The Honorable Phil Carruthers

Speaker of the House of Representatives

The State of Minnesota

Dear Speaker Carruthers:

It is my honor to inform you that I have received, approved, signed and deposited in the Office of the Secretary of State the following House File:

H. F. No. 125, relating to taxation; authorizing the city of Kenyon to recertify its final levy for taxes levied in 1996.

Warmest regards,

Arne H. Carlson

Governor

The Honorable Phil Carruthers

Speaker of the House of Representatives

The State of Minnesota

Dear Speaker Carruthers:

It is my honor to inform you that I have received, approved, signed and deposited in the Office of the Secretary of State the following House File:

H. F. No. 35, relating to Minnesota Statutes; correcting erroneous, ambiguous, and omitted text and obsolete references; eliminating certain redundant, conflicting, and superseded provisions; making miscellaneous technical corrections to statutes and other laws.

Warmest regards,

Arne H. Carlson

Governor

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

I have the honor to inform you that the following enrolled Acts of the 1997 Session of the State Legislature have been received from the Office of the Governor and are deposited in the Office of the Secretary of State for preservation, pursuant to the State Constitution, Article IV, Section 23:

S.F. No.	H.F. No.	Session Laws Chapter No.	Time and Date Approved 1997	Date Filed 1997
	125	6	10:25 a.m. March 11	March 11
	35	7	10:20 a.m. March 11	March 11
274		8	10:17 a.m. March 11	March 11

Sincerely,

Joan Anderson Growe
Secretary of State

The board commissioner shall review the transferred rules, orders, and directives and, when appropriate, develop and adopt new rules, orders, or directives within 18 months of July 1, 1985.

Sec. 8. Minnesota Statutes 1996, section 218.031, subdivision 2, is amended to read:

Subd. 2. [ACCIDENT INFORMATION FURNISHED COMMISSIONER.] Every common carrier shall furnish to the commissioner:

(1) All schedules of rates, fares and charges, every part and classification thereof, together with minimum weights and rules with respect thereto, and any and all amendments, modifications or changes therein.

(2) All information duly required in blanks and forms furnished by the commissioner.

(3) A copy of all annual reports and valuation data furnished to the Interstate Commerce Commission not later than June 30th, covering the preceding calendar year, together with any additional information regarding valuation of its properties requested by the commissioner.

(4) a report of accidents, wrecks, and casualties occurring in this state in such the manner and form and at such the times as prescribed by the commissioner. All such The reports administered by the department of public safety shall must be received and administered in accordance with the provisions of section 169.09, subdivision 13. All Other reports shall must be open to public inspection but shall are not be admissible in evidence in any a suit or action for damages growing out of such the accident, wreck, or casualty.

(5) All tariff agreements or arrangements with other carriers.

(6) All joint schedules of rates, fares or classifications.

Sec. 9. Minnesota Statutes 1996, section 218.041, subdivision 4, is amended to read:

Subd. 4. [BOARD COMMISSIONER DUTIES UPON PETITION.] The board commissioner shall, upon petition:

(1) at all points of intersection and crossings of different railroads, or where two railroads are not more than one-half mile apart, and at all terminals, prescribe ample facilities by track connection, joint use of tracks, freight platforms and depots, warehouses, docks over which general merchandise is handled and forwarded, and other necessary appliances and conveniences for the transfer, forwarding and handling of general merchandise and parcel freight between such railroads and between such railroads and such docks, warehouses and vessels at such docks.;

(2) Determine the proportionate share of each company in the cost of providing connecting and transfer facilities in the event the companies fail to agree.

(3) direct construction, maintenance and operation at any points prescribed by law of all side tracks and reasonable facilities connecting any road with any grain warehouse or mill, dock, wharf, coal yard, quarry, brick or lime kiln, sand or gravel pit, crushed rock or concrete plant, or manufactory adjacent thereto, and prescribe the terms therefor.;

(4) Prescribe reasonable rules for handling property, passenger, baggage, express and mail, partly over privately owned rights-of-way and partly over highways, so that reasonable and adequate accommodations and service may be afforded.

(5) Prescribe the extent to which any designated carrier, upon its petition, may be relieved from the operation of the principles established by section 218.021, subdivision 1, clauses (5), (6) and (7).

(6) (3) direct the repair, reconstruction or replacement of any inadequate or unsafe trackage, structure or facility.

the petition from any person within 20 days after the notice of filing has been fully made, the exemption shall be granted or denied only after a contested case hearing has been held on the matter. The board commissioner may elect to hold a contested case hearing if no objections to the petition or application are received. If a timely objection is not received and the board commissioner declines to act without hearing, the petitioner may request within 30 days of receiving a notice of denial, and shall be granted, a contested case hearing on the application.

Sec. 10. Minnesota Statutes 1996, section 218.041, subdivision 6, is amended to read:

Subd. 6. [COMMISSIONER'S POWERS.] In exercising the powers granted by this chapter, the commissioner may:

(1) subpoena books, papers or accounts kept by any regulated business within or without the state, or compel production of verified copies;

(2) prepare all forms or blanks for the purpose of obtaining information which the commissioner may deem necessary or useful for the proper exercise of the authority and duties of the commissioner or the board in connection with regulated businesses, and prescribe the time and manner within which the blanks and forms shall be completed and filed;

(3) inspect, at all reasonable times, and copy the books, records, memoranda, correspondence or other documents and records of any business under the commissioner's jurisdiction; and

(4) examine, under oath, any officer, agent or employee of a business under the commissioner's jurisdiction concerning its business and affairs; and any matter within the commissioner's jurisdiction.

(5) Prescribe rules, duly promulgated in accordance with chapter 14, relating to rates, care in handling and other livestock transportation matters.

Sec. 11. Minnesota Statutes 1996, section 219.074, subdivision 2, is amended to read:

Subd. 2. [CROSSING VACATION PROGRAM.] On or before July 1, 1992, and on or before July 1 of each of the next four years, and as necessary afterward, the commissioner shall propose to the board a list of grade crossings proposed to be vacated. The list must be developed by applying the standards set forth in the rules adopted under section 219.073. Grade crossings that are part of an abandonment, closing, or removal under section 219.741 may not be included in the list. The board commissioner shall notify the public officials having the necessary authority and the railway companies operating the railroads of the proposed vacations. Either affected party may request a hearing. If requested, the board commissioner shall hold a contested case hearing, applying in its determination the rules developed under section 219.073. If after the hearing the board commissioner determines that the vacation is consistent with the standards adopted under section 219.073, it the commissioner may order the crossing vacated. If a request for a hearing on a particular crossing is not received within 30 days of the publication in the State Register, the board commissioner shall order the crossing vacated.

Sec. 12. Minnesota Statutes 1996, section 219.384, subdivision 2, is amended to read:

Subd. 2. [PENALTY.] A railroad company, road authority, or property owner that fails to comply with this section within 30 days after being notified in writing is subject to a fine of $50 for each day that the condition is uncorrected. This penalty may be recovered in the manner provided in section 219.97, subdivision 5 in a civil action brought by the attorney general or by the county attorney of the county through or into which that railroad extends.

Sec. 13. Minnesota Statutes 1996, section 219.98, is amended to read:

219.98 [FEES FOR APPLYING FOR BOARD COMMISSIONER ORDER.]

Sec. 14. Minnesota Statutes 1996, section 574.26, subdivision 1a, is amended to read:

Subd. 1a. [EXEMPTION; EXEMPTIONS: CERTAIN MANUFACTURERS; COMMISSIONER OF TRANSPORTATION.] (a) Sections 574.26 to 574.32 do not apply to a manufacturer of public transit buses that manufactures at least 100 public transit buses in a calendar year. For purposes of this section, "public transit bus" means a motor vehicle designed to transport people, with a design capacity for carrying more than 40 passengers, including the driver. The term "public transit bus" does not include a school bus, as defined in section 169.01, subdivision 6.

(b) At the discretion of the commissioner of transportation, sections 574.26 to 574.32 do not apply to any projects of the department of transportation (1) costing less than $75,000, or (2) involving the permanent or semipermanent installation of heavy machinery, fixtures, or other capital equipment to be used primarily for maintenance or repair.

Sec. 15. Laws 1995, chapter 248, article 13, section 4, subdivision 2, is amended to read:

Subd. 2. [PILOT PROJECT.] Notwithstanding any law to the contrary, the governor shall designate an executive agency that, during the biennium ending department of transportation, until June 30, 1997 1998, is exempt from any law, rule, or administrative procedure that requires approval of the commissioner of administration before an agency enters into a contract. The agency selected in this subdivision must establish a process for obtaining goods and services that complies with the policies in subdivision 1. The process must include guidelines to prevent conflicts of interest for agency employees involved in developing bid specifications or proposals, evaluating bids or proposals, entering into contracts, or evaluating the performance of a contractor. The guidelines must attempt to ensure that such an employee:

(1) does not have any financial interest in and does not personally benefit from the contract;

(2) does not accept from a contractor or bidder any promise, obligation, contract for future reward, or gift, other than an item of nominal value; and

(3) does not appear to have a conflict of interest because of a family or close personal relationship to a contractor or bidder, or because of a past employment or business relationship with a contractor or bidder.

Upon request of the agency, the department of administration shall provide the agency technical assistance in designing such a process.

Sec. 16. [SALE OF TAX-FORFEITED LAND; HENNEPIN COUNTY.]

(a) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, Hennepin county may sell to the Minnesota department of transportation the tax-forfeited land bordering public water that is described in paragraph (c).

(b) The conveyance must be in the form approved by the attorney general.

(c) The land that may be conveyed is located in the city of Champlin, Hennepin county and is described as: That part of Lot 11, Block 5, Auditor's Subdivision No. 15, according to the plat thereof on file and of record in the office of the County Recorder in and for Hennepin County, Minnesota, lying south of a line run parallel with and distant 43 feet north of the south line of Government Lot 3, Section 19, Township 120 North, Range 21 West and lying east of a line run parallel with and distant 36.5 feet east of the west line of said Government Lot 3;

together with all right of access, being the right of ingress to and egress from said Lot 11 to U.S. Highway No. 169 and Hayden Lake Road.

Subject to permanent easement for sanitary sewers granted to the metropolitan council on March 2, 1995, by the Hennepin county auditor. Subject to easements of record.

Sec. 17. [INSTRUCTION TO REVISOR.]

"board or department," and "board and the department," when referring to the transportation regulation board, to the term "commissioner," "commissioner's," or "commissioner of transportation," as appropriate, wherever those terms appear in Minnesota Statutes, chapters 218, 219, and 222.

Sec. 18. [TRUNK HIGHWAYS; EFFECTIVE DATES; INSTRUCTION TO REVISOR.]

Subdivision 1. [DESCRIPTION OF ROUTE NO. 107 CHANGED; EFFECTIVE DATE.] Section 3 is effective when an agreement to transfer jurisdiction of a portion of marked Route No. 52 has been signed by the commissioner of transportation and the chair of the Hennepin county board and filed in the office of the commissioner.

Subd. 2. [ROUTE NO. 126 DISCONTINUED; EFFECTIVE DATE.] Section 19, paragraph (a), is effective when the transfer of jurisdiction of legislative Route No. 126 is agreed to by the commissioner of transportation and Ramsey county and a copy of the agreement, signed by the commissioner and the chair of the Ramsey county board, has been filed in the office of the commissioner.

Subd. 3. [DESCRIPTION OF ROUTE NO. 156 CHANGED; EFFECTIVE DATE.] Section 4 is effective when the transfer of jurisdiction of a portion of the old route is agreed to by the commissioner of transportation and Hennepin county and a copy of the agreement, signed by the commissioner and the chair of the Hennepin county board, has been filed in the office of the commissioner.

Subd. 4. [INSTRUCTION TO REVISOR.] The revisor of statutes shall delete the route identified in subdivision 2 and change the description of each route identified in subdivisions 1 and 3 in the next publication of Minnesota Statutes unless the commissioner of transportation informs the revisor that the conditions required to transfer a particular route were not satisfied.

Sec. 19. [REPEALER.]

(a) Minnesota Statutes 1996, section 161.115, subdivision 57, is repealed.

(b) Minnesota Statutes 1996, sections 218.021; 218.025; 218.031, subdivisions 1, 3, 4, 5, 6, 7, 8, 9, and 10; 218.041, subdivisions 1, 2, 7, and 8; 219.383, subdivisions 1 and 2; 219.558; 219.559; 219.56; and 219.97, subdivision 6, are repealed.

Sec. 20. [EFFECTIVE DATES.]

Sections 1, 6, and 15 are effective the day following final enactment. Sections 2 and 14 are effective July 1, 1997."

Amend the title as follows:

Page 1, line 17, delete "providing"

Page 1, delete lines 18 to 20

Page 1, line 30, delete ", 56,"

Page 1, line 33, delete everything after the first semicolon

Page 1, line 34, delete everything before "and"

Page 1, line 35, delete "and"

Page 1, delete lines 43 and 44 and insert "and"

Page 1, line 45, delete everything after the comma and insert "subdivision 6."

With the recommendation that when so amended the bill pass.

The report was adopted.

Jaros from the Committee on Economic Development and International Trade to which was referred:

H. F. No. 544, A bill for an act relating to community development; providing partial funding for moving a steam plant away from the Mississippi river; appropriating money.

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

The report was adopted.

Wenzel from the Committee on Agriculture to which was referred:

H. F. No. 578, A bill for an act relating to agriculture; setting expiration dates for certain advisory committees and commissions; adding a member to the food safety advisory committee; making technical changes; amending Minnesota Statutes 1996, sections 17.136; 17.49, subdivision 1; and 28A.20, subdivision 2, and by adding a subdivision.

Reported the same back with the following amendments:

Page 1, line 22, after "but" insert ", after June 30, 1997,"

Page 1, line 23, strike "three" and insert "four"

Page 1, line 26, strike "one"

Page 2, line 1, strike "member from" and insert "and chairs of" and strike the comma and strike "one member from"

Page 2, line 2, before the period, insert "committees that deal with agricultural policy or the designees of the chairs" and strike "department" and insert "departments" and after the second comma, insert "health, and natural resources,"

Page 3, after line 4, insert:

"Sec. 3. Minnesota Statutes 1996, section 21.112, subdivision 2, is amended to read:

Subd. 2. [ADVISORY SEED POTATO CERTIFICATION TASK FORCE.] The commissioner may appoint an advisory seed potato certification task force. If the task force is appointed each member shall be a grower in Minnesota of certified seed potatoes. The task force shall expire, and the terms, compensation, and removal of members shall be as provided in section 15.059. The task force shall expire June 30, 2001."

Page 3, after line 10, insert:

"(3) the executive director of the agricultural utilization resource institute or the director's designee;"

Page 3, line 13, strike "(4)" and insert "(5)"

Page 3, line 15, strike "(5)" and insert "(6)"

Page 3, line 17, strike "(6)" and insert "(7)" and reinstate the stricken "eight" and delete "nine"

Page 3, after line 30, insert:

"Sec. 6. Minnesota Statutes 1996, section 31.95, subdivision 3a, is amended to read:

Subd. 3a. [CERTIFICATION ORGANIZATIONS.] (a) A Minnesota grown organic product that is labeled "certified" must be certified by a designated certification organization.

(b) A certified organic product sold in this state must be certified by a designated certification organization or by a certification organization approved by the commissioner. Before approving a certification organization, the commissioner must seek the evaluation and recommendation of the Minnesota organic advisory task force.

(c) The commissioner shall appoint a Minnesota organic advisory task force composed of members of the organic industry to advise the commissioner on organic issues. Members of the task force may not be paid compensation or costs for expenses. The task force expires on June 30, 2001."

Renumber the sections in sequence

Amend the title as follows:

Page 1, line 3, delete "adding a"

Page 1, line 4, delete everything before the semicolon and insert "changing membership requirements"

Page l, line 6, delete "and" and insert "21.112, subdivision 2;"

Page 1, line 7, before the period, insert "; and 31.95, subdivision 3a"

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

The report was adopted.

Rest from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 662, A bill for an act relating to the board of government innovation and cooperation; permitting the apportionment of a local government unit between two or more contiguous units; permitting the establishment of interim governing bodies to act on behalf of new local government units before the effective date of the combination establishing the new units; authorizing the pro rata allocation of board aid to cooperating and combining units; increasing eligibility for planning aid; amending Minnesota Statutes 1996, sections 465.81, subdivisions 1 and 3; 465.82, subdivisions 1, 2, and by adding a subdivision; 465.84; 465.85; 465.87, subdivisions 1a, 2, and 3; and 465.88.

Reported the same back with the following amendments:

Page 8, line 3, after "Two" insert "or more"

Page 8, line 7, after "two" insert "or more"

Page 8, line 8, strike "motion" and insert "proceeding"

Page 8, line 20, after "Two" insert "or more"

Page 8, line 22, delete "15,000" and insert "30,000"

With the recommendation that when so amended the bill pass.

The report was adopted.

Rest from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 685, A bill for an act relating to local government; establishing a program for aid payments to local units of government for innovation and efficiency in the delivery of local services; appropriating money; amending Minnesota Statutes 1996, section 465.796, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 465; and 477A.

Reported the same back with the following amendments:

Page 3, lines 29, 34, and 36, delete "collaboration" and insert "cooperation"

Page 4, line 26, delete "20" and insert "25"

Page 4, after line 28, insert:

"(2) an additional 15 points if the application would restructure service delivery and involves services provided by a county and at least one other taxing jurisdiction located at least partially within the county;"

Page 4, line 29, delete "(2)" and insert "(3)" and delete "20" and insert "ten"

Page 4, line 34, delete "(3)" and insert "(4)" and delete "20" and insert "ten"

Page 5, line 26, delete "collaborations" and insert "cooperative efforts"

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

The report was adopted.

Anderson, I., from the Committee on Financial Institutions and Insurance to which was referred:

subdivision 3, and by adding subdivisions; 65A.27, subdivision 4; 65B.48, subdivision 5; 67A.231; 72A.20, subdivision 34; 72B.04, subdivision 10; 79A.01, subdivision 10; 79A.02, subdivisions 1 and 4; 79A.03, subdivisions 6, 7, 9, and by adding a subdivision; 79A.06, subdivision 5; 79A.20, subdivision 1; 79A.21, subdivision 2; 79A.22, subdivision 7, and by adding a subdivision; 79A.23, subdivisions 1 and 2; 79A.24, subdivisions 1, 2, and 4; 79A.26, subdivision 2; and 79A.31, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 60B; and 65B; repealing Minnesota Statutes 1996, sections 60B.36; and 79A.04, subdivision 8.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1996, section 60A.02, subdivision 1a, is amended to read:

Subd. 1a. [ASSOCIATION OR ASSOCIATIONS.] (a) "Association" or "associations" means an organized body of people who have some interest in common and that has at the onset a minimum of 100 persons; is organized and maintained in good faith for purposes other than that of obtaining insurance; and has a constitution and bylaws which provide that: (1) the association or associations hold regular meetings not less frequently than annually to further purposes of the members; (2) except for credit unions, the association or associations collect dues or solicit contributions from members; (3) the members have voting privileges and representation on the governing board and committees, which provide the members with control of the association including the purchase and administration of insurance products offered to members; and (4) the members are not, within the first 30 days of membership, directly solicited, offered, or sold an insurance policy if the policy is available as an association benefit.

(b) An association may apply to the commissioner for a waiver of the 30-day waiting period to that association. The commissioner may grant the waiver upon a finding of all at least three of the following: (1) the association is in full compliance with this subdivision; (2) sanctions have not been imposed against the association as a result of significant disciplinary action by the commissioner; and (3) at least 80 percent of the association's income comes from dues, contributions, or sources other than income from the sale of insurance; or (4) the association has been organized and maintained for at least ten years.

Sec. 2. Minnesota Statutes 1996, section 60A.02, is amended by adding a subdivision to read:

Subd. 2b. [FILED.] In cases where a law requires documents to be filed with the commissioner, the documents will be considered filed when they are received by the department of commerce.

Sec. 3. Minnesota Statutes 1996, section 60A.052, subdivision 2, is amended to read:

Sec. 4. Minnesota Statutes 1996, section 60A.052, is amended by adding a subdivision to read:

Subd. 4a. [WITHDRAWAL OF INSURER FROM STATE.] No insurer shall withdraw from this state until its direct liability to its policyholders and obligees under all its insurance contracts then in force in this state have been assumed by another licensed insurer according to section 60A.09, subdivision 4a.

Sec. 5. Minnesota Statutes 1996, section 60A.06, subdivision 1, is amended to read:

Subdivision 1. [STATUTORY LINES.] Insurance corporations may be authorized to transact in any state or territory in the United States, in the Dominion of Canada, and in foreign countries, when specified in their charters or certificates of incorporation, either as originally granted or as thereafter amended, any of the following kinds of business, upon the stock plan, or upon the mutual plan when the formation of such mutual companies is otherwise authorized by law; and business trusts as authorized by law of this state shall only be authorized to transact in this state the following kind of business hereinafter specified in clause (7) hereof when specified in their "declaration of trust":

(1) To insure against loss or damage to property on land and against loss of rents and rental values, leaseholds of buildings, use and occupancy and direct or consequential loss or damage caused by fire, smoke or smudge, water or other fluid or substance, lightning, windstorm, tornado, cyclone, earthquake, collapse and slippage, rain, hail, frost, snow, freeze, change of temperature, weather or climatic conditions, excess or deficiency of moisture, floods, the rising of waters, oceans, lakes, rivers or their tributaries, bombardment, invasion, insurrection, riot, civil war or commotion, military or usurped power, electrical power interruption or electrical breakdown from any cause, railroad equipment, motor vehicles or aircraft, accidental injury to sprinklers, pumps, conduits or containers or other apparatus erected for extinguishing fires, explosion, whether fire ensues or not, except explosions on risks specified in clause (3); provided, however, that there may be insured hereunder the following: (a) explosion of any kind originating outside the insured building or outside of the building containing the property insured, (b) explosion of pressure vessels which do not contain steam or which are not operated with steam coils or steam jackets; and (c) risks under home owners multiple peril policies;

(2)(a) To insure vessels, freight, goods, wares, merchandise, specie, bullion, jewels, profits, commissions, bank notes, bills of exchange, and other evidences of debt, bottomry and respondentia interest, and every insurance appertaining to or connected with risks of transportation and navigation on and under water, on land or in the air;

(b) To insure all personal property floater risks;

(3) To insure against any loss from either direct or indirect damage to any property or interest of the assured or of another, resulting from the explosion of or injury to (a) any boiler, heater or other fired pressure vessel; (b) any unfired pressure vessel; (c) pipes or containers connected with any of said boilers or vessels; (d) any engine, turbine, compressor, pump or wheel; (e) any apparatus generating, transmitting or using electricity; (f) any other machinery or apparatus connected with or operated by any of the previously named boilers, vessels or machines; and including the incidental power to make inspections of and to issue certificates of inspection upon, any such boilers, apparatus, and machinery, whether insured or otherwise;

(4) To make contracts of life and endowment insurance, to grant, purchase, or dispose of annuities or endowments of any kind; and, in such contracts, or in contracts supplemental thereto to provide for additional benefits in event of death of the insured by accidental means, total permanent disability of the insured, or specific dismemberment or disablement suffered by the insured, or acceleration of life or endowment or annuity benefits in advance of the time they would otherwise be payable;

(b) To insure against the legal liability, whether imposed by common law or by statute or assumed by contract, of employers for the death or disablement of, or injury to, employees;

(6) To guarantee the fidelity of persons in fiduciary positions, public or private, or to act as surety on official and other bonds, and for the performance of official or other obligations;

(7) To insure owners and others interested in real estate against loss or damage, by reason of defective titles, encumbrances, or otherwise;

(8) To insure against loss or damage by breakage of glass, located or in transit;

(9)(a) To insure against loss by burglary, theft, or forgery;

(b) To insure against loss of or damage to moneys, coins, bullion, securities, notes, drafts, acceptance or any other valuable paper or document, resulting from any cause, except while in the custody or possession of and being transported by any carrier for hire or in the mail;

(c) To insure individuals by means of an all risk type of policy commonly known as the "personal property floater" against any kind and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise;

(d) To insure against loss or damage by water or other fluid or substance;

(10) To insure against loss from death of domestic animals and to furnish veterinary service;

(11) To guarantee merchants and those engaged in business, and giving credit, from loss by reason of giving credit to those dealing with them; this shall be known as credit insurance;

(12) To insure against loss or damage to automobiles or other vehicles or aircraft and their contents, by collision, fire, burglary, or theft, and other perils of operation, and against liability for damage to persons, or property of others, by collision with such vehicles or aircraft, and to insure against any loss or hazard incident to the ownership, operation, or use of motor or other vehicles or aircraft;

(13) To insure against liability for loss or damage to the property or person of another caused by the insured or by those for whom the insured is responsible, including insurance of medical, hospital, surgical, funeral or other related expense of the insured or other person injured, irrespective of legal liability of the insured, when issued with or supplemental to policies of liability insurance;

(14) To insure against loss of or damage to any property of the insured, resulting from the ownership, maintenance or use of elevators, except loss or damage by fire;

(15) To insure against attorneys fees, court costs, witness fees and incidental expenses incurred in connection with the use of the professional services of attorneys at law.

Sec. 6. Minnesota Statutes 1996, section 60A.06, subdivision 2, is amended to read:

Sec. 7. Minnesota Statutes 1996, section 60A.075, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For the purposes of this section, the terms in this subdivision have the meanings given them.

(a) "Eligible member" means a policyholder whose policy is in force as of the record date, which is the date that the mutual company's board of directors adopts a plan of conversion or some other date specified as the record date in the plan of conversion and approved by the commissioner. Unless otherwise provided in the plan, a person insured under a group policy is not an eligible member, unless on the record date:

(1) the person is insured or covered under a group life policy or group annuity contract under which funds are accumulated and allocated to the respective covered persons;

(2) the person has the right to direct the application of the funds so allocated;

(3) the group policyholder makes no contribution to the premiums or deposits for the policy or contract; and

(4) the converting mutual company has the names and addresses of the persons covered under the group life policy or group annuity contract.

(b) "Reorganized company" means a Minnesota domestic stock insurance company that has converted from a Minnesota domestic mutual insurance company according to this section.

(c) "Plan of conversion" or "plan" means a plan adopted by a Minnesota domestic mutual insurance company's board of directors under this section to convert the mutual company into a Minnesota domestic stock insurance company.

(d) "Policy" means a policy or contract of insurance issued by a converting mutual company, including an annuity contract.

(e) "Commissioner" means the commissioner of commerce.

(f) "Converting mutual company" means a Minnesota domestic mutual insurance company seeking to convert to a Minnesota domestic stock insurance company according to this section.

(g) "Effective date of a conversion" means the date determined according to subdivision 6.

(h) "Membership interests" means all policyholders' rights as members of the converting mutual company, including but not limited to, rights to vote and to participate in any distributions of surplus, whether or not incident to the company's liquidation.

(i) "Equitable surplus" means the converting mutual company's surplus as regards policyholders as of the effective record date of the conversion or other date approved by the commissioner determined in a manner that is not unfair or inequitable to policyholders.

(j) "Permitted issuer" means: (1) a corporation organized and owned by the converting mutual company or by any other insurance company or insurance holding company for the purpose of purchasing and holding all of the stock securities representing a majority of voting control of the reorganized company; (2) a stock insurance company owned by the converting mutual company or by any other insurance company or insurance holding company into which the converting mutual company will be merged; or (3) any other corporation approved by the commissioner.

Sec. 8. Minnesota Statutes 1996, section 60A.075, subdivision 8, is amended to read:

(a) The policyholders' membership interests shall be exchanged, in a manner that takes into account the estimated proportionate contribution of equitable surplus of each class of participating policies and contracts, for all of the common shares of the reorganized company or common shares of its parent company or a permitted issuer, or for a combination of the common shares of the reorganized company or common shares of its parent company or a permitted issuer.

(b) Unless the anticipated issuance within a shorter period is disclosed in the plan of conversion, the issuer of common shares shall not, within two years after the effective date of reorganization, issue either of the following:

(1) any of its common shares or any securities convertible with or without consideration into the common shares or carrying any warrant to subscribe to or purchase common shares; and

(2) any warrant, right, or option to subscribe to or purchase the common shares or other securities described in paragraph (a), except for the issue of common shares to or for the benefit of policyholders according to the plan of conversion and the issue of options nontransferable subscription rights for the purchase of common shares being granted to officers, directors, or employees a tax qualified employee benefit plan of the reorganized company or its parent company, if any, or a permitted issuer, according to this section subdivision 11.

(c) Unless the common shares have a public market when issued, the issuer shall use its best efforts to encourage and assist in the establishment of a public market for the common shares within two years of the effective date of the conversion or a longer period as disclosed in the plan of conversion. Within one year after any offering of stock other than the initial distribution, but no later than six years after the effective date of the conversion, the reorganized company shall offer to make available to policyholders who received and retained shares of common stock or securities described in paragraph (b), clause (1), a procedure to dispose of those shares of stock at market value without brokerage commissions or similar fees.

Sec. 9. Minnesota Statutes 1996, section 60A.075, subdivision 9, is amended to read:

Subd. 9. [SURPLUS DISTRIBUTION.] A plan of conversion under this subdivision shall provide for the exchange of the policyholders' membership interests in return for the operation of the converting mutual company's participating policies as a closed block of business and for the distribution of the company's equitable surplus to policyholders, and shall provide for the issuance of new shares of the reorganized company or its parent corporation, each according to paragraphs (a) to (i).

(a) The converting mutual company's participating business, comprised of its participating policies and contracts in force on the effective date of the conversion or other reasonable date as provided in the plan, shall be operated by the reorganized company as a closed block of participating business. However, at the option of the converting mutual company, group policies and group contracts may be omitted from the closed block.

(b) Assets of the converting mutual company must be allocated to the closed block of participating business in an amount equal to the reserves and liabilities for the converting mutual life insurer's participating policies and contracts in force on the effective date of the conversion. The plan must be accompanied by an opinion of an independent qualified actuary who meets the standards set forth in the insurance laws or regulations for the submission of actuarial opinions as to the adequacy of reserves or assets. The opinion must relate to the adequacy of the assets allocated to support the closed block of business. The actuarial opinion must be based on methods of analysis considered appropriate for those purposes by the Actuarial Standards Board.

(c) The reorganized company shall keep a separate accounting for the closed block and shall make and include in the annual statement to be filed with the commissioner each year a separate statement showing the gains, losses, and expenses properly attributable to the closed block.

(d) Notwithstanding the establishment of a closed block, the entire assets of the reorganized company shall be available for the payment of benefits to policyholders. Payment must first be made from the assets supporting the closed block until exhausted, and then from the general assets of the reorganized company.

increased dividends, reduced premiums, or other equitable consideration or any combination of forms of consideration. The consideration, if any, given to a class or category of policyholders may differ from the consideration given to another class or category of policyholders. A certificate of contribution must be repayable in ten years, be equal to 100 percent of the value of the policyholders' membership interest, and bear interest at the highest rate charged by the reorganized company for policy loans on the effective date of the conversion.

(f) The consideration must be allocated among the policyholders in a manner that is fair and equitable to the policyholders.

(g) The reorganized company or its parent corporation shall issue and sell shares of one or more classes having a total price equal to the estimated value in the market of the shares on the initial offering date. The estimated value must take into account all of the following:

(1) the pro forma market value of the reorganized company;

(2) the consideration to be given to policyholders according to paragraph (e);

(3) the proceeds of the sale of the shares; and

(4) any additional value attributable to the shares as a result of a purchaser or a group of purchasers who acted in concert to obtain shares in the initial offering, attaining, through such purchase, control of the reorganized company or its parent corporation.

(h) If a purchaser or a group of purchasers acting in concert is to attain control in the initial offering, the mutual company shall not, directly or indirectly, pay for any of the costs or expenses of conversion of the mutual company, whether or not the conversion is effected, except with permission of the commissioner.

(i) Periodically, with the commissioner's approval, the reorganized company may share in the profits of the closed block of participating business for the benefit of stockholders if the assets allocated to the closed block are in excess of those necessary to support the closed block.

Sec. 10. Minnesota Statutes 1996, section 60A.077, subdivision 1, is amended to read:

Subdivision 1. [FORMATION.] (a) A domestic mutual insurance company, upon approval of the commissioner, may reorganize by forming an insurance holding company based upon a mutual plan and continuing the corporate existence of the reorganizing insurance company as a stock insurance company. The commissioner, if satisfied that the interests of the policyholders are properly protected and that the plan of reorganization is fair and equitable to the policyholders, may approve the proposed plan of reorganization and may require as a condition of approval the modifications of the proposed plan of reorganization as the commissioner finds necessary for the protection of the policyholders' interests. The commissioner shall retain jurisdiction over the mutual insurance holding company according to this section and chapter 60D to assure that policyholder and member interests are protected.

(b) All of the initial voting shares of the capital stock of the reorganized insurance company must be issued to the mutual insurance holding company or to an intermediate stock holding company that is wholly owned by the mutual insurance holding company. The membership interests of the policyholders of the reorganized insurance company become membership interests in the mutual insurance holding company. "Membership interests" means those interests described in section 60A.075, subdivision 1, paragraph (h). Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company and their voting rights must be determined in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall, at all times, directly or through an one or more intermediate stock holding company companies, control a majority of the voting shares of the capital stock of the reorganized insurance company, taking into account any potential dilution resulting from convertible securities.

Sec. 11. Minnesota Statutes 1996, section 60A.077, subdivision 2, is amended to read:

Subd. 2. [MERGER.] (a) A domestic or foreign mutual insurance company, upon the approval of the commissioner, may reorganize by merging its policyholders' membership interests into a mutual insurance holding company formed according to subdivision 1 and continuing the corporate existence of the reorganizing insurance company as a stock insurance company subsidiary of the mutual insurance holding company or of an intermediate stock holding company. "Membership interests" means those interests described in section 60A.075, subdivision 1, paragraph (h). The commissioner, if satisfied that the interests of the policyholder policyholders of the reorganizing company and the interests of the existing members of the mutual insurance holding company are properly protected and that the merger is fair and equitable to the policyholders those parties, may approve the proposed merger and may require as a condition of approval the modifications of the proposed merger as the commissioner finds necessary for the protection of the policyholders' or members' interests. The commissioner shall retain jurisdiction, under chapter 60D, over the mutual insurance holding company organized according to this section to assure that policyholder and member interests are protected.

(b) All of the initial voting shares of the capital stock of the reorganized insurance company must be issued to the mutual insurance holding company, or to an intermediate stock holding company that is wholly owned by the mutual insurance holding company. The membership interests of the policyholders of the reorganized insurance company become membership interests in the mutual insurance holding company. Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company and their voting rights must be determined according to the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall, at all times, directly or through one or more intermediate stock holding companies, control a majority of the voting shares of the capital stock of the reorganized insurance company, taking into account any potential dilution resulting from convertible securities.

(c) A domestic mutual insurance holding company may merge with a domestic or foreign mutual insurance holding company in the manner prescribed for the merger of insurance companies set forth in section 60A.16, with any exceptions or modifications the commissioner may approve.

Sec. 12. Minnesota Statutes 1996, section 60A.077, subdivision 3, is amended to read:

Subd. 3. [PLAN OF REORGANIZATION; APPROVAL BY COMMISSIONER.] (a) The A reorganizing or merging insurer or a merging mutual insurance holding company shall file a plan of reorganization, approved, by the affirmative vote of a majority of its board of directors, for review and approval by the commissioner adopt a plan of reorganization or merger consistent with the requirements of this section and file the plan with the commissioner. At any time before the approval of a plan by the commissioner, the company, by the affirmative vote of a majority of its directors, may amend or withdraw the plan. The plan must provide for the following:

(1) in the case of a reorganization under subdivision 1, establishing a mutual insurance holding company with at least one stock insurance company subsidiary, the majority of shares of which must be owned, either directly or through an intermediate stock holding company, by the mutual insurance holding company or in the case of a reorganization under subdivision 2, a description of the terms and conditions of the proposed merger;

(2) analyzing the benefits and risks attendant to the proposed reorganization, including the rationale for the reorganization and analysis of the comparative benefits and risks of a demutualization under section 60A.075;

(3) protecting the immediate and long-term interests of existing policyholders;

(4) ensuring immediate membership in the mutual insurance holding company of all existing policyholders of the reorganizing domestic insurance company;

(5) describing a plan providing for membership interests of future policyholders;

(7) ensuring that, in the event of proceedings under chapter 60B involving a stock insurance company subsidiary of the mutual insurance holding company that resulted from the reorganization of a domestic mutual insurance company, the assets of the mutual insurance holding company will be available to satisfy the policyholder obligations of the stock insurance company;

(8) for periodic distribution of accumulated holding company earnings to members describing the mutual insurance holding company's plan for distributions to members or other uses of accumulated mutual holding company earnings;

(9) (8) describing the nature and content of the annual report and financial statement to be sent to each member;

(10) (9) a copy of the proposed mutual insurance holding company's articles of incorporation and bylaws specifying all membership rights;

(11) (10) the names, addresses, and occupational information of all corporate officers and members of the proposed mutual insurance holding company board of directors;

(12) (11) information sufficient to demonstrate that the financial condition of the reorganizing or merging company will not be materially diminished upon reorganization, including information concerning any subsidiaries of the reorganizing or merging insurers that will become subsidiaries of the mutual insurance holding company or an intermediate holding company as part of the reorganization;

(13) (12) a copy of the articles of incorporation and bylaws for any proposed insurance company subsidiary or intermediate holding company subsidiary;

(14) (13) describing any plans for the an initial sale or subscription of stock for or other securities of the reorganized insurance company or any intermediate holding company; and

(15) (14) any other information requested by the commissioner or required by rule.

(b) The commissioner may approve the plan upon finding that the requirements of this section have been fully met and the plan will protect the immediate and long-term interests of policyholders.

(c) The commissioner may retain, at the reorganizing or merging mutual company's expense, any qualified experts not otherwise a part of the commissioner's staff to assist in reviewing the plan.

(d) The commissioner may, but need not, conduct a public hearing regarding the proposed plan. The hearing must be held within 30 days after submission of a completed plan of reorganization to the commissioner. The commissioner shall give the reorganizing mutual company at least 20 days' notice of the hearing. At the hearing, the reorganizing mutual company, its policyholders, and any other person whose interest may be affected by the proposed reorganization, may present evidence, examine and cross-examine witnesses, and offer oral and written arguments or comments according to the procedure for contested cases under chapter 14. The persons participating may conduct discovery proceedings in the same manner as prescribed for the district courts of this state. All discovery proceedings must be concluded no later than three days before the scheduled commencement of the public hearing.

Sec. 13. Minnesota Statutes 1996, section 60A.077, subdivision 5, is amended to read:

Subd. 5. [APPROVAL BY MEMBERS.] The plan shall be approved by the members as provided in section 60A.075, subdivision 5. by the eligible members described in paragraphs (a) to (c).

(a) In the case of a formation under subdivision 1, the plan must be approved by the eligible members of the reorganizing insurance company.

(c) In the case of a merger of two mutual insurance holding companies under subdivision 2, paragraph (c), the plan must be approved by the eligible members of both companies. The vote of the eligible members of the surviving mutual holding company is not required if the commissioner determines that the merger would not be material to the financial condition of the surviving company.

Sec. 14. Minnesota Statutes 1996, section 60A.077, subdivision 6, is amended to read:

Subd. 6. [INCORPORATION.] A mutual insurance holding company resulting from the reorganization of a domestic mutual insurance company organized under chapter 300 shall be incorporated pursuant to chapter 300. The articles of incorporation and any amendments to the articles of the mutual insurance holding company are subject to approval of the commissioner in the same manner as those of an insurance company. Members of a mutual insurance holding company shall be entitled to vote on all matters required to be submitted to members under chapter 300 and shall additionally be treated as shareholders for purposes of the voting approval requirements of section 300.09.

Sec. 15. Minnesota Statutes 1996, section 60A.077, subdivision 7, is amended to read:

Subd. 7. [APPLICABILITY OF CERTAIN PROVISIONS.] (a) A In the event of the insolvency of a mutual insurance holding company, the mutual insurance holding company is considered to be an insurer subject to chapter 60B. and shall automatically be a party to any proceeding under chapter 60B involving an insurance company that, as a result of a reorganization according to subdivision 1 or 2, is a subsidiary of the mutual insurance holding company. In any proceeding under chapter 60B involving the reorganized insurance company, the assets of the mutual insurance holding company are considered to be assets of the estate of the reorganized insurance company for purposes of satisfying the claims of the reorganized insurance company's policyholders. A mutual insurance holding company shall not dissolve or liquidate without the approval of the commissioner or as ordered by the district a court according to chapter 60B of competent jurisdiction.

(b) A mutual insurance holding company is subject to chapter 60D to the extent consistent with this section.

(c) As a condition to approval of the plan, the commissioner may require the mutual insurance holding company to comply with any provision of the insurance laws necessary to protect the interests of the policyholders as if the mutual insurance holding company were a domestic mutual insurance company.

(d) No person or group of persons other than the chief executive officer of a mutual insurance holding company, or the chief executive officer's designee, shall seek to obtain proxies from the members of the mutual insurance holding company for the purposes of affecting a change of control of the mutual insurance holding company unless that person or persons have filed with the commissioner and have sent to the mutual insurance holding company a statement containing the information required by section 60D.17. Section 60D.17, subdivisions 2 to 7, apply in the event of a proxy solicitation regulated by this paragraph.

(e) For purposes of this subdivision, the term "control," including the terms "controlling," "controlled by," and "under common control with," means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through membership voting interests, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with, corporate office held by, or court appointment of, the person. Control is presumed to exist if any person directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, ten percent or more of the membership voting interests of the mutual insurance holding company. This presumption may be rebutted by a showing made in the manner provided by section 60D.19, subdivision 11, that control does not exist in fact. The commissioner may determine after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.

Sec. 16. Minnesota Statutes 1996, section 60A.077, subdivision 8, is amended to read:

(b) Section 60A.075 is applicable to demutualization of a mutual insurance holding company that resulted from the reorganization of a domestic mutual insurance company organized under chapter 300 as if it were a mutual insurance company.

(c) Section 60A.075, subdivisions 14 to 16 are applicable to a reorganization or merger under this section.

Sec. 17. Minnesota Statutes 1996, section 60A.077, subdivision 9, is amended to read:

Subd. 9. [MEMBERSHIP INTERESTS.] A membership interest in a domestic mutual insurance holding company does not constitute a security as defined in section 80A.14, subdivision 18. No member of a mutual insurance holding company may transfer or pledge membership in the mutual insurance holding company or any right arising from the membership except as attendant to the valid transfer or assignment of the member's policy in any reorganized company that gave rise to the member's membership interest. A member of a mutual insurance holding company is not, as a member, personally liable for the acts, debts, liabilities, or obligations of the company. No assessments of any kind may be imposed upon the members of a mutual insurance holding company by the directors or members, or because of any liability of any company owned or controlled by the mutual insurance holding company or because of any act, debt, or liability of the mutual insurance holding company. A member's interest in the mutual insurance holding company shall automatically terminate upon cancellation, nonrenewal, expiration, or termination of the member's policy in any insurance company that gave rise to the member's membership interest.

Sec. 18. Minnesota Statutes 1996, section 60A.077, subdivision 10, is amended to read:

Subd. 10. [FINANCIAL STATEMENT REQUIREMENTS.] (a) In addition to any items required under chapter 60D, each mutual insurance holding company shall file with the commissioner, by April 1 of each year, an annual statement consisting of the following:

(1) an income statement, balance sheet, and cashflow statement prepared in accordance with generally accepted accounting principles;

(2) complete information on the status of any closed block formed as part of a plan of reorganization;

(3) an investment plan covering all assets; and

(4) a statement disclosing any intention to pledge, borrow against, alienate, hypothecate, or in any way encumber the assets of the mutual insurance holding company or an intermediate stock holding company. Action taken according to the statement is subject to the commissioner's prior written approval.

(b) The aggregate pledges and encumbrances of a mutual insurance holding company's assets shall not affect more than 49 percent of the company's stock in ownership of any subsidiary insurance holding company or subsidiary insurance company that resulted from a reorganization or merger.

(c) At least 50 percent of the generally accepted accounting principles (GAAP) net worth of a mutual insurance holding company must be invested in insurance company subsidiaries.

Sec. 19. Minnesota Statutes 1996, section 60A.077, subdivision 11, is amended to read:

(b) A registration statement covering securities that has been approved by the commissioner and filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933 pursuant to any provision of that statute or rule that allows registration of securities to be sold on a delayed or continuous basis may be sold without further approval.

(c) Unless the commissioner has granted the mutual insurance holding company a written exemption from the requirements of this paragraph any securities which are regularly traded on the New York Stock Exchange, the American Stock Exchange, or another exchange approved by the commissioner, or designated on the National Association of Securities Dealers automated quotations (NASDAQ) national market system, shall be sold according to the procedure in this paragraph. If the mutual insurance holding company, an intermediate holding company, or a reorganized insurance company intends to offer securities that are governed by this paragraph, that entity shall deliver to the commissioner, not less than ten days before the offering, a notice of the planned offering and information regarding: (1) the approximate number of shares intended to be offered; (2) the target date of sale; (3) evidence the security is regularly traded on one of the public exchanges noted above; and (4) the recent history of the trading price and trading volume of the security. The commissioner is considered to have approved the sale unless within ten days following receipt of the notice, the commissioner issues an objection to the sale. If the commissioner issues an objection to the sale, the security may not be sold until the commissioner issues an order approving the sale.

(d) A reorganized insurance company or intermediate holding company that has issued securities that are regularly traded on one of the exchanges or markets described in paragraph (c), may establish stock option, incentive, and share ownership plans customary for publicly traded companies in the same or similar industries. If the reorganized insurance company or intermediate holding company intends to establish a stock option, incentive or share ownership plan, that entity shall deliver to the commissioner, not less than 30 days before the establishment of the plan, a notice of the proposed plan along with any information about the proposed plan the commissioner requires. The commissioner is considered to have approved the plan unless within 30 days following receipt of the notice, the commissioner issues an objection to the proposed plan. If the commissioner issues an objection to the proposed plan, the plan may not be established until the commissioner issues an order approving the plan. If the commissioner approves the establishment of the stock option, incentive or share ownership plan, the reorganized insurance company or the intermediate holding company that obtained the approval may sell or issue securities according to the approved plan without further approval.

(e) The total number of shares of capital stock issued by the reorganized insurance company or an intermediate holding company that may be held by directors and officers of the mutual insurance holding company, any intermediate holding company, and of any reorganized insurance company, and acquired according to subscription rights or stock option, incentive, and share ownership plans, may not exceed the percentage limits set forth in section 60A.075, subdivision 11, paragraph (b). Subject to the requirements of subdivision 1, paragraph (c), nothing in this section prohibits the acquisition of any securities of a reorganized insurance company or intermediate stock holding company through a licensed securities broker-dealer by any officer or director of the reorganized company, an intermediate stock holding company, or the mutual insurance holding company.

(f) Dividends and other distributions to the shareholders of the reorganized stock insurance company or of an intermediate stock holding company shall not be made except in compliance must comply with section 60D.20. Any dividends and other distributions to the members of the mutual insurance holding company must comply with section 60D.20 and any other approval requirements contained in the mutual insurance holding company's articles of incorporation.

Sec. 20. Minnesota Statutes 1996, section 60A.077, is amended by adding a subdivision to read:

Subd. 12. [PROVISIONS IN THE EVENT OF INSURER INSOLVENCY.] (a) In the event of any insolvency proceeding involving an insolvent stock subsidiary, the assets of the mutual insurance holding company, together with any assets of any intermediate holding company that directly or indirectly controls the insolvent stock subsidiary, must be available to satisfy the policyholder obligations of the insolvent stock subsidiary in an amount determined by the commissioner, but in no event more than the total amount of nonpolicyholder dividends paid by the insolvent stock subsidiary to the mutual insurance holding company, or any intermediate holding company that controls the insolvent stock subsidiary, during the ten-year period immediately preceding the date of insolvency.

(b) In determining the required contribution by the mutual insurance holding company or any intermediate stock holding company which controls the insolvent stock subsidiary, the commissioner shall take into account among other factors:

(1) the possible direct or indirect negative effects of any required contribution on any insurance company affiliate of the insolvent stock subsidiary; and

(2) the possible direct or indirect, long-term, or short-term negative effects on the members of the mutual insurance holding company, other than those members who, are, or were policyholders of the insolvent stock subsidiary.

Nothing in this subdivision limits the powers of the commissioner or the liquidator under chapter 60B.

(c) For purposes of this subdivision, the following terms have the meanings given:

(1) "date of insolvency" means, as to an insolvent stock subsidiary, the date established in accordance with chapter 60B or comparable statute of another state governing the rehabilitation or liquidation of a foreign insolvent stock subsidiary;

(2) "insolvency proceeding" means any proceeding under chapter 60B or comparable statute of another state governing the rehabilitation and liquidation of a foreign insolvent stock subsidiary;

(3) "insolvent stock subsidiary" means any stock insurance company subsidiary of a mutual insurance holding company that resulted from the reorganization of a domestic or foreign mutual insurance company according to subdivision 1 or 2, or any other stock insurance company subsidiary that is subject to an insolvency proceeding, which on the date of insolvency has in force policies that have given rise to membership interests in the mutual insurance holding company;

(4) "control" has the meaning given in section 60D.15, subdivision 4; and

(5) "dividends" include distributions of cash or any other assets.

Sec. 21. Minnesota Statutes 1996, section 60A.092, subdivision 6, is amended to read:

Subd. 6. [SINGLE ASSUMING INSURER; TRUST FUND REQUIREMENTS.] In the case of a single assuming insurer, the trust shall consist of a trusteed account representing the assuming insurer's liabilities attributable to business written in the United States and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000 or such additional amount as the commissioner deems necessary, and the assuming insurer shall maintain a its surplus as regards policyholders in an amount not less than $50,000,000 for long-tail casualty reinsurers as provided under subdivision 3, paragraph (a), clause (5).

Sec. 22. Minnesota Statutes 1996, section 60A.10, subdivision 1, is amended to read:

(2) [SECURITIES DEFINED.] For the purpose of this subdivision, the word "securities" means bonds or other obligations of, or bonds or other obligations insured or guaranteed by, the United States, any state of the United States, any municipality of this state, or any agency or instrumentality of the foregoing.

(3) [PROTECTION OF DEPOSIT FROM LEVY.] No judgment creditor or other claimant may levy upon any securities held on deposit with, or for the account of, the commissioner. Upon the entry of an order by a court of competent jurisdiction for the rehabilitation, liquidation or conservation of any depositing company as provided in chapter 60B, that company's deposit together with any accrued income thereon shall be transferred to the commissioner as rehabilitator, liquidator, or conservator.

Sec. 23. Minnesota Statutes 1996, section 60A.111, subdivision 1, is amended to read:

Subdivision 1. [REPORT.] Annually, or more frequently if determined by the commissioner to be necessary for the protection of policyholders, each foreign, alien and domestic insurance company other than a life insurance company shall report to the commissioner the ratio of its qualified assets to its required liabilities.

Sec. 24. Minnesota Statutes 1996, section 60A.13, subdivision 1, is amended to read:

Subdivision 1. [ANNUAL STATEMENTS REQUIRED.] Every insurance company, including fraternal benefit societies, and reciprocal exchanges, doing business in this state, shall transmit to file with the commissioner, annually, on or before March 1, the appropriate verified National Association of Insurance Commissioners' annual statement blank, prepared in accordance with the association's instructions handbook and following those accounting procedures and practices prescribed by the association's accounting practices and procedures manual, unless the commissioner requires or finds another method of valuation reasonable under the circumstances. Another method of valuation permitted by the commissioner must be at least as conservative as those prescribed in the association's manual. All companies required to file an annual statement under this subdivision must also file with the commissioner a copy of their annual statement on computer diskette. All Minnesota domestic insurers required to file annual statements under this subdivision must also file quarterly statements with the commissioner for the first, second, and third calendar quarter on or before 45 days after the end of the applicable quarter, prepared in accordance with the association's instruction handbook. All companies required to file quarterly statements under this subdivision must also file a copy of their quarterly statement on computer diskette. In addition, the commissioner may require the filing of any other information determined to be reasonably necessary for the continual enforcement of these laws. The statement may be limited to the insurer's business and condition in the United States unless the commissioner finds that the business conducted outside the United States may detrimentally affect the interests of policyholders in this state. The statements shall also contain a verified schedule showing all details required by law for assessment and taxation. The statement or schedules shall be in the form and shall contain all matters the commissioner may prescribe, and it may be varied as to different types of insurers so as to elicit a true exhibit of the condition of each insurer.

Sec. 25. Minnesota Statutes 1996, section 60A.19, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENTS.] Any insurance company of another state, upon compliance with all laws governing such corporations in general and with the foregoing provisions so far as applicable and the following requirements, shall be admitted to do business in this state:

(1) It shall deposit with the commissioner a certified copy of its charter or certificate of incorporation and its bylaws, and a statement showing its financial condition and business, verified by its president and secretary or other proper officers;

(2) It shall furnish the commissioner satisfactory evidence of its legal organization and authority to transact the proposed business and that its capital, assets, deposits with the proper official of its own state, amount insured, number of risks, reserve and other securities, and guaranties for protection of policyholders, creditors, and the public, comply with those required of like domestic companies;

(4) It shall appoint, as its agents in this state, residents thereof, and obtain from the commissioner a license to transact business;

(5) Regardless of what lines of business an insurer of another state is seeking to write in this state, the lines of business it is licensed to write in its state of incorporation shall be the basis for establishing the financial requirements it must meet for admission in this state or for continuance of its authority to write business in this state;

(6) No insurer of another state shall be admitted to do business in this state for a line of business that it is not authorized to write in its state of incorporation, unless the statutes of that state prohibit all insurers from writing that line of business.

Sec. 26. Minnesota Statutes 1996, section 60B.04, is amended by adding a subdivision to read:

Subd. 7. [JURISDICTION.] If there is a delinquency proceeding under this chapter, the provisions of this chapter govern those proceedings, and all conflicting contractual provisions contained in a contract between the insurer that is subject to the delinquency proceeding and a third party, including, but not limited to, the choice of law or arbitration provisions, are subordinated to the provisions of this chapter.

Sec. 27. [60B.085] [IMMUNITY AND INDEMNIFICATION OF THE RECEIVER AND EMPLOYEES.]

Subdivision 1. [SCOPE.] The persons entitled to protection under this section are:

(1) all receivers responsible for the conduct of a delinquency proceeding under this chapter, including present and former receivers; and

(2) their employees, meaning all present and former special deputies and assistant special deputies, and all persons whom the commissioner, special deputies, or assistant special deputies have employed to assist in a delinquency proceeding under this chapter. Attorneys, accountants, auditors, and other professional persons or firms, who are retained by the receiver as independent contractors and their employees shall not be considered employees of the receiver for purposes of this section.

Subd. 2. [IMMUNITY FROM LIABILITY.] The receiver and the receiver's employees shall have official immunity and shall be immune from suit and liability, both personally and in their official capacities, for a claim for damage to or loss of property or personal injury or other civil liability caused by or resulting from an alleged act, error, or omission of the receiver or an employee arising out of or by reason of their duties or employment. Nothing in this subdivision shall be construed to hold the receiver or an employee immune from suit or liability for damage, loss, injury, or liability caused by the intentional or willful and wanton misconduct of the receiver or an employee.

Subd. 3. [INDEMNIFICATION.] If a legal action is commenced against the receiver or any employee, whether against the receiver or employee personally or in their official capacity, alleging property damage, property loss, personal injury, or other civil liability caused by or resulting from an alleged act, error, or omission of the receiver or an employee arising out of or by reason of their duties or employment, the receiver and employee must be indemnified from the assets of the insurer for all expenses, attorneys' fees, judgments, settlements, decrees, or amounts due and owing or paid in satisfaction or incurred in the defense of the legal action unless it is determined upon a final adjudication on the merits that the alleged act, error, or omission of the receiver or employee giving rise to the claim did not arise out of or by reason of the receiver's or employee's duties or employment, or was caused by intentional or willful and wanton misconduct.

(a) Attorney's fees and related expenses incurred in defending a legal action for which immunity or indemnity is available under this section must be paid from the assets of the insurer, as they are incurred, in advance of the final disposition of the action upon receipt of an undertaking by or on behalf of the receiver or employee to repay the attorneys' fees and expenses if it is ultimately determined upon a final adjudication on the merits that the receiver or employee is not entitled to immunity or indemnity under this section.

(b) Indemnification for expense payments, judgments, settlements, decrees, attorneys' fees, surety bond premiums, or other amounts paid or to be paid from the insurer's assets according to this section is an administrative expense of the insurer.

of indemnity until all applicable statutes of limitation have run and all actual or threatened actions against the receiver or an employee have been completely and finally resolved, and all obligations of the insurer and the commissioner under this section have been satisfied.

(d) In lieu of segregation and reserving of funds, the commissioner may, in the commissioner's discretion, obtain a surety bond or make other arrangements that will enable the commissioner to fully secure the payment of all obligations under this section.

Subd. 4. [SETTLEMENT COVERAGE.] If a legal action against an employee for which indemnity may be available under this section is settled before final adjudication on the merits, the insurer must pay the settlement amount on behalf of the employee, or indemnify the employee for the settlement amount, unless the commissioner determines:

(1) that the claim did not arise out of or by reason of the employee's duties or employment; or

(2) that the claim was caused by the intentional or willful and wanton misconduct of the employee.

Subd. 5. [SETTLEMENT APPROVAL.] In a legal action in which the receiver is a defendant, that portion of a settlement relating to the alleged act, error, or omission of the receiver is subject to the approval of the court before which the delinquency proceeding is pending. The court shall not approve that portion of the settlement if it determines:

(1) that the claim did not arise out of or by reason of the receiver's duties or employment; or

(2) that the claim was caused by the intentional or willful and wanton misconduct of the receiver.

Subd. 6. [CONSTRUCTION.] Nothing contained or implied in this section operates, or shall be construed or applied, to deprive the receiver or an employee of immunity, indemnity, benefits of law, rights, or any defense otherwise available.

Sec. 28. Minnesota Statutes 1996, section 60B.21, subdivision 2, is amended to read:

Subd. 2. [FIXING OF RIGHTS.] Upon issuance of the order, the rights and liabilities of any such insurer and of its creditors, policyholders, shareholders, members, and all other persons interested in its estate are fixed as of the date of filing of the petition for liquidation, except as provided in sections 60B.22, 60B.25, clause (22), and 60B.39.

Sec. 29. Minnesota Statutes 1996, section 60B.25, is amended to read:

60B.25 [POWERS OF LIQUIDATOR.]

The liquidator shall report to the court monthly, or at other intervals specified by the court, on the progress of the liquidation in whatever detail the court orders. The liquidator shall coordinate activities with those of each guaranty association having an interest in the liquidation and shall submit a report detailing how coordination will be achieved to the court for its approval within 30 days following appointment, or within the time which the court, in its discretion, may establish. Subject to the court's control, the liquidator may:

(1) Appoint a special deputy to act under sections 60B.01 to 60B.61 and determine the deputy's compensation. The special deputy shall have all powers of the liquidator granted by this section. The special deputy shall serve at the pleasure of the liquidator.

(2) Appoint or engage employees and agents, actuaries, accountants, appraisers, consultants, and other personnel deemed necessary to assist in the liquidation without regard to chapter 14.

(3) Fix the compensation of persons under clause (2), subject to the control of the court.

(5) Hold hearings, subpoena witnesses and compel their attendance, administer oaths, examine any person under oath and compel any person to subscribe to testimony after it has been correctly reduced to writing, and in connection therewith require the production of any books, papers, records, or other documents which the liquidator deems relevant to the inquiry.

(6) Collect all debts and money due and claims belonging to the insurer, wherever located, and for this purpose institute timely action in other jurisdictions, in order to forestall garnishment and attachment proceedings against such debts; do such other acts as are necessary or expedient to collect, conserve, or protect its assets or property, including sell, compound, compromise, or assign for purposes of collection, upon such terms and conditions as the liquidator deems best, any bad or doubtful debts; and pursue any creditor's remedies available to enforce claims.

(7) Conduct public and private sales of the property of the insurer in a manner prescribed by the court.

(8) Use assets of the estate to transfer coverage obligations to a solvent assuming insurer, if the transfer can be arranged without prejudice to applicable priorities under section 60B.44.

(9) Acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with any property of the insurer at its market value or upon such terms and conditions as are fair and reasonable, except that no transaction involving property the market value of which exceeds $10,000 shall be concluded without express permission of the court. The liquidator may also execute, acknowledge, and deliver any deeds, assignments, releases, and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation. In cases where real property sold by the liquidator is located other than in the county where the liquidation is pending, the liquidator shall cause to be filed with the county recorder for the county in which the property is located a certified copy of the order of appointment.

(10) Borrow money on the security of the insurer's assets or without security and execute and deliver all documents necessary to that transaction for the purpose of facilitating the liquidation.

(11) Enter into such contracts as are necessary to carry out the order to liquidate, and affirm or disavow any contracts to which the insurer is a party.

(12) Continue to prosecute and institute in the name of the insurer or in the liquidator's own name any suits and other legal proceedings, in this state or elsewhere, and abandon the prosecution of claims the liquidator deems unprofitable to pursue further. If the insurer is dissolved under section 60B.23, the liquidator may apply to any court in this state or elsewhere for leave to be substituted for the insurer as plaintiff.

(13) Prosecute any action which may exist in behalf of the creditors, members, policyholders, or shareholders of the insurer against any officer of the insurer, or any other person.

(14) Remove any records and property of the insurer to the offices of the commissioner or to such other place as is convenient for the purposes of efficient and orderly execution of the liquidation.

(15) Deposit in one or more banks in this state such sums as are required for meeting current administration expenses and dividend distributions.

(16) Deposit with the state board of investment for investment pursuant to section 11A.24, all sums not currently needed, unless the court orders otherwise.

(17) File any necessary documents for record in the office of any county recorder or record office in this state or elsewhere where property of the insurer is located.

(18) Assert all defenses available to the insurer as against third persons, including statutes of limitations, statutes of frauds, and the defense of usury. A waiver of any defense by the insurer after a petition for liquidation has been filed shall not bind the liquidator.

(20) Intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee, and act as the receiver or trustee whenever the appointment is offered.

(21) Enter into agreements with any receiver or commissioner of any other state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both states.

(22) Collect from an insured any unpaid earned premium or retrospectively rated premium due the insurer based on the termination of coverage under section 60B.22. Premium on surety business is considered earned at inception if no policy term can be determined. All other premium will be considered earned and will be prorated over the determined policy term, regardless of any provision in the bond, guaranty, contract, or other agreement.

(22) (23) Exercise all powers now held or hereafter conferred upon receivers by the laws of this state not inconsistent with sections 60B.01 to 60B.61.

(23) (24) The enumeration in this section of the powers and authority of the liquidator is not a limitation, nor does it exclude the right to do such other acts not herein specifically enumerated or otherwise provided for as are necessary or expedient for the accomplishment of or in aid of the purpose of liquidation.

(24) (25) The power of the liquidator of a health maintenance organization includes the power to transfer coverage obligations to a solvent and voluntary health maintenance organization, insurer, or nonprofit health service plan, and to assign provider contracts of the insolvent health maintenance organization to an assuming health maintenance organization, insurer, or nonprofit health service plan permitted to enter into such agreements. The liquidator is not required to meet the notice requirements of section 62D.121. Transferees of coverage obligations or provider contracts shall have no liability to creditors or obligees of the health maintenance organization except those liabilities expressly assumed.

Sec. 30. [60B.365] [REINSURER'S LIABILITY.]

Subdivision 1. [GENERALLY.] The amount recoverable by the liquidator from reinsurers must not be reduced as a result of the delinquency proceedings, regardless of any provision in the reinsurance contract or other agreement.

Subd. 2. [REQUIRED CONTRACT PROVISIONS.] All reinsurance contracts to which an insurer domiciled in this state is a ceding party that do not contain the following provisions required with respect to the obligation of reinsurers in the event of insolvency of the reinsured in order to obtain credit for reinsurance or other applicable statutes, must be construed to contain the following provisions:

(1) in the event of insolvency and the appointment of a receiver, the reinsurance obligation is payable to the receiver, with reasonable provision for verification, without diminution because of the insolvency or because the receiver has failed to pay all or a portion of any claims. Payments by the reinsurer must be made directly to the ceding insurer or to its receiver; and

(2) the receiver of a reinsured company shall give written notice of the pendency of a claim against the reinsured company indicating the policy or bond reinsured, within a reasonable time after the claim is filed. The receiver of a reinsured company may arrange for the giving of notice of the pendency of claims on reinsured policies by guaranty funds or by other persons responsible for the adjustment and settlement of the reinsured company's claims. Failure to give notice does not excuse the obligation of the reinsurer unless it is substantially prejudiced by the failure of the receiver to give notice. The reinsurer may interpose, at its own expense, in the proceeding where the claim is to be adjudicated, any defense or defenses that it may consider available to the reinsured company or its receiver.

Sec. 31. Minnesota Statutes 1996, section 60B.44, subdivision 2, is amended to read:

Subd. 2. [ADMINISTRATION COSTS.] The costs and expenses of administration, including but not limited to the following: The actual and necessary costs of preserving or recovering the assets of the insurer; compensation for all services rendered in the liquidation; any necessary filing fees; the fees and mileage payable to witnesses; and reasonable attorney's fees. This includes qualifying expenses incurred by the guaranty association.

Sec. 32. Minnesota Statutes 1996, section 60B.44, subdivision 4, is amended to read:

Subd. 4. [LOSS CLAIMS; INCLUDING CLAIMS NOT COVERED BY A GUARANTY ASSOCIATION.] All claims under policies or contracts of coverage for losses incurred including third party claims, and all claims against the insurer for liability for bodily injury or for injury to or destruction of tangible property which are not under policies or contracts. All claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds, or investment values, shall be treated as loss claims. That portion of any loss for which indemnification is provided by other benefits or advantages recovered or recoverable by the claimant shall not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment made by an employer to an employee shall be treated as a gratuity. Claims not covered by a guaranty association are loss claims. If any portion of a claim is covered by a reinsurance treaty or similar contractual obligation, that claim shall be entitled to a pro rata share, based upon the relationship the claim amount bears to all claims payable under the treaty or contract, of the proceeds received under that treaty or contractual obligation.

