSTS.]

The commissioner of health, as part of the commissioner's ongoing evaluation of nursing facility regulation, and in consultation with representatives of the nursing facility industry and the commissioner of human services, shall seek to reduce the financial burden placed on nursing facilities as a result of federal and state regulation. The commissioner shall identify federal and state laws and rules related to nursing facilities that are duplicative, limit efficiency, or which increase nursing facility administrative and operating costs without improving quality of care. For each law or rule identified, the commissioner shall determine whether the financial burden on nursing facilities can be reduced by repeal, modification, or waiver of the law or rule, and shall provide an estimate of potential cost savings from reduced regulation. The commissioner shall seek federal law and rule changes necessary to reduce the financial burden on nursing facilities due to regulation, and shall seek appropriate waivers from the health care financing administration. The commissioner shall present recommendations for changes in state laws and rules, estimates of costs savings from reduced regulation, and draft legislation and rule revisions necessary to reduce regulation to the legislature by December 15, 1995."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Ness and Worke amendment and the roll was called. There were 65 yeas and 66 nays as follows:

Those who voted in the affirmative were:

Abrams       Dorn         Kinkel       Mulder       Sviggum
Anderson, B. Erhardt      Knight       Ness         Swenson, D.
Bettermann   Finseth      Knoblach     Olson, M.    Swenson, H.
Bishop       Frerichs     Koppendrayer Osskopp      Sykora
Boudreau     Girard       Kraus        Ozment       Tompkins
Bradley      Goodno       Krinkie      Paulsen      Tuma
Broecker     Haas         Larsen       Pawlenty     Van Dellen
Commers      Hackbarth    Leppik       Pellow       Van Engen
Daggett      Harder       Lindner      Rhodes       Warkentin
Dauner       Hasskamp     Lynch        Rostberg     Weaver
Davids       Holsten      Mares        Seagren      Wolf
Dehler       Hugoson      McElroy      Smith        Worke
Dempsey      Johnson, V.  Molnau       Stanek       Workman 

Bakk         Huntley      LutherOsthoffSolberg
Brown        Jaros        MahonTomassoni
Carlson      Jefferson    MarianiTrimble
Carruthers   Jennings     MarkoTunheim
Clark        Johnson, A.  McCollumVickerman
Cooper       Johnson, R.  McGuireWagenius
Dawkins      Kahn         MilbertWejcman
Delmont      Kalis        MungerWenzel
Entenza      Kelley       MurphyWinter
Farrell      Kelso        Olson, E.Sp.Anderson,I
Garcia       Leighton     Onnen
Greenfield   Lieder       Opatz
Greiling     Long         Orenstein
Hausman      Lourey       Orfield
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
Ostrom       
Otremba      
Pelowski     
Perlt        
Peterson     
Pugh         
Rest         
Rice         
Rukavina     
Sarna        
Schumacher   
Simoneau     
Skoglund     

Tompkins offered an amendment to S. F. No. 1110, the unofficial engrossment, as amended.

Tompkins moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 10, line 51, increase the appropriation by $1,800,000 in each year of the biennium in order to provide additional monies for the TEFRA program under section 256B.055, subdivision 12.

Page 12, after line 1, insert:

"[TEFRA INCREASE.] Of this appropriation, $1,800,000 each year is to increase the appropriation in order to provide additional funds for the TEFRA program under section 256B.055, subdivision 12."

Page 15, line 30, reduce the money appropriated for health systems development for grants under section 145.925 by $1,800,000 in each year of the biennium.

Adjust the appropriations by the specified amounts and correct the totals and the summaries by fund accordingly

A roll call was requested and properly seconded.

The question was taken on the Tompkins amendment and the roll was called. There were 56 yeas and 77 nays as follows:

Those who voted in the affirmative were:

Abrams       Harder       Macklin      Perlt        Tuma
Broecker     Holsten      Mares        Rhodes       Van Engen
Commers      Johnson, R.  McElroy      Rostberg     Vickerman
Daggett      Johnson, V.  Mulder       Sarna        Warkentin
Davids       Kelso        Ness         Seagren      Weaver
Dehler       Knight       Olson, M.    Smith        Wolf
Dempsey      Knoblach     Orenstein    Stanek       Worke
Finseth      Kraus        Osskopp      Sviggum      Workman 
Girard       Krinkie      Ozment       Swenson, D.  
Goodno       Larsen       Paulsen      Swenson, H.  
Haas         Lindner      Pawlenty     Sykora       
Hackbarth    Lynch        Pellow       Tompkins     

Anderson, B. Entenza      Kalis        Molnau       Schumacher
Bakk         Erhardt      Kelley       Munger       Simoneau
Bertram      Farrell      Kinkel       Murphy       Skoglund
Bettermann   Frerichs     Koppendrayer Olson, E.    Solberg
Bishop       Garcia       Leighton     Onnen        Tomassoni
Boudreau     Greenfield   Leppik       Opatz        Trimble
Bradley      Greiling     Lieder       Orfield      Tunheim
Brown        Hasskamp     Long         Osthoff      Van Dellen
JOURNAL OF THE HOUSE - 50th Day - Top of Page 3452

Carlson      Hausman      Lourey       Ostrom       Wagenius
Carruthers   Hugoson      Luther       Otremba      Wejcman
Clark        Huntley      Mahon        Pelowski     Wenzel
Cooper       Jaros        Mariani      Peterson     Winter
Dauner       Jefferson    Marko        Pugh         Sp.Anderson,I
Dawkins      Jennings     McCollum     Rest         
Delmont      Johnson, A.  McGuire      Rice         
Dorn         Kahn         Milbert      Rukavina     

Van Engen moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 21, delete lines 54 to 59

A roll call was requested and properly seconded.

The question was taken on the Van Engen amendment and the roll was called. There were 65 yeas and 67 nays as follows:

Those who voted in the affirmative were:

Abrams       Finseth      Koppendrayer Olson, M.    Swenson, D.
Anderson, B. Frerichs     Kraus        Onnen        Swenson, H.
Bettermann   Girard       Krinkie      Osskopp      Sykora
Bishop       Goodno       Larsen       Ozment       Tompkins
Boudreau     Haas         Leppik       Paulsen      Tuma
Bradley      Hackbarth    Lindner      Pawlenty     Van Dellen
Broecker     Harder       Lynch        Pellow       Van Engen
Commers      Holsten      Macklin      Rhodes       Vickerman
Daggett      Hugoson      Mares        Rostberg     Warkentin
Davids       Jaros        McElroy      Seagren      Weaver
Dehler       Johnson, V.  Molnau       Smith        Wolf
Dempsey      Knight       Mulder       Stanek       Worke
Erhardt      Knoblach     Ness         Sviggum      Workman 

Bakk         Greenfield   Leighton     Opatz        Schumacher
Bertram      Greiling     Lieder       Orenstein    Simoneau
Brown        Hasskamp     Long         Orfield      Skoglund
Carlson      Hausman      Lourey       Osthoff      Solberg
Carruthers   Huntley      Luther       Ostrom       Tomassoni
Clark        Jefferson    Mahon        Otremba      Trimble
Cooper       Jennings     Mariani      Pelowski     Wagenius
Dauner       Johnson, A.  Marko        Perlt        Wejcman
Dawkins      Johnson, R.  McCollum     Peterson     Wenzel
Delmont      Kahn         McGuire      Pugh         Winter
Dorn         Kalis        Milbert      Rest         Sp.Anderson,I
Entenza      Kelley       Munger       Rice         
Farrell      Kelso        Murphy       Rukavina     
Garcia       Kinkel       Olson, E.    Sarna        

Tuma moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 417, after line 19, insert:

"Sec. 44. Minnesota Statutes 1994, section 148.921, subdivision 2, is amended to read:

Subd. 2. [PERSONS PREVIOUSLY QUALIFIED.] (a) The board shall grant a license for a licensed psychologist to a person who:

(1) before November 1, 1991, entered a graduate program granting a master's degree with a major in psychology at an educational institution meeting the standards the board has established by rule and earned a master's degree or a master's equivalent in a doctoral program;

(2) before December 31, 1993, filed with the board a written declaration of intent to seek licensure under this subdivision;

(3) (2) complied with all requirements of section 148.91, subdivisions 2 to 4, before December 31, 1997; and

(4) (3) completed at least two full years or their equivalent of post-master's supervised psychological employment, including predoctoral internship, before December 31, 1998.

(b) Notwithstanding paragraph (a), the board shall not grant a license for a licensed psychologist under this subdivision to a person who files a written declaration of licensure after October 31, 1992, unless the applicant demonstrates that the applicant was a resident of Minnesota on October 31, 1992, and meets all other the requirements for licensure under this subdivision."

Renumber the sections in article 9

Correct internal cross-references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Haas moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 8, delete lines 44 to 52

Page 12, after line 1, insert "[ADDITIONAL TEFRA FUNDS.] $800,000 is added to the funding for the TEFRA program under section 256B.055, subdivison 12."

Page 15, line 30, reduce the money appropriated for health systems development by $150,000 in each year of the biennium to delete funding for the osteoporosis prevention program.

Page 16, delete lines 34 to 43

Page 19, delete lines 5 to 14

Adjust the appropriations in article 1 by the specified amounts and correct the totals and the summaries by fund accordingly

Pages 382 and 383, delete sections 8 and 9

Renumber the sections in articles 4 and 9

Correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Haas amendment and the roll was called. There were 64 yeas and 68 nays as follows:

Those who voted in the affirmative were:

Abrams       Finseth      Koppendrayer Olson, M.    Swenson, D.
Anderson, B. Frerichs     Kraus        Onnen        Swenson, H.
Bettermann   Girard       Krinkie      Osskopp      Sykora
JOURNAL OF THE HOUSE - 50th Day - Top of Page 3454

Bishop       Goodno       Larsen       Ozment       Tuma
Boudreau     Haas         Leppik       Paulsen      Van Dellen
Bradley      Hackbarth    Lindner      Pawlenty     Van Engen
Broecker     Harder       Lynch        Pellow       Vickerman
Commers      Holsten      Macklin      Rhodes       Warkentin
Daggett      Hugoson      Mares        Rostberg     Weaver
Davids       Jaros        McElroy      Seagren      Wolf
Dehler       Johnson, V.  Molnau       Smith        Worke
Dempsey      Knight       Mulder       Stanek       Workman 
Erhardt      Knoblach     Ness         Sviggum      

Bakk         Greenfield   Leighton     Opatz        Schumacher
Bertram      Greiling     Lieder       Orenstein    Simoneau
Brown        Hasskamp     Long         Orfield      Skoglund
Carlson      Hausman      Lourey       Osthoff      Solberg
Carruthers   Huntley      Luther       Ostrom       Tomassoni
Clark        Jefferson    Mahon        Otremba      Trimble
Cooper       Jennings     Mariani      Pelowski     Tunheim
Dauner       Johnson, A.  Marko        Perlt        Wagenius
Dawkins      Johnson, R.  McCollum     Peterson     Wejcman
Delmont      Kahn         McGuire      Pugh         Wenzel
Dorn         Kalis        Milbert      Rest         Winter
Entenza      Kelley       Munger       Rice         Sp.Anderson,I
Farrell      Kelso        Murphy       Rukavina     
Garcia       Kinkel       Olson, E.    Sarna        

The Speaker called Trimble to the Chair.

Sviggum moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 216, after line 28, insert:

"Sec. 53. [256B.0635] [DEFINITION.]

For purposes of section 256B.0636, "emergency services" means services provided in a hospital that is equipped to furnish the required care, after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) that the absence of immediate medical attention could reasonably be expected to result in:

(1) placing the patient's health in serious jeopardy;

(2) serious impairment to bodily functions; or

(3) serious dysfunction of any bodily organ or part.

Sec. 54. [256B.0636] [NONEMERGENCY SERVICES PROVIDED IN EMERGENCY ROOMS.]

Subdivision 1. [COPAYMENT ASSESSED.] (a) Except as provided in paragraph (b), hospitals licensed under sections 144.50 to 144.56, shall assess recipients copayments of double the copayment amounts determined under Code of Federal Regulations, title 42, part 447.54(a)(3), for nonemergency services provided in a hospital emergency room. The commissioner shall reduce medical assistance reimbursement for nonemergency services provided in a hospital emergency room by the amount of the copayment required to be assessed.

(b) Recipients who are children, pregnant women or institutionalized shall not be assessed copayments.

Subd. 2. [FEDERAL WAIVER.] The commissioner shall seek a waiver from the federal Health Care Financing Administration that would allow double the nominal copayment amounts allowed under Code of Federal Regulations, title 42, part 447.54(a)(3) to be charged for nonemergency service provided in a hospital emergency room. The commissioner shall notify the chairs of the human services committees of the senate and house of representatives when the waiver authorized by this section is received. This waiver shall not be implemented until approved by the legislature."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

Jennings moved to amend the Sviggum amendment to S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 2, after line 12, insert:

"Subd. 3. [STUDY.] By February 1, 1996, the commmissioner of human services shall submit recommendations to the legislature regarding the feasibility of sections 256B.0635 and 256B.0636."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment to the amendment was adopted.

The question recurred on the Sviggum amendment, as amended, and the roll was called. There were 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Koppendrayer Olson, M.    Solberg
Anderson, B. Garcia       Kraus        Onnen        Stanek
Bakk         Girard       Krinkie      Opatz        Sviggum
Bertram      Goodno       Larsen       Orenstein    Swenson, D.
Bettermann   Greenfield   Leighton     Orfield      Swenson, H.
Bishop       Greiling     Leppik       Osskopp      Sykora
Boudreau     Haas         Lieder       Osthoff      Tomassoni
Bradley      Hackbarth    Lindner      Ostrom       Tompkins
Broecker     Harder       Long         Otremba      Trimble
Brown        Hasskamp     Lourey       Ozment       Tuma
Carlson      Hausman      Luther       Paulsen      Tunheim
Carruthers   Holsten      Lynch        Pawlenty     Van Dellen
Clark        Hugoson      Macklin      Pellow       Van Engen
Commers      Huntley      Mahon        Pelowski     Vickerman
Cooper       Jaros        Mares        Perlt        Wagenius
Daggett      Jefferson    Mariani      Peterson     Warkentin
Dauner       Jennings     Marko        Pugh         Weaver
Davids       Johnson, A.  McCollum     Rest         Wejcman
Dawkins      Johnson, R.  McElroy      Rhodes       Wenzel
Dehler       Johnson, V.  McGuire      Rice         Winter
Delmont      Kahn         Milbert      Rostberg     Wolf
Dempsey      Kalis        Molnau       Rukavina     Worke
Dorn         Kelley       Mulder       Sarna        Workman
Entenza      Kelso        Munger       Seagren      Sp.Anderson,I
Erhardt      Kinkel       Murphy       Simoneau     
Farrell      Knight       Ness         Skoglund     
Finseth      Knoblach     Olson, E.    Smith        

Daggett, Boudreau, Van Engen and Onnen moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 197, after line 3, insert:

"Sec. 41. Minnesota Statutes 1994, section 256B.0625, subdivision 17, is amended to read:

Subd. 17. [TRANSPORTATION COSTS.] (a) Medical assistance covers transportation costs incurred solely for obtaining emergency medical care or transportation costs incurred by nonambulatory persons in obtaining emergency or nonemergency medical care when paid directly to an ambulance company, common carrier, or other recognized providers of transportation services. For the purpose of this subdivision, a person who is incapable of transport by taxicab or bus shall be considered to be nonambulatory.

(b) Medical assistance covers special transportation, as defined in Minnesota Rules, part 9505.0315, subpart 1, item F, if the provider receives and maintains (1) a current physician's order by the recipient's attending physician certifying that the recipient is so mentally or physically impaired as to be unable to safely access and use a bus, taxi,

other commercial transportation, or private automobile, and (2) the local agency may require prior authorization for special transportation provided the recipient was notified of this additional requirement or provided the recipient is residing in a facility that received notification of this requirement for all its residents. The commissioner shall establish maximum medical assistance reimbursement rates for special transportation services for persons who need a wheelchair lift van or stretcher-equipped vehicle and for those who do not need a wheelchair lift van or stretcher-equipped vehicle. The average of these two rates must not exceed $14 for the base rate and $1.10 per mile. Special transportation provided to nonambulatory persons who do not need a wheelchair lift van or stretcher-equipped vehicle, may be reimbursed at a lower rate than special transportation provided to persons who need a wheelchair lift van or stretcher-equipped vehicle."

Page 197, after line 10, insert:

"Sec. 42. Minnesota Statutes 1994, section 256B.0625, is amended by adding a subdivision to read:

Subd. 18a. [PAYMENT FOR MEALS AND LODGING.] (a) Medical assistance reimbursement for meals for persons traveling to receive medical care may not exceed $20 per day.

(b) Medical assistance reimbursement for lodging for persons traveling to receive medical care may not exceed $50 per day unless prior authorized by the commissioner or local agency."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Sviggum moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 181, after line 21, insert:

"(g) Effective for transfers made on or after July 1, 1995, or upon federal approval, whichever is later, a person, a person's spouse, or any person, court, or administrative body with legal authority to act in place of, on behalf of, at the direction of, or upon the request of the person or person's spouse, may not give away, sell, or dispose of, for less than fair market value, any asset or interest therein, for the purpose of establishing or maintaining medical assistance eligibility. For purposes of determining eligibility for long-term care services, any transfer of such assets within 60 months before, or any time after, an institutionalized person applies for medical assistance, or 60 months before, or any time after, a medical assistance recipient becomes institutionalized, for less than fair market value may be considered. Any such transfer is presumed to have been made for the purpose of establishing or maintaining medical assistance eligibility and the person is ineligible for long-term care services for the period of time determined under subdivision 2, unless the person furnishes convincing evidence to establish that the transaction was exclusively for another purpose, or unless the transfer is permitted under subdivision 3 or 4."

Page 266, after line 24, insert:

"Sec. 95. [WAIVER.]

The commissioner of human services shall seek a federal waiver to implement the 60-month period for transfers of assets under section 256B.0595, subdivision 1, paragraph (g)."

A roll call was requested and properly seconded.

The question was taken on the Sviggum amendment and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Koppendrayer Olson, M.    Smith
Anderson, B. Garcia       Kraus        Onnen        Solberg
Bakk         Girard       Krinkie      Opatz        Stanek
Bertram      Goodno       Larsen       Orenstein    Sviggum
Bettermann   Greenfield   Leighton     Orfield      Swenson, D.
Bishop       Greiling     Leppik       Osskopp      Swenson, H.
Boudreau     Haas         Lieder       Osthoff      Sykora
Bradley      Hackbarth    Lindner      Ostrom       Tomassoni
Broecker     Harder       Long         Otremba      Tompkins
Brown        Hasskamp     Lourey       Ozment       Trimble
Carlson      Hausman      Luther       Paulsen      Tuma
Carruthers   Holsten      Lynch        Pawlenty     Tunheim
Clark        Hugoson      Macklin      Pellow       Van Dellen
Commers      Huntley      Mahon        Pelowski     Van Engen
Cooper       Jaros        Mares        Perlt        Vickerman
Daggett      Jefferson    Mariani      Peterson     Wagenius
Dauner       Jennings     Marko        Pugh         Warkentin
Davids       Johnson, A.  McCollum     Rest         Weaver
Dawkins      Johnson, R.  McElroy      Rhodes       Wejcman
Dehler       Johnson, V.  McGuire      Rice         Wenzel
Delmont      Kahn         Milbert      Rostberg     Winter
JOURNAL OF THE HOUSE - 50th Day - Top of Page 3457

Dempsey      Kalis        Molnau       Rukavina     Wolf
Dorn         Kelley       Mulder       Sarna        Worke
Entenza      Kelso        Munger       Schumacher   Workman
Erhardt      Kinkel       Murphy       Seagren      Sp.Anderson,I
Farrell      Knight       Ness         Simoneau     
Finseth      Knoblach     Olson, E.    Skoglund     

Frerichs moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 15, after line 8, insert:

"Notwithstanding the requirements of Minnesota Statutes, chapter 94, or section 252.50, or any other law to the contrary, the commissioner of human services is directed to sell directly by private sealed bid for not less than the appraised value, or to lease, all of the state-operated community residential facilities. The commissioner shall present to the legislature by October 15, 1996, a report on the implementation of this section and a plan for phase out of all state programs operated under the authority of section 252.50. The plan shall include recommendations developed in consultation with bargaining representatives for transfer of affected state employees."

A roll call was requested and properly seconded.

The question was taken on the Frerichs amendment and the roll was called. There were 48 yeas and 84 nays as follows:

Those who voted in the affirmative were:

Abrams       Erhardt      Knoblach     Ness         Swenson, H.
Anderson, B. Finseth      Koppendrayer Olson, M.    Sykora
Bettermann   Frerichs     Kraus        Onnen        Tuma
Bishop       Girard       Krinkie      Osskopp      Van Dellen
Bradley      Haas         Leppik       Paulsen      Vickerman
Broecker     Harder       Lindner      Pawlenty     Wolf
Commers      Holsten      Macklin      Pellow       Worke
Daggett      Hugoson      McElroy      Seagren      Workman 
Davids       Johnson, V.  Molnau       Stanek       
Dehler       Knight       Mulder       Sviggum      

Bakk         Greenfield   Leighton     Orenstein    Simoneau
Bertram      Greiling     Lieder       Orfield      Skoglund
Boudreau     Hackbarth    Long         Osthoff      Smith
Brown        Hasskamp     Lourey       Ostrom       Solberg
Carlson      Hausman      Luther       Otremba      Swenson, D.
Carruthers   Huntley      Lynch        Ozment       Tomassoni
Clark        Jaros        Mahon        Pelowski     Trimble
Cooper       Jefferson    Mares        Perlt        Tunheim
Dauner       Jennings     Mariani      Peterson     Van Engen
Dawkins      Johnson, A.  Marko        Pugh         Wagenius
Delmont      Johnson, R.  McCollum     Rest         Warkentin
Dempsey      Kahn         McGuire      Rhodes       Weaver
Dorn         Kalis        Milbert      Rice         Wejcman
Entenza      Kelley       Munger       Rostberg     Wenzel
Farrell      Kelso        Murphy       Rukavina     Winter
JOURNAL OF THE HOUSE - 50th Day - Top of Page 3458

Garcia       Kinkel       Olson, E.    Sarna        Sp.Anderson,I
Goodno       Larsen       Opatz        Schumacher   

The Speaker resumed the Chair.

Ness and Cooper moved to amend S. F. No. 1110, the unofficial engrossment, as amended, as follows:

Page 308, after line 36, insert:

"Sec. 24. Minnesota Statutes 1994, section 256B.431, is amended by adding a subdivision to read:

Subd. 25. [NURSING HOME GEOGRAPHIC GROUPS.] For rate years beginning on or after July 1, 1995, when determining nursing facility reimbursement rates, the commissioner shall modify the nursing home geographic groups designated in Minnesota Rules, part 9549.0052, by moving Meeker county from group 1 to group 2."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion did not prevail and the amendment was not adopted.

S. F. No. 1110, A bill for an act relating to human services; appropriating money for the department of human services and health, for the veterans nursing homes board, for the health-related boards, for the council on disability, for the ombudsman for mental health and mental retardation, and for the ombudsman for families; modifying day training and habilitation services; creating the consumer support program; modifying child care programs; defining and including essential persons in determining AFDC eligibility; modifying the Minnesota Supplemental Aid program by making it consistent with the federal SSI program; modifying group residential housing; limiting the admission of certain high-functioning persons to nursing facilities; modifying hospital inflation and requiring inflation adjustments to reflect prior overpayments; modifying medical assistance disproportionate share payments; establishing hospital peer groups; establishing long-term hospital rates; modifying treatment of certain trusts; modifying treatment of assets and income for institutionalized persons; reducing the pharmacy dispensing fee; establishing pharmacy copayments in medical assistance and general assistance medical care; establishing a service allowance for certain persons denied admission to a nursing facility; increasing reimbursement rates for certain home care services provided in Anoka county; modifying certain intergovernmental transfers; clarifying the county nursing home payment adjustment; requiring a discount in general assistance medical care prepaid contracts; eliminating payment for gender reassignment services under general assistance medical care; providing a two percent rate increase for certain providers; authorizing certain demonstration projects; modifying certain parental fees; modifying medical assistance eligibility criteria for certain disabled children; modifying requirements for personal care assistants and personal care assistant organizations; modifying coverage for personal care services and reducing maximum hours of service; expanding certain services under medical assistance managed care for disabled children; authorizing certain studies; authorizing exceptions to the nursing home moratorium and modifying reimbursements for legislatively-approved exceptions; modifying requirements for hospital-attached nursing facility status; modifying nursing facility reimbursement and inflationary adjustments; establishing a contractual alternative payment system for nursing facilities; modifying reimbursement for intermediate care facilities for persons with mental retardation or related conditions; establishing transition mental health services; modifying chemical dependency treatment programs; providing Faribault and Cambridge regional human services center downsizing agreements; decreasing certain license and permit fees; modifying the licensing and inspecting of hotel, restaurant, and other food and lodging establishments; amending Minnesota Statutes 1994, sections 62A.045; 62A.046; 62A.048; 62A.27; 144.0721, by adding subdivisions; 144.122; 144.226, subdivision 1; 144A.071, subdivision 4a; 144A.33, subdivision 3; 144A.43, subdivision 3; 144A.47; 147.01, subdivision 6; 157.03; 198.003, subdivisions 3 and 4; 245.4882, subdivision 5; 245.4886, by adding a subdivision; 246.18, subdivision 4, and by adding a subdivision; 246.23, subdivision 2; 252.27, subdivision 2a; 252.292,

subdivision 4; 252.46, subdivision 6, and by adding a subdivision; 254A.17, subdivision 3; 254B.05, subdivision 4; 256.025, subdivisions 1 and 2; 256.026; 256.73, subdivision 3a; 256.736, subdivisions 3 and 13; 256.74, subdivision 1; 256.9365; 256.9657, subdivision 3; 256.9685, subdivision 1b, and by adding subdivisions; 256.969, subdivisions 1, 9, 24, and by adding subdivisions; 256B.055, subdivision 12; 256B.056, by adding a subdivision; 256B.0575; 256B.0625, subdivisions 8, 8a, 13, 19a, and by adding subdivisions; 256B.0627, subdivisions 1, 2, 4, and 5; 256B.0641, subdivision 1; 256B.0911, subdivisions 4 and 7; 256B.0913, by adding subdivisions; 256B.0915, subdivision 2, and by adding a subdivision; 256B.092, subdivision 4; 256B.15, subdivisions 1a, 2, and by adding a subdivision; 256B.19, subdivisions 1c and 1d; 256B.431, subdivisions 2b, 2j, 17, 23, and by adding subdivisions; 256B.49, subdivision 1, and by adding subdivisions; 256B.501, subdivisions 3, 3c, and by adding a subdivision; 256B.69, subdivisions 4, 5, 6, 9, and by adding subdivisions; 256D.03, subdivisions 3b, 4, and by adding a subdivision; 256D.051, subdivision 6; 256D.36, subdivision 1; 256D.385; 256D.405, subdivision 3; 256D.425, subdivision 1, and by adding a subdivision; 256D.435, subdivisions 1, 3, 4, 5, 6, and by adding a subdivision; 256D.44, subdivisions 1, 2, 3, 4, 5, and 6; 256D.45, subdivision 1; 256D.48, subdivision 1; 256H.03, subdivision 4; 256H.05, subdivision 6; 256I.04, subdivision 3; 256I.05, subdivision 1a; 393.07, subdivision 10; 501B.89, subdivision 1, and by adding a subdivision; and Laws 1993, First Special Session chapter 1, article 8, section 51, subdivision 5; proposing coding for new law in Minnesota Statutes, chapters 157; 256; and 256B; proposing coding for new law as Minnesota Statutes, chapter 144D; repealing Minnesota Statutes 1994, sections 38.161; 38.162; 144.0723, subdivision 5; 157.01; 157.02; 157.031; 157.04; 157.045; 157.05; 157.08; 157.12; 157.13; 157.14; 252.47; 256.851; 256B.501, subdivisions 3d, 3e, and 3f; 256D.35, subdivisions 14 and 19; 256D.36, subdivision 1a; 256D.37; 256D.425, subdivision 3; 256D.435, subdivisions 2, 7, 8, 9, and 10; 256D.44, subdivision 7; 256E.06, subdivisions 12 and 13; 256I.04, subdivision 1b; and Minnesota Rules, part 9500.1452, subpart 2, item B.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 106 yeas and 27 nays as follows:

Those who voted in the affirmative were:

Bakk         Farrell      Larsen       Orenstein    Sviggum
Bertram      Finseth      Leighton     Orfield      Swenson, D.
Bettermann   Garcia       Leppik       Osthoff      Swenson, H.
Bishop       Goodno       Lieder       Ostrom       Sykora
Boudreau     Greenfield   Long         Otremba      Tomassoni
Bradley      Greiling     Lourey       Ozment       Tompkins
Brown        Harder       Luther       Pawlenty     Trimble
Carlson      Hasskamp     Lynch        Pelowski     Tuma
Carruthers   Hausman      Mahon        Perlt        Tunheim
Clark        Huntley      Mares        Pugh         Van Engen
Commers      Jaros        Mariani      Rest         Vickerman
Cooper       Jefferson    Marko        Rhodes       Wagenius
Daggett      Jennings     McCollum     Rice         Warkentin
Dauner       Johnson, A.  McElroy      Rostberg     Wejcman
Davids       Johnson, R.  McGuire      Rukavina     Wenzel
Dawkins      Johnson, V.  Milbert      Sarna        Winter
Dehler       Kahn         Molnau       Schumacher   Worke
Delmont      Kalis        Munger       Simoneau     Sp.Anderson,I
Dempsey      Kelley       Murphy       Skoglund     
Dorn         Kelso        Olson, E.    Smith        
Entenza      Kinkel       Onnen        Solberg      
Erhardt      Knoblach     Opatz        Stanek       

Abrams       Hackbarth    Krinkie      Osskopp      Weaver
Anderson, B. Holsten      Lindner      Paulsen      Wolf
Broecker     Hugoson      Macklin      Pellow       Workman 
Frerichs     Knight       Mulder       Peterson     
Girard       Koppendrayer Ness         Seagren      
Haas         Kraus        Olson, M.    Van Dellen   

H. F. No. 1573 was reported to the House.

Kelley moved that H. F. No. 1573 be continued on Special Orders until Wednesday, May 3, 1995. The motion prevailed.

S. F. No. 1134 was reported to the House.

There being no objection, S. F. No. 1134 was temporarily laid over on Special Orders.

H. F. No. 980 was reported to the House.

Skoglund moved that H. F. No. 980 be continued on Special Orders. The motion prevailed.

S. F. No. 1134 which was temporarily laid over earlier today on Special Orders was again reported to the House.

Jennings moved to amend S. F. No. 1134 as follows:

Delete everything after the enacting clause and insert:

Section 1. [45.014] [SEAL OF DEPARTMENT OF COMMERCE.]

The commissioner of commerce shall devise a seal for official use as the seal of the department of commerce. The seal must be capable of being legibly reproduced under photographic methods. A description of the seal, and a copy of it, must be filed in the office of the secretary of state.

Sec. 2. Minnesota Statutes 1994, section 46.04, subdivision 1, is amended to read:

Subdivision 1. The commissioner of commerce, referred to in chapters 46 to 59 59A, and sections 332.12 to 332.29, 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 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 18 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 1994, section 46.041, subdivision 4, is amended to read:

Subd. 4. [HEARING.] In any case in which the commissioner grants a request for a hearing or makes the independent determination that a hearing is warranted on the basis of the conditions in subdivision 3, the commissioner shall fix a time for a hearing conducted pursuant to chapter 14 to decide whether or not the application will be granted. A notice of the hearing must be published by the applicant in the form prescribed by the commissioner in a newspaper published in the municipality in which the proposed bank is to be located, and if there is no such newspaper, then at the county seat of the county in a qualified newspaper likely to give notice in the municipality in which the bank is proposed to be located. The notice must be published once, at the expense of the applicants, not less than 30 days prior to the date of the hearing. At the hearing the commissioner shall consider the application and hear the applicants and witnesses that appear in favor of or against the granting of the application of the proposed bank. If an application is contested, 50 percent of an additional fee equal to the actual costs incurred by the department of commerce in approving or disapproving the application, payable to the department of commerce to be deposited in the general fund, must be paid by the applicant and 50 percent equally by the intervening parties.

Sec. 4. Minnesota Statutes 1994, section 46.046, subdivision 1, is amended to read:

Subdivision 1. [WORDS, TERMS, AND PHRASES.] Unless the language or context clearly indicates that a different meaning is intended, the word defined in subdivision 2, for the purposes of sections 46.041 to 46.044, shall be given the meaning subjoined to it; and the word defined in subdivision 3, for the purposes of chapters 46 to 77 83, shall be given the meaning subjoined to it.

Sec. 5. Minnesota Statutes 1994, section 47.11, is amended to read:

47.11 [SELECTION OF NAME.]

Before execution of the certificate of incorporation of any such corporation or conduct of business under an assumed name, its proposed name or proposed assumed name shall be submitted to the commissioner of commerce, who shall compare it with those of corporations operating in the state, and if it is likely to be mistaken for any of them, or to confuse the public as to the character of its business, or is otherwise objectionable, additional names shall be submitted until a satisfactory one is selected, whereupon the commissioner shall issue a certificate of approval thereof.

Sec. 6. Minnesota Statutes 1994, section 47.28, subdivision 1, is amended to read:

Subdivision 1. Any savings bank organized and existing under and by virtue of the law of this state may amend its articles of incorporation so as to convert itself into a savings, building and loan association, by complying with the following requirements and procedure:

The savings bank by a two-thirds vote of the entire board of trustees, at any regular or special meeting of said board duly called for that purpose, shall (a) pass a resolution declaring their intention to convert the savings bank into a savings, building and loan association, and (b) cause an application in writing to be executed, by such persons as the trustees may direct, in the form prescribed by the department of commerce, requesting a certificate of authorization (charter) as a savings, building and loan association to transact business at the place and in the name stated in the application. The amendments proposed to the articles of incorporation and bylaws shall be included as part of the application.

The application shall be submitted to, considered and acted upon by the department of commerce in the same manner and by the same standards as applications are submitted, considered and acted upon under section 51.08 chapter 51A.

Sec. 7. Minnesota Statutes 1994, section 47.58, subdivision 2, is amended to read:

Subd. 2. [AUTHORIZATION.] Pursuant to rules which the commissioner of commerce or commissioner of insurance may find to be necessary and proper, if any, and subject to federal laws and regulations, lenders may make investments in reverse mortgage loans and purchases of obligations representing reverse mortgage loans, provided the aggregate total of committed principal of the investment in reverse mortgage loans by any bank, savings bank, or savings and loan association, does not exceed five percent of that lender's total deposits and savings accounts. This limitation shall be determined at each June 30 and December 31 for the following six-month period. Any decline in the total of deposits and savings accounts subsequent to a determination may be disregarded. Security for loans made under this section shall be a first lien on residential property (a) which the borrower occupies as principal residence and which qualifies for homestead classification pursuant to section 273.13, and (b) to which the borrower alone has title.

Sec. 8. Minnesota Statutes 1994, section 47.62, subdivision 3, is amended to read:

Subd. 3. Application for authorization shall be made in the manner prescribed by rule. The commissioner shall grant authorization for the establishment of an electronic financial terminal if the commissioner finds that:

(a) There is reason to believe that the terminal will be properly and safely managed;

(b) The applicant is financially sound;

(c) The proposed charges for making the services of the terminal available to financial institutions are fair, equitable, and nondiscriminatory;

(d) The applicant has furnished all of the information required by rule;

(e) The terminal applicant will not gain an unfair competitive advantage because the terminal is not operationally available to other financial institutions or their data processors within a reasonable period of time; and.

(f) The location and placement of the electronic financial terminal is not designed to give or promote an unfair competitive advantage to any financial institution.

If the commissioner has not denied the application within 45 days of its submission, the authorization shall be deemed to be granted.

Sec. 9. Minnesota Statutes 1994, section 48.475, subdivision 3, is amended to read:

Subd. 3. [GENERAL REQUIREMENTS.] If the bank at which a trust service office is to be established has exercised trust powers, then the trust company or bank which is establishing the trust service office shall enter into an agreement respecting those fiduciary powers to which the trust company or bank shall succeed and shall file the agreement with the commissioner. The trust company or bank which is establishing a trust service office under subdivision 1 shall publish a notice of the filing in the form prescribed by the commissioner in a newspaper published in the municipality in which the trust service office is to be located, and if there is no such newspaper, then at the county seat of the county in which the trust service office is to be located. The notice shall be published once in a qualified newspaper in the municipality in which the proposed trust service office is to be located, and if there is no such newspaper, then in a qualified newspaper likely to give notice in the municipality in which the proposed trust service office is to be located, and proof of publication shall be filed with the commissioner immediately after publication of the notice of filing. After filing and publication, the trust company or bank establishing the trust service office shall, as of the date the office first opens for business, and without further authorization of any kind, succeed to and be substituted for the bank at which the trust service office is located as to all fiduciary powers, rights, duties, privileges, and liabilities of the bank in its capacity as fiduciary for all estates, trusts, conservatorships, guardianships, and other fiduciary relationships of which the bank is then serving as fiduciary, except as may be otherwise specified in the agreement between the bank and the trust company or bank which has established the trust service office. The trust company or bank which has established the trust service office shall also be deemed named as fiduciary in all writings, including, but not limited to, wills, trusts, court orders, and similar documents and instruments, naming the bank at which the trust service office is located signed before the date the trust service office first opens for business, unless expressly negated by the writing or otherwise specified in the agreement between the trust company or bank and the bank at which the trust service office is located. On the effective date of the substitution, the bank at which the trust service office has been established shall be released and absolved from all fiduciary duties and obligations

under the writings and shall discontinue its exercise of trust powers on all matters not specifically retained by the agreement. This subdivision does not absolve the bank from liabilities arising out of any breach of fiduciary duty or obligation occurring prior to the date the trust service office first opens for business. This subdivision does not affect the authority, duties, or obligations of a bank with respect to relationships which may be established without trust powers, whether the relationships arise before or after the establishment of the trust service office.

Sec. 10. Minnesota Statutes 1994, section 48.61, is amended by adding a subdivision to read:

Subd. 9. [MERGER WITH SUBSIDIARIES; AUTHORITY.] (a) Notwithstanding any other law to the contrary, a bank may merge a subsidiary authorized and established according to this section into itself if it owns 100 percent of the outstanding voting stock.

(b) A merger of a subsidiary authorized by subdivision 1 must conform to the procedures in section 302A.621.

(c) Before filing the articles of merger with the secretary of state, the merger plan must be filed with and approved in writing by the commissioner who shall determine that:

(1) the provisions of section 302A.621 are followed; and

(2) the merger will not have an undue adverse effect on the safety and soundness of the bank.

Sec. 11. Minnesota Statutes 1994, section 48.65, is amended to read:

48.65 [TRUST COMPANIES TO COMPLY WITH CERTAIN LAWS.]

No trust company of this state shall conduct a banking business, as defined in section 47.02, without fully complying with the provisions of section 48.22 48.221 relating to the reserve requirements of the state banks.

Sec. 12. Minnesota Statutes 1994, section 48.92, subdivision 1, is amended to read:

Subdivision 1. [TERMS.] When used in sections 48.90 to 48.991 48.99, the terms defined in this section have the meanings given them, unless their context requires a different meaning.

Sec. 13. Minnesota Statutes 1994, section 49.01, subdivision 3, is amended to read:

Subd. 3. [INVESTMENT COMPANY.] "Investment company" means any person, copartnership, association, or corporation referred to in sections 54.26 to 54.29 54.297.

Sec. 14. Minnesota Statutes 1994, section 51A.58, is amended to read:

51A.58 [INTERSTATE BRANCHING.]

An association, whether or not the subsidiary of a savings and loan holding company, may, by acquisition, merger, purchase and assumption of some or all of the assets and liabilities, or consolidation, establish or operate branch offices in any reciprocating state, and a savings and loan association chartered in any reciprocating state may establish or operate branch offices in this state by acquisition, merger, purchase, and assumption of some or all of the assets or liabilities or consolidation. A savings and loan holding company with its headquarters in this state may acquire by direct or indirect ownership or control the voting shares of a savings and loan holding company, savings and loan association, or savings bank located in any reciprocating state, and a savings and loan holding company with its headquarters in a reciprocating state, may acquire by direct or indirect ownership or control the voting shares of a savings and loan holding company, a savings and loan association, or savings bank located in this state, and may acquire and merge with a savings and loan holding company with its headquarters in this state. For the purposes of this section, "reciprocating state" is a state that authorizes the establishment of branch offices in that state by an association located in this state, and the acquisition of savings and loan associations and savings banks located in that state by a savings and loan holding company with its headquarters in this state, under conditions no more restrictive than those imposed by the laws of Minnesota as determined by the commissioner of commerce.

The commissioner of commerce shall adopt rules to provide that procedural requirements equivalent to those contained in sections 48.90 to 48.991 48.99 apply to reciprocal interstate branching and acquisitions by savings and loan associations.

Sec. 15. Minnesota Statutes 1994, section 53.04, subdivision 3a, is amended to read:

Subd. 3a. (a) The right to make loans, secured or unsecured, at the rates and on the terms and other conditions permitted licensees under chapter 56. Loans made under the authority of section 56.125 must be in amounts in compliance with section 53.05, clause (7). All other loans made under the authority of chapter 56 must be in amounts in compliance with section 53.05, clause (7), or 56.131, subdivision 1, paragraph (a), whichever is less. The right to extend credit or lend money and to collect and receive charges therefor as provided by chapter 334, or in lieu thereof to charge, collect, and receive interest at the rate of 21.75 percent per annum, including the right to contract for, charge, and collect all other charges including discount points, fees, late payment charges, and insurance premiums on the loans to the same extent permitted on loans made under the authority of chapter 56, regardless of the amount of the loan. The provisions of sections 47.20 and 47.21 do not apply to loans made under this subdivision, except as specifically provided in this subdivision. Nothing in this subdivision is deemed to supersede, repeal, or amend any provision of section 53.05. A licensee making a loan under this chapter secured by a lien on real estate shall comply with the requirements of section 47.20, subdivision 8.

(b) Loans made under this subdivision at a rate of interest not in excess of that provided for in paragraph (a) may be secured by real or personal property, or both. If the proceeds of a loan secured by a first lien on the borrower's primary residence are used to finance the purchase of the borrower's primary residence, the loan must comply with the provisions of section 47.20.

(c) A loan made under this subdivision that is secured by real estate and that is in a principal amount of $7,500 $12,000 or more and a maturity of 60 months or more may contain a provision permitting discount points, if the loan does not provide a loan yield in excess of the maximum rate of interest permitted by this subdivision. Loan yield means the annual rate of return obtained by a licensee computed as the annual percentage rate is computed under Federal Regulation Z. If the loan is prepaid in full, the licensee must make a refund to the borrower to the extent that the loan yield will exceed the maximum rate of interest provided by this subdivision when the prepayment is taken into account.

(d) An agency or instrumentality of the United States government or a corporation otherwise created by an act of the United States Congress or a lender approved or certified by the secretary of housing and urban development, or approved or certified by the administrator of veterans affairs, or approved or certified by the administrator of the farmers home administration, or approved or certified by the federal home loan mortgage corporation, or approved or certified by the federal national mortgage association, that engages in the business of purchasing or taking assignments of mortgage loans and undertakes direct collection of payments from or enforcement of rights against borrowers arising from mortgage loans, is not required to obtain a certificate of authorization under this chapter in order to purchase or take assignments of mortgage loans from persons holding a certificate of authorization under this chapter.

Sec. 16. Minnesota Statutes 1994, section 53.09, subdivision 1, is amended to read:

Subdivision 1. [FREQUENCY AND EXPENSE.] The commissioner shall make examinations for the purposes set forth in section 46.04, subdivision 1, at least once every 18 calendar months, of each authorized place of business of every industrial loan and thrift company with the right to issue thrift certificates for investment organized or operating under this chapter to satisfy the commissioner that the corporation is in a solvent condition and is complying with the requirements of this chapter and operating according to sound business principles. In order to enforce actions in this connection, the commissioner is hereby vested with the same authority as in the examination and regulation of state banks. The corporation so examined shall pay to the commissioner such fees as may be required under section 46.131. The commissioner may maintain an action for the recovery of such costs in any court of competent jurisdiction.

Sec. 17. Minnesota Statutes 1994, section 53.09, subdivision 2, is amended to read:

Subd. 2. [REPORT TO COMMISSIONER.] (1) Each industrial loan and thrift company shall annually on or before the first day of February March file a report with the commissioner stating in detail, under appropriate heads, its assets and liabilities at the close of business on the last day of the preceding calendar year. This report shall be made under oath in the form prescribed by the commissioner.

(2) Each industrial loan and thrift company which holds authority to accept accounts pursuant to section 53.04, subdivision 5, shall in place of the requirement in clause (1) submit the reports and make the publication required of state banks pursuant to section 48.48.

(3) Within 30 days following a change in controlling ownership of the capital stock of an industrial loan and thrift company, it shall file a written report with the commissioner stating in detail the nature of such change in ownership.

Sec. 18. Minnesota Statutes 1994, section 53.09, is amended by adding a subdivision to read:

Subd. 2a. [COMPLIANCE EXAMINATIONS.] For the purpose of discovering violations of this chapter or securing information lawfully required by the commissioner under this chapter, the commissioner may, at any time, either personally or by a person or persons duly designated, investigate the loans and business, and examine the books, accounts, records, and files used in the business, of every licensee and of every person engaged in the business whether or not the person acts or claims to act as principal or agent, or under the authority of this chapter. For the purposes of this subdivision, the commissioner and duly designated representatives have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons. The commissioner and all persons duly designated may require the attendance of and examine, under oath, all persons whose testimony the commissioner may require relative to the loans or business or to the subject matter of an examination, investigation, or hearing.

Each licensee shall pay to the commissioner the amount required under section 46.131, and the commissioner may maintain an action for the recovery of the costs in a court of competent jurisdiction.

Sec. 19. Minnesota Statutes 1994, section 56.11, is amended to read:

56.11 [BOOKS OF ACCOUNT; ANNUAL REPORT.]

The licensee shall keep and use in the licensee's business such books, accounts, and records as will enable the commissioner to determine whether the licensee is complying with the provisions of this chapter and with the rules lawfully made by the commissioner hereunder. Every licensee shall preserve such books, accounts, and records, including cards used in the card system, if any, for at least two years after making the final entry on any loan recorded therein. Accounting systems maintained in whole or in part by mechanical or electronic data processing methods which provide information equivalent to that otherwise required are acceptable for this purpose.

Each licensee shall annually on or before the fifteenth day of March, except in odd numbered years and then on or before the seventh first day of February March, file a report with the commissioner giving such relevant information as the commissioner reasonably may require concerning the business and operations during the preceding calendar year of each licensed place of business, conducted by such licensee within the state. Such report shall be made under oath and shall be in the form prescribed by the commissioner, who shall make and publish annually an analysis and recapitulation of such reports.

Sec. 20. Minnesota Statutes 1994, section 56.12, is amended to read:

56.12 [ADVERTISING; TAKING OF SECURITY; PLACE OF BUSINESS.]

No licensee shall advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast, in any manner any statement or representation with regard to the rates, terms, or conditions for the lending of money, credit, goods, or things in action which is false, misleading, or deceptive. The commissioner may order any licensee to desist from any conduct which the commissioner shall find to be a violation of the foregoing provisions.

The commissioner may require that rates of charge, if stated by a licensee, be stated fully and clearly in such manner as the commissioner may deem necessary to prevent misunderstanding thereof by prospective borrowers. In lieu of the disclosure requirements of this section and section 56.14, a licensee may give the disclosures required by the federal Truth-in-Lending Act.

A licensee may take a lien upon real estate as security for any loan exceeding $2,700 $4,320 in principal amount made under this chapter. The provisions of sections 47.20 and 47.21 do not apply to loans made under this chapter, except as provided in this section. No loan secured by a first lien on a borrower's primary residence shall be made pursuant to this section if the proceeds of the loan are used to finance the purchase of the borrower's primary residence, unless:

(1) the proceeds of the loan are used to finance the purchase of a manufactured home or a prefabricated building; or

(2) the proceeds of the loan are used in whole or in part to satisfy the balance owed on a contract for deed.

If the proceeds of the loan are used to finance the purchase of the borrower's primary residence, the licensee shall consent to the subsequent transfer of the real estate if the existing borrower continues after transfer to be obligated for repayment of the entire remaining indebtedness. The licensee shall release the existing borrower from all obligations under the loan instruments, if the transferee (1) meets the standards of credit worthiness normally used by persons in the business of making loans, including but not limited to the ability of the transferee to make the loan payments and satisfactorily maintain the property used as collateral, and (2) executes an agreement in writing with the licensee whereby the transferee assumes the obligations of the existing borrower under the loan instruments. Any such agreement shall not affect the priority, validity or enforceability of any loan instrument. A licensee may charge a fee not in excess of one-tenth of one percent of the remaining unpaid principal balance in the event the loan is assumed by the transferee and the existing borrower continues after the transfer to be obligated for repayment of the entire assumed indebtedness. A licensee may charge a fee not in excess of one percent of the remaining unpaid principal balance in the event the remaining indebtedness is assumed by the transferee and the existing borrower is released from all obligations under the loan instruments, but in no event shall the fee exceed $150 $240.

A licensee making a loan under this chapter secured by a lien on real estate shall comply with the requirements of section 47.20, subdivision 8.

No licensee shall conduct the business of making loans under this chapter within any office, room, or place of business in which any other business is solicited or engaged in, or in association or conjunction therewith, if the commissioner finds that the character of the other business is such that it would facilitate evasions of this chapter or of the rules lawfully made hereunder. The commissioner may promulgate rules dealing with such other businesses.

No licensee shall transact the business or make any loan provided for by this chapter under any other name or at any other place of business than that named in the license. No licensee shall take any confession of judgment or any power of attorney. No licensee shall take any note or promise to pay that does not accurately disclose the principal amount of the loan, the time for which it is made, and the agreed rate or amount of charge, nor any instrument in which blanks are left to be filled in after execution. Nothing herein is deemed to prohibit the making of loans by mail or arranging for settlement and closing of real estate secured loans by an unrelated qualified closing agent at a location other than the licensed location.

Sec. 21. Minnesota Statutes 1994, section 56.125, subdivision 2, is amended to read:

Subd. 2. [REAL ESTATE AS SECURITY.] A licensee may take a lien upon real estate as security for any open-end loan at or after such time as the outstanding balance first exceeds $2,700 $4,320. A subsequent reduction in the balance below $2,700 $4,320 has no effect on the lien. A licensee may retain the security interest until it terminates the open-end account. If there is no outstanding balance in the account and there is no commitment by the licensee to a line of credit in excess of $2,700 $4,320, the licensee shall, within 20 days following written demand by the borrower, deliver to the borrower a release of the mortgage on any real property taken as security for the open-end loan agreement. A real estate mortgage authorized for a financial institution secures all advances and obligations thereunder from the date of recording.

Sec. 22. Minnesota Statutes 1994, section 56.131, subdivision 1, is amended to read:

Subdivision 1. [INTEREST RATES AND CHARGES.] (a) On any loan in a principal amount not exceeding $35,000 $56,000 or 15 percent of a Minnesota corporate licensee's capital stock and surplus as defined in section 53.015, if greater, a licensee may contract for and receive interest, calculated according to the actuarial method, not exceeding the equivalent of the greater of any of the following:

(1) the total of: (i) 33 percent per year on that part of the unpaid balance of the principal amount not exceeding $750; and (ii) 19 percent per year on that part of the unpaid balance of the principal amount exceeding $750; or

(2) 21.75 percent per year on the unpaid balance of the principal amount.

(b) On any loan where interest has been calculated according to the method provided for in paragraph (a), clause (1), interest must be contracted for and earned as provided in that provision or at the single annual percentage rate computed to the nearest 1/100 of one percent that would earn the same total interest at maturity of the contract as would be earned by the application of the graduated rates provided in paragraph (a), clause (1), when the debt is paid according to the agreed terms and the calculations are made according to the actuarial method.

(c) Loans may be interest-bearing or precomputed.

(d) To compute time on interest-bearing and precomputed loans, including, but not limited to the calculation of interest, a day is considered 1/30 of a month when calculation is made for a fraction of a calendar month. A year is 12 calendar months. A calendar month is that period from a given date in one month to the same numbered date in the following month, and if there is no same numbered date, to the last day of the following month. When a period of time includes a whole month and a fraction of a month, the fraction of a month is considered to follow the whole month.

In the alternative, for interest-bearing loans, a licensee may charge interest at the rate of 1/365 of the agreed annual rate for each actual day elapsed.

(e) With respect to interest-bearing loans:

(1) Interest must be computed on unpaid principal balances outstanding from time to time, for the time outstanding. Each payment must be applied first to the accumulated interest and the remainder of the payment applied to the unpaid principal balance; provided however, that if the amount of the payment is insufficient to pay the accumulated interest, the unpaid interest continues to accumulate to be paid from the proceeds of subsequent payments and is not added to the principal balance.

(2) Interest must not be payable in advance or compounded. However, if part or all of the consideration for a new loan contract is the unpaid principal balance of a prior loan, then the principal amount payable under the new loan contract may include any unpaid interest which has accrued. The unpaid principal balance of a precomputed loan is the balance due after refund or credit of unearned interest as provided in paragraph (f), clause (3). The resulting loan contract is deemed a new and separate loan transaction for all purposes.

(f) With respect to precomputed loans:

(1) Loans must be repayable in substantially equal and consecutive monthly installments of principal and interest combined, except that the first installment period may be more or less than one month by not more than 15 days, and the first installment payment amount may be larger than the remaining payments by the amount of interest charged for the extra days and must be reduced by the amount of interest for the number of days less than one month to the first installment payment; and monthly installment payment dates may be omitted to accommodate borrowers with seasonal income.

(2) Payments may be applied to the combined total of principal and precomputed interest until the loan is fully paid. Payments must be applied in the order in which they become due.

(3) When any loan contract is paid in full by cash, renewal or refinancing, or a new loan, one month or more before the final installment due date, a licensee shall refund or credit the borrower with the total of the applicable charges for all fully unexpired installment periods, as originally scheduled or as deferred, which follow the day of prepayment; if the prepayment is made other than on a scheduled payment date, the nearest scheduled installment payment date must be used in the computation; provided further, if the prepayment occurs prior to the first installment due date, the licensee may retain 1/30 of the applicable charge for a first installment period of one month for each day from the date of the loan to the date of prepayment, and shall refund or credit the borrower with the balance of the total interest contracted for. If the maturity of the loan is accelerated for any reason and judgment is entered, the licensee shall credit the borrower with the same refund as if prepayment in full had been made on the date the judgment is entered.

(4) If an installment, other than the final installment, is not paid in full within ten days of its scheduled due date, a licensee may contract for and receive a default charge not exceeding five percent of the amount of the installment, but not less than $4 $5.20.

A default charge under this subdivision may not be collected on an installment paid in full within ten days of its scheduled due date, or deferred installment due date with respect to deferred installments, even though a default or deferral charge on an earlier installment has not been paid in full. A default charge may be collected at the time it accrues or at any time thereafter.

(5) If the parties agree in writing, either in the loan contract or in a subsequent agreement, to a deferment of wholly unpaid installments, a licensee may grant a deferment and may collect a deferment charge as provided in this section. A deferment postpones the scheduled due date of the earliest unpaid installment and all subsequent installments as originally scheduled, or as previously deferred, for a period equal to the deferment period. The deferment period

is that period during which no installment is scheduled to be paid by reason of the deferment. The deferment charge for a one-month period may not exceed the applicable charge for the installment period immediately following the due date of the last undeferred payment. A proportionate charge may be made for deferment for periods of more or less than one month. A deferment charge is earned pro rata during the deferment period and is fully earned on the last day of the deferment period. Should a loan be prepaid in full during a deferment period, the licensee shall make or credit to the borrower a refund of the unearned deferment charge in addition to any other refund or credit made for prepayment of the loan in full.

(6) If two or more installments are delinquent one full month or more on any due date, and if the contract so provides, the licensee may reduce the unpaid balance by the refund credit which would be required for prepayment in full on the due date of the most recent maturing installment in default. Thereafter, and in lieu of any other default or deferment charges, the single annual percentage rate permitted by this subdivision may be charged on the unpaid balance until fully paid.

(7) Following the final installment as originally scheduled or deferred, the licensee, for any loan contract which has not previously been converted to interest-bearing under clause (6), may charge interest on any balance remaining unpaid, including unpaid default or deferment charges, at the single annual percentage rate permitted by this subdivision until fully paid.

(8) With respect to a loan secured by an interest in real estate, and having a maturity of more than 60 months, the original schedule of installment payments must fully amortize the principal and interest on the loan. The original schedule of installment payments for any other loan secured by an interest in real estate must provide for payment amounts that are sufficient to pay all interest scheduled to be due on the loan.

Sec. 23. Minnesota Statutes 1994, section 56.131, subdivision 2, is amended to read:

Subd. 2. [ADDITIONAL CHARGES.] In addition to the charges provided for by this section and section 56.155, no further or other amount whatsoever, shall be directly or indirectly charged, contracted for, or received for the loan made, except actual out of pocket expenses of the licensee to realize on a security after default, and except for the following additional charges which may be included in the principal amount of the loan:

(a) lawful fees and taxes paid to any public officer to record, file, or release security;

(b) with respect to a loan secured by an interest in real estate, the following closing costs, if they are bona fide, reasonable in amount, and not for the purpose of circumvention or evasion of this section; provided the costs do not exceed one percent of the principal amount or $250 $400, whichever is greater:

(1) fees or premiums for title examination, abstract of title, title insurance, surveys, or similar purposes;

(2) fees, if not paid to the licensee, an employee of the licensee, or a person related to the licensee, for preparation of a mortgage, settlement statement, or other documents, fees for notarizing mortgages and other documents, and appraisal fees;

(c) the premium for insurance in lieu of perfecting and releasing a security interest to the extent that the premium does not exceed the fees described in paragraph (a);

(d) discount points and appraisal fees may not be included in the principal amount of a loan secured by an interest in real estate when the loan is a refinancing for the purpose of bringing the refinanced loan current and is made within 24 months of the original date of the refinanced loan. For purposes of this paragraph, a refinancing is not considered to be for the purpose of bringing the refinanced loan current if new funds advanced to the customer, not including closing costs or delinquent installments, exceed $1,000.

Sec. 24. Minnesota Statutes 1994, section 56.131, subdivision 4, is amended to read:

Subd. 4. [ADJUSTMENT OF DOLLAR AMOUNTS.] (a) The dollar amounts in this section, sections 53.04, subdivision 3a, paragraph (c), 56.01, 56.12, and 56.125 shall change periodically, as provided in this section, according to and to the extent of changes in the implicit price deflator for the gross national domestic product, 1972 1987 = 100, compiled by the United States Department of Commerce, and hereafter referred to as the index. The index for December 1980 1991 is the reference base index for adjustments of dollar amounts, except that the index for December 1984 is the reference base index for the minimum default charge of $4. The reference base index for subdivision 1, paragraph (a), clause (1), and subdivision 2, paragraph (d), is December 1990.

(b) The designated dollar amounts shall change on July 1 of each even-numbered year if the percentage of change, calculated to the nearest whole percentage point, between the index for December of the preceding year and the reference base index is ten percent or more, but;

(1) the portion of the percentage change in the index in excess of a multiple of ten percent shall be disregarded and the dollar amounts shall change only in multiples of ten percent of the amounts appearing in Laws 1981, chapter 258 this act, on the date of enactment; and

(2) the dollar amounts shall not change if the amounts required by this section are those currently in effect pursuant to Laws 1981, chapter 258 this act, as a result of earlier application of this section.

(c) If the index is revised, the percentage of change pursuant to this section shall be calculated on the basis of the revised index. If a revision of the index changes the reference base index, a revised reference base index shall be determined by multiplying the reference base index then applicable by the rebasing factor furnished by the department of commerce. If the index is superseded, the index referred to in this section is the one represented by the department of commerce as reflecting most accurately changes in the purchasing power of the dollar for consumers.

(d) The commissioner shall announce and publish:

(1) on or before April 30 of each year in which dollar amounts are to change, the changes in dollar amounts required by paragraph (b); and

(2) promptly after the changes occur, changes in the index required by paragraph (c) including, if applicable, the numerical equivalent of the reference base index under a revised reference base index and the designation or title of any index superseding the index.

(e) A person does not violate this chapter with respect to a transaction otherwise complying with this chapter if that person relies on dollar amounts either determined according to paragraph (b), clause (2) or appearing in the last publication of the commissioner announcing the then current dollar amounts.

(f) The adjustments provided in this section shall not be affected unless explicitly provided otherwise by law.

Sec. 25. Minnesota Statutes 1994, section 56.131, subdivision 6, is amended to read:

Subd. 6. [DISCOUNT POINTS.] A loan made under this section that is secured by real estate and that is in a principal amount of $7,500 $12,000 or more and has a maturity of 60 months or more may contain a provision permitting discount points, if the loan does not provide a loan yield in excess of the maximum rate of interest permitted by this section. Loan yield means the annual rate of return obtained by a licensee computed as the annual percentage rate is computed under Federal Regulation Z. If the loan is prepaid in full, the licensee must make a refund to the borrower to the extent that the loan yield will exceed the maximum rate of interest provided by this section when the prepayment is taken into account.

Sec. 26. Minnesota Statutes 1994, section 56.17, is amended to read:

56.17 [LIMITATION; ASSIGNMENT OF WAGES; SECURITY AGREEMENT.]

No assignment of, or order for payment of, any salary, wages, commissions, or other compensation for services earned or to be earned, given to secure any loan made by any licensee under this chapter, shall be valid unless the principal amount of the loan is $1,200 or less and is paid to the borrower simultaneously with its execution; nor shall any assignment or order, or any security agreement or other lien on household furniture then in the possession and use of the borrower, be valid unless it is in writing, signed in person by the borrower, nor if the borrower is married, unless it is signed in person by both husband and wife; provided, that written assent of a spouse shall not be required when husband and wife have been living separate and apart for a period of at least five months prior to the making of the assignment, order, security agreement, or lien.

Under any assignment or order for the payment of future salary, wages, commissions, or other compensation for services, given as security for a loan made by any licensee under this chapter, a sum not to exceed ten percent of the borrower's salary, wages, commissions, or other compensation for services shall be collectible from the employer of the borrower by the licensee at the time for each payment to the borrower of salary, wages, commissions, or other

compensation for services, from the time that a copy of the assignment, verified by the oath of the licensee or the licensee's agent, together with a similarly verified statement of the amount unpaid upon the loan and a printed copy of this section is served upon the employer; provided, that this section shall not be construed as giving the assignee any greater rights than those under section 181.05.

This section shall control, with respect to licensees, notwithstanding anything in section 47.59, subdivision 12, clause (c), to the contrary.

Sec. 27. [REVISOR INSTRUCTION.]

The revisor of statutes shall change the term "building and loan association" or "savings, building and loan association" or similar term to "savings association" or similar term in Minnesota Statutes and Minnesota Rules.

Sec. 28. [REPEALER.]

Minnesota Statutes 1994, sections 46.03; 48.611; and 48.97, subdivisions 2, 3, and 4, are repealed.

Sec. 29. [EFFECTIVE DATE.]

Sections 1 to 23 and 25 to 28 are effective the day following final enactment.

Section 1. Minnesota Statutes 1994, section 46.04, is amended by adding a subdivision to read:

Subd. 3. [FINANCIAL INSTITUTIONS AND LICENSEE RECORDS.] For purposes of examination and regulation of those entities referred to in subdivisions 1 and 2, records may be maintained on optical image storage systems acceptable to the commissioner. Electronically maintained and stored records must meet the following minimum standards:

(1) a document or record may be transferred to and stored on a nonerasable imaging system and retained only in that format if all documents and records preserved on nonerasable optical imaging systems meet nationally recognized standards for permanent records and are available for retrieval for as long as applicable law requires;

(2) a backup copy of the record is created and stored at a site other than the site where the original is kept. The backup copy must be preserved either: (i) on a nonerasable optical imaging system; or (ii) by another reproduction method approved by the commissioner; and

(3) all contracts for third-party maintenance and storage of those records must include assurance of access by the commissioner consistent with the purposes of this section.

Sec. 2. Minnesota Statutes 1994, section 47.10, subdivision 3, is amended to read:

Subd. 3. [LEASEHOLD PLACE OF BUSINESS; APPROVAL OF CERTAIN LEASE AGREEMENTS.] No bank, trust company, savings bank, or building and loan savings association may acquire real property and improvements of any nature to it for its place of business by lease agreement if the lessor has an existing direct or indirect interest in the management or ownership of the bank, trust company, savings bank, or building and loan savings association without prior written approval by the commissioner. This includes subsequent amendments and associated leasehold improvements. A lessee's expenditures to maintain the leasehold premises consistent with ordinary business conditions and within the preapproved lease agreement does not constitute an amendment requiring prior written approval.

Sec. 3. Minnesota Statutes 1994, section 47.20, subdivision 5, is amended to read:

Subd. 5. [PREPAYMENT PENALTY.] (a) Unless the mortgagor waives its right to prepay the mortgage loan without penalty, in a uniform written disclosure waiver approved by the commissioner and signed by the mortgagor, no conventional loan or loan authorized in subdivision 1 made on or after the effective date of Laws 1977, chapter 350 shall contain a provision requiring or permitting the imposition of a penalty in the event the loan or advance of

credit is prepaid. The prepayment penalty shall not exceed the lesser of two percent of the unpaid principal balance or 60 days interest on the unpaid principal balance. A lender that offers a mortgage loan with a prepayment penalty shall also offer a mortgage loan without a prepayment penalty.

This section does not permit the imposition of a prepayment penalty in the event that the property securing the mortgage loan is sold or the mortgage loan is prepaid in part. No prepayment penalty may be enforced after 42 months from the date of the mortgage loan.

(b) A precomputed conventional loan or precomputed loan authorized in subdivision 1 shall provide for a refund of the precomputed finance charge according to the actuarial method if the loan is paid in full by cash, renewal or refinancing, or a new loan, one month or more before the final installment due date. The actuarial method for the purpose of this section is the amount of interest attributable to each fully unexpired monthly installment period of the loan contract following the date of prepayment in full, calculated as if the loan was made on an interest-bearing basis at the rate of interest provided for in the note based on the assumption that all payments were made according to schedule. A precomputed loan for the purpose of this section means a loan for which the debt is expressed as a sum comprised of the principal amount and the amount of interest for the entire term of the loan computed actuarially in advance on the assumption that all scheduled payments will be made when due, and does not include a loan for which interest is computed from time to time by application of a rate to the unpaid principal balance, interest-bearing loans, or simple-interest loans. For the purpose of calculating a refund for precomputed loans under this section, any portion of the finance charge for extending the first payment period beyond one month may be ignored. Nothing in this section shall be considered a limitation on discount points or other finance charges charged or collected in advance, and nothing in this section shall require a refund of the charges in the event of prepayment. Nothing in this section shall be considered to supersede section 47.204.

Sec. 4. Minnesota Statutes 1994, section 47.20, subdivision 10, is amended to read:

Subd. 10. [WAIVER.] Notwithstanding any other law Except as provided in subdivision 5, the provisions of this section may not be waived by any oral or written agreement executed by any person.

Sec. 5. Minnesota Statutes 1994, section 47.52, is amended to read:

47.52 [AUTHORIZATION.]

(a) With the prior approval of the commissioner, any bank doing business in this state may establish and maintain not more than five detached facilities provided the facilities are located within the municipality in which the principal office of the applicant bank is located; or within 5,000 feet of its principal office measured in a straight line from the closest points of the closest structures involved; or within 100 miles of its principal office measured in a straight line from the closest points of the closest structures involved, if the detached facility is within any municipality in which no bank is located at the time of application or if the detached facility is in a municipality having a population of more than 10,000, or if the detached facility is located in a municipality having a population of 10,000 or less, as determined by the commissioner from the latest available data from the state demographer, or for municipalities located in the seven-county metropolitan area from the metropolitan council, and all the banks having a principal office in the municipality have consented in writing to the establishment of the facility.

(b) A detached facility shall not be closer than 50 feet to a detached facility operated by any other bank and shall not be closer than 100 feet to the principal office of any other bank, the measurement to be made in the same manner as provided above. This paragraph shall not be applicable if the proximity to the facility or the bank is waived in writing by the other bank and filed with the application to establish a detached facility.

(c) Any bank is allowed, in addition to other facilities, one drive-in or walk-up facility located between 150 to 1,500 feet of the main banking house or within 1,500 feet from a detached facility. The drive-in or walk-up facility permitted by this clause is subject to paragraph (b) and section 47.53.

(d) A bank is allowed, in addition to other facilities, part-time deposit-taking locations at elementary and secondary schools located within the municipality in which the main banking house or a detached facility is located if they are established in connection with student education programs approved by the school administration and consistent with safe, sound banking practices.

Sec. 6. Minnesota Statutes 1994, section 47.56, is amended to read:

47.56 [TRANSFER OF LOCATION.]

The location of a detached facility may be transferred to another location, outside of a radius of three miles measured in a straight line is subject to the same procedures and approval as required hereunder for establishing a

new detached facility, except that the relocation of a detached facility within a municipality of 10,000 or less population shall not require consent of other banks required in section 47.52.

Sec. 7. Minnesota Statutes 1994, section 47.61, subdivision 3, is amended to read:

Subd. 3. (a) "Electronic financial terminal" means an electronic information processing device, that is established to do either or both of the following:

(1) capture the data necessary to initiate financial transactions; or

(2) through its attendant support system, store or initiate the transmission of the information necessary to consummate a financial transaction. other than

(b) "Electronic financial terminal" does not include:

(1) a telephone or;

(2) an electronic information processing device that is used internally by a financial institution to conduct the business activities of the institution, that is established to do either or both of the following:

(a) capture the data necessary to initiate financial transactions; or

(b) through its attendant support system, store or initiate the transmission of the information necessary to consummate a financial transaction.; or

(3) an electronic point-of-sale terminal operated by a retailer that is used to process payments for the purchase of goods and services by consumers through the use of debit cards, which payment transactions are subject to the federal Electronic Funds Transfer Act, United States Code, title 12, sections 1693 et seq., and Regulation E of the Federal Reserve Board, Code of Federal Regulations title 12, subpart 205.2; this clause does not exempt the retailer from liability for negligent conduct or intentional misconduct of the operator under section 47.69, subdivision 3.

Sec. 8. Minnesota Statutes 1994, section 47.62, subdivision 2, is amended to read:

Subd. 2. [APPROVAL REQUIRED.] No electronic financial terminal shall be established by a person other than a state or federal savings and loan association, state or federal savings bank, state or federal credit union, or state bank or national banking association unless the commissioner has approved the establishment of the terminal.

Sec. 9. Minnesota Statutes 1994, section 47.62, is amended by adding a subdivision to read:

Subd. 5. [ESTABLISHMENT BY NOTICE.] A bank, savings bank, savings association, or credit union organized under the laws of this state may, after completing the notification procedure required by this subdivision, establish and maintain one or more electronic financial terminals. The filing must be on forms provided by the commissioner. No electronic financial terminal may be established according to sections 47.61 to 47.74 if disallowed by order of the commissioner within 15 days of the filing of a complete and acceptable notification of the intent to establish an electronic financial terminal.

Sec. 10. Minnesota Statutes 1994, section 47.62, is amended by adding a subdivision to read:

Subd. 6. [RELOCATION; PROCEDURE.] An application or notification to relocate an existing financial terminal outside a radius of three miles measured in a straight line must be approved by, or a notification must be filed with, the commissioner of commerce as provided for in this section.

Sec. 11. Minnesota Statutes 1994, section 47.67, is amended to read:

47.67 [ADVERTISING.]

No advertisement by a person which relates to an electronic financial terminal may be inaccurate or misleading with respect to such a terminal. Except with respect to direct mailings by financial institutions to their customers, the advertising of rate of interest paid on accounts in connection with electronic financial terminals is prohibited. Any advertisement, either on or off the site of an electronic financial terminal, promoting the use or identifying the location

of an electronic financial terminal, which identifies any financial institution, group or combination of financial institutions, or third parties as owning or providing for the use of its services is prohibited. The following shall be expressly permitted:

(a) a simple directory listing placed at the site of an electronic financial terminal identifying the particular financial institutions using its services;

(b) the use of a generic name, either on or off the site of an electronic financial terminal, which does not promote or identify any particular financial institution, group or combination of financial institutions, or any third parties;

(c) media advertising or direct mailing of information by a financial institution or retailer identifying locations of electronic financial terminals and promoting their usage; and

(d) any advertising, whether on or off the site, relating to electronic financial terminals, or the services performed at the electronic financial terminals located on the premises of the main office, or any office or detached facility of any financial institution;

(e) a coupon or other promotional advertising that is printed upon the reverse side of the receipt or record of each transaction required under section 47.69, subdivision 6; and

(f) promotional advertising displayed on the electronic screen.

Sec. 12. Minnesota Statutes 1994, section 47.69, subdivision 3, is amended to read:

Subd. 3. Every financial institution using an electronic financial terminal shall maintain reasonable procedures to minimize losses from unauthorized withdrawals from its customers' accounts by use of an electronic financial terminal. After a customer makes a bona fide deposit or payment at an electronic financial terminal and has received a receipt, any loss due to theft or other reason shall not be borne by the customer; provided, loss due to the nonpayment or dishonor of a check, or other order for payment, deposited at an electronic financial terminal shall be governed by the applicable provisions of chapter 336. A financial institution shall be liable for all unauthorized withdrawals unless the unauthorized withdrawal was (1) due to the negligent conduct or the intentional misconduct of the operator of an electronic financial terminal or that operator's agent in which case the operator of an electronic financial terminal or the agent shall be liable, or (2) due to the loss or theft of the customer machine readable card in which case the customer shall be liable, subject to a maximum liability of $50, for those unauthorized withdrawals made prior to the time the financial institution is notified of the loss or theft. The limitation on liability contained in clause (2) is effective only if the issuer is notified of unauthorized charges contained in a bill within 60 days of receipt of the bill by the person in whose name the card is issued. For purposes of this subdivision, "unauthorized withdrawal" means a withdrawal by a person other than the customer who does not have actual, implied, or apparent authority for such withdrawal, and from which withdrawal the customer or a member of the customer's family or household receives no benefit.

Sec. 13. Minnesota Statutes 1994, section 47.69, subdivision 5, is amended to read:

Subd. 5. Any customer of a financial institution may bring a civil action against any person violating any subdivision of this section in the district court in the county of the alleged violator's residence or principal place of business or in the county wherein the alleged violation occurred. Upon adverse adjudication, the defendant shall be liable for actual damages, or $500, whichever is greater, punitive damages when applicable, together with the court costs and reasonable attorneys' fees incurred by the plaintiff. The court may provide such equitable relief as it deems necessary or proper, including enjoining the defendant from further violations. If the unauthorized withdrawal was due to the negligent conduct or the intentional misconduct of an operator or person establishing and maintaining an electronic financial terminal other than a financial institution or agent of a financial institution, that operator or person establishing and maintaining an electronic financial terminal or its agent is liable and subject to a civil action under this subdivision by the financial institution considered liable under subdivision 3 and having made reimbursement to the customer.

Sec. 14. Minnesota Statutes 1994, section 48.16, is amended to read:

48.16 [BANKS MAY NOT PLEDGE ASSETS; EXCEPTIONS.]

No bank or trust company shall pledge, hypothecate, assign, transfer, or create a lien upon or charge against any of its assets except as follows:

(1) to the state;

(2) to secure public deposits;

(3) to secure funds of trustees in bankruptcy;

(4) to secure money borrowed in good faith from other banks, trust companies, or a financial agency created by act of Congress, or the state in programs specifically authorizing state banks to participate as an eligible local lender;

(5) to finance the acquisition of real estate to be carried as an asset as provided for in section 47.10;

(6) to secure a liability that arises from a transfer of a direct obligation of, or obligations that are fully guaranteed as to principal and interest by, the United States government or an agency thereof that the bank or trust company is obligated to repurchase.

This section shall not be construed to permit the use of assets as security for public deposits other than the securities made eligible by law for that purpose.

Sec. 15. Minnesota Statutes 1994, section 48.24, subdivision 5, is amended to read:

Subd. 5. Loans or obligations shall not be subject under this section to any limitation based upon such capital and surplus to the extent that they are secured or covered by guarantees, or by commitments or agreements to take over or to purchase the same, made by:

(1) the commissioner of agriculture on the purchase of agricultural land;

(2) any Federal Reserve bank;

(3) the United States or any department, bureau, board, commission, or establishment of the United States, including any corporation wholly owned directly or indirectly by the United States;

(4) the Minnesota energy and economic development authority; or

(5) the Minnesota export finance authority; or

(6) a municipality or political subdivision within Minnesota to the extent that the guarantee or collateral is a valid and enforceable general obligation of that political body.

Sec. 16. Minnesota Statutes 1994, section 48.48, subdivision 1, is amended to read:

Subdivision 1. [SUBMISSION AND PUBLICATION.] At least four times in each year, and at any other time when so requested by the commissioner, every bank or trust company shall, within 30 days of the date of notice, make and transmit to the commissioner or to the commissioner's designee, in a form the commissioner prescribes, a report, verified by its president or vice-president and by its cashier or treasurer, and attested by at least two to in the official minutes of its directors, stating in detail, under appropriate heads, as required by the commissioner, its assets and liabilities at the close of business on the day specified in the request. The commissioner may accept a report made to a federal authority having supervision of banks or trust companies in fulfilling this requirement. This statement shall be published once at the expense of the bank or trust company in a qualified newspaper in the municipality or town in which the bank or trust company is located, and if there is no such newspaper, then in a qualified newspaper likely to give notice in the municipality or town in which the bank or trust company is located. Proof of publication shall be filed with the commissioner immediately after publication of the report, but no later than 60 days following the date of the notice. That portion of the report constituting the statement of assets, liabilities, and capital and statement of income and expenses must be made available to the public within 45 days of the notice at every location of the bank or trust company including detached facilities and trust service offices.

Sec. 17. Minnesota Statutes 1994, section 48.48, subdivision 2, is amended to read:

Subd. 2. [PENALTIES FOR LATE SUBMISSION.] For failure to send these reports to the commissioner or to the commissioner's designee in the time specified, a bank or trust company shall forfeit to the state the sum of $25 for each day of delay and shall pay the accumulated sum to the commissioner upon a formal demand for payment by the commissioner. If it appears that a report was mailed transmitted by a bank or trust company on or before the end of the 30-day period, or proof of publication mailed on or before the end of the 60-day period, the commissioner

shall waive any forfeit. In the event it does not appear that a report was timely mailed transmitted, the commissioner may nevertheless waive forfeit upon a showing by the bank or trust company to the satisfaction of the commissioner that failure to send the reports was the result of causes beyond the control of the bank or trust company.

Sec. 18. Minnesota Statutes 1994, section 48.49, is amended to read:

48.49 [BOOKS TO BE KEPT.]

Every such bank shall open and keep such books and accounts as the commissioner may prescribe, for the purpose of keeping accurate and convenient records of its transactions; and every bank refusing or neglecting so to do shall forfeit $10 for every day of such neglect or refusal.

Sec. 19. Minnesota Statutes 1994, section 48.61, subdivision 7, is amended to read:

Subd. 7. [SUBSIDIARIES.] (a) A state bank or trust company may organize, acquire, or invest in a subsidiary located in this state for the purposes of engaging in one or more of the following activities, subject to the prior written approval of the commissioner:

(1) any activity, not including receiving deposits, lending money, or paying checks that a state bank is authorized to engage in under state law or rule or under federal law or regulation unless the activity is prohibited by the laws of this state;

(2) any activity that a bank clerical service corporation is authorized to engage in under section 48.89; and

(3) any other activity authorized for a national bank, a bank holding company, or a subsidiary of a national bank or bank holding company under federal law or regulation of general applicability, and approved by the commissioner by rule.

(b) A bank or trust company subsidiary may engage in an activity under this section only upon application together with a filing fee of $250 and with the prior written approval of the commissioner. In approving or denying a proposed activity, the commissioner shall consider the financial and management strength of the bank or trust company, the current written operating plan and policies of the proposed subsidiary corporation, the bank or trust company's community reinvestment record, and whether the proposed activity should be conducted through a subsidiary of the bank or trust company.

(c) The aggregate amount of funds invested in either an equity or loan capacity in all of the subsidiaries of the bank or trust company authorized under this subdivision shall not exceed 25 percent of the capital stock and paid in surplus of the bank or trust company.

(d) A subsidiary organized or acquired under this subdivision is subject to the examination and enforcement authority of the commissioner under chapters 45 and 46 to the same extent as a state bank or trust company.

(e) For the purposes of this section, "subsidiary" means a corporation of which more than 50 percent of the voting shares are owned or controlled by the bank or trust company.

Sec. 20. [52.211] [STUDENT EDUCATION PROGRAMS.]

A credit union is allowed to establish part-time deposit-taking locations at elementary and secondary schools provided that the locations are established in connection with student education programs approved by the school administration and consistent with safe and sound financial institution practices. For purposes of this section, students do not need to be members of the credit union to participate, and the students' parents are not automatically made members by reason of their child's participation.

Sec. 21. Minnesota Statutes 1994, section 53.015, subdivision 4, is amended to read:

Subd. 4. [CAPITAL STOCK.] "Capital stock" means the par value of preferred or common stock multiplied by the respective number of shares of each type of stock. For purposes of section 53.05, clause (7), capital stock may include an amount of mandatory convertible debentures approved by the commissioner. The terms and conditions for redemption of the qualifying debentures must include the prior written approval of the commissioner as a condition for a redemption, but in no event an amount in excess of 50 percent of total preferred or common stock.

Sec. 22. Minnesota Statutes 1994, section 56.14, is amended to read:

56.14 [DUTIES OF LICENSEE.]

Every licensee shall:

(1) deliver to the borrower (or if there are two or more borrowers to one of them) at the time any loan is made a statement making the disclosures and furnishing the information required by the federal Truth-in-Lending Act, United States Code, title 15, sections 1601 to 1667e, as amended from time to time, with respect to the contract of loan. A copy of the loan contract may be delivered in lieu of a statement if it discloses the required information;

(2) deliver or mail to the borrower without request, a written receipt within 30 days following payment for each payment by coin or currency made on account of any loan wherein charges are computed and paid on unpaid principal balances for the time actually outstanding, specifying the amount applied to charges and the amount, if any, applied to principal, and stating the unpaid principal balance, if any, of the loan; and wherein precomputed charges have been added to the principal of the loan specifying the amount of the payment applied to principal and charges combined, the amount applied to default or extension charges, if any, and stating the unpaid balance, if any, of the precomputed loan contract. A periodic statement showing a payment received by mail complies with this clause;

(3) permit payment to be made in advance in any amount on any contract of loan at any time, but the licensee may apply the payment first to all charges in full at the agreed rate up to the date of the payment;

(4) upon repayment of the loan in full, mark indelibly every obligation and security, other than a mortgage or security agreement which secures a new loan to the licensee, signed by the borrower with the word "Paid" or "Canceled," and release any mortgage or security agreement which no longer secures a loan to the licensee, restore any pledge, and cancel and return any note, and any assignment given to the licensee which does not secure a new loan to the licensee within 20 days after the repayment. For purposes of this requirement, the document including actual evidence of an obligation or security may be maintained, stored, and retrieved in a form or format acceptable to the commissioner under section 46.04, subdivision 3;

(5) display prominently in each licensed place of business a full and accurate schedule, to be approved by the commissioner, of the charges to be made and the method of computing the same; furnish a copy of the contract of loan to any person obligated on it or who may become obligated on it at any time upon the request of that person;

(6) show in the loan contract or statement of loan the rate or rates of charge on which the charge in the contract is based, expressed in terms of rate or rates per annum. The rate expression shall be printed in at least 8-point type on the loan statement or copy of the loan contract given to the borrower.;

(7) if a payment results in the prepayment of three or more installment payments on a precomputed loan, at the same time the receipt required by clause (2) is delivered or mailed, deliver or mail to the borrower a notice in at least eight-point type as part of the receipt or together with the receipt. The notice must contain the following statement:

"You have substantially prepaid the installment payments on your loan and may experience an interest savings over the remaining term only if you refinance the balance within the next 30 days."

Sec. 23. Minnesota Statutes 1994, section 56.155, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZATION.] No licensee shall, directly or indirectly, sell or offer for sale any insurance in connection with any loan made under this chapter except as and to the extent authorized by this section. The sale of credit life, credit accident and health, and credit involuntary unemployment insurance is subject to the provisions of chapter 62B, except that the term of the insurance may exceed 60 months if the term of the loan exceeds 60 months. Life, accident, health, and involuntary unemployment insurance, or any of them, may be written upon or in connection with any loan but must not be required as additional security for the indebtedness. If the debtor chooses to procure credit life insurance, credit accident and health insurance, or credit involuntary unemployment insurance as security for the indebtedness, the debtor shall have the option of furnishing this security through existing policies of insurance that the debtor owns or controls, or of furnishing the coverage through any insurer authorized to transact business in this state. A statement in substantially the following form must be made orally, except for loans by mail pursuant to section 56.12, and provided in writing in bold face type of a minimum size of 12 points to the borrower before the

transaction is completed for each credit life, accident and health, and involuntary unemployment insurance coverage sold:

CREDIT LIFE INSURANCE, CREDIT DISABILITY INSURANCE, AND CREDIT INVOLUNTARY UNEMPLOYMENT INSURANCE ARE NOT REQUIRED TO OBTAIN CREDIT. YOU MAY BUY ANY INSURANCE FROM ANYONE YOU CHOOSE OR YOU MAY USE EXISTING INSURANCE.

The licensee shall disclose whether or not the benefits commence as of the first day of disability or involuntary unemployment and shall further disclose the number of days that an insured obligor must be disabled or involuntarily unemployed, as defined in the policy, before benefits, whether retroactive or nonretroactive, commence. In case there are multiple obligors under a transaction subject to this chapter, no policy or certificate of insurance providing credit unemployment benefits may be procured by or through a licensee upon more than one of the obligors. In case there are multiple obligors under a transaction subject to this chapter, no policy or certificate of insurance providing credit accident and health or, credit life insurance, or credit unemployment benefits may be procured by or through a licensee upon more than two of the obligors in which case they shall be insured jointly or in the case of credit unemployment benefits on a basis provided for in rules adopted by the commissioner. The premium or identifiable charge for the insurance must not exceed that filed by the insurer with the department of commerce. The charge, computed at the time the loan is made for a period not to exceed the full term of the loan contract on an amount not to exceed the total amount required to pay principal and charges, may be deducted from the proceeds or may be included as part of the principal of any loan. If a borrower procures insurance by or through a licensee, the statement required by section 56.14 must disclose the cost to the borrower and the type of insurance, and the licensee shall cause to be delivered to the borrower a copy of the policy, certificate, or other evidence thereof, within a reasonable time. No licensee shall decline new or existing insurance which meets the standards set out in this section nor prevent any obligor from obtaining this insurance coverage from other sources. Notwithstanding any other provision of this chapter, any gain or advantage to the licensee or to any employee, affiliate, or associate of the licensee from this insurance or the sale or provision thereof is not an additional or further charge in connection with the loan; nor are any of the provisions pertaining to insurance contained in this section prohibited by any other provision of this chapter.

Sec. 24. Minnesota Statutes 1994, section 59A.06, subdivision 2, is amended to read:

Subd. 2. Every licensee shall preserve its records of premium finance transactions for at least three years after making the final entry in respect to any premium finance agreement. The records may be preserved in photographic form or in a form acceptable to the commissioner under section 46.04, subdivision 3.

Sec. 25. Minnesota Statutes 1994, section 62B.04, subdivision 1, is amended to read:

Subdivision 1. [CREDIT LIFE INSURANCE.] (1) The initial amount of credit life insurance shall not exceed the amount of principal repayable under the contract of indebtedness plus an amount equal to one monthly payment. Thereafter, if the indebtedness is repayable in substantially equal installments according to a predetermined schedule, the amount of insurance shall not exceed the scheduled indebtedness plus one monthly payment or actual amount of indebtedness, whichever is greater.

(2) Notwithstanding clause (1), the amount of credit life insurance written in connection with credit transactions repayable over a specified term exceeding 63 months shall not exceed the greater of: (i) the actual amount of unpaid indebtedness as it exists from time to time; or (ii) where an indebtedness is repayable in substantially equal installments according to a predetermined schedule, the scheduled amount of unpaid indebtedness, less any unearned interest or finance charges, plus an amount equal to two monthly payments.

(3) Notwithstanding clauses (1) and (2), insurance on educational, agricultural, and horticultural credit transaction commitments may be written on a nondecreasing or level term plan for the amount of the loan commitment.

(4) If the contract of indebtedness provides for a variable rate of finance charge or interest, the initial rate or the scheduled rates based on the initial index shall be used in determining the scheduled amount of indebtedness, and subsequent changes to the rate shall be disregarded in determining whether the contract is repayable in substantially equal installments according to a predetermined schedule.

Sec. 26. Minnesota Statutes 1994, section 62B.08, subdivision 2, is amended to read:

Subd. 2. Each individual policy or group certificate shall provide that in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund of an amount paid by the debtor for insurance shall be paid or credited promptly to the person entitled thereto; provided, however, that the commissioner shall

prescribe a minimum refund and no refund which would be less than such minimum need be made a premium refund or credit need not be made if the amount thereof is less than $5. The formula to be used in computing the refund shall be filed with and approved by the commissioner.

Sec. 27. [168.79] [MOTOR VEHICLE LEASING CONTRACT REGULATION.]

Subdivision 1. [DEFINITIONS.] (a) For purposes of this section, the terms defined in this subdivision have the meanings given.

(b) "Acquisition fee" means an origination fee, document preparation fee, or similar change regardless of what it is called, charged by the lessor or lease finance company for the privilege of entering into the lease contract.

(c) "Capitalized cost" means the charge for the motor vehicle and other charges to be financed under the lease contract less any capitalized cost reduction.

(d) "Capitalized cost reduction" means the amount paid by the lessee at the time of entering into the leasing contract to be applied against the cost of the motor vehicle, regardless of whether it is called a down payment or similar term.

(e) "Commissioner" means the commissioner of commerce or that commissioner's designee.

(f) "Depreciation" means the capitalized cost minus the residual.

(g) "Disposition fee" means a charge for disposing of the motor vehicle upon termination fo the leasing contract.

(h) "Excess mileage charge" means a charge imposed for exceeding the mileage allowed under the leasing contract.

(i) "Gap insurance" means insurance to protect the lessee, in the event of a total loss of the motor vehicle, against a difference between the amount owing under the leasing contract the amount received from insurance on the motor vehicle.

(j) "Lease finance company" means a person engaged, in whole or in part, in the business of purchasing motor vehicle leasing contracts, or any rights with respect to them, in this state from one or more lessors. The term includes a bank, trust company, savings bank, savings association, industrial loan and thrift company, or a regulated lender, if so engaged. The term also includes a lessor engaged, in whole or in part, in the business of creating and holding motor vehicle leasing contracts. The term includes a person that obtains a pledge of, or other security interest in, motor vehicle leasing contracts.

(k) "Lessee" means an individual, a small business as defined in section 645.445, or a small employer as defined in section 62L.02, that enters into a motor vehicle leasing contract in this state with a lessor.

(l) "Lessor" means a person engaged in the business of entering into motor vehicle leasing contract in this state with lessees.

(m) "Money factor" means the rate charged under the leasing contract for the time value of money, whether called interest or not. The money factor is the interest rate divided by 2400.

(n) "Motor vehicle" has the meaning given in section 168.66, subdivision 5, except that the term includes all farm tractors and other agricultural machinery.

(o) "Motor vehicle leasing contract" or "leasing contract" means a contract for the lease of a motor vehicle entered into in this state between a lessor and lessee, provided that a contract for the short-term rental of a motor vehicle at a daily, weekly, or monthly rental rate is not a lease.

(p) "MSRP" means the manufacturer's suggested retail price of the motor vehicle.

(q) "Residual" means the lessor's determination of the expected value of the motor vehicle at the scheduled termination date of the leasing contract.

Subd. 2. [APPLICABILITY.] (a) This section applies to all motor vehicle leasing contracts entered into in this state, including those extended or otherwise renewed beyond their original term after the effective date of this section.

(b) This section does not apply to a retail installment sales contract, as defined under section 168.66, subdivision 4.

Subd. 3. [GENERAL REQUIREMENTS AND PROVISIONS.] (a) Motor vehicle lease contracts must comply with Regulation Z of the Federal Reserve Board. This includes contracts that are not covered by Regulation Z but are covered by this section. For purposes of the state requirement contained in this paragraph, the commissioner may independently determine whether a motor vehicle leasing contract complies with Regulation Z and is not bound by any such determination made by a federal regulator for purposes of federal enforcement. The commissioner is not bound by any interpretative opinions or other guidance provided by a federal regulator.

(b) Motor vehicle leasing contracts and any disclosures and other documents provided in connection with them must comply with the applicable requirements of chapter 72C. The certification of the Flesch scale analysis readability score must be provided by a qualified person not employed by, or regularly retained in any way by, the lessor or lease finance company. For purposes of this paragraph, requirements are applicable unless clearly inapplicable, as determined by the commissioner.

(c) Motor vehicle leasing contracts must comply with all applicable requirements of sections 168.66 to 168.78. For purposes of this paragraph, requirements are applicable unless clearly inapplicable, as determined by the commissioner.

Subd. 4. [REQUIRED DISCLOSURE.] (a) This subdivision applies to all motor vehicle leasing contracts, in addition to requirements under subdivision 3.

(b) A motor vehicle leasing contract, and all disclosures required in connection with it, must not be used in this state until the forms have been filed with and approved by the commissioner. Any such forms filed with the commissioner must be accompanied by the written opinion of an attorney admitted to practice in this state, stating that in the attorney's opinion, the forms fully comply with all requirements of this section. If, however, the attorney believes that there is any uncertainty as to whether the forms fully comply, the attorney's opinion shall state the uncertainty and the grounds for the uncertainty. If the attorney's opinion is based in whole or in part upon the analysis by accountants, actuaries, financial analysts, or other attorneys, the attorney providing the opinion shall attach a copy of the written analyses relied upon. The attorney providing the opinion must not be employed by, or retained on a regular basis by, the lessor, the lease finance company, an affiliate of either, or a trade association of either.

(c) A motor vehicle leasing contract may be canceled by the lessee at any time, for any reason or for no reason, prior to the end of the fifth business day after the day upon which the leasing contract became effective, at no cost to the lessee. Upon the cancellation, the lessor or lease finance company shall refund to the lessee all payments of any kind made by the lessee in connection with the lease contract.

(d) A motor vehicle leasing contract may be canceled by the lessee, for any reason or for no reason, at any time prior to the end of the 60th day after the effective date of the leasing contract. In the event of a cancellation under this paragraph, the total charge to the lessee must not exceed the money factor times 24 times the capitalized cost, times the number of months since the effective date, in addition to a depreciation charge of 1/60 times the charge for the motor vehicle times the number of months since the effective date. Partial months must be included on a pro rata basis, based upon a 30-day month.

(e) A motor vehicle leasing contract must be accompanied by a completed disclosure form, clearly explaining the differences between a leasing contract, a sales finance contract, and a purchase for cash. The disclosure must compare the total cost to the customer at one-year intervals, including the time value of money.

(f) A motor vehicle leasing contract and any written disclosures used with it must prominently display the telephone number of the commissioner and state that complaints may be made to the commissioner.

(g) A motor vehicle leasing contract must be accompanied by a disclosure form informing the potential lessee of:

(1) the MSRP of the vehicle and, if the lessor is also in the business of selling motor vehicles, the lessor's average discount from the MSRP on cash purchases and sales finance contracts over the most recent 12 calendar months, not including the most recent calendar month;

(2) the charge for the motor vehicle implicit in the leasing contract;

(3) the annual percentage rate as defined under the Federal Truth in Lending Act, United States Code, title 15, sections 1601 to 1667e;

(4) the money factor and its relationship to the annual percentage rate;

(5) an amortization schedule showing the allocation of each payment among interest, credit against the capitalization cost, and credit against other charges, showing with each payment the amount required at that point to purchase the motor vehicle for cash, if that option is offered;

(6) the amounts of the acquisition fee, capitalized cost, capitalized cost reduction, depreciation, disposition fee, excess mileage charge, premiums for gap insurance, the residual, and any other charges of any kind;

(7) the commissions received by the lessor or lease finance company for the gap insurance, together with a statement that the insurance is not required as a condition of the leasing contract;

(8) precisely how the amount needed to purchase the motor vehicle will be determined at each point during the term of the leasing contract, if that option is available, and at termination; and

(9) the rights of cancellation under paragraphs (c) and (d).

Subd. 5. [ENFORCEMENT.] (a) The commissioner shall enforce this section and has for purposes of this section all enforcement powers otherwise available to the commissioner.

(b) A lessee or other person damaged by a violation of this section has the rights and remedies provided under section 8.31, subdivision 3a.

(c) The penalty or damages assessed against a lessor or lease finance company under paragraphs (a) and (b) must be no less than the interest that was paid or would have been payable by the lessee over the term of the motor vehicle leasing contract.

(d) A motor vehicle leasing contract that violates this section is not assignable, transferable, or subject to creation of a security interest. Any purported assignment, transfer, or creation of a security interest in the leasing contract is voidable at the option of the party to whom the contract was purportedly assigned, transferred, or pledged as security. A lessor, lease finance company, or the assignee of either, must provide to prospective assignees, transferees, or recipients of a security interest a certification of the commissioner that the form of the motor vehicle leasing contract, and all disclosures used with it, were approved by the commissioner prior to use and have not since that time been disapproved by the commissioner.

Sec. 28. Minnesota Statutes 1994, section 300.20, subdivision 1, is amended to read:

Subdivision 1. [ELECTION.] The business of savings banks must be managed by a board of at least seven trustees, residents of this state, each of whom, before being authorized to act, must file a written acceptance of the trust. The business of other corporations must be managed by a board of at least three five directors, unless a greater number is otherwise required by law, elected by ballot by the stockholders or members. A board of directors of a financial institution referred to in section 47.12 which has less than five members on August 1, 1995, is not subject to this requirement but may be increased to not more than five members by order of the commissioner of commerce.

Sec. 29. Minnesota Statutes 1994, section 325G.02, subdivision 1, is amended to read:

Subdivision 1. [APPLICABILITY.] For purposes of sections 325G.02 to 325G.04 325G.042 the terms defined in this section shall have meanings given them.

Sec. 30. [325G.042] [CONSUMER CREDIT; EQUAL TREATMENT OF SPOUSES.]

Subdivision 1. [CONSIDERATION REQUIRED; SPOUSAL CREDIT HISTORY.] (a) To the extent that an issuer of financial transaction cards considers credit history in evaluating the credit worthiness of similarly qualified applicants for a similar type and amount of credit, in evaluating an applicant's credit worthiness, the issuer shall consider:

(1) the credit history, when available, of accounts designated as accounts that the applicant and the applicant's spouse are permitted to use or for which both are contractually liable; and

(2) at the applicant's request, the credit history, when available, of any account reported in the name of the applicant's spouse or former spouse that the applicant can demonstrate accurately reflects the applicant's credit worthiness.

(b) In considering a credit history referred to in paragraph (a), the issuer shall consider it as if the credit history were reported in the name of the applicant.

(c) This section does not affect the right of an issuer to decline to issue a financial transaction card to an applicant who does not meet the issuer's standards of credit worthiness, other than credit history.

Subd. 2. [CREDIT REPORTING; EQUAL TREATMENT OF SPOUSES.] (a) An issuer of financial transaction cards that furnishes credit information shall designate:

(1) any new account to reflect the participation of both spouses if the applicant's spouse is permitted to use or is contractually liable on the account, other than as a guarantor, surety, endorser, or similar party; and

(2) any existing account to reflect such participation, within 90 days after receiving a written request to do so from one of the spouses. The issuer shall at least once per year, inform the accountholder in writing of the right to make that request.

(b) If an issuer of financial transaction cards furnishes credit information to a consumer reporting agency concerning an account designated to reflect the participation of both spouses, the issuer shall furnish the information in a manner that will enable the agency to provide access to the information in the name of each spouse.

(c) If an issuer of financial transaction cards furnishes credit information in response to an inquiry concerning an account designated to reflect the participation of both spouses, the issuer shall furnish the information in the name of the spouse about whom the information is requested.

Subd. 3. [ENFORCEMENT.] Enforcement of this section is under section 8.31, except that in the private cause of action under subdivision 3a of that section, the damages are limited to $1,000 and the plaintiff has no right to recover costs of investigation and attorney fees.

Sec. 31. Minnesota Statutes 1994, section 327B.04, subdivision 1, is amended to read:

Subdivision 1. [LICENSE AND BOND REQUIRED.] No person shall act as a dealer in manufactured homes, new or used, without a license and a surety bond as provided in this section. No person shall manufacture manufactured homes without a license and a surety bond as provided in this section. The licensing and bonding requirements of this section do not apply to any bank, savings bank, savings and loan association, or credit union, chartered by either this state or the federal government, which acts as a dealer only by repossessing manufactured homes and then offering the homes for resale through the brokering services of a licensed dealer or real estate broker or salesperson.

Sec. 32. Minnesota Statutes 1994, section 327B.09, subdivision 1, is amended to read:

Subdivision 1. [LICENSE REQUIRED.] No person shall engage in the business, either exclusively or in addition to any other occupation of manufacturing, selling, offering to sell, soliciting or advertising the sale of manufactured homes, or act as a broker without being licensed as a manufacturer or a dealer as provided in section 327B.04. Any person who manufactures, sells, offers to sell, solicits or advertises the sale of manufactured homes, or acts as a broker in violation of this subdivision shall nevertheless be subject to the duties, prohibitions and penalties imposed by sections 327B.01 to 327B.12. This subdivision chapter does not prohibit either an individual from reselling, without a license, a manufactured home which is or has been the individual's residence or any bank, savings bank, savings association, or credit union, chartered by either this state or the federal government, from reselling, without a license, a repossessed manufactured home.

Sec. 33. Minnesota Statutes 1994, section 332.23, subdivision 1, is amended to read:

Subdivision 1. [ORIGINATION FEE, CREDIT BACKGROUND REPORT COST.] The licensee may charge an origination fee of not more than $25 and collect the actual cost of a credit background report from a credit reporting agency not related to or affiliated with the licensee. The costs to the debtor of said origination fee and credit background report may be made from the originating amount paid by the debtor to the licensee. The cost of only one credit background report may be collected from the debtor in any 12-month period.

Sec. 34. Minnesota Statutes 1994, section 332.23, subdivision 2, is amended to read:

Subd. 2. [WITHDRAWAL OF FEE.] The licensee may withdraw and retain as partial payment of the licensee's total fee not more than 15 percent of any sum deposited with the licensee by the debtor for distribution. The remaining 85 percent must be disbursed to listed creditors pursuant to and in accordance with the contract between the debtor

and the licensee within 35 days after receipt. Total payment to licensee for services rendered, excluding the origination fee and any credit background report, shall not exceed 15 percent of funds deposited with licensee by debtor for distribution.

Sec. 35. [RECOMMENDATIONS; POINT-OF-SALE TERMINALS.]

The commissioner of commerce shall select and convene an informal workgroup to make recommendations to the commissioner regarding whether there is a need to license electronic point-of-sale terminals operated by a retailer for use with credit cards, rather than debit cards. The informal workgroup must include persons representing retailers, financial institutions, and consumers. The commissioner shall make recommendations to the legislature no later than December 1, 1994.

Sec. 36. [EFFECTIVE DATE.]

Sections 1 to 2, 5 to 15, 17 to 21, 23 to 26, 28, and 31 to 35 are effective the day following final enactment. Sections 3 and 4 are effective September 1, 1995. Section 16 is effective for reports filed for close of business beginning June 30, 1995. Section 22 is effective June 1, 1995. Section 27 is effective January 1, 1996. Sections 29 and 30 are effective August 1, 1995.

Section 1. [47.59] [FINANCIAL INSTITUTION CREDIT EXTENSION MAXIMUM RATES.]

Subdivision 1. [DEFINITIONS.] For purposes of this section, the following definitions shall apply.

(a) "Actuarial method" has the meaning given the term in the Code of Federal Regulations, title 12, part 226, and appendix J thereto.

(b) "Annual percentage rate" has the meaning given the term in the Code of Federal Regulations, title 12, part 226, but using the definition of "finance charge" used in this section.

(c) "Borrower" means a debtor under a loan or a purchaser or debtor under a credit sale contract.

(d) "Business purpose" means a purpose other than personal, family, household, or agricultural purpose.

(e) "Cardholder" means a person to whom a credit card is issued or who has agreed with the financial institution to pay obligations arising from the issuance to or use of the card by another person.

(f) "Consumer loan" means a loan made by a financial institution in which:

(1) the debtor is a person other than an organization;

(2) the debt is incurred primarily for a personal, family, or household purpose; and

(3) the debt is payable in installments or a finance charge is made.

(g) "Credit" means the right granted by a financial institution to a borrower to defer payment of a debt, to incur debt and defer its payment, or to purchase property or services and defer payment.

(h) "Credit card" means a card or device issued under an arrangement pursuant to which a financial institution gives to a cardholder the privilege of obtaining credit from the financial institution or other person in purchasing or leasing property or services, obtaining loans, or otherwise. A transaction is "pursuant to a credit card" only if credit is obtained according to the terms of the arrangement by transmitting mechanical or electronic methods, or in any other manner. A transaction is not "pursuant to a credit card" if the card or device is used solely in that transaction to:

(1) identify the cardholder or evidence the cardholder's creditworthiness and credit is not obtained according to the terms of the arrangement;

(2) obtain a guarantee of payment from the cardholder's deposit account, whether or not the payment results in a credit extension to the cardholder by the financial institution; or

(3) effect an immediate transfer of funds from the cardholder's deposit account by electronic or other means, whether or not the transfer results in a credit extension to the cardholder by the financial institution.

(i) "Credit sale contract" means a contract evidencing a credit sale. "Credit sale" means a sale of goods or services, or an interest in land, in which:

(1) credit is granted by a seller who regularly engages as a seller in credit transactions of the same kind; and

(2) the debt is payable in installments or a finance charge is made.

(j) "Finance charge" has the meaning set forth in this section.

(k) "Financial institution" means state and federally chartered banks, state and federally chartered banks and trusts, trust companies with banking powers, state and federally chartered savings banks, state and federally chartered savings associations, industrial loan and thrift companies, and regulated lenders.

(l) "Loan" means:

(1) the creation of debt by the financial institution's payment of money to the borrower or a third person for the account of the borrower;

(2) the creation of debt pursuant to a credit card in any manner, including a cash advance or the financial institution's honoring a draft or similar order for the payment of money drawn or accepted by the borrower, paying or agreeing to pay the borrower's obligation, or purchasing or otherwise acquiring the borrower's obligation from the obligee or the borrower's assignee;

(3) the creation of debt by a cash advance to a borrower pursuant to an overdraft line of credit arrangement;

(4) the creation of debt by a credit to an account with the financial institution upon which the borrower is entitled to draw immediately;

(5) the forbearance of debt arising from a loan; and

(6) the creation of debt pursuant to open-end credit.

"Loan" does not include the forbearance of debt arising from a sale or lease, a credit sale contract, or an overdraft from a person's deposit account with a financial institution which is not pursuant to a written agreement to pay overdrafts with the right to defer repayment thereof.

(m) "Official fees" means:

(1) fees and charges which actually are or will be paid to public officials for determining the existence of or for perfecting, releasing, terminating, or satisfying a security interest or mortgage relating to a loan or credit sale, and any separate fees or charges which actually are or will be paid to public officials for recording a notice described in section 580.032, subdivision 1; and

(2) premiums payable for insurance in lieu of perfecting a security interest or mortgage otherwise required by a financial institution in connection with a loan or credit sale, if the premium does not exceed the fees and charges described in clause (1), which would otherwise be payable.

(n) "Organization" means a corporation, government, or government subdivision or agency, trust, estate, partnership, joint venture, cooperative, limited liability company, limited liability partnership, or association.

(o) "Person" means a natural person or an organization.

(p) "Principal" means the total of:

(1) the amount paid to, received by or paid or repayable for the account of the borrower; and

(2) to the extent that payment is deferred:

(i) the amount actually paid or to be paid by the financial institution for additional charges permitted under this section; and

(ii) prepaid finance charges.

Subd. 2. [APPLICATION.] This section does not apply to loans and other direct advances of credit made by financial institutions as lender or creditor under sections 47.20, 47.21, 47.201, 47.204, 47.58, 47.60, 48.185, 48.195, 59A.01, 334.01, 334.011, 334.012, 334.06, and 334.061 to 334.19.

Subd. 3. [FINANCE CHARGE FOR LOANS.] (a) With respect to a loan, including a loan pursuant to open-end credit but excluding open-end credit pursuant to a credit card, a financial institution may contract for and receive a finance charge on the unpaid balance of the principal amount not to exceed the greater of:

(1) an annual percentage rate not exceeding 21.75 percent; or

(2) the total of:

(i) 33 percent per year on that part of the unpaid balance of the principal amount not exceeding $750; and

(ii) 19 percent per year on that part of the unpaid balance of the principal amount exceeding $750.

With respect to open-end credit pursuant to a credit card, the financial institution may contract for and receive a finance charge on the unpaid balance of the principal amount at an annual percentage rate not exceeding 18 percent per year.

(b) On a loan where the finance charge is calculated according to the method provided for in paragraph (a), clause (2), the finance charge must be contracted for and earned as provided in that provision or at the single annual percentage rate computed to the nearest .001 of one percent that would earn the same total finance charge at maturity of the contract as would be earned by the application of the graduated rates provided in paragraph (a), clause (2), when the debt is paid according to the agreed terms and the calculations are made according to the actuarial method.

(c) With respect to a loan, the finance charge must be considered not to exceed the maximum annual percentage rate permitted under this section if the finance charge contracted for and received does not exceed the equivalent of the maximum annual percentage rate calculated in accordance with Code of Federal Regulations, title 12, part 226, except that the following will not in any event be considered a finance charge:

(1) a charge as a result of default or delinquency under subdivision 6 if made for actual unanticipated late payment, delinquency, default, or other similar occurrence, and a charge made for an extension or deferment under subdivision 5, unless the parties agree that these charges are finance charges;

(2) an additional charge under subdivision 6; or

(3) a discount, if a financial institution purchases a loan at less than the face amount of the obligation or purchases or satisfies obligations of a cardholder pursuant to a credit card and the purchase or satisfaction is made at less than the face amount of the obligation.

(d) This subdivision does not limit or restrict the manner of calculating the finance charge, whether by way of add-on, discount, discount points, precomputed charges, single annual percentage rate, variable rate, interest in advance, compounding, average daily balance method, or otherwise, if the annual percentage rate does not exceed that permitted by this section.

(e) With respect to a loan secured by real estate, if a finance charge is calculated or collected in advance, or included in the principal amount of the loan, and the borrower prepays the loan in full, the financial institution shall credit the borrower with a refund of the charge to the extent that the annual percentage rate yield on the loan would exceed the maximum rate permitted under paragraph (a), taking into account the prepayment.

(f) With respect to all other loans, if the finance charge is calculated or collected in advance, or included in the principal amount of the loan, and the borrower prepays the loan in full, the financial institution shall credit the borrower with a refund of the charge to the extent the annual percentage rate yield on the loan would exceed the annual percentage rate on the loan as originally determined under paragraph (a) and taking into account the prepayment.

(g) For the purpose of calculating the refund under this subdivision, the financial institution may assume that the contract was paid before the date of prepayment according to the schedule of payments under the loan and that all payments were paid on their due dates.

(h) For loans repayable in substantially equal successive monthly installments, the financial institution may calculate the refund under paragraph (f) as the portion of the finance charge allocable on an actuarial basis to all wholly unexpired payment periods following the date of prepayment, based on the annual percentage rate on the loan as originally determined under paragraph (a), and for the purpose of calculating the refund may assume that all payments are made on the due date.

(i) The dollar amounts in this subdivision and subdivision (6), clause (4), shall change periodically, as provided in this section, according to and to the extent of changes in the implicit price deflator for the gross domestic product, 1987 = 100, compiled by the United States Department of Commerce, and hereafter referred to as the index. The index for December 1991 is the reference base index for adjustments of dollar amounts.

(j) The designated dollar amounts shall change on July 1 of each even-numbered year if the percentage of change, calculated to the nearest whole percentage point, between the index for December of the preceding year and the reference base index is ten percent or more; but

(1) the portion of the percentage change in the index in excess of a multiple of ten percent shall be disregarded and the dollar amounts shall change only in multiples of ten percent of the amounts appearing in this act, on the date of enactment; and

(2) the dollar amounts shall not change if the amounts required by this section are those currently in effect pursuant to this act, as a result of earlier application of this section.

(k) If the index is revised, the percentage of change pursuant to this section shall be calculated on the basis of the revised index. If a revision of the index changes the reference base index, a revised reference base index shall be determined by multiplying the reference base index then applicable by the rebasing factor furnished by the department of commerce. If the index is superseded, the index referred to in this section is the one represented by the department of commerce as reflecting most accurately changes in the purchasing power of the dollar for consumers.

(l) The commissioner shall announce and publish:

(1) on or before April 30 of each year in which dollar amounts are to change, the changes in dollar amounts required by paragraph (j); and

(2) promptly after the changes occur, changes in the index required by paragraph (k) including, if applicable, the numerical equivalent of the reference base index under a revised reference base index and the designation or title of any index superseding the index.

(m) A person does not violate this chapter with respect to a transaction otherwise complying with this chapter if that person relies on dollar amounts either determined according to paragraph (j), clause (2), or appearing in the last publication of the commissioner announcing the then current dollar amounts.

(n) The adjustments provided in this section shall not be affected unless explicitly provided otherwise by law.

Subd. 4. [FINANCE CHARGE FOR CREDIT SALES MADE BY A THIRD PARTY.] (a) A person may enter into a credit sale contract for sale to a financial institution and a financial institution may purchase and enforce the contract, if the annual percentage rate provided for in the contract does not exceed that permitted in this section, or, in the case of contracts governed by sections 168.66 to 168.77, the rates permitted by those sections.

(b) The annual percentage rate may not exceed the equivalent of the greater of either of the following:

(1) the total of:

(i) 36 percent per year on that part of the unpaid balances of the amount financed that is $300 or less;

(ii) 21 percent per year on that part of the unpaid balances of the amount financed which exceeds $300 but does not exceed $1,000; and

(iii) 15 percent per year on that part of the unpaid balances of the amount financed which exceeds $1,000; or

(2) 19 percent per year on the unpaid balances of the amount financed.

(c) This subdivision does not limit or restrict the manner of calculating the finance charge whether by way of add-on, discount, discount points, single annual percentage rate, precomputed charges, variable rate, interest in advance, compounding, or otherwise, if the annual percentage rate calculated under paragraph (d) does not exceed that permitted by this section. The finance charge may be contracted for and earned at the single annual percentage rate that would earn the same finance charge as the graduated rates when the debt is paid according to the agreed terms and the finance charge is calculated under paragraph (d). If the finance charge is calculated and collected in advance, or included in the principal amount of the contract, and the borrower prepays the contract in full, the financial institution shall credit the borrower with a refund of the charge to the extent the annual percentage rate yield on the contract would exceed the annual percentage rate on the contract as originally determined under paragraph (d) and taking into account the prepayment. For the purpose of calculating the refund under this subdivision, the financial institution may assume that the contract was paid before the date of prepayment according to the schedule of payments under the contract and that all payments were paid on their due dates. For contracts repayable in substantially equal successive monthly installments, the financial institution may calculate the refund as the portion of the finance charge allocable on an actuarial basis to all wholly unexpired payment periods following the date of prepayment, based on the annual percentage rate on the contract as originally determined under paragraph (d), and for the purpose of calculating the refund may assume that all payments are made on the due date.

(d) The annual percentage rate must be calculated in accordance with Code of Federal Regulations, title 12, part 226, except that the following will not in any event be considered a finance charge:

(1) a charge as a result of delinquency or default under subdivision 6 if made for actual unanticipated late payment, delinquency, default, or other similar occurrence, and a charge made for an extension or deferment under subdivision 5, unless the parties agree that these charges are finance charges;

(2) an additional charge under subdivision 6; or

(3) a discount, if a financial institution purchases a contract evidencing a credit sale at less than the face amount of the obligation or purchases or satisfies obligations of a cardholder according to a credit card and the purchase or satisfaction is made at less than the face amount of the obligation.

Subd. 5. [EXTENSIONS AND DEFERMENTS.] The parties may agree in writing, either in the loan contract or credit sale contract or in a subsequent agreement, to a deferment of wholly unpaid installments. For precomputed loans and credit sale contracts, the manner of deferment charge shall be determined as provided for in this section. A deferment postpones the scheduled due date of the earliest unpaid installment and all subsequent installments as originally scheduled, or as previously deferred, for a period equal to the deferment period. The deferment period is that period during which no installment is scheduled to be paid by reason of the deferment. The deferment charge for a one-month period may not exceed the applicable charge for the installment period immediately following the due date of the last undeferred payment. A proportionate charge may be made for deferment periods of more or less than one month. A deferment charge is earned pro rata during the deferment period and is fully earned on the last day of the deferment period. If a loan or credit sale is prepaid in full during a deferment period, the financial institution shall make or credit to the borrower a refund of the unearned deferment charge in addition to any other refund or credit made for prepayment of the loan or credit sale in full.

For the purpose of this subdivision, "applicable charge" means the amount of finance charge attributable to each monthly installment period for the loan or credit sale contract. The applicable charge is computed as if each installment period were one month and any charge for extending the first installment period beyond the one month, or reduction in charge for a first installment less than one month, is ignored. The applicable charge for any installment period is that which would have been made for the period had the loan been made on an interest-bearing basis at the single annual percentage rate provided for in the contract based upon the assumption that all payments were made according to schedule. For convenience in computation, the financial institution may round the single annual rate to the nearest one quarter of one percent.

Subd. 6. [ADDITIONAL CHARGES.] (a) In addition to the finance charges permitted by this section, a financial institution may contract for and receive the following additional charges that may be included in the amount financed:

(1) official fees and taxes;

(2) charges for insurance as described in paragraph (b);

(3) with respect to a loan or credit sale contract secured by real estate, the following "closing costs," if they are bona fide, reasonable in amount, and not for the purpose of circumvention or evasion of this section:

(i) fees or premiums for title examination, abstract of title, title insurance, surveys, or similar purposes;

(ii) fees for preparation of a deed, mortgage, settlement statement, or other documents, if not paid to the financial institution;

(iii) escrows for future payments of taxes, including assessments for improvements, insurance, and water, sewer, and land rents;

(iv) fees for notarizing deeds and other documents; and

(v) appraisal and credit report fees;

(4) a delinquency charge on a payment, including the minimum payment due in connection with the open-end credit, not paid in full on or before the tenth day after its due date in an amount not to exceed five percent of the amount of the payment or $5.20, whichever is greater;

(5) for a returned check or returned automatic payment withdrawal request, an amount not in excess of the service charge limitation in section 332.50; and

(6) charges for other benefits, including insurance, conferred on the borrower that are of a type that is not for credit.

(b) An additional charge may be made for insurance written in connection with the loan or credit sale contract, which may be included in the amount financed:

(1) with respect to insurance against loss of or damage to property, or against liability arising out of the ownership or use of property, if the financial institution furnishes a clear, conspicuous, and specific statement in writing to the borrower setting forth the cost of the insurance if obtained from or through the financial institution and stating that the borrower may choose the person through whom the insurance is to be obtained;

(2) with respect to credit insurance providing life, accident, health, or unemployment coverage, if the insurance coverage is not required by the financial institution, and this fact is clearly and conspicuously disclosed in writing to the borrower, and the borrower gives specific, dated, and separately signed affirmative written indication of the borrower's desire to do so after written disclosure to the borrower of the cost of the insurance; and

(3) with respect to the vendor's single interest insurance, but only (i) to the extent that the insurer has no right of subrogation against the borrower; and (ii) to the extent that the insurance does not duplicate the coverage of other insurance under which loss is payable to the financial institution as its interest may appear, against loss of or damage to property for which a separate charge is made to the borrower according to clause (1); and (iii) if a clear, conspicuous, and specific statement in writing is furnished by the financial institution to the borrower setting forth the cost of the insurance if obtained from or through the financial institution and stating that the borrower may choose the person through whom the insurance is to be obtained.

(c) In addition to the finance charges and other additional charges permitted by this section, a financial institution may contract for and receive the following additional charges in connection with open-end credit, which may be included in the amount financed or balance upon which the finance charge is computed:

(1) annual charges, not to exceed $50 per annum, payable in advance, for the privilege of opening and maintaining open-end credit;

(2) charges for the use of an automated teller machine;

(3) charges for any monthly or other periodic payment period in which the borrower has exceeded or, except for the financial institution's dishonor would have exceeded, the maximum approved credit limit, in an amount not in excess of the service charge permitted in section 332.50;

(4) charges for obtaining a cash advance in an amount not to exceed the service charge permitted in section 332.50; and

(5) charges for check and draft copies and for the replacement of lost or stolen credit cards.

(d) In addition to the finance charges and other additional charges permitted by this section, a financial institution may contract for and receive a one-time loan administrative fee not exceeding $25 in connection with closed-end credit, which may be included in the amount financed or principal balance upon which the finance charge is computed. This paragraph applies only to closed-end credit in an original principal amount of $4,320 or less.

Subd. 7. [ADVANCES TO PERFORM COVENANTS OF BORROWER OR PURCHASER.] (a) If the agreement with respect to a loan or credit sale contract contains covenants by the borrower or purchaser to perform certain duties pertaining to insuring or preserving collateral and the financial institution according to the agreement pays for performance of the duties on behalf of the borrower or purchaser, the financial institution may add to the debt or contract balance the amounts so advanced. Before or within a reasonable time not less than 30 days after advancing any sums, the financial institution shall state to the borrower or purchaser in writing the amount of sums advanced or to be advanced, any charges with respect to this amount, and any revised payment schedule and, if the duties of the borrower or purchaser performed by the financial institution pertain to insurance, a brief description of the insurance paid for or to be paid for by the financial institution including the type and amount of coverages. Additional information need not be given. The actions of the financial institution pursuant to this subdivision shall not be deemed to cure the borrower's failure to perform covenants in the loan or credit sale contract, unless the loan or credit sale contract expressly provides otherwise.

(b) A finance charge equal to that specified in the loan agreement or credit sale contract may be made for sums advanced under paragraph (a).

Subd. 8. [ATTORNEY'S FEES.] With respect to a loan or credit sale, the agreement may provide for payment by the borrower of the attorney's fees and court costs incurred in connection with collection or foreclosure. This subdivision is not a limitation on attorney's fees that may be charged to an organization.

Subd. 9. [RIGHT TO PREPAY.] The borrower or purchaser may prepay in full the unpaid balance of a consumer loan or credit sale contract, at any time without penalty.

Subd. 10. [CREDIT INSURANCE.] (a) The sale of credit insurance is subject to chapter 62B and the rules adopted under that chapter, but the term of the insurance may exceed 60 months if the loan or credit sale contract exceeds 60 months and the insurance will nevertheless be subject to chapter 62B and the rules adopted under that chapter. In case there are multiple consumers obligated under a transaction subject to this chapter, no policy or certificate or insurance providing credit life insurance may be procured by or through a financial institution or person described in subdivision 2 upon more than two of the consumers, in which case they may be insured jointly.

(b) A financial institution that provides credit insurance in relation to open-end credit may calculate the charge to the borrower in each billing cycle by applying the current premium rate to the balance in the manner permitted with respect to finance charges by the provisions on finance charge in this section.

(c) Upon prepayment in full of a consumer loan or credit sale contract by the proceeds of credit insurance, the consumer or the consumer's estate is entitled to a refund of any portion of a separate charge for insurance that by reason of prepayment is retained by the financial institution or returned to it by the insurer, unless the charge was computed from time to time on the basis of the balances of the consumer's loan or credit sale contract.

(d) This section does not require a financial institution to grant a refund to the consumer if all refunds due to the consumer under paragraph (c) amount to less than $5 and, except as provided in paragraph (c), does not require the financial institution to account to the consumer for any portion of a separate charge for insurance because:

(1) the insurance is terminated by performance of the insurer's obligation;

(2) the financial institution pays or accounts for premiums to the insurer in amounts and at times determined by the agreement between them; or

(3) the financial institution receives directly or indirectly under a policy of insurance a gain or advantage not prohibited by law.

(e) Except as provided in paragraph (d), the financial institution shall promptly make or cause to be made an appropriate refund to the consumer with respect to a separate charge made to the consumer for insurance if:

(1) the insurance is not provided or is provided for a shorter term than for which the charge to the borrower for insurance was computed; or

(2) the insurance terminates before the end of the term for which it was written because of prepayment in full or otherwise.

(f) If a financial institution requires insurance, upon notice to the borrower, the borrower has the option of providing the required insurance through an existing policy of insurance owned or controlled by the borrower, or through a policy to be obtained and paid for by the borrower, but the financial institution for reasonable cause may decline the insurance provided by the borrower.

Subd. 11. [PROPERTY AND LIABILITY INSURANCE.] (a) Except as otherwise provided in this section and subject to the provisions on additional charges and maximum finance charges in this section, a financial institution may agree to sell, as an agent, property and liability insurance, and may contract for and receive a charge for this insurance separate from and in addition to other charges. A financial institution need not make a separate charge for the insurance provided or required by it. This section does not authorize the issuance of the insurance prohibited under any statute or rule governing the business of insurance nor does it authorize a financial institution to underwrite insurance.

(b) This section does not apply to an insurance premium loan. A financial institution may request cancellation of a policy of property or liability insurance only after the borrower's default or in accordance with a written authorization by the borrower. In either case, the cancellation does not take effect until written notice is delivered to the borrower or mailed to the borrower at the borrower's address as stated by the borrower. The notice must state that the policy may be canceled on a date not less than ten days after the notice is delivered, or, if the notice is mailed, not less than 13 days after it is mailed. A cancellation may not take effect until those notice periods expire.

Subd. 12. [CONSUMER PROTECTIONS.] (a) Financial institutions shall comply with the requirements of the federal Truth in Lending Act, United States Code, title 15, sections 1601 to 1693, in connection with a consumer loan or credit sale for a consumer purpose where the federal Truth in Lending Act is applicable.

(b) Financial institutions shall comply with the following consumer protection provisions in connection with a consumer loan or credit sale for a consumer purpose: sections 325G.02 to 325G.05; 325G.06 to 325G.11; 325G.15 to 325G.22; and 325G.29 to 325G.36, and Code of Federal Regulations, title 12, part 535, where those statutes or regulations are applicable.

(c) An assignment of a consumer's earnings by the consumer to a financial institution as payment or as security for payment of a debt arising out of a consumer loan or consumer credit sale is unenforceable by the financial institution and revocable by the consumer.

Subd. 13. [LOANS AND CONTRACTS OTHER THAN CONSUMER LOANS AND CONTRACTS.] Loans and credit sale contracts other than consumer loans and consumer credit sale contracts are not subject to the provisions and limitations of subdivisions 9, 10, 11, paragraph (b), and 12, and this section.

Subd. 14. [EFFECT OF VIOLATIONS ON RIGHTS OF PARTIES.] (a) If a financial institution has violated any provision of this section applying to collection of finance or other charges, the borrower or purchaser under a credit sale contract may recover damages and a penalty from the financial institution in an amount determined by the court but not less than $100 nor more than $1,000. With respect to violations arising from other than open-end credit transactions, no action may be brought according to this paragraph and no set-off or recoupment may be asserted according to this paragraph more than one year after the making of the debt.

(b) A borrower or purchaser under a credit sale contract is not obligated to pay a charge in excess of that allowed by this section and has a right of refund of any excess charge paid. A refund may not be made by reducing the borrower's or purchaser's obligation by the amount of the excess charge, unless the financial institution has notified the borrower or purchaser that the borrower or purchaser may request a refund and the borrower or purchaser has not so requested within 30 days thereafter. If the borrower or purchaser has paid an amount in excess of the lawful obligation under the agreement, the borrower or purchaser may recover the excess amount from the financial institution who made the excess charge or from an assignee of the financial institution's rights who undertakes direct collection of payments from or enforcement of rights against borrowers or purchasers arising from the debt.

(c) If a financial institution has contracted for or received a charge in excess of that allowed by this section, or if a borrower or purchaser under a credit sale contract is entitled to a refund and a person liable to the borrower or purchaser refuses to make a refund within a reasonable time after demand, the borrower or purchaser may recover from the financial institution or the person liable in an action other than a class action a penalty in an amount determined by the court but not less than $100 nor more than $1,000. With respect to excess charges arising from other than open-end credit transactions, no action according to this paragraph may be brought more than one year after the making of the debt. For purposes of this paragraph, a reasonable time is presumed to be 30 days.

(d) A violation of this section does not impair rights on a debt.

(e) A financial institution is not liable for a penalty under paragraph (a) or (c) if it notifies the borrower or purchaser under a credit sale contract of a violation before the financial institution receives from the borrower or purchaser written notice of the violation or the borrower or purchaser has brought an action under this section, and the financial institution corrects the violation within 45 days after notifying the borrower or purchaser. If the violation consists of a prohibited agreement, giving the borrower or purchaser a corrected copy of the writing containing the violation is sufficient notification and correction. If the violation consists of an excess charge, correction must be made by an adjustment or refund.

(f) A financial institution may not be held liable in an action brought under this section for a violation of this section if the financial institution shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid the error.

(g) In an action in which it is found that a financial institution has violated this section, the court shall award to the borrower or the purchaser under a credit sale contract the costs of the action and to the borrower's or purchaser's attorneys their reasonable fees.

Sec. 2. [47.60] [CONSUMER SMALL LOANS.]

Subdivision 1. [DEFINITIONS.] For purposes of this section, the terms defined have the meanings given them:

(a) "Consumer small loan" is a loan transaction in which cash is advanced to a borrower for the borrower's own personal, family, or household purpose. A consumer small loan is a short-term, unsecured loan to be repaid in a single installment. The cash advance of a consumer small loan is equal to or less than $350. A consumer small loan includes an indebtedness evidenced by but not limited to a promissory note or agreement to defer the presentation of a personal check for a fee.

(b) "Consumer small loan lender" is a financial institution as defined in section 47.59 or a person registered with the commissioner and engaged in the business of making consumer small loans.

Subd. 2. [AUTHORIZATION, TERMS, CONDITIONS, AND PROHIBITIONS.] (a) In lieu of the interest, finance charges, or fees in any other law, a consumer small loan lender may charge the following:

(i) on any amount up to and including $50, a charge of $5.50 may be added;

(ii) on amounts in excess of $50, but not more than $100, a charge may be added equal to ten percent of the loan proceeds plus a $5 administrative fee;

(iii) on amounts in excess of $100, but not more than $250, a charge may be added equal to seven percent of the loan proceeds with a minimum of $10 plus a $5 administrative fee;

(iv) for amounts in excess of $250 and not greater than the maximum in subdivision 1, paragraph (a), a charge may be added equal to six percent of the loan proceeds with a minimum of $17.50 plus a $5 administrative fee.

(b) The term of a loan made under this section shall be 30 days.

(c) After maturity, the contract rate must not exceed 2.75 percent per month of the remaining loan proceeds after the maturity date calculated at a rate of 1/30 of the monthly rate in the contract for each calendar day the balance is outstanding.

(d) No insurance charges or other charges must be permitted to be charged, collected, or imposed on a consumer small loan except as authorized in this section.

(e) On a loan transaction in which cash is advanced in exchange for a personal check, a return check charge may be charged as authorized by section 332.50, subdivision 2, paragraph (d).

(f) A loan made under this section must not be repaid by the proceeds of another loan made under this section by the same lender or related interest. The proceeds from a loan made under this section must not be applied to another loan from the same lender or related interest. No loan to a single borrower made pursuant to this section shall be split or divided and no single borrower shall have outstanding more than one loan with the result of collecting a higher charge than permitted by this section or in an aggregate amount of principal exceed at any one time the maximum of $350.

Subd. 3. [FILING.] Before a person other than a financial institution as defined by section 47.59 engages in the business of making consumer small loans, the person shall file with the commissioner as a consumer small loan lender. The filing must be on a form prescribed by the commissioner together with a fee of $150 for each place of business and contain the following information in addition to the information required by the commissioner:

(1) evidence that the filer has available for the operation of the business at the location specified, liquid assets of at least $50,000; and

(2) a biographical statement on the principal person responsible for the operation and management of the business to be certified.

Revocation of the filing and the right to engage in the business of a consumer small loan lender is the same as in the case of a regulated lender license in section 56.09.

Subd. 4. [BOOKS OF ACCOUNT; ANNUAL REPORT; SCHEDULE OF CHARGES; DISCLOSURES.] (a) A lender filing under subdivision 3 shall keep and use in the business books, accounts, and records as will enable the commissioner to determine whether the filer is complying with this section.

(b) A lender filing under subdivision 3 shall annually on or before March 15 file a report to the commissioner giving the information the commissioner reasonably requires concerning the business and operations during the preceding calendar year.

(c) A lender filing under subdivision 3 shall display prominently in each place of business a full and accurate schedule, to be approved by the commissioner, of the charges to be made and the method of computing those charges; furnish a copy of the contract of loan to a person obligated on it or who may become obligated on it at any time upon the request of that person. This is in addition to any disclosures required by the federal Truth in Lending Act, United States Code, title 15.

(d) Upon repayment of the loan in full, mark indelibly every obligation signed by the borrower with the word "Paid" or "Canceled" within 20 days after repayment.

Subd. 5. [COMPLAINTS ALLEGING VIOLATION.] A person obligated to or having been obligated to a consumer small loan lender filing under subdivision 3 and having reason to believe that this section has been violated may file with the commissioner a written complaint setting forth the details of the alleged violation. The commissioner, upon receipt of the complaint, may inspect the pertinent books, records, letters, and contracts of the lender and borrower involved. The commissioner may assess against the lender a fee covering the necessary costs of an investigation under this section. The commissioner may maintain an action for the recovery of the costs in a court of competent jurisdiction.

Subd. 6. [PENALTIES FOR VIOLATION.] A person or the person's members, officers, directors, agents, and employees who violate or participate in the violation of any of the provisions of this section may be liable in the same manner as in section 56.19.

Sec. 3. Minnesota Statutes 1994, section 48.194, is amended to read:

48.194 [INSTALLMENT SALES CONTRACTS; LOANS.]

A person may enter into a credit sale or service contract for sale to a state or national bank doing business in this state, and a bank may purchase and enforce the contract under the terms and conditions set forth in section 51A.385, subdivisions 2 and 5 to 13 sections 47.59, subdivisions 2 and 4 to 14; and 51A.386, subdivision 4. A state bank or national bank may extend credit pursuant to the terms and conditions set forth in section 51A.385 sections 47.59, 47.60, and 51A.386, subdivision 4.

Sec. 4. Minnesota Statutes 1994, section 51A.02, subdivision 6, is amended to read:

Subd. 6. [ANNUAL PERCENTAGE RATE.] "Annual percentage rate" has the meaning given the term in the Code of Federal Regulations, title 12, part 226, but using the definition of "finance charge" used in this section.

Sec. 5. Minnesota Statutes 1994, section 51A.02, subdivision 26, is amended to read:

Subd. 26. [FINANCE CHARGE.] "Finance charge" has the meaning given the term in the Code of Federal Regulations, title 12, part 226, except that the following will not in any event be considered a finance charge:

(1) a charge as a result of default or delinquency under section 51A.385 47.59 if made for actual unanticipated late payment, delinquency, default, or other similar occurrence, and a charge for an extension or deferment under section 47.59, unless the parties agree that these charges are finance charges;

(2) any additional charge under section 51A.385 47.59, subdivision 5 6; or

(3) a discount, if an association purchases a contract evidencing a contract sale or loan at less than the face amount of the obligation or purchases or satisfies obligations of a cardholder pursuant to a credit card and the purchase or satisfaction is made at less than the face amount of the obligation.

Sec. 6. Minnesota Statutes 1994, section 51A.02, subdivision 40, is amended to read:

Subd. 40. [OFFICIAL FEES.] "Official fees" means:

(1) fees and charges which actually are or will be paid to public officials for determining the existence of or for perfecting, releasing, terminating, or satisfying a security interest or mortgage related to a loan or credit sale, and any separate fees or charges which actually are or will be paid to public officials for recording a notice described in section 580.032, subdivision 1; and

(2) premiums payable for insurance in lieu of perfecting a security interest or mortgage otherwise required by an association in connection with a loan or credit sale, if the premium does not exceed the fees and charges described in clause (1) which would otherwise be payable.

Sec. 7. Minnesota Statutes 1994, section 51A.19, subdivision 9, is amended to read:

Subd. 9. [MAINTENANCE OF LOAN AND INVESTMENT RECORDS.] Every association shall maintain complete loan and investment records, and shall do so in a manner satisfactory to the commissioner. Detailed records necessary to make determinations of compliance by an association with the requirements of sections 47.59 and 51A.35 to 51A.385 51A.386, and other provisions of sections 51A.01 to 51A.57 shall be maintained consistently and at all times, the record of each real estate loan or other secured loan or investment containing documentation to the satisfaction of the commissioner of the type, adequacy, and complexion of the security.

Sec. 8. [51A.386] [TERMS AND CONDITIONS OF LOANS, CONTRACTS, AND EXTENSIONS OF CREDIT.]

Subdivision 1. [APPLICATION.] Except as otherwise provided in this section, this section applies to loans made and contracts purchased by federal and state associations, and "association" as used in this section applies to federal and state associations.

Subd. 2. [FINANCE CHARGE FOR CREDIT SALES MADE BY A THIRD PARTY.] A person may enter into a credit sale contract for sale to an association and an association may purchase and enforce a contract evidencing the sale, if the annual percentage rate provided for in the contract does not exceed that permitted in section 47.59 or, in the case of contracts governed by sections 168.66 to 168.77, the rates permitted by those sections.

Subd. 3. [FINANCE CHARGE FOR LOANS.] An association may make loans and extend credit at the rates and on the terms provided for in section 47.59.

Subd. 4. [ADDITIONAL AUTHORITY.] Extensions of credit, and purchases of extensions of credit, authorized by sections 47.20, subdivision 1, 3, or 4a; 47.204; 47.21; 47.58; 47.60; 47.69; 48.153; 48.185; 48.195; 59A.01 to 59A.15; 168.66 to 168.77; 334.01; 334.011; and 334.012 may, but need not, be made according to those sections in lieu of the authority set forth in subdivisions 1 to 3, and if so, are subject to those sections, and not this section, except this subdivision.

An association may also charge an organization a rate of interest and any charges agreed to by the organization and may calculate and collect finance and other charges in any manner agreed to by that organization. Except for extensions of credit the association elects to make under section 334.01; 334.011; or 334.012, the provisions of chapter 334 do not apply to extensions of credit made according to this section or the sections mentioned in this subdivision.

Subd. 5. [ADDITIONAL CHARGES.] In addition to the finance charges permitted by this section, an association, or a person described in subdivision 2, to the extent not otherwise prohibited by law, may contract for and receive the additional charges that may be included in the amount financed provided for in section 47.59.

Sec. 9. Minnesota Statutes 1994, section 51A.50, is amended to read:

51A.50 [FEDERAL ASSOCIATIONS.]

The following sections apply to federal associations, except to the extent they are inconsistent with federal law or regulations: sections 47.59; 51A.01; 51A.02; 51A.065; 51A.15, subdivision 6; 51A.21, subdivisions 6a, 15, 16, 22, 25, 27, and 28; 51A.23, subdivision 1; 51A.24; 51A.251; 51A.261; 51A.262; 51A.27; 51A.28; 51A.29; 51A.30; 51A.31; 51A.37, subdivisions 1, 2, 3, paragraphs (a), (c), (d), 4, 5, 6, 7, 8, 9, 10, 11, and 12; 51A.38; 51A.385 51A.386; 51A.40; 51A.50; 51A.52; 51A.56; and 51A.57.

Sec. 10. Minnesota Statutes 1994, section 52.04, subdivision 2a, is amended to read:

Subd. 2a. A person may enter into a credit sale or service contract for sale to a state or federal credit union doing business in this state, and a credit union may purchase and enforce the contract under the terms and conditions set forth in section 51A.385 47.59, subdivisions 2 4 and 5 6 to 13 14.

Sec. 11. Minnesota Statutes 1994, section 53.04, subdivision 3a, is amended to read:

Subd. 3a. (a) The right to make loans, secured or unsecured, at the rates and on the terms and other conditions permitted licensees under chapter 56. Loans made under the authority of section 56.125 in section 47.59. Loans made under this authority must be in amounts in compliance with section 53.05, clause (7). All other loans made under the authority of chapter 56 must be in amounts in compliance with section 53.05, clause (7), or 56.131, subdivision 1, paragraph (a), whichever is less. The right to extend credit or lend money and to collect and receive charges therefor as provided by chapter 334, or in lieu thereof to charge, collect, and receive interest at the rate of 21.75 percent per annum, including the right to contract for, charge, and collect all other charges including discount points, fees, late payment charges, and insurance premiums on the loans to the same extent permitted on loans made under the authority of chapter 56, regardless of the amount of the loan. The provisions of sections 47.20 and 47.21 do not apply to loans made under this subdivision, except as specifically provided in this subdivision. Nothing in this subdivision is deemed to supersede, repeal, or amend any provision of section 53.05. A licensee making a loan under this chapter secured by a lien on real estate shall comply with the requirements of section 47.20, subdivision 8.

(b) Loans made under this subdivision at a rate of interest not in excess of that provided for in paragraph (a) may be secured by real or personal property, or both. If the proceeds of a loan secured by a first lien on the borrower's primary residence are used to finance the purchase of the borrower's primary residence, the loan must comply with the provisions of section 47.20.

(c) A loan made under this subdivision that is secured by real estate and that is in a principal amount of $7,500 or more and a maturity of 60 months or more may contain a provision permitting discount points, if the loan does not provide a loan yield in excess of the maximum rate of interest permitted by this subdivision. Loan yield means the annual rate of return obtained by a licensee computed as the annual percentage rate is computed under Federal Regulation Z. If the loan is prepaid in full, the licensee must make a refund to the borrower to the extent that the loan yield will exceed the maximum rate of interest provided by this subdivision when the prepayment is taken into account.

(d) An agency or instrumentality of the United States government or a corporation otherwise created by an act of the United States Congress or a lender approved or certified by the secretary of housing and urban development, or approved or certified by the administrator of veterans affairs, or approved or certified by the administrator of the farmers home administration, or approved or certified by the federal home loan mortgage corporation, or approved or certified by the federal national mortgage association, that engages in the business of purchasing or taking assignments of mortgage loans and undertakes direct collection of payments from or enforcement of rights against borrowers arising from mortgage loans, is not required to obtain a certificate of authorization under this chapter in order to purchase or take assignments of mortgage loans from persons holding a certificate of authorization under this chapter.

Sec. 12. Minnesota Statutes 1994, section 53.04, subdivision 3c, is amended to read:

Subd. 3c. The right to extend credit and make loans under chapter 51A sections 47.59 and 47.60 on the same terms and subject to the same conditions as apply to other lenders under that chapter those sections. This subdivision does not authorize an industrial loan and thrift company to make loans under a credit card or an overdraft checking plan.

Sec. 13. Minnesota Statutes 1994, section 53.04, subdivision 4a, is amended to read:

Subd. 4a. [DISCLOSURE, AUTHORIZED INTEREST, AND OTHER CHARGES.] The documentation of loans made pursuant to this section must include in the promissory note clear reference to the provisions of Minnesota Statutes under which the rate of interest and other charges are authorized. The references must be to the chapter number in the case of this chapter or chapter 56, or to the particular section or sections in the case of chapter 47 or 334. On loans made under the authority of subdivision 3a and not under the authority of chapter 334, other charges including discount points, fees, late payment charges, and insurance premiums not specifically authorized by this chapter or any other state statute are controlled by chapter 56.

Sec. 14. Minnesota Statutes 1994, section 53.04, subdivision 5a, is amended to read:

Subd. 5a. A person may enter into a credit sale or service contract for sale to an industrial loan and thrift company operating under this chapter in this state, and an industrial loan and thrift company may purchase and enforce the contract under the terms and conditions set forth in section 51A.385, subdivisions 2 and 5 to 13 47.59, subdivisions 2 and 4 to 14.

Sec. 15. Minnesota Statutes 1994, section 56.125, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZATION.] A licensee may make open-end loans under this chapter other than loans under a credit card or an overdraft checking plan and may charge a daily, monthly, or other periodic rate of finance charge on unpaid balances not in excess of the maximum rate of interest permitted by section 56.131, subdivision 1, paragraph (a), clause (2) under section 47.59, subdivision 3, paragraph (a), clause (1). For purposes of this section "open-end loan" means an agreement whereby: (1) the licensee pursuant to written agreement permits the borrower to obtain advances of money from the licensee from time to time or the licensee advances money on behalf of the borrower from time to time as directed by the borrower; (2) the borrower has the option of paying the balance in full at any time without penalty; (3) the amount of each advance and permitted charges and costs are debited to the borrower's account and payments and other credits are credited to the same account; and (4) the charges are computed on the unpaid principal balance of the account from time to time. A finance charge imposed on a transaction subject to this section must be computed on: (1) the previous balance after deducting all payments on accounts received by the licensee during the cycle and all credits to the account during the cycle applicable to any transaction reflected in the previous balance; (2) the average daily balance determined by adding the daily balances on the account for each day in the billing cycle and dividing the total by the number of days in the billing cycle; or (3) daily balances. The daily balance is figured by taking the beginning balance of the account each day, adding any new advances, subtracting any principal payments or credits, and any unpaid interest. The average daily balance is calculated by adding together all of the daily balances for the billing cycle, and the sum is then divided by the total number of days in the billing cycle. A billing cycle is considered to be monthly if the billing dates are on the same day of each month or do not vary by more than four days from that day. If a licensee makes loans under a credit card plan, it may do so only on the same terms and subject to the same conditions as apply to lenders under section 47.59.

Sec. 16. Minnesota Statutes 1994, section 56.125, subdivision 3, is amended to read:

Subd. 3. [CHARGES.] In addition to the charges authorized in subdivision 1, a licensee may contract for and receive in connection with an open-end loan agreement the additional charges, fees, costs, and expenses with respect to the line of credit limit permitted by sections 47.59, subdivisions 5 and 6, paragraph (a), clause (4); 56.131, subdivisions 1, paragraph (f), clauses (4) and (5), 2, 5, and 6; and 56.155 with respect to other loans, with the following variations:

(1) If credit life, disability, or involuntary unemployment insurance is provided and if the insured dies, becomes disabled, or becomes involuntarily unemployed when there is an outstanding open-end loan indebtedness, the amount of the insurance may not exceed the total balance of the loan due on the date of the borrower's death or on the date of the last billing statement in the case of credit life insurance, or all minimum payments which become due on the loan during the covered period of disability in the case of credit disability insurance, or during the covered period

of involuntary unemployment in the case of credit involuntary unemployment insurance. The additional charge for credit life insurance, credit disability insurance, or credit involuntary unemployment insurance must be calculated in each billing cycle by applying the current monthly premium rate for the insurance to the unpaid balances in the borrower's account.

(2) The amount, terms, and conditions of any credit insurance against loss or damage to property must be reasonable in relation to the character and value of the property insured.

Sec. 17. Minnesota Statutes 1994, section 56.131, subdivision 1, is amended to read:

Subdivision 1. [INTEREST RATES AND CHARGES.] (a) On any loan in a principal amount not exceeding $35,000 $56,000 or 15 percent of a Minnesota corporate licensee's capital stock and surplus as defined in section 53.015, if greater, a licensee may contract for and receive interest, calculated according to the actuarial method, not exceeding the equivalent of the greater of any of the following:

(1) the total of: (i) 33 percent per year on that part of the unpaid balance of the principal amount not exceeding $750; and (ii) 19 percent per year on that part of the unpaid balance of the principal amount exceeding $750; or

(2) 21.75 percent per year on the unpaid balance of the principal amount finance charges, and other charges as provided in section 47.59.

(b) On any loan where interest has been calculated according to the method provided for in paragraph (a), clause (1), interest must be contracted for and earned as provided in that provision or at the single annual percentage rate computed to the nearest 1/100 of one percent that would earn the same total interest at maturity of the contract as would be earned by the application of the graduated rates provided in paragraph (a), clause (1), when the debt is paid according to the agreed terms and the calculations are made according to the actuarial method.

(c) (b) Loans may be interest-bearing or precomputed.

(d) (c) Notwithstanding section 47.59 to the contrary, to compute time on interest-bearing and precomputed loans, including, but not limited to the calculation of interest, a day is considered 1/30 of a month when calculation is made for a fraction of a calendar month. A year is 12 calendar months. A calendar month is that period from a given date in one month to the same numbered date in the following month, and if there is no same numbered date, to the last day of the following month. When a period of time includes a whole month and a fraction of a month, the fraction of a month is considered to follow the whole month.

In the alternative, for interest-bearing loans, a licensee may charge interest at the rate of 1/365 of the agreed annual rate for each actual day elapsed.

(e) (d) With respect to interest-bearing loans and notwithstanding section 47.59:

(1) Interest must be computed on unpaid principal balances outstanding from time to time, for the time outstanding. Each payment must be applied first to the accumulated interest and the remainder of the payment applied to the unpaid principal balance; provided however, that if the amount of the payment is insufficient to pay the accumulated interest, the unpaid interest continues to accumulate to be paid from the proceeds of subsequent payments and is not added to the principal balance.

(2) Interest must not be payable in advance or compounded. However, if part or all of the consideration for a new loan contract is the unpaid principal balance of a prior loan, then the principal amount payable under the new loan contract may include any unpaid interest which has accrued. The unpaid principal balance of a precomputed loan is the balance due after refund or credit of unearned interest as provided in paragraph (f) (e), clause (3). The resulting loan contract is deemed a new and separate loan transaction for all purposes.

(f) (e) With respect to precomputed loans and notwithstanding section 47.59 to the contrary:

(1) Loans must be repayable in substantially equal and consecutive monthly installments of principal and interest combined, except that the first installment period may be more or less than one month by not more than 15 days, and the first installment payment amount may be larger than the remaining payments by the amount of interest charged for the extra days and must be reduced by the amount of interest for the number of days less than one month to the first installment payment; and monthly installment payment dates may be omitted to accommodate borrowers with seasonal income.

(2) Payments may be applied to the combined total of principal and precomputed interest until the loan is fully paid. Payments must be applied in the order in which they become due.

(3) When any loan contract is paid in full by cash, renewal or refinancing, or a new loan, one month or more before the final installment due date, a licensee shall refund or credit the borrower with the total of the applicable charges for all fully unexpired installment periods, as originally scheduled or as deferred, which follow the day of prepayment; if the prepayment is made other than on a scheduled payment date, the nearest scheduled installment payment date must be used in the computation; provided further, if the prepayment occurs prior to the first installment due date, the licensee may retain 1/30 of the applicable charge for a first installment period of one month for each day from the date of the loan to the date of prepayment, and shall refund or credit the borrower with the balance of the total interest contracted for. If the maturity of the loan is accelerated for any reason and judgment is entered, the licensee shall credit the borrower with the same refund as if prepayment in full had been made on the date the judgment is entered.

(4) If an installment, other than the final installment, is not paid in full within ten days of its scheduled due date, a licensee may contract for and receive a default charge not exceeding five percent of the amount of the installment, but not less than $4.

A default charge under this subdivision may not be collected on an installment paid in full within ten days of its scheduled due date, or deferred installment due date with respect to deferred installments, even though a default or deferral charge on an earlier installment has not been paid in full. A default charge may be collected at the time it accrues or at any time thereafter.

(5) If the parties agree in writing, either in the loan contract or in a subsequent agreement, to a deferment of wholly unpaid installments, a licensee may grant a deferment and may collect a deferment charge as provided in this section. A deferment postpones the scheduled due date of the earliest unpaid installment and all subsequent installments as originally scheduled, or as previously deferred, for a period equal to the deferment period. The deferment period is that period during which no installment is scheduled to be paid by reason of the deferment. The deferment charge for a one-month period may not exceed the applicable charge for the installment period immediately following the due date of the last undeferred payment. A proportionate charge may be made for deferment for periods of more or less than one month. A deferment charge is earned pro rata during the deferment period and is fully earned on the last day of the deferment period. Should a loan be prepaid in full during a deferment period, the licensee shall make or credit to the borrower a refund of the unearned deferment charge in addition to any other refund or credit made for prepayment of the loan in full.

(6) (4) If two or more installments are delinquent one full month or more on any due date, and if the contract so provides, the licensee may reduce the unpaid balance by the refund credit which would be required for prepayment in full on the due date of the most recent maturing installment in default. Thereafter, and in lieu of any other default or deferment charges, the single annual percentage rate permitted by this subdivision may be charged on the unpaid balance until fully paid.

(7) (5) Following the final installment as originally scheduled or deferred, the licensee, for any loan contract which has not previously been converted to interest-bearing under clause (6) (4), may charge interest on any balance remaining unpaid, including unpaid default or deferment charges, at the single annual percentage rate permitted by this subdivision until fully paid.

(8) (6) With respect to a loan secured by an interest in real estate, and having a maturity of more than 60 months, the original schedule of installment payments must fully amortize the principal and interest on the loan. The original schedule of installment payments for any other loan secured by an interest in real estate must provide for payment amounts that are sufficient to pay all interest scheduled to be due on the loan.

Sec. 18. Minnesota Statutes 1994, section 56.131, subdivision 2, is amended to read:

Subd. 2. [ADDITIONAL CHARGES.] In addition to the charges provided for by this section and section 56.155, and notwithstanding section 47.59, subdivision 5, to the contrary, no further or other amount whatsoever, shall be directly or indirectly charged, contracted for, or received for the loan made, except actual out of pocket expenses of the licensee to realize on a security after default, and except for the following additional charges which may be included in the principal amount of the loan:

(a) lawful fees and taxes paid to any public officer to record, file, or release security;

(b) with respect to a loan secured by an interest in real estate, the following closing costs, if they are bona fide, reasonable in amount, and not for the purpose of circumvention or evasion of this section; provided the costs do not exceed one percent of the principal amount or $250 $400, whichever is greater:

(1) fees or premiums for title examination, abstract of title, title insurance, surveys, or similar purposes;

(2) fees, if not paid to the licensee, an employee of the licensee, or a person related to the licensee, for preparation of a mortgage, settlement statement, or other documents, fees for notarizing mortgages and other documents, and appraisal fees;

(c) the premium for insurance in lieu of perfecting and releasing a security interest to the extent that the premium does not exceed the fees described in paragraph (a);

(d) discount points and appraisal fees may not be included in the principal amount of a loan secured by an interest in real estate when the loan is a refinancing for the purpose of bringing the refinanced loan current and is made within 24 months of the original date of the refinanced loan. For purposes of this paragraph, a refinancing is not considered to be for the purpose of bringing the refinanced loan current if new funds advanced to the customer, not including closing costs or delinquent installments, exceed $1,000.

Sec. 19. Minnesota Statutes 1994, section 56.132, is amended to read:

56.132 [INSTALLMENT SALES CONTRACTS.]

A person may enter into a credit sale or service contract for sale to a licensee under this chapter doing business in this state, and a licensee may purchase and enforce the contract under the terms and conditions set forth in section 51A.385, subdivisions 2 and 5 to 13 47.59, subdivisions 2 and 4 to 14.

Sec. 20. Minnesota Statutes 1994, section 56.155, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZATION.] Notwithstanding section 47.59 to the contrary, no licensee shall, directly or indirectly, sell or offer for sale any insurance in connection with any loan made under this chapter except as and to the extent authorized by this section. The sale of credit life, credit accident and health, and credit involuntary unemployment insurance is subject to the provisions of chapter 62B, except that the term of the insurance may exceed 60 months if the term of the loan exceeds 60 months. Life, accident, health, and involuntary unemployment insurance, or any of them, may be written upon or in connection with any loan but must not be required as additional security for the indebtedness. If the debtor chooses to procure credit life insurance, credit accident and health insurance, or credit involuntary unemployment insurance as security for the indebtedness, the debtor shall have the option of furnishing this security through existing policies of insurance that the debtor owns or controls, or of furnishing the coverage through any insurer authorized to transact business in this state. A statement in substantially the following form must be made orally, except for loans by mail pursuant to section 56.12, and provided in writing in bold face type of a minimum size of 12 points to the borrower before the transaction is completed for each credit life, accident and health, and involuntary unemployment insurance coverage sold:

CREDIT LIFE INSURANCE, CREDIT DISABILITY INSURANCE, AND CREDIT INVOLUNTARY UNEMPLOYMENT INSURANCE ARE NOT REQUIRED TO OBTAIN CREDIT. YOU MAY BUY ANY INSURANCE FROM ANYONE YOU CHOOSE OR YOU MAY USE EXISTING INSURANCE.

The licensee shall disclose whether or not the benefits commence as of the first day of disability or involuntary unemployment and shall further disclose the number of days that an insured obligor must be disabled or involuntarily unemployed, as defined in the policy, before benefits, whether retroactive or nonretroactive, commence. In case there are multiple obligors under a transaction subject to this chapter, no policy or certificate of insurance providing credit unemployment benefits may be procured by or through a licensee upon more than one of the obligors. In case there are multiple obligors under a transaction subject to this chapter, no policy or certificate of insurance providing credit accident and health or credit life insurance may be procured by or through a licensee upon more than two of the obligors in which case they shall be insured jointly. The premium or identifiable charge for the insurance must not exceed that filed by the insurer with the department of commerce. The charge, computed at the time the loan is made for a period not to exceed the full term of the loan contract on an amount not to exceed the total amount required to pay principal and charges, may be deducted from the proceeds or may be included as part of the principal of any loan. If a borrower procures insurance by or through a licensee, the statement required by section 56.14 must disclose the cost to the borrower and the type of insurance, and the licensee shall cause to be delivered to the borrower a copy

of the policy, certificate, or other evidence thereof, within a reasonable time. No licensee shall decline new or existing insurance which meets the standards set out in this section nor prevent any obligor from obtaining this insurance coverage from other sources. Notwithstanding any other provision of this chapter, any gain or advantage to the licensee or to any employee, affiliate, or associate of the licensee from this insurance or the sale or provision thereof is not an additional or further charge in connection with the loan; nor are any of the provisions pertaining to insurance contained in this section prohibited by any other provision of this chapter.

Sec. 21. Minnesota Statutes 1994, section 61A.09, subdivision 3, is amended to read:

Subd. 3. Group life insurance policies may be issued to cover groups of not less than ten debtors of a creditor written under a master policy issued to a creditor to insure its debtors in connection with real estate mortgage loans, in an amount not to exceed the actual or scheduled amount of their indebtedness except that section 62B.04, subdivision 1, clause (2), may be applied. Each application for group mortgage insurance offered prior to or at the time of loan closing shall contain a clear and conspicuous notice that the insurance is optional and is not a condition for obtaining the loan. Each person insured under a group insurance policy issued under this subdivision shall be furnished a certificate of insurance which conforms to the requirements of section 62B.06, subdivision 2, and which includes a conversion privilege permitting an insured debtor to convert, without evidence of insurability, to an individual policy of decreasing term insurance within 30 days of the date the insured debtor's group coverage is terminated for any reason other than the nonpayment of premiums. The initial amount of coverage under the individual policy shall be an amount equal to the amount of coverage terminated under the group policy and shall decrease over a term not to exceed the term that corresponds with the scheduled term of the insured debtor's mortgage loan. The premium for the individual policy shall be the same premium the insured debtor was paying under the group policy. If the mortgage loan provides for a variable rate of finance charge or interest, the initial rate shall be used in determining the scheduled amount of indebtedness.

Sec. 22. Minnesota Statutes 1994, section 325F.91, subdivision 2, is amended to read:

Subd. 2. [CASH PRICE LIMITS RULES, DECEPTIVE TRADE PRACTICE.] The commissioner of commerce shall adopt rules governing cash price limits for rental-purchase agreements. Notwithstanding section 14.18, the rules are effective 45 working days after the notice of adoption is published in the State Register. (a) It is an unlawful and deceptive trade practice for a lessor to disclose as the "cash price" of the merchandise under section 325F.86, paragraph (k), an amount that is 150 percent or more of the fair market value of the goods.

Disclosure of the cash price stated in a rental-purchase agreement materially fails to be the equivalent of the fair market value of the goods offered and is considered to be a deceptive trade practice if:

(1) the personal property that is the subject of a rental-purchase agreement with terms providing for the acquisition of ownership of the property by the lessee is available for retail sale on a cash basis at locations within 50 miles of the lessor location at which the agreement was entered into;

(2) the personal property available for retail sale under clause (1) is substantially the same in terms of model equipment and the same manufacturer at the date of the agreement or no more than 60 days after that date; and

(3) the personal property was generally advertised to the public at retail cash price of less than 50 percent of the cash price in the agreement.

(b) A person violating this subdivision is subject to the penalties and remedies in section 325F.97 and the 60 days prescribed in paragraph (a), clause (2), do not limit the time within which a claim or action may be brought to an agreement under generally applicable law.

Sec. 23. [334.171] [OPEN END CREDIT PLANS; DELINQUENCIES AND COLLECTION CHARGES.]

If an open end credit plan, agreement, or arrangement between the buyer and seller so provides, a seller or holder may collect a delinquency and collection charge on each installment in arrears for a period of not less than ten days in an amount not in excess of any such charge which may be imposed on residents of this state by any institution defined in subsection (c)(2)(F) of section 101(a) of the Competitive Equality Amendments of 1987 and the Bank Holding Company Act of 1956, United States Code, title 12, section 1841(c)(2)(F), by any national banking association under section 85 of the National Bank Act of 1864, United States Code, title 12, section 85, or by any state chartered insured depository institution under section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980, United States Code, title 12, section 1813d(a).

Sec. 24. [REPEALER.]

Minnesota Statutes 1994, section 51A.385, is repealed.

Section 1. Minnesota Statutes 1994, section 46.048, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENT.] Whenever a change in the outstanding voting stock of a banking institution will result in control or in a change in the control of the banking institution, the person acquiring control of the banking institution, including an out-of-state bank holding company, shall file notice of the proposed acquisition of control with the commissioner of commerce at least 60 days before the actual effective date of the change, except that the commissioner may extend the 60-day period an additional 30 days if in the commissioner's judgment any material information submitted is substantially inaccurate or the acquiring party has not furnished all the information required. As used in this section, the term "control" means the power to directly or indirectly direct or cause the direction of the management or policies of the banking institution. A change in ownership of capital stock that would result in direct or indirect ownership by a stockholder or an affiliated group of stockholders of less than 25 percent of the outstanding capital stock is not considered a change of control. If there is any doubt as to whether a change in the outstanding voting stock is sufficient to result in control or to effect a change in the control, the doubt shall be resolved in favor of reporting the facts to the commissioner. The commissioner shall use the criteria established by the Financial Institution Regulatory and Interest Rate Control Act of 1978, United States Code, title 12, section 1817(j), and the regulations adopted under it, when reviewing the acquisition and determining if the acquisition should or should not be disapproved. Within three days after making the decision to disapprove a proposed acquisition, the commissioner shall notify the acquiring party in writing of the disapproval. The notice must provide a statement of the basis for the disapproval.

Sec. 2. Minnesota Statutes 1994, section 46.048, is amended by adding a subdivision to read:

Subd. 2a. [CONTENTS.] The notice required by subdivision 1 must contain the following information to the extent that it is known by the person making the notice:

(1) the identity, personal history, business background, and experience of each person by whom or on whose behalf the acquisition is to be made, including the person's material business activities and affiliations during the past five years, and a description of any material pending legal or administrative proceedings in which the person is a party and any criminal indictment or conviction of that person by a state or federal court;

(2) a statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made, as of the end of the fiscal year for each of the five years immediately preceding the date of the notice, together with related statements of income, sources, and application of funds for each of the fiscal years then concluded, all prepared in accordance with generally accepted accounting principles consistently applied, and an interim statement of the assets and liabilities for each person, together with related statements of income, source, and application of funds as of a date not more than 90 days before the date of the filing of the notice;

(3) the terms and conditions of the proposed acquisition and the manner in which the acquisition is to be made;

(4) the identity, source, and amount of the funds or other consideration to be used in making the acquisition, and if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names of the parties, and any arrangements, agreements, or understandings with those persons;

(5) any plans or proposals that an acquiring party making the acquisition may have to liquidate the bank, to sell its assets or merge it, or make any other major change in its business or corporate structure or management;

(6) the identification of any person employed, retained, or to be compensated by the acquiring party, or by any person on the acquiring party's behalf, to make solicitations or recommendations to stockholders for the purpose of assisting in the acquisition, and a brief description of the terms of the employment, retainer, or arrangement for compensation;

(7) copies of all invitations, tenders, or advertisements making tender offers to stockholders for purchase of their stock to be used in connection with the proposed acquisition; and

(8) any additional relevant information in the form the commissioner requires by rule or by specific request in connection with any particular notice.

Sec. 3. Minnesota Statutes 1994, section 46.048, is amended by adding a subdivision to read:

Subd. 2b. [NOTICE.] Upon the filing of an application:

(1) an applicant shall publish in a newspaper of general circulation notice of the proposed acquisition in a form acceptable to the commissioner; and

(2) the commissioner shall accept public comment on an application for a period of not less than 30 days from the date of the final publication required by clause (1).

Sec. 4. Minnesota Statutes 1994, section 46.048, is amended by adding a subdivision to read:

Subd. 4. [HEARINGS.] Within ten days of receipt of notice of disapproval according to subdivision 1, the acquiring party may request an agency hearing on the proposed acquisition. At the hearing, all issues must be determined on the record according to chapter 14 and the rules issued by the department. At the conclusion of the hearing, the commissioner shall by order approve or disapprove the proposed acquisition on the basis of the record made at the hearing.

Sec. 5. Minnesota Statutes 1994, section 47.52, is amended to read:

47.52 [AUTHORIZATION.]

(a) With the prior approval of the commissioner, any bank doing business in this state may establish and maintain not more than five detached facilities provided the facilities are located within the municipality in which the principal office of the applicant bank is located; or within 5,000 feet of its principal office measured in a straight line from the closest points of the closest structures involved; or within 100 miles of its principal office measured in a straight line from the closest points of the closest structures involved, if the detached facility is within any municipality in which no bank is located at the time of application or if the detached facility is in a municipality having a population of more than 10,000, or if the detached facility is located in a municipality having a population of 10,000 or less, as determined by the commissioner from the latest available data from the state demographer, or for municipalities located in the seven-county metropolitan area from the metropolitan council, and all the banks having a principal office in the municipality have consented in writing to the establishment of the facility.

(b) A detached facility shall not be closer than 50 feet to a detached facility operated by any other bank and shall not be closer than 100 feet to the principal office of any other bank, the measurement to be made in the same manner as provided above. This paragraph shall not be applicable if the proximity to the facility or the bank is waived in writing by the other bank and filed with the application to establish a detached facility.

(c) Any bank is allowed, in addition to other facilities, one drive-in or walk-up facility located between 150 to 1,500 feet of the main banking house or within 1,500 feet from a detached facility. The drive-in or walk-up facility permitted by this clause is subject to paragraph (b) and section 47.53.

(d) A bank whose home state is Minnesota as defined in section 48.92 is allowed, in addition to other facilities, to establish and operate a de novo detached facility in a location in the host states of Iowa, North Dakota, South Dakota, and Wisconsin not more than 30 miles from its principal office measured in a straight line from the closest points of the closest structures involved and subject to requirements of sections 47.54 and 47.561 and the following additional requirements and conditions:

(1) there is in effect in the host state a law, rule, or ruling that permits Minnesota home state banks to establish de novo branches in the host state under conditions substantially similar to those imposed by the laws of Minnesota as determined by the commissioner; and

(2) there is in effect a cooperative agreement between the home and host state banking regulators to facilitate their respective regulation and supervision of the bank including the coordination of examinations.

Sec. 6. Minnesota Statutes 1994, section 47.78, is amended to read:

47.78 [CONTRACTS TO ACCEPT AND RECEIVE DEPOSITS-HONOR AND PAY WITHDRAWALS.]

(a) Notwithstanding any other law to the contrary, a financial institution, the "customer institution," may contract with another financial institution, the "service institution," to grant the service institution the authority to render services to the customer institution's depositors, borrowers or other customers, provided notice of the proposed contract is given to the commissioner and the commissioner does not object to the contract within 30 days of the notice.

(b) For purposes of this section: "Financial institution" means a national banking association, federal savings and loan association, or federal credit union having its main office in this state, or a bank, savings bank, savings and loan association or credit union established and operating under the laws of this state; and "services" means accepting and receiving deposits, honoring and paying withdrawals, issuing money orders, cashiers' checks, and travelers' checks or similar instruments, cashing checks or drafts, receiving loan payments, receiving or delivering cash and instruments and securities, disbursing loan proceeds by machine, and any other transactions authorized by section 47.63.

The term also includes a bank subsidiary of a bank holding company or affiliated savings association to the extent agency activities are permitted under section 18 of the Federal Deposit Insurance Act, United States Code, title 12, section 1828, as amended, effective September 29, 1995, and title I, Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.

(c) A contract entered into pursuant to this section may include authority to conduct transactions at or through any principal office, branch, or detached facility of either financial institution which is a party to the contract, and the service institution is not considered a branch of the customer institution for purposes of section 48.34.

Sec. 7. Minnesota Statutes 1994, section 48.90, subdivision 1, is amended to read:

Subdivision 1. [SEVERABILITY.] It is the express intention of the Minnesota legislature to act pursuant to the United States Code, title 12, section 1842(d) to provide an orderly transition to interstate banking by initially permitting limited interstate banking on a regional basis as amended by title I of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 to provide for interstate banking on a nationwide basis and to preserve certain state law, policy, and practices. Therefore, notwithstanding the provisions of section 645.20, if any provision of Laws 1986, chapter 339, other than Laws 1986, chapter 339, sections 1 to 3, and 14, this act providing for the supervisory powers of the commissioner or limiting expansion into this state to by bank holding companies located in other states defined as "reciprocating states" is determined by final, nonappealable order of any Minnesota or federal court of competent jurisdiction to be invalid or unconstitutional, Laws 1986, chapter 339, this act is null and void and of no further force and effect from the effective date of the final determination.

Sec. 8. Minnesota Statutes 1994, section 48.91, is amended to read:

48.91 [TITLE.]

Laws 1986, chapter 339 Section 48.90 may be cited as the "reciprocal interstate banking act."

Sec. 9. Minnesota Statutes 1994, section 48.92, subdivision 2, is amended to read:

Subd. 2. [CONTROL.] "Control," means, with respect to a bank holding company, bank, or bank to be organized pursuant to chapters 46, 47, 48, and 300, (1) the ownership, directly or indirectly or acting through one or more other persons, control of or the power to vote 25 percent or more of any class of voting securities; (2) control in any manner over the election of a majority of the directors; or (3) the power to exercise, directly or indirectly, a controlling influence over management and policies is defined in section 46.048, subdivision 1.

Sec. 10. Minnesota Statutes 1994, section 48.92, subdivision 6, is amended to read:

Subd. 6. [LOCATED IN THIS HOME STATE.] "Located in this Home state" means: (1) a bank whose organizational certificate identifies an address in this state as the principal place of conducting the business of banking; or (2) a bank holding company as defined in the Bank Holding Company Act of 1956, as amended, with banking subsidiaries, the majority of whose deposits are in Minnesota. with respect to a national bank, the state in which the main office of the bank is located; (2) with respect to a state bank, the state by which the bank is chartered; and (3)

with respect to a bank holding company, the state in which the total deposits of all banking subsidiaries of the company are the largest on the later of (i) July 1, 1996, or (ii) the date on which the company becomes a bank holding company under the Bank Holding Company Act of 1956, as amended, United States Code, title 12, section 1842.

Sec. 11. Minnesota Statutes 1994, section 48.92, subdivision 7, is amended to read:

Subd. 7. [RECIPROCATING HOST STATE.] "Reciprocating Host state" is a state that authorizes the acquisition, directly or indirectly, or control of, banks in that state by a bank or bank holding company located in this state under conditions substantially similar to those imposed by the laws of Minnesota as determined by the commissioner. other than the home state of the bank holding company, in which the company controls, or seeks to control, a bank subsidiary.

Sec. 12. Minnesota Statutes 1994, section 48.92, subdivision 8, is amended to read:

Subd. 8. [RECIPROCATING STATE OUT-OF-STATE BANK HOLDING COMPANY.] "Reciprocating state Out-of-state bank holding company" means a bank holding company as defined in the Bank Holding Company Act of 1956, as amended, whose operations are principally conducted in a reciprocating home state other than Minnesota and is that state in which the operations of its banking subsidiaries are the largest in terms of total deposits.

Sec. 13. Minnesota Statutes 1994, section 48.92, subdivision 9, is amended to read:

Subd. 9. [INTERSTATE BANK HOLDING COMPANY.] "Interstate bank holding company" means (a) a bank holding company located in this state, whose home state is Minnesota and is engaging in interstate banking under reciprocal legislation, and (b) a reciprocating state an out-of-state bank holding company engaged in banking in this state, and (c) other out-of-state bank holding companies operating an institution located in this state having deposits insured by the Federal Deposit Insurance Corporation.

Sec. 14. Minnesota Statutes 1994, section 48.92, is amended by adding a subdivision to read:

Subd. 11. [OUT-OF-STATE BANK.] "Out-of-state bank" means a bank whose home state is other than Minnesota.

Sec. 15. Minnesota Statutes 1994, section 48.93, subdivision 1, is amended to read:

Subdivision 1. [APPLICATION.] A reciprocating state An out-of-state bank holding company may, through a purchase of stock or assets of a bank, or through a purchase of stock or assets of or merger with a bank holding company, acquire an interest control in an existing bank or banks located in this whose home state is Minnesota if it meets the conditions in this section, sections 46.047 and 46.048 and, if the interest will result in control of the bank or banks, it files an application in writing with the commissioner on forms provided by the department. The commissioner, upon receipt of the application, shall act upon it within 30 days of the end of the public comment period provided by section 48.98, and, unless the proposed acquisition is disapproved within that period of time, it becomes effective without approval in the manner provided for in sections 46.047 and 46.048, except that the commissioner may extend the 30-day 60-day period an additional 30 days if in the commissioner's judgment any material information submitted is substantially inaccurate or the acquiring party has not furnished all the information required by subdivision 3 law, rule, or the commissioner. No application for approval required by this section is complete unless accompanied by an application fee of $5,000 payable to the state treasurer. Compliance with the requirements of this section satisfies the requirements of section 48.03, subdivision 4. Within three days after making the decision to disapprove any proposed acquisition, the commissioner shall notify the acquiring party in writing of the disapproval. The notice must provide a statement of the basis for the disapproval.

Sec. 16. Minnesota Statutes 1994, section 48.93, subdivision 3, is amended to read:

Subd. 3. [CRITERIA FOR APPROVAL.] Except as otherwise provided by rule of the department, an application filed pursuant to subdivision 1 must contain the following information: required by sections 46.047 and 46.048.

(1) the identity, personal history, business background, and experience of each person by whom or on whose behalf the acquisition is to be made, including the person's material business activities and affiliations during the past five years, and a description of any material pending legal or administrative proceedings in which the person is a party and any criminal indictment or conviction of that person by a state or federal court;

(2) a statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made, as of the end of the fiscal year for each of the five years immediately preceding the date of the notice, together with related statements of income, sources, and application of funds for each of the fiscal years then concluded, all

prepared in accordance with generally accepted accounting principles consistently applied, and an interim statement of the assets and liabilities for each person, together with related statements of income, source, and application of funds as of a date not more than 90 days prior to the date of the filing of the notice;

(3) the terms and conditions of the proposed acquisition and the manner in which the acquisition is to be made;

(4) the identity, source, and amount of the funds or other consideration to be used in making the acquisition, and if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names of the parties, and any arrangements, agreements, or understandings with those persons;

(5) any plans or proposals which an acquiring party making the acquisition may have to liquidate the bank, to sell its assets or merge it, or make any other major change in its business or corporate structure or management;

(6) the identification of any person employed, retained, or to be compensated by the acquiring party, or by any person on the acquiring party's behalf, to make solicitations or recommendations to stockholders for the purpose of assisting in the acquisition, and a brief description of the terms of the employment, retainer, or arrangement for compensation;

(7) copies of all invitations, tenders, or advertisements making tender offers to stockholders for purchase of their stock to be used in connection with the proposed acquisition;

(8) a statement of how the acquisition will bring "net new funds" to Minnesota. The description of net new funds must be filed with the application stating the amount of capital funds, including the increase in equity capital that will result from the acquisition or establishment of a bank. The level of total equity capital must exceed $3,000,000 for a new chartered bank and $1,000,000 for an acquired bank. The description must state the net increase in loanable funds expressed as an increase in the total loan to asset ratio of Minnesota loans and assets. The statement must also include a discussion of initial capital investments, loan policy, investment policy, dividend policy, and the general plan of business, including the full range of consumer and business services which will be offered; and

(9) any additional relevant information in the form the commissioner requires by rule or by specific request in connection with any particular notice.

Sec. 17. Minnesota Statutes 1994, section 48.93, subdivision 4, is amended to read:

Subd. 4. [DISAPPROVAL.] The commissioner shall disapprove any proposed acquisition if:

(1) the financial condition of any acquiring person is such as might jeopardize the financial stability of the bank or prejudice the interests of the depositors of the bank;

(2) the competence, experience, integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of the bank, or in the interest of the public to permit the person to control the bank;

(3) the acquisition will result in undue concentration of resources or substantial lessening of competition in this state;

(4) the application fails to adequately demonstrate that the acquisition proposal would bring net new funds into Minnesota;

(5) the application is incomplete or any acquiring party neglects, fails, or refuses to furnish all the information required by the commissioner;

(6) (5) a subsidiary of the acquiring bank holding company has failed to meet the requirements set forth in the federal Community Reinvestment Act; or

(7) the acquisition will result in over 30 percent of Minnesota's total deposits in financial institutions as defined in section 13A.01, subdivision 2, being held by banks located in this state owned by reciprocating state bank holding companies. This limitation does not apply to consideration for approval pursuant to section 48.99, special acquisitions.

(6) the bank to be acquired has not been in existence for at least five years. For purposes of this paragraph, a bank that has been chartered solely for the purpose of, and does not open for business before, acquiring control of, or acquiring all or substantially all of the assets of, an existing bank is considered to have been in existence for the same period of time as the bank to be acquired. For determining the time period of existence of a bank, the time period begins after the issuance of a certificate of authorization and from the date the approved bank actually opens for business.

Sec. 18. Minnesota Statutes 1994, section 48.96, is amended to read:

48.96 [SUPERVISION.]

The department may enter into cooperative and reciprocal agreements with federal or bank regulatory authorities of reciprocating states out-of-state bank holding companies for exchange or acceptance of reports of examination and other records from the authorities in lieu of conducting its own examinations. The department may enter into joint actions with federal or bank regulatory authorities of reciprocating states out-of-state bank holding companies to carry out its responsibilities under Laws 1986, chapter 339 and assure compliance with the laws of this state.

Sec. 19. Minnesota Statutes 1994, section 48.99, subdivision 1, is amended to read:

Subdivision 1. [APPLICATION CRITERIA FOR APPROVAL.] Pursuant to the present requirement of the United States Code, title 12, section 1842(d) and notwithstanding any other provision of state law, a reciprocating state an out-of-state bank holding company, or any subsidiary of a bank holding company, may acquire a bank located in this whose home state is Minnesota where the commissioner has determined that a merger, consolidation, or purchase of assets and assumption of liabilities is necessary and in the public interest to prevent the probable failure of a bank or is made for the incorporation of a new bank in the same locality coincidental with the closing of an existing bank by the commissioner or federal authorities and does not increase the number of banks in the community affected. The acquisition is subject to the prior written approval of the commissioner of an application submitted under this section and after the following considerations:

(1) the financial and managerial resources of the applicant;

(2) the future prospects of the applicant and the state bank or its subsidiary whose assets, interest in, or shares it will acquire;

(3) the financial history of the applicant;

(4) whether the acquisition or holding may result in undue concentration of resources or substantial lessening of competition in this state, however, any deposit concentration limitations imposed on the acquisition by Public Law Number 103-328, title 1, section 101, (a)(2), may be waived by order of the commissioner;

(5) the convenience and needs of the public of this state; and

(6) whether the acquisition or holding will strengthen the financial condition of the state bank.

Sec. 20. [48.993] [RECIPROCAL INTERSTATE BRANCHING.]

With the prior approval of the commissioner, a bank doing business in the state of Iowa, North Dakota, South Dakota, or Wisconsin may establish a de novo detached facility in this state not more than 30 miles from its principal office measured in a straight line from the closest points of the closest structures provided further that:

(a) There is in effect in the home state a law, rule, or ruling that permits Minnesota home state banks to establish de novo branches in the state under conditions substantially similar to those imposed by the laws of Minnesota as determined by the commissioner.

(b) There is in effect a cooperative agreement between the home state and host state banking regulator to facilitate their respective regulation and supervision of the bank including application and approval process, and the coordination of examinations. The agreement must at a minimum provide:

(1) common form and information requirements to be completed by the applicant bank;

(2) common form and procedure required to publish the application in the location of the branch in the host state;

(3) a fee for the application to the state of Minnesota, department of commerce, for filing and approval as the host state of the application of $500;

(4) the requirements and limitations on the location and operations of an interstate branch must be the same as for host state branches in sections 47.51 to 47.55 except for transfer of location in section 47.56 which is limited by this section;

(5) the branch is subject to the laws of the host state relating to banking in resolution of conflicts of laws between the home and host state; and

(6) the deposits of the bank must be insured by the Federal Deposit Insurance Corporation.

(c) The home state banking regulator has granted any and all necessary approvals.

(d) Beginning one year following establishment of a detached facility in a host state, the home state bank's level of lending in the host state relative to the deposits from the host state shall not be less than half of the level of the bank's loan to deposit ratio in its home state operations. The bank shall maintain sufficient records to permit an examination to determine this requirement by the host state banking regulator. If the bank is found to be in noncompliance, the home state or host state banking regulator may order that an interstate branch of the bank in the host state be closed.

Sec. 21. [48.995] [FOREIGN CORPORATION FILING.]

Subdivision 1. [TRUST POWERS.] A bank that holds trust powers may conduct the activity through a host state branch provided it complies with section 303.25.

Subd. 2. [FILING WITH SECRETARY OF STATE.] Notwithstanding section 303.03, the branch in a host state must operate under a certificate of authority filed with the Minnesota secretary of state.

Sec. 22. Minnesota Statutes 1994, section 52.05, subdivision 2, is amended to read:

Subd. 2. [APPLICATION.] Any 25 residents of the state persons representing a group may apply to the commissioner, advising the commissioner of the common bond of the group and its number of potential members, for a determination whether it is feasible for the group to form a credit union. Upon a determination that it is not feasible to organize because the number of potential members is too small, the applicants will be certified by the commissioner as eligible to petition for membership in an existing credit union capable of serving the group. If the credit union so petitioned resolves to accept the group into membership, it shall follow the bylaw amendment and approval procedure set forth in section 52.02.

The commissioner shall adopt rules to implement this subdivision. These rules must provide that:

(1) for the purpose of this subdivision, groups with a potential membership of less than 1,500 will be considered too small to be feasible as a separate credit union, unless there are compelling reasons to the contrary, relevant to the objectives of this subdivision;

(2) groups with a potential membership in excess of 1,500 will be considered in light of all circumstances relevant to the objectives of this subdivision; and

(3) all group applications, except for applications from groups made up of members of existing credit unions or groups made up of people who have a common employer which qualifies them for membership in an existing credit union, will be considered separately from any consideration of the membership provisions of existing credit unions; except that, groups made up of members of an existing credit union may be certified under this subdivision with the agreement of the credit union.

Sec. 23. [IMMEDIATE REPEALER.]

Minnesota Statutes 1994, sections 48.1585; 48.512, subdivision 6; 48.97; and 48.991, are repealed.

Sec. 24. [DELAYED REPEALER.]

Minnesota Statutes 1994, sections 47.80; 47.81; 47.82; 47.83; 47.84; 47.85; 48.95; and 48.98, are repealed.

Sec. 25. [EFFECTIVE DATE.]

Sections 1, 5, and 20 to 23 are effective the day following final enactment. Sections 2 to 4 and 6 to 19 are effective September 29, 1995, except that the portions of section 17 that strike existing clauses (4) and (7) are effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to financial institutions; regulating notices; electronic financial terminals, mergers with subsidiaries, the powers and duties of the commissioner of commerce, reporting and records requirements, lending powers, the powers and duties of institutions, detached facilities, interstate banking, and pawnbrokers; making technical changes; amending Minnesota Statutes 1994, sections 46.04, subdivision 1, and by adding a subdivision; 46.041, subdivision 4; 46.046, subdivision 1; 46.048, subdivision 1, and by adding subdivisions; 47.10, subdivision 3; 47.11; 47.20, subdivisions 5 and 10; 47.28, subdivision 1; 47.52; 47.56; 47.58, subdivision 2; 47.61, subdivision 3; 47.62, subdivisions 2, 3, and by adding subdivisions; 47.67; 47.69, subdivisions 3 and 5; 47.78; 48.16; 48.194; 48.24, subdivision 5; 48.475, subdivision 3; 48.48, subdivisions 1 and 2; 48.49; 48.61, subdivision 7, and by adding a subdivision; 48.65; 48.90, subdivision 1; 48.91; 48.92, subdivisions 1, 2, 6, 7, 8, 9, and by adding a subdivision; 48.93, subdivisions 1, 3, and 4; 48.96; 48.99, subdivision 1; 49.01, subdivision 3; 51A.02, subdivisions 6, 26, and 40; 51A.19, subdivision 9; 51A.50; 51A.58; 52.04, subdivision 2a; 52.05, subdivision 2; 53.015, subdivision 4; 53.04, subdivisions 3a, 3c, 4a, and 5a; 53.09, subdivisions 1, 2, and by adding a subdivision; 56.11; 56.12; 56.125, subdivisions 1, 2, and 3; 56.131, subdivisions 1, 2, 4, and 6; 56.132; 56.14; 56.155, subdivision 1; 56.17; 59A.06, subdivision 2; 61A.09, subdivision 3; 62B.04, subdivision 1; 62B.08, subdivision 2; 300.20, subdivision 1; 325F.91, subdivision 2; 325G.02, subdivision 1; 327B.04, subdivision 1; 327B.09, subdivision 1; and 332.23, subdivisions 1 and 2; proposing coding for new law in Minnesota Statutes, chapters 45; 47; 48; 51A; 52; 168; 325G; and 334; repealing Minnesota Statutes 1994, sections 46.03; 48.1585; 48.512, subdivision 6; 48.611; 48.97; 48.991; and 51A.385."

The motion prevailed and the amendment was adopted.

Jennings, Davids, Abrams and Simoneau moved to amend S. F. No. 1134, as amended, as follows:

Pages 17 to 22, delete sections 22 and 23 of article 1

Page 25, line 11, after the second "or" insert ""savings and loan association" or"

Page 30, line 7, after "of" insert "credit cards or"

Page 30, line 8, delete "which" and insert "provided that the" and after "transactions" insert "using debit cards"

Page 30, line 11, after "Regulations" insert a comma

Page 30, line 14, delete "3" and insert "5"

Page 30, line 31, delete "according to" and insert "under"

Page 32, line 33, after "customer" insert "without actual authority to initiate the withdrawal and from which the customer receives no benefit. The term does not include any withdrawal that is: (1) initiated by a person who was furnished with the card by the customer, unless the customer has notified the financial institution involved that transfers by that person are no longer authorized; (2) initiated with fraudulent intent by the customer or any person acting in concert with the customer; or (3) initiated by the financial institution or its employee."

Page 32, strike lines 34 to 36

Page 33, line 21, delete "and having made reimbursement to" and insert "that has reimbursed"

Page 33, line 33, strike "or"

Page 36, line 20, after "checks" insert a comma

Page 37, line 24, delete "automatically made" and insert "eligible to become" and after "members" insert "solely"

Pages 43 to 48, delete section 27 of article 2

Page 49, line 19, delete "credit worthiness" and insert "creditworthiness"

Page 49, line 24, after "new" insert "credit"

Page 49, line 25, after "permitted" insert "by the issuer"

Page 49, line 28, after "existing" insert "credit"

Page 49, line 32, after "request" insert "if the issuer has not already designated the account to reflect such participation"

Page 49, line 34, delete "an" and insert "a credit"

Page 50, line 4, delete the second "an" and insert "a credit"

Page 51, line 13, after "collect" insert "from the debtor"

Page 51, line 14, after "report" insert "obtained"

Page 51, after line 31, insert:

"Sec. 35. Minnesota Statutes 1994, section 334.011, is amended by adding a subdivision to read:

Subd. 5. [LOANS BY CHARITABLE ORGANIZATIONS TO ASSIST CERTAIN SMALL BUSINESSES.] (a) This subdivision applies to nonprofit charitable organizations recognized as exempt from federal income taxation under section 501(c)(3) of the federal Internal Revenue Code of 1986, as amended, that make loans for business purposes to individuals who are disadvantaged or otherwise unable to access standard sources of business credit, in conjunction with a program of education, training, business counseling, or other assistance to assist borrowers in developing their businesses at no extra charge to the borrowers or at a charge that does not exceed the cost of providing the assistance.

(b) Notwithstanding section 334.01 and subdivisions 1 and 2, an organization described in paragraph (a) may make loans described in that paragraph, in principal amounts not to exceed $10,000, at a rate of interest not to exceed 16 percent per year, and with an origination fee not to exceed two percent of the principal amount.

(c) Prior to beginning to make loans under this subdivision, the lender shall provide written notice to the commissioner of commerce, on a form prescribed by that commissioner. The lender shall at the same time provide a copy of that written notice to the commissioner of trade and economic development.

(d) A lender making loans under this subdivision shall annually file with the commissioner an annual report, on a date and on a form prescribed by the commissioner, summarizing the lender's loans made or outstanding in this state during the preceding year. The lender shall at the same time provide a copy of that annual report to the commissioner of trade and economic development."

Page 52, line 1, delete ", rather than" and insert "or"

Page 52, line 11, delete everything through the period

Page 52, line 29, after "than" insert "a"

Page 53, line 16, after "transmitting" insert "information contained on the card or device orally, in writing, by"

Page 54, delete lines 1 to 2 and insert:

"(j) "Finance charge" has the meaning given in the Code of Federal Regulations, title 12, part 226, except that the following will not in any event be considered a finance charge:

(1) a charge as a result of default or delinquency under subdivision 6 if made for actual unanticipated late payment, delinquency, default, or other similar occurrence, and a charge made for an extension or deferment under subdivision 5, unless the parties agree that these charges are finance charges;

(2) an additional charge under subdivision 6; or

(3) a discount, if a financial institution purchases a loan at less than the face amount of the obligation or purchases or satisfies obligations of a cardholder pursuant to a credit card and the purchase or satisfaction is made at less than the face amount of the obligation."

Page 54, delete lines 3 to 8 and insert:

"(k) "Financial institution" means a state or federally chartered bank, a state or federally chartered bank and trust, a trust company with banking powers, a state or federally chartered saving bank, a state or federally chartered savings association, an industrial loan and thrift company, or a regulated lender."

Page 55, line 9, delete "or"

Page 55, line 15, after "by" insert a comma

Page 55, line 16, after "of" insert a comma

Page 55, line 23, delete "direct advances" and insert "extensions" and delete "made" and insert "or purchases of extensions of credit"

Page 55, line 24, delete "as lender or creditor"

Page 55, line 25, after "47.60," insert "48.153," and after "59A.01," insert "168.66 to 168.77,"

Page 56, line 23, delete "except that the" and insert "but using the definition of finance charge provided in this section."

Page 56, delete lines 24 to 35

Page 62, line 20, delete "and"

Page 62, line 21, after the semicolon, insert "and"

Page 62, after line 21, insert:

"(vi) fees for determining whether any portion of the property is located in a flood zone and fees for ongoing monitoring of the property to determine changes, if any, in flood zone status;"

Page 63, line 8, after "insurance" insert "or mortgage insurance"

Page 65, delete lines 18 to 21, and insert "insurance or mortgage insurance is subject to chapters 61A, 62A, and 62B, as applicable, and the rules adopted under those chapters, if any."

Page 65, line 22, delete "rules adopted under that chapter."

Page 65, line 35, after "insurance" insert "or mortgage insurance"

Page 68, line 8, delete both commas and insert semicolons

Page 68, line 9, delete the second comma and insert a semicolon and delete ", and this section"

Page 68, line 14, delete "damages and a penalty" and after "institution" insert "actual damages and, in an action other than a class action, a penalty"

Page 68, line 32, delete "who" and insert "that"

Page 68, line 33, delete "who" and insert "that"

Page 72, line 21, after "(d)" insert "A lender filing under subdivision 3 shall,"

Page 72, after line 23, insert:

"(e) A lender filing under subdivision 3 shall display prominently, in each licensed place of business, a full and accurate statement of the charges to be made for loans made under this section. The statement of charges must be displayed in a notice, on plastic or other durable material measuring at least 12 inches by 18 inches, headed "CONSUMER NOTICE REQUIRED BY THE STATE OF MINNESOTA." The notice shall include, immediately above the statement of charges, the following sentence, or a substantially similar sentence approved by the commissioner: "These loan charges are higher than otherwise permitted under Minnesota law. Minnesota law permits these higher charges only because short-term small loans might otherwise not be available to consumers. If you have another source of a loan, you may be able to benefit from a lower interest rate and other loan charges." The notice must not contain any other statement or information, unless the commissioner has determined that the additional statement or information is necessary to prevent confusion or inaccuracy. The notice must be designed with a type size that is large enough to be readily noticeable and legible. The form of the notice must be approved by the commissioner prior to its use."

Page 74, line 1, strike "contract" and insert "credit"

Page 75, line 27, delete both semicolons and insert commas

Page 75, line 28, delete "the provisions of" and delete "do" and insert "does"

Page 88, delete section 21 of article 3

Page 92, line 15, delete "an acquiring" and insert "a"

Page 92, line 19, delete "identification" and insert "identity"

Page 92, line 34, after "publish" insert "once"

Page 93, line 3, delete "final"

Page 93, line 8, delete "an agency" and insert "a department"

Page 93, line 10, delete "issued" and insert "adopted" and delete "department" and insert "commissioner"

Page 94, line 14, delete "other" and after "facilities" insert "otherwise permitted"

Page 94, after line 30 insert:

"For purposes of this paragraph, "host state" means a state other than the home state, as defined in section 48.92."

Page 95, line 11, after "association" insert a comma

Page 96, lines 5 to 15, delete the new language and strike the existing language

Page 96, line 19, delete "Section" and insert "Sections" and after "48.90" insert "to 48.99"

Page 96, line 31, delete "is" and insert "means that term as"

Page 97, line 9, delete "1996" and insert "1966"

Page 97, line 28, strike "operations are"

Page 97, line 29, strike "principally conducted in a" and after "state" insert "is a state"

Page 97, line 36, after "and" insert "that"

Page 98, line 31, delete "law" and insert "statute"

Page 102, line 3, strike "bank" and insert "state" and strike "of"

Page 102, line 4, before "out-of-state" insert "responsible for supervision of"

Page 102, line 8, strike "bank" and insert "state" and strike "of"

Page 102, line 9, before "out-of-state" insert "responsible for supervision of"

Page 102, line 19, delete the new language and restore the stricken language

Page 102, line 20, delete the new language

Page 103, line 2, delete "however," and insert "but"

Page 103, line 17, delete "law" and insert "statute"

Page 103, line 36, delete "except for" and insert a period

Page 104, line 1, delete "in" and insert "under" and delete "which"

Page 104, line 15, after "determine" insert "compliance with"

Page 104, after line 18, insert:

"(e) For purposes of this section, "home state" has the meaning given in section 48.92, and "host state" means a state other than the home state."

Page 104, after line 26, insert:

"Subd. 3. [DEFINITION.] For purposes of this section, "host state" means a state other than the home state, as defined in section 48.92."

Page 105, after line 22, insert:

"Sec. 22. [NON-SEVERABILITY.]

Notwithstanding section 645.20, if any section, subdivision, clause, phrase, or word of section 5, paragraph (d), section 20, or section 21 is for any reason determined by a final nonappealable order or judgment of a court of competent jurisdiction to be unconstitutional, in violation of federal law, or to constitute opting-in to de novo interstate branching under section 103 of the federal Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, the determination shall cause the remaining portions of those sections, subdivisions, clauses, and phrases to be null and void from the effective date of the final determination.

Sec. 23. [SUNSET.]

Sections 5, 20, and 21 expire May 31, 1997."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Haas moved to amend S. F. No. 1134, as amended, as follows:

Page 67, line 6, delete everything after "charges."

Page 67, delete line 7

Page 67, line 8, delete "it."

The motion prevailed and the amendment was adopted.

S. F. No. 1134, A bill for an act relating to financial institutions; regulating notices, electronic financial terminals, mergers with subsidiaries, the powers and duties of the commissioner of commerce, reporting and records requirements, lending powers, the powers and duties of institutions, detached facilities, and interstate banking; making technical changes; regulating mortgage prepayments; allowing written waivers of the right to prepay without penalty under certain circumstances; clarifying definition of franchise; permitting a delinquency and collection charge; amending Minnesota Statutes 1994, sections 46.04, subdivision 1, and by adding a subdivision; 46.041, subdivision 4; 46.046, subdivision 1; 46.048, subdivision 1, and by adding subdivisions; 47.10, subdivision 3; 47.11; 47.20, subdivisions 5 and 10; 47.28, subdivision 1; 47.52; 47.56; 47.58, subdivision 2; 47.61, subdivision 3; 47.62, subdivisions 2, 3, and by adding subdivisions; 47.67; 47.69, subdivisions 3 and 5; 47.78; 48.16; 48.194; 48.24, subdivision 5; 48.475, subdivision 3; 48.48, subdivisions 1 and 2; 48.49; 48.61, subdivision 7, and by adding a subdivision; 48.65; 48.90, 1; 48.91; 48.92, subdivisions 1, 2, 6, 7, 8, 9, and by adding a subdivision; 48.93, subdivisions 1, 3, and 4; 48.96; 48.99, subdivision 1; 49.01, subdivision 3; 51A.02, subdivisions 6, 26, and 40; 51A.19, subdivision 9; 51A.50; 51A.58; 52.04, subdivision 2a; 52.05, subdivision 2; 53.015, subdivision 4; 53.04, subdivisions 3a, 3c, 4a, and 5a; 53.09, subdivisions 1, 2, and by adding a subdivision; 56.11; 56.12; 56.125, subdivisions 1, 2, and 3; 56.131, subdivisions 1, 2, 4, and 6; 56.132; 56.14; 56.155, subdivision 1; 56.17; 59A.06, subdivision 2; 61A.09, subdivision 3; 62B.04, subdivision 1; 62B.08, subdivision 2; 80C.01, subdivision 4; 300.20, subdivision 1; 327B.04, subdivision 1; 327B.09, subdivision 1; 332.23, subdivisions 1 and 2; proposing coding for new law in Minnesota Statutes, chapters 45; 47; 48; 51A; 52; and 334; repealing Minnesota Statutes 1994, sections 46.03; 47.80; 47.81; 47.82; 47.83; 47.84; 47.85; 48.1585; 48.512, subdivision 6; 48.611; 48.95; 48.97; 48.98; 48.991; and 51A.385.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 128 yeas and 4 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Koppendrayer Onnen        Smith
Anderson, B. Garcia       Kraus        Opatz        Solberg
Bakk         Girard       Krinkie      Orenstein    Stanek
Bertram      Goodno       Larsen       Orfield      Sviggum
Bettermann   Greenfield   Leighton     Osskopp      Swenson, D.
Bishop       Greiling     Leppik       Osthoff      Swenson, H.
Boudreau     Haas         Lieder       Ostrom       Sykora
Bradley      Hackbarth    Lindner      Otremba      Tomassoni
Broecker     Harder       Long         Ozment       Tompkins
Brown        Hasskamp     Lourey       Paulsen      Tuma
Carlson      Hausman      Luther       Pawlenty     Tunheim
Carruthers   Holsten      Lynch        Pellow       Van Dellen
Clark        Hugoson      Macklin      Pelowski     Van Engen
Commers      Huntley      Mahon        Perlt        Vickerman
Cooper       Jaros        Mares        Peterson     Wagenius
Daggett      Jefferson    Marko        Pugh         Warkentin
Dauner       Jennings     McElroy      Rest         Weaver
Davids       Johnson, R.  McGuire      Rhodes       Wejcman
Dawkins      Johnson, V.  Milbert      Rice         Wenzel
Dehler       Kahn         Molnau       Rostberg     Winter
Delmont      Kalis        Mulder       Rukavina     Wolf
Dempsey      Kelley       Munger       Sarna        Worke
Dorn         Kelso        Murphy       Schumacher   Workman
Entenza      Kinkel       Ness         Seagren      Sp.Anderson,I
Erhardt      Knight       Olson, E.    Simoneau     
Finseth      Knoblach     Olson, M.    Skoglund     
JOURNAL OF THE HOUSE - 50th Day - Top of Page 3512

Farrell      Mariani      McCollum     Trimble      

S. F. No. 973, A bill for an act relating to insurance; automobile; permitting users of rental vehicles to benefit from lower price rental periods without losing coverage; amending Minnesota Statutes 1994, section 65B.49, subdivision 5a.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Koppendrayer Olson, M.    Smith
Anderson, B. Garcia       Kraus        Onnen        Solberg
Bakk         Girard       Krinkie      Opatz        Stanek
Bertram      Goodno       Larsen       Orenstein    Sviggum
Bettermann   Greenfield   Leighton     Orfield      Swenson, D.
Bishop       Greiling     Leppik       Osskopp      Swenson, H.
Boudreau     Haas         Lieder       Osthoff      Sykora
Bradley      Hackbarth    Lindner      Ostrom       Tomassoni
Broecker     Harder       Long         Otremba      Tompkins
Brown        Hasskamp     Lourey       Ozment       Trimble
Carlson      Hausman      Luther       Paulsen      Tuma
Carruthers   Holsten      Lynch        Pawlenty     Tunheim
Clark        Hugoson      Macklin      Pellow       Van Dellen
Commers      Huntley      Mahon        Pelowski     Van Engen
Cooper       Jaros        Mares        Perlt        Vickerman
Daggett      Jefferson    Mariani      Peterson     Wagenius
Dauner       Jennings     Marko        Pugh         Warkentin
Davids       Johnson, A.  McCollum     Rest         Weaver
Dawkins      Johnson, R.  McElroy      Rhodes       Wejcman
Dehler       Johnson, V.  McGuire      Rice         Wenzel
Delmont      Kahn         Milbert      Rostberg     Winter
Dempsey      Kalis        Molnau       Rukavina     Wolf
Dorn         Kelley       Mulder       Sarna        Worke
Entenza      Kelso        Munger       Schumacher   Workman
Erhardt      Kinkel       Murphy       Seagren      Sp.Anderson,I
Farrell      Knight       Ness         Simoneau     
Finseth      Knoblach     Olson, E.    Skoglund     

There being no objection, the order of business reverted to Reports of Standing Committees.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 398, A bill for an act relating to elevators; regulating persons who may do elevator work; appropriating money; amending Minnesota Statutes 1994, sections 183.355, subdivision 3; 183.357, subdivisions 1, 2, and 4; and 183.358; proposing coding for new law in Minnesota Statutes, chapter 183.

Reported the same back with the following amendments:

Page 1, line 11, delete "removal,"

Page 1, line 16, delete "two" and insert "five"

Page 2, line 2, delete "remove,"

Page 2, line 9, delete "remove,"

With the recommendation that when so amended the bill pass.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 1280, A bill for an act relating to game and fish; amending Minnesota Statutes 1994, sections 18.317; 84.796; 84.81, by adding a subdivision; 84.82, by adding a subdivision; 84.92, subdivision 8; 84.968, subdivision 1; 84.9691; 84.9692, subdivisions 1, 2, and by adding a subdivision; 86B.401, subdivision 11; 97A.045, by adding a subdivision; 97A.401, subdivision 3; 97B.005, subdivision 3; 97B.055, subdivision 3; 97B.075; 97B.731, subdivision 1; 97B.931; 97C.355, subdivision 2; and 97C.505, subdivision 4; Laws 1994, chapter 623, article 1, section 45; proposing coding for new law in Minnesota Statutes, chapter 18.

Reported the same back with the following amendments:

Page 9, delete section 15

Renumber the sections in sequence

Amend the title as follows:

Page 1, line 2, after the semicolon, insert "changing the undesirable exotic species law; restricting taking migratory birds; regulating use of traps; making miscellaneous game and fish law changes;"

Page 1, lines 8 and 9, delete "97B.005, subdivision 3;"

With the recommendation that when so amended the bill pass.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 1444, A bill for an act relating to game and fish; form of licenses; reports by licensees; amending Minnesota Statutes 1994, sections 97A.045, subdivision 5; and 97B.061.

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

The report was adopted.

H. F. Nos. 398, 1280 and 1444 were read for the second time.

Carruthers moved that the remaining bills on Special Orders for today be continued. The motion prevailed.

Carruthers moved that the bills on General Orders for today be continued. The motion prevailed.

Rest moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 26, 1995, when the vote was taken on the repassage of H. F. No. 32, as amended by the Senate." The motion prevailed.

Rest moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 26, 1995, when the vote was taken on the repassage of H. F. No. 383, as amended by the Senate." The motion prevailed.

Commers moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 26, 1995, when the vote was taken on the repassage of H. F. No. 399, as amended by the Senate." The motion prevailed.

Knight moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 26, 1995, when the vote was taken on the repassage of H. F. No. 399, as amended by the Senate." The motion prevailed.

Rest moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 26, 1995, when the vote was taken on the repassage of H. F. No. 399, as amended by the Senate." The motion prevailed.

Frerichs moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 26, 1995, when the vote was taken on the repassage of H. F. No. 651, as amended by the Senate." The motion prevailed.

Rest moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 26, 1995, when the vote was taken on the repassage of H. F. No. 651, as amended by the Senate." The motion prevailed.

Vickerman moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 26, 1995, when the vote was taken on the Rukavina amendment to S. F. No. 106, the unofficial engrossment, as amended." The motion prevailed.

Schumacher moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the negative on Thursday, April 27, 1995, when the vote was taken on the Koppendrayer amendment to S. F. No. 1678, the unofficial engrossment, as amended." The motion prevailed.

Van Dellen moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Thursday, April 27, 1995, when the vote was taken on the first Knoblach et al amendment to S. F. No. 1678, the unofficial engrossment, as amended." The motion prevailed.

Carruthers moved that the name of Solberg be stricken and the name of Hackbarth be added as an author on H. F. No. 398. The motion prevailed.

Milbert moved that S. F. No. 1180 be recalled from the Committee on Ways and Means and together with H. F. No. 1280, now on Technical General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

Milbert moved that S. F. No. 1118 be recalled from the Committee on Governmental Operations and be re-referred to the Committee on Judiciary. The motion prevailed.

Seagren moved that H. F. No. 92 be returned to its author. The motion prevailed.

Bishop moved that H. F. No. 180 be returned to its author. The motion prevailed.

Ness moved that H. F. No. 429 be returned to its author. The motion prevailed.

Wenzel moved that H. F. No. 1853 be returned to its author. The motion prevailed.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 96:

Bishop, Van Dellen and Pugh.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 365:

Jennings, Simoneau and Molnau.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 536:

Entenza, Sarna and Pellow.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 778:

Orenstein, Marko and Girard.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 1055:

Dauner; Olson, E., and Finseth.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 1132:

Jennings, Sarna and Holsten.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 1159:

Jefferson, Clark and Rostberg.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 1856:

Kinkel, Kelso, Pelowski, Dehler and Leppik.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 1864:

Rest, Winter, Dawkins, Milbert and Goodno.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 1670:

Rice, Clark, Mahon, Leighton and Ozment.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 1678:

Rukavina; Jefferson; Johnson, R.; Kahn and Rostberg.

Carruthers moved that when the House adjourns today it adjourn until 11:00 a.m., Tuesday, May 2, 1995. The motion prevailed.

Carruthers moved that the House adjourn. The motion prevailed, and the Speaker declared the House stands adjourned until 11:00 a.m., Tuesday, May 2, 1995.

Edward A. Burdick, Chief Clerk, House of Representatives

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