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 Files:

H. F. No. 1863, relating to agriculture; establishing task force to make recommendations on modifications to the agricultural marketing and bargaining law.

H. F. No. 512, relating to municipalities; authorizing bankruptcy filing.

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
	1863	142	10:10 a.m. May 13	May 13
703		145	10:30 a.m. May 13	May 13
72		147	10:25 a.m. May 13	May 13
	512	148	10:12 a.m. May 13	May 13

Sincerely,

Joan Anderson Growe
Secretary of State

S. F. No. 1820 was read for the second time.

The following House Files were introduced:

Murphy introduced:

H. F. No. 2214, A bill for an act relating to education; providing that high school pupils enrolled in post-secondary courses may participate in high school activities; excluding grades earned in a post-secondary course from a pupil's grade point average and class rank in a secondary school; amending Minnesota Statutes 1996, section 123.3514, subdivision 5; and by adding a subdivision.

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

Dehler, Tomassoni, Pugh, Koppendrayer and Delmont introduced:

H. F. No. 2215, A bill for an act relating to gambling; authorizing dice games in retail establishments licensed to sell alcoholic beverages under certain circumstances; amending Minnesota Statutes 1996, sections 340A.410, subdivision 5; and 609.761, by adding a subdivision.

The bill was read for the first time and referred to the Committee on Regulated Industries and Energy.

Tunheim, Bakk, Finseth, Solberg and Daggett introduced:

H. F. No. 2216, A bill for an act relating to private property; providing for the Private Property Protection Act; proposing coding for new law as Minnesota Statutes, chapter 516.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

Kahn, Pugh, Farrell and Tuma introduced:

H. F. No. 2217, A bill for an act relating to mediation; regulating mediation meetings of public bodies; amending Minnesota Statutes 1996, section 471.705, by adding a subdivision.

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

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

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 97.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to health; providing for the isolation and detention of persons with active tuberculosis who pose an endangerment to the public health; establishing standards and procedures for isolation and detention; requiring reporting by licensed health professionals; modifying tuberculosis screening requirements; appropriating money; amending Minnesota Statutes 1996, section 144.445, subdivisions 1 and 3; proposing coding for new law in Minnesota Statutes, chapter 144.

May 8, 1997

The Honorable Allan H. Spear

President of the Senate

The Honorable Phil Carruthers

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 97, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendment and that S. F. No. 97 be further amended as follows:

Page 8, line 18, before the period, insert "health if the person is reportable under subdivision 3, clause (3), (4), or (5)"

Page 23, delete section 16

Renumber the sections in sequence and correct the internal references

Amend the title as follows:

We request adoption of this report and repassage of the bill.

Senate Conferees: Don Betzold, Linda Berglin and Sheila M. Kiscaden.

House Conferees: Kevin Goodno, Lynda Boudreau and Betty McColllum.

Goodno moved that the report of the Conference Committee on S. F. No. 97 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 97, A bill for an act relating to health; providing for the isolation and detention of persons with active tuberculosis who pose an endangerment to the public health; establishing standards and procedures for isolation and detention; requiring reporting by licensed health professionals; modifying tuberculosis screening requirements; appropriating money; amending Minnesota Statutes 1996, section 144.445, subdivisions 1 and 3; proposing coding for new law in Minnesota Statutes, chapter 144.

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 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Evans	Kahn	Mares	Paymar	Swenson, D.
Anderson, B.	Farrell	Kalis	Mariani	Pelowski	Swenson, H.
Anderson, I.	Finseth	Kelso	McCollum	Peterson	Sykora
Bakk	Folliard	Kielkucki	McElroy	Pugh	Tingelstad
Bettermann	Garcia	Kinkel	McGuire	Rest	Tomassoni
Biernat	Goodno	Knight	Milbert	Reuter	Tompkins
Boudreau	Greenfield	Knoblach	Molnau	Rhodes	Trimble
Bradley	Greiling	Koppendrayer	Mulder	Rifenberg	Tuma
Broecker	Gunther	Koskinen	Mullery	Rostberg	Tunheim
Carlson	Haas	Kraus	Munger	Rukavina	Van Dellen
Chaudhary	Harder	Krinkie	Murphy	Schumacher	Vickerman
Clark	Hasskamp	Kubly	Ness	Seagren	Wagenius
Commers	Hausman	Kuisle	Nornes	Seifert	Weaver
Daggett	Hilty	Larsen	Olson, E.	Sekhon	Wejcman
Davids	Holsten	Leighton	Olson, M.	Skare	Wenzel
Dawkins	Huntley	Leppik	Opatz	Skoglund	Westfall
Dehler	Jaros	Lieder	Orfield	Slawik	Westrom
Delmont	Jefferson	Lindner	Osskopp	Smith	Winter
Dempsey	Jennings	Long	Osthoff	Solberg	Wolf
Dorn	Johnson, A.	Luther	Ozment	Stanek	Workman
Entenza	Johnson, R.	Macklin	Paulsen	Stang	Spk. Carruthers
Erhardt	Juhnke	Mahon	Pawlenty	Sviggum

The bill was repassed, as amended by Conference, and its title agreed to.

Mr. Speaker:

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

enforcement mechanisms for the provider tax pass-through; modifying mandatory Medicare assignment; making technical, policy, and administrative changes and connections to MinnesotaCare taxes; providing grants for MinnesotaCare outreach; regulating community purchasing arrangements; requiring certain studies; appropriating money; amending Minnesota Statutes 1996, sections 60A.15, subdivision 1; 60A.951, subdivision 5; 62A.61; 62J.017; 62J.06; 62J.07, subdivisions 1 and 3; 62J.09, subdivision 1; 62J.15, subdivision 1; 62J.152, subdivisions 1, 2, 4, 5, and by adding a subdivision; 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; 62M.02, subdivision 21; 62N.01, subdivision 1; 62N.22; 62N.23; 62N.25, subdivision 5; 62N.26; 62N.40; 62Q.01, subdivisions 3, 4, and 5; 62Q.03, subdivision 5a; 62Q.106; 62Q.19, subdivision 1; 62Q.33, subdivision 2; 62Q.45, subdivision 2; 136A.1355; 144.147, subdivisions 1, 2, 3, and 4; 144.1484, subdivision 1; 256.01, subdivision 2; 256.045, subdivision 3a; 256.9352, subdivision 3; 256.9353, subdivisions 1, 3, and 7; 256.9354, subdivisions 4, 5, 6, 7, and by adding a subdivision; 256.9355, subdivisions 1, 4, and by adding a subdivision; 256.9357, subdivision 3; 256.9358, subdivision 4; 256.9359, subdivision 2; 256.9363, subdivisions 1 and 5; 256.9657, subdivision 3; 256B.0625, subdivision 13; 256D.03, subdivision 3; 295.50, subdivisions 3, 4, 6, 7, 9b, 13, 14, and by adding a subdivision; 295.51, subdivision 1; 295.52, subdivisions 1, 1a, 2, 4, and by adding subdivisions; 295.53, subdivisions 1, 3, and 4; 295.54, subdivisions 1 and 2; 295.55, subdivision 2; and 295.582; proposing coding for new law in Minnesota Statutes, chapters 16A; 144; and 256; proposing coding for new law as Minnesota Statutes, chapter 62S; repealing Minnesota Statutes 1996, sections 62E.11, subdivision 12; 62J.04, subdivisions 4 and 7; 62J.05; 62J.051; 62J.09, subdivision 3a; 62J.37; 62N.01, subdivision 2; 62N.02, subdivisions 2, 3, 4b, 4c, 6, 7, 8, 9, 10, and 12; 62N.03; 62N.04; 62N.05; 62N.06; 62N.065; 62N.071; 62N.072; 62N.073; 62N.074; 62N.076; 62N.077; 62N.078; 62N.10; 62N.11; 62N.12; 62N.13; 62N.14; 62N.15; 62N.17; 62N.18; 62N.24; 62N.38; 62Q.165, subdivision 3; 62Q.25; 62Q.29; 62Q.41; 147.01, subdivision 6; 295.52, subdivision 1b; and 295.53, subdivision 5; Laws 1993, chapter 247, article 4, section 8; Laws 1994, chapter 625, article 5, section 5, as amended; Laws 1995, chapter 96, section 2; and Laws 1995, First Special Session chapter 3, article 13, section 2.

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

Mses. Berglin; Piper; Mr. Sams; Ms. Kiscaden and Mrs. Lourey.

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

Greenfield moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 5 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 1208. The motion prevailed.

Mr. Speaker:

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

H. F. No. 1755, A bill for an act relating to local government; providing for procedures between the county housing and redevelopment authority and certain municipalities and municipal authorities; amending Minnesota Statutes 1996, section 383B.77, subdivision 2.

Patrick E. Flahaven, Secretary of the Senate

Jefferson moved that the House concur in the Senate amendments to H. F. No. 1755 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 1755, A bill for an act relating to local government; providing for procedures between the county housing and redevelopment authority and certain municipalities and municipal authorities; expanding authority of regional rail authorities; providing for contamination cleanup and rail improvement; amending Minnesota Statutes 1996, sections 383B.77, subdivision 2; and 398A.04, subdivision 1.

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

The question was taken on the repassage of the bill and the roll was called. There were 129 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Farrell	Kelso	Marko	Pelowski	Sykora
Anderson, B.	Finseth	Kielkucki	McCollum	Peterson	Tingelstad
Anderson, I.	Folliard	Kinkel	McElroy	Pugh	Tomassoni
Bettermann	Garcia	Knight	McGuire	Rest	Tompkins
Biernat	Goodno	Knoblach	Milbert	Reuter	Trimble
Bishop	Greenfield	Koppendrayer	Molnau	Rhodes	Tuma
Boudreau	Greiling	Koskinen	Mulder	Rifenberg	Tunheim
Bradley	Gunther	Kraus	Mullery	Rostberg	Van Dellen
Broecker	Haas	Krinkie	Munger	Schumacher	Vickerman
Carlson	Harder	Kubly	Murphy	Seagren	Wagenius
Chaudhary	Hasskamp	Kuisle	Ness	Seifert	Weaver
Clark	Hausman	Larsen	Nornes	Sekhon	Wejcman
Commers	Hilty	Leighton	Olson, E.	Skare	Wenzel
Daggett	Holsten	Leppik	Olson, M.	Skoglund	Westfall
Davids	Huntley	Lieder	Opatz	Slawik	Westrom
Dawkins	Jefferson	Lindner	Orfield	Smith	Winter
Dehler	Jennings	Long	Osskopp	Solberg	Wolf
Dempsey	Johnson, A.	Luther	Osthoff	Stanek	Workman
Dorn	Johnson, R.	Macklin	Ozment	Stang	Spk. Carruthers
Entenza	Juhnke	Mahon	Paulsen	Sviggum
Erhardt	Kahn	Mares	Pawlenty	Swenson, D.
Evans	Kalis	Mariani	Paymar	Swenson, H.

The bill was repassed, as amended by the Senate, and its title agreed to.

Farrell was excused between the hours of 11:30 a.m. and 2:00 p.m.

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 78.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

A bill for an act relating to elections; changing certain absentee ballot provisions; amending Minnesota Statutes 1996, sections 203B.02, subdivision 1; 203B.03, subdivision 1; 203B.04, subdivision 1; 203B.06, subdivision 3; 203B.07, subdivision 2; 203B.11, by adding a subdivision; and 203B.12, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 203B.

May 12, 1997

The Honorable Allan H. Spear

President of the Senate

The Honorable Phil Carruthers

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 78, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 78 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1996, section 203B.02, subdivision 1, is amended to read:

Subdivision 1. [UNABLE TO GO TO POLLING PLACE ELIGIBILITY FOR ABSENTEE VOTING.] Any eligible voter who reasonably expects to be unable to go to the polling place on election day in the precinct where the individual maintains residence because of absence from the precinct, illness, disability, religious discipline, observance of a religious holiday, or service as an election judge in another precinct may vote by absentee ballot as provided in sections 203B.04 to 203B.15. The voter must indicate on the application for absentee ballots the reason that the voter will be unable to vote in person at the polling place on election day.

Sec. 2. Minnesota Statutes 1996, section 203B.03, subdivision 1, is amended to read:

Subdivision 1. [VIOLATION.] No individual shall intentionally:

(a) make or sign any false certificate required by this chapter;

(b) make any false or untrue statement in any application for absentee ballots;

(c) apply for absentee ballots more than once in any election with the intent to cast an illegal ballot;

(d) exhibit a ballot marked by that individual to any other individual;

(e) do any act in violation of the provisions of this chapter for the purpose of casting an illegal vote in any precinct or for the purpose of aiding another to cast an illegal vote; or

(f) use information from absentee ballot materials or records for purposes unrelated to elections, political activities, or law enforcement;

(g) provide assistance to an absentee voter except in the manner provided by section 204C.15, subdivision 1; or

(h) accept any payment of money or other thing of monetary value for delivery, in person or by mail, of any absentee ballot application or voted ballots to the county auditor, municipal clerk, or school district clerk.

Sec. 3. Minnesota Statutes 1996, section 203B.04, subdivision 1, is amended to read:

Subdivision 1. [APPLICATION PROCEDURES.] Except as otherwise allowed by subdivision 2, an application for absentee ballots for any election may be submitted at any time not less than one day before the day of that election. An application submitted pursuant to this subdivision shall be in writing and shall be submitted to:

(a) the county auditor of the county where the applicant maintains residence; or

(b) the municipal clerk of the municipality, or school district if applicable, where the applicant maintains residence.

An application shall be accepted if it is signed and dated by the applicant, contains the applicant's name and residence and mailing addresses, and states that the applicant is eligible to vote by absentee ballot for one of the reasons specified in section 203B.02 the reason that the voter will be unable to vote in person at the polling place on election day. An application may be submitted to the county auditor or municipal clerk by an electronic facsimile device, at the discretion of the auditor or clerk.

Sec. 4. Minnesota Statutes 1996, section 203B.06, subdivision 3, is amended to read:

Subd. 3. [DELIVERY OF BALLOTS.] If an application for absentee ballots is accepted at a time when absentee ballots are not yet available for distribution, the county auditor, or municipal clerk accepting the application shall file it and as soon as absentee ballots are available for distribution shall mail them to the address specified in the application. If an application for absentee ballots is accepted when absentee ballots are available for distribution, the county auditor or municipal clerk accepting the application shall promptly:

(a) mail the ballots to the voter whose signature appears on the application if the application is submitted by mail; or

(b) deliver the absentee ballots directly to the voter if the application is submitted in person; or

(c) transmit a facsimile of the ballots to the voter in the manner provided in section 203B.082.

If an application does not indicate the election for which absentee ballots are sought, the county auditor or municipal clerk shall mail or deliver only the ballots for the next election occurring after receipt of the application. Only one set of ballots may be mailed to an applicant for any election.

This subdivision does not apply to applications for absentee ballots received pursuant to sections 203B.04, subdivision 2, and 203B.11.

Sec. 5. [203B.082] [USE OF FACSIMILE BALLOTS.]

Subdivision 1. [ELIGIBILITY.] An eligible voter who either becomes a patient in a health care facility during the seven days immediately before an election or is residing outside the United States may vote by an electronically transmitted facsimile ballot as provided in this section.

Subd. 2. [APPLICATION.] Upon receipt of a properly completed application, the county auditor may send the voter the appropriate ballots and a ballot transmission form using an electronic facsimile device. The ballot transmission form must provide space for the voter's name, address, signature, date of birth, date on which the ballots were transmitted by the voter, and a statement acknowledging that the voter's ballots will not be secret. The ballot transmission form for a patient in a health care facility must include the certificate of eligibility required by section 203B.07, subdivision 2. The ballot transmission form for a person residing outside the United States must contain the affidavit required by section 203B.21, subdivision 3. The secretary of state shall prepare samples of the ballot transmission form for use by the county auditor.

may be made. After the information on the ballot transmission form has been verified, the ballots must be sealed in a ballot secrecy envelope. The ballot transmission form must be attached to the ballot secrecy envelope and placed with the other absentee ballots for the precinct in which the voter resides. The county auditor shall certify that the ballots were properly enclosed in the ballot secrecy envelope, that no record of the votes cast on the ballots was made, and that the auditor will not disclose for whom the voter has voted.

Subd. 4. [REJECTION.] If the county auditor cannot verify that the ballots were transmitted by the same person who submitted the absentee ballot application, the ballots must be rejected and no votes on the ballots may be counted.

Sec. 6. [203B.145] [ACCESS TO ABSENTEE BALLOT MATERIALS.]

Public inspection of absentee ballot applications, absentee ballot return envelopes, other materials related to absentee voting, and any list that includes information from these materials must occur in the manner provided in the rules of the secretary of state."

Delete the title and insert:

"A bill for an act relating to elections; changing certain absentee ballot provisions; amending Minnesota Statutes 1996, sections 203B.02, subdivision 1; 203B.03, subdivision 1; 203B.04, subdivision 1; and 203B.06, subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 203B."

We request adoption of this report and repassage of the bill.

Senate Conferees: John Marty, Linda Scheid and Dennis R. Frederickson.

House Conferees: Tom Osthoff, Betty McCollum and Barb Vickerman.

Osthoff moved that the report of the Conference Committee on S. F. No. 78 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 78, A bill for an act relating to elections; changing certain absentee ballot provisions; amending Minnesota Statutes 1996, sections 203B.02, subdivision 1; 203B.03, subdivision 1; 203B.04, subdivision 1; 203B.06, subdivision 3; 203B.07, subdivision 2; 203B.11, by adding a subdivision; and 203B.12, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 203B.

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 69 yeas and 63 nays as follows:

Those who voted in the affirmative were:

Anderson, I.	Folliard	Johnson, R.	Luther	Paymar	Tomassoni
Bakk	Garcia	Juhnke	Mahon	Pelowski	Trimble
Biernat	Greenfield	Kahn	Mariani	Peterson	Tunheim
Carlson	Greiling	Kalis	McCollum	Pugh	Vickerman
Chaudhary	Hasskamp	Kelso	McGuire	Rest	Wagenius
Clark	Hausman	Kinkel	Milbert	Rukavina	Wejcman
Davids	Hilty	Koskinen	Mullery	Schumacher	Westfall
Dawkins	Huntley	Kraus	Munger	Sekhon	Winter
Delmont	Jaros	Kubly	Murphy	Skare	Spk. Carruthers
Dorn	Jefferson	Leighton	Olson, E.	Skoglund
Entenza	Jennings	Lieder	Opatz	Slawik
Evans	Johnson, A.	Long	Osthoff	Solberg

Those who voted in the negative were:

Abrams	Erhardt	Krinkie	Ness	Rostberg	Tompkins
Anderson, B.	Finseth	Kuisle	Nornes	Seagren	Tuma
Bettermann	Goodno	Larsen	Olson, M.	Seifert	Van Dellen
Bishop	Gunther	Leppik	Orfield	Smith	Weaver
Boudreau	Haas	Lindner	Osskopp	Stanek	Wenzel
Bradley	Harder	Macklin	Ozment	Stang	Westrom
Broecker	Holsten	Mares	Paulsen	Sviggum	Wolf
Commers	Kielkucki	Marko	Pawlenty	Swenson, D.	Workman
Daggett	Knight	McElroy	Reuter	Swenson, H.
Dehler	Knoblach	Molnau	Rhodes	Sykora
Dempsey	Koppendrayer	Mulder	Rifenberg	Tingelstad

The bill was repassed, as amended by Conference, and its title agreed to.

Mr. Speaker:

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

S. F. No. 1006.

Patrick E. Flahaven, Secretary of the Senate

S. F. No. 1006, A bill for an act relating to firefighters; authorizing certain background investigations; requiring disclosures of certain employment information; providing civil and criminal penalties; providing employers immunity for certain disclosures; modifying employment provisions for Rochester firefighters; amending Minnesota Statutes 1996, section 604A.31, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 299F.

The bill was read for the first time.

McGuire moved that S. F. No. 1006 and H. F. No. 1283, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

Pursuant to rule 1.10, Solberg requested immediate consideration of H. F. No. 1579.