Claims receiving pro rata payments shall not, as to any remaining unpaid portion of their claim, be treated in a different manner than if no such payment had been received.

Sec. 33. Minnesota Statutes 1996, section 60B.44, is amended by adding a subdivision to read:

Subd. 4a. [FEDERAL CLAIMS.] Claims of the federal government.

Sec. 34. Minnesota Statutes 1996, section 60B.44, is amended by adding a subdivision to read:

Subd. 4b. [WAGES.] (a) Debts due to employees for services performed, not to exceed $1,000 to each employee, which have been earned within one year before the filing of the petition for liquidation, subject to payment of applicable federal, state, or local government taxes required by law to be withheld from the debts. Officers are not entitled to the benefit of this priority. In cases where there are no claims and no potential claims of the federal government in the estate, these claims will have priority over claims in subdivision 4.

(b) The priority in paragraph (a) is in lieu of any other similar priority authorized by law as to wages or compensation of employees.

Sec. 35. Minnesota Statutes 1996, section 60B.44, subdivision 6, is amended to read:

Subd. 6. [RESIDUAL CLASSIFICATION.] All other claims including claims of the federal or any state or local government, not falling within other classes under this section. Claims, including those of any governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of such claims shall be postponed to the class of claims under subdivision 9.

Sec. 36. Minnesota Statutes 1996, section 60D.20, subdivision 2, is amended to read:

of earned surplus attributable to net unrealized capital gains. Dividends which are paid from sources other than an insurer's earned surplus as of the end of the immediately preceding quarter for which the insurer has filed a quarterly or annual statement as appropriate, or are extraordinary dividends or distributions may be paid only as provided in paragraphs (d), (e), and (f).

(b) The insurer shall notify the commissioner within five business days following declaration of a dividend declared pursuant to paragraph (a) and at least ten days prior to its payment. The commissioner shall promptly consider the notification filed pursuant to this paragraph, taking into consideration the factors described in subdivision 4.

(c) The commissioner shall review at least annually the dividends paid by an insurer pursuant to paragraph (a) for the purpose of determining if the dividends are reasonable based upon (1) the adequacy of the level of surplus as regards policyholders remaining after the dividend payments, and (2) the quality of the insurer's earnings and extent to which the reported earnings include extraordinary items, such as surplus relief reinsurance transactions and reserve destrengthening.

(d) No domestic insurer shall pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until: (1) 30 days after the commissioner has received notice of the declaration of it and has not within the period disapproved the payment; or (2) the commissioner has approved the payment within the 30-day period.

(e) For purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding 12 months exceeds the greater of (1) ten percent of the insurer's surplus as regards policyholders as of the 31st day of December next preceding on December 31 of the preceding year; or (2) the net gain from operations of the insurer, if the insurer is a life insurer, or the net income, if the insurer is not a life insurer, not including realized capital gains, for the 12-month period ending the 31st day of December next preceding on December 31 of the preceding year, but does not include pro rata distributions of any class of the insurer's own securities.

(f) Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution that is conditional upon the commissioner's approval, and the declaration shall confer no rights upon shareholders until: (1) the commissioner has approved the payment of such a dividend or distribution; or (2) the commissioner has not disapproved the payment within the 30-day period referred to above.

Sec. 37. Minnesota Statutes 1996, section 60K.02, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENT.] No person shall act or assume to act as an insurance agent in the solicitation or procurement of applications for insurance, nor in the sale of insurance or policies of insurance, nor in any manner aid as an insurance agent in the negotiation of insurance by or with an insurer, including resident agents or reciprocal or interinsurance exchanges and fraternal benefit societies, until that person obtains from the commissioner a license for that purpose. The license must specifically set forth the name of the person authorized to act as an agent and the class or classes of insurance for which that person is authorized to solicit or countersign policies. An insurance agent may qualify for a license in the following classes to sell: (1) life and health; and (2) life and health and variable contracts; (3) property and casualty; (4) travel baggage; (5) bail bonds; (6) title insurance; and (7) farm property and liability.

No insurer shall appoint or reappoint a natural person, partnership, or corporation to act as an insurance agent on its behalf until that natural person, partnership, or corporation obtains a license as an insurance agent.

Sec. 38. Minnesota Statutes 1996, section 60K.03, subdivision 2, is amended to read:

Subd. 2. [RESIDENT AGENT.] The commissioner shall issue a resident insurance agent's license to a qualified resident of this state as follows:

thereafter claims to be a resident of, any other state or jurisdiction or if the licensee ceases to be a resident of this state; provided, however, if the applicant is a resident of a community or trade area, the border of which is contiguous with the state line of this state, the applicant may qualify for a resident license in this state and at the same time hold a resident license from the contiguous state.

(b) The commissioner shall subject each applicant who is a natural person to a written examination as to the applicant's competence to act as an insurance agent. The examination must be held at a reasonable time and place designated by the commissioner.

(c) The examination shall be approved for use by the commissioner and shall test the applicant's knowledge of the lines of insurance, policies, and transactions to be handled under the class of license applied for, of the duties and responsibilities of the licensee, and pertinent insurance laws of this state.

(d) The examination shall be given only after the applicant has completed a program of classroom studies in a school, which shall not include a school sponsored by, offered by, or affiliated with an insurance company or its agents; except that this limitation does not preclude a bona fide professional association of agents, not acting on behalf of an insurer, from offering courses. The course of study shall consist of 30 hours of classroom study devoted to the basic fundamentals of insurance for those seeking a Minnesota license for the first time,; three hours devoted to state laws, regulations, and rules applicable to the line or lines of insurance for which licensure is being applied; 15 hours devoted to specific life and health topics for those seeking a life and health license,; and 15 hours devoted to specific property and casualty topics for those seeking a property and casualty license. The program of studies or study course shall have been approved by the commissioner in order to qualify under this paragraph. If the applicant has been previously licensed for the particular line of insurance in the state of Minnesota, the requirement of a program of studies or a study course shall be waived. A certification of compliance by the organization offering the course shall accompany the applicant's license application. This program of studies in a school or a study course shall not apply to farm property perils and farm liability applicants, or to agents writing such other lines of insurance as the commissioner may exempt from examination by order.

(e) The applicant must pass the examination with a grade determined by the commissioner to indicate satisfactory knowledge and understanding of the class or classes of insurance for which the applicant seeks qualification. The commissioner shall inform the applicant as to whether or not the applicant has passed. Examination results are valid for a period of three years from the date of the examination. The applicant must pass the examination with a grade determined by the commissioner.

(f) An applicant who has failed to pass an examination may take subsequent examinations. Examination fees for subsequent examinations shall not be waived.

(g) Any applicant for a license covering the same class or classes of insurance for which the applicant was licensed under a similar license in this state, other than a temporary license, within the three years preceding the date of the application shall be exempt from the requirement of a written examination, unless the previous license was revoked or suspended by the commissioner. An applicant whose license is not renewed under section 60K.12 is exempt from the requirement of a written examination.

Sec. 39. Minnesota Statutes 1996, section 60K.03, subdivision 3, is amended to read:

Subd. 3. [NONRESIDENT AGENT.] The commissioner shall issue a nonresident insurance agent's license to a qualified person who is a resident of another state or country as follows:

(a) A person may qualify for a license under this section as a nonresident only if that person holds a license in another state, province of Canada, or other foreign country which, in the opinion of the commissioner, qualifies that person for the same activity as that for which a license is sought.

Service of process upon a licensee in an action or proceeding begun in a court of competent jurisdiction of this state may be made in compliance with section 45.028, subdivision 2.

(c) A nonresident agent shall be held to the same knowledge of insurance law, regulations, and rules as that required of a resident agent according to subdivision 2, paragraph (d).

(c) (d) A nonresident license terminates automatically when the resident license for that class of license in the state, province, or foreign country in which the licensee is a resident is terminated for any reason.

Sec. 40. Minnesota Statutes 1996, section 60K.14, subdivision 4, is amended to read:

Subd. 4. [SUITABILITY OF INSURANCE.] In recommending the purchase of any life, endowment, individual accident and sickness, long-term care, annuity, life-endowment, or Medicare supplement insurance to a customer, an agent must have reasonable grounds for believing that the recommendation is suitable for the customer and must make reasonable inquiries to determine suitability. The suitability of a recommended purchase of insurance will be determined by reference to the totality of the particular customer's circumstances upon the basis of the facts disclosed by the customer as to the customer's other insurance and financial situation and needs, including, but not limited to, the customer's income financial status, the customer's need for insurance, and the values, benefits, and costs of the customer's existing insurance program, if any, when compared to the values, benefits, and costs of the recommended policy or policies.

Sec. 41. Minnesota Statutes 1996, section 60K.19, subdivision 7, is amended to read:

Subd. 7. [CRITERIA FOR COURSE ACCREDITATION.] (a) The commissioner may accredit a course only to the extent it is designed to impart substantive and procedural knowledge of the insurance field. The burden of demonstrating that the course satisfies this requirement is on the individual or organization seeking accreditation. The commissioner shall approve any educational program approved by Minnesota Continuing Legal Education relating to the insurance field. The commissioner is authorized to establish a procedure for renewal of course accreditation.

(b) The commissioner shall approve or disapprove professional designation examinations that are recommended for approval by the advisory task force. In order for an agent to receive full continuing education credit for a professional designation examination, the agent must pass the examination. An agent may not receive credit for classroom instruction preparing for the professional designation examination and also receive continuing education credit for passing the professional designation examination.

(c) The commissioner may not accredit a course:

(1) that is designed to prepare students for a license examination;

(2) in mechanical office or business skills, including typing, speedreading, use of calculators, or other machines or equipment;

(3) in sales promotion, including meetings held in conjunction with the general business of the licensed agent;

(4) in motivation, the art of selling, psychology, or time management; or

(5) which can be completed by the student at home or outside the classroom without the supervision of an instructor approved by the department of commerce, except that home-study courses may be accredited by the commissioner if the student is a nonresident agent residing in a state which is not contiguous to Minnesota.

(d) The commissioner has discretion to establish a pilot program to explore delivery of accredited courses using new delivery technology, including interactive technology. This pilot program expires August 1, 2000.

Sec. 42. Minnesota Statutes 1996, section 60K.19, subdivision 8, is amended to read:

the line or lines of insurance for which the agent is licensed. At least 15 of the 30 credit hours must be completed during the first 12 months of the 24-month licensing period. Any person whose initial licensing period extends more than six months shall complete 15 hours of courses accredited by the commissioner during the initial license period. Any person teaching or lecturing at an accredited course qualifies for 1-1/2 times the number of credit hours that would be granted to a person completing the accredited course. No more than 15 credit hours per licensing period may be credited to a person for courses sponsored by, offered by, or affiliated with an insurance company or its agents. Courses sponsored by, offered by, or affiliated with an insurance company or agent may restrict its students to agents of the company or agency.

Sec. 43. Minnesota Statutes 1996, section 61A.28, subdivision 6, is amended to read:

Subd. 6. [STOCKS, OBLIGATIONS, AND OTHER INVESTMENTS.] (a) Common stocks, common stock equivalents, or securities convertible into common stock or common stock equivalents of a business entity organized under the laws of the United States or any state thereof, or the Dominion of Canada or any province thereof, if the net earnings of the business entity after the elimination of extraordinary nonrecurring items of income and expense and before income taxes and fixed charges over the five immediately preceding completed fiscal years, or its period of existence if less than five years, has averaged not less than 1-1/4 times its average annual fixed charges applicable to the period.

(b) Preferred stock of, or common or preferred stock guaranteed as to dividends by a business entity organized under the laws of the United States or any state thereof, or the Dominion of Canada or any province thereof, under the following conditions: (1) No investment may be made under this paragraph in a stock upon which any dividend, current or cumulative, is in arrears; (2) the company may not invest in stocks under this paragraph and in common stocks under paragraph (a) if the investment causes the company's aggregate investments in the common or preferred stocks to exceed 25 percent of the company's total admitted assets, provided that no more than 20 percent of the company's admitted assets may be invested in common stocks under paragraph (a); and (3) the company may not invest in any preferred stock or common stock guaranteed as to dividends, which is rated in the four lowest categories established by the securities valuation office of the National Association of Insurance Commissioners, if the investment causes the company's aggregate investment in the lower rated preferred or common stock guaranteed as to dividends to exceed five percent of its total admitted assets.

(c) Warrants, options, and rights to purchase stock if the stock, at the time of the acquisition of the warrant, option, or right to purchase, would qualify as an investment under paragraph (a) or (b), whichever is applicable. A company shall not invest in a warrant, option, or right to purchase stock if, upon purchase and immediate exercise thereof, the acquisition of the stock violates any of the concentration limitations contained in paragraphs (a) and (b).

(d) In addition to amounts that may be invested under subdivision 8 and without regard to the percentage limitation applicable to stocks, warrants, options, and rights to purchase, the securities of any face amount certificate company, unit investment trust, or management type investment company, registered or in the process of registration under the Investment Company Act of 1940 as from time to time amended. In addition, the company may transfer assets into one or more of its separate accounts for the purpose of establishing, or supporting its contractual obligations under, the accounts in accordance with the provisions of sections 61A.13 to 61A.21. A company may not invest in a security authorized under this paragraph if the investment causes the company's aggregate investments in the securities to exceed five percent of its total admitted assets, except that for a health service plan corporation operating under chapter 62C, and for a health maintenance organization operating under chapter 62D, the company's aggregate investments may not exceed 20 percent of its total admitted assets. No more than five percent of the allowed investment by health service plan corporations or health maintenance organizations may be invested in funds that invest in assets not backed by the federal government. When investing in money market mutual funds, nonprofit health service plans regulated under chapter 62C, and health maintenance organizations regulated under chapter 62D, shall establish a trustee custodial account for the transfer of cash into the money market mutual fund.

(e) Investment grade obligations that are:

(1) bonds, obligations, notes, debentures, repurchase agreements, or other evidences of indebtedness of a business entity, organized under the laws of the United States or any state thereof, or the Dominion of Canada or any province thereof; and

(f) Noninvestment grade obligations: A company may acquire noninvestment grade obligations as defined in subclause (i) (hereinafter noninvestment grade obligations) which meet the earnings test set forth in subclause (ii). A company may not acquire a noninvestment grade obligation if the acquisition will cause the company to exceed the limitations set forth in subclause (iii).

(i) A noninvestment grade obligation is an obligation of a business entity, organized under the laws of the United States or any state thereof, or the Dominion of Canada or any province thereof, that is not rated in one of the four highest rating categories by at least one nationally recognized statistical rating organization, or is not rated in one of the two highest categories established by the securities valuation office of the National Association of Insurance Commissioners.

(ii) Noninvestment grade obligations authorized by this subdivision may be acquired by a company if the business entity issuing or assuming the obligation, or the business entity securing or guaranteeing the obligation, has had net earnings after the elimination of extraordinary nonrecurring items of income and expense and before income taxes and fixed charges over the five immediately preceding completed fiscal years, or its period of existence of less than five years, has averaged not less than 1-1/4 times its average annual fixed charges applicable to the period; provided, however, that if a business entity issuing or assuming the obligation, or the business entity securing or guaranteeing the obligation, has undergone an acquisition, recapitalization, or reorganization within the immediately preceding 12 months, or will use the proceeds of the obligation for an acquisition, recapitalization, or reorganization, then such business entity shall also have, on a pro forma basis, for the next succeeding 12 months, net earnings averaging 1-1/4 times its average annual fixed charges applicable to such period after elimination of extraordinary nonrecurring items of income and expense and before taxes and fixed charges; no investment may be made under this section upon which any interest obligation is in default.

(iii) Limitation on aggregate interest in noninvestment grade obligations. A company may not invest in a noninvestment grade obligation if the investment will cause the company's aggregate investments in noninvestment grade obligations to exceed the applicable percentage of admitted assets set forth in the following table:

Percentage of

Effective DateAdmitted Assets

January 1, 1992 20

January 1, 1993 17.5

January 1, 1994 15

Nothing in this paragraph limits the ability of a company to invest in noninvestment grade obligations as provided under subdivision 12.

(g) Obligations for the payment of money under the following conditions: (1) The obligation must be secured, either solely or in conjunction with other security, by an assignment of a lease or leases on property, real or personal; (2) the lease or leases must be nonterminable by the lessee or lessees upon foreclosure of any lien upon the leased property; (3) the rents payable under the lease or leases must be sufficient to amortize at least 90 percent of the obligation during the primary term of the lease; and (4) the lessee or lessees under the lease or leases, or a governmental entity or business entity, organized under the laws of the United States or any state thereof, or the Dominion of Canada, or any province thereof, that has assumed or guaranteed any lessee's performance thereunder, must be a governmental entity or business entity whose obligations would qualify as an investment under subdivision 2 or paragraph (e) or (f). A company may acquire leases assumed or guaranteed by a noninvestment grade lessee unless the value of the lease, when added to the other noninvestment grade obligations owned by the company, exceeds 15 percent of the company's admitted assets.

(h) A company may sell exchange-traded call options against stocks or other securities owned by the company and may purchase exchange-traded call options in a closing transaction against a call option previously written by the company. In addition to the authority granted by paragraph (c), to the extent and on the terms and conditions the commissioner determines to be consistent with the purposes of this chapter, a company may purchase or sell other exchange-traded call options, and may sell or purchase exchange-traded put options.

(j) For nonprofit health service plan corporations regulated under chapter 62C, and for health maintenance organizations regulated under chapter 62D, a company may invest in commercial paper rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization, or rated in one of the two highest categories established by the securities valuation office of the National Association of Insurance Commissioners, if the investment, valued at cost at the date of purchase, does not cause the company's aggregate investment in any one business entity to exceed six percent of the company's admitted assets.

Sec. 44. Minnesota Statutes 1996, section 61A.28, subdivision 9a, is amended to read:

Subd. 9a. [HEDGING.] A domestic life insurance company may enter into financial transactions solely for the purpose of managing reducing the interest rate risk associated with the company's assets and liabilities that the company has acquired or incurred or has legally contracted to acquire or incur, and not for speculative or other purposes. For purposes of this subdivision, "financial transactions" include, but are not limited to, futures, options to buy or sell fixed income securities, repurchase and reverse repurchase agreements, and interest rate swaps, caps, and floors. This authority is in addition to any other authority of the insurer.

Sec. 45. Minnesota Statutes 1996, section 61A.28, subdivision 12, is amended to read:

Subd. 12. [ADDITIONAL INVESTMENTS.] Investments of any kind, without regard to the categories, conditions, standards, or other limitations set forth in the foregoing subdivisions and section 61A.31, subdivision 3, except that the prohibitions in clause (d) of subdivision 3 remains applicable, may be made by a domestic life insurance company in an amount not to exceed the lesser of the following:

(1) Five percent of the company's total admitted assets as of the end of the preceding calendar year, or

(2) Fifty percent of the amount by which its capital and surplus as of the end of the preceding calendar year exceeds $675,000. Except as provided in section 61A.281, a company's total investment under this section in the common stock of any corporation, other than the stock of the types of corporations specified in section 61A.284, may not exceed ten percent of the common stock of the corporation. No investment may be made under the authority of this clause or clause (1) by a company that has not completed five years of actual operation since the date of its first certificate of authority.

If, subsequent to being made under the provisions of this subdivision, an investment is determined to have become qualified or eligible under any of the other provisions of this chapter, the company may consider the investment as being held under the other provision and the investment need no longer be considered as having been made under the provisions of this subdivision.

In addition to the investments authorized by this subdivision, with the written order of the commissioner, a domestic life insurance company may make qualified investments in any additional securities or property of the type authorized by subdivision 6, paragraph (e), (f), or (g), with the written order of the commissioner other type of investment or exceed any limitations of quality, quantity, or percentage of admitted assets contained in this section, section 61A.29 or 61A.31, or other provision governing the investments of a domestic life insurance company. This approval is at the discretion of the commissioner, provided that the additional investments allowed by the commissioner's written order may not exceed five percent of the company's admitted assets. This authorization does not negate or reduce the investment authority granted in subdivision 6, paragraph (e), (f), or (g), or this subdivision.

Sec. 46. Minnesota Statutes 1996, section 61A.32, is amended to read:

61A.32 [DOMESTIC MUTUAL AND STOCK AND MUTUAL COMPANIES; VOTING RIGHTS OF MEMBERS.]

deductions, the employees shall be allowed to choose their representative, who shall exercise a voting power in proportion to the percentage of premium paid by such employees. Every member shall be notified of its annual meetings by a written notice mailed to the member's address, or by an imprint on the back of the policy, premium notice, receipt or certificate of renewal, as follows:

"The insured is hereby notified that by virtue of this policy the insured is a member of the .......... Insurance Company, and that the annual meetings of said company are held at its home office on the ..... day of ..... in each year, at .......... o'clock."

The blanks shall be duly filled in print. Any such member may vote by proxy by filing written proxy appointment with the secretary of the company at its home office at least five days before the first meeting at which it is to be used. Such proxy appointment may be for a specified period of time not to exceed one year. A proxy may be revoked by a member at any time by written notice to the secretary of the company or by executing a new proxy appointment and filing it as required herein: provided, however, that any member may always appear personally and exercise rights as a member at any meeting of the company.

No person or group of persons other than the chief executive officer of a domestic mutual life insurance company, or the officer's designee, shall seek to obtain proxies from the members of the domestic mutual life insurance company for the purposes of affecting a change of control of the domestic mutual life insurance company unless that person or group has filed with the commissioner and has sent to the domestic mutual life insurance company a statement containing the information required by section 60D.17. Section 60D.17, subdivisions 2 to 7, applies in the event of any such solicitation.

A domestic mutual life insurance company may by its articles of incorporation or bylaws provide for a representative system of voting in any meeting of members. The articles or bylaws may provide for the selection of representatives from districts as therein specified, such representatives to represent approximately equal numbers of members with power to exercise all the voting powers, rights and privileges of the members they represent with the same force and effect as might be exercised by the members themselves. In such a representative system the votes cast by the representative shall be one vote for each member, notwithstanding the amount of insurance carried, and proxy voting shall not be permitted; provided, however, that any member may always appear personally and exercise rights as a member of the company at any meeting of the membership.

Sec. 47. Minnesota Statutes 1996, section 61A.60, subdivision 1, is amended to read:

Subdivision 1. [NOTICE FORM; AGENT SALES.] The notice required where sections 61A.53 to 61A.60 refer to this subdivision is as follows:

DEFINITION REPLACEMENT is any transaction where, in connection with the purchase of New Insurance or a New Annuity, you LAPSE, SURRENDER, CONVERT to Paid-up Insurance, Place on Extended Term, or BORROW all or part of the policy loan values on an existing insurance policy or an annuity.(See reverse side for DEFINITIONS.)

IF YOU INTEND In connection with the purchase of this insurance or annuity, if you have REPLACED or TO REPLACE intend to REPLACE your present life insurance coverage or annuity(ies), you should be COVERAGE certain that you understand all the relevant factors involved.

You should BE AWARE that you may be required to provide EVIDENCE OF INSURABILITY and

(2) Your present occupation or activities may not be covered or could require additional premiums.

(3) The INCONTESTABLE and SUICIDE CLAUSE will begin anew in a new policy. This could RESULT in a CLAIM under the new policy BEING DENIED that would otherwise have been paid.

(4) Current law DOES MAY NOT REQUIRE your present insurer(s) to REFUND any premiums.

(5)It is to your advantage to OBTAIN INFORMATION regarding your existing policies or annuity contracts [FROM THE INSURER OR AGENT FROM WHOM YOU PURCHASED THE POLICY OR ANNUITY CONTRACT.]

(If you are purchasing an annuity, clauses (1), (2), and (3) above would not apply to the new

annuity contract.)

THE INSURANCE OR ANNUITY I INTEND TO PURCHASE FROM _______________________________________INSURANCE CO. MAY REPLACE OR ALTER EXISTING LIFE INSURANCE POLICY(IES) OR ANNUITY CONTRACT(S).

The following policy(ies) or annuity contract(s) may be replaced as a result of this transaction:

Insurer Insured

as it appears on the policy or contracts as it appears on the policy or contract

______________________________ ______________________________

______________________________ ______________________________

______________________________ ______________________________

______________________________ ______________________________

Policy or contract number Insured birthdate

______________________________ ______________________________

______________________________ ______________________________

______________________________ ______________________________

______________________________ ______________________________

The proposed policy or contract is:

_______________________________ $_______________

type of policy- or contract-generic name face amount

________________________________________________________

signature of applicant date

________________________________________________________

address of applicant city state

I certify that this form was given to and completed by

________________________________________________________

(applicant-please print or type)

prior to taking an application and that I am leaving a signed copy for the applicant.

___________________________________________________

agent's signature date

___________________________________________________

address

___________________________________________________

city state

Sec. 48. Minnesota Statutes 1996, section 61B.19, subdivision 3, is amended to read:

Subd. 3. [LIMITATION OF COVERAGE.] Sections 61B.18 to 61B.32 do not provide coverage for:

(1) a portion of a policy or contract under which the investment risk is borne by the policy or contract holder;

(2) a policy or contract of reinsurance, unless assumption certificates have been issued and the insured has consented to the assumption as provided under section 60A.09, subdivision 4a;

(3) a policy or contract issued by an assessment benefit association operating under section 61A.39, or a fraternal benefit society operating under chapter 64B;

(4) any obligation to nonresident participants of a covered retirement plan or to the plan sponsor, employer, trustee, or other party who owns the contract; in these cases, the association is obligated under this chapter only to participants in a covered plan who are residents of the state of Minnesota on the date of impairment or insolvency;

(5) an annuity contract issued in connection with and for the purpose of funding a structured settlement of a liability claim, where the liability insurer remains liable;

(6) a portion of an unallocated annuity contract which is not issued to or in connection with a specific employee, union, or association of natural persons benefit plan or a governmental lottery, including but not limited to, a contract issued to, or purchased at the direction of, any governmental bonding authority, such as a municipal guaranteed investment contract;

(7) a plan or program of an employer, association, or similar entity to provide life, health, or annuity benefits to its employees or members to the extent that the plan or program is self-funded or uninsured, including benefits payable by an employer, association, or similar entity under:

(i) a multiple employer welfare arrangement as defined in the Employee Retirement Income Security Act of 1974, United States Code, title 29, section 1002(40)(A), as amended;

(ii) a minimum premium group insurance plan;

(iii) a stop-loss group insurance plan; or

(iv) an administrative services only contract;

(8) any policy or contract issued by an insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this state;

(9) an unallocated annuity contract issued to an employee benefit plan protected under the federal Pension Benefit Guaranty Corporation; and

(10) a portion of a policy or contract to the extent that it provides dividends or experience rating credits except to the extent the dividends or experience rating credits have actually become due and payable or have been credited to the policy or contract before the date of impairment or insolvency, or provides that a fee or allowance be paid to a person, including the policy or contract holder, in connection with the service to, or administration of, the policy or contract.; and

(11) a contractual agreement that establishes the member insurer's obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer.

Sec. 49. Minnesota Statutes 1996, section 62A.04, subdivision 3, is amended to read:

corresponding provision of different wording approved by the commissioner which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate caption appearing in this subdivision or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the commissioner may approve.

(1) A provision as follows:

CHANGE OF OCCUPATION: If the insured be injured or contract sickness after having changed occupations to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premiums paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes occupations to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation will reduce the premium rate accordingly, and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such state prior to the occurrence of the loss or prior to the date of proof of change of occupation.

(2) A provision as follows:

MISSTATEMENT OF AGE: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age.

(3) A provision as follows:

OTHER INSURANCE IN THIS INSURER: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured be in force concurrently herewith, making the aggregate indemnity for ..... (insert type of coverage or coverages) in excess of $..... (insert maximum limit of indemnity or indemnities) the excess insurance shall be void and all premiums paid for such excess shall be returned to the insured or to the insured's estate, or, in lieu thereof:

Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one such policy elected by the insured, or the insured's beneficiary or estate, as the case may be, and the insurer will return all premiums paid for all other such policies.

(4) A provision as follows:

INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for such proportion of the loss as the amount which would otherwise have been payable hereunder plus the total of the like amounts under all such other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for such loss, and for the return of such portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the "like amount" of such other coverage shall be taken as the amount which the services rendered would have cost in the absence of such coverage.

service organizations, and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of such definition such term shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any workers' compensation or employer's liability statute) whether provided by a governmental agency or otherwise shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the foregoing policy provision no third party liability coverage shall be included as "other valid coverage."

(5) A provision as follows:

INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss, and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined.

If the foregoing policy provision is included in a policy which also contains the next preceding policy provision there shall be added to the caption of the foregoing provision the phrase -- "OTHER BENEFITS." The insurer may, at its option, include in this provision a definition of "other valid coverage," approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of such definition such term shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any workers' compensation or employer's liability statute) whether provided by a governmental agency or otherwise shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the foregoing policy provision no third party liability coverage shall be included as "other valid coverage."

(6) A provision as follows:

RELATION OF EARNINGS TO INSURANCE: If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or the insured's average monthly earnings for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such two years as shall exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of $200 or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time.

(7) A provision as follows:

UNPAID PREMIUM: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom.

(8) A provision as follows:

CANCELLATION: The insurer may cancel this policy at any time by written notice delivered to the insured or mailed to the insured's last address as shown by the records of the insurer, stating when, not less than five days thereafter, such cancellation shall be effective; and after the policy has been continued beyond its original term the insured may cancel this policy at any time by written notice delivered or mailed to the insurer, effective upon receipt or on such later date as may be specified in such notice. In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If Regardless of whether it is the insurer or the insured who cancels, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata, unless the mode of payment is monthly or less, or if the unearned amount is for more than one month. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation.

(9) A provision as follows:

CONFORMITY WITH STATE STATUTES: Any provision of this policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on such date is hereby amended to conform to the minimum requirements of such statutes.

(10) A provision as follows:

ILLEGAL OCCUPATION: The insurer shall not be liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation.

(11) A provision as follows:

NARCOTICS: The insurer shall not be liable for any loss sustained or contracted in consequence of the insured's being under the influence of any narcotic unless administered on the advice of a physician.

Sec. 50. Minnesota Statutes 1996, section 62A.135, subdivision 5, is amended to read:

Subd. 5. [SUPPLEMENT TO ANNUAL STATEMENTS SUPPLEMENTAL FILINGS.] Each insurer that has fixed indemnity policies in force in this state shall, as a supplement to the annual statement required by section 60A.13 upon request by the commissioner, submit, in a form prescribed by the commissioner, the experience data for the calendar year showing its incurred claims, earned premiums, incurred to earned loss ratio, and the ratio of the actual loss ratio to the expected loss ratio for each fixed indemnity policy form in force in Minnesota. The experience data must be provided on both a Minnesota only and a national basis. If in the opinion of the company's actuary, the deviation of the actual loss ratio from the expected loss ratio for a policy form is due to unusual reserve fluctuations, economic conditions, or other nonrecurring conditions, the insurer should also file that opinion with appropriate justification.

Sec. 51. Minnesota Statutes 1996, section 62A.50, subdivision 3, is amended to read:

Subd. 3. [DISCLOSURES.] No long-term care policy shall be offered or delivered in this state, whether or not the policy is issued in this state, and no certificate of coverage under a group long-term care policy shall be offered or delivered in this state, unless a statement containing at least the following information is delivered to the applicant at the time the application is made:

(1) a description of the benefits and coverage provided by the policy and the differences between this policy, a supplemental Medicare policy and the benefits to which an individual is entitled under parts A and B of Medicare;

(2) a statement of the exceptions and limitations in the policy including the following language, as applicable, in bold print: "THIS POLICY DOES NOT COVER ALL NURSING CARE FACILITIES OR NURSING HOME, HOME CARE, OR ADULT DAY CARE EXPENSES AND DOES NOT COVER RESIDENTIAL CARE. READ YOUR POLICY CAREFULLY TO DETERMINE WHICH FACILITIES AND EXPENSES ARE COVERED BY YOUR POLICY.";

(3) a statement of the renewal provisions including any reservation by the insurer of the right to change premiums;

(4) a statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions;

(5) an explanation of the policy's loss ratio including at least the following language: "This means that, on the average, policyholders may expect that $........ of every $100 in premium will be returned as benefits to policyholders over the life of the contract.";

(6) a statement of the out-of-pocket expenses, including deductibles and copayments for which the insured is responsible, and an explanation of the specific out-of-pocket expenses that may be accumulated toward any out-of-pocket maximum as specified in the policy;

(7) the following language, in bold print: "YOUR PREMIUMS CAN BE INCREASED IN THE FUTURE. THE RATE SCHEDULE THAT LISTS YOUR PREMIUM NOW CAN CHANGE.";

(8) the following language, if applicable, in bold print: "IF YOU ARE NOT HOSPITALIZED PRIOR TO ENTERING A NURSING HOME OR NEEDING HOME CARE, YOU WILL NOT BE ABLE TO COLLECT ANY BENEFITS UNDER THIS PARTICULAR POLICY.";

(9) (8) the following language in bold print, with any provisions that are inapplicable to the particular policy omitted or crossed out: "THIS POLICY HAS A WAITING PERIOD OF ..... (CALENDAR OR BENEFIT) DAYS FOR NURSING CARE SERVICES AND A WAITING PERIOD OF ..... (CALENDAR OR BENEFIT) DAYS FOR HOME CARE SERVICES. THIS MEANS THAT THIS POLICY WILL NOT COVER YOUR CARE FOR THE FIRST ..... (CALENDAR OR BENEFIT) DAYS AFTER YOU ENTER A NURSING HOME, OR THE FIRST ..... (CALENDAR OR BENEFIT) DAYS AFTER YOU BEGIN TO USE HOME CARE SERVICES. YOU WOULD NEED TO PAY FOR YOUR CARE FROM OTHER SOURCES FOR THOSE WAITING PERIODS."; and

(10) (9) a signed and completed copy of the application for insurance is left with the applicant at the time the application is made.

Sec. 52. Minnesota Statutes 1996, section 62B.04, subdivision 2, is amended to read:

Subd. 2. [CREDIT ACCIDENT AND HEALTH INSURANCE.] (a) The total amount of periodic indemnity payable by credit accident and health insurance in the event of disability, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of the indebtedness; and the amount of each periodic indemnity payment shall not exceed the original indebtedness divided by the number of periodic installments. If the credit transaction provides for a variable rate of finance charge or interest, the initial rate or the scheduled rates based on the initial index must be used in determining the aggregate of the periodic scheduled unpaid installments of the indebtedness.

Sec. 53. Minnesota Statutes 1996, section 62E.12, is amended to read:

62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE PLAN.]

The association through its comprehensive health insurance plan shall offer policies which provide the benefits of a number one qualified plan and a number two qualified plan, except that the maximum lifetime benefit on these plans shall be $1,500,000 $2,000,000, and an extended basic plan and a basic Medicare plan as described in sections 62A.31 to 62A.44 and 62E.07. The requirement that a policy issued by the association must be a qualified plan is satisfied if the association contracts with a preferred provider network and the level of benefits for services provided within the network satisfies the requirements of a qualified plan. If the association uses a preferred provider network, payments to nonparticipating providers must meet the minimum requirements of section 72A.20, subdivision 15. They shall offer health maintenance organization contracts in those areas of the state where a health maintenance organization has agreed to make the coverage available and has been selected as a writing carrier. Notwithstanding the provisions of section 62E.06 and unless those charges are billed by a provider that is part of the association's preferred provider network, the state plan shall exclude coverage of services of a private duty nurse other than on an inpatient basis and any charges for treatment in a hospital located outside of the state of Minnesota in which the covered person is receiving treatment for a mental or nervous disorder, unless similar treatment for the mental or nervous disorder is medically necessary, unavailable in Minnesota and provided upon referral by a licensed Minnesota medical practitioner.

Sec. 54. Minnesota Statutes 1996, section 65A.01, subdivision 3, is amended to read:

Subd. 3. [POLICY PROVISIONS.] On said policy following such matter as provided in subdivisions 1 and 2, printed in the English language in type of such size or sizes and arranged in such manner, as is approved by the commissioner of commerce, the following provisions and subject matter shall be stated in the following words and in the following sequence, but with the convenient placing, if desired, of such matter as will act as a cover or back for such policy when folded, with the blanks below indicated being left to be filled in at the time of the issuing of the policy, to wit:

(Space for listing the amounts of insurance, rates and premiums for the basic coverages provided under the standard form of policy and for additional coverages or perils provided under endorsements attached. The description and location of the property covered and the insurable value(s) of any building(s) or structure(s) covered by the policy or its attached endorsements; also in the above space may be stated whether other insurance is limited and if limited the total amount permitted.)

In consideration of the provisions and stipulations herein or added hereto and of the premium above specified this company, for a term of ..... from ..... (At 12:01 a.m. Standard Time) to ..... (At 12:01 a.m. Standard Time) at location of property involved, to an amount not exceeding the amount(s) above specified does insure ..... and legal representatives ...........................................

(In above space may be stated whether other insurance is limited.) (And if limited the total amount permitted.)

Subject to form No.(s) ..... attached hereto.

This policy is made and accepted subject to the foregoing provisions and stipulations and those hereinafter stated, which are hereby made a part of this policy, together with such provisions, stipulations and agreements as may be added hereto as provided in this policy.

The insurance effected above is granted against all loss or damage by fire originating from any cause, except as hereinafter provided, also any damage by lightning and by removal from premises endangered by the perils insured against in this policy, to the property described hereinafter while located or contained as described in this policy, or pro rata for five days at each proper place to which any of the property shall necessarily be removed for preservation from the perils insured against in this policy, but not elsewhere. The amount of said loss or damage, except in case of total loss on buildings, to be estimated according to the actual value of the insured property at the time when such loss or damage happens.

This entire policy shall be void if, whether before a loss, the insured has willfully, or after a loss, the insured has willfully and with intent to defraud, concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interests of the insured therein.

This policy shall not cover accounts, bills, currency, deeds, evidences of debt, money or securities; nor, unless specifically named hereon in writing, bullion, or manuscripts.

This company shall not be liable for loss by fire or other perils insured against in this policy caused, directly or indirectly by: (a) enemy attack by armed forces, including action taken by military, naval or air forces in resisting an actual or immediately impending enemy attack; (b) invasion; (c) insurrection; (d) rebellion; (e) revolution; (f) civil war; (g) usurped power; (h) order of any civil authority except acts of destruction at the time of and for the purpose of preventing the spread of fire, providing that such fire did not originate from any of the perils excluded by this policy.

Other insurance may be prohibited or the amount of insurance may be limited by so providing in the policy or an endorsement, rider or form attached thereto.

Unless otherwise provided in writing added hereto this company shall not be liable for loss occurring:

(a) while the hazard is increased by any means within the control or knowledge of the insured; or

(b) while the described premises, whether intended for occupancy by owner or tenant, are vacant or unoccupied beyond a period of 60 consecutive days; or

(c) as a result of explosion or riot, unless fire ensue, and in that event for loss by fire only.

Any other peril to be insured against or subject of insurance to be covered in this policy shall be by endorsement in writing hereon or added hereto.

The extent of the application of insurance under this policy and the contributions to be made by this company in case of loss, and any other provision or agreement not inconsistent with the provisions of this policy, may be provided for in writing added hereto, but no provision may be waived except such as by the terms of this policy is subject to change.

No permission affecting this insurance shall exist, or waiver of any provision be valid, unless granted herein or expressed in writing added hereto. No provision, stipulation or forfeiture shall be held to be waived by any requirements or proceeding on the part of this company relating to appraisal or to any examination provided for herein.

This policy shall be canceled at any time at the request of the insured, in which case this company shall, upon demand and surrender of this policy, refund the excess of paid premium above the customary short rates for the expired time. This policy may be canceled at any time by this company by giving to the insured 30 days' a written notice of cancellation with or without tender of the excess of paid premium above the pro rata premium for the expired time, which excess, if not tendered, shall be refunded on demand. Notice of cancellation shall state that said excess premium (if not tendered) will be refunded on demand.

If loss hereunder is made payable, in whole or in part, to a designated mortgagee or contract for deed vendor not named herein as insured, such interest in this policy may be canceled by giving to such mortgagee or vendor a ten days' written notice of cancellation.

owner, and this company shall elect by itself, or with others, to pay the mortgagee or vendor the full amount secured by such mortgage or contract for deed, then the mortgagee or vendor shall assign and transfer to the company the mortgagee's or vendor's interest, upon such payment, in the said mortgage or contract for deed together with the note and debts thereby secured.

This company shall not be liable for a greater proportion of any loss than the amount hereby insured shall bear to the whole insurance covering the property against the peril involved.

In case of any loss under this policy the insured shall give immediate written notice to this company of any loss, protect the property from further damage, and a statement in writing, signed and sworn to by the insured, shall within 60 days be rendered to the company, setting forth the value of the property insured, except in case of total loss on buildings the value of said buildings need not be stated, the interest of the insured therein, all other insurance thereon, in detail, the purposes for which and the persons by whom the building insured, or containing the property insured, was used, and the time at which and manner in which the fire originated, so far as known to the insured.

The insured, as often as may be reasonably required, shall exhibit to any person designated by this company all that remains of any property herein described, and, after being informed of the right to counsel and that any answers may be used against the insured in later civil or criminal proceedings, the insured shall, within a reasonable period after demand by this company, submit to examinations under oath by any person named by this company, and subscribe the oath. The insured, as often as may be reasonably required, shall produce for examination all records and documents reasonably related to the loss, or certified copies thereof if originals are lost, at a reasonable time and place designated by this company or its representatives, and shall permit extracts and copies thereof to be made.

In case the insured and this company, except in case of total loss on buildings, shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of such demand. In case either fails to select an appraiser within the time provided, then a presiding judge of the district court of the county wherein the loss occurs may appoint such appraiser for such party upon application of the other party in writing by giving five days' notice thereof in writing to the party failing to appoint. The appraisers shall first select a competent and disinterested umpire; and failing for 15 days to agree upon such umpire, then a presiding judge of the above mentioned court may appoint such an umpire upon application of party in writing by giving five days' notice thereof in writing to the other party. The appraisers shall then appraise the loss, stating separately actual value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this company shall determine the amount of actual value and loss. Each appraiser shall be paid by the selecting party, or the party for whom selected, and the expense of the appraisal and umpire shall be paid by the parties equally.

It shall be optional with this company to take all of the property at the agreed or appraised value, and also to repair, rebuild or replace the property destroyed or damaged with other of like kind and quality within a reasonable time, on giving notice of its intention so to do within 30 days after the receipt of the proof of loss herein required.

There can be no abandonment to this company of any property.

The amount of loss for which this company may be liable shall be payable 60 days after proof of loss, as herein provided, is received by this company and ascertainment of the loss is made either by agreement between the insured and this company expressed in writing or by the filing with this company of an award as herein provided. It is moreover understood that there can be no abandonment of the property insured to the company, and that the company will not in any case be liable for more than the sum insured, with interest thereon from the time when the loss shall become payable, as above provided.

No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy have been complied with, and unless commenced within two years after inception of the loss.

Assignment of this policy shall not be valid except with the written consent of this company.

IN WITNESS WHEREOF, this company has executed and attested these presents.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Signature) (Signature)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Name of office) (Name of office)

Sec. 55. Minnesota Statutes 1996, section 65A.01, is amended by adding a subdivision to read:

Subd. 3c. [TIME REQUIREMENTS.] (a) In the event of a policy less than 60 days old that is not being renewed, or a policy that it is being canceled for nonpayment of premium, the notice must be mailed to the insured so that it is received at least 30 days before the effective cancellation date, as shown by a dated and signed certified mail receipt. If a policy is being canceled for underwriting considerations, the insured must be informed of the source from which the information was received.

(b) In the event of a mid-term cancellation, for reasons listed in subdivision 3a, or according to policy provisions, the insured must receive a 30-day notice.

(c) In the event of a nonrenewal, a 60-day notice must be sent to the insured, containing the specific underwriting or other reason for the indicated actions.

This subdivision does not apply to commercial policies regulated under sections 60A.36 and 60A.37.

Sec. 56. Minnesota Statutes 1996, section 65A.27, subdivision 4, is amended to read:

Subd. 4. "Homeowner's insurance" means insurance coverage, as provided in section 60A.06, subdivision 1, clause (1)(c), normally written by the insurer as a standard homeowner's package policy or as a standard residential renter's package policy. This definition includes, but is not limited to, policies that are generally described as homeowners' policies, mobile/manufactured homeowners' policies, dwelling owner policies, condominium owner policies, and tenant policies.

Sec. 57. Minnesota Statutes 1996, section 65A.29, subdivision 4, is amended to read:

Subd. 4. [FORM REQUIREMENTS.] Any notice or statement required by subdivisions 1 to 3, or any other notice canceling a homeowner's insurance policy must be written in language which is easily readable and understandable by a person of average intelligence and understanding. The statement of reason must be sufficiently specific to convey, clearly and without further inquiry, the basis for the insurer's refusal to renew or to write the insurance coverage.

The notice or statement must also inform the insured of:

(1) the possibility of coverage through the Minnesota property insurance placement facility under sections 65A.31 to 65A.42;

(2) the right to object to the commissioner under subdivision 9; and

(3) the right to the return of unearned premium in appropriate situations under subdivision 10.

Sec. 58. Minnesota Statutes 1996, section 65B.48, subdivision 5, is amended to read:

(b) At the time an application for motorcycle insurance without personal injury protection coverage is completed, there must be attached to the application a separate form containing a written notice in at least 10-point bold type, if printed, or in capital letters, if typewritten that states:

"Under Minnesota law, a policy of motorcycle coverage issued in the State of Minnesota must provide liability coverage only, and there is no requirement that the policy provide personal injury protection (PIP) coverage in the case of injury sustained by the insured. No PIP coverage provided by an automobile insurance policy you may have in force will extend to provide coverage in the event of a motorcycle accident."

Sec. 59. [65B.492] [TOTAL DISABILITY; WAIVER OF WAGE LOSS REIMBURSEMENT.]

A plan of reparation security issued to or renewed with a person who is totally disabled may contain a waiver of wage loss reimbursement coverage, provided that the rate for any plan for which this coverage has been excluded or reduced must be reduced accordingly. For purposes of this section, the term "total disability" means the inability of an insured who is ill or injured to engage in any paid employment or work. The reparation obligor may request the insured to provide written certification of the disability by a licensed practicing physician so long as the written certification is required no more frequently than on an annual basis. This section applies to self-insurance.

Sec. 60. Minnesota Statutes 1996, section 67A.231, is amended to read:

67A.231 [DEPOSIT OF FUNDS; INVESTMENT; LIMITATIONS.]

The directors of any township mutual insurance company may authorize the treasurer to invest any of its funds and accumulations in:

(a) Bonds, notes, mortgages, or other obligations guaranteed by the full faith and credit of the United States of America and those for which the credit of the United States is pledged to pay principal, interest or dividends, including United States agency and instrumentality bonds, debentures, or obligations;

(b) Bonds, notes, evidence of indebtedness, or other public authority obligations guaranteed by this state;

(c) Bonds, notes, evidence of the indebtedness or other obligations guaranteed by the full faith and credit of any county, municipality, school district, or other duly authorized political subdivision of this state;

(d) Bonds or other interest bearing obligations, payable from revenues, provided that the bonds or other interest bearing obligations are at the time of purchase rated among the highest four quality categories used by a nationally recognized rating agency for rating the quality of similar bonds or other interest bearing obligations, and are not rated lower by any other such agency; or obligations of a United States agency or instrumentality that have been rated in one of the two highest categories established by the Securities Valuation Office of the National Association of Insurance Commissioners. A company may not invest more than 20 percent of its admitted assets in the obligations of any one corporation. This is not applicable to bonds or other interest bearing obligations in default as to principal;

(e) Investments in the obligations stated in paragraphs (a), (b), (c), and (d), may be made either directly or in the form of securities of, or other interests in, an investment company registered under the Federal Investment Company Act of 1940. Investment company shares authorized pursuant to this subdivision shall not exceed 20 percent of the company's surplus. These obligations must be carried at the lower of cost or market on the annual statement filed with the commissioner and adjusted to market on an annual basis;

(f) Loans upon improved and unencumbered real property in this state worth at least twice the amount loaned thereon, not including buildings, unless insured by property insurance policies payable to and held by the security holder;

(h) Demand or time deposits or savings accounts in federally insured depositories located in this state to the extent that the deposit or investment is insured by the Federal Deposit Insurance Corporation, Federal Savings and Loan Corporation, or the National Credit Union Administration. An additional deposit not to exceed 50 percent of the township mutual insurance company's policyholder surplus may be located in these depositories if covered by private deposit insurance written by an insurer licensed by the department of commerce;

(i) Guarantee fund certificates of a mutual insurer which reinsures the business of the township mutual insurance company. The commissioner may by rule limit the amount of guarantee fund certificates which the township mutual insurance company may purchase and this limit may be a function of the size of the township mutual insurance company; and

(j) Up to $1,500 in stock of an insurer which issues directors and officers liability insurance to township mutual insurance company directors and officers.

Sec. 61. Minnesota Statutes 1996, section 72A.20, subdivision 34, is amended to read:

Subd. 34. [SUITABILITY OF INSURANCE FOR CUSTOMER.] In recommending or issuing life, endowment, individual accident and sickness, long-term care, annuity, life-endowment, or Medicare supplement insurance to a customer, an insurer, either directly or through its agent, must have reasonable grounds for believing that the recommendation is suitable for the customer, upon the basis of facts disclosed by the customer as to the customer's other insurance and financial situation and needs, including, but not limited to, the customer's financial status, the customer's need for insurance, and the values, benefits, and costs of the customer's existing insurance program, if any, when compared to the values, benefits, and costs of the recommended policy or policies.

In the case of group insurance marketed on a direct response basis without the use of direct agent contact, this subdivision is satisfied if the insurer has reasonable grounds to believe that the insurance offered is generally suitable for the group to whom the offer is made.

Sec. 62. Minnesota Statutes 1996, section 72B.04, subdivision 10, is amended to read:

Subd. 10. [FEES.] A fee of $40 is imposed for each initial license or temporary permit and $25 for each renewal thereof or amendment thereto. A fee of $20 is imposed for each examination taken. A fee of $20 is imposed for the registration of each nonlicensed adjuster who is required to register under section 72B.06. All fees shall be transmitted to the commissioner and shall be payable to the state treasurer department of commerce. If a fee is paid for an examination and if within one year from the date of that payment no written request for a refund is received by the commissioner or the examination for which the fee was paid is not taken, the fee is forfeited to the state of Minnesota.

Sec. 63. Minnesota Statutes 1996, section 79A.01, subdivision 10, is amended to read:

Subd. 10. [COMMON CLAIMS FUND.] "Common claims fund," with respect to group self-insurers, means the cash, cash equivalents, or investment accounts maintained by the mutual self-insurance group to pay its workers' compensation liabilities.

Sec. 64. Minnesota Statutes 1996, section 79A.01, is amended by adding a subdivision to read:

Subd. 11. [DIMINUTIVE APPLICANTS.] "Diminutive applicants" to group self-insurance means applicants to existing self-insurance groups whose equity and premium are both less than five percent of the total group's equity and premium.

Sec. 65. Minnesota Statutes 1996, section 79A.02, subdivision 1, is amended to read:

Sec. 66. Minnesota Statutes 1996, section 79A.02, subdivision 4, is amended to read:

Subd. 4. [RECOMMENDATIONS TO COMMISSIONER REGARDING REVOCATION.] After each fifth anniversary from the date each individual and group self-insurer becomes certified to self-insure, the committee shall review all relevant financial data filed with the department of commerce that is otherwise available to the public and make a recommendation to the commissioner about whether each self-insurer's certificate should be revoked. For group self-insurers who have been in existence for five years or more and have been granted renewal authority, a level of funding in the common claims fund must be maintained at not less than the greater of either: (1) one year's claim losses paid in the most recent year; or (2) one-third of the security deposit posted with the department of commerce according to section 79A.04, subdivision 2. This provision supersedes any requirements under section 79A.03, subdivision 10, and Minnesota Rules, part 2780.5000.

Sec. 67. Minnesota Statutes 1996, section 79A.03, subdivision 6, is amended to read:

Subd. 6. [APPLICATIONS FOR GROUP SELF-INSURANCE.] (a) Two or more employers may apply to the commissioner for the authority to self-insure as a group, using forms available from the commissioner. This initial application shall be accompanied by a copy of the bylaws or plan of operation adopted by the group. Such bylaws or plan of operation shall conform to the conditions prescribed by law or rule. The commissioner shall approve or disapprove the bylaws within 60 days unless a question as to the legality of a specific bylaw or plan provision has been referred to the attorney general's office. The commissioner shall make a determination as to the application within 15 days after receipt of the requested response from the attorney general's office.

(b) After the initial application and the bylaws or plan of operation have been approved by the commissioner or at the time of the initial application, the group shall submit the names of employers that will be members of the group; an indemnity agreement providing for joint and several liability for all group members for any and all workers' compensation claims incurred by any member of the group, as set forth in Minnesota Rules, part 2780.9920, signed by an officer of each member; and an accounting review performed by a certified public accountant. A certified financial audit may be filed in lieu of an accounting review.

(c) When a group has obtained its authority to self-insure, additional applicants who wish to join the group must apply for approval by submitting: (1) an application; (2) an indemnity agreement providing for joint and several liability as set forth in Minnesota Rules, part 2780.9920, signed by an officer of the applicant; and (3) a certified financial audit performed by a certified public accountant at least 45 days before joining the group. An accounting review performed by a certified public accountant may be filed in lieu of a certified audit.

New diminutive applicants to the group, as defined in section 79A.01, subdivision 11, applying for membership in groups in existence longer than one year, who have a combined equity of all group members in excess of 15 times the last retention limit selected by the group with the workers' compensation reinsurance association, and have posted 125 percent of the group's total estimated future liability, must submit the items in this paragraph at least ten days before joining the group.

If the cumulative total of premium added to the group by diminutive new members is greater than 50 percent in a fiscal year of the group, all subsequent new members' applications must be submitted at least 45 days before joining the group.

In all cases of new membership, evidence that cash premiums equal to not less than 20 percent of the current year's modified premium of each applicant have been paid into a common claims fund, maintained by the group in a designated depository must be filed with the department at least ten days before joining the group.

Sec. 68. Minnesota Statutes 1996, section 79A.03, subdivision 7, is amended to read:

Subd. 7. [FINANCIAL STANDARDS.] A self-insurer group proposing to self-insure shall have and maintain:

(b) Sufficient assets, net worth, and liquidity to promptly and completely meet all obligations of its members under chapter 176 or this chapter. In determining whether a group is in sound financial condition, consideration shall be given to the combined net worth of the member companies; the consolidated long-term and short-term debt to equity ratios of the member companies; any excess insurance other than reinsurance with the workers' compensation reinsurance association, purchased by the group from an insurer licensed in Minnesota or from an authorized surplus line carrier; other financial data requested by the commissioner or submitted by the group; and the combined workers' compensation experience of the group for the last four years.

Sec. 69. Minnesota Statutes 1996, section 79A.03, subdivision 9, is amended to read:

Subd. 9. [FILING REPORTS.] (a) Incurred losses, paid and unpaid, specifying indemnity and medical losses by classification, payroll by classification, and current estimated outstanding liability for workers' compensation shall be reported to the commissioner by each self-insurer on a calendar year basis, in a manner and on forms available from the commissioner. Payroll information must be filed by April 1 of the following year, and loss information and total workers' compensation liability must be filed by August 1 of the following year.

(b) Each self-insurer shall, under oath, attest to the accuracy of each report submitted pursuant to paragraph (a). Upon sufficient cause, the commissioner shall require the self-insurer to submit a certified audit of payroll and claim records conducted by an independent auditor approved by the commissioner, based on generally accepted accounting principles and generally accepted auditing standards, and supported by an actuarial review and opinion of the future contingent liabilities. The basis for sufficient cause shall include the following factors: where the losses reported appear significantly different from similar types of businesses; where major changes in the reports exist from year to year, which are not solely attributable to economic factors; or where the commissioner has reason to believe that the losses and payroll in the report do not accurately reflect the losses and payroll of that employer. If any discrepancy is found, the commissioner shall require changes in the self-insurer's or workers' compensation service company record keeping practices.

(c) With the An annual loss status report due August 1, by each self-insurer shall report to the commissioner any workers' compensation claim from the previous year where the full, undiscounted value is estimated to exceed $50,000, be filed in a manner and on forms prescribed by the commissioner.

(d) Each individual self-insurer shall, within four months after the end of its fiscal year, annually file with the commissioner its latest 10K report required by the Securities and Exchange Commission. If an individual self-insurer does not prepare a 10K report, it shall file an annual certified financial statement, together with such other financial information as the commissioner may require to substantiate data in the financial statement.

(e) Each member of the group shall, within four months after the end of each fiscal year for that group, file the most recent annual financial statement, reviewed by a certified public accountant in accordance with the Statements on Standards for Accounting and Review Services, Volume 2, the American Institute of Certified Public Accountants Professional Standards, or audited in accordance with generally accepted auditing standards, together with such other financial information the commissioner may require. In addition, the group shall file, within four months after the end of each fiscal year for that group, combining financial statements of the group members, compiled by a certified public accountant in accordance with the Statements on Standards for Accounting and Review Services, Volume 2, the American Institute of Certified Public Accountants Professional Standards. The combining financial statements shall include, but not be limited to, a balance sheet, income statement, statement of changes in net worth, and statement of cash flow. Each combining financial statement shall include a column for each individual group member along with a total column.

Where a group has 50 or more members, the group shall file, in lieu of the combining financial statements, a combined financial statement showing only the total column for the entire group's balance sheet, income statement, statement of changes in net worth, and statement of cash flow. Additionally, the group shall disclose, for each member, the total assets, net worth, revenue, and income for the most recent fiscal year. The combining and combined financial statements may omit all footnote disclosures.

net loss of income, the downgrading of the company's bond rating, or any other significant change that may adversely affect the self-insurer's ability to pay expected losses. Any self-insurer that files an 8K report with the Securities and Exchange Commission shall also file a copy of the report with the commissioner within 30 days of the filing with the Securities and Exchange Commission.

Sec. 70. Minnesota Statutes 1996, section 79A.03, subdivision 10, is amended to read:

Subd. 10. [ANNUAL AUDIT AND REFUNDS.] (a) The accounts and records of the group self-insurer's fund shall be audited annually. Audits shall be made by certified public accountants, based on generally accepted accounting principles and generally accepted auditing standards, and supported by actuarial review and opinion of the future contingent liabilities, in order to determine the solvency of the self-insurer's fund. All audits required by this subdivision shall be filed with the commissioner 90 days after the close of the fiscal year for the group self-insurer. The commissioner may require a special audit to be made at other times if the financial stability of the fund or the adequacy of its monetary reserves is in question.

(b) One hundred percent of any surplus money for a fund year in excess of 125 percent of the amount necessary to fulfill all obligations under chapter 176 for that fund year may be declared refundable to a member at any time after 18 months following the end of such fund year. There can be no more than one refund in any 12-month period. When all claims of any one fund year have been fully paid, as certified by an actuary, all surplus money from that fund year may be declared refundable.

Sec. 71. Minnesota Statutes 1996, section 79A.03, is amended by adding a subdivision to read:

Subd. 13. [ANNUAL REQUIREMENTS.] The financial requirements set forth in subdivisions 3, 4, 5, and 7 must be met on an annual basis.

Sec. 72. Minnesota Statutes 1996, section 79A.06, subdivision 5, is amended to read:

Subd. 5. [PRIVATE EMPLOYERS WHO HAVE CEASED TO BE SELF-INSURED.] Private employers who have ceased to be private self-insurers shall discharge their continuing obligations to secure the payment of compensation which is accrued during the period of self-insurance, for purposes of Laws 1988, chapter 674, sections 1 to 21, by compliance with all of the following obligations of current certificate holders:

(1) Filing reports with the commissioner to carry out the requirements of this chapter;

(2) Depositing and maintaining a security deposit for accrued liability for the payment of any compensation which may become due, pursuant to chapter 176. However, if a private employer who has ceased to be a private self-insurer purchases an insurance policy from an insurer authorized to transact workers' compensation insurance in this state which provides coverage of all claims for compensation arising out of injuries occurring during the period the employer was self-insured, whether or not reported during that period, the policy will discharge the obligation of the employer to maintain a security deposit for the payment of the claims covered under the policy. The policy may not be issued by an insurer unless it has previously been approved as to form and substance by the commissioner; and

(3) Paying within 30 days all assessments of which notice is sent by the security fund, for a period of seven years from the last day its certificate of self-insurance was in effect. Thereafter, the private employer who has ceased to be a private self-insurer may either: (a) continue to pay within 30 days all assessments of which notice is sent by the security fund until it has no incurred liabilities for the payment of compensation arising out of injuries during the period of self-insurance; or (b) pay the security fund a cash payment equal to four percent of the net present value of all remaining incurred liabilities for the payment of compensation under sections 176.101 and 176.111 as certified by a member of the casualty actuarial society. Assessments shall be based on the benefits paid by the employer during the calendar year immediately preceding the calendar year in which the employer's right to self-insure is terminated or withdrawn.

notification of approval of the actuarial opinion by the commissioner, the member shall pay to the security fund an amount equal to 120 percent of that discounted outstanding indemnity liability, multiplied by the greater of the average annualized assessment rate since inception of the security fund or the annual rate at the time of the most recent assessment before termination.

(5) A former member who terminated its self-insurance authority before the effective date of this clause who has paid assessments to the self-insurers' security fund for seven years, and whose annualized assessment is $500 or less, may buy out of its outstanding liabilities to the self-insurers' security fund by an amount calculated as follows: 1.35 multiplied by the indemnity case reserves at the time of the calculation, multiplied by the then current self-insurers' security fund annualized assessment rate.

(6) A former member who terminated its self-insurance authority before the effective date of this clause, and who is paying assessments within the first seven years after ceasing to be self-insured under clause (3), may elect to buy out its outstanding liabilities to the self-insurers' security fund by obtaining and filing with the commissioner an actuarial opinion of its outstanding liabilities as determined by an associate or fellow of the Casualty Actuarial Society. The opinion must separate liability for indemnity benefits from liability from medical benefits, and must discount each up to four percent per annum to net present value. Within 30 days after notification of approval of the actuarial opinion by the commissioner, the member shall pay to the security fund an amount equal to 120 percent of that discounted outstanding indemnity liability, multiplied by the greater of the average annualized assessment rate since inception of the security fund or the annual rate at the time of the most recent assessment.

(7) A former member who has paid the security fund according to clauses (4) to (6) and subsequently receives authority from the commissioner to again self-insure shall be assessed under section 79A.12, subdivision 2, only on indemnity benefits paid on injuries that occurred after the former member received authority to self-insure again; provided that the member furnishes verified data regarding those benefits to the security fund.

In addition to proceedings to establish liabilities and penalties otherwise provided, a failure to comply may be the subject of a proceeding before the commissioner. An appeal from the commissioner's determination may be taken pursuant to the contested case procedures of chapter 14 within 30 days of the commissioner's written determination.

Any current or past member of the self-insurers' security fund is subject to service of process on any claim arising out of chapter 176 or this chapter in the manner provided by section 5.25, or as otherwise provided by law. The issuance of a certificate to self-insure to the private self-insured employer shall be deemed to be the agreement that any process which is served in accordance with this section shall be of the same legal force and effect as if served personally within this state.

Sec. 73. Minnesota Statutes 1996, section 79A.21, subdivision 2, is amended to read:

Subd. 2. [REQUIRED DOCUMENTS.] All first year applications must be accompanied by the following:

(a) A detailed business plan including the risk profile of the proposed membership, underwriting guidelines, marketing plan, minimum financial criteria for each member, and financial projections for the first year of operation.

(b) A plan describing the method in which premiums are to be charged to the employer members. The plan shall be accompanied by copies of the member's workers' compensation insurance policies in force at the time of application. In developing the premium for the group, the commercial self-insurance group shall base its premium on the Minnesota workers' compensation insurers association's manual of rules, loss costs, and classifications approved for use in Minnesota by the commissioner. Each member applicant shall, on a form approved by the commissioner, complete estimated payrolls for the first 12-month period that the applicant will be self-insured. Premium volume discounts per the plan will be permitted if they can be shown to be consistent with actuarial standards.

(d) An indemnity agreement from each member who will participate in the commercial self-insurance group, signed by an officer of each member, providing for joint and several liability for all claims and expenses of all of the members of the commercial self-insurance group arising in any fund year in which the member was a participant on a form approved by the commissioner. The indemnity agreement shall provide for assessments according to the group's bylaws on an individual and proportionate basis.

(e) A copy of the commercial self-insurance group bylaws.

(f) Evidence of the security deposit required under section 79A.24, accompanied by the actuarial certification study for the minimum security deposit as required under section 79A.24.

(g) Each initial member of the commercial self-insurance group shall submit to the commercial self-insurance group accountant its most recent annual financial statement. Financial statements for a period ending more than six months prior to the date of the application must be accompanied by an affidavit, signed by a company officer under oath, stating that there has been no material lessening of the net worth nor other adverse changes in its financial condition since the end of the period. Individual group members constituting at least 75 percent of the group's annual premium shall submit reviewed or audited financial statements. The remaining members may submit compilation level statements. Statements for a period ending more than 12 months prior to the date of application cannot be accepted.

(h) A compiled combined financial statement of all group members prepared by the commercial self-insurance group's accountant and a list of members included in such statements.

(i) A copy of each member's accountant's report letter from the reports used in compiling the combined financial statements.

(j) A list of all members and the percentage of premium each represents to the total group's annual premium for the policy year.

Sec. 74. Minnesota Statutes 1996, section 79A.22, subdivision 7, is amended to read:

Subd. 7. [INVESTMENTS.] (a) Any securities purchased by the common claims fund shall be in such denominations and with dates of maturity to ensure securities may be redeemable at sufficient time and in sufficient amounts to meet the fund's current and long-term liabilities.

(b) Cash assets of the common claims fund may be invested in the following securities:

(1) direct obligations of the United States government, except mortgage-backed securities of the Government National Mortgage Association;

(2) bonds, notes, debentures, and other instruments which are obligations of agencies and instrumentalities of the United States including, but not limited to, the federal National Mortgage Association, the federal Home Loan Mortgage Corporation, the federal Home Loan Bank, the Student Loan Marketing Association, and the Farm Credit System, and their successors, but not including collateralized mortgage obligations or mortgage pass-through instruments;

(3) bonds or securities that are issued by the state of Minnesota and that are secured by the full faith and credit of the state;

(4) certificates of deposit which are insured by the federal Deposit Insurance Corporation and are issued by a Minnesota depository institution;

(5) obligations of, or instruments unconditionally guaranteed by, Minnesota depository institutions whose long-term debt rating is at least AA-, or Aa3, or their equivalent by at least two nationally recognized rating agencies.

(b) Cash assets of the self-insurer's fund may be invested as provided in section 60A.11 for a casualty insurance company, provided that investment in real estate of or indebtedness from any member company or affiliates prohibited. In addition, investment in the following is allowed:

(2) share accounts or savings certificates in a duly chartered savings and loan association located within the state of Minnesota and insured through the Federal Savings and Loan Insurance Corporation;

(3) direct obligations of the United States Treasury, such as notes, bonds, or bills;

(4) a bond or security issued by the state of Minnesota and backed by the full faith and credit of the state;

(5) a credit union where the employees of the self-insurer are members if the credit union is located in Minnesota, licensed by the state of Minnesota, and insured through the Federal Deposit Insurance Corporation; or

(6) real estate, common stock, preferred stock, or corporate bonds listed on the New York, American Stock Exchange or NASDAQ Stock Market, so long as these investments are not issued by any member company or affiliate and the total in all other allowable categories make up at least 75 percent of the total required in the common claims fund.

Sec. 75. Minnesota Statutes 1996, section 79A.22, is amended by adding a subdivision to read:

Subd. 13. [COMMON CLAIMS FUND; FIVE-YEAR EXCEPTION.] For commercial group self-insurers who have been in existence for five years or more, a level of funding in the common claims fund must be maintained at not less than the greater of either:

(1) one year's claim losses paid in the most recent year; or

(2) one-third of the security deposit posted with the department of commerce according to section 79A.24, subdivision 2.

This provision supersedes any requirements under subdivisions 11 and 12 and Minnesota Rules, part 2780.5000.

Sec. 76. Minnesota Statutes 1996, section 79A.23, subdivision 1, is amended to read:

Subdivision 1. [REQUIRED REPORTS TO COMMISSIONER.] Each commercial self-insurance group shall submit the following documents to the commissioner.

(a) An annual report shall be submitted by April 1 showing the incurred losses, paid and unpaid, specifying indemnity and medical losses by classification, payroll by classification, and current estimated outstanding liability for workers' compensation on a calendar year basis, in a manner and on forms available from the commissioner. In addition each group will submit a quarterly interim loss report showing incurred losses for all its membership.

(b) Each commercial self-insurance group shall submit within 45 days of the end of each quarter:

(1) a schedule showing all the members who participate in the group, their date of inception, and date of withdrawal, if applicable;

(2) a separate section identifying which members were added or withdrawn during that quarter; and

(3) an internal financial statement and copies of the fiscal agent's statements supporting the balances in the common claims fund.

(c) The commercial self-insurance group shall submit an annual certified financial audit report of the commercial self-insurance group fund by April 1 of the following year. The report must be accompanied by an expense schedule showing the commercial self-insurance group's operational costs for the same year including service company charges, accounting and actuarial fees, fund administration charges, reinsurance premiums, commissions, and any other costs associated with the administration of the group program.

commissioner, based on generally accepted accounting principles and generally accepted auditing standards, and supported by an actuarial review and opinion of the future contingent liabilities. The basis for sufficient cause shall include the following factors:

(1) where the losses reported appear significantly different from similar types of groups;

(2) where major changes in the reports exist from year to year, which are not solely attributable to economic factors; or

(3) where the commissioner has reason to believe that the losses and payroll in the report do not accurately reflect the losses and payroll of the commercial self-insurance group.

If any discrepancy is found, the commissioner shall require changes in the commercial self-insurance group's business plan or service company recordkeeping practices.

(e) Each commercial self-insurance group shall submit by August September 15 a copy of the group's annual federal and state income tax returns or provide proof that it has received an exemption from these filings.

(f) With the annual loss report each commercial self-insurance group shall report to the commissioner any worker's compensation claim where the full, undiscounted value is estimated to exceed $50,000, in a manner and on forms prescribed by the commissioner.

(g) Each commercial self-insurance group shall submit by May 1 a list of all members and the percentage of premium each represents to the total group's premium for the previous calendar year.

(h) Each commercial self-insurance group shall submit by May 1 the following documents prepared by the group's certified public accountant:

(1) a compiled combined financial statement of group members and a list of members included in this statement; and

(2) a report that the statements which were combined have met the requirements of subdivision 2.

(i) If any group member comprises over 25 percent of total group premium, that member's financial statement must be reviewed or audited, and must be submitted to the commissioner, at the commissioner's option, must be filed with the department of commerce by May 1 of the following year.

(j) Each commercial self-insurance group shall submit a copy of each member's accountant's report letter from the reports used in compiling the combined financial statements.

Sec. 77. Minnesota Statutes 1996, section 79A.23, subdivision 2, is amended to read:

Subd. 2. [REQUIRED REPORTS FROM MEMBERS TO GROUP.] Each member of the commercial self-insurance group shall, by April 1, submit to the group its most recent annual financial statement, together with other financial information the group may require. These financial statements submitted must not have a fiscal year end date older than January 15 of the group's calendar year end. Individual group members constituting at least 75 50 percent of the group's annual premium shall submit to the group reviewed or audited financial statements. The remaining members may submit compilation level statements.

Sec. 78. Minnesota Statutes 1996, section 79A.24, subdivision 1, is amended to read:

Sec. 79. Minnesota Statutes 1996, section 79A.24, subdivision 2, is amended to read:

Subd. 2. [MINIMUM DEPOSIT.] The minimum deposit is 150 percent of the commercial self-insurance group's estimated future incurred liabilities liability for the payment of compensation as determined by an actuary. If all the members of the commercial self-insurance group have submitted reviewed or audited financial statements to the group's accountant, this minimum deposit shall be 110 percent of the commercial self-insurance group's estimated future incurred liabilities liability for the payment of workers' compensation as determined by an actuary. The group must file a letter with the commissioner from the group's accountant which confirms that the compiled combined financial statements were prepared from members reviewed or audited financial statements only before the lower security deposit is allowed. Each actuarial study shall include a projection of future losses during a one-year period until the next scheduled actuarial study, less payments anticipated to be made during that time. Deduction should be made for the total amount which is estimated to be returned to the commercial self-insurance group from any specific excess insurance coverage, aggregate excess insurance coverage, and any supplementary benefits which are estimated to be reimbursed by the special compensation fund. Supplementary benefits will not be reimbursed by the special compensation fund unless the special compensation fund assessment pursuant to section 176.129 is paid and the required reports are filed with the special compensation fund. In the case of surety bonds, bonds shall secure administrative and legal costs in addition to the liability for payment of compensation reflected on the face of the bond. In no event shall the security be less than the group's selected retention limit of the workers' compensation reinsurance association. The posting or depositing of security under this section shall release all previously posted or deposited security from any obligations under the posting or depositing and any surety bond so released shall be returned to the surety. Any other security shall be returned to the depositor or the person posting the bond.

Sec. 80. Minnesota Statutes 1996, section 79A.24, subdivision 4, is amended to read:

Subd. 4. [CUSTODIAL ACCOUNTS.] (a) All surety bonds, irrevocable letters of credit, and documents showing issuance of any irrevocable letter of credit shall be deposited in accordance with the provisions of section 79A.071.

(b) Upon the commissioner sending a request to renew, request to post, or request to increase a security deposit, a perfected security interest is created in the commercial self-insurance group's and member's assets in favor of the commissioner to the extent of any then unsecured portion of the commercial self-insurance group's incurred liabilities. The perfected security interest is transferred to any cash or securities thereafter posted by the commercial self-insurance group with the state treasurer and is released only upon either of the following:

(1) the acceptance by the commissioner of a surety bond or irrevocable letter of credit for the full amount of the incurred liabilities for the payment of compensation; or

(2) the return of cash or securities by the commissioner. The commercial self-insurance group loses all right, title, and interest in and any right to control all assets or obligations posted or left on deposit as security. In the event of a declaration of bankruptcy or insolvency by a court of competent jurisdiction, or in the event of the issuance of a certificate of default by the commissioner, the commissioner shall liquidate the deposit as provided in this chapter, and transfer it to the commercial self-insurance group security fund for application to the commercial self-insurance group's incurred liability.

(c) No securities in physical form on deposit with the state treasurer or the commissioner or custodial accounts assigned to the state shall be released or exchanged without an order from the commissioner. No security can be exchanged more than once every 90 days.

(d) Any securities deposited with the state treasurer or with a custodial account assigned to the state treasurer or letters of credit or surety bonds held by the commissioner may be exchanged or replaced by the depositor with any other acceptable securities or letters of credit or surety bond of like amount so long as the market value of the securities or amount of the surety bonds or letter of credit equals or exceeds the amount of the deposit required. If securities are replaced by surety bond, the commercial self-insurance group must maintain securities on deposit in an amount sufficient to meet all outstanding workers' compensation liability arising during the period covered by the deposit of the replaced securities.

Sec. 81. Minnesota Statutes 1996, section 79A.26, subdivision 2, is amended to read:

Subd. 2. [BOARD OF TRUSTEES.] The commercial security fund shall be governed by a board consisting of a minimum of three and maximum of five trustees. The trustees shall be representatives of commercial self-insurance groups who shall be elected by the participants of the commercial security fund, each group having one vote. The trustees initially elected by the participants shall serve staggered terms of either two or three years. Thereafter, trustees shall be elected to three-year terms and shall serve until their successors are elected and assume office pursuant to the bylaws of the commercial security fund. Two additional trustees shall be appointed by the commissioner. These trustees shall serve four-year terms. Initially, one of these trustees shall serve a two-year term. Thereafter, the trustees shall be appointed to four-year terms, and shall serve until their successors are appointed and assume office according to the bylaws of the commercial security fund. In addition to the trustees elected by the participants or appointed by the commissioner, the commissioner of labor and industry or the commissioner's designee shall be an ex officio, nonvoting member of the board of trustees. A member of the board of trustees may designate another person to act in the member's place as though the member were acting and the designee's actions shall be deemed those of the member.

Sec. 82. Minnesota Statutes 1996, section 79A.31, subdivision 1, is amended to read:

Subdivision 1. [WITHDRAWAL.] Any group self-insurer that is a member as of August 1, 1995, of the self-insurers' security fund established under section 79A.09, may until January 1, 1996, elect to withdraw from that fund and become a member of the commercial self-insurance group security fund established under section 79A.26. The transferring group shall be subject to the provisions and requirements of sections 79A.19 to 79A.32 as of the date of transfer. Additional security may be required pursuant to section 79A.24. Group self-insurers electing to transfer to the commercial self-insurance group fund shall not be subject to the provisions of section 79A.06, subdivision 5, including, but not limited to, assessments by the self-insurers' security fund. Notice of transfer must be filed by November 1 for all transfers that must be effective at midnight on December 31.

Sec. 83. [WARRANTY PRODUCTS AND EXTENDED SERVICE CONTRACTS; STUDY.]

The commissioner of commerce shall conduct a study to determine the appropriate regulatory framework for warranty products and extended service contracts offered for sale in Minnesota.

The commissioner shall make a written report to the legislature on or before February 15, 1998, discussing the types of warranty and extended service contracts available to Minnesota consumers. The report must also include recommendations as to how these products should be regulated in Minnesota, including a discussion as to when these products should be regulated as insurance. In examining these issues, the commissioner may seek the advice of representatives from the attorney general's office, the retail merchants industry, public utilities, and the insurance industry.

Sec. 84. [APPLICATION.]

(a) Section 27, subdivision 2, applies to a suit based in whole or in part on an alleged act, error, or omission that takes place on or after the effective date of the section.

(b) No legal action lies against the receiver or any employee based in whole or in part on any alleged act, error, or omission that took place before the effective date of the section, unless suit is filed and valid service of process is obtained within 12 months after the effective date of the section.

(c) Section 27, subdivisions 3 to 5, apply to a suit that is pending on or filed after the effective date of the section without regard to when the alleged act, error, or omission took place.

(d) Section 30 applies to all contracts entered into, renewed, extended, or amended on or after its effective date and to obligations arising from any business written or transaction occurring covered by reinsurance after the effective date according to any contract including those in existence before the effective date.

Sec. 85. [REPEALER.]

Sec. 86. [EFFECTIVE DATE.]

Sections 1, 2, 24, 26, 37, 41, 47, 49, 51, 54, 56, 62, and 81 are effective the day after final enactment.

Sections 31 to 35 are effective the day following final enactment and apply to all insurers in liquidation on or after that date and to all insolvencies occurring on or after that date.

Sections 38, 39, and 42 are effective January 1, 1998."

Delete the title and insert:

"A bill for an act relating to insurance; regulating companies and agents; providing immunity from suit and indemnification for receivers and their employees; regulating coverages; providing certain notices and filing requirements; providing for a study; making certain technical changes; amending Minnesota Statutes 1996, sections 60A.02, subdivision 1a, and by adding a subdivision; 60A.052, subdivision 2, and by adding a subdivision; 60A.06, subdivisions 1 and 2; 60A.075, subdivisions 1, 8, and 9; 60A.077, subdivisions 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, and by adding a subdivision; 60A.092, subdivision 6; 60A.10, subdivision 1; 60A.111, subdivision 1; 60A.13, subdivision 1; 60A.19, subdivision 1; 60B.04, by adding a subdivision; 60B.21, subdivision 2; 60B.25; 60B.44, subdivisions 2, 4, 6, and by adding subdivisions; 60D.20, subdivision 2; 60K.02, subdivision 1; 60K.03, subdivisions 2 and 3; 60K.14, subdivision 4; 60K.19, subdivisions 7 and 8; 61A.28, subdivisions 6, 9a, and 12; 61A.32; 61A.60, subdivision 1; 61B.19, subdivision 3; 62A.04, subdivision 3; 62A.135, subdivision 5; 62A.50, subdivision 3; 62B.04, subdivision 2; 62E.12; 65A.01, subdivision 3, and by adding a subdivision; 65A.27, subdivision 4; 65A.29, subdivision 4; 65B.48, subdivision 5; 67A.231; 72A.20, subdivision 34; 72B.04, subdivision 10; 79A.01, subdivision 10, and by adding a subdivision; 79A.02, subdivisions 1 and 4; 79A.03, subdivisions 6, 7, 9, 10, and by adding a subdivision; 79A.06, subdivision 5; 79A.21, subdivision 2; 79A.22, subdivision 7, and by adding a subdivision; 79A.23, subdivisions 1 and 2; 79A.24, subdivisions 1, 2, and 4; 79A.26, subdivision 2; and 79A.31, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 60B; and 65B; repealing Minnesota Statutes 1996, sections 60A.11, subdivision 24a; 60B.36; 60B.44, subdivision 3; 65A.29, subdivision 12; and 79A.04, subdivision 8."

With the recommendation that when so amended the bill pass.

The report was adopted.

Wenzel from the Committee on Agriculture to which was referred:

H. F. No. 748, A bill for an act relating to agriculture; appropriating money for wheat and barley scab research.

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

The report was adopted.

Anderson, I., from the Committee on Financial Institutions and Insurance to which was referred:

subdivision 1; 52.04, subdivision 2a, and by adding a subdivision; 52.062, subdivision 1, and by adding a subdivision; 52.063; 52.064, by adding a subdivision; 52.201; 53.04, by adding a subdivision; 53.05; 53.09, subdivision 2a; 55.06, subdivision 1; 56.07; 56.10, subdivision 1; 56.131, subdivisions 1 and 4; 59A.08, subdivision 3, and by adding a subdivision; 59A.11, subdivisions 2 and 3; 62B.04, subdivision 1; 300.20, subdivision 2; 303.25, subdivision 5; 332.21; 332.23, subdivisions 2 and 5; proposing coding for new law in Minnesota Statutes, chapter 48; repealing Minnesota Statutes 1996, sections 13.99, subdivision 13; 47.29; 47.31; 47.32; 48.185, subdivision 5; 49.47; 49.48; 50.03; 50.23; and 59A.14.

Reported the same back with the following amendments:

Page 3, line 5, before the comma, insert "operating under section 53.04, subdivision 5"

Page 3, line 6, delete the new language

Page 5, line 12, strike "seventh" and insert "fifth"

Page 5, line 17, after the period, insert "The lender or mortgage broker shall, with respect to mortgages made on or after August 1, 1997, inform an applicant for a mortgage of the applicant's rights under this paragraph."

Page 5, line 23, strike "seventh" and insert "fifth"

Page 6, delete line 3

Page 6, line 4, delete "account,"

Page 6, delete section 8 and insert:

"Sec. 8. Minnesota Statutes 1996, section 47.20, subdivision 14, is amended to read:

Subd. 14. (a) A lender requiring or offering private mortgage insurance shall make available to the borrower or other person paying the insurance premium the same premium payment plans as are available to the lender in paying the private mortgage insurance premium.

(b) Any refund or rebate for unearned private mortgage insurance premiums shall be paid to the borrower or other person actually providing the funds for payment of the premium.

(c) With regard to first mortgage loans made before, on, or after January 1, 1997, the mortgagor shall have the right to elect, in writing, to cancel borrower-purchased private mortgage insurance if all of the following terms and conditions have been met:

(1) if the current unpaid principal balance of a first mortgage is 75 percent or less of the current fair market appraised value of the property. "Current fair market appraised value" shall be based upon a current appraisal by a real estate appraiser licensed or certified by the appropriate state or federal agency and reasonably acceptable to the lender. The lender may require the mortgagor to pay for the appraisal;

(2) the mortgagor's monthly installments of principal, interest, and escrow obligations have not been more than 30 days past due over the 24-month period immediately preceding the request for cancellation and all accrued late charges have been paid;

(3) the mortgage was made at least 24 months prior to the receipt of a request for cancellation of private mortgage insurance;

(4) the property securing the mortgage is owner-occupied; and

(d) Other than the appraisal fee allowed pursuant to paragraph (c), clause (1), the lender shall not charge the borrower a fee or other consideration for cancellation of the private mortgage insurance.

(e) A lender requiring private mortgage insurance shall, after the payment of the 24th monthly premium installment of private mortgage insurance, provide an annual written notice to each mortgagor currently paying premiums for private mortgage insurance. The notice may be included in the annual statement or may be included in other regular mailings to the mortgagor. For mortgage loans made prior to January 1, 1997, the first required annual notice must be provided no later than January 1, 1998. The annual notice shall be on its own page, unless included in a private mortgage insurance notice required under the federal Real Estate Settlement Procedures Act, and shall appear substantially as follows:

If you currently pay private mortgage insurance premiums, you may have the right to cancel the insurance and cease paying premiums. This would permit you to make a lower total monthly mortgage payment. In most cases, you have the right to cancel private mortgage insurance if the principal balance of your loan is 80 percent or less of the current fair market appraised value of your home. If you wish to learn whether you are eligible to cancel this insurance, please contact us at (address/phone)."

(f) If a mortgage loan governed by paragraph (c) is serviced in accordance with the guidelines of either the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, the lender shall cancel private mortgage insurance in accordance with the cancellation guidelines of the applicable entity in effect at the time the request for cancellation is received."

Page 8, delete section 11 and insert:

"Sec. 11. Minnesota Statutes 1996, section 47.59, subdivision 1, is amended to read:

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 a 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.

to the terms of the arrangement by transmitting information contained on the card or device orally, in writing, by 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 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.;

(4) fees paid by a borrower to a broker, provided the financial institution or a person described in subdivision 4 does not require use of the broker to obtain credit; or

(5) a commission, expense reimbursement, or other sum received by a financial institution or a person described in subdivision 4 in connection with insurance described in subdivision 6.

(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.

(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;

(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, 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."

Page 11, lines 29 to 36, delete the new language and insert "A financial institution shall give the following disclosure to the borrower in writing at the time an open-end credit account is established if the financial institution imposes a loan fee, points, or similar charge that relates to the opening of the account which is not included in the annual percentage rate given pursuant to the federal Truth in Lending Act: "YOU HAVE BEEN ASSESSED FINANCE CHARGES, OR POINTS, WHICH ARE NOT INCLUDED IN THE ANNUAL PERCENTAGE RATE. THESE CHARGES MAY BE REFUNDED, IN WHOLE OR IN PART, IF YOU DO NOT USE YOUR LINE OF CREDIT OR IF YOU REPAY YOUR LINE OF CREDIT EARLY. THESE CHARGES INCREASE THE COST OF YOUR CREDIT.""

Pages 12 to 17, delete sections 13 and 14

Pages 19 and 20, delete sections 19 and 20

Page 23, line 1, delete the comma and insert "and"

Page 23, line 2, delete everything after "office"

Page 23, line 30, after the semicolon, insert "and"

Page 23, line 31, delete everything after "office"

Page 23, line 32, delete everything before the period

Page 33, line 34, delete "group" and insert "groups"

Page 47, after line 31, insert:

"Sec. 51. Minnesota Statutes 1996, section 325F.68, subdivision 2, is amended to read:

Subd. 2. "Merchandise" means any objects, wares, goods, commodities, intangibles, real estate, loans, or services."

Page 49, line 32, delete "48.185, subdivision 5;"

Page 49, delete lines 35 and 36 and insert "Sections 1, 4 to 6, 9, 10, 13 to 18, 22 to 48, 50, and 52 to 55 are effective the day following final enactment."

Page 50, delete lines 1 to 4

Renumber the sections in sequence

Amend the title as follows:

Page 1, line 12, delete "subdivision 9" and insert "subdivisions 9 and 14" and delete "47.51;"

Page 1, line 13, delete "3, 12, and by adding subdivisions" and insert "1 and 12"

Page 1, line 15, delete "48.185,"

Page 1, line 16, delete "subdivisions 3 and 4;"

Page 1, line 28, before "332.21;" insert "325F.68, subdivision 2;"

Page 1, line 32, delete "48.185, subdivision 5;"

With the recommendation that when so amended the bill pass.

The report was adopted.

Rest from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 771, A bill for an act relating to economic development; modifying requirements of the contamination cleanup grant program; providing for redevelopment and job creation grants; appropriating money; amending Minnesota Statutes 1996, sections 116J.553, subdivision 2; and 116J.554, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 116J.

Reported the same back with the following amendments:

Page 4, line 4, before "installation" insert "and" and delete everything after "infrastructure"

Page 4, line 5, delete everything before the period

Page 7, line 11, delete "$60,000,000" and insert "$......." and delete "lottery" and insert "general"

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

The report was adopted.

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

H. F. No. 799, A bill for an act relating to taxation; property tax; modifying the taxation of certain wind energy conversion systems; permitting the recovery through rates of certain property tax payments; amending Minnesota Statutes 1996, sections 216B.16, by adding a subdivision; and section 272.02, subdivision 1.

Reported the same back with the following amendments:

Page 1, line 16, before "county" insert "Minnesota"

Page 1, line 17, after the second "facility" insert "located in Minnesota"

Page 1, line 23, before "county" insert "Minnesota" and after "facility" inserted "located in Minnesota"

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

The report was adopted.

Rest from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 809, A bill for an act relating to economic development; regulating regional development commissions; amending Minnesota Statutes 1996, sections 462.381; 462.383; 462.384, subdivision 5; 462.385; 462.386, subdivision 1; 462.387; 462.388; 462.389, subdivisions 1, 3, and 4; 462.39, subdivisions 2 and 3; 462.391, subdivision 5, and by adding subdivisions; 462.393; 462.394; 462.396; and 462.398; repealing Minnesota Statutes 1996, sections 462.384, subdivision 7; 462.385, subdivision 2; 462.389, subdivision 5; 462.391, subdivisions 1, 2, 3, 4, 6, 7, 8, and 9; and 462.392.

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

The report was adopted.

Rest from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 812, A bill for an act relating to property taxation; local performance aid; modifying eligibility requirements; allowing for participation by school districts; amending Minnesota Statutes 1996, section 477A.05.

Reported the same back with the following amendments:

Page 2, after line 31, insert:

responsible for providing the services or substantively changes the method for providing services, the jurisdiction's population will be increased by a factor of 1.5 for the purposes of this subdivision. If the program is both collaborative and efficient, or both collaborative and innovative, the jurisdiction's population will be increased by a factor of two for the purposes of this subdivision. The jurisdiction shall indicate on its application whether it qualifies for treatment under this paragraph."

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

The report was adopted.

Munger from the Committee on Environment and Natural Resources to which was referred:

H. F. No. 880, A bill for an act relating to the environment; reactivating and reorganizing the nuclear waste council; modifying provisions relating to dry cask storage of nuclear waste; appropriating money; amending Minnesota Statutes 1996, sections 116C.711, subdivisions 1 and 2; 116C.712, subdivisions 1, 2, and 5; and 116C.771; repealing Minnesota Statutes 1996, section 116C.80.

Reported the same back with the following amendments:

Page 3, delete lines 17 to 19

Page 3, line 20, delete "(4)" and insert "(3)"

Page 3, line 27, delete "(5)" and insert "(4)"

Page 3, line 30, delete "(6)" and insert "(5)"

Page 4, line 2, delete "(7)" and insert "(6)"

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

The report was adopted.

Jaros from the Committee on Economic Development and International Trade to which was referred:

H. F. No. 889, A bill for an act relating to housing; providing for changes in rights of parties to mobile home park rentals; amending Minnesota Statutes 1996, sections 327C.07, subdivision 2; and 327C.09, subdivision 4.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1996, section 327C.02, subdivision 5, is amended to read:

State law provides special rules for the owners, residents, and prospective residents of manufactured home parks.

You may keep your home in the park as long as the park is in operation and you meet your financial obligations, obey state and local laws which apply to the park, obey reasonable park rules, do not substantially annoy or endanger the other residents or substantially endanger park personnel and do not substantially damage the park premises. You may not be evicted or have your rent increased or your services cut for complaining to the park owner or to a governmental official.

If you receive an eviction notice and do not leave the park, the park owner may take you to court. If you lose in court, a sheriff may remove you and your home from the park within seven days. Or, the court may require you to leave the park within seven days but give you 60 days to sell the home within the park.

If you receive an eviction notice for a new or amended rule and the court finds the rule to be reasonable and not a substantial modification of your original agreement, the court will not order you to leave but will order you to comply with the rule within ten days. If you do not comply within the time given or if you violate the rule at a later time, you will be subject to eviction.

All park rules and policies must be reasonable. Your rent may not be increased more than twice a year. Changes made in park rules after you become a park resident will not apply to you if they substantially change your original agreement.

The park may not charge you an entrance fee.

The park may require a security deposit, but the deposit must not amount to more than two months rent.

You have a right to sell the home in the park. But the sale is not final until the park owner approves the buyer as a new resident, and you must advise in writing anyone who wants to buy your home that the sale is subject to final approval by the park owner.

The park must provide to you, in writing, the procedures and criteria used to evaluate a prospective resident. If your application is denied, you can request, in writing, the reason why.

You must also disclose in writing certain safety information about your home to anyone who wants to buy it in the park. You must give this information to the buyer before the sale, in writing, on the form that is attached to this notice. You must completely and accurately fill out the form and you and the buyer should each keep a copy.

Your rental agreement and the park rules contain important information about your rights and duties. Read them carefully and keep a copy.

You must be given a copy of the shelter or evacuation plan for the park. This document contains information on where to seek shelter in times of severe weather conditions. You should carefully review the plan and keep a copy.

By February 1 of each year, the park must give you a certificate of rent constituting property taxes as required by Minnesota Statutes, section 290A.19.

For further information concerning your rights, consult a private attorney. The state law governing the rental of lots in manufactured home parks may also be enforced by the Minnesota Attorney General."

In addition, the safety feature disclosure form required under section 327C.07, subdivision 3a, must be attached to the notice.

Sec. 2. Minnesota Statutes 1996, section 327C.07, subdivision 2, is amended to read:

Subd. 2. [PARK OWNER'S RIGHTS.] Any in park sale is subject to the park owner's approval of the buyer as a resident. A park owner may not deny a prospective buyer approval as a resident unless:

(b) the written disclosure required by clause (a) is made included with the rental application and is available on request at no charge to residents, prospective buyers, and their agents;

(c) the park owner is available to the prospective buyer at reasonable times if the park owner requires the prospective buyer to apply or be interviewed in person;

(d) all the specified procedures and criteria are reasonable and applied uniformly;

(e) in evaluating a prospective buyer, the park owner does not use any stricter standards than it uses for evaluating other prospective residents;

(f) the park owner does not deny tenancy to a prospective buyer for any reason prohibited by federal, state or local law;

(g) within 14 days of receiving a completed application form, the park owner makes a decision or gives the prospective buyer and the seller a written explanation of the specific reasons for the delay and makes a decision as soon as practicable;

(h) if the park owner denies tenancy to a prospective buyer, the park owner gives the prospective buyer a written explanation of the denial within three days of receiving a written request for an explanation; and

(i) the decision to deny tenancy is reasonable in light of the criteria set forth in section 327C.01, subdivision 8.

Sec. 3. Minnesota Statutes 1996, section 327C.09, subdivision 4, is amended to read:

Subd. 4. [RULE VIOLATIONS.] The resident fails to comply with a rule within 30 days after receiving written notice of the alleged noncompliance, except the 30-day notice requirement does not apply to nonpayment of rent. To be effective, the notice must specify the date, approximate time, and nature of the alleged rule violation. Loud noise created by residents, guests, or their equipment is a rule violation. After written notice has been provided for two prior incidents, loud noise is a violation of subdivision 5."

Amend the title as follows:

Page 1, line 4, after "sections" insert "327C.02, subdivision 5;"

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Commerce, Tourism and Consumer Affairs.

The report was adopted.

Jefferson from the Committee on Labor-Management Relations to which was referred:

H. F. No. 892, A bill for an act relating to wages; raising the minimum wage; amending Minnesota Statutes 1996, section 177.24, subdivision 1.

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

The report was adopted.

Wagenius from the Committee on Transportation and Transit to which was referred:

Reported the same back with the following amendments:

Page 1, line 26, strike "and" and insert "or"

Page 2, line 7, delete "meeting the description"

Page 2, line 8, delete "in paragraph (a) using any street or highway" and insert "used in livestock raising operations"

Page 2, line 10, delete "and operated solely by" and insert "or under the control of"

Page 2, lines 11 and 36, delete "35" and insert "30"

Page 3, lines 7 and 15, delete "35" and insert "30"

Page 4, line 23, delete "35" and insert "30"

Page 4, line 25, after "farmer" insert "or implement dealer"

Page 4, line 27, after "farmland" insert "or implement dealership"

Page 4, line 28, after "farmer" insert "or implement dealer" in both places

Page 4, line 29, after "uses" insert "or sells or leases"

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

The report was adopted.

Wenzel from the Committee on Agriculture to which was referred:

H. F. No. 913, A bill for an act relating to agriculture; providing an appropriation for livestock odor research; appropriating money.

Reported the same back with the following amendments:

Page 1, line 12, delete "recommended" and insert "information tools to be provided to local units of government to create"

Page 1, line 14, delete "and"

Page 1, line 18, before the period, insert "; and

(4) provisions for rating the efficacy of new odor-reduction technologies. Applicants for a rating under this clause must pay for the research necessary to provide the rating to be used in marketing their new technology"

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

The report was adopted.

Anderson, I., from the Committee on Financial Institutions and Insurance to which was referred:

certain enrollees; prohibiting certain exclusive arrangements; appropriating money; amending Minnesota Statutes 1996, section 181.932, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 62J; and 62Q; repealing Minnesota Statutes 1996, sections 62Q.105, subdivisions 2, 3, 4, and 8; and 62Q.11.

Reported the same back with the following amendments:

Page 4, delete line 36

Page 5, delete lines 1 to 25

Renumber remaining subdivisions of section 4

Page 18, after line 32, insert:

"Sec. 16. [62Q.63] [DISCLOSURE OF CERTAIN FINANCIAL ARRANGEMENTS.]

Subdivision 1. [GENERAL REQUIREMENT.] No health plan company as defined in section 62Q.01, subdivision 4, shall offer, sell, issue, or renew a health plan, as defined in section 62Q.01, subdivision 3, to an enrollee or prospective enrollee without providing to the enrollee or prospective enrollee a disclosure statement that meets the requirements of subdivision 2. The disclosure statement must be provided at least annually.

Subd. 2. [CONTENTS AND FORM OF DISCLOSURE.] (a) The disclosure statement required in subdivision 1 must disclose and explain clearly to the enrollee or prospective enrollee any financial arrangements between the health plan company and any health care provider that in any way make it advantageous for the health care provider to minimize or restrict the health care provided to enrollees under the health plan. Financial arrangements to which this section applies include, but are not limited to, capitation, withhold arrangements, utilization standards used to evaluate health care providers, arrangements in which health care providers are subject to terms of compensation or contract renewal in a future time period that penalize the health care providers for providing care to enrollees in the current time period, and any other arrangement that may have the potential to create a conflict between the best interest of the enrollee and the best interest of the health care provider. Financial arrangements with health care providers who are employed by the health plan company, or by an affiliate, are subject to this section.

(b) The disclosure statement must comply with the Readability of Insurance Policies Act in chapter 72C and be approved by the commissioner prior to its use. A disclosure statement that has been filed with the commissioner for approval is deemed approved 30 days after the date of filing unless approved or disapproved by the commissioner on or before the end of that 30-day period.

(c) For purposes of this section:

(1) "capitation" means a financial arrangement in which a health plan company compensates a health care provider, partially or entirely, through a fixed payment per time period per enrollee served by that health care provider, without regard to the services actually provided to enrollees by that health care provider. The services covered by the capitation may include the health care provider's own services, referral services, or all health care services;

(2) "financial arrangement" means an agreement between a health plan company, or an affiliate of it, and a health care provider, or an affiliate of it, that determines, or provides a methodology for determining, the payments to be made by the health plan company to the health care provider for providing health care to the health plan company's enrollees;

(3) "affiliate" has the meaning given in section 60D.15, subdivision 2; and

Subd. 3. [EXEMPTION.] A health plan company that does not use any arrangement described in subdivision 2 in connection with a health plan may apply to the commissioner for an exemption from subdivision 1 with respect to that health plan. If the commissioner grants the exemption, the health plan company need not provide a disclosure statement with respect to that health plan.

Subd. 4. [GROUP HEALTH PLANS.] With respect to group health plans, the health plan company must comply with subdivision 1 by providing the disclosure statement to the group policyholder or prospective group policyholder and by requiring the group policyholder to provide the disclosure statement to each enrollee or prospective enrollee prior to initial enrollment, at each renewal of the group health plan, and at each open enrollment period. Any literature prepared by the health plan company for distribution to prospective enrollees must contain the disclosure statement or state that it is available from the health plan company or from the group policyholder upon request. The health plan company shall retain in its files, for purposes of compliance audits, proof that the health plan company and group policyholder complied with this subdivision.

Subd. 5. [FAMILY COVERAGE.] With respect to family coverage, the disclosure statement required under this section must be provided to the enrollee to whom the policy, contract, or certificate is issued or is to be issued and need not be provided to enrollees or prospective enrollees who are that person's dependents.

Sec. 17. [62Q.64] [DISCLOSURE OF EXECUTIVE COMPENSATION.]

(a) Each nonprofit health plan company doing business in this state shall annually file with the consumer advisory board created in section 62J.73, subdivision 4:

(1) a copy of the health plan company's form 990 filed with the federal Internal Revenue Service; or

(2) if the health plan company did not file a form 990 with the federal Internal Revenue Service, a list of the amount and recipients of the health plan company's five highest salaries, including all types of compensation, in excess of $50,000.

(b) A filing under this section is public data under section 13.03.

Sec. 18. [62Q.65] [CERTIFICATION; NO USE OF RELATED ENTITIES TO EVADE STATE LAWS.]

(a) Each health plan company shall annually certify to the commissioner that the health plan company and each of its affiliates have, during the immediately preceding year, fully complied with this act in connection with all health coverage arrangements in this state for which the health plan company or affiliate has acted as a health plan company, third party administrator, preferred provider organization, utilization review organization, or stop-loss coverage provider. Compliance with this act means compliance, in connection with all health coverage arrangements, with all requirements that under this act apply to health plans or health plan companies, regardless of whether the health plan company or affiliate is acting as a health plan company in connection with a particular health coverage arrangement. The certification must be filed with the commissioner, on a form and date prescribed by the commissioner, and not disapproved by the commissioner, as a condition of continued licensure or certificate of authority.

(b) For purposes of this section:

(1) "commissioner," "health plan," and "health plan company" have the meanings given in Minnesota Statutes, section 62Q.01;

(2) "affiliate" has the meaning given in Minnesota Statutes, section 60D.15, subdivision 2; and

(3) "utilization review organization" has the meaning given in Minnesota Statutes, section 62M.02, subdivision 21."

Page 19, line 27, after "sections" insert "62J.2911; 62J.2912; 62J.2913; 62J.2914; 62J.2915; 62J.2916; 62J.2917; 62J.2918; 62J.2919; 62J.2920; 62J.2921;"

Page 20, after line 7, insert:

"(e) Section 18 is effective January 1, 1998, and the first annual certification must cover the 1998 calendar year."

Renumber the sections in sequence and correct internal references

Amend the title as follows:

Page 1, line 5, delete everything after "requiring"

Page 1, line 6, delete everything before the semicolon, and insert "certain disclosures by health care providers and health plan companies"

Page 1, line 9, after the semicolon, insert "requiring annual certification of compliance with this act by health plan companies;"

Page 1, line 13, after "sections" insert "62J.2911; 62J.2912; 62J.2913; 62J.2914; 62J.2915; 62J.2916; 62J.2917; 62J.2918; 62J.2919; 62J.2920; 62J.2921;"

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

The report was adopted.

Munger from the Committee on Envirnonment and Natural Resources to which was referred:

H. F. No. 949, A bill for an act relating to the environment; making manufacturers of electric relays or other electrical devices responsible for the waste management costs of these devices; amending Minnesota Statutes 1996, sections 115A.932, subdivision 1; and 116.92, subdivision 3, and by adding a subdivision.

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

The report was adopted.

Rest from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 958, A bill for an act relating to local government; providing that St. Louis county may attach certain unorganized territory to the town of White without a petition of residents.

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

The report was adopted.

Jaros from the Committee on Economic Development and International Trade to which was referred:

H. F. No. 960, A bill for an act relating to state agencies; creating the board for blind Minnesotans; authorizing rulemaking; appropriating money; amending Minnesota Statutes 1996, sections 13.791, subdivision 3; 248.011; 248.07; 248.10; 248.11, subdivision 1; and 256.482, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 248.

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

Jefferson from the Committee on Labor-Management Relations to which was referred:

H. F. No. 966, A bill for an act relating to employment; modifying provisions governing payment of wages; including the state in the definition of employer for certain purposes; amending Minnesota Statutes 1996, sections 181.02; 181.03; 181.063; 181.10; 181.13; and 181.171, by adding a subdivision.

Reported the same back with the following amendments:

Page 3, lines 9 to 11, reinstate the stricken language and delete the new language

With the recommendation that when so amended the bill pass.

The report was adopted.

Rest from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 995, A bill for an act relating to taxation; allowing for joint truth in taxation hearings to be held in some cases; amending Minnesota Statutes 1996, section 275.065, by adding a subdivision.

Reported the same back with the following amendments:

Page 1, line 13, after "county" insert a comma and delete "and"

Page 1, line 14, after "boundary" insert ", and the member or the member's designee of the metropolitan council for the district in which the city is located, if the city is in the metropolitan area, as defined in section 473.121, subdivision 2,"

Page 1, line 19, after "county" insert a comma and delete "and" and after "district" insert ", and the metropolitan council if the city is in the metropolitan area,"

Page 1, line 20, after "member" insert ", and the member or the designee of the metropolitan council,"

Page 2, line 14, after "officials" insert ", and metropolitan council representative if the city is in the metropolitan area"

Page 2, delete lines 22 and 23, and insert "relieve a county, school district, or the metropolitan council of the requirement to hold its individual hearing under"

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

The report was adopted.

Rest from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 1000, A bill for an act relating to planning; establishing goals for community-based planning; permitting counties and municipalities to prepare community-based plans; requiring the metropolitan council to meet the community-based planning goals; establishing an advisory council to develop the framework for implementing community-based planning; appropriating money; amending Minnesota Statutes 1996, sections 394.24, subdivision 1; and 462.357, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 4A; 394; 462; and 473.

Page 7, delete lines 6 to 8, and insert:

"(1) two members of the majority caucus of the house of representatives appointed by the speaker, and two members of the minority caucus appointed by the minority leader;"

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

The report was adopted.

Jefferson from the Committee on Labor-Management Relations to which was referred:

H. F. No. 1038, A bill for an act relating to employment; providing for a wage protection program; providing penalties; appropriating money; amending Minnesota Statutes 1996, section 268.022, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 181.

Reported the same back with the following amendments:

Page 1, line 22, delete "in the"

Page 1, line 23, delete everything before "to"

Page 1, line 24, delete "labor and industry" and insert "economic security"

Page 2, line 4, delete "labor and industry" and insert "economic security"

Pages 2 and 3, delete section 2

Page 3, line 22, delete "3" and insert "2"

Page 3, line 23, delete "workforce investment" and insert "general"

Page 3, line 24, delete everything before "to"

Amend the title as follows:

Page 1, line 4, delete everything after "money;"

Page 1, line 5, delete everything before "proposing"

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

The report was adopted.

Milbert from the Committee on General Legislation, Veterans Affairs and Elections to which was referred:

H. F. No. 1088, A bill for an act relating to elections; allowing towns to rotate names of candidates on town ballots; amending Minnesota Statutes 1996, section 205.17, subdivision 1.

Page 1, line 20, reinstate the stricken language and delete "may"

With the recommendation that when so amended the bill pass and be placed on the Consent Calendar.

The report was adopted.

Milbert from the Committee on General Legislation, Veterans Affairs and Elections to which was referred:

H. F. No. 1093, A bill for an act relating to elections; authorizing the electors of a metropolitan town to move the town election from March to November; amending Minnesota Statutes 1996, section 205.075, subdivision 2.

Reported the same back with the following amendments:

Page 2, line 3, delete "1996" and insert "1997"

With the recommendation that when so amended the bill pass and be placed on the Consent Calendar.

The report was adopted.

Jefferson from the Committee on Labor-Management Relations to which was referred:

H. F. No. 1147, A bill for an act relating to workers' compensation; requiring that all health care provider disciplines use current procedural terminology coding for workers' compensation reimbursement; amending Minnesota Statutes 1996, section 176.136, subdivision 1a.

Reported the same back with the following amendments:

Page 2, line 2, delete "all health care provider disciplines" and insert "chiropractors"

Amend the title as follows:

Page 1, line 2, delete "all" and insert "chiropractors"

Page 1, line 3, delete "health care provider disciplines"

With the recommendation that when so amended the bill pass.

The report was adopted.

Munger from the Committee on Environment and Natural Resources to which was referred:

H. F. No. 1208, A bill for an act relating to natural resources; appropriating money for community forest improvement grants.

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

Rest from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 1237, A bill for an act relating to community development; appropriating money for specified projects in the city of St. Paul; providing for a comprehensive planning process.

Reported the same back with the following amendments:

Page 2, line 12, delete "East" and insert "West"

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Economic Development and International Trade.

The report was adopted.

H. F. Nos. 182, 450, 454, 457, 662, 740, 753, 892, 949, 958, 966, 1088, 1093 and 1147 were read for the second time.

S. F. Nos. 78, 129 and 463 were read for the second time.

The following House Files were introduced:

Weaver; Swenson, D., and Stanek introduced:

H. F. No. 1402, A bill for an act relating to crime; clarifying eligibility criteria for imposing minimum mandatory incarceration period for repeat DWI offenders; restricting conditions under which minimum jail sentence may be waived; referencing the broader definitions of prior impaired driving convictions and prior license revocations; amending Minnesota Statutes 1996, section 169.121, subdivision 3a.

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

Johnson, R.; Kelso; Seagren and Koskinen introduced:

H. F. No. 1403, A bill for an act relating to education; providing grants under the first-grade preparedness program; appropriating money.

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

Pugh, Macklin, Skoglund and Abrams introduced:

H. F. No. 1404, A bill for an act relating to civil actions; modifying and expanding provisions for sanctions in civil actions; amending Minnesota Statutes 1996, sections 336.2A-108; 566.25; 570.041, subdivision 1; 571.932, subdivision 6; and 609.5314, subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 549; repealing Minnesota Statutes 1996, section 549.21.

Mariani, Leighton, Carruthers and Luther introduced:

H. F. No. 1405, A bill for an act relating to children; clarifying certain program accounts in the Head Start program; appropriating money; amending Minnesota Statutes 1996, sections 268.912; 268.913, subdivisions 2 and 4; and 268.914, subdivision 1; repealing Minnesota Statutes 1996, section 268.913, subdivision 5.

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

Seagren, Entenza, Pelowski, Kinkel and Anderson, B., introduced:

H. F. No. 1406, A bill for an act relating to education; appropriating money for adults with disabilities.

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

Dorn; Johnson, R.; Gunther; Kalis and Swenson, H., introduced:

H. F. No. 1407, A bill for an act relating to education; appropriating money to fund the model school for chronic truants.

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

Peterson, Kelso, Carlson, Schumacher and Ness introduced:

H. F. No. 1408, A bill for an act relating to education; appropriating money for school district foundations to assist with fundraising and other improvement projects.

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

Kubly, Hilty, Rifenberg, Kielkucki and Wenzel introduced:

H. F. No. 1409, A bill for an act relating to agriculture; legislative review of feedlot permit rules; amending Minnesota Statutes 1996, section 116.07, subdivision 7.

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

Bradley, Sykora, Goodno, Jennings and Boudreau introduced:

H. F. No. 1410, A bill for an act relating to human services; licensing; modifying the exclusion from licensure for child care services; amending Minnesota Statutes 1996, section 245A.03, subdivision 2.

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

Leppik introduced:

H. F. No. 1411, A bill for an act relating to taxation; preserving certain exempt rules of the department of revenue.

Johnson, R.; Juhnke; Greiling; Hilty and Ozment introduced:

H. F. No. 1412, A bill for an act relating to human services; ensuring that exclusive bargaining representatives are informed about and allowed to participate in development of mental health pilot projects; amending Laws 1995, chapter 207, article 8, section 41, subdivision 6.

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

Workman introduced:

H. F. No. 1413, A bill for an act relating to traffic regulations; authorizing the infliction of corporal punishment on habitual DWI offenders; providing criminal penalties; amending Minnesota Statutes 1996, sections 169.121, subdivision 3a, and by adding a subdivision; 609.10; and 609.125.

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

Leighton, Entenza, Mullery and Pawlenty introduced:

H. F. No. 1414, A bill for an act relating to probate; changing provisions on appointment of guardians and conservators; amending Minnesota Statutes 1996, section 525.591.

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

Pugh and Peterson introduced:

H. F. No. 1415, A bill for an act relating to recreational vehicles; requiring strobe lights on snowmobiles; amending Minnesota Statutes 1996, sections 84.821, by adding a subdivision; and 169.64, subdivision 8.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Pugh, Milbert, Commers and Pawlenty introduced:

H. F. No. 1416, A bill for an act relating to human services; providing a licensure exception for six-bed service sites in some circumstances; amending Minnesota Statutes 1996, section 252.28, by adding a subdivision.

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

Johnson, R.; Stanek; Evans; Tomassoni and Boudreau introduced:

H. F. No. 1417, A bill for an act relating to health; requiring screening of newborn infants for hearing loss; proposing coding for new law in Minnesota Statutes, chapter 144.

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

Peterson, Munger, Osthoff, Goodno and Holsten introduced:

H. F. No. 1418, A bill for an act relating to natural resources; appropriating money to survey trails in state parks for accessibility to persons with disabilities.

Finseth, Kinkel, Koppendrayer and Carlson introduced:

H. F. No. 1419, A bill for an act relating to education; modifying secondary vocational education aid guarantee; amending Minnesota Statutes 1996, section 124.573, subdivision 2f.

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

Swenson, D.; Skoglund; Tuma; Weaver and Chaudhary introduced:

H. F. No. 1420, A bill for an act relating to crime prevention; authorizing the forfeiture of a motor vehicle used to commit a violation of the aggravated DWI law or certain repeat violations of the DWI law; amending Minnesota Statutes 1996, sections 169.121, subdivision 3; and 169.1217, subdivision 1.

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

Wenzel, Juhnke, Kubly, Westrom and Otremba introduced:

H. F. No. 1421, A bill for an act relating to agriculture; appropriating money for the grant program that provides technology services to dairy farmers and for dairy industry development.

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

Larsen, Broecker, Holsten, Mares and Swenson, D., introduced:

H. F. No. 1422, A bill for an act relating to health; exempting dental goods and services from the MinnesotaCare provider tax; reducing the MinnesotaCare provider tax; amending Minnesota Statutes 1996, sections 295.50, subdivision 4; 295.52; 295.53, subdivisions 3, 4, and by adding a subdivision; 295.54, subdivision 2; and 295.582.

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

Weaver, Broecker and Stanek introduced:

H. F. No. 1423, A bill for an act relating to crime; providing that certain proposed sentencing guidelines modifications regarding increases in durations at severity levels I through VI shall not take effect; amending Laws 1996, chapter 408, article 3, section 39.

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

Ness, Carlson, Kalis, Solberg and Bishop introduced:

H. F. No. 1424, A bill for an act relating to capital improvements; appropriating money for an addition to, and remodeling of, the Hutchinson technical college; authorizing the sale of state bonds.

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

Erhardt introduced:

H. F. No. 1425, A bill for an act relating to taxation; reducing the property tax class rates on certain apartments; amending Minnesota Statutes 1996, section 273.13, subdivision 25.

Peterson; Lieder; Swenson, H., and Juhnke introduced:

H. F. No. 1426, A bill for an act relating to transportation; requiring legislative report on economic impacts of highways on rural areas; appropriating money.

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

Erhardt, Murphy, Rhodes and Hasskamp introduced:

H. F. No. 1427, A bill for an act relating to taxation; providing an additional property tax refund to certain homeowners; amending Minnesota Statutes 1996, sections 290A.04, by adding a subdivision; and 290A.23, subdivision 3.

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

Dehler, Schumacher, Kelso, Stang and Opatz introduced:

H. F. No. 1428, A bill for an act relating to education; appropriating money to fund the establishment of the central Minnesota area learning center.

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

Greenfield, Huntley and Bradley introduced:

H. F. No. 1429, A bill for an act relating to health; modifying mandatory Medicare assignment; exempting medical supplies and equipment from mandatory Medicare assignment; amending Minnesota Statutes 1996, section 62J.25.

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

Greenfield introduced:

H. F. No. 1430, A bill for an act relating to human services; appropriating money for community support services for deaf and hard-of-hearing adults.

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

Greenfield introduced:

H. F. No. 1431, A bill for an act relating to medical assistance; expanding eligibility for the elderly waiver program; seeking a change in a federal waiver; stopping enrollment in the alternative care program; amending Minnesota Statutes 1996, sections 256B.0913, by adding a subdivision; and 256B.0915, by adding a subdivision.

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

Peterson, Winter and Rest introduced:

H. F. No. 1432, A bill for an act relating to retirement; removing the requirement of an actuarial valuation for certain volunteer firefighter relief associations; proposing coding for new law in Minnesota Statutes, chapter 69.

Peterson; Olson, E.; Kalis; Long and Anderson, I., introduced:

H. F. No. 1433, A bill for an act relating to taxation; property tax; allowing for market value exclusion on certain business property; amending Minnesota Statutes 1996, section 273.11, by adding a subdivision.

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

Delmont, Jennings, Goodno, Huntley and Bradley introduced:

H. F. No. 1434, A bill for an act relating to health; repealing physicians' license surcharge; repealing Minnesota Statutes 1996, section 147.01, subdivision 6.

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

Rukavina, Huntley, Jennings, Tompkins and Ness introduced:

H. F. No. 1435, A bill for an act relating to human services; increasing medical assistance reimbursement rates for dental services; amending Minnesota Statutes 1996, section 256B.76.

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

Wenzel; Swenson, D.; Dempsey; Kalis and Farrell introduced:

H. F. No. 1436, A bill for an act relating to crime; providing criminal penalties for possession or sale of a small amount of marijuana; amending Minnesota Statutes 1996, section 152.027, subdivision 4.

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

Dempsey, Goodno, Tompkins and Dorn introduced:

H. F. No. 1437, A bill for an act relating to human services; creating a pilot project in Goodhue county to downsize an existing ICF/MR facility.

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

Carlson; Tomassoni; Ness; Anderson, I., and Westrom introduced:

H. F. No. 1438, A bill for an act relating to insurance; no-fault auto; regulating medical examinations requested by reparation obligors; amending Minnesota Statutes 1996, sections 65B.56, subdivision 1; and 72A.201, subdivision 6.

The bill was read for the first time and referred to the Committee on Financial Institutions and Insurance.

Larsen, Broecker and Chaudhary introduced:

H. F. No. 1439, A bill for an act relating to peace officers; increasing criminal penalties for falsely reporting a crime; providing criminal penalties for persons who knowingly make false allegations of misconduct against peace officers in civil actions; amending Minnesota Statutes 1996, section 609.505; proposing coding for new law in Minnesota Statutes, chapter 609.

Broecker, Larsen and Stanek introduced:

H. F. No. 1440, A bill for an act relating to public safety; indexing maximum soft body armor reimbursement amount; amending Minnesota Statutes 1996, section 299A.38, subdivision 2, and by adding a subdivision.

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

Greenfield and Huntley introduced:

H. F. No. 1441, A bill for an act relating to health insurance; limiting the growth limits; limiting loss ratios; repealing the health care commission; modifying the regional coordinating boards; modifying the health technology advisory committee; expanding the eligibility of the MinnesotaCare program; modifying the enforcement mechanisms for the provider tax pass-through; modifying mandatory Medicare assignment; amending Minnesota Statutes 1996, sections 62A.021, subdivision 1; 62A.61; 62A.65, subdivision 3; 62J.04, subdivisions 1 and 9; 62J.041; 62J.07, subdivisions 1 and 3; 62J.09, subdivision 1; 62J.15, subdivision 1; 62J.152, subdivisions 1, 2, 4, and 5; 62J.17, subdivision 6a; 62J.22; 62J.25; 62J.2914, subdivision 1; 62J.2915; 62J.2916, subdivision 1; 62J.2917, subdivision 2; 62J.2921, subdivision 2; 62J.451, subdivision 6b; 62L.02, subdivision 26; 62L.08, subdivision 8; 62N.25, subdivision 5; 62Q.03, subdivision 5a; 62Q.33, subdivision 2; 256.9354, subdivision 5; 256.9355, by adding a subdivision; and 295.582; repealing Minnesota Statutes 1996, sections 62J.03, subdivision 3; 62J.042; 62J.05; 62J.051; 62J.06; 62J.09, subdivision 3a; 62N.02, subdivision 3; 62Q.165, subdivision 3; 62Q.23; 62Q.25; 62Q.29; and 62Q.41; Laws 1993, chapter 247, article 4, section 8; Laws 1994, chapter 625, article 5, section 5, subdivision 1, as amended; Laws 1995, chapter 96, section 2; and Laws 1995, First Special Session chapter 3, article 13, section 2.

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

Pelowski introduced:

H. F. No. 1442, A bill for an act relating to taxation; providing for education funding; providing property tax classification reform; changing and providing state aids to local government; reducing the sales and use tax rate and authorizing city general sales and use taxes; providing for property tax deferral for senior citizens; reducing the franchise tax rate and providing a business activity tax; increasing property tax refunds, and providing a separate refund for farm homesteads; appropriating money; amending Minnesota Statutes 1996, sections 124.17, subdivision 1d; 124A.03, subdivisions 1f and 3c; 124A.22, subdivisions 1 and 2, as amended; 124A.23, subdivision 1; 270B.12, by adding a subdivision; 273.13, subdivisions 23, 24, 25, and by adding a subdivision; 273.1398, subdivision 6; 275.065, subdivision 3; 275.08, subdivision 1b; 276.04, subdivision 2; 290.06, subdivision 1; 290A.03, subdivisions 6, 13, and by adding a subdivision; 290A.04, subdivisions 1, 2, 2a, 6, and by adding a subdivision; 297A.02, subdivision 1; 473F.08, subdivision 3; 477A.011, subdivision 34, and by adding subdivisions; 477A.013, subdivisions 1, 8, and 9; and 477A.03, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 124A; 290; 297A; and 477A; proposing coding for new as Minnesota Statutes, chapter 290B; repealing Minnesota Statutes 1996, sections 124A.22, subdivisions 4a, 4b, 13d, and 13e; 124A.23, subdivisions 2, 3, 4, and 5; 273.13, subdivision 32; 273.1398, subdivisions 1a, 2, 2c, 2d, 3, and 3a; 273.166; 290.0921; 290.0922; and 477A.011, subdivisions 35, 36, and 37; Laws 1995, chapter 264, article 4, as amended.

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

Wejcman, Winter, Clark and Huntley introduced:

H. F. No. 1443, A bill for an act relating to human services; creating a food program for certain individuals terminated from the federal food stamp program; appropriating money.

Wejcman, Winter, Wenzel and Dorn introduced:

H. F. No. 1444, A bill for an act relating to agriculture; creating a food coupon program using "Minnesota grown" products; appropriating money.

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

Ozment introduced:

H. F. No. 1445, A bill for an act relating to taxation; property; providing for the classification of property which is used for both residential and agricultural purposes; amending Minnesota Statutes 1996, section 273.13, subdivision 23.

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

Abrams, Rest, Macklin and Olson, E., introduced:

H. F. No. 1446, A bill for an act relating to taxation; property tax; eliminating the one commercial-industrial parcel per county limitation to receive the preferred class rate in certain cases; amending Minnesota Statutes 1996, section 273.13, subdivision 24.

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

Wenzel, Kalis, Dehler, Otremba and Boudreau introduced:

H. F. No. 1447, A bill for an act relating to health; prohibiting partial-birth abortions; providing criminal penalties; 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.

Carruthers, McCollum, Peterson and Finseth introduced:

H. F. No. 1448, A bill for an act relating to game and fish; permitting taking of fish without a license for persons age 65 or over; amending Minnesota Statutes 1996, sections 97A.451, subdivision 2; and 97A.475, subdivision 6; repealing Minnesota Statutes 1996, section 97A.451, subdivision 7.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Knoblach, Tuma, Osskopp, Dehler and Reuter introduced:

H. F. No. 1449, A bill for an act relating to human services; proposing welfare reform initiatives for MA, GA, GAMC, TANF, and MinnesotaCare; amending Minnesota Statutes 1996, sections 256.73, subdivision 1b; 256B.056, subdivision 1; 256D.02, subdivision 12a; and 256D.05, by adding subdivisions; proposing coding for new law in Minnesota Statutes, chapters 256; and 256B; proposing coding for new law as Minnesota Statutes, chapter 256J.

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

Pugh, Commers and Erhardt introduced:

H. F. No. 1450, A bill for an act relating to commerce; regulating franchises; providing franchisees with the power to suspend performance under and rescind nonexempt franchises which are not covered by effective registration statements; amending Minnesota Statutes 1996, sections 80C.02; and 80C.12, by adding a subdivision.

Kuisle, Skare, Rifenberg and Stang introduced:

H. F. No. 1451, A bill for an act relating to game and fish; providing a free deer license to certain landowners to use on their land; amending Minnesota Statutes 1996, section 97A.441, subdivision 7.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Tunheim, Finseth, Leppik, Bakk and Milbert introduced:

H. F. No. 1452, A bill for an act relating to watercraft; modifying provisions for the operation of personal watercraft; requiring a personal watercraft safety certificate; appropriating money; amending Minnesota Statutes 1996, sections 86B.313, subdivisions 1, 3, 4, and by adding a subdivision.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Ness, Marko, Jennings, Lieder and McElroy introduced:

H. F. No. 1453, A bill for an act relating to highways; directing commissioner of transportation to study and prepare a report proposing a comprehensive, statewide highway access management policy.

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

Jennings; Kelso; Johnson, A., and Rostberg introduced:

H. F. No. 1454, A bill for an act relating to education; establishing an open enrollment technology project; appropriating money.

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

Wejcman, Skoglund and Clark introduced:

H. F. No. 1455, A bill for an act relating to crime; adding an exception to the crime of female genital mutilation for certified nurse midwives acting within the legal scope of their practice; amending Minnesota Statutes 1996, section 609.2245, subdivision 2.

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

Carruthers, Greiling and Hausman introduced:

H. F. No. 1456, A bill for an act proposing an amendment to the Minnesota Constitution; providing for a unicameral legislature; changing article IV; article VIII, section 1; article IX, sections 1 and 2; and article XI, section 5; providing by law for a legislature of 112 members; amending Minnesota Statutes 1996, sections 2.021; and 2.031, subdivision 1.

The bill was read for the first time and referred to the Committee on General Legislation, Veterans Affairs and Elections.

Jennings introduced:

H. F. No. 1457, A bill for an act relating to human services; allowing use of personal care attendant services for respite care and allowing sharing of personal care attendants; amending Minnesota Statutes 1996, section 256B.0627, by adding a subdivision.

Marko introduced:

H. F. No. 1458, A bill for an act relating to economic development; appropriating money for a study of the economic impact of certain improvement projects on Newport.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

McGuire introduced:

H. F. No. 1459, A bill for an act relating to crime prevention; requiring that all new chiefs of police of municipal police departments in cities of the first, second, and third classes and directors of statewide law enforcement agencies appointed on or after January 1, 1998, hold a bachelor's degree; proposing coding for new law in Minnesota Statutes, chapter 626.

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

McGuire introduced:

H. F. No. 1460, A bill for an act relating to privacy; providing for the classification of and access to government data; eliminating the requirement that government agencies pay a fee for commissioner's opinions; amending Minnesota Statutes 1996, sections 13.99, by adding subdivisions; and 53A.081, by adding a subdivision; repealing Minnesota Statutes 1996, sections 13.072, subdivision 3; 13.71, subdivisions 18, 19, 20, and 21; and 13.99, subdivision 21d.

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

Entenza; Anderson, B., and Kahn introduced:

H. F. No. 1461, A bill for an act relating to government operations; providing for a uniform business identifier to assist businesses in their dealings with the state; providing for electronic filing and information retrieval pertaining to business licenses; appropriating money.

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

Pawlenty; Skoglund; Evans; Swenson, D., and Larsen introduced:

H. F. No. 1462, A bill for an act relating to crime; expanding the scope of fourth degree assault to include the infliction of any amount of bodily harm on a correctional facility employee; requiring state prison inmates who are convicted of fourth degree assault to serve the sentence for the assault consecutively to their current sentence; amending Minnesota Statutes 1996, section 609.2231, subdivision 3.

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

Mahon, Milbert, Abrams and Mullery introduced:

H. F. No. 1463, A bill for an act relating to campaign finance; clarifying limits on contributions to candidates for local elected office; amending Minnesota Statutes 1996, section 211A.12.

The bill was read for the first time and referred to the Committee on General Legislation, Veterans Affairs and Elections.

Juhnke, Jennings, Winter, Bettermann and Kubly introduced:

H. F. No. 1464, A bill for an act relating to utilities; authorizing municipal and cooperative utilities to form joint ventures for the provision of utility services; proposing coding for new law as Minnesota Statutes, chapter 453B; repealing Laws 1996, chapter 300, section 1.

Pugh, Stanek, Broecker, Marko and Schumacher introduced:

H. F. No. 1465, A bill for an act relating to traffic regulations; motor vehicles; establishing system for the notification, recording, and collection of delinquent fines for traffic and parking violations; prohibiting registration of vehicle of owner who has not paid the fine for a traffic or parking violation; prohibiting issuance of warrants for parking violations; providing for redesigned license plates to be issued in 1999 for passenger automobiles for five-year periods; imposing a fee; appropriating money; amending Minnesota Statutes 1996, sections 168.12, subdivision 1, and by adding a subdivision; 169.91, subdivision 3; 169.95; and 169.99, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 168; and 169.

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

Leppik; Johnson, A.; Ness; Kelso and Pelowski introduced:

H. F. No. 1466, A bill for an act relating to education; establishing a data access program for public libraries and school media centers; appropriating money.

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

Stanek, Skoglund and Jefferson introduced:

H. F. No. 1467, A bill for an act relating to public safety; appropriating money for grants to Hennepin county sheriff's office and the Minneapolis police department for operation of the FBI Drugfire computer system.

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

Clark, Jefferson, Skoglund, Stanek and Mariani introduced:

H. F. No. 1468, A bill for an act relating to crime; requiring bias-motivated crimes training requirements for peace officers; authorizing a public education campaign about hate-based violence; amending Minnesota Statutes 1996, sections 8.34, subdivision 3, and by adding subdivisions; and 626.8451, subdivisions 1 and 4.

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

Rukavina, Tomassoni and Bakk introduced:

H. F. No. 1469, A bill for an act relating to the town of White; providing for the extension of the duration of certain tax increment financing districts of the joint east range economic development authority; providing for the expansion of a district or establishment of an additional district; exempting the districts from certain restrictions.

The bill was read for the first time and referred to the Committee on Local Government and Metropolitan Affairs.

Rukavina, Tomassoni and Bakk introduced:

H. F. No. 1470, A bill for an act relating to local government; authorizing certain cities, towns, and the county for certain unorganized townships to create the Virginia area ambulance district; authorizing a tax levy; requiring local approval.

Anderson, B., by request, introduced:

H. F. No. 1471, A bill for an act relating to highways; requiring commissioner of transportation to construct pedestrian-bicycle overpass on marked U.S. highway No. 169 in the city of Elk River.

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

Juhnke, Skare, Nornes, Gunther and Anderson, I., introduced:

H. F. No. 1472, A bill for an act relating to transportation; directing the commissioner of transportation to establish an air service marketing program; proposing coding for new law in Minnesota Statutes, chapter 360.

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

Clark, Knight, Leighton, Ozment and Jaros introduced:

H. F. No. 1473, A bill for an act relating to economic development; creating a commission to examine and make recommendations on state subsidy programs and tax laws related to economic development.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Opatz, Pelowski, Tuma, Bettermann and Dorn introduced:

H. F. No. 1474, A bill for an act relating to education; appropriating money for libraries at the University of Minnesota and the Minnesota state colleges and universities.

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

Erhardt, Pawlenty, Van Dellen, Harder and Daggett introduced:

H. F. No. 1475, A bill for an act relating to taxation; individual income; providing a nonrefundable personal and dependent credit for the 1996 tax year; amending Minnesota Statutes 1996, section 290.06, by adding a subdivision.

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

Hasskamp, Smith, Van Dellen, Kubly and Anderson, B., introduced:

H. F. No. 1476, A bill for an act relating to health; modifying provisions for reporting abortion data; providing criminal penalties; amending Minnesota Statutes 1996, section 145.411, by adding a subdivision; 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.

Evans and Leighton introduced:

H. F. No. 1477, A bill for an act relating to human rights; protecting independent contractors from unfair discriminatory actions in employment; amending Minnesota Statutes 1996, section 363.01, subdivision 16.

Skoglund introduced:

H. F. No. 1478, A bill for an act relating to crime; clarifying minimum sentences of imprisonment for subsequent violations of firearm offenses; providing criminal penalties; amending Minnesota Statutes 1996, section 609.11, subdivision 5.

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

Clark introduced:

H. F. No. 1479, A bill for an act relating to housing; appropriating money for housing for people with HIV/AIDS.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Anderson, B., by request, introduced:

H. F. No. 1480, A bill for an act relating to the city of Buffalo; authorizing the extension of the duration of a tax increment financing district; providing for use of the tax increments.

The bill was read for the first time and referred to the Committee on Local Government and Metropolitan Affairs.

Wejcman, Otremba, Mahon, Rest and Koskinen introduced:

H. F. No. 1481, A bill for an act relating to health; requiring the attorney general to investigate unfair drug price discrimination; giving the commissioner of administration authority to negotiate contract prices for prescription drugs; requiring the commissioner of administration to establish and administer a nongovernmental pharmaceutical contracting alliance; modifying prescription dispensing requirements; requiring a pharmacy to post a sign on generic substitution; appropriating money; amending Minnesota Statutes 1996, sections 8.31, subdivision 1; and 151.21, subdivisions 2, 3, and by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 16B.

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

Skoglund introduced:

H. F. No. 1482, A bill for an act relating to crimes; broadening the permissible use of preliminary breath test results obtained in DWI situations; broadening the scope of the DWI forfeiture law to include certain implied consent license revocations; authorizing an administrative forfeiture process; requiring that the alcohol concentration of a person who is driving while impaired be placed on the person's driving record; amending Minnesota Statutes 1996, sections 169.121, subdivision 6; 169.1217; and 171.12, by adding a subdivision.

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

Rifenberg, Seifert, Reuter and Harder introduced:

H. F. No. 1483, A bill for an act relating to crime prevention; specifying that the prosecution may reply in rebuttal to the closing argument of the defense; amending Minnesota Statutes 1996, section 631.07.

Hausman, Westfall, Kubly and Dorn introduced:

H. F. No. 1484, A bill for an act relating to health; expanding the number of living-at-home/block nurse programs; modifying contract requirements for the living-at-home/block nurse program; appropriating money; amending Minnesota Statutes 1996, section 256B.0917, subdivisions 7 and 8.

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

Solberg introduced:

H. F. No. 1485, A bill for an act relating to children; appropriating money for the Greenway Readiness Program for early childhood family education and early childhood special education.

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

Olson, E.; Anderson, I., and Hilty introduced:

H. F. No. 1486, A bill for an act relating to state lands; authorizing private sale of certain state lands to wild rice lessees.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Peterson, Clark, Kubly, Rhodes and Carruthers introduced:

H. F. No. 1487, A bill for an act relating to housing; appropriating money for the affordable rental investment fund program.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Knight, Rifenberg, Larsen and Krinkie introduced:

H. F. No. 1488, A bill for an act relating to taxation; individual income; allowing a personal and dependent credit for two taxable years; amending Minnesota Statutes 1996, section 290.06, by adding a subdivision.

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

Pugh, Dawkins, Smith and Macklin introduced:

H. F. No. 1489, A bill for an act relating to tort liability; municipalities; clarifying the liability for torts of officers, employees, and agents; amending Minnesota Statutes 1996, sections 466.02; and 466.04, subdivisions 1 and 3.

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

Sekhon, Osthoff, Holsten, Tingelstad and McCollum introduced:

H. F. No. 1490, A bill for an act relating to parks; funding the operation and maintenance of parks in the metropolitan area; appropriating money.

Peterson; Anderson, I.; Mulder; Winter and Kubly introduced:

H. F. No. 1491, A bill for an act relating to health plans; regulating certain provisions in managed care agreements between health plan companies and providers; proposing coding for new law in Minnesota Statutes, chapter 62Q.

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

Jefferson, Delmont and McGuire introduced:

H. F. No. 1492, A bill for an act relating to education; establishing a pilot program for adolescent parenting and prevention support; establishing eligibility criteria and program components; appropriating money.

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

Huntley, Opatz, Greenfield and Bradley introduced:

H. F. No. 1493, A bill for an act relating to health care benefits; establishing a mandate assessment process; proposing coding for new law in Minnesota Statutes, chapter 62A.

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

Wenzel; Peterson; Finseth; Swenson, H., and Munger introduced:

H. F. No. 1494, A bill for an act relating to agriculture; appropriating money for technical support grants to soil and water conservation districts.

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

Huntley, Delmont, Haas and Boudreau introduced:

H. F. No. 1495, A bill for an act relating to health; restricting the ability of providers and health plan companies to enter into exclusive or restrictive contracts; providing civil penalties; proposing coding for new law in Minnesota Statutes, chapter 62Q.

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

Finseth introduced:

H. F. No. 1496, A bill for an act relating to human services; requiring utility deposits to be returned to the county under EA, TANF, and MFIP-S; amending Minnesota Statutes 1996, section 256.81; proposing coding for new law as Minnesota Statutes, chapter 256J.

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

Broecker, Tuma, Pelowski, Paulsen and Larsen introduced:

H. F. No. 1497, A bill for an act relating to taxation; allowing an income tax credit for gifts by individuals to institutions of higher education; amending Minnesota Statutes 1996, section 290.06, by adding a subdivision.

Leighton, Entenza, Biernat, Kelso and Schumacher introduced:

H. F. No. 1498, A bill for an act relating to education; providing for summer food service replacement aid; providing for school breakfast outreach programs; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 124.

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

Milbert, Jennings, Ozment, Macklin and Hasskamp introduced:

H. F. No. 1499, A bill for an act relating to gambling; modifying the combined receipts tax schedule; amending Minnesota Statutes 1996, section 297E.02, subdivision 6.

The bill was read for the first time and referred to the Committee on Regulated Industries and Energy.

Marko introduced:

H. F. No. 1500, A bill for an act relating to transportation; providing that cities with a combined population of at least 5,000 may qualify for municipal state aid if certain conditions are met; amending Minnesota Statutes 1996, section 162.09, subdivision 4.

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

Skoglund, Carruthers, McGuire, Stanek and Weaver introduced:

H. F. No. 1501, A bill for an act relating to crime; making it a felony to commit indecent exposure while confining or restraining another person; requiring persons convicted of this offense to register under the Sex Offender Registration Act and to provide a DNA sample at the time of conviction or release from incarceration; amending Minnesota Statutes 1996, sections 243.166, subdivision 1; 609.3451, subdivision 3; 609.3461, subdivisions 1 and 2; and 617.23.

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

Carruthers; Johnson, A.; Milbert and Abrams introduced:

H. F. No. 1502, A bill for an act relating to taxes; use tax; expanding the de minimis exemption for the use tax; amending Minnesota Statutes 1996, section 297A.14, subdivision 4.

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

Luther, Carruthers, McElroy, Tunheim and Bradley introduced:

H. F. No. 1503, A bill for an act relating to consumer protection; providing for maximum permitted charges by pawnbrokers; prohibiting the pledge or sale of property to a pawnbroker by a person under 21 years of age; amending Minnesota Statutes 1996, sections 325J.07; and 325J.08.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

Pugh; Skoglund; Entenza; Swenson, D., and Bishop introduced:

H. F. No. 1504, A bill for an act relating to crime prevention; permitting courts to extend a sex offender's term of probation if the offender fails to complete court-ordered sex offender treatment successfully before probation expires; amending Minnesota Statutes 1996, section 609.135, subdivision 2, and by adding a subdivision.

Jefferson introduced:

H. F. No. 1505, A bill for an act relating to retirement; providing for actuarial funding of the legislators retirement plan and the elective state officers retirement plan; amending Minnesota Statutes 1996, sections 3A.01, by adding a subdivision; 3A.03; 3A.04, subdivisions 3 and 4; 3A.11, subdivision 1; 352C.021, by adding a subdivision; 352C.031, subdivision 6; 352C.04, subdivision 3; 352C.051, subdivision 3; 352C.09; 352C.10; 490.121, subdivisions 5, 6, and 20; 490.122; 490.123; and 490.124, subdivisions 1, 6, and 12; proposing coding for new law in Minnesota Statutes, chapter 352C; repealing Minnesota Statutes 1996, sections 3A.02, subdivision 2; 3A.07; 3A.09; 352C.091, subdivisions 2 and 3; and 490.123, subdivision 1c.

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

Kahn introduced:

H. F. No. 1506, A bill for an act relating to retirement; exempting certain persons from reemployed annuitant provisions governing the Minnesota state retirement system; providing certain health insurance benefits.

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

Bakk and Rukavina introduced:

H. F. No. 1507, A bill for an act relating to state lands; authorizing the sale of certain parcels of tax-forfeited land that border public waters in Cook county.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Kubly, Juhnke, Peterson, Ozment and Jennings introduced:

H. F. No. 1508, A bill for an act relating to renewable energy; permitting certain municipalities in the upper Minnesota river valley region to establish a rural development financing authority and establishing the Minnesota alternative energy development authority; proposing coding for new law as Minnesota Statutes, chapter 41D.

The bill was read for the first time and referred to the Committee on Regulated Industries and Energy.

Dawkins introduced:

H. F. No. 1509, A bill for an act relating to higher education; appropriating money to the higher education services office to match grants made under the National Service Scholars program.

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

Dawkins introduced:

H. F. No. 1510, A bill for an act relating to community development; providing for planning coordination for brownfields cleanup in certain areas of St. Paul; amending Minnesota Statutes 1996, section 116J.554, subdivision 1.

Dawkins introduced:

H. F. No. 1511, A bill for an act relating to community development; appropriating money for specified projects in the city of St. Paul; providing for a comprehensive planning process.

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

Bakk, Rukavina, Ozment, Tomassoni and Leighton introduced:

H. F. No. 1512, A bill for an act relating to educational facilities; making certain construction, remodeling, and improvements a project; amending Minnesota Statutes 1996, section 121.15, by adding a subdivision.

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

Wenzel and Dehler introduced:

H. F. No. 1513, A bill for an act relating to economic development; repealing a requirement for matching funds for a grant to the Morrison county rural development finance authority; amending Laws 1996, chapter 452, section 2.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Tomassoni, Juhnke, Tunheim and Bakk introduced:

H. F. No. 1514, A bill for an act relating to alcoholic beverages; allowing a municipality to authorize a holder of an on-sale intoxicating liquor license to dispense intoxicating liquor at community festivals; amending Minnesota Statutes 1996, section 340A.404, subdivision 4.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

Carlson and Ness introduced:

H. F. No. 1515, A bill for an act relating to education; providing for a pilot program for state aid to cooperative districts.

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

Chaudhary, Skoglund, Biernat, Clark and Dawkins introduced:

H. F. No. 1516, A bill for an act relating to nuisance; providing mediation in the housing calendar program; providing a lessor and lessee covenant against unlawful activity on residential premises; providing an expedited process for certain unlawful detainer actions; imposing civil penalties; appropriating money; amending Minnesota Statutes 1996, sections 504.181, subdivision 1; 566.05; 566.18, subdivision 6; 617.82; and 617.85; proposing coding for new law in Minnesota Statutes, chapter 484.

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

Rukavina, by request, introduced:

H. F. No. 1517, A bill for an act relating to taxation and government financial security; authorizing the study of the state's tax structure based upon a fair percentage of a partial gross worth dollar value for a tax system, and ability to pay factor.

Chaudhary, Pelowski, Ness and Paulsen introduced:

H. F. No. 1518, A bill for an act relating to education; eliminating the requirement that the telecommunications council require the use of MnNet; appropriating money to the higher education services office for the learning network of Minnesota to support development and extension of telecommunications networks; amending Laws 1993, First Special Session chapter 2, article 5, section 2, as amended.

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

Chaudhary, Evans, Rukavina, Dawkins and Clark introduced:

H. F. No. 1519, A bill for an act relating to landlords and tenants; requiring a landlord to return an application fee or provide a reason for denial in writing; providing for a civil penalty; proposing coding for new law in Minnesota Statutes, chapter 504.

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

Chaudhary, Long, Solberg, Macklin and Tunheim introduced:

H. F. No. 1520, A bill for an act relating to taxation; corporate franchise; increasing the rate of the research credit; amending Minnesota Statutes 1996, section 290.068, subdivision 1.

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

Greiling and Pugh introduced:

H. F. No. 1521, A bill for an act relating to liquor; modifying requirements for brand registration; amending Minnesota Statutes 1996, section 340A.311.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

Lieder and Wagenius introduced:

H. F. No. 1522, A bill for an act relating to transportation; appropriating money for repair, rehabilitation, and replacement of state and local bridges.

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

Jaros, Kahn, Otremba, Trimble and Gunther introduced:

H. F. No. 1523, A bill for an act relating to economic development and international trade; establishing a Minnesota office of international affairs; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 4.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Seifert introduced:

H. F. No. 1524, A bill for an act relating to appropriations; appropriating money to the commissioner of natural resources for a grant to the city of Marshall for flood control.

Jennings, Wolf, Holsten, Delmont and Hilty introduced:

H. F. No. 1525, A bill for an act relating to utilities; providing for customer-specific terms in electric utility service contracts; amending Minnesota Statutes 1996, sections 216B.05; and 216B.162, subdivisions 1, 4, and by adding subdivisions.

The bill was read for the first time and referred to the Committee on Regulated Industries and Energy.

Rest and Carlson introduced:

H. F. No. 1526, A bill for an act relating to education; authorizing learning year revenue for half-day kindergarten pupils; amending Minnesota Statutes 1996, section 124.17, subdivision 4.

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

Westrom, Koppendrayer and Mares introduced:

H. F. No. 1527, A bill for an act relating to education; restoration of revenue lost to the fund balance reduction for independent school district No. 264, Herman-Norcross.

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

Murphy, Leighton, Wejcman, Boudreau and McGuire introduced:

H. F. No. 1528, A bill for an act relating to health; establishing home visiting programs for infant care; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 145A.

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

Jefferson, Winter, Mares and Carruthers introduced:

H. F. No. 1529, A bill for an act relating to capital improvements; providing for completion of the Minneapolis convention center; authorizing state bonds; providing for debt service; authorizing the city to expand the convention center; repealing expenditure limit on original construction; appropriating money; amending Laws 1986, chapter 396, section 2, subdivision 1, as amended; repealing Laws 1986, chapter 396, section 2, subdivision 2.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Knoblach, Wenzel, Dehler and Schumacher introduced:

H. F. No. 1530, A bill for an act relating to public employees; prohibiting coverage of elective abortion; amending Minnesota Statutes 1996, sections 43A.23, subdivision 2; 471.61, by adding a subdivision; and 471.617, subdivision 1.

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

Kahn and Luther introduced:

H. F. No. 1531, A bill for an act relating to state government; reallocating appropriations for the renovation of the capitol building; amending Laws 1996, chapter 463, section 13, subdivision 4.

Skare and Kinkel introduced:

H. F. No. 1532, A bill for an act relating to capital improvements; staging the availability of an appropriation in proportion to the matching money received; amending Laws 1994, chapter 643, section 19, subdivision 9.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Jennings, Smith, Entenza, Ozment and Milbert introduced:

H. F. No. 1533, A bill for an act relating to occupations and professions; heating, ventilating, and air filtering; creating an advisory council and prescribing its powers and duties; providing rulemaking; prescribing penalties; appropriating money; amending Minnesota Statutes 1996, section 116J.70, subdivision 2a; proposing coding for new law as Minnesota Statutes, chapter 16C.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

Tunheim introduced:

H. F. No. 1534, A bill for an act relating to the environment; providing a new license category under the well code for a vertical heat exchanger contractor; establishing training requirements for well contractors installing vertical heat exchangers; amending Minnesota Statutes 1996, sections 103I.101, subdivisions 2 and 5; 103I.105; 103I.208, subdivision 2; 103I.501; 103I.525, by adding a subdivision; and 103I.641, subdivisions 1 and 3; proposing coding for new law in Minnesota Statutes, chapters 103I.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Sviggum introduced:

H. F. No. 1535, A bill for an act relating to finance; providing for allocation of certain revenues to the budget reserve account; providing a refundable tax credit for the 1996 tax year; amending Minnesota Statutes 1996, sections 16A.152, subdivision 2; 124.195, subdivisions 7 and 10; and 290.06, by adding a subdivision; repealing Minnesota Statutes 1996, section 121.904, subdivision 4d.

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

Wagenius, McElroy, Winter and Abrams introduced:

H. F. No. 1536, A bill for an act relating to economic policy and strategic planning; calling for a survey of past and present economic policy initiatives in Minnesota and possible directions for an economic policy council; appropriating money.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Carlson, Mares, Mullery, Luther and Kielkucki introduced:

H. F. No. 1537, A bill for an act relating to state government; creating an advisory task force to consider a new motor vehicle license plate motto and a change in the design of the state flag.

Molnau, Lieder, Workman and Mahon introduced:

H. F. No. 1538, A bill for an act relating to taxation; exempting gasoline and special fuel used to operate well drilling machines; amending Minnesota Statutes 1996, sections 296.18, subdivision 1; and 297A.25, subdivision 7.

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

Workman, Mares, Commers, Holsten and Broecker introduced:

H. F. No. 1539, A bill for an act relating to traffic regulations; prohibiting admission of motorcycle helmet use by operators and passengers age 18 or older in litigation involving damages arising from use or operation of a motor vehicle; amending Minnesota Statutes 1996, section 169.685, by adding a subdivision; repealing Minnesota Statutes 1996, section 169.974, subdivision 6.

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

Murphy; Johnson, A.; Mahon; Broecker and Rhodes introduced:

H. F. No. 1540, A bill for an act relating to traffic regulations; requiring drivers to reduce speed when approaching authorized emergency vehicles stopped on the roadway or shoulder; amending Minnesota Statutes 1996, section 169.14, subdivision 3.

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

Chaudhary introduced:

H. F. No. 1541, A bill for an act relating to drivers' licenses; establishing youth-oriented driver improvement clinics; requiring motorcycle drivers under 18 to hold instruction permit for 12 violation-free months before receiving two-wheeled vehicle endorsement; establishing a graduated licensing system with provisional license phase; requiring two-phase driver education program; restricting driving privileges for holders of instruction permits and provisional licenses and requiring violation-free period before advancement to next license stage; making technical changes; amending Minnesota Statutes 1996, sections 84.912, subdivision 1; 86B.337, subdivision 1; 120.73, subdivision 1; 168.042, subdivision 1; 169.121, subdivision 4; 169.1217, subdivision 1; 169.89, subdivision 5; 169.971, subdivision 1, and by adding a subdivision; 169.972; 169.973, subdivision 1; 169.974, subdivision 2; 171.01, subdivision 14; 171.04, subdivision 1; 171.043; 171.05, subdivisions 2 and 2a; 171.06, subdivisions 1, 2, and 4; 171.07, subdivision 1; 171.10, subdivision 1; 171.12, subdivision 3; 171.16, subdivision 5; 171.17, subdivisions 2 and 3; 171.171; 171.172; 171.173; 171.174; 171.20, subdivision 3; 171.24, subdivision 5; 171.27; 171.30, subdivision 3; 171.305, subdivision 5; and 171.39; proposing coding for new law in Minnesota Statutes, chapter 171.

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

Solberg, Murphy and Mares introduced:

H. F. No. 1542, A bill for an act relating to public employment; making technical changes; modifying definitions; ratifying certain labor agreements; amending Minnesota Statutes 1996, sections 3.855, subdivision 2; 179A.03, subdivision 14; 179A.10, subdivision 1; and 179A.11, subdivision 1.

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

Weaver; Swenson, D.; Entenza and Broecker introduced:

subdivisions 2, 3, and 6; 86B.331, subdivisions 2, 5, 6, 7, 8, and by adding a subdivision; 86B.335, subdivisions 2, 3, 4, and 6; 97B.066, subdivision 6, and by adding subdivisions; repealing Minnesota Statutes 1996, section 86B.335, subdivisions 11 and 12.

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

Dawkins introduced:

H. F. No. 1544, A bill for an act relating to taxation; permitting local governments to adjust truth-in-taxation notices and final levies in relation to proposed mergers of services; amending Minnesota Statutes 1996, section 275.065, subdivisions 3 and 6.

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

Weaver, Broecker and Abrams introduced:

H. F. No. 1545, A bill for an act relating to public employment; adopting a policy for all public employees; excepting employees found to have engaged in sexual harassment from standard discharge procedure; amending Minnesota Statutes 1996, section 179A.20, subdivision 4; proposing coding for new law in Minnesota Statutes, chapter 179A.

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

Jefferson and Long introduced:

H. F. No. 1546, A bill for an act relating to tax increment financing; authorizing the city of Minneapolis to establish a housing transition district and providing the conditions thereof.

The bill was read for the first time and referred to the Committee on Local Government and Metropolitan Affairs.

Ozment and Rest introduced:

H. F. No. 1547, A bill for an act relating to taxation; tax increment financing; imposing restrictions; defining terms; requiring fiscal disparities contributions to be paid by the district; modifying the computation of original net tax capacity; clarifying provisions; amending Minnesota Statutes 1996, sections 469.174, subdivision 10, and by adding a subdivision; 469.175, subdivisions 3, 5, and by adding subdivisions; 469.176, subdivisions 1a, 2, 4g, and 4j; and 469.177, subdivisions 3 and 4.

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

Paulsen introduced:

H. F. No. 1548, A bill for an act relating to reemployment insurance; modifying reemployment insurance account provisions; providing a waiting period for certain claimants; amending Minnesota Statutes 1996, sections 268.07, subdivision 2; and 268.08, by adding a subdivision.

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

Peterson, Westrom, Kalis, Westfall and Winter introduced:

H. F. No. 1549, A bill for an act relating to tax increment financing; allowing use of economic development districts for certain retail facilities; amending Minnesota Statutes 1996, section 469.176, subdivision 4c.

Haas, Carruthers, Skoglund, Luther and Stanek introduced:

H. F. No. 1550, A bill for an act relating to local government; appropriating money for curfew enforcement.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Delmont and Skoglund introduced:

H. F. No. 1551, A bill for an act relating to public safety; directing commissioner of administration to temporarily transfer proceeds of enhanced 911 service fee to pay for enhanced 911 services for cellular and other wireless communications access costs accruing to state patrol; amending Minnesota Statutes 1996, sections 403.113, subdivision 1; and 403.13.

The bill was read for the first time and referred to the Committee on Regulated Industries and Energy.

Tunheim and Carruthers introduced:

H. F. No. 1552, A bill for an act relating to professions; authorizing the attorney general to take action against unlicensed private detectives and protective agents; amending Minnesota Statutes 1996, section 326.339.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

Dawkins introduced:

H. F. No. 1553, A bill for an act relating to taxation; providing that the market value of certain improvements to commercial-industrial property located in an enterprise zone is exempt from taxation; amending Minnesota Statutes 1996, section 273.11, by adding a subdivision.

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

Dawkins introduced:

H. F. No. 1554, A bill for an act relating to appellate courts; providing for questions of law certified between the appellate courts of this state and other states and nations; enacting the 1997 Uniform Certification of Questions of Law Act; proposing coding for new law in Minnesota Statutes, chapter 480; repealing Minnesota Statutes 1996, section 480.061.

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

Rifenberg, Krinkie, Gunther and Reuter introduced:

H. F. No. 1555, A bill for an act relating to commerce; providing for economic impact statements on bills that regulate the activities of businesses in this state; proposing coding for new law in Minnesota Statutes, chapter 3.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

Murphy introduced:

H. F. No. 1556, A bill for an act relating to local government; providing a maximum rate for municipal water sales to another municipality; proposing coding for new law in Minnesota Statutes, chapter 444.

Munger, Finseth, Osthoff, Sekhon and Westfall introduced:

H. F. No. 1557, A bill for an act relating to windbreaks; appropriating money for cost-share grants for windbreaks.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

McCollum, Holsten, Osthoff, Larsen and Munger introduced:

H. F. No. 1558, A bill for an act relating to highways; appropriating money for constructing a highway pedestrian bridge over marked trunk highway No. 36 in North St. Paul.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

McCollum, Osthoff, Holsten, Trimble and Farrell introduced:

H. F. No. 1559, A bill for an act relating to natural resources; appropriating money to the commissioner of natural resources for a Southeast Asian conservation officer recruitment and training program.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Munger, Hausman, Ozment, McCollum and Dempsey introduced:

H. F. No. 1560, A bill for an act relating to natural resources and pollution control; appropriating money for research on amphibians.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Munger; Johnson, R.; Rostberg; Finseth and Lieder introduced:

H. F. No. 1561, A bill for an act relating to highways; appropriating money for natural snow fencing.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Johnson, A.; Winter; Pelowski; Weaver and Sviggum introduced:

H. F. No. 1562, A bill for an act relating to data practices; classifying student evaluation data on instruction in the statewide university system as public; amending Minnesota Statutes 1996, section 13.43, by adding a subdivision.

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

Garcia; Entenza; Greenfield; Anderson, B., and Kraus introduced:

H. F. No. 1563, A bill for an act relating to health; appropriating money for the STAR program.

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

Wagenius, Greiling, Ozment, Macklin and Long introduced:

H. F. No. 1564, A bill for an act relating to taxation; requiring the state to impose a future school facility charge; requiring revenue to be held in trust; authorizing disbursal to local school districts for school facility capital costs; proposing coding for new law as Minnesota Statutes, chapter 281A.

Entenza introduced:

H. F. No. 1565, A bill for an act relating to taxation; providing that contributions to and interest earned on certain educational savings plan accounts are exempt from income taxes; amending Minnesota Statutes 1996, section 290.01, subdivision 19b; proposing coding for new law in Minnesota Statutes, chapter 290.

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

Winter, Solberg, Kinkel, Sviggum and Mares introduced:

H. F. No. 1566, A bill for an act relating to public safety; establishing a committee to plan training programs for firefighters; appropriating money.

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

Mariani, Clark and Rhodes introduced:

H. F. No. 1567, A bill for an act relating to educational community services; providing funding for strategic investments in families statewide; providing criteria for funding eligibility; appropriating money.

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

Tompkins, Pugh, Dempsey, Ozment and Milbert introduced:

H. F. No. 1568, A bill for an act relating to parks; funding the operation and maintenance of parks in the metropolitan area; appropriating money.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources Finance.

Mullery, Kahn, Long and Skoglund introduced:

H. F. No. 1569, A bill for an act relating to parks; funding the operation and maintenance of parks in the metropolitan area; appropriating money.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources Finance.

Clark, Kahn, Carruthers, Evans and Rest introduced:

H. F. No. 1570, A bill for an act relating to smoking; requiring a landlord to prevent smoke from a residential rental unit from entering the rental apartment building's common areas; amending Minnesota Statutes 1996, section 144.416.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.

Winter 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.

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned:

H. F. No. 441, A bill for an act relating to commerce; enacting the revised article 5 of the Uniform Commercial Code; regulating letters of credit; making conforming changes; amending Minnesota Statutes 1996, sections 336.1-105; 336.2-512; 336.9-103; 336.9-104; 336.9-105; 336.9-106; 336.9-304; and 336.9-305; proposing coding for new law in Minnesota Statutes, chapter 336; repealing Minnesota Statutes 1996, sections 336.5-101; 336.5-102; 336.5-103; 336.5-104; 336.5-105; 336.5-106; 336.5-107; 336.5-108; 336.5-109; 336.5-110; 336.5-111; 336.5-112; 336.5-113; 336.5-114; 336.5-115; 336.5-116; and 336.5-117.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

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

Senate Concurrent Resolution No. 7, A senate concurrent resolution relating to adoption of revenue targets under Minnesota Statutes 1996, section 16A.102, subdivision 2.

Patrick E. Flahaven, Secretary of the Senate

Solberg moved that the rules be so far suspended that Senate Concurrent Resolution No. 7 be now considered and be placed upon its adoption. The motion prevailed.

Senate Concurrent Resolution No. 7 was reported to the House.

A senate concurrent resolution relating to adoption of revenue targets under Minnesota Statutes 1996, section 16A.102, subdivision 2.

Be It Resolved by the Senate, the House of Representatives concurring, that the following revenue targets are adopted under the requirements of Minnesota Statutes 1996, section 16A.102:

Fiscal Years Fiscal Years

1998 and 1999 2000 and 2001

(1) the maximum share of personal income to

(2) the division of the share between

state services 58 percent 57 percent

local services 42 percent 43 percent

the appropriate mix of rates This resolution assumes no permanent change in the appropriate mix and rates

of state taxes, and a reduction in the rate

of local property taxes.

Adoption of these revenue targets is expected to make a small change in the incidence of Minnesota state and local taxes.

Solberg moved that Senate Concurrent Resolution No. 7 be now adopted.

Knight, Krinkie, Kielkucki, Koppendrayer, Mulder, Siefert and Olson, M., moved to amend Senate Concurrent Resolution No. 7 as follows:

Page 1, line 14, delete "17.8" and insert "17.45" and delete "17.7" and insert "17.37"

A roll call was requested and properly seconded.

The question was taken on the Knight et al amendment and the roll was called. There were 62 yeas and 71 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Kraus	Ness	Seifert	Van Dellen
Anderson, B.	Finseth	Krinkie	Nornes	Smith	Vickerman
Bettermann	Goodno	Kuisle	Olson, M.	Stanek	Weaver
Boudreau	Gunther	Larsen	Osskopp	Stang	Westfall
Bradley	Haas	Leppik	Ozment	Sviggum	Westrom
Broecker	Harder	Lindner	Paulsen	Swenson, D.	Wolf
Commers	Holsten	Macklin	Pawlenty	Swenson, H.	Workman
Daggett	Kielkucki	Mares	Reuter	Sykora
Davids	Knight	McElroy	Rifenberg	Tingelstad
Dehler	Knoblach	Molnau	Rostberg	Tompkins
Dempsey	Koppendrayer	Mulder	Seagren	Tuma

Those who voted in the negative were:

Anderson, I.	Farrell	Johnson, A.	Luther	Orfield	Skoglund
Bakk	Folliard	Johnson, R.	Mahon	Osthoff	Slawik
Biernat	Garcia	Juhnke	Mariani	Paymar	Solberg
Bishop	Greenfield	Kahn	Marko	Pelowski	Tomassoni
Carlson	Greiling	Kalis	McCollum	Peterson	Trimble
Chaudhary	Hasskamp	Kelso	McGuire	Pugh	Tunheim
Clark	Hausman	Kinkel	Milbert	Rest	Wagenius
Dawkins	Hilty	Koskinen	Mullery	Rhodes	Wejcman
Delmont	Huntley	Kubly	Munger	Rukavina	Wenzel
Dorn	Jaros	Leighton	Murphy	Schumacher	Winter
Entenza	Jefferson	Lieder	Olson, E.	Sekhon	Spk. Carruthers
Evans	Jennings	Long	Opatz	Skare

Sviggum moved to amend Senate Concurrent Resolution No. 7 as follows:

Page 1, line 14, delete "17.8" and insert "17.55" and delete "17.7" and insert "17.47"

A roll call was requested and properly seconded.

The question was taken on the Sviggum amendment and the roll was called. There were 62 yeas and 71 nays as follows:

Those who voted in the affirmative were:

Abrams	Dempsey	Koppendrayer	Mulder	Seifert	Van Dellen
Anderson, B.	Erhardt	Kraus	Ness	Smith	Vickerman
Bettermann	Finseth	Krinkie	Nornes	Stanek	Weaver
Bishop	Goodno	Kuisle	Ozment	Stang	Westfall
Boudreau	Gunther	Larsen	Paulsen	Sviggum	Westrom
Bradley	Haas	Leppik	Pawlenty	Swenson, D.	Wolf
Broecker	Harder	Lindner	Reuter	Swenson, H.	Workman
Commers	Holsten	Macklin	Rhodes	Sykora
Daggett	Kielkucki	Mares	Rifenberg	Tingelstad
Davids	Knight	McElroy	Rostberg	Tompkins
Dehler	Knoblach	Molnau	Seagren	Tuma

Those who voted in the negative were:

Anderson, I.	Folliard	Johnson, R.	Mahon	Orfield	Skoglund
Bakk	Garcia	Juhnke	Mariani	Osskopp	Slawik
Biernat	Greenfield	Kahn	Marko	Osthoff	Solberg
Carlson	Greiling	Kalis	McCollum	Paymar	Tomassoni
Chaudhary	Hasskamp	Kelso	McGuire	Pelowski	Trimble
Clark	Hausman	Kinkel	Milbert	Peterson	Tunheim
Dawkins	Hilty	Koskinen	Mullery	Pugh	Wagenius
Delmont	Huntley	Kubly	Munger	Rest	Wejcman
Dorn	Jaros	Leighton	Murphy	Rukavina	Wenzel
Entenza	Jefferson	Lieder	Olson, E.	Schumacher	Winter
Evans	Jennings	Long	Olson, M.	Sekhon	Spk. Carruthers
Farrell	Johnson, A.	Luther	Opatz	Skare

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

The question recurred on the Solberg motion and the roll was called. There were 68 yeas and 64 nays as follows:

Those who voted in the affirmative were:

Anderson, I.	Folliard	Juhnke	Mariani	Paymar	Tomassoni
Bakk	Garcia	Kahn	Marko	Pelowski	Trimble
Biernat	Greenfield	Kalis	McCollum	Peterson	Tunheim
Carlson	Greiling	Kelso	McGuire	Pugh	Wagenius
Chaudhary	Hasskamp	Kinkel	Milbert	Rest	Wejcman
Clark	Hilty	Koskinen	Mullery	Rukavina	Wenzel
Dawkins	Huntley	Kubly	Munger	Schumacher	Winter
Delmont	Jaros	Leighton	Murphy	Sekhon	Spk. Carruthers
Dorn	Jefferson	Lieder	Olson, E.	Skare
Entenza	Jennings	Long	Opatz	Skoglund
Evans	Johnson, A.	Luther	Orfield	Slawik
Farrell	Johnson, R.	Mahon	Osthoff	Solberg

Those who voted in the negative were:

Abrams	Dempsey	Koppendrayer	Mulder	Rostberg	Tompkins
Anderson, B.	Erhardt	Kraus	Ness	Seagren	Tuma
Bettermann	Finseth	Krinkie	Nornes	Seifert	Van Dellen
Bishop	Goodno	Kuisle	Olson, M.	Smith	Vickerman
Boudreau	Gunther	Larsen	Osskopp	Stanek	Weaver
Bradley	Haas	Leppik	Ozment	Stang	Westfall
Broecker	Harder	Lindner	Paulsen	Sviggum	Westrom
Commers	Holsten	Macklin	Pawlenty	Swenson, D.	Wolf
Daggett	Kielkucki	Mares	Reuter	Swenson, H.	Workman
Davids	Knight	McElroy	Rhodes	Sykora
Dehler	Knoblach	Molnau	Rifenberg	Tingelstad

The motion prevailed and Senate Concurrent Resolution No. 7 was adopted.

Mr. Speaker:

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

S. F. No. 35, A bill for an act relating to elections; permitting the election of soil and water conservation district supervisors from single-member districts in the counties of Ramsey and Washington; amending Minnesota Statutes 1996, section 103C.311.

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

Mr. Wiger; Mses. Flynn and Runbeck.

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

McCollum moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 3 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. 35. The motion prevailed.

Mr. Speaker:

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

S. F. Nos. 221, 305, 368, 624, 417, 504, 124, 641 and 745.

Patrick E. Flahaven, Secretary of the Senate

S. F. No. 221, A bill for an act relating to state government; changing the appointment authority for the executive director of the board of private detective and protective agents; amending Minnesota Statutes 1996, section 326.3321, subdivision 1.

S. F. No. 305, A bill for an act relating to civil actions; modifying and clarifying provisions governing lawsuits by prison inmates; amending Minnesota Statutes 1996, sections 244.035; and 563.02, subdivision 3.

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

S. F. No. 368, A bill for an act relating to civil actions; providing immunity from civil liability for persons who preside at alternative dispute resolution proceedings; proposing coding for new law in Minnesota Statutes, chapter 604A.

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

S. F. No. 624, A bill for an act relating to professional firms; modernizing and standardizing the law regulating professional business organizations; amending Minnesota Statutes 1996, sections 13.99, subdivision 92e; 144A.43, subdivision 4; 322B.12, subdivision 1; 322B.92; 323.44, by adding a subdivision; and 323.49, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 303; proposing coding for new law as Minnesota Statutes, chapter 319B; repealing Minnesota Statutes 1996, sections 319A.01; 319A.02; 319A.03; 319A.04; 319A.05; 319A.06; 319A.07; 319A.08; 319A.09; 319A.10; 319A.11; 319A.12; 319A.13; 319A.14; 319A.15; 319A.16; 319A.17; 319A.18; 319A.19; 319A.20; 319A.21; and 319A.22.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

S. F. No. 417, A bill for an act relating to Becker county; authorizing an economic development authority.

The bill was read for the first time.

Olson, E., moved that S. F. No. 417 and H. F. No. 564, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 504, A bill for an act relating to local government; permitting the city of Nashwauk to own and operate a gas utility.

The bill was read for the first time and referred to the Committee on Local Government and Metropolitan Affairs.

S. F. No. 124, A bill for an act relating to towns; authorizing the charging and collection of certain service charges; proposing coding for new law in Minnesota Statutes, chapter 366.

The bill was read for the first time.

Olson, E., moved that S. F. No. 124 and H. F. No. 483, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 641, A bill for an act relating to utilization review organizations; requiring a peer of the treating mental health or substance abuse provider to review a utilization review organization's determination not to certify a mental health or substance abuse service; amending Minnesota Statutes 1996, section 62M.09, subdivision 3, and by adding a subdivision.

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

S. F. No. 745, A bill for an act relating to taxation; property tax; allowing certain towns and cities to transfer their local board of review duties and responsibilities to the county; amending Minnesota Statutes 1996, sections 271.01, subdivision 5; 273.121; 274.01; and 274.13, by adding subdivisions.

Pugh was excused for the remainder of today's session.

H. F. No. 763, A bill for an act relating to historic places; designating Zion Lutheran Church and cemetery as a historic place; amending Minnesota Statutes 1996, section 138.664, by adding a subdivision.

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 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Juhnke	Mahon	Paulsen	Sviggum
Anderson, B.	Evans	Kahn	Mares	Pawlenty	Swenson, D.
Anderson, I.	Farrell	Kalis	Mariani	Paymar	Swenson, H.
Bakk	Finseth	Kelso	Marko	Pelowski	Sykora
Bettermann	Folliard	Kielkucki	McCollum	Peterson	Tingelstad
Biernat	Garcia	Kinkel	McElroy	Rest	Tomassoni
Bishop	Goodno	Knight	McGuire	Reuter	Tompkins
Boudreau	Greenfield	Knoblach	Milbert	Rhodes	Trimble
Bradley	Greiling	Koppendrayer	Molnau	Rifenberg	Tuma
Broecker	Gunther	Koskinen	Mulder	Rostberg	Tunheim
Carlson	Haas	Kraus	Mullery	Rukavina	Van Dellen
Chaudhary	Harder	Krinkie	Munger	Schumacher	Vickerman
Clark	Hasskamp	Kubly	Murphy	Seagren	Wagenius
Commers	Hausman	Kuisle	Ness	Seifert	Weaver
Daggett	Hilty	Larsen	Nornes	Sekhon	Wejcman
Davids	Holsten	Leighton	Olson, E.	Skare	Wenzel
Dawkins	Huntley	Leppik	Olson, M.	Skoglund	Westfall
Dehler	Jaros	Lieder	Opatz	Slawik	Westrom
Delmont	Jefferson	Lindner	Orfield	Smith	Winter
Dempsey	Jennings	Long	Osskopp	Solberg	Wolf
Dorn	Johnson, A.	Luther	Osthoff	Stanek	Workman
Entenza	Johnson, R.	Macklin	Ozment	Stang	Spk. Carruthers

The bill was passed and its title agreed to.

The following Conference Committee Report was received:

March 12, 1997

The Honorable Phil Carruthers

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 100, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 100 be further amended as follows:

Delete everything after the enacting clause and insert:

Section 1. [APPROPRIATION FOR 1997 SEVERE WEATHER AFFECTING PUBLIC SAFETY.]

Subdivision 1. [COORDINATION.] A special 1997 severe weather appropriation is authorized. Reimbursement to counties, cities, and towns under this section must be coordinated in so far as possible, and subject to immediate public safety concerns, with emergency federal funding for the same or similar purposes.

Subd. 2. [ALLOCATION OF FUNDS.] The appropriation in this article must be distributed as follows:

(a) $6,000,000 is available:

(1) for the state match of federal disaster funds for 1997 snow-related disaster costs according to the formula agreed to by the state and the federal emergency management agency (FEMA);

(2) to fund what would otherwise be the local government match for eligible 1997 snow-related disaster costs in the formula in clause (1); and

(3) to fund the ten percent of snow removal costs determined by the FEMA to be ineligible for federal reimbursement;

(b) $3,000,000 is reserved for assistance associated with 1997 flooding or related emergencies that affect public safety to be distributed as follows:

(1) for the state match of federal disaster funds for any 1997 flood-related disaster costs according to the formula agreed to by the state and FEMA;

(2) for other 1997 flood-related costs not covered in clause (1); and

(3) for the purposes specified in paragraph (a) if, by June 30, 1997, the commissioner of public safety determines that all or any part of the funds reserved in this paragraph are not needed for the purposes specified in clauses (1) and (2); and

(c) $11,000,000 shall be distributed according to a formula that compares snow removal expenditures of local government units for calendar year 1996 to the average annual snow removal expenses for calendar years 1993, 1994, and 1995.

Subd. 4. [NO PRECEDENT SET.] Funding by the state in this section for costs that would otherwise be a local fiscal responsibility under funding formulas negotiated by the state with FEMA is not to be considered a precedent for any future disaster funding.

Sec. 2. [APPROPRIATION.]

$20,000,000 in fiscal year 1997 is appropriated from the general fund to the commissioner of public safety to be spent as provided in section 1, except that the commissioner may use up to $15,000 of this appropriation for administration of this program. This appropriation does not cancel, but is available until expended.

Sec. 3. [EFFECTIVE DATE.]

This article is effective the day after its final enactment.

Section 1. [STATE HIGHWAY OPERATIONS; APPROPRIATION.]

$16,000,000 is appropriated from the trunk highway fund to the commissioner of transportation for state road operations. This amount is added to the appropriation for state road operations for fiscal year 1997 in Laws 1995, chapter 265, article 2, section 2, subdivision 8.

Sec. 2. [STATE PATROL; APPROPRIATION.]

$95,000 is appropriated from the trunk highway fund to the commissioner of public safety for state trooper overtime costs in fiscal year 1997 related to winter weather emergencies. This appropriation is added to the appropriation for the state patrol for fiscal year 1997 in Laws 1995, chapter 265, article 2, section 5, subdivision 3.

Sec. 3. [EFFECTIVE DATE.]

This article is effective the day after its final enactment.

Section 1. Minnesota Statutes 1996, section 12.221, subdivision 3, is amended to read:

Subd. 3. [GOVERNOR'S AUTHORIZED REPRESENTATIVE.] The state director may serve as the governor's authorized representative. As such, the state director may apply for and enter into an agreement with any federal agency to accept and administer federal financial assistance made available to the state as a result of a disaster declaration. Federal money received is appropriated to the state director, who shall report its expenditure to the chairs of the house of representatives ways and means committee and the appropriate senate finance committee.

Sec. 2. Minnesota Statutes 1996, section 84.912, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] As used in this section, the following terms have the meanings given them:

(a) "All-terrain vehicle" has the meaning given in section 84.92, subdivision 8.

(c) "Designated offense" means a violation of section 84.91 or an ordinance in conformity with it:

(1) occurring within five years of the first of three prior impaired driving convictions or the first of three prior license revocations based on separate impaired driving incidents;

(2) occurring within 15 years of the first of four or more prior impaired driving convictions or the first of four or more prior license revocations based on separate impaired driving incidents;

(3) by a person whose driver's license or driving privileges have been canceled under section 171.04, subdivision 1, clause (8) (9); or

(4) by a person who is subject to a restriction on the person's driver's license under section 171.09 that provides that the person may not use or consume any amount of alcohol or a controlled substance.

(d) "Owner" means the registered owner of the snowmobile or all-terrain vehicle according to records of the department of natural resources and includes a lessee of a snowmobile or all-terrain vehicle if the lease agreement has a term of 180 days or more.

(e) "Prior impaired driving conviction" has the meaning given in section 169.121, subdivision 3.

(f) "Prior license revocation" has the meaning given in section 169.121, subdivision 3.

(g) "Prosecuting authority" means the attorney in the jurisdiction in which the designated offense occurred who is responsible for prosecuting violations of a designated offense.

(h) "Snowmobile" has the meaning given in section 84.81, subdivision 3.

(i) "Vehicle" means a snowmobile or an all-terrain vehicle.

Sec. 3. Minnesota Statutes 1996, section 86B.337, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] As used in this section, the following terms have the meanings given them:

(a) "Appropriate agency" means a law enforcement agency that has the authority to make an arrest for a violation of a designated offense.

(b) "Designated offense" means a violation of section 86B.331 or an ordinance in conformity with it:

(1) occurring within five years of the first of three prior impaired driving convictions or the first of three prior license revocations based on separate impaired driving incidents;

(2) occurring within 15 years of the first of four or more prior impaired driving convictions or the first of four or more prior license revocations based on separate impaired driving incidents;

(3) by a person whose driver's license or driving privileges have been canceled under section 171.04, subdivision 1, clause (8) (9); or

(4) by a person who is subject to a restriction on the person's driver's license under section 171.09 that provides that the person may not use or consume any amount of alcohol or a controlled substance.

(c) "Motorboat" has the meaning given in section 86B.005, subdivision 9.

(e) "Prior impaired driving conviction" has the meaning given in section 169.121, subdivision 3.

(f) "Prior license revocation" has the meaning given in section 169.121, subdivision 3.

(g) "Prosecuting authority" means the attorney in the jurisdiction in which the designated offense occurred who is responsible for prosecuting violations of a designated offense.

Sec. 4. Minnesota Statutes 1996, section 168.042, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] (a) For purposes of this section, the following terms have the meanings given.

(b) "Violator" means a person who was driving, operating, or in physical control of the motor vehicle when the violation occurred.

(c) "Violation" means:

(1) a violation of section 169.123 or an impaired driving conviction as defined in section 169.121, subdivision 3, that results in the revocation of a person's driver's license or driving privileges, and also includes an alcohol-related license revocation from another state;

(2) a violation of section 169.129; and

(3) a violation of section 171.24 by a person whose driver's license or driving privileges have been canceled under section 171.04, subdivision 1, clause (8) (9).

Sec. 5. Minnesota Statutes 1996, section 169.121, subdivision 4, is amended to read:

Subd. 4. [ADMINISTRATIVE PENALTIES.] (a) The commissioner of public safety shall revoke the driver's license of a person convicted of violating this section or an ordinance in conformity with it as follows:

(1) for an offense under subdivision 1: not less than 30 days;

(2) for an offense under subdivision 1a: not less than 90 days;

(3) for an offense occurring within five years after a prior impaired driving conviction or a prior license revocation, or any time after two or more prior impaired driving convictions or prior license revocations: (i) if the current conviction is for a violation of subdivision 1, not less than 180 days and until the court has certified that treatment or rehabilitation has been successfully completed where prescribed in accordance with section 169.126; or (ii) if the current conviction is for a violation of subdivision 1a, not less than one year and until the court has certified that treatment or rehabilitation has been successfully completed where prescribed in accordance with section 169.126;

(4) for an offense occurring within five years after the first of two prior impaired driving convictions or prior license revocations: not less than one year, together with denial under section 171.04, subdivision 1, clause (8) (9), until rehabilitation is established in accordance with standards established by the commissioner;

(5) for an offense occurring any time after three or more prior impaired driving convictions or prior license revocations: not less than two years, together with denial under section 171.04, subdivision 1, clause (8) (9), until rehabilitation is established in accordance with standards established by the commissioner.

(b) If the person convicted of violating this section is under the age of 21 years, the commissioner of public safety shall revoke the offender's driver's license or operating privileges for a period of six months or for the appropriate period of time under paragraph (a), clauses (1) to (5), for the offense committed, whichever is the greatest period.

(d) Whenever department records show that the violation involved personal injury or death to any person, not less than 90 additional days shall be added to the base periods provided above.

(e) Except for a person whose license has been revoked under paragraph (b), and except for a person who commits a violation described in subdivision 3, paragraph (c), clause (4), (child endangerment), any person whose license has been revoked pursuant to section 169.123 as the result of the same incident, and who does not have a prior impaired driving conviction or prior license revocation within the previous ten years, is subject to the mandatory revocation provisions of paragraph (a), clause (1) or (2), in lieu of the mandatory revocation provisions of section 169.123.

(f) As used in this subdivision, the terms "prior impaired driving conviction" and "prior license revocation" have the meanings given in subdivision 3, paragraph (a).

Sec. 6. Minnesota Statutes 1996, section 169.1217, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] As used in this section, the following terms have the meanings given them:

(a) "Appropriate agency" means a law enforcement agency that has the authority to make an arrest for a violation of a designated offense.

(b) "Designated offense" includes a violation of section 169.121, an ordinance in conformity with it, or 169.129:

(1) within five years of three prior impaired driving convictions or three prior license revocations based on separate incidents;

(2) within 15 years of the first of four or more prior impaired driving convictions or the first of four or more prior license revocations based on separate incidents;

(3) by a person whose driver's license or driving privileges have been canceled under section 171.04, subdivision 1, clause (8) (9); or

(4) by a person who is subject to a restriction on the person's driver's license under section 171.09 which provides that the person may not use or consume any amount of alcohol or a controlled substance.

"Designated offense" also includes a violation of section 169.121, subdivision 3, paragraph (c), clause (4):

(1) within five years of two prior impaired driving convictions or two prior license revocations based on separate incidents; or

(2) within 15 years of the first of three or more prior impaired driving convictions or the first of three or more prior license revocations based on separate incidents.

(c) "Motor vehicle" and "vehicle" have the meaning given "motor vehicle" in section 169.121, subdivision 11. The terms do not include a vehicle which is stolen or taken in violation of the law.

(d) "Owner" means the registered owner of the motor vehicle according to records of the department of public safety and includes a lessee of a motor vehicle if the lease agreement has a term of 180 days or more.

(e) "Prior impaired driving conviction" has the meaning given it in section 169.121, subdivision 3. A prior impaired driving conviction also includes a prior juvenile adjudication that would have been a prior impaired driving conviction if committed by an adult.

(f) "Prior license revocation" has the meaning given it in section 169.121, subdivision 3.

Sec. 7. Minnesota Statutes 1996, section 171.043, is amended to read:

171.043 [NOTICE OF PERSONS UNDER DRIVER'S LICENSE CANCELLATION.]

The commissioner of public safety shall develop a program under which the commissioner provides a monthly notice to local law enforcement agencies of the names and addresses of persons residing within the local agency's jurisdiction whose driver's licenses or driving privileges have been canceled under section 171.04, subdivision 1, clause (8) (9). At the commissioner's discretion, the commissioner may adopt necessary procedures so that the information is current and accurate. Data in the notice are private data on individuals and are available to law enforcement agencies.

Sec. 8. Minnesota Statutes 1996, section 171.24, subdivision 5, is amended to read:

Subd. 5. [GROSS MISDEMEANOR.] A person is guilty of a gross misdemeanor if:

(1) the person's driver's license or driving privilege has been canceled or denied under section 171.04, subdivision 1, clause (8) (9);

(2) the person has been given notice of or reasonably should know of the cancellation or denial; and

(3) the person disobeys the order by operating in this state any motor vehicle, the operation of which requires a driver's license, while the person's license or privilege is canceled or denied.

Sec. 9. Minnesota Statutes 1996, section 171.30, subdivision 3, is amended to read:

Subd. 3. [CONDITIONS ON ISSUANCE.] The commissioner shall issue a limited license restricted to the vehicles whose operation is permitted only under a class A, class B, or class C license whenever a class A, class B, or class C license has been suspended under section 171.18, or revoked under section 171.17, for violation of the highway traffic regulation act committed in a private passenger motor vehicle. This subdivision shall not apply to any persons described in section 171.04, subdivision 1, clauses (4), (5), (6), (8) (7), (9), (10), and (11) (12), or any person whose license or privilege has been suspended or revoked for a violation of section 169.121 or 169.123, or a statute or ordinance from another state in conformity with either of those sections.

Sec. 10. Minnesota Statutes 1996, section 171.305, subdivision 5, is amended to read:

Subd. 5. [ISSUANCE OF LIMITED LICENSE.] The commissioner may issue a limited license to a person whose driver's license has been canceled and denied due to an alcohol or controlled substance related incident under section 171.04, subdivision 1, clause (8) (9), under the following conditions:

(1) at least one-half of the person's required abstinence period has expired;

(2) the person has completed all rehabilitation requirements; and

(3) the person agrees to drive only a motor vehicle equipped with a functioning and certified ignition interlock device.

Sec. 11. [EFFECTIVE DATES.]

Section 1 is effective retroactively to August 1, 1996. Sections 2 to 10 are effective retroactively to February 1, 1997."

Delete the title and insert:

We request adoption of this report and repassage of the bill.

House Conferees: Stephen G. Wenzel, Bernard L. "Bernie" Lieder, Al Juhnke, Marty Seifert and Richard Mulder.

Senate Conferees: Jim Vickerman, Keith Langseth, Cal Larson, Carol Flynn and Dennis R. Frederickson.

Wenzel moved that the report of the Conference Committee on H. F. No. 100 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 100, A bill for an act relating to public safety; providing for emergency expenditures related to the continuing severe weather conditions and their aftermath; providing additional funding for state road operations and state trooper overtime in fiscal year 1997; making certain cross-reference corrections; appropriating money; amending Minnesota Statutes 1996, sections 84.912, subdivision 1; 86B.337, subdivision 1; 168.042, subdivision 1; 169.121, subdivision 4; 169.1217, subdivision 1; 171.043; 171.24, subdivision 5; 171.30, subdivision 3; and 171.305, subdivision 5.

The bill was read for the third time, as amended by Conference, 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 1 nay as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Juhnke	Mares	Pawlenty	Swenson, D.
Anderson, B.	Evans	Kahn	Mariani	Paymar	Swenson, H.
Anderson, I.	Farrell	Kalis	Marko	Pelowski	Sykora
Bakk	Finseth	Kelso	McCollum	Peterson	Tingelstad
Bettermann	Folliard	Kielkucki	McElroy	Rest	Tomassoni
Biernat	Garcia	Kinkel	McGuire	Reuter	Tompkins
Bishop	Goodno	Knoblach	Milbert	Rhodes	Trimble
Boudreau	Greenfield	Koppendrayer	Molnau	Rifenberg	Tuma
Bradley	Greiling	Koskinen	Mulder	Rostberg	Tunheim
Broecker	Gunther	Kraus	Mullery	Rukavina	Van Dellen
Carlson	Haas	Krinkie	Munger	Schumacher	Vickerman
Chaudhary	Harder	Kubly	Murphy	Seagren	Wagenius
Clark	Hasskamp	Kuisle	Ness	Seifert	Weaver
Commers	Hausman	Larsen	Nornes	Sekhon	Wejcman
Daggett	Hilty	Leighton	Olson, E.	Skare	Wenzel
Davids	Holsten	Leppik	Olson, M.	Skoglund	Westfall
Dawkins	Huntley	Lieder	Opatz	Slawik	Westrom
Dehler	Jaros	Lindner	Orfield	Smith	Winter
Delmont	Jefferson	Long	Osskopp	Solberg	Wolf
Dempsey	Jennings	Luther	Osthoff	Stanek	Workman
Dorn	Johnson, A.	Macklin	Ozment	Stang	Spk. Carruthers
Entenza	Johnson, R.	Mahon	Paulsen	Sviggum

Those who voted in the negative were:

Knight

The bill was repassed, as amended by Conference, and its title agreed to.

Winter from the Committee on Rules and Legislative Administration, pursuant to rule 1.09, designated the following bills as Special Orders to be acted upon today:

H. F. Nos. 211, 281 and 601.

H. F. No. 211, A bill for an act relating to telecommunications; authorizing the installation of extended area service within combined school districts.

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 126 yeas and 4 nays as follows:

Those who voted in the affirmative were:

Abrams	Evans	Kahn	Mares	Pawlenty	Swenson, D.
Anderson, B.	Farrell	Kalis	Mariani	Paymar	Swenson, H.
Bakk	Finseth	Kelso	Marko	Pelowski	Sykora
Bettermann	Folliard	Kielkucki	McCollum	Peterson	Tingelstad
Bishop	Garcia	Kinkel	McElroy	Rest	Tomassoni
Boudreau	Goodno	Knight	McGuire	Reuter	Tompkins
Bradley	Greenfield	Knoblach	Milbert	Rhodes	Trimble
Broecker	Gunther	Koppendrayer	Molnau	Rifenberg	Tuma
Carlson	Haas	Koskinen	Mulder	Rostberg	Tunheim
Chaudhary	Harder	Kraus	Mullery	Rukavina	Van Dellen
Clark	Hasskamp	Krinkie	Munger	Schumacher	Vickerman
Commers	Hausman	Kubly	Murphy	Seagren	Wagenius
Daggett	Hilty	Kuisle	Ness	Seifert	Weaver
Davids	Holsten	Larsen	Nornes	Sekhon	Wejcman
Dawkins	Huntley	Leighton	Olson, M.	Skoglund	Wenzel
Dehler	Jaros	Leppik	Opatz	Slawik	Westfall
Delmont	Jefferson	Lindner	Orfield	Smith	Westrom
Dempsey	Jennings	Long	Osskopp	Solberg	Winter
Dorn	Johnson, A.	Luther	Osthoff	Stanek	Wolf
Entenza	Johnson, R.	Macklin	Ozment	Stang	Workman
Erhardt	Juhnke	Mahon	Paulsen	Sviggum	Spk. Carruthers

Those who voted in the negative were:

Anderson, I.	Lieder	Olson, E.	Skare

The bill was passed and its title agreed to.

H. F. No. 281, A bill for an act relating to utilities; providing performance regulation plans for gas utility services; amending Minnesota Statutes 1996, section 216B.16, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 216B.

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 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Juhnke	Mahon	Paulsen	Sviggum
Anderson, B.	Evans	Kahn	Mares	Pawlenty	Swenson, D.
Anderson, I.	Farrell	Kalis	Mariani	Paymar	Swenson, H.
Bakk	Finseth	Kelso	Marko	Pelowski	Sykora
Bettermann	Folliard	Kielkucki	McCollum	Peterson	Tingelstad
Biernat	Garcia	Kinkel	McElroy	Rest	Tomassoni
Bishop	Goodno	Knight	McGuire	Reuter	Tompkins
Boudreau	Greenfield	Knoblach	Milbert	Rhodes	Trimble
Bradley	Greiling	Koppendrayer	Molnau	Rifenberg	Tuma
Broecker	Gunther	Koskinen	Mulder	Rostberg	Tunheim
Carlson	Haas	Kraus	Mullery	Rukavina	Van Dellen
Chaudhary	Harder	Krinkie	Munger	Schumacher	Vickerman
Clark	Hasskamp	Kubly	Murphy	Seagren	Wagenius
Commers	Hausman	Kuisle	Ness	Seifert	Weaver
Daggett	Hilty	Larsen	Nornes	Sekhon	Wejcman
Davids	Holsten	Leighton	Olson, E.	Skare	Wenzel
Dawkins	Huntley	Leppik	Olson, M.	Skoglund	Westfall
Dehler	Jaros	Lieder	Opatz	Slawik	Westrom
Journal of the House - 22nd Day - Top of Page 713
Delmont	Jefferson	Lindner	Orfield	Smith	Winter
Dempsey	Jennings	Long	Osskopp	Solberg	Wolf
Dorn	Johnson, A.	Luther	Osthoff	Stanek	Workman
Entenza	Johnson, R.	Macklin	Ozment	Stang	Spk. Carruthers

The bill was passed and its title agreed to.

H. F. No. 601 was reported to the House.

Kraus moved to amend H. F. No. 601, the first engrossment, as follows:

Page 1, line 15, before "Upon" insert "Upon initiation by resolution of the governing body or"

The motion prevailed and the amendment was adopted.

H. F. No. 601, A bill for an act relating to local government; authorizing boundary commissions; amending Minnesota Statutes 1996, section 465.79.

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 1 nay as follows:

Those who voted in the affirmative were:

Abrams	Evans	Kalis	Marko	Peterson	Tingelstad
Anderson, B.	Farrell	Kielkucki	McElroy	Rest	Tomassoni
Journal of the House - 22nd Day - Top of Page 714
Anderson, I.	Finseth	Kinkel	McGuire	Reuter	Tompkins
Bakk	Folliard	Knight	Milbert	Rhodes	Trimble
Bettermann	Garcia	Knoblach	Molnau	Rifenberg	Tuma
Bishop	Goodno	Koppendrayer	Mulder	Rostberg	Tunheim
Boudreau	Greenfield	Koskinen	Mullery	Rukavina	Van Dellen
Bradley	Greiling	Kraus	Munger	Schumacher	Vickerman
Broecker	Gunther	Krinkie	Murphy	Seagren	Wagenius
Carlson	Haas	Kubly	Ness	Seifert	Weaver
Chaudhary	Harder	Kuisle	Nornes	Sekhon	Wejcman
Clark	Hasskamp	Larsen	Olson, E.	Skare	Wenzel
Commers	Hausman	Leighton	Olson, M.	Skoglund	Westfall
Daggett	Hilty	Leppik	Opatz	Slawik	Westrom
Davids	Holsten	Lieder	Orfield	Smith	Winter
Dawkins	Huntley	Lindner	Osskopp	Solberg	Wolf
Dehler	Jaros	Long	Osthoff	Stanek	Workman
Delmont	Jefferson	Luther	Ozment	Stang	Spk. Carruthers
Dempsey	Johnson, A.	Macklin	Paulsen	Sviggum
Dorn	Johnson, R.	Mahon	Pawlenty	Swenson, D.
Entenza	Juhnke	Mares	Paymar	Swenson, H.
Erhardt	Kahn	Mariani	Pelowski	Sykora

Those who voted in the negative were:

McCollum

The bill was passed, as amended, and its title agreed to.

Winter moved that the bills on General Orders for today be continued. The motion prevailed.

Van Dellen moved that the names of Kelso, Seagren, Haas and Tingelstad be added as authors on H. F. No. 9. The motion prevailed.

McElroy moved that the name of Tingelstad be added as an author on H. F. No. 58. The motion prevailed.

Skoglund moved that the name of Chaudhary be shown as chief author on H. F. No. 338. The motion prevailed.

McElroy moved that the name of Mulder be added as an author on H. F. No. 561. The motion prevailed.

Boudreau moved that the name of Johnson, A., be added as an author on H. F. No. 1114. The motion prevailed.

McCollum moved that the name of Trimble be added as an author on H. F. No. 1281. The motion prevailed.

Reuter moved that the name of Hasskamp be added as an author on H. F. No. 1288. The motion prevailed.

Dawkins moved that the name of Milbert be added as an author on H. F. No. 1292. The motion prevailed.

Murphy moved that the name of Stanek be added as an author on H. F. No. 1308. The motion prevailed.

Carlson moved that the name of Delmont be added as an author on H. F. No. 1310. The motion prevailed.

Carlson moved that the name of Wenzel be added as an author on H. F. No. 1312. The motion prevailed.

Dawkins moved that the name of Kahn be added as an author on H. F. No. 1316. The motion prevailed.

Delmont moved that the name of Stanek be stricken and the name of Larsen be added as an author on H. F. No. 1327. The motion prevailed.

Smith moved that the names of Murphy, Macklin and Sviggum be added as authors on H. F. No. 1347. The motion prevailed.

Juhnke moved that the name of Winter be added as an author on H. F. No. 1395. The motion prevailed.

Abrams moved that H. F. No. 637 be recalled from the Committee on Economic Development and International Trade and be re-referred to the Committee on Taxes. The motion prevailed.

Clark moved that H. F. No. 1166 be recalled from the Committee on Economic Development and International Trade and be re-referred to the Committee on Labor-Management Relations. The motion prevailed.

Holsten moved that H. F. No. 1300 be recalled from the Committee on Regulated Industries and Energy and be re-referred to the Committee on Agriculture. The motion prevailed.

Clark moved that H. F. No. 1304 be recalled from the Committee on Judiciary and be re-referred to the Committee on Economic Development and International Trade. The motion prevailed.

Leppik moved that H. F. No. 1411 be recalled from the Committee on Taxes and be re-referred to the Committee on Governmental Operations. The motion prevailed.

Solberg moved that H. F. No. 653, now on General Orders, be re-referred to the Committee on Governmental Operations. The motion prevailed.

Luther moved that H. F. No. 128 be returned to its author. The motion prevailed.

Ozment moved that H. F. No. 1368 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 S. F. No. 35:

McCollum, Osthoff and Holsten.

Winter moved that when the House adjourns today it adjourn until 2:30 p.m., Monday, March 17, 1997. The motion prevailed.

Winter moved that the House adjourn. The motion prevailed, and the Speaker declared the House stands adjourned until 2:30 p.m., Monday, March 17, 1997.