H. F. No. 1579 was reported to the House.

Sviggum moved to amend H. F. No. 1579, the third engrossment, as follows:

Page 1, after line 5, insert:

"Section 1. Minnesota Statutes 1996, section 97A.037, subdivision 1, is amended to read:

or preparing to take a wild animal. "Preparing to take a wild animal" includes travel, camping, and other acts that occur on land or water where the affected person has the right or privilege to take lawfully a wild animal."

Page 1, line 6, delete "Section 1." and insert "Sec. 2."

Amend the title as follows:

Page 1, line 2, after the semicolon, insert "modifying provisions prohibiting hunter, trapper, and angler harassment;"

Page 1, line 4, delete "section" and insert "sections 97A.037, subdivision 1; and"

The motion prevailed and the amendment was adopted.

H. F. No. 1579, A bill for an act relating to game and fish; modifying certain license issuing fees; amending Minnesota Statutes 1996, section 97A.485, subdivision 6.

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 101 yeas and 30 nays as follows:

Those who voted in the affirmative were:

Abrams	Folliard	Kahn	Mares	Peterson	Sykora
Bettermann	Garcia	Kalis	McCollum	Pugh	Tingelstad
Bishop	Goodno	Kelso	McElroy	Rest	Trimble
Boudreau	Greenfield	Kinkel	McGuire	Reuter	Tuma
Bradley	Greiling	Koppendrayer	Milbert	Rhodes	Van Dellen
Broecker	Gunther	Koskinen	Molnau	Rifenberg	Vickerman
Carlson	Haas	Kraus	Mulder	Rostberg	Wagenius
Daggett	Harder	Krinkie	Munger	Schumacher	Weaver
Davids	Hasskamp	Kubly	Ness	Seagren	Wejcman
Dawkins	Hausman	Kuisle	Nornes	Sekhon	Wenzel
Dehler	Hilty	Larsen	Olson, E.	Slawik	Westfall
Delmont	Holsten	Leppik	Olson, M.	Smith	Westrom
Dempsey	Huntley	Lieder	Orfield	Solberg	Winter
Dorn	Jaros	Lindner	Osskopp	Stang	Wolf
Entenza	Jennings	Long	Osthoff	Sviggum	Workman
Erhardt	Johnson, R.	Luther	Ozment	Swenson, D.	Spk. Carruthers
Finseth	Juhnke	Macklin	Pelowski	Swenson, H.

Those who voted in the negative were:

Anderson, B.	Commers	Knight	Marko	Pawlenty	Skoglund
Anderson, I.	Evans	Knoblach	Mullery	Paymar	Stanek
Bakk	Jefferson	Leighton	Murphy	Rukavina	Tomassoni
Biernat	Johnson, A.	Mahon	Opatz	Seifert	Tompkins
Chaudhary	Kielkucki	Mariani	Paulsen	Skare	Tunheim

The bill was passed, as amended, and its title agreed to.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 1208:

Greenfield, Huntley, Dorn, Koskinen and Goodno.

S. F. No. 73, A bill for an act relating to elections; providing a change of address system for registered voters; amending Minnesota Statutes 1996, section 201.13, subdivision 3.

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 69 yeas and 62 nays as follows:

Those who voted in the affirmative were:

Anderson, I.	Garcia	Juhnke	Mariani	Paymar	Solberg
Bakk	Greenfield	Kahn	Marko	Pelowski	Tomassoni
Biernat	Greiling	Kalis	McCollum	Peterson	Trimble
Carlson	Hasskamp	Kelso	McGuire	Pugh	Tunheim
Chaudhary	Hausman	Kinkel	Milbert	Rest	Wagenius
Clark	Hilty	Koskinen	Mullery	Rhodes	Wejcman
Dawkins	Huntley	Kubly	Munger	Rukavina	Wenzel
Delmont	Jaros	Leighton	Murphy	Schumacher	Winter
Dorn	Jefferson	Lieder	Olson, E.	Sekhon	Spk. Carruthers
Entenza	Jennings	Long	Opatz	Skare
Evans	Johnson, A.	Luther	Orfield	Skoglund
Folliard	Johnson, R.	Mahon	Osthoff	Slawik

Those who voted in the negative were:

Abrams	Dempsey	Koppendrayer	Mulder	Seagren	Van Dellen
Anderson, B.	Erhardt	Kraus	Ness	Seifert	Vickerman
Bettermann	Finseth	Krinkie	Nornes	Smith	Weaver
Bishop	Goodno	Kuisle	Olson, M.	Stanek	Westfall
Boudreau	Gunther	Larsen	Osskopp	Stang	Westrom
Bradley	Haas	Leppik	Ozment	Sviggum	Wolf
Broecker	Harder	Lindner	Paulsen	Swenson, D.	Workman
Commers	Holsten	Macklin	Pawlenty	Swenson, H.
Daggett	Kielkucki	Mares	Reuter	Sykora
Davids	Knight	McElroy	Rifenberg	Tompkins
Dehler	Knoblach	Molnau	Rostberg	Tuma

The bill was passed and its title agreed to.

S. F. No. 1170, A bill for an act relating to elections; precinct caucus; authorizing certain minors to be elected a delegate or officer at the precinct caucus; amending Minnesota Statutes 1996, section 202A.16, subdivision 1.

The question was taken on the passage of the bill 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	Mahon	Paymar	Tomassoni
Bakk	Garcia	Kahn	Mariani	Pelowski	Trimble
Biernat	Greenfield	Kalis	Marko	Peterson	Tunheim
Broecker	Greiling	Kelso	McCollum	Pugh	Wagenius
Carlson	Hasskamp	Kinkel	McGuire	Rest	Wejcman
Chaudhary	Hausman	Koskinen	Milbert	Rukavina	Wenzel
Clark	Hilty	Kubly	Mullery	Schumacher	Winter
Dawkins	Huntley	Larsen	Munger	Sekhon	Spk. Carruthers
Delmont	Jaros	Leighton	Murphy	Skare
Dorn	Jefferson	Lieder	Olson, E.	Skoglund
Entenza	Jennings	Long	Opatz	Slawik
Evans	Johnson, R.	Luther	Orfield	Solberg

Those who voted in the negative were:

Abrams	Erhardt	Koppendrayer	Ness	Rostberg	Tompkins
Anderson, B.	Finseth	Kraus	Nornes	Seagren	Tuma
Bettermann	Goodno	Krinkie	Olson, M.	Seifert	Van Dellen
Bishop	Gunther	Kuisle	Osskopp	Smith	Vickerman
Boudreau	Haas	Leppik	Osthoff	Stanek	Weaver
Bradley	Harder	Lindner	Ozment	Stang	Westfall
Commers	Holsten	Macklin	Paulsen	Sviggum	Westrom
Daggett	Johnson, A.	Mares	Pawlenty	Swenson, D.	Wolf
Davids	Kielkucki	McElroy	Reuter	Swenson, H.	Workman
Dehler	Knight	Molnau	Rhodes	Sykora
Dempsey	Knoblach	Mulder	Rifenberg	Tingelstad

The bill was passed and its title agreed to.

S. F. No. 296 was reported to the House.

Finseth moved to amend S. F. No. 296, the unofficial engrossment, as follows:

Page 3, after line 28, insert:

"Sec. 7. [CANCELLATION OF GENERAL ELECTION AND ANNUAL MEETING; INDEPENDENT SCHOOL DISTRICT NO. 595, EAST GRAND FORKS.]

The May 20, 1997, general election and the July 1997 annual meeting in independent school district No. 595, East Grand Forks, are canceled. All filings for that election are void and all filing fees shall be returned to affected candidates. The general election shall be held on November 4, 1997, in compliance with Minnesota Statutes, chapter 205A. The annual meeting of the board shall be held on the first Monday of January 1998, or as soon thereafter as practicable. The terms of existing members whose terms would otherwise expire on July 1, 1997, shall be lengthened to expire on January 1, 1998, and the terms of existing officers shall be lengthened to the January 1998 annual meeting and until their successors are elected and qualify.

Sec. 8. [EFFECTIVE DATE.]

Section 7 is effective for independent school district No. 595, East Grand Forks, the day after its compliance with the requirements of Minnesota Statutes, section 645.021, subdivision 3."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

S. F. No. 296, A bill for an act relating to water; providing for four-year terms for soil and water conservation district supervisors; conforming the timelines for appointing supervisor replacements to other election law; amending Minnesota Statutes 1996, sections 103C.301, subdivisions 1 and 6; 103C.305, subdivision 6; 103C.311; and 103C.315, subdivision 2.

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 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Kahn	Mares	Pawlenty	Sviggum
Anderson, B.	Evans	Kalis	Mariani	Paymar	Swenson, D.
Anderson, I.	Finseth	Kelso	Marko	Pelowski	Swenson, H.
Bakk	Folliard	Kielkucki	McCollum	Peterson	Sykora
Bettermann	Garcia	Kinkel	McElroy	Pugh	Tingelstad
Biernat	Goodno	Knight	McGuire	Rest	Tomassoni
Bishop	Greenfield	Knoblach	Milbert	Reuter	Tompkins
Boudreau	Greiling	Koppendrayer	Molnau	Rhodes	Trimble
Bradley	Gunther	Koskinen	Mulder	Rifenberg	Tuma
Broecker	Haas	Kraus	Mullery	Rostberg	Tunheim
Carlson	Harder	Krinkie	Munger	Rukavina	Van Dellen
Chaudhary	Hasskamp	Kubly	Murphy	Schumacher	Vickerman
Clark	Hausman	Kuisle	Ness	Seagren	Wagenius
Commers	Hilty	Larsen	Nornes	Seifert	Weaver
Daggett	Holsten	Leighton	Olson, E.	Sekhon	Wejcman
Davids	Huntley	Leppik	Olson, M.	Skare	Wenzel
Dawkins	Jaros	Lieder	Opatz	Skoglund	Westfall
Dehler	Jefferson	Lindner	Orfield	Slawik	Westrom
Delmont	Jennings	Long	Osskopp	Smith	Winter
Dempsey	Johnson, A.	Luther	Osthoff	Solberg	Wolf
Dorn	Johnson, R.	Macklin	Ozment	Stanek	Workman
Entenza	Juhnke	Mahon	Paulsen	Stang	Spk. Carruthers

The bill was passed, as amended, and its title agreed to.

S. F. No. 242 was reported to the House.

Sviggum withdrew his pending amendment offered on Monday, April 14, 1997, to S. F. No. 242.

S. F. No. 242, A bill for an act relating to human rights; suspending a deadline during mediation in certain cases; amending Minnesota Statutes 1996, section 363.06, 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 130 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Evans	Kalis	Mariani	Pelowski	Swenson, H.
Anderson, B.	Finseth	Kelso	McCollum	Peterson	Sykora
Journal of the House - 59th Day - Wednesday, May 14, 1997 - Top of Page 4155
Anderson, I.	Folliard	Kielkucki	McElroy	Pugh	Tingelstad
Bakk	Garcia	Kinkel	McGuire	Rest	Tomassoni
Bettermann	Goodno	Knight	Milbert	Reuter	Tompkins
Biernat	Greenfield	Knoblach	Molnau	Rhodes	Trimble
Bishop	Greiling	Koppendrayer	Mulder	Rifenberg	Tuma
Boudreau	Gunther	Koskinen	Mullery	Rostberg	Tunheim
Bradley	Haas	Kraus	Munger	Rukavina	Van Dellen
Broecker	Harder	Krinkie	Murphy	Schumacher	Vickerman
Carlson	Hasskamp	Kubly	Ness	Seagren	Wagenius
Chaudhary	Hausman	Kuisle	Nornes	Seifert	Weaver
Clark	Hilty	Larsen	Olson, E.	Sekhon	Wejcman
Commers	Holsten	Leighton	Olson, M.	Skare	Wenzel
Daggett	Huntley	Leppik	Opatz	Skoglund	Westfall
Davids	Jaros	Lieder	Orfield	Slawik	Westrom
Dehler	Jefferson	Lindner	Osskopp	Smith	Winter
Delmont	Jennings	Long	Osthoff	Solberg	Wolf
Dempsey	Johnson, A.	Luther	Ozment	Stanek	Workman
Dorn	Johnson, R.	Macklin	Paulsen	Stang	Spk. Carruthers
Entenza	Juhnke	Mahon	Pawlenty	Sviggum
Erhardt	Kahn	Mares	Paymar	Swenson, D.

The bill was passed and its title agreed to.

S. F. No. 323, A bill for an act relating to human rights; prohibiting reprisals by any individual; amending Minnesota Statutes 1996, section 363.03, subdivision 7.

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 6 nays as follows:

Those who voted in the affirmative were:

Abrams	Evans	Kahn	Marko	Pelowski	Swenson, D.
Anderson, I.	Finseth	Kalis	McCollum	Peterson	Swenson, H.
Bakk	Folliard	Kelso	McElroy	Pugh	Sykora
Bettermann	Garcia	Kielkucki	McGuire	Rest	Tingelstad
Biernat	Goodno	Kinkel	Milbert	Reuter	Tomassoni
Bishop	Greenfield	Knoblach	Molnau	Rhodes	Tompkins
Boudreau	Greiling	Koppendrayer	Mulder	Rifenberg	Trimble
Broecker	Gunther	Koskinen	Mullery	Rostberg	Tuma
Carlson	Haas	Kraus	Munger	Rukavina	Tunheim
Chaudhary	Harder	Kubly	Murphy	Schumacher	Van Dellen
Clark	Hasskamp	Kuisle	Ness	Seagren	Vickerman
Commers	Hausman	Larsen	Nornes	Seifert	Wagenius
Daggett	Hilty	Leighton	Olson, E.	Sekhon	Weaver
Davids	Holsten	Leppik	Opatz	Skare	Wejcman
Dawkins	Huntley	Lieder	Orfield	Skoglund	Wenzel
Dehler	Jaros	Long	Osskopp	Slawik	Westfall
Delmont	Jefferson	Luther	Osthoff	Smith	Westrom
Dempsey	Jennings	Macklin	Ozment	Solberg	Winter
Dorn	Johnson, A.	Mahon	Paulsen	Stanek	Wolf
Entenza	Johnson, R.	Mares	Pawlenty	Stang	Workman
Erhardt	Juhnke	Mariani	Paymar	Sviggum	Spk. Carruthers

Those who voted in the negative were:

Anderson, B.	Bradley	Knight	Krinkie	Lindner	Olson, M.

There being no objection, the order of business reverted to Reports of Standing Committees.

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

H. F. No. 113, A bill for an act proposing an amendment to the Minnesota Constitution, article XI, section 14; extending until the year 2020 the period during which at least 40 percent of the net proceeds from the state lottery must be credited to the environment and natural resources trust fund; modifying authority for appropriations from the fund.

Reported the same back with the following amendments:

Page 1, line 18, reinstate "until fiscal year" and after "1997" insert "2020"

Page 2, after line 14, insert:

"Sec. 3. [CONSTITUTIONAL AMENDMENT PROPOSED.]

An amendment to the Minnesota Constitution, article XIII, by adding a section, is proposed to the people. If the amendment is adopted, the section will read as follows:

Sec. 12. The citizens of this state, who are considered to be equal regardless of gender, have the privilege to take game and fish and to gather in accordance with law and regulations. No new right is intended to be granted, nor any existing right impaired, by this declaration.

Sec. 4. [SUBMISSION TO VOTERS.]

The proposed amendment must be submitted to the people at the 1998 general election. The question submitted shall be:

"Shall the Minnesota Constitution be amended to affirm the privilege of citizens, who are considered to be equal regardless of gender, to take game and fish and to gather in accordance with law and regulations?

Yes .......

No ........" "

Amend the title as follows:

Page 1, line 3, after "14" insert ", and article XIII, by adding a section"

Page 1, line 7, after "fund" insert "; affirming the privilege of citizens to take game and fish and to gather"

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

The report was adopted.

S. F. No. 324 was reported to the House.

Goodno moved to amend S. F. No. 324 as follows:

Page 2, line 2, before "The" insert "after making a finding of probable cause,"

The motion prevailed and the amendment was adopted.

S. F. No. 324, A bill for an act relating to human rights; reclassifying certain investigative data; amending Minnesota Statutes 1996, section 363.061, subdivisions 2 and 3.

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

The question was taken on the passage of the bill and the roll was called. There were 128 yeas and 4 nays as follows:

Those who voted in the affirmative were:

Abrams	Finseth	Kelso	McCollum	Peterson	Tingelstad
Anderson, B.	Folliard	Kielkucki	McElroy	Pugh	Tomassoni
Anderson, I.	Garcia	Kinkel	McGuire	Rest	Tompkins
Bakk	Goodno	Knight	Milbert	Reuter	Trimble
Bettermann	Greenfield	Knoblach	Molnau	Rhodes	Tuma
Bishop	Greiling	Koppendrayer	Mulder	Rifenberg	Tunheim
Boudreau	Gunther	Koskinen	Mullery	Rostberg	Van Dellen
Bradley	Haas	Kraus	Munger	Rukavina	Vickerman
Broecker	Harder	Krinkie	Murphy	Schumacher	Wagenius
Carlson	Hasskamp	Kubly	Ness	Seagren	Weaver
Chaudhary	Hausman	Kuisle	Nornes	Seifert	Wejcman
Clark	Hilty	Larsen	Olson, E.	Sekhon	Wenzel
Commers	Holsten	Leighton	Olson, M.	Skare	Westfall
Daggett	Huntley	Leppik	Opatz	Skoglund	Westrom
Davids	Jaros	Lieder	Orfield	Slawik	Winter
Dawkins	Jefferson	Lindner	Osskopp	Solberg	Wolf
Dehler	Jennings	Long	Osthoff	Stanek	Workman
Delmont	Johnson, A.	Luther	Ozment	Stang	Spk. Carruthers
Dempsey	Johnson, R.	Mahon	Paulsen	Sviggum
Dorn	Juhnke	Mares	Pawlenty	Swenson, D.
Erhardt	Kahn	Mariani	Paymar	Swenson, H.
Evans	Kalis	Marko	Pelowski	Sykora

Those who voted in the negative were:

Biernat	Entenza	Macklin	Smith

The bill was passed, as amended, 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. No. 354; and S. F. Nos. 1697, 1266, 298, 1419, 1715, 501, 1328, 739, 234, 349 and 122.

H. F. No. 354 was reported to the House.

Huntley moved that H. F. No. 354 be returned to General Orders. The motion prevailed.

S. F. No. 1697, A bill for an act relating to public finance; updating and clarifying bond allocation provisions; amending Minnesota Statutes 1996, sections 474A.03, subdivisions 1 and 2a; 474A.04, subdivision 1a; 474A.047, subdivision 1; 474A.061, subdivision 2b; 474A.091, subdivisions 3 and 6; and 474A.131, subdivisions 1 and 1a.

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 127 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Folliard	Kielkucki	McElroy	Rest	Tomassoni
Anderson, B.	Garcia	Kinkel	McGuire	Reuter	Tompkins
Anderson, I.	Goodno	Knight	Milbert	Rhodes	Trimble
Bettermann	Greenfield	Knoblach	Molnau	Rifenberg	Tuma
Biernat	Greiling	Koppendrayer	Mulder	Rostberg	Tunheim
Bishop	Gunther	Koskinen	Mullery	Rukavina	Van Dellen
Boudreau	Haas	Kraus	Munger	Schumacher	Vickerman
Bradley	Harder	Krinkie	Murphy	Seagren	Wagenius
Broecker	Hasskamp	Kubly	Ness	Seifert	Weaver
Carlson	Hausman	Kuisle	Nornes	Sekhon	Wejcman
Chaudhary	Hilty	Larsen	Olson, E.	Skare	Wenzel
Clark	Holsten	Leighton	Olson, M.	Skoglund	Westfall
Commers	Huntley	Leppik	Opatz	Slawik	Westrom
Daggett	Jaros	Lieder	Orfield	Smith	Winter
Davids	Jefferson	Lindner	Osskopp	Solberg	Wolf
Dehler	Jennings	Luther	Ozment	Stanek	Workman
Delmont	Johnson, A.	Macklin	Paulsen	Stang	Spk. Carruthers
Dempsey	Johnson, R.	Mahon	Pawlenty	Sviggum
Dorn	Juhnke	Mares	Paymar	Swenson, D.
Erhardt	Kahn	Mariani	Pelowski	Swenson, H.
Evans	Kalis	Marko	Peterson	Sykora
Finseth	Kelso	McCollum	Pugh	Tingelstad

The bill was passed and its title agreed to.

S. F. No. 1266, A bill for an act relating to local government; authorizing town electors to require the removal of snow or ice from town roads in certain circumstances; proposing coding for new law in Minnesota Statutes, chapter 366.

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 129 yeas and 1 nay as follows:

Those who voted in the affirmative were:

Abrams	Finseth	Kelso	Marko	Pelowski	Sykora
Anderson, B.	Folliard	Kielkucki	McCollum	Peterson	Tingelstad
Anderson, I.	Garcia	Kinkel	McElroy	Pugh	Tomassoni
Bettermann	Goodno	Knight	McGuire	Rest	Tompkins
Biernat	Greenfield	Knoblach	Milbert	Reuter	Trimble
Bishop	Greiling	Koppendrayer	Molnau	Rhodes	Tuma
Boudreau	Gunther	Koskinen	Mulder	Rifenberg	Tunheim
Bradley	Haas	Kraus	Mullery	Rostberg	Van Dellen
Broecker	Harder	Krinkie	Munger	Rukavina	Vickerman
Carlson	Hasskamp	Kubly	Murphy	Schumacher	Wagenius
Chaudhary	Hausman	Kuisle	Ness	Seagren	Weaver
Clark	Hilty	Larsen	Nornes	Seifert	Wejcman
Commers	Holsten	Leighton	Olson, E.	Sekhon	Wenzel
Daggett	Huntley	Leppik	Olson, M.	Skare	Westfall
Davids	Jaros	Lieder	Opatz	Skoglund	Westrom
Dawkins	Jefferson	Lindner	Orfield	Slawik	Winter
Dehler	Jennings	Long	Osskopp	Solberg	Wolf
Delmont	Johnson, A.	Luther	Osthoff	Stanek	Workman
Journal of the House - 59th Day - Wednesday, May 14, 1997 - Top of Page 4159
Dempsey	Johnson, R.	Macklin	Ozment	Stang	Spk. Carruthers
Dorn	Juhnke	Mahon	Paulsen	Sviggum
Erhardt	Kahn	Mares	Pawlenty	Swenson, D.
Evans	Kalis	Mariani	Paymar	Swenson, H.

Those who voted in the negative were:

Smith

The bill was passed and its title agreed to.

S. F. No. 298 was reported to the House.

Leighton moved to amend S. F. No. 298 as follows:

Page 48, after line 16, insert:

"Sec. 65. Laws 1997, chapter 22, section 6, subdivision 3, is amended to read:

Subd. 3. [RELATIONSHIP TO PERSON SERVED.] (a) Sections 319B.01 to 319B.12 do not alter any law applicable to the relationship between a person furnishing professional services and a person receiving the professional services, including liability arising out of the professional services and the confidential relationship and privilege of communications between the person furnishing professional services and the person receiving the professional services.

(b) Sections 319B.01 to 319B.12 do not alter any law applicable to the relationship between a professional firm furnishing professional services and a person receiving the professional services, including liability arising out of the professional services and the confidential relationship and privilege of communications between the professional firm furnishing professional services and the person receiving the professional services.

(c) Whether a Minnesota professional firm's owners and persons who control, manage, or act for the firm are personally liable for the firm's debts and obligations is determined according to the firm's generally applicable governing law."

Page 48, after line 24, insert:

Page 49, after line 5, insert:

"In the next edition of Minnesota Statutes, where a section of Minnesota Statutes refers to chapter 319A or a section or subdivision of that chapter, the revisor shall add a reference to the chapter 319B enacted in 1997 or the equivalent section or subdivision of chapter 319B."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

S. F. No. 298, A bill for an act relating to partnerships; enacting the Uniform Partnership Act of 1994; providing for limited liability partnerships; proposing coding for new law in Minnesota Statutes, chapter 322A; proposing coding for new law as Minnesota Statutes, chapter 323A; repealing Minnesota Statutes 1996, sections 323.01; 323.02, subdivisions 1, 2, 3, 4, 5, 6, 7, and 8; 323.03; 323.04; 323.05; 323.06; 323.07; 323.08; 323.09; 323.10; 323.11; 323.12; 323.13; 323.14; 323.15; 323.16; 323.17; 323.18; 323.19; 323.20; 323.21; 323.22; 323.23; 323.24; 323.25; 323.26; 323.27; 323.28; 323.29; 323.30; 323.31; 323.32; 323.33; 323.34; 323.35; 323.36; 323.37; 323.38; 323.39; 323.40; 323.41; 323.42; 323.43; 323.44; 323.45; 323.46; and 323.47.

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 131 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Kahn	Mares	Paymar	Swenson, D.
Anderson, B.	Evans	Kalis	Marko	Pelowski	Swenson, H.
Anderson, I.	Finseth	Kelso	McCollum	Peterson	Sykora
Bakk	Folliard	Kielkucki	McElroy	Pugh	Tingelstad
Bettermann	Garcia	Kinkel	McGuire	Rest	Tomassoni
Biernat	Goodno	Knight	Milbert	Reuter	Tompkins
Bishop	Greenfield	Knoblach	Molnau	Rhodes	Trimble
Boudreau	Greiling	Koppendrayer	Mulder	Rifenberg	Tuma
Bradley	Gunther	Koskinen	Mullery	Rostberg	Tunheim
Broecker	Haas	Kraus	Munger	Rukavina	Van Dellen
Carlson	Harder	Krinkie	Murphy	Schumacher	Vickerman
Chaudhary	Hasskamp	Kubly	Ness	Seagren	Wagenius
Clark	Hausman	Kuisle	Nornes	Seifert	Weaver
Commers	Hilty	Larsen	Olson, E.	Sekhon	Wejcman
Daggett	Holsten	Leighton	Olson, M.	Skare	Wenzel
Davids	Huntley	Leppik	Opatz	Skoglund	Westfall
Dawkins	Jaros	Lieder	Orfield	Slawik	Westrom
Dehler	Jefferson	Lindner	Osskopp	Smith	Winter
Delmont	Jennings	Long	Osthoff	Solberg	Wolf
Dempsey	Johnson, A.	Luther	Ozment	Stanek	Workman
Dorn	Johnson, R.	Macklin	Paulsen	Stang	Spk. Carruthers
Entenza	Juhnke	Mahon	Pawlenty	Sviggum

The bill was passed, as amended, and its title agreed to.

Juhnke moved to amend S. F. No. 1419 as follows:

Page 4, delete lines 26 through 29 and insert:

"Subd. 5. [TELEPHONE EXCHANGE REQUIREMENT.] Nothing in this section shall permit the city of Willmar to establish a telephone exchange within the city unless it complies with the referendum requirements of section 237.19."

The motion prevailed and the amendment was adopted.

Harder moved to amend S. F. No. 1419, as amended, as follows:

Page 1, line 10, strike "the city of" and insert "their respective cities: (1)"

Page 1, line 11, strike "Willmar" and delete the comma

Page 1, line 13, after "association" insert "; and (2) the Jackson municipal utilities commission is authorized to enter into a joint venture with the Federated rural electric association. These joint ventures shall be solely"

Page 1, line 18, after "of" strike "the" and insert "a"

Page 1, line 19, after "venture" insert "authorized by this subdivision"

Page 1, line 20, strike "of the city of Willmar"

Page 1, line 21, strike "Kandiyohi" and after "association" strike "and" and insert "participating in the joint venture. These terms and conditions"

Page 3, line 27, strike "Kandiyohi"

Page 3, line 28, strike "Willmar"

Page 3, line 29, after "commission" insert "participating in a joint venture authorized under subdivision 1"

Page 4, line 1, after the first "the" delete "Willmar" and after "utilities" delete "commission" and insert "commissions"

Page 4, line 2, delete "Kandiyohi" and after "power" delete "association" and insert "associations named in subdivision 1"

Page 4, line 4, after "the" delete "city" and insert "cities" and after "Willmar" insert "and Jackson"

Page 4, line 8, after "Willmar" insert "and Jackson"

Page 4, line 9, after "utilities" delete "commission" and insert "commissions"

Page 4, line 17, after "Willmar" insert "or Jackson"

Page 4, line 18, delete "commission" and insert "commissions" and after "Kandiyohi" insert "or Federated"

Page 4, line 19, before the period, delete "association" and insert "associations" and after "Willmar" insert "or Jackson"

Page 4, line 20, delete "the Willmar" and insert "their respective"

Page 4, line 21, delete "Willmar" and insert "relevant"

S. F. No. 1419, A bill for an act relating to utilities; authorizing a municipal and cooperative utility to form joint ventures for the provision of utility services; amending Laws 1996, chapter 300, section 1.

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 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Kahn	Mares	Pawlenty	Sviggum
Anderson, B.	Evans	Kalis	Mariani	Paymar	Swenson, D.
Anderson, I.	Finseth	Kelso	Marko	Pelowski	Swenson, H.
Bakk	Folliard	Kielkucki	McCollum	Peterson	Sykora
Bettermann	Garcia	Kinkel	McElroy	Pugh	Tingelstad
Biernat	Goodno	Knight	McGuire	Rest	Tomassoni
Bishop	Greenfield	Knoblach	Milbert	Reuter	Tompkins
Boudreau	Greiling	Koppendrayer	Molnau	Rhodes	Trimble
Bradley	Gunther	Koskinen	Mulder	Rifenberg	Tuma
Broecker	Haas	Kraus	Mullery	Rostberg	Tunheim
Carlson	Harder	Krinkie	Munger	Rukavina	Van Dellen
Chaudhary	Hasskamp	Kubly	Murphy	Schumacher	Vickerman
Clark	Hausman	Kuisle	Ness	Seagren	Wagenius
Commers	Hilty	Larsen	Nornes	Seifert	Weaver
Daggett	Holsten	Leighton	Olson, E.	Sekhon	Wejcman
Davids	Huntley	Leppik	Olson, M.	Skare	Wenzel
Dawkins	Jaros	Lieder	Opatz	Skoglund	Westfall
Dehler	Jefferson	Lindner	Orfield	Slawik	Westrom
Delmont	Jennings	Long	Osskopp	Smith	Winter
Dempsey	Johnson, A.	Luther	Osthoff	Solberg	Wolf
Dorn	Johnson, R.	Macklin	Ozment	Stanek	Workman
Entenza	Juhnke	Mahon	Paulsen	Stang	Spk. Carruthers

The bill was passed, as amended, and its title agreed to.

S. F. No. 1715 was reported to the House.

Davids moved to amend S. F. No. 1715 as follows:

Delete everything after the enacting clause and insert the following language of H. F. No. 1605, the first engrossment:

Section 1. Minnesota Statutes 1996, section 62E.02, subdivision 13, is amended to read:

Subd. 13. [ELIGIBLE PERSON.] "Eligible person" means an individual who is currently and has been a resident of Minnesota for the six months immediately preceding the date of receipt by the association or its writing carrier of a completed certificate of eligibility and who meets the enrollment requirements of section 62E.14. For purposes of eligibility under section 62E.14, subdivision 4c, paragraph (b), this definition is modified as provided in that paragraph.

Sec. 2. Minnesota Statutes 1996, section 62E.14, subdivision 3, is amended to read:

Sec. 3. Minnesota Statutes 1996, section 62E.14, subdivision 4c, is amended to read:

Subd. 4c. [WAIVER OF PREEXISTING CONDITIONS FOR PERSONS WHOSE COVERAGE IS TERMINATED OR WHO EXCEED THE MAXIMUM LIFETIME BENEFIT.] (a) A Minnesota resident may enroll in the comprehensive health plan with a waiver of the preexisting condition limitation described in subdivision 3 if that person applies for coverage within 90 days of termination of prior coverage and if the termination is for reasons other than fraud or nonpayment of premiums.

For purposes of this subdivision paragraph, termination of prior coverage includes exceeding the maximum lifetime benefit of existing coverage.

Coverage in the comprehensive health plan is effective on the date of termination of prior coverage. The availability of conversion rights does not affect a person's rights under this subdivision paragraph.

This section does not apply to prior coverage provided under policies designed primarily to provide coverage payable on a per diem, fixed indemnity, or nonexpense incurred basis, or policies providing only accident coverage.

(b) An eligible individual, as defined in the federal Health Insurance Portability and Accountability Act of 1996, section 111 (to be codified as United States Code, chapter 42, section 2741(b)) may enroll in the comprehensive health insurance plan with a waiver of the preexisting condition limitation described in subdivision 3 and a waiver of the evidence of rejection or similar events described in subdivision 1, clause (c). The eligible individual must apply for enrollment under this paragraph within 63 days of termination of prior coverage, and coverage under the comprehensive health insurance plan is effective as of the date of receipt of the complete application. The six month durational residency requirement provided in section 62E.02, subdivision 13, does not apply with respect to eligibility for enrollment under this paragraph, but the applicant must be a Minnesota resident as of the date of application. A person's eligibility to enroll under this paragraph does not affect the person's eligibility to enroll under any other provision.

Sec. 4. [EFFECTIVE DATE.]

Sections 1 to 3 are effective January 1, 1998.

Section 1. Minnesota Statutes 1996, section 62L.02, subdivision 9, is amended to read:

Subd. 9. [CONTINUOUS COVERAGE.] "Continuous coverage" means the maintenance of continuous and uninterrupted qualifying coverage. An individual is considered to have maintained continuous coverage if the individual requests enrollment in qualifying coverage within 30 63 days of termination of qualifying coverage.

Sec. 2. Minnesota Statutes 1996, section 62L.02, subdivision 11, is amended to read:

Subd. 11. [DEPENDENT.] "Dependent" means an eligible employee's spouse, unmarried child who is under the age of 19 years, unmarried child under the age of 25 years who is a full-time student as defined in section 62A.301, dependent child of any age who is handicapped and who meets the eligibility criteria in section 62A.14, subdivision 2, or any other person whom state or federal law requires to be treated as a dependent for purposes of health plans. For the purpose of this definition, a child includes a child for whom the employee or the employee's spouse has been appointed legal guardian and an adoptive child as provided in section 62A.27.

Sec. 3. Minnesota Statutes 1996, section 62L.02, is amended by adding a subdivision to read:

Sec. 4. Minnesota Statutes 1996, section 62L.02, subdivision 15, is amended to read:

Subd. 15. [HEALTH BENEFIT PLAN.] "Health benefit plan" means a policy, contract, or certificate offered, sold, issued, or renewed by a health carrier to a small employer for the coverage of medical and hospital benefits. Health benefit plan includes a small employer plan. Health benefit plan does not include coverage, including any combination of the following coverages, that is:

(1) limited to disability or income protection coverage;

(2) automobile medical payment coverage;

(3) liability insurance or supplemental to liability insurance;

(4) designed solely to provide coverage for a specified disease or illness or to provide payments on a per diem, fixed indemnity, or non-expense-incurred basis, if offered as independent, noncoordinated coverage;

(5) credit accident and health insurance as defined in section 62B.02;

(6) designed solely to provide dental or vision care;

(7) blanket accident and sickness insurance as defined in section 62A.11;

(8) accident-only coverage;

(9) a long-term care policy as defined in section 62A.46;

(10) issued as a supplement to Medicare, as defined in sections 62A.31 to 62A.44, or policies, contracts, or certificates that supplement Medicare issued by health maintenance organizations or those policies, contracts, or certificates governed by section 1833 or 1876 of the federal Social Security Act, United States Code, title 42, section 1395, et seq., as amended Medicare-related coverage as defined in section 62Q.01, subdivision 6;

(11) workers' compensation insurance; or

(12) issued solely as a companion to a health maintenance contract as described in section 62D.12, subdivision 1a, so long as the health maintenance contract meets the definition of a health benefit plan limited to care provided at on-site medical clinics operated by an employer for the benefit of the employer's employees and their dependents, in connection with which the employer does not transfer risk.

For the purpose of this chapter, a health benefit plan issued to eligible employees of a small employer who meets the participation requirements of section 62L.03, subdivision 3, is considered to have been issued to a small employer. A health benefit plan issued on behalf of a health carrier is considered to be issued by the health carrier.

Sec. 5. Minnesota Statutes 1996, section 62L.02, subdivision 19, is amended to read:

Subd. 19. [LATE ENTRANT.] "Late entrant" means an eligible employee or dependent who requests enrollment in a health benefit plan of a small employer following the initial enrollment period applicable to the employee or dependent under the terms of the health benefit plan, provided that the initial enrollment period must be a period of at least 30 days. However, an eligible employee or dependent must not be considered a late entrant if:

in the number of hours of employment. For purposes of this clause, an individual is not a late entrant if the individual elects coverage under the health benefit plan rather than accepting continuation coverage for which the individual is eligible under state or federal law with respect to the individual's previous qualifying coverage;

(2) the individual has lost coverage under another group health plan due to the expiration of benefits available under the Consolidated Omnibus Budget Reconciliation Act of 1985, Public Law Number 99-272, as amended, and any state continuation laws applicable to the employer or health carrier, provided that the individual maintains continuous coverage and requests enrollment within 30 days of the loss of coverage;

(3) the individual is a new spouse of an eligible employee, provided that enrollment is requested within 30 days of becoming legally married;

(4) the individual is a new dependent child of an eligible employee, provided that enrollment is requested within 30 days of becoming a dependent;

(5) the individual is employed by an employer that offers multiple health benefit plans and the individual elects a different plan during an open enrollment period; or

(6) a court has ordered that coverage be provided for a former spouse or dependent child under a covered employee's health benefit plan and request for enrollment is made within 30 days after issuance of the court order.

Sec. 6. Minnesota Statutes 1996, section 62L.02, subdivision 23, is amended to read:

Subd. 23. [PREEXISTING CONDITION.] "Preexisting condition" means, with respect to coverage, a condition manifesting in a manner that causes an ordinarily prudent person to seek medical advice, diagnosis, care, or treatment or present before the individual's enrollment date for the coverage, for which medical advice, diagnosis, care, or treatment was recommended or received during the six months immediately preceding the effective date of coverage, or a pregnancy existing as of the effective date of coverage of a health benefit plan enrollment date.

Sec. 7. Minnesota Statutes 1996, section 62L.02, subdivision 24, is amended to read:

Subd. 24. [QUALIFYING COVERAGE.] "Qualifying coverage" means health benefits or health coverage provided under:

(1) a health benefit plan, as defined in this section, but without regard to whether it is issued to a small employer and including blanket accident and sickness insurance, other than accident-only coverage, as defined in section 62A.11;

(2) part A or part B of Medicare;

(3) medical assistance under chapter 256B;

(4) general assistance medical care under chapter 256D;

(5) MCHA;

(6) a self-insured health plan;

(7) the MinnesotaCare program established under section 256.9352, when the plan includes inpatient hospital services as provided in section 256.9353;

(8) a plan provided under section 43A.316, 43A.317, or 471.617;

(10) coverage provided by a health care network cooperative under chapter 62R or by a health provider cooperative under section 62R.17; or

(11) a medical care program of the Indian Health Service or of a tribal organization;

(12) the federal Employees Health Benefits Plan, or other coverage provided under United States Code, title 5, chapter 89;

(13) a health benefit plan under section 5(e) of the Peace Corps Act, codified as United States Code, title 32, section 2504(e); or

(14) a plan similar to any of the above plans provided in this state or in another state as determined by the commissioner.

Sec. 8. Minnesota Statutes 1996, section 62L.02, subdivision 26, is amended to read:

Subd. 26. [SMALL EMPLOYER.] (a) "Small employer" means, with respect to a calendar year and a plan year, a person, firm, corporation, partnership, association, or other entity actively engaged in business, including a political subdivision of the state, that, on at least 50 percent of its working days during the preceding 12 months, employed an average of no fewer than two nor more than 29, or after June 30, 1995, more than 49, 50 current employees, the majority of whom were employed in this state. If an employer has only two eligible employees and one is the spouse, child, sibling, parent, or grandparent of the other, the employer must be a Minnesota domiciled employer and have paid social security or self-employment tax on behalf of both eligible employees on business days during the preceding calendar year and that employs at least two current employees on the first day of the plan year. If an employer has only one eligible employee who has not waived coverage, the sale of a health plan to or for that eligible employee is not a sale to a small employer and is not subject to this chapter and may be treated as the sale of an individual health plan. A small employer plan may be offered through a domiciled association to self-employed individuals and small employers who are members of the association, even if the self-employed individual or small employer has fewer than two current employees. Entities that are eligible to file a combined tax return for purposes of state tax laws treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the federal Internal Revenue Code are considered a single employer for purposes of determining the number of current employees. Small employer status must be determined on an annual basis as of the renewal date of the health benefit plan. The provisions of this chapter continue to apply to an employer who no longer meets the requirements of this definition until the annual renewal date of the employer's health benefit plan. If an employer was not in existence throughout the preceding calendar year, the determination of whether the employer is a small employer is based upon the average number of current employees that it is reasonably expected that the employer will employ on business days in the current calendar year. For purposes of this definition, the term employer includes any predecessor of the employer. An employer that has more than 50 current employees but has 50 or fewer employees, as "employee" is defined under section 3(6) of the federal Employee Retirement Income Security Act of 1974, is a small employer under this subdivision.

(b) Where an association, as defined in section 62L.045, comprised of employers contracts with a health carrier to provide coverage to its members who are small employers, the association and health benefit plans it provides to small employers, are subject to section 62L.045, with respect to small employers in the association, even though the association also provides coverage to its members that do not qualify as small employers.

(c) If an employer has employees covered under a trust specified in a collective bargaining agreement under the federal Labor-Management Relations Act of 1947, United States Code, title 29, section 141, et seq., as amended, or employees whose health coverage is determined by a collective bargaining agreement and, as a result of the collective bargaining agreement, is purchased separately from the health plan provided to other employees, those employees are excluded in determining whether the employer qualifies as a small employer. Those employees are considered to be a separate small employer if they constitute a group that would qualify as a small employer in the absence of the employees who are not subject to the collective bargaining agreement.

Sec. 9. Minnesota Statutes 1996, section 62L.02, is amended by adding a subdivision to read:

Sec. 10. Minnesota Statutes 1996, section 62L.03, subdivision 1, is amended to read:

Subdivision 1. [GUARANTEED ISSUE AND REISSUE.] (a) Every health carrier shall, as a condition of authority to transact business in this state in the small employer market, affirmatively market, offer, sell, issue, and renew any of its health benefit plans, on a guaranteed issue basis, to any small employer that meets the participation and contribution requirements of subdivision 3, as provided in this chapter.

(b) Notwithstanding paragraph (a), a health carrier may, at the time of coverage renewal, modify the health coverage for a product offered in the small employer market if the modification is consistent with state law, approved by the commissioner, and effective on a uniform basis for all small employers purchasing that product other than through a qualified association in compliance with section 62L.045, subdivision 2.

This requirement Paragraph (a) does not apply to a health benefit plan designed for a small employer to comply with a collective bargaining agreement, provided that the health benefit plan otherwise complies with this chapter and is not offered to other small employers, except for other small employers that need it for the same reason. This paragraph applies only with respect to collective bargaining agreements entered into prior to August 21, 1996, and only with respect to plan years beginning before the later of July 1, 1997, or the date upon which the last of the collective bargaining agreements relating to the plan terminates determined without regard to any extension agreed to after August 21, 1996.

(c) Every health carrier participating in the small employer market shall make available both of the plans described in section 62L.05 to small employers and shall fully comply with the underwriting and the rate restrictions specified in this chapter for all health benefit plans issued to small employers.

(d) A health carrier may cease to transact business in the small employer market as provided under section 62L.09.

Sec. 11. Minnesota Statutes 1996, section 62L.03, subdivision 2, is amended to read:

Subd. 2. [EXCEPTIONS.] (a) No health maintenance organization is required to offer coverage or accept applications under subdivision 1 in the case of the following:

(1) with respect to a small employer, where the worksite of the employees of the small employer is not physically located does not have eligible employees who work or reside in the health maintenance organization's approved service areas; or

(2) with respect to an employee, when the employee does not work or reside within the health maintenance organization's approved service areas.

(b) A health carrier participating in the small employer market shall not be required to offer coverage or accept applications pursuant to subdivision 1 where the commissioner finds that the acceptance of an application or applications would place the health carrier participating in the small employer market in a financially impaired condition, provided, however, that a health carrier participating in the small employer market that has not offered coverage or accepted applications pursuant to this paragraph shall not offer coverage or accept applications for any health benefit plan until 180 days following a determination by the commissioner that the health carrier is not financially impaired and that offering coverage or accepting applications under subdivision 1 would not cause the health carrier to become financially impaired.

Sec. 12. Minnesota Statutes 1996, section 62L.03, subdivision 3, is amended to read:

(b) If a small employer does not satisfy the contribution or participation requirements under this subdivision, a health carrier may voluntarily issue or renew individual health plans, or a health benefit plan which must fully comply with this chapter. A health carrier that provides a health benefit plan to a small employer that does not meet the contribution or participation requirements of this subdivision must maintain this information in its files for audit by the commissioner. A health carrier may not offer an individual health plan, purchased through an arrangement between the employer and the health carrier, to any employee unless the health carrier also offers the individual health plan, on a guaranteed issue basis, to all other employees of the same employer.

(c) Nothing in this section obligates a health carrier to issue coverage to a small employer that currently offers coverage through a health benefit plan from another health carrier, unless the new coverage will replace the existing coverage and not serve as one of two or more health benefit plans offered by the employer. This paragraph does not apply if the small employer will meet the required participation level with respect to the new coverage.

Sec. 13. Minnesota Statutes 1996, section 62L.03, subdivision 4, is amended to read:

Subd. 4. [UNDERWRITING RESTRICTIONS.] (a) Health carriers may apply underwriting restrictions to coverage for health benefit plans for small employers, including any preexisting condition limitations, only as expressly permitted under this chapter. For purposes of this section, "underwriting restrictions" means any refusal of the health carrier to issue or renew coverage, any premium rate higher than the lowest rate charged by the health carrier for the same coverage, any preexisting condition limitation, preexisting condition exclusion, or any exclusionary rider.

(b) Health carriers may collect information relating to the case characteristics and demographic composition of small employers, as well as health status and health history information about employees, and dependents of employees, of small employers.

(c) Except as otherwise authorized for late entrants, preexisting conditions may be excluded by a health carrier for a period not to exceed 12 months from the effective enrollment date of coverage of an eligible employee or dependent, but exclusionary riders must not be used. When calculating a preexisting condition limitation, a health carrier shall credit the time period an eligible employee or dependent was previously covered by qualifying coverage, provided that the individual maintains continuous coverage. Late entrants may be subject to a preexisting condition limitation not to exceed 18 months from the effective enrollment date of coverage of the late entrant, but must not be subject to any exclusionary rider or preexisting condition exclusion. When calculating any length of preexisting condition limitation, a health carrier shall credit the time period an eligible employee or dependent was previously covered by qualifying coverage, provided that the individual maintains continuous coverage. The credit must be given for all qualifying coverage with respect to all preexisting conditions, regardless of whether the conditions were preexisting with respect to any previous qualifying coverage. Section 60A.082, relating to replacement of group coverage, and the rules adopted under that section apply to this chapter, and this chapter's requirements are in addition to the requirements of that section and the rules adopted under it. A health carrier shall, at the time of first issuance or renewal of a health benefit plan on or after July 1, 1993, credit against any preexisting condition limitation or exclusion permitted under this section, the time period prior to July 1, 1993, during which an eligible employee or dependent was covered by qualifying coverage, if the person has maintained continuous coverage.

(d) Health carriers shall not use pregnancy as a preexisting condition under this chapter.

Sec. 14. Minnesota Statutes 1996, section 62L.03, subdivision 5, is amended to read:

Subd. 5. [CANCELLATIONS AND FAILURES TO RENEW.] (a) No health carrier shall cancel, decline to issue, or fail to renew a health benefit plan as a result of the claim experience or health status of the persons covered or to be covered by the health benefit plan. For purposes of this subdivision, a failure to renew does not include a uniform modification of coverage at time of renewal, as described in subdivision 1.

(b) A health carrier may cancel or fail to renew a health benefit plan:

(2) for fraud or misrepresentation by the small employer, or, with respect to coverage of an individual eligible employee or dependent, fraud or misrepresentation by the eligible employee or dependent, with respect to eligibility for coverage or any other material fact;

(3) if the employer fails to comply with the minimum contribution percentage required under subdivision 3; or

(4) for any other reasons or grounds expressly permitted by the respective licensing laws and regulations governing a health carrier, including, but not limited to, service area restrictions imposed on health maintenance organizations under section 62D.03, subdivision 4, paragraph (m), to the extent that these grounds are not expressly inconsistent with this chapter.

(c) A health carrier may fail to renew a health benefit plan:

(1) if eligible employee participation during the preceding calendar year declines to less than 75 percent, subject to the waiver of coverage provision in subdivision 3;

(2) if the health carrier ceases to do business in the small employer market under section 62L.09; or

(3) if a failure to renew is based upon the health carrier's decision to discontinue the health benefit plan form previously issued to the small employer, but only if the health carrier permits each small employer covered under the prior form to switch to its choice of any other health benefit plan offered by the health carrier, without any underwriting restrictions that would not have been permitted for renewal purposes.

(d) A health carrier need not renew a health benefit plan, and shall not renew a small employer plan, if an employer ceases to qualify as a small employer as defined in section 62L.02. If a health benefit plan, other than a small employer plan, provides terms of renewal that do not exclude an employer that is no longer a small employer, the health benefit plan may be renewed according to its own terms. If a health carrier issues or renews a health plan to an employer that is no longer a small employer, without interruption of coverage, the health plan is subject to section 60A.082. Between July 1, 1994, and June 30, 1995, a health benefit plan in force during this time may be renewed, if the number of employees exceeds two, but does not exceed 49 employees.

Sec. 15. [EFFECTIVE DATE.]

Sections 1 to 14 are effective July 1, 1997, and apply to coverage issued or renewed on or after that date.

Section 1. Minnesota Statutes 1996, section 62Q.18, subdivision 1, is amended to read:

Subdivision 1. [DEFINITION.] For purposes of this section,

(1) "continuous coverage" has the meaning given in section 62L.02, subdivision 9;

(2) "guaranteed issue" means:

(i) for individual health plans, that a health plan company shall not decline an application by an individual for any individual health plan offered by that health plan company, including coverage for a dependent of the individual to whom the health plan has been or would be issued; and

(3) "large employer" means an entity that would be a small employer, as defined in section 62L.02, subdivision 26, except that the entity has more than 50 current employees, based upon the method provided in that subdivision for determining the number of current employees;

(4) "preexisting condition" has the meaning given in section 62L.02, subdivision 23; and

(3) (5) "qualifying coverage" has the meaning given in section 62L.02, subdivision 24.

Sec. 2. Minnesota Statutes 1996, section 62Q.18, subdivision 7, is amended to read:

Subd. 7. [PORTABILITY OF COVERAGE.] Effective July 1, 1994, no health plan company shall offer, sell, issue, or renew any group health plan that does not, with respect to individuals who maintain continuous coverage and who qualify under the group's eligibility requirements:

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

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

(3) with respect to a group health plan offered, sold, issued, or renewed to a large employer, impose preexisting condition limitations or preexisting condition exclusions except to the extent that would be permitted under chapter 62L if the group sponsor were a small employer as defined in section 62L.02, subdivision 26.

To the extent that this subdivision conflicts with chapter 62L, chapter 62L governs, regardless of whether the group sponsor is a small employer as defined in section 62L.02, except that for group health plans issued to groups that are not small employers, this subdivision's requirement that the individual have maintained continuous coverage applies. An individual who has maintained continuous coverage, but would be considered a late entrant under chapter 62L, may be treated as a late entrant in the same manner under this subdivision as permitted under chapter 62L.

Sec. 3. [62Q.185] [GUARANTEED RENEWABILITY; LARGE EMPLOYER GROUP HEALTH COVERAGE.]

(a) No health plan company, as defined in section 62Q.01, subdivision 4, shall refuse to renew a health benefit plan, as defined in section 62L.02, subdivision 15, but issued to a large employer, as defined in section 62Q.18, subdivision 1.

(b) This section does not require renewal if:

(1) the large employer has failed to pay premiums or contributions as required under the terms of the health benefit plan, or the health plan company has not received timely premium payments unless the late payments were received within a grace period provided under state law;

(2) the large employer has performed an act or practice that constitutes fraud or misrepresentation of material fact under the terms of the health benefit plan;

(3) the large employer has failed to comply with a material plan provision relating to employer contribution or group participation rules not prohibited by state law;

(4) the health plan company is ceasing to offer coverage in the large employer market in this state in compliance with United States Code, title 42, section 2712(c), and applicable state law;

(5) in the case of a health maintenance organization, there is no longer any enrollee in the large employer's health benefit plan who lives, resides, or works in the approved service area; or

(c) This section does not prohibit a health plan company from modifying the premium rate or from modifying the coverage for purposes of renewal.

Sec. 4. [EFFECTIVE DATE.]

Sections 1 to 3 are effective July 1, 1997, and apply to health benefit plans offered, sold, issued, or renewed on or after that date.

Section 1. Minnesota Statutes 1996, section 62D.12, subdivision 1a, is amended to read:

Subd. 1a. [SWING-OUT PRODUCTS.] Notwithstanding subdivision 1, nothing in sections 62A.049, 62A.60, and 72A.201, subdivision 4a, applies to a commercial health policy issued under this chapter as a companion to a health maintenance contract. The commissioner has approval authority with respect to the commercial health policy.

Sec. 2. Minnesota Statutes 1996, section 62H.01, is amended to read:

62H.01 [JOINT SELF-INSURANCE EMPLOYEE HEALTH PLAN.]

Any two or more employers, excluding the state and its political subdivisions as described in section 471.617, subdivision 1, who are authorized to transact business in Minnesota may jointly self-insure employee health, dental, short-term disability benefits, or other benefits permitted under the Employee Retirement Income Security Act of 1974, United States Code, title 29, sections 1001 et seq. Joint plans must have a minimum of 100 covered employees and meet all conditions and terms of sections 62H.01 to 62H.08. Joint plans covering employers not resident in Minnesota must meet the requirements of sections 62H.01 to 62H.08 as if the portion of the plan covering Minnesota resident employees was treated as a separate plan. A plan may cover employees resident in other states only if the plan complies with the applicable laws of that state.

A multiple employer welfare arrangement as defined in United States Code, title 29, section 1002(40)(a), is subject to this chapter to the extent authorized by the Employee Retirement Income Security Act of 1974, United States Code, title 29, sections 1001 et seq. The commissioner of commerce may, on behalf of the state, enter into an agreement with the United States Secretary of Labor for delegation to the state of some or all of the secretary's enforcement authority with respect to multiple employer welfare arrangements, as described in United States Code, title 29, section 1136, subsection (c).

Sec. 3. [62Q.021] [FEDERAL ACT; COMPLIANCE REQUIRED.]

Each health plan company shall comply with the federal Health Insurance Portability and Accountability Act of 1996, to the extent that it imposes a requirement that applies in this state and that is not also required by the laws of this state. This section does not require compliance with any provision of the federal act prior to the effective date provided for that provision in the federal act. The commissioner shall enforce this section.

Sec. 4. [62Q.181] [WRITTEN CERTIFICATION OF COVERAGE.]

A health plan company shall provide the written certifications of coverage required under United States Code, title 42, sections 300gg and 300gg-43, as amended through November 1996. This section applies only to coverage that is subject to regulation under state law and only to the extent that the certification of coverage is required under federal law. The commissioner shall enforce this section.

Sec. 5. [EFFECTIVE DATE.]

Delete the title and insert:

"A bill for an act relating to insurance; making changes in response to the federal Health Insurance Portability and Accountability Act of 1996; amending Minnesota Statutes 1996, sections 62D.12, subdivision 1a; 62E.02, subdivision 13; 62E.14, subdivisions 3 and 4c; 62H.01; 62L.02, subdivisions 9, 11, 15, 19, 23, 24, 26, and by adding subdivisions; 62L.03, subdivisions 1, 2, 3, 4, and 5; and 62Q.18, subdivisions 1 and 7; proposing coding for new law in Minnesota Statutes, chapter 62Q."

The motion prevailed and the amendment was adopted.

Davids moved to amend S. F. No. 1715, as amended, as follows:

Page 2, line 27, delete "in the federal"

Page 2, delete line 28

Page 2, line 29, delete everything before "United" and insert "under"

Page 2, line 30, delete "2741(b))" and insert "300gg-41(b)"

Page 7, line 31, delete "32" and insert "22"

Page 9, line 5, delete "section 3(6) of" and insert "United States Code, title 29, section 1002(6)"

Page 9, line 6, delete everything before the comma

Page 17, line 32, delete "2712(c)" and insert "300gg-12(c)"

Page 18, delete section 1 of article 4

Page 19, line 15, delete "1136, subsection (c)" and insert " 1136(c)"

Page 19, line 18, after the comma insert "including any federal regulations adopted under that act,"

Page 19, line 28, delete "300gg" and insert "300gg(e)" and delete everything after "300gg-43"

Page 19, line 29, delete everything before the period

Page 19, line 34, delete "2 and 3" and insert "1 and 2"

Page 19, line 35, delete "Sections 1 and 4 are" and insert " Section 3 is"

Renumber the sections in sequence and correct internal references

Amend the title accordingly

S. F. No. 1715, A bill for an act relating to insurance; making changes in response to the federal Health Insurance Portability and Accountability Act; amending Minnesota Statutes 1996, sections 62E.02, subdivision 13; 62E.14, subdivisions 3 and 4c; 62H.01; 62L.02, subdivisions 9, 11, 15, 19, 23, 24, 26, and by adding subdivisions; 62L.03, subdivisions 1, 2, 3, 4, and 5; and 62Q.18, subdivisions 1 and 7; proposing coding for new law in Minnesota Statutes, chapter 62Q.

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 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Kahn	Mares	Pawlenty	Sviggum
Anderson, B.	Evans	Kalis	Mariani	Paymar	Swenson, D.
Anderson, I.	Finseth	Kelso	Marko	Pelowski	Swenson, H.
Bakk	Folliard	Kielkucki	McCollum	Peterson	Sykora
Bettermann	Garcia	Kinkel	McElroy	Pugh	Tingelstad
Biernat	Goodno	Knight	McGuire	Rest	Tomassoni
Bishop	Greenfield	Knoblach	Milbert	Reuter	Tompkins
Boudreau	Greiling	Koppendrayer	Molnau	Rhodes	Trimble
Bradley	Gunther	Koskinen	Mulder	Rifenberg	Tuma
Broecker	Haas	Kraus	Mullery	Rostberg	Tunheim
Carlson	Harder	Krinkie	Munger	Rukavina	Van Dellen
Chaudhary	Hasskamp	Kubly	Murphy	Schumacher	Vickerman
Clark	Hausman	Kuisle	Ness	Seagren	Wagenius
Commers	Hilty	Larsen	Nornes	Seifert	Weaver
Daggett	Holsten	Leighton	Olson, E.	Sekhon	Wejcman
Davids	Huntley	Leppik	Olson, M.	Skare	Wenzel
Dawkins	Jaros	Lieder	Opatz	Skoglund	Westfall
Dehler	Jefferson	Lindner	Orfield	Slawik	Westrom
Delmont	Jennings	Long	Osskopp	Smith	Winter
Dempsey	Johnson, A.	Luther	Osthoff	Solberg	Wolf
Dorn	Johnson, R.	Macklin	Ozment	Stanek	Workman
Entenza	Juhnke	Mahon	Paulsen	Stang	Spk. Carruthers

The bill was passed, as amended, and its title agreed to.

The Speaker resumed the Chair.

S. F. No. 501 was reported to the House.

Entenza moved to amend S. F. No. 501 as follows:

Delete everything after the enacting clause and insert the following language of H. F. No. 1032, the first engrossment:

"Section 1. Minnesota Statutes 1996, section 45.011, subdivision 1, is amended to read:

Sec. 2. [45.0111] [TEMPORARY LICENSES.]

Subdivision 1. [AUTHORITY.] The commissioner may grant a temporary license to an applicant who can demonstrate successful completion of all requirements for a permanent license. The temporary license will remain in effect until the earliest of:

(1) receipt by the applicant of the permanent license;

(2) the expiration of 45 days from the date on which the temporary license was granted; or

(3) denial by the commissioner of the permanent license.

Subd. 2. [NONAPPLICATION.] A temporary license as described in this section may not be issued to an applicant for licensure as a:

(1) currency exchange regulated under chapter 53A;

(2) collection agency regulated under sections 332.31 to 332.45;

(3) credit service organization regulated under sections 332.52 to 332.60; or

(4) broker dealer, investment advisor, or agent regulated under chapter 80A.

Sec. 3. [45.0112] [STREET ADDRESSES REQUIRED.]

Licensees or applicants for licenses issued by the commissioner shall provide to the commissioner a residence telephone number, a street address where the licensee actually resides, and a street address where the licensee's business is physically located. A post office box address is not sufficient to satisfy this requirement. The individual shall notify the department of any change in street address or residence telephone number within ten days.

Sec. 4. Minnesota Statutes 1996, section 45.028, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENT.] (a) When a person, including any nonresident of this state, engages in conduct prohibited or made actionable by chapters 45 to 83, 155A, 309, and 332, and section 326.83, or any rule or order under those chapters, and the person has not filed a consent to service of process under chapters 45 to 83, 155A, 309, and 332, and section 326.83, that conduct is equivalent to an appointment of the commissioner as the person's attorney to receive service of process in any noncriminal suit, action, or proceeding against the person which is based on that conduct and is brought under chapters 45 to 83, 155A, 309, and 332, and section 326.83, or any rule or order under those chapters.

(b) Subdivision 2 applies in all other cases under chapters 45 to 83, 155A, 309, and 332, and section 326.83, or any rule or order under those chapters, in which a person, including a nonresident of this state, has filed a consent to service of process. This paragraph supersedes any inconsistent provision of law.

(c) Subdivision 2 applies in all cases in which service of process is allowed to be made on the commissioner of commerce.

Sec. 5. [45.0292] [LICENSE RECIPROCITY.]

The commissioner may waive all or part of the requirements of prelicense education, examination, and continuing education for individuals of other jurisdictions if:

(1) a written reciprocal licensing agreement is in effect between the commissioner and the licensing officials of that jurisdiction;

(2) the individual is licensed in that jurisdiction; and

Sec. 6. [60K.20] [SOCIAL SECURITY NUMBERS OF LICENSED AGENTS; COMMISSIONER'S AUTHORITY TO PROVIDE TO NAIC.]

The commissioner may provide the social security numbers of licensed insurance agents to the National Association of Insurance Commissioners.

Sec. 7. Minnesota Statutes 1996, section 80A.02, subdivision 1, is amended to read:

Subdivision 1. [ADVISORY ACTIVITIES AND PRINCIPAL TRANSACTIONS.] (a) It is unlawful for any person who receives, directly or indirectly, any consideration from another primarily for advising the other as to the value of securities or their purchase or sale:

(a) (1) to employ any device, scheme, or artifice to defraud the other; or

(b) (2) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the other; or.

(c) (b) It is unlawful for an investment adviser to knowingly sell any security to or purchase any security from a client while acting as principal for the person's own account or knowingly effect any sale or purchase of any security for the account of a client while acting as broker for one other than the client, unless the person discloses to the client in writing before the execution of the transaction the capacity in which the person is acting and obtains the consent of the client to the transaction.

Sec. 8. Minnesota Statutes 1996, section 80A.04, subdivision 3, is amended to read:

Subd. 3. It is unlawful for any person to transact business in this state as an investment adviser unless that person is so licensed or licensed as a broker-dealer under this chapter or unless: (1) that person's only clients in this state are investment companies as defined in the Investment Company Act of 1940, other investment advisers, broker-dealers, banks, trust companies, savings associations, federal covered advisers insurance companies, employee benefit plans, corporations with a class of equity securities registered under section 12(b) or 12(g) of the Securities Exchange Act of 1934, small business investment companies, and government agencies or instrumentalities, whether acting for themselves or as trustees with investment control, or other institutional investors as are designated by rule or order of the commissioner. buyers; or (2) that person has no place of business in this state and during the preceding 12-month period has had fewer than six clients, other than those in clause (1), who are residents of this state.

Sec. 9. Minnesota Statutes 1996, section 80A.04, subdivision 4, is amended to read:

Subd. 4. Every license shall expire or notice filing expires on December 31 of each year unless an application for renewal has been received by the commissioner by November 15.

Sec. 10. Minnesota Statutes 1996, section 80A.04, is amended by adding a subdivision to read:

Subd. 5. Except with respect to advisers whose only clients are those described in subdivision 3, clause (2), it is unlawful for a federal covered adviser to conduct advisory business in this state unless the person complies with section 80A.05, subdivision 1a.

Sec. 11. Minnesota Statutes 1996, section 80A.05, is amended by adding a subdivision to read:

Sec. 12. Minnesota Statutes 1996, section 80A.05, subdivision 4, is amended to read:

Subd. 4. The commissioner may by rule require a minimum capital for broker-dealers, subject to the limitations of section 15 of the Securities Act of 1934, and establish minimum financial requirements for investment advisers and establish limitations on aggregate indebtedness of broker-dealers in relation to net capital., subject to the limitations of section 222 of the Investment Advisers Act of 1940 which may include different requirements for those investment advisers who maintain custody of clients' funds or securities or who have discretionary authority over the funds or securities and those investment advisers who do not.

Sec. 13. Minnesota Statutes 1996, section 80A.05, subdivision 5, is amended to read:

Subd. 5. The commissioner may by rule require licensed broker-dealers, agents and investment advisers who have custody of or discretionary authority over client funds or securities, to post surety bonds in amounts up to $25,000, as the commissioner may prescribe subject to the limitations of section 15 of the Securities Exchange Act of 1934 for broker-dealers and section 222 of the Investment Advisers Act of 1940 for investment advisers and may by rule or order determine their conditions. Any appropriate deposit of cash or securities shall be accepted in lieu of any bond so required. No bond may be required of any broker-dealer whose net capital, which may be defined by rule, exceeds $25,000 the amounts required by the commissioner. Every bond shall provide for suit thereon by any person who has a cause of action under section 80A.23 and, if the commissioner by rule or order requires, by any person who has a cause of action not arising under sections 80A.01 to 80A.31. Every bond shall provide that no suit may be maintained to enforce any liability on the bond unless brought within three years after the sale or other act upon which it is based.

Sec. 14. Minnesota Statutes 1996, section 80A.06, subdivision 1, is amended to read:

Subdivision 1. Every licensed broker-dealer and investment adviser shall make and keep all accounts, correspondence, memoranda, papers, books and other records which the commissioner by rule prescribes by rule or order, except as provided by section 15 of the Securities Act of 1934 in the case of a broker-dealer and section 222 of the Investment Advisers Act of 1940 in the case of an investment adviser. All records required shall be preserved for three years unless the commissioner by rule prescribes otherwise for particular types of records. All required records shall be kept within the state or shall, at the request of the commissioner, be made available at any time for examination by the commissioner either in the principal office of the licensee or by production of exact copies thereof in this state.

Sec. 15. Minnesota Statutes 1996, section 80A.06, subdivision 2, is amended to read:

Subd. 2. Every licensed broker-dealer and investment adviser shall file such reports as the commissioner by rule or order prescribes except as provided in section 15 of the Securities Exchange Act of 1934 in the case of a broker-dealer and section 222 of the Investment Advisers Act of 1940 in the case of an investment adviser.

Sec. 16. Minnesota Statutes 1996, section 80A.06, subdivision 3, is amended to read:

Subd. 3. If the information contained in any document filed with the commissioner is or becomes inaccurate or incomplete in any material respect, the licensee or federal covered adviser shall within 30 days file a correcting amendment unless notification of the correction has been given under section 80A.04, subdivision 2.

Sec. 17. Minnesota Statutes 1996, section 80A.08, is amended to read:

80A.08 [REGISTRATION REQUIREMENT.]

It is unlawful for any person to offer or sell any security in this state unless (a) it is registered under sections 80A.01 to 80A.31 or (b) the security or transaction is exempted under section 80A.15 or (c) it is a federal covered security.

Sec. 18. Minnesota Statutes 1996, section 80A.12, is amended by adding a subdivision to read:

Sec. 19. [80A.122] [FEDERAL COVERED SECURITIES.]

Subdivision 1. [18(b)(2) FILINGS.] The commissioner may, by rule or otherwise, require the filing of any or all of the following documents with respect to a federal covered security under section 18(b)(2) of the Securities Act of 1933:

(1) prior to the initial offer of a federal covered security in this state, all documents that are part of a current federal registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933, together with a fee and a consent to service of process;

(2) after the initial offer of a federal covered security in this state, all documents that are part of an amendment to a current federal registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933, which must be filed concurrently with the commissioner;

(3) notices that increase the aggregate amount of securities offered or sold in this state, together with the fee;

(4) notwithstanding any other provision of this section, until October 10, 1999, a federal covered security for which the fees required by section 80A.28 have not been promptly paid after the issuer of such securities has been notified in writing by the commissioner of the nonpayment or underpayment of such fees. An issuer shall be considered to have promptly paid such fees if the fees are remitted to the commissioner within 15 days following the receipt of written notification from the commissioner.

Subd. 2. [18(b)(4)(D) FILINGS.] With respect to a security that is a federal covered security under section 18(b)(4)(D) of the Securities Act of 1933, the commissioner, by rule or otherwise, may require the issuer to file a notice on form D of the Securities and Exchange Commission, together with a fee and a consent to service of process no later than 15 days after the first sale of the covered security in this state.

Subd. 3. [18(b)(3) or (4) FILINGS.] The commissioner, by rule or otherwise, may require the filing of any document filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to a federal covered security under section 18(b)(3) or (4) of the Securities Act of 1933 together with the fee.

Subd. 4. [STOP ORDERS.] The commissioner may issue a stop order suspending the offer and sale of a federal covered security, except a federal covered security under section 18(b)(1) of the Securities Act of 1933, if the commissioner finds that: (1) the order is in the public interest; and (2) there is a failure to comply with any condition established under this section.

Subd. 5. [COMMISSIONER'S WAIVER.] The commissioner may, by rule or otherwise, waive any or all of the provisions of this section.

Sec. 20. Minnesota Statutes 1996, section 80A.14, subdivision 3, is amended to read:

Subd. 3. [AGENT.] "Agent" means any individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. "Agent" does not include:

(a) an individual who represents an issuer in:

(1) effecting transactions in a security exempted by section 80A.15, subdivision 1;

(2) effecting transactions exempted by section 80A.15, subdivision 2;

(3) effecting transactions with existing employees, partners or directors of the issuer if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state;

(5) effecting transactions in securities registered by notification under section 80A.09 if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state.; or

(6) effecting transactions in a federal covered security as described in sections 18(b)(3) and 18(b)(4) of the Securities Act of 1933; or

(b) an individual who represents a broker-dealer in effecting transactions in the state limited to those transactions described in section 15(h)(2) of the Securities Exchange Act of 1934.

A partner, officer or director of a broker-dealer or issuer, or a person occupying a similar status or performing similar functions, is an agent only if that person otherwise comes within this definition.

Sec. 21. Minnesota Statutes 1996, section 80A.14, subdivision 4, is amended to read:

Subd. 4. [BROKER-DEALER.] "Broker-dealer" means any person engaged in the business of effecting transactions in securities for the account of others or for that person's own account. "Broker-dealer" does not include:

(1) an agent;

(2) an issuer;

(3) a trust company; or

(4) a bank, savings institution, savings association, credit union:

(i) acting for the account of others, provided that such activities are conducted in compliance with such rules as may be adopted by the commissioner;

(ii) acting for its own account; or

(iii) acting in a fiduciary capacity pursuant to the powers and privileges described by sections 48.36 to 48.49 or United States Code, title 12, section 92(a);

(5) a person who has no place of business in this state if that person effects transactions in this state exclusively with or through (i) the issuers of the securities involved in the transactions, (ii) other broker-dealers, or (iii) banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, pension or profit sharing trusts, or other financial institutions or institutional buyers, or to broker-dealers, whether the purchaser is acting for itself or in some fiduciary capacity; or

(6) other persons not within the intent of this subsection whom the commissioner by rule or order designates.

Sec. 22. Minnesota Statutes 1996, section 80A.14, is amended by adding a subdivision to read:

Subd. 5a. [FEDERAL COVERED ADVISER.] "Federal covered adviser" means a person who is: (1) registered under section 203 of the Investment Act of 1940; or (2) is excluded from the definition of "investment adviser" under section 202(a)(11).

Sec. 23. Minnesota Statutes 1996, section 80A.14, is amended by adding a subdivision to read:

Sec. 24. Minnesota Statutes 1996, section 80A.14, is amended by adding a subdivision to read:

Subd. 8a. [INSTITUTIONAL BUYER.] For the purposes of sections 80A.04, subdivision 3; 80A.14, subdivision 4, clause (5); and 80A.15, subdivision 2, paragraph (g), "institutional buyer" includes, but is not limited to, a corporation with a class of equity securities registered under section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, a "qualified institutional buyer" within the meaning of rule 144A, and an "accredited investor" within the meaning of rule 501(a) of regulation D.

Sec. 25. Minnesota Statutes 1996, section 80A.15, subdivision 1, is amended to read:

Subdivision 1. The following securities are exempted from sections 80A.08 and 80A.16:

(a) Any security, including a revenue obligation, issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency or corporate or other instrumentality of one or more of the foregoing.; but this exemption does not apply to a security issued by any of the foregoing that is payable solely from payments to be received in respect of property or money used under a lease, sale, or loan arrangement by or for a nongovernmental industrial or commercial enterprise. Pursuant to section 106(c) of the Secondary Mortgage Market Enhancement Act of 1984, Public Law Number 98-440, this exemption does not apply to a security that is offered or sold pursuant to section 106(a)(1) or (2) of that act.

(b) Any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any province, any agency or corporate or other instrumentality of one or more of the foregoing, if the security is recognized as a valid obligation by the issuer or guarantor; but this exemption shall not include any revenue obligation payable solely from payments to be made in respect of property or money used under a lease, sale or loan arrangement by or for a nongovernmental industrial or commercial enterprise.

(c) Any security issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States, or any bank, savings institution or trust company organized under the laws of any state and subject to regulation in respect of the issuance or guarantee of its securities by a governmental authority of that state.

(d) Any security issued by and representing an interest in or a debt of, or guaranteed by, any federal savings association, or any savings association or similar association organized under the laws of any state and authorized to do business in this state.

(e) Any security issued or guaranteed by any federal credit union or any credit union, or similar association organized and supervised under the laws of this state.

(f) Any security listed or approved for listing upon notice of issuance on the New York Stock Exchange, the American Stock Exchange, the Midwest Stock Exchange, the Pacific Stock Exchange, or the Chicago Board Options Exchange; any other security of the same issuer which is of senior or substantially equal rank; any security called for by subscription rights or warrants so listed or approved; or any warrant or right to purchase or subscribe to any of the foregoing. This exemption does not apply to second tier listings on any of the exchanges in this paragraph.

(g) Any commercial paper which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which evidences an obligation to pay cash within nine months of the date of issuance, exclusive of days of grace, or any renewal of the paper which is likewise limited, or any guarantee of the paper or of any renewal which are not advertised for sale to the general public in newspapers or other publications of general circulation or otherwise, or by radio, television or direct mailing.

(h) Any interest in any employee's savings, stock purchase, pension, profit sharing or similar benefit plan, or a self-employed person's retirement plan.

(j) Any interest in a common trust fund or similar fund maintained by a state bank or trust company organized and operating under the laws of Minnesota, or a national bank wherever located, for the collective investment and reinvestment of funds contributed thereto by the bank or trust company in its capacity as trustee, executor, administrator, or guardian; and any interest in a collective investment fund or similar fund maintained by the bank or trust company, or in a separate account maintained by an insurance company, for the collective investment and reinvestment of funds contributed thereto by the bank, trust company or insurance company in its capacity as trustee or agent, which interest is issued in connection with an employee's savings, pension, profit sharing or similar benefit plan, or a self-employed person's retirement plan.

(k) Any security which meets all of the following conditions:

(1) If the issuer is not organized under the laws of the United States or a state, it has appointed a duly authorized agent in the United States for service of process and has set forth the name and address of the agent in its prospectus;

(2) A class of the issuer's securities is required to be and is registered under section 12 of the Securities Exchange Act of 1934, and has been so registered for the three years immediately preceding the offering date;

(3) Neither the issuer nor a significant subsidiary has had a material default during the last seven years, or for the period of the issuer's existence if less than seven years, in the payment of (i) principal, interest, dividend, or sinking fund installment on preferred stock or indebtedness for borrowed money, or (ii) rentals under leases with terms of three years or more;

(4) The issuer has had consolidated net income, before extraordinary items and the cumulative effect of accounting changes, of at least $1,000,000 in four of its last five fiscal years including its last fiscal year; and if the offering is of interest bearing securities, has had for its last fiscal year, net income, before deduction for income taxes and depreciation, of at least 1-1/2 times the issuer's annual interest expense, giving effect to the proposed offering and the intended use of the proceeds. For the purposes of this clause "last fiscal year" means the most recent year for which audited financial statements are available, provided that such statements cover a fiscal period ended not more than 15 months from the commencement of the offering;

(5) If the offering is of stock or shares other than preferred stock or shares, the securities have voting rights and the rights include (i) the right to have at least as many votes per share, and (ii) the right to vote on at least as many general corporate decisions, as each of the issuer's outstanding classes of stock or shares, except as otherwise required by law; and

(6) If the offering is of stock or shares, other than preferred stock or shares, the securities are owned beneficially or of record, on any date within six months prior to the commencement of the offering, by at least 1,200 persons, and on that date there are at least 750,000 such shares outstanding with an aggregate market value, based on the average bid price for that day, of at least $3,750,000. In connection with the determination of the number of persons who are beneficial owners of the stock or shares of an issuer, the issuer or broker-dealer may rely in good faith for the purposes of this clause upon written information furnished by the record owners.

(l) Any certificate of indebtedness sold or issued for investment, other than a certificate of indebtedness pledged as a security for a loan made contemporaneously therewith, and any savings account or savings deposit issued, by an industrial loan and thrift company.

Sec. 26. Minnesota Statutes 1996, section 80A.15, subdivision 2, is amended to read:

Subd. 2. The following transactions are exempted from sections 80A.08 and 80A.16:

(a) Any sales, whether or not effected through a broker-dealer, provided that:

(1) no person shall make more than ten sales of securities of the same issuer pursuant to this exemption, exclusive of sales according to clause (2), during any period of 12 consecutive months; provided further, that in the case of sales by an issuer, except sales of securities registered under the Securities Act of 1933 or exempted by section 3(b) of that act, (i) the seller reasonably believes that all buyers are purchasing for investment, and (ii) the securities are not advertised for sale to the general public in newspapers or other publications of general circulation or otherwise, or by radio, television, electronic means or similar communications media, or through a program of general solicitation by means of mail or telephone; and

(2) no issuer shall make more than 25 sales of its securities according to this exemption, exclusive of sales pursuant to clause (1), during any period of 12 consecutive months; provided further, that the issuer meets the conditions in clause (1) and, in addition meets the following additional conditions: (i) files with the commissioner, ten days before a sale according to this clause, a statement of issuer on a form prescribed by the commissioner; and (ii) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyers in this state in connection with a sale according to this clause except reasonable and customary commissions paid by the issuer to a broker-dealer licensed under this chapter.

(b) Any nonissuer distribution of an outstanding security if (1) either Moody's, Fitch's, or Standard & Poor's Securities Manuals, or other recognized manuals approved by the commissioner contains the names of the issuer's officers and directors, a balance sheet of the issuer as of a date not more than 18 months prior to the date of the sale, and a profit and loss statement for the fiscal year preceding the date of the balance sheet, and (2) the issuer or its predecessor has been in active, continuous business operation for the five-year period next preceding the date of sale, and (3) if the security has a fixed maturity or fixed interest or dividend provision, the issuer has not, within the three preceding fiscal years, defaulted in payment of principal, interest, or dividends on the securities.

(c) The execution of any orders by a licensed broker-dealer for the purchase or sale of any security, pursuant to an unsolicited offer to purchase or sell; provided that the broker-dealer acts as agent for the purchaser or seller, and has no direct material interest in the sale or distribution of the security, receives no commission, profit, or other compensation from any source other than the purchaser and seller and delivers to the purchaser and seller written confirmation of the transaction which clearly itemizes the commission, or other compensation.

(d) Any nonissuer sale of notes or bonds secured by a mortgage lien if the entire mortgage, together with all notes or bonds secured thereby, is sold to a single purchaser at a single sale.

(e) Any judicial sale, exchange, or issuance of securities made pursuant to an order of a court of competent jurisdiction.

(f) The sale, by a pledge holder, of a security pledged in good faith as collateral for a bona fide debt.

(g) Any offer or sale to a bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit sharing trust, or other financial institution or institutional buyer, or to a broker-dealer, whether the purchaser is acting for itself or in some fiduciary capacity.

(h) An offer or sale of securities by an issuer made in reliance on the exemptions provided by Rule 505 or 506 of Regulation D promulgated by the Securities and Exchange Commission, Code of Federal Regulations, title 17, sections 230.501 to 230.508, subject to the conditions and definitions provided by Rules 501 to 503 of Regulation D, if the offer and sale also satisfies the conditions and limitations in clauses (1) to (10).

(1) The exemption under this paragraph is not available for the securities of an issuer if any of the persons described in Rule 252(c) to (f) of Regulation A promulgated by the Securities and Exchange Commission, Code of Federal Regulations, title 17, sections 230.251 to 230.263:

(ii) has been convicted, within five years before the filing of the notice required under clause (5), of a felony or misdemeanor in connection with the offer, sale, or purchase of a security or franchise, or a felony involving fraud or deceit, including but not limited to forgery, embezzlement, obtaining money under false pretenses, larceny, or conspiracy to defraud;

(iii) is subject to an effective administrative order or judgment entered by a state securities administrator within five years before the filing of the notice required under clause (5), that prohibits, denies, or revokes the use of an exemption from securities registration, that prohibits the transaction of business by the person as a broker-dealer or agent, or that is based on fraud, deceit, an untrue statement of a material fact, or an omission to state a material fact; or

(iv) is subject to an order, judgment, or decree of a court entered within five years before the filing of the notice required under clause (5), temporarily, preliminarily, or permanently restraining or enjoining the person from engaging in or continuing any conduct or practice in connection with the offer, sale, or purchase of a security, or the making of a false filing with a state.

A disqualification under paragraph (h) involving a broker-dealer or agent is waived if the broker-dealer or agent is or continues to be licensed in the state in which the administrative order or judgment was entered against the person or if the broker-dealer or agent is or continues to be licensed in this state as a broker-dealer or agent after notifying the commissioner of the act or event causing disqualification.

The commissioner may waive a disqualification under paragraph (h) upon a showing of good cause that it is not necessary under the circumstances that use of the exemption be denied.

A disqualification under paragraph (h) may be waived if the state securities administrator or agency of the state that created the basis for disqualification has determined, upon a showing of good cause, that it is not necessary under the circumstances that an exemption from registration of securities under the state's laws be denied.

It is a defense to a violation of paragraph (h) based upon a disqualification if the issuer sustains the burden of proof to establish that the issuer did not know, and in the exercise of reasonable care could not have known, that a disqualification under paragraph (h) existed.

(2) This exemption must not be available to an issuer with respect to a transaction that, although in technical compliance with this exemption, is part of a plan or scheme to evade registration or the conditions or limitations explicitly stated in paragraph (h).

(3) No commission, finder's fee, or other remuneration shall be paid or given, directly or indirectly, for soliciting a prospective purchaser, unless the recipient is appropriately registered licensed, or exempt from registration licensure, in this state as a broker-dealer.

(4) Nothing in this exemption is intended to or should be in any way construed as relieving issuers or persons acting on behalf of issuers from providing disclosure to prospective investors adequate to satisfy the antifraud provisions of the securities law of Minnesota.

(5) The issuer shall file with the commissioner a notice on form D as adopted by the Securities and Exchange Commission according to Regulation D, Code of Federal Regulations, title 17, section 230.502. The notice must be filed not later than 15 days after the first sale in this state of securities in an offering under this exemption. Every notice on form D must be manually signed by a person duly authorized by the issuer and must be accompanied by a consent to service of process on a form prescribed by the commissioner.

(7) The issuer, upon request by the commissioner, shall, within ten days of the request, furnish to the commissioner a copy of any and all information, documents, or materials furnished to investors or offerees in connection with the offer and sale according to paragraph (h).

(8) Neither compliance nor attempted compliance with the exemption provided by paragraph (h), nor the absence of an objection or order by the commissioner with respect to an offer or sale of securities undertaken according to this exemption, shall be considered to be a waiver of a condition of the exemption or considered to be a confirmation by the commissioner of the availability of this exemption.

(9) The commissioner may, by rule or order, increase the number of purchasers or waive any other condition of this exemption.

(10) The determination whether offers and sales made in reliance on the exemption set forth in paragraph (h) shall be integrated with offers and sales according to other paragraphs of this subdivision shall be made according to the integration standard set forth in Rule 502 of Regulation D promulgated by the Securities and Exchange Commission, Code of Federal Regulations, title 17, section 230.502. If not subject to integration according to that rule, offers and sales according to paragraph (h) shall not otherwise be integrated with offers and sales according to other exemptions set forth in this subdivision.

(i) Any offer (but not a sale) of a security for which a registration statement has been filed under sections 80A.01 to 80A.31, if no stop order or refusal order is in effect and no public proceeding or examination looking toward an order is pending; and any offer of a security if the sale of the security is or would be exempt under this section. The commissioner may by rule exempt offers (but not sales) of securities for which a registration statement has been filed as the commissioner deems appropriate, consistent with the purposes of sections 80A.01 to 80A.31.

(j) The offer and sale by a cooperative organized under chapter 308A or under the laws of another state, of its securities when the securities are offered and sold only to its members, or when the purchase of the securities is necessary or incidental to establishing membership in the cooperative, or when such securities are issued as patronage dividends. This paragraph applies to a cooperative organized under the laws of another state only if the cooperative has filed with the commissioner a consent to service of process under section 80A.27, subdivision 7, and has, not less than ten days prior to the issuance or delivery, furnished the commissioner with a written general description of the transaction and any other information that the commissioner requires by rule or otherwise.

(l) The issuance and delivery of any securities of one corporation to another corporation or its security holders in connection with a merger, exchange of shares, or transfer of assets whereby the approval of stockholders of the other corporation is required to be obtained, provided, that the commissioner has been furnished with a general description of the transaction and with other information as the commissioner by rule prescribes not less than ten days prior to the issuance and delivery.

(m) Any transaction between the issuer or other person on whose behalf the offering is made and an underwriter or among underwriters.

(n) The distribution by a corporation of its or other securities to its own security holders as a stock dividend or as a dividend from earnings or surplus or as a liquidating distribution; or upon conversion of an outstanding convertible security; or pursuant to a stock split or reverse stock split.

(o) Any offer or sale of securities by an affiliate of the issuer thereof if: (1) a registration statement is in effect with respect to securities of the same class of the issuer and (2) the offer or sale has been exempted from registration by rule or order of the commissioner.

(q) Any nonissuer sales of any security, including a revenue obligation, issued by the state of Minnesota or any of its political or governmental subdivisions, municipalities, governmental agencies, or instrumentalities.

(r) Any transaction as to which the commissioner by rule or order finds that registration is not necessary in the public interest and for the protection of investors.

(s) An offer or sale of a security issued in connection with an employee's stock purchase, savings, option, profit sharing, pension, or similar employee benefit plan, if the following conditions are met:

(1) the issuer, its parent corporation or any of its majority-owned subsidiaries offers or sells the security according to a written benefit plan or written contract relating to the compensation of the purchaser; and

(2) the class of securities offered according to the plan or contract, or if an option or right to purchase a security, the class of securities to be issued upon the exercise of the option or right, is registered under section 12 of the Securities Exchange Act of 1934, or is a class of securities with respect to which the issuer files reports according to section 15(d) of the Securities Exchange Act of 1934; or

(3) the issuer fully complies with the provisions of Rule 701 as adopted by the Securities and Exchange Commission, Code of Federal Regulations, title 12, section 230.701.

The issuer shall file not less than ten days before the transaction, a general description of the transaction and any other information that the commissioner requires by rule or otherwise or, if applicable, a Securities and Exchange Form S-8. Annually, within 90 days after the end of the issuer's fiscal year, the issuer shall file a notice as provided with the commissioner.

(t) Any sale of a security of an issuer that is a pooled income fund, a charitable remainder trust, or a charitable lead trust that has a qualified charity as the only charitable beneficiary.

(u) Any sale by a qualified charity of a security that is a charitable gift annuity if the issuer has a net worth, otherwise defined as unrestricted fund balance, of not less than $300,000 and either: (1) has been in continuous operation for not less than three years; or (2) is a successor or affiliate of a qualified charity that has been in continuous operation for not less than three years.

Sec. 27. Minnesota Statutes 1996, section 80A.16, is amended to read:

80A.16 [FILING OF SALES AND ADVERTISING LITERATURE.]

The commissioner may by rule or order require the filing of any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature or advertising communication addressed or intended for distribution to prospective investors, including clients or prospective clients of an investment adviser or broker-dealer unless:

(1) the security or transaction is exempted by section 80A.15; or

(2) the security is a federal covered security.

Sec. 28. Minnesota Statutes 1996, section 80A.28, subdivision 1, is amended to read:

Subdivision 1. (a) There shall be a filing fee of $100 for every application for registration. There shall be an additional fee of one-tenth of one percent of the maximum aggregate offering price at which the registered securities are to be offered in this state, and the maximum combined fees shall not exceed $300.

(c) When an application for registration is withdrawn before the effective date or a preeffective stop order is entered under section 80A.13, subdivision 1, all but the $100 filing fee shall be returned. If an application to register securities is denied, the total of all fees received shall be retained.

(c) Where a filing is made in connection with a federal covered security under section 18(b)(2) of the Securities Act of 1933, there is a fee of $100 for every initial filing. There is an additional fee of 1/20 of one percent of the maximum aggregate offering price at which the securities are to be offered in this state. There is no maximum fee for securities filings made according to this section.

Sec. 29. Minnesota Statutes 1996, section 80A.28, subdivision 2, is amended to read:

Subd. 2. Every applicant for an initial or renewal license shall pay a filing fee of $200 in the case of a broker-dealer, $50 in the case of an agent, and $100 in the case of an investment adviser. When an application is denied or withdrawn, the filing fee shall be retained. A licensed agent who has terminated employment with one broker-dealer shall, before beginning employment with another broker-dealer, pay a transfer fee of $25. The fee for a filing made according to section 80A.05, subdivision 1a, is $100.

Sec. 30. Minnesota Statutes 1996, section 80C.01, subdivision 4, is amended to read:

Subd. 4. "Franchise" means (a) a contract or agreement, either express or implied, whether oral or written, for a definite or indefinite period, between two or more persons:

(1) by which a franchisee is granted the right to engage in the business of offering or distributing goods or services using the franchisor's trade name, trademark, service mark, logotype, advertising, or other commercial symbol or related characteristics;

(2) in which the franchisor and franchisee have a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or otherwise; and

(3) for which the franchisee pays, directly or indirectly, a franchise fee; or

(b) a contract, lease, or other agreement, either express or implied, whether oral or written, for a definite or indefinite period, between two or more persons, whereby the franchisee is granted the right to market motor vehicle fuel; or

(c) the sale or lease of any products, equipment, chattels, supplies, or services to the purchaser, other than the sale of sales demonstration equipment, materials or samples for a total price of $500 or less to any one person, for the purpose of enabling the purchaser to start a business and in which the seller:

(1) represents that the seller, lessor, or an affiliate thereof will provide locations or assist the purchaser in finding locations for the use or operation of vending machines, racks, display cases, or similar devices, or currency operated amusement machines or devices, on premises neither owned or leased by the purchaser or seller; or

(2) represents that the seller will purchase any or all products made, produced, fabricated, grown, bred, or modified by the purchaser using, in whole or in part, the supplies, services, or chattels sold to the purchaser; or

(3) guarantees that the purchaser will derive income from the business which exceeds the price paid to the seller; or

(d) an oral or written contract or agreement, either expressed or implied, for a definite or indefinite period, between two or more persons, under which a manufacturer, selling security systems through dealers or distributors in this state, requires regular payments from the distributor or dealer as royalties or residuals for products purchased and paid for by the dealer or distributor.

(f) "Franchise" does not include any contract, lease or other agreement whereby the franchisee is required to pay less than $100 on an annual basis, except those franchises identified in paragraph (b).

(g) "Franchise" does not include a contract, lease or other agreement between a new motor vehicle manufacturer, distributor, or factory branch and a franchisee whereby the franchisee is granted the right to market automobiles, motorcycles, trucks, truck tractors, or self-propelled motor homes or campers if the foregoing are designed primarily for the transportation of persons or property on public highways.

(h) "Franchise" does not include a contract, lease, or other agreement or arrangement between two or more air carriers, or between one or more air carriers and one or more foreign air carriers. For purposes of this paragraph, "air carrier" and "foreign air carrier" have the meanings provided in United States Code, title 49, sections 1301(3) and 1301(22), respectively.

Sec. 31. Minnesota Statutes 1996, section 82.19, is amended by adding a subdivision to read:

Subd. 9. [EXCLUSIVE AGENCY AGREEMENTS.] (a) Except as provided in paragraph (b), a licensee shall not negotiate the sale, exchange, lease, or listing of any real property directly with the owner or lessor knowing that the owner or lessor has executed a written exclusive listing contract or exclusive contract for nonagency services in connection with the property with another real estate broker, buyer, or lessee, nor shall a licensee negotiate the purchase, lease, or exchange of real property knowing that the buyer or lessee has executed a written exclusive buyer representation contract or exclusive contract for nonagency services for the purchase, lease, or exchange of the real property with another real estate broker.

(b) A licensee may discuss the terms upon which a listing or buyer representation contract or a contract for nonagency services may be entered into after expiration of any existing exclusive contract when the inquiry or discussion is initiated by the owner, lessor, buyer, or lessee, and may enter into a contract with the owner, lessor, buyer, or lessee to begin after the expiration date of the existing exclusive contract. The licensee must inquire of the owner, lessor, buyer, or lessee whether such an exclusive contract exists.

Sec. 32. Minnesota Statutes 1996, section 82.20, subdivision 15, is amended to read:

Subd. 15. [EXEMPTION.] The following persons, when acting as closing agents, are exempt from the requirements of sections 82.19 and 82.24 unless otherwise required in this section or chapter:

(1) a direct employee of a title insurance company authorized to do business in this state, or a direct employee of a title company, or a person who has an agency agreement with a title insurance company or a title company in which the agent agrees to perform closing services on the title insurance company's or title company's behalf and the title insurance company or title company assumes responsibility for the actions of the agent as if the agent were a direct employee of the title insurance company or title company;

(2) a licensed attorney or a direct employee of a licensed attorney;

(3) a licensed real estate broker or salesperson;

(4) a direct employee of a licensed real estate broker if the broker maintains all funds received in connection with the closing services in the broker's trust account;

(5) any bank, trust company, savings association, credit union, industrial loan and thrift company, regulated lender under chapter 56, public utility, or land mortgage or farm loan association organized under the laws of this state or the United States, when engaged in the transaction of businesses within the scope of its corporate powers as provided by law; and

(6) a title insurance company authorized to do business in this state or a title company which is the appointed agent of a title insurance company authorized to do business in this state.; and

Sec. 33. Minnesota Statutes 1996, section 82.22, subdivision 13, is amended to read:

Subd. 13. [CONTINUING EDUCATION.] (a) After their first renewal date, all real estate salespersons and all real estate brokers shall be required to successfully complete 30 hours of real estate continuing education, either as a student or a lecturer, in courses of study approved by the commissioner, during each 24-month license period. At least 15 of the 30 credit hours must be completed during the first 12 months of the 24-month licensing period. Salespersons and brokers whose initial license period extends more than 12 months are required to complete 15 hours of real estate continuing education during the initial license period. Those licensees who will receive a 12-month license on July 1, 1995, because of the staggered implementation schedule must complete 15 hours of real estate continuing education as a requirement for renewal on July 1, 1996. Licensees may not claim credit for continuing education not actually completed as of the date their report of continuing education compliance is filed.

(b) The commissioner shall adopt rules defining the standards for course and instructor approval, and may adopt rules for the proper administration of this subdivision. The commissioner may not approve a course 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. 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 on August 1, 2000.

(c) Any program approved by Minnesota continuing legal education shall be approved by the commissioner of commerce for continuing education for real estate brokers and salespeople if the program or any part thereof relates to real estate.

(d) As part of the continuing education requirements of this section, the commissioner shall require that all real estate brokers and salespersons receive:

(1) at least two hours of training during each license period in courses in laws or regulations on agency representation and disclosure; and

(2) at least two hours of training during each license period in courses in state and federal fair housing laws, regulations, and rules, or other antidiscrimination laws.

Clause (1) does not apply to real estate salespersons and real estate brokers engaged solely in the commercial real estate business who file with the commissioner a verification of this status along with the continuing education report required under paragraph (a).

(e) The commissioner is authorized to establish a procedure for renewal of course accreditation.

Sec. 34. Minnesota Statutes 1996, section 82.24, subdivision 5, is amended to read:

Subd. 5. [TRUST ACCOUNT RECORDS ACCOUNTS.] (a) Each broker or closing agent shall maintain and retain records of all trust funds and trust accounts. The commissioner may prescribe information to be included in the records by appropriate rules.

(b) A check received from a potential buyer shall be deposited into the listing broker's trust account not later than the third business day after delivery of the check to the broker, except that the check may be held by the listing broker until acceptance or rejection of the offer if:

(1) the check by its terms is not negotiable by the broker or if the potential buyer has given written instructions that the check shall not be deposited or cashed until acceptance or shall be immediately returned if the offer is rejected; and

(2) the potential seller is informed that the check is being so held before or at the time the offer is presented to that person for acceptance.

Sec. 35. Minnesota Statutes 1996, section 82B.13, subdivision 1, is amended to read:

Subdivision 1. [REGISTERED REAL PROPERTY APPRAISER OR LICENSED REAL PROPERTY APPRAISER.] As a prerequisite for licensing as a registered real property appraiser or licensed real property appraiser, an applicant must present evidence satisfactory to the commissioner that the person has successfully completed at least 75 90 classroom hours of courses. The courses must consist of 60 75 hours of general real estate appraisal principles and 15 hours related to standards of professional appraisal practice and the provisions of this chapter.

Sec. 36. Minnesota Statutes 1996, section 82B.13, subdivision 4, is amended to read:

Subd. 4. [CERTIFIED RESIDENTIAL REAL PROPERTY APPRAISER.] As a prerequisite for licensing as a certified residential real property appraiser, an applicant must present evidence satisfactory to the commissioner that the person has successfully completed at least 165 120 classroom hours of courses, including 15 hours related to the standards of professional appraisal practice and the provisions of this chapter, with particular emphasis on the appraisal of one to four unit residential properties.

Sec. 37. Minnesota Statutes 1996, section 82B.13, subdivision 5, is amended to read:

Subd. 5. [CERTIFIED GENERAL REAL PROPERTY APPRAISER.] As a prerequisite for licensing as a certified general real property appraiser, an applicant must present evidence satisfactory to the commissioner that the person has successfully completed at least 165 180 classroom hours of courses, including 15 hours related to the standards of professional appraisal practice and the provisions of this chapter, with particular emphasis on the appraisal of nonresidential properties.

Sec. 38. Minnesota Statutes 1996, section 82B.14, is amended to read:

82B.14 [EXPERIENCE REQUIREMENT.]

(a) A license under section 82B.11, subdivision 3, 4, or 5, may not be issued to a person who does not have the equivalent of two years of experience in real property appraisal supported by adequate written reports or file memoranda. As a prerequisite for licensing as a registered real property appraiser or licensed real property appraiser, an applicant must present evidence satisfactory to the commissioner that the person has obtained 2,000 hours of experience in real property appraisal.

As a prerequisite for licensing as a certified residential real property appraiser, an applicant must present evidence satisfactory to the commissioner that the person has obtained 2,500 hours of experience in real property appraisal.

As a prerequisite for licensing as a certified general real property appraiser, an applicant must present evidence satisfactory to the commissioner that the person has obtained 3,000 hours of experience in real property appraisal.

(b) Each applicant for license under section 82B.11, subdivision 3, 4, or 5, shall give under oath a detailed listing of the real estate appraisal reports or file memoranda for each year for which experience is claimed by the applicant. Upon request, the applicant shall make available to the commissioner for examination, a sample of appraisal reports that the applicant has prepared in the course of appraisal practice.

(c) Applicants may not receive credit for experience accumulated while unlicensed, if the experience is based on activities which required a license under this section.

Sec. 39. Minnesota Statutes 1996, section 82B.19, subdivision 1, is amended to read:

Subdivision 1. [LICENSE RENEWALS.] A licensed real estate appraiser shall present evidence satisfactory to the commissioner of having met the continuing education requirements of this chapter before the commissioner renews a license.

of this section, the commissioner shall require that all real estate appraisers receive at least four hours of training each license period in courses in laws or regulations on standards of professional practice. If the applicant's immediately preceding term of licensing consisted of 12 or more months, but fewer than 24 months, the applicant must provide evidence of completion of 15 hours of instruction during the license period. If the immediately preceding term of licensing consisted of fewer than 12 months, no continuing education need be reported.

Sec. 40. Minnesota Statutes 1996, section 317A.141, is amended by adding a subdivision to read:

Subd. 4. [EFFECT OF AMENDMENTS ON CHARITABLE TRUST ASSETS.] Assets held by a corporation, including income or fees from services, are restricted to the uses and purposes for which the property was received and held.

Sec. 41. Minnesota Statutes 1996, section 317A.671, is amended to read:

317A.671 [CERTAIN ASSETS NOT TO BE DIVERTED.]

Except as provided in section 501B.31, when a corporation dissolves, merges, substantially changes the use or purposes for which it will use its assets, or consolidates, transfers its assets, or grants a mortgage or other security interest in its assets, assets of the corporation or a constituent corporation, and assets subsequently received by a single corporation after a merger or consolidation, may not be diverted from the uses and purposes for which the assets have been received and held, or from the uses and purposes expressed or intended by the original donor.

Sec. 42. [325E.58] [SIGN CONTRACTOR; BOND.]

(a) A sign contractor may post a compliance bond with the commissioner, conditioned that the sign contractor shall faithfully perform duties and comply with laws, ordinances, rules, and contracts entered into for the installation of signs. The bond must be renewed annually and maintained for so long as determined by the commissioner. The aggregate liability of the surety on the bond to any and all persons, regardless of the number of claims made against the bond, may not exceed the annual amount of the bond. The bond may be canceled as to future liability by the surety upon 30 days' written notice mailed to the commissioner by United States mail.

(b) The amount of the bond shall be $8,000. The bond may be drawn upon only by a local unit of government that requires sign installers to post a compliance bond. The bond is in lieu of any compliance bond required by a local unit of government.

(c) For purposes of this section, "sign" means a device, structure, fixture, or placard using graphics, symbols, or written copy that is erected on the premises of an establishment including the name of the establishment or identifying the merchandise, services, activities, or entertainment available on the premises.

Sec. 43. Minnesota Statutes 1996, section 326.83, subdivision 11, is amended to read:

Subd. 11. [OWNER.] Except in section 326.91, subdivision 1, "owner" means a person who has any legal or equitable interest in real property. For purposes of sections 326.83 to 326.991, "owner" does not include a residential building contractor or residential remodeler who constructs or improves its own property for purposes of speculation. A residential building contractor or residential remodeler will be presumed to be building or improving for purposes of speculation if it constructs or improves more than one property within any 12-month 24-month period.

Sec. 44. Minnesota Statutes 1996, section 326.84, subdivision 3, is amended to read:

Subd. 3. [EXEMPTIONS.] The license requirement does not apply to:

(1) an employee of a licensee performing work for the licensee;

(3) an owner or owners of residential real estate who build or improve residential real estate and who do the work themselves or jointly with the owner's own bona fide employees. This exemption does not apply to a person who engages in a pattern of building or improving real estate for purposes of resale. Such a pattern is presumed to exist if the person constructs or improves more than one property within any 12-month 24-month period;

(4) an architect or engineer engaging in professional practice as defined in this chapter;

(5) a person whose total gross annual receipts from projects regulated under this section do not exceed $15,000;

(6) a mechanical contractor;

(7) a plumber, electrician, or other person whose profession is otherwise subject to statewide licensing, when engaged in the activity which is the subject of licensure;

(8) specialty contractors who provide only one special skill as defined in section 326.83;

(9) a school district, or a technical college governed under chapter 136F;

(10) manufactured housing installers; and

(11) Habitat for Humanity and Builders Outreach Foundation, and their individual volunteers when engaged in activities on their behalf.

To qualify for the exemption in clause (5), a person must obtain a certificate of exemption from licensing from the commissioner.

A certificate of exemption will be issued upon the applicant's filing with the commissioner, an affidavit stating that the applicant does not expect to exceed $15,000 in gross annual receipts derived from contracting activities during the calendar year for which the exemption is requested.

To renew the exemption in clause (5), the applicant must file an affidavit stating that the applicant did not exceed $15,000 in gross annual receipts during the past calendar year, and the applicant does not expect to exceed $15,000 in gross annual receipts during the calendar year for which the exemption is requested.

If a person, operating under the exemption in clause (5), exceeds $15,000 in gross receipts during any calendar year, the person must immediately surrender the exemption certificate and apply for the appropriate license. The person must remain licensed until such time as the person's gross annual receipts during a calendar year fall below $15,000. The person may then apply for this exemption for the next calendar year.

Sec. 45. Minnesota Statutes 1996, section 326.921, is amended to read:

326.921 [BUILDING PERMIT CONDITIONED ON LICENSURE.]

A political subdivision shall not issue a building permit to an unlicensed person who is required to be licensed under sections 326.83 to 326.991. A political subdivision that issues zoning or land use permits in lieu of a building permit shall not issue those permits to an unlicensed person who is required to be licensed under sections 326.83 to 326.911. The political subdivision shall report the person applying for a building the permit to the commissioner who may bring an action against the person.

Sec. 46. Minnesota Statutes 1996, section 332.33, subdivision 1, is amended to read:

Sec. 47. Minnesota Statutes 1996, section 332.33, is amended by adding a subdivision to read:

Subd. 7. [NOTICE.] A licensed collection agency or individual collector must give the commissioner written notice of a change in personal name, company name, address, or ownership not later than 15 days after the change occurs.

Sec. 48. Minnesota Statutes 1996, section 332.34, is amended to read:

332.34 [BOND.]

The commissioner of commerce shall require each collection agency licensee to annually file and maintain in force a corporate surety bond, in a form to be prescribed by, and acceptable to, the commissioner, and in the a sum of at least $20,000. An applicant for a new or renewal license may request that the amount of the bond be reduced to an amount not less than $5,000. This request may be granted upon a showing that the total dollar amount received from debtors by the collection agency in the preceding fiscal year did not exceed $30,000. A collection agency may deposit cash in and with a depository acceptable to the commissioner in an amount and in the manner prescribed and approved by the commissioner in lieu of a bond.

Sec. 49. Minnesota Statutes 1996, section 359.061, is amended to read:

359.061 [RECORD OF COMMISSION; CERTIFICATE.]

The commission of every notary shall be recorded in the office of the court administrator of the district court of the notary's county of residence, in a record kept for that purpose. The commission of a nonresident notary must be recorded in the office of the court administrator of the district court of the Minnesota county that borders the county in which the nonresident notary resides. The court administrator, when requested, shall certify to official acts in the manner and for the fees prescribed by statute or court rule.

Sec. 50. Minnesota Statutes 1996, section 359.071, is amended to read:

359.071 [CHANGE OF NAME OR ADDRESS.]

A notary shall notify the commissioner of any name or address change within 30 days of the change.

Sec. 51. Minnesota Statutes 1996, section 501B.35, subdivision 3, is amended to read:

Subd. 3. [CHARITABLE TRUST.] "Charitable trust" means a fiduciary relationship with respect to property that arises as a result of a manifestation of an intention to create it, and that subjects the person by whom the property is held to equitable duties to deal with the property for a charitable purpose. As used in this definition, property includes all income derived from fees for services.

Sec. 52. Minnesota Statutes 1996, section 507.401, subdivision 2, is amended to read:

Sec. 53. Minnesota Statutes 1996, section 507.401, subdivision 3, is amended to read:

Subd. 3. [CONTENTS.] A certificate of release executed under this section must contain substantially all of the following:

(1) the name of the mortgagor, the name of the original mortgagee, and, if applicable, the mortgage servicer, the date of the mortgage, the date of recording, and volume and page or document number in the real property records where the mortgage is recorded, together with similar information for the last recorded assignment of the mortgage;

(2) a statement that the mortgage was in the original principal amount of $500,000 or less;

(3) a statement that the person executing the certificate of release is an officer or a duly appointed agent of a title insurance company authorized and licensed to transact the business of insuring titles to interests in real property in this state under chapter 68A;

(4) a statement that the certificate of release is made on behalf of the mortgagor or a person who acquired title from the mortgagor to all or a part of the property described in the mortgage;

(5) a statement that the mortgagee or mortgage servicer provided a payoff statement which was used to make payment in full of the unpaid balance of the loan secured by the mortgage; and

(6) a statement that payment in full of the unpaid balance of the loan secured by the mortgage was made in accordance with the written or verbal payoff statement., and received by the mortgagee or mortgage servicer, as evidenced by one or more of the following in the records of the title insurance company or its agent:

(i) a bank check, certified check, escrow account check from the title company or title insurance agent, or attorney trust account check that has been negotiated by the mortgagee or mortgage servicer; or

(ii) other documentary evidence of payment to the mortgagee or mortgage servicer;

(7) a statement that more than 60 days have elapsed since the date payment in full was sent;

(8) a statement that after the expiration of the 60-day period referred to in subdivision 2, the title insurance company, its officer, or agent sent to the last known address of the mortgagee or mortgage servicer, at least 30 days prior to executing the certificate of release, notice in writing of its intention to execute and record a certificate of release in accordance with this section, with an unexecuted copy of the proposed certificate of release attached to the written notice; and

(9) a statement that the title insurance company, its officer, or agent has not received notification in writing of any reason why the certificate of release should not be executed and recorded after the expiration of the 30-day notice period referred to in subdivision 2.

Sec. 54. [REPEALER.]

Minnesota Statutes 1996, section 60K.07, subdivision 1, is repealed.

Sec. 55. [EFFECTIVE DATE.]

Section 30 is effective the day following final enactment and applies to all contracts, leases, or other agreements in effect on or after that date. Sections 40, 41, and 51 are effective the day following final enactment."

Delete the title and insert:

contractors; regulating residential building contractors and remodelers; modifying licensing requirements for collection agencies; regulating notaries public; regulating certificates of release by title insurance companies; making technical changes; amending Minnesota Statutes 1996, sections 45.011, subdivision 1; 45.028, subdivision 1; 80A.02, subdivision 1; 80A.04, subdivisions 3, 4, and by adding a subdivision; 80A.05, subdivisions 4, 5, and by adding a subdivision; 80A.06, subdivisions 1, 2, and 3; 80A.08; 80A.12, by adding a subdivision; 80A.14, subdivisions 3, 4, and by adding subdivisions; 80A.15, subdivisions 1 and 2; 80A.16; 80A.28, subdivisions 1 and 2; 80C.01, subdivision 4; 82.19, by adding a subdivision; 82.20, subdivision 15; 82.22, subdivision 13; 82.24, subdivision 5; 82B.13, subdivisions 1, 4, and 5; 82B.14; 82B.19, subdivision 1; 317A.141, by adding a subdivision; 317A.671; 326.83, subdivision 11; 326.84, subdivision 3; 326.921; 332.33, subdivision 1, and by adding a subdivision; 332.34; 359.061; 359.071; 501B.35, subdivision 3; and 507.401, subdivisions 2 and 3; proposing coding for new law in Minnesota Statutes, chapters 45; 60K; 80A; and 325E; repealing Minnesota Statutes 1996, section 60K.07, subdivision 1."

The motion prevailed and the amendment was adopted.

Entenza moved to amend S. F. No. 501, the unofficial engrossment, as amended, as follows:

Page 25, delete section 30

The motion prevailed and the amendment was adopted.

Pugh, Abrams, Jennings, Weaver and Tunheim moved to amend S. F. No. 501, the unofficial engrossment, as amended, as follows:

Page 25, after line 23, insert:

"Sec. 30. Minnesota Statutes 1996, section 80C.01, subdivision 4, is amended to read:

Subd. 4. "Franchise" means (a) a contract or agreement, either express or implied, whether oral or written, for a definite or indefinite period, between two or more persons:

(1) by which a franchisee is granted the right to engage in the business of offering or distributing goods or services using the franchisor's trade name, trademark, service mark, logotype, advertising, or other commercial symbol or related characteristics;

(2) in which the franchisor and franchisee have a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or otherwise; and

(3) for which the franchisee pays, directly or indirectly, a franchise fee; or

(b) a contract, lease, or other agreement, either express or implied, whether oral or written, for a definite or indefinite period, between two or more persons, whereby the franchisee is granted the right to market motor vehicle fuel using the franchisor's trade name, trademark, service mark, logotype, advertising, or other commercial symbol or related characteristics; or

(c) the sale or lease of any products, equipment, chattels, supplies, or services to the purchaser, other than the sale of sales demonstration equipment, materials or samples for a total price of $500 or less to any one person, for the purpose of enabling the purchaser to start a business and in which the seller:

(2) represents that the seller will purchase any or all products made, produced, fabricated, grown, bred, or modified by the purchaser using, in whole or in part, the supplies, services, or chattels sold to the purchaser; or

(3) guarantees that the purchaser will derive income from the business which exceeds the price paid to the seller; or

(d) an oral or written contract or agreement, either expressed or implied, for a definite or indefinite period, between two or more persons, under which a manufacturer, selling security systems through dealers or distributors in this state, requires regular payments from the distributor or dealer as royalties or residuals for products purchased and paid for by the dealer or distributor.

(e) "Franchise" does not include any business which is operated under a lease or license on the premises of the lessor or licensor as long as such business is incidental to the business conducted by the lessor or licensor on such premises, including, without limitation, leased departments, licensed departments, and concessions.

(f) "Franchise" does not include any contract, lease or other agreement whereby the franchisee is required to pay less than $100 on an annual basis, except those franchises identified in paragraph (b).

(g) "Franchise" does not include a contract, lease or other agreement between a new motor vehicle manufacturer, distributor, or factory branch and a franchisee whereby the franchisee is granted the right to market automobiles, motorcycles, trucks, truck tractors, or self-propelled motor homes or campers if the foregoing are designed primarily for the transportation of persons or property on public highways."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Milbert moved to amend S. F. No. 501, the unofficial engrossment, as amended, as follows:

Page 37, after line 31, insert:

"Sec. 49. Minnesota Statutes 1996, section 333.01, is amended to read:

333.01 [COMMERCIAL ASSUMED NAMES; CERTIFICATE.]

Subdivision 1. [CERTIFICATE.] No person shall hereafter carry on or conduct or transact a commercial business in this state under any designation, name, or style, which does not set forth the true name of every person interested in such business unless such person shall file in the office of the secretary of state, a certificate setting forth the name and business address under which the business is conducted or transacted, or is to be conducted or transacted, and the true name of each person conducting or transacting the same, with the address of such person. The name of the business must not include any of the following phrases or their abbreviations: corporation, incorporated, limited, chartered, professional cooperative, association, limited partnership, limited liability company, professional limited liability company, limited liability partnership, or professional limited liability partnership, except to the extent that an entity filing a certificate would be authorized to use the phrase or abbreviation. The certificate shall be executed by one of the persons conducting, or intending to conduct, the business. The certificate shall be published after it has been filed with the secretary of state in a qualified newspaper in the county in which the person has a principal or registered office for two successive issues.

Subd. 2. [INTENTIONAL MISREPRESENTATION PROHIBITED.] No person shall use an assumed or fictitious name in the conduct of its business to intentionally misrepresent its geographic origin or location.

Sec. 50. [333.065] [PENALTY FOR VIOLATION.]

The relief provided in this section is in addition to the remedies or penalties otherwise available."

Page 40, after line 31, after the period, insert:

"Sections 49 and 50 are effective the day following final enactment and apply to causes of action arising from incidents occurring on or after that date."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Entenza, Tunheim, Commers amd McElroy moved to amend S. F. No. 501, the unofficial engrossment, as amended, as follows:

Page 28, line 2, delete everything after "lessee"

Page 28, delete line 3

Page 28, line 4, delete everything before the period

The motion prevailed and the amendment was adopted.

Davids and Tomassoni moved to amend S. F. No. 501, the unofficial engrossment, as amended, as follows:

Page 3, after line 32, insert:

"Sec. 7. 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;

(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;

(g) Real estate, including land, buildings and fixtures, located in this state and used primarily as home office space for the insurance company;

(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."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Davids and Mariani moved to amend S. F. No. 501, the unofficial engrossment, as amended, as follows:

Page 3, after line 27, insert:

"Sec. 6. [45.0293] [REGULATION OF GROUP LIFE INSURANCE.]

The commissioner may waive all or part of the requirements of section 61A.09, subdivision 3, if:

(1) all the premiums under the group policy are paid by the group policyholder;

(2) the loans insured are first real estate residential mortgage loans owned or guaranteed by the group policyholder; or

(3) the group policy is in the best interests of insured debtors."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

Anderson, I., raised a point of order pursuant to rule 3.09 that the Davids and Mariani amendment was not in order. The Speaker ruled the point of order not well taken and the Davids and Mariani amendment in order.

Anderson, I., raised a point of order pursuant to rule 3.10 that the Davids and Mariani amendment was not in order. The Speaker ruled the point of order not well taken and the Davids and Mariani amendment in order.

The question recurred on the Davids and Mariani amendment and the roll was called. There were 80 yeas and 52 nays as follows:

Those who voted in the affirmative were:

Anderson, B.	Entenza	Kraus	Mulder	Rifenberg	Trimble
Bettermann	Farrell	Krinkie	Ness	Schumacher	Tuma
Bishop	Finseth	Kuisle	Nornes	Seagren	Van Dellen
Boudreau	Goodno	Larsen	Olson, M.	Seifert	Vickerman
Bradley	Gunther	Leppik	Opatz	Sekhon	Weaver
Broecker	Haas	Lindner	Osskopp	Stanek	Wejcman
Chaudhary	Hausman	Macklin	Osthoff	Stang	Westfall
Commers	Hilty	Mares	Paulsen	Sviggum	Westrom
Daggett	Holsten	Mariani	Pawlenty	Swenson, D.	Wolf
Davids	Kahn	McCollum	Paymar	Swenson, H.	Workman
Dawkins	Kielkucki	McElroy	Pelowski	Sykora
Dehler	Knight	McGuire	Pugh	Tingelstad
Delmont	Knoblach	Milbert	Reuter	Tomassoni
Dempsey	Koppendrayer	Molnau	Rhodes	Tompkins

Those who voted in the negative were:

Abrams	Folliard	Johnson, A.	Lieder	Orfield	Smith
Anderson, I.	Garcia	Johnson, R.	Long	Ozment	Solberg
Bakk	Greenfield	Juhnke	Luther	Peterson	Tunheim
Biernat	Greiling	Kalis	Mahon	Rest	Wagenius
Carlson	Harder	Kelso	Marko	Rostberg	Wenzel
Clark	Huntley	Kinkel	Mullery	Rukavina	Winter
Dorn	Jaros	Koskinen	Munger	Skare	Spk. Carruthers
Erhardt	Jefferson	Kubly	Murphy	Skoglund
Evans	Jennings	Leighton	Olson, E.	Slawik

The motion prevailed and the amendment was adopted.

S. F. No. 501, A bill for an act relating to commerce; providing powers and duties to the commissioner; regulating securities; modifying the real estate licensing exemption for closing agents; regulating real property appraisers; regulating residential building contractors and remodelers; modifying licensing requirements for collection agencies; regulating notaries public; making technical changes; amending Minnesota Statutes 1996, sections 45.011, subdivision 1; 45.028, subdivision 1; 80A.04, subdivisions 3, 4, and by adding a subdivision; 80A.05, subdivisions 4, 5, and by adding a subdivision; 80A.06, subdivisions 1, 2, and 3; 80A.08; 80A.12, by adding a subdivision; 80A.14, subdivisions 3, 4, and by adding subdivisions; 80A.15, subdivisions 1 and 2; 80A.16; 80A.28, subdivisions 1 and 2; 80C.01, subdivision 4; 82.19, by adding a subdivision; 82.20, subdivision 15; 82.22, subdivision 13; 82.24, subdivision 5; 82B.13, subdivisions 1, 4, and 5; 82B.14; 82B.19, subdivision 1; 326.83, subdivisions 11 and 19; 326.84, subdivision 3; 326.85, by adding a subdivision; 326.921; 332.33, subdivision 1, and by adding a subdivision; 332.34; 359.061; and 359.071; proposing coding for new law in Minnesota Statutes, chapters 45; 60K; and 80A; repealing Minnesota Statutes 1996, section 60K.07, subdivision 1.

The question was taken on the passage of the bill and the roll was called. There were 123 yeas and 4 nays as follows:

Those who voted in the affirmative were:

Abrams	Evans	Kahn	Marko	Pelowski	Sykora
Anderson, B.	Farrell	Kalis	McCollum	Peterson	Tingelstad
Bakk	Finseth	Kelso	McElroy	Pugh	Tomassoni
Bettermann	Folliard	Kielkucki	McGuire	Rest	Tompkins
Biernat	Goodno	Kinkel	Milbert	Reuter	Trimble
Boudreau	Greenfield	Knight	Molnau	Rhodes	Tuma
Bradley	Greiling	Knoblach	Mulder	Rifenberg	Tunheim
Broecker	Gunther	Koppendrayer	Mullery	Rostberg	Van Dellen
Carlson	Haas	Koskinen	Munger	Rukavina	Vickerman
Chaudhary	Harder	Kraus	Murphy	Schumacher	Weaver
Clark	Hasskamp	Krinkie	Ness	Seagren	Wejcman
Commers	Hausman	Kubly	Nornes	Seifert	Wenzel
Daggett	Hilty	Kuisle	Olson, M.	Sekhon	Westfall
Davids	Holsten	Larsen	Opatz	Skare	Westrom
Dawkins	Huntley	Leighton	Orfield	Slawik	Winter
Dehler	Jaros	Leppik	Osskopp	Solberg	Wolf
Delmont	Jefferson	Lindner	Osthoff	Stanek	Workman
Dempsey	Jennings	Luther	Ozment	Stang	Spk. Carruthers
Dorn	Johnson, A.	Macklin	Paulsen	Sviggum
Entenza	Johnson, R.	Mahon	Pawlenty	Swenson, D.
Erhardt	Juhnke	Mariani	Paymar	Swenson, H.

Those who voted in the negative were:

Anderson, I.	Garcia	Skoglund	Smith

The bill was passed, as amended, and its title agreed to.

The Speaker called Trimble to the Chair.

S. F. No. 1328 was reported to the House.

Kubly moved to amend S. F. No. 1328 as follows:

Page 1, after line 20, insert:

"Sec. 2. Minnesota Statutes 1996, section 216B.2422, subdivision 5, is amended to read:

Subd. 5. [BIDDING; EXEMPTION FROM CERTIFICATE OF NEED PROCEEDING.] (a) A utility may select resources to meet its projected energy demand through a bidding process approved or established by the commission. A utility shall use the environmental cost estimates determined under subdivision 3 in evaluating bids submitted in a process established under this subdivision.

(b) A certificate of need proceeding is not required for an electric power generating plant that has been selected in a bidding process approved or established by the commission, or such other selection process approved by the commission, to satisfy, in whole or in part, the wind power mandate of section 216B.2423 or the biomass mandate of section 216B.2424."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

S. F. No. 1328, A bill for an act relating to renewable energy; providing for action by the public utilities commission on purchases of wind and biomass power; requiring a study; proposing coding for new law in Minnesota Statutes, chapter 216B.

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 111 yeas and 20 nays as follows:

Those who voted in the affirmative were:

Anderson, I.	Finseth	Kahn	Milbert	Rest	Tingelstad
Bakk	Folliard	Kalis	Molnau	Reuter	Tomassoni
Bettermann	Garcia	Kelso	Mulder	Rhodes	Tompkins
Biernat	Goodno	Kinkel	Mullery	Rostberg	Trimble
Bishop	Greenfield	Koskinen	Munger	Rukavina	Tuma
Boudreau	Greiling	Kraus	Murphy	Schumacher	Tunheim
Carlson	Gunther	Kubly	Ness	Seagren	Van Dellen
Chaudhary	Harder	Larsen	Nornes	Seifert	Vickerman
Clark	Hasskamp	Leppik	Olson, E.	Sekhon	Wagenius
Daggett	Hausman	Lieder	Opatz	Skare	Weaver
Davids	Hilty	Long	Orfield	Skoglund	Wejcman
Dawkins	Holsten	Luther	Osskopp	Slawik	Wenzel
Delmont	Huntley	Macklin	Osthoff	Smith	Westfall
Dempsey	Jaros	Mahon	Ozment	Solberg	Westrom
Dorn	Jefferson	Mares	Pawlenty	Stanek	Winter
Entenza	Jennings	Mariani	Paymar	Stang	Spk. Carruthers
Erhardt	Johnson, A.	Marko	Pelowski	Sviggum
Evans	Johnson, R.	McCollum	Peterson	Swenson, D.
Farrell	Juhnke	McGuire	Pugh	Swenson, H.

Those who voted in the negative were:

Abrams	Commers	Knight	Kuisle	Rifenberg	Workman
Anderson, B.	Dehler	Knoblach	McElroy	Sykora
Bradley	Haas	Koppendrayer	Olson, M.	Wolf
Broecker	Kielkucki	Krinkie	Paulsen

The bill was passed, as amended, and its title agreed to.

S. F. No. 739 was reported to the House.

Jennings moved to amend S. F. No. 739 as follows:

Page 1, line 29, delete "shall" and insert "may"

Page 2, line 25, after "December", delete "1" and insert "15"

Page 2, line 32, after "December", delete "1" and insert "15"

Page 3, line 5, delete "shall" and insert "may"

Page 12, delete section 18 and insert:

"Sec. 18. [STUDY OF GEOGRAPHICALLY DEAVERAGED RATES.]

The commissioner of public service shall convene a working group to study the impacts of geographic deaveraging on wholesale and retail rates and shall report in writing the findings of this study to the legislature by February 1, 1998. Members of the working group shall include representatives of the office of the governor, the department of public service, the public utilities commission, and the office of the attorney general, as well as representatives of telephone companies, telecommunications carriers, and other interested parties. The study must include: (1) consideration of whether geographic deaveraging of wholesale and/or retail rates is appropriate; (2) a description of how the universal service mechanism should operate in conjunction with geographic deaveraging of retail rates, in the event deaveraging were to occur; (3) consideration of the appropriate timing of implementation of wholesale and/or retail rate deaveraging, in the event deaveraging were to occur; and (4) recommendations regarding the state's regulatory role within the deaveraging process, in the event deaveraging were to occur."

Amend the title accordingly

Hausman and Anderson, I., moved to amend the Jennings amendment to S. F. No. 739 as follows:

Page 1, delete lines 2, 7, and 8

A roll call was requested and properly seconded.

The question was taken on the amendment to the amendment and the roll was called. There were 58 yeas and 73 nays as follows:

Those who voted in the affirmative were:

Anderson, I.	Farrell	Juhnke	Marko	Ozment	Solberg
Bakk	Garcia	Kahn	McCollum	Paymar	Tomassoni
Biernat	Greenfield	Kalis	McGuire	Peterson	Trimble
Carlson	Greiling	Kinkel	Milbert	Pugh	Tunheim
Chaudhary	Gunther	Kubly	Mullery	Rest	Wagenius
Clark	Hasskamp	Leighton	Munger	Rukavina	Wejcman
Dawkins	Hausman	Long	Murphy	Schumacher	Wenzel
Dehler	Hilty	Luther	Opatz	Sekhon	Winter
Entenza	Jaros	Mahon	Orfield	Skare
Evans	Johnson, R.	Mariani	Osthoff	Skoglund

Those who voted in the negative were:

Abrams	Erhardt	Koppendrayer	Mulder	Seagren	Van Dellen
Anderson, B.	Finseth	Koskinen	Ness	Seifert	Vickerman
Bettermann	Folliard	Kraus	Nornes	Slawik	Weaver
Bishop	Goodno	Krinkie	Olson, E.	Smith	Westfall
Boudreau	Haas	Kuisle	Olson, M.	Stanek	Westrom
Bradley	Harder	Larsen	Osskopp	Stang	Wolf
Broecker	Holsten	Leppik	Paulsen	Sviggum	Workman
Commers	Huntley	Lieder	Pawlenty	Swenson, D.	Spk. Carruthers
Daggett	Jennings	Lindner	Pelowski	Swenson, H.
Davids	Johnson, A.	Macklin	Reuter	Sykora
Delmont	Kielkucki	Mares	Rhodes	Tingelstad
Dempsey	Knight	McElroy	Rifenberg	Tompkins
Dorn	Knoblach	Molnau	Rostberg	Tuma

Hilty moved to amend the Jennings amendment to S. F. No. 739 as follows:

Page 1, after line 8, insert:

"Page 5, line 6, after "service" strike "with" and insert "including access, usage and" and after "capability" strike the comma and insert a semi colon

Page 5, line 7, strike the comma and insert a semi colon

Page 5, line 8, strike the comma and insert a semi colon

Page 5, line 9, strike the comma and insert a semi colon

Page 6, line 9, after "filing" insert "and upon notice to affected customers"

Page 11, line 10, after the second comma, strike "may" and insert " shall"

Page 11, line 11, strike "paid into a universal service fund or""

Page 1, line 19, after "carriers" insert "consumer organizations representing senior citizens, other consumer organizations,"

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

The question recurred on the Jennings amendment, as amended, to S. F. No. 739. The motion prevailed and the amendment, as amended, was adopted.

S. F. No. 739, A bill for an act relating to telecommunications; providing policies to carry out the state's role in telecommunications regulation; providing for a state policy encouraging high speed telecommunication services and greater capacity for services; providing for a single statewide local access and transport are,a; amending Minnesota Statutes 1996, sections 8.33, subdivision 2; 237.12, by adding a subdivision; 237.121; 237.16, subdivision 9; 237.761, subdivisions 4 and 8; 237.762, subdivisions 1, 3, and by adding a subdivision; 237.764, subdivision 1; 237.765; 237.766; and 237.769; proposing coding for new law in Minnesota Statutes, chapter 237.

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.

Pursuant to rule 2.05, Speaker pro tempore Trimble excused Knight from voting on S. F. No. 739, as amended.

There were 96 yeas and 33 nays as follows:

Those who voted in the affirmative were:

Journal of the House - 59th Day - Wednesday, May 14, 1997 - Top of Page 4202
Anderson, B.	Dorn	Johnson, R.	Macklin	Pawlenty	Stang
Bakk	Entenza	Kalis	Mares	Pelowski	Sviggum
Bettermann	Erhardt	Kielkucki	McCollum	Peterson	Swenson, D.
Biernat	Evans	Kinkel	McElroy	Reuter	Swenson, H.
Bishop	Farrell	Knoblach	Milbert	Rhodes	Sykora
Boudreau	Folliard	Koppendrayer	Molnau	Rifenberg	Tingelstad
Bradley	Goodno	Koskinen	Mulder	Rostberg	Tompkins
Broecker	Gunther	Kraus	Murphy	Rukavina	Tuma
Carlson	Haas	Krinkie	Ness	Schumacher	Van Dellen
Chaudhary	Harder	Kubly	Nornes	Seagren	Vickerman
Clark	Hilty	Kuisle	Olson, E.	Seifert	Weaver
Daggett	Holsten	Larsen	Olson, M.	Skoglund	Westrom
Davids	Huntley	Leppik	Opatz	Slawik	Winter
Dawkins	Jefferson	Lieder	Osskopp	Smith	Wolf
Delmont	Jennings	Lindner	Ozment	Solberg	Workman
Dempsey	Johnson, A.	Luther	Paulsen	Stanek	Spk. Carruthers

Those who voted in the negative were:

Abrams	Greenfield	Kahn	McGuire	Sekhon	Wejcman
Anderson, I.	Greiling	Leighton	Mullery	Skare	Wenzel
Commers	Hasskamp	Long	Munger	Tomassoni	Westfall
Dehler	Hausman	Mahon	Orfield	Trimble
Finseth	Jaros	Mariani	Paymar	Tunheim
Garcia	Juhnke	Marko	Rest	Wagenius

The bill was passed, as amended, and its title agreed to.

S. F. No. 234 was reported to the House.

Wejcman moved to amend S. F. No. 234 as follows:

Delete everything after the enacting clause and insert the following language of H. F. No.272, the third engrossment:

"Section 1. Minnesota Statutes 1996, section 144.057, subdivision 1, is amended to read:

Subdivision 1. [BACKGROUND STUDIES REQUIRED.] The commissioner of health shall contract with the commissioner of human services to conduct background studies of:

(1) individuals providing services which have direct contact, as defined under section 245A.04, subdivision 3, with patients and residents in hospitals, boarding care homes, outpatient surgical centers licensed under sections 144.50 to 144.58; nursing homes and home care agencies licensed under chapter 144A; residential care homes licensed under chapter 144B, and board and lodging establishments that are registered to provide supportive or health supervision services under section 157.17.; and

(2) beginning July 1, 1999, all other employees in nursing homes licensed under chapter 144A, and boarding care homes licensed under sections 144.50 to 144.58. A disqualification of an individual in this section shall disqualify the individual from positions allowing direct contact or access to patients or residents receiving services.

If a facility or program is licensed by the department of human services and subject to the background study provisions of chapter 245A and is also licensed by the department of health, the department of human services is solely responsible for the background studies of individuals in the jointly licensed programs.

Sec. 2. Minnesota Statutes 1996, section 144A.46, subdivision 5, is amended to read:

county sheriffs, and local chiefs of police shall, if requested, provide the commissioner with criminal conviction data available from local, state, and national criminal record repositories, including the criminal justice data communications network complete a background study under section 144.057. No person may be involved in the management, operation, or control of a provider, if the person has been convicted of a crime that relates to the provision of home care services or to the position, duties, or responsibilities undertaken by that person in the operation of the home care provider, unless the person can provide sufficient evidence of rehabilitation. The commissioner shall adopt rules for determining whether a crime relates to home care services and what constitutes sufficient evidence of rehabilitation. The rules must require consideration of the nature and seriousness of the crime; the relationship of the crime to the purposes of home care licensure and regulation; the relationship of the crime to the ability, capacity, and fitness required to perform the duties and discharge the responsibilities of the person's position; mitigating circumstances or social conditions surrounding the commission of the crime; the length of time elapsed since the crime was committed; the seriousness of the risk to the home care client's person or property; and other factors the commissioner considers appropriate disqualified under the provisions of chapter 245A and Minnesota Rules, parts 9543.3000 to 9543.3090. Individuals disqualified under these provisions can request a reconsideration, and if the disqualification is set aside are then eligible to be involved in the management, operation or control of the provider. For purposes of this section, owners of a home care provider subject to the background check requirement are those individuals whose ownership interest provides sufficient authority or control to affect or change decisions related to the operation of the home care provider. An owner includes a sole proprietor, a general partner, or any other individual whose individual ownership interest can affect the management and direction of the policies of the home care provider. For the purposes of this section, managerial officials subject to the background check requirement are those individuals who provide "direct contact" as defined in section 245A.04 or those individuals who have the responsibility for the ongoing management or direction of the policies, services, or employees of the home care provider. Data collected under this subdivision shall be classified as private data under section 13.02, subdivision 12.

(b) Employees, contractors, and volunteers of a home care provider or hospice are subject to the background study required by section 144.057. These individuals shall be disqualified under the provisions of chapter 245A and Minnesota Rules, parts 9543.3000 to 9543.3090. Until October 1, 1997, grounds for disqualification shall also include the crimes specified under Minnesota Rules, part 4668.0020, subpart 14, or a comparable crime or act in another jurisdiction. Nothing in this section shall be construed to prohibit a home care provider from requiring self-disclosure of criminal conviction information; however, compliance with the provisions of section 144.057 constitutes compliance with the provisions of Minnesota Rules, part 4668.0020, subpart 8.

(c) Notwithstanding the provisions of Minnesota Rules, part 4668.0020, subparts 12, 13, and 15, disqualifications under paragraph (b), removal from a direct care position, and the process for reconsiderations shall be governed by the provisions of section 144.057.

(d) Unless superseded by the provisions of section 144.057 or this section, the provisions of Minnesota Rules, part 4668.0020, remain in effect.

(e) Termination of an employee in good faith reliance on information or records obtained under paragraph (a) or (b) regarding a confirmed conviction does not subject the home care provider to civil liability or liability for reemployment insurance benefits.

Sec. 3. Minnesota Statutes 1996, section 245A.02, subdivision 15, is amended to read:

Subd. 15. [RESPITE CARE SERVICES.] "Respite care services" means temporary services provided to a person due to the absence or need for relief of the primary caregiver, the person's family member or legal representative who is the primary caregiver and principally responsible for the care and supervision of the person. Respite care services are those that provide the level of supervision and care that is necessary to ensure the health and safety of the person. Respite care services do not include services that are specifically directed toward the training and habilitation of the person.

Sec. 4. Minnesota Statutes 1996, section 245A.02, subdivision 16, is amended to read:

Sec. 5. Minnesota Statutes 1996, section 245A.02, subdivision 17, is amended to read:

Subd. 17. [SCHOOL AGE CHILD CARE PROGRAM.] "School age child care program" means a nonresidential program licensed or required to be licensed as a child care center under Minnesota Rules, parts 9503.0005 to 9503.0170, serving more than ten children with the primary purpose of providing child care for school age children. School age child care program does not include programs such as scouting, boys clubs, girls clubs, nor sports or art programs.

Sec. 6. Minnesota Statutes 1996, section 245A.03, subdivision 2, is amended to read:

Subd. 2. [EXCLUSION FROM LICENSURE.] Sections 245A.01 to 245A.16 do not apply to:

(1) residential or nonresidential programs that are provided to a person by an individual who is related unless the residential program is a foster care placement made by a local social services agency or a licensed child-placing agency, except as provided in subdivision 2a;

(2) nonresidential programs that are provided by an unrelated individual to persons from a single related family;

(3) residential or nonresidential programs that are provided to adults who do not abuse chemicals or who do not have a chemical dependency, a mental illness, mental retardation or a related condition, a functional impairment, or a physical handicap;

(4) sheltered workshops or work activity programs that are certified by the commissioner of economic security;

(5) programs for children enrolled in kindergarten to the 12th grade and prekindergarten special education in a school as defined in section 120.101, subdivision 4, and programs serving children in combined special education and regular prekindergarten programs that are operated or assisted by the commissioner of children, families, and learning;

(6) nonresidential programs primarily for children that provide care or supervision, without charge for ten or fewer days a year, and for periods of less than three hours a day while the child's parent or legal guardian is in the same building as the nonresidential program or present within another building that is directly contiguous to the building in which the nonresidential program is located;

(7) nursing homes or hospitals licensed by the commissioner of health except as specified under section 245A.02;

(8) board and lodge facilities licensed by the commissioner of health that provide services for five or more persons whose primary diagnosis is mental illness who have refused an appropriate residential program offered by a county agency. This exclusion expires on July 1, 1990;

(9) homes providing programs for persons placed there by a licensed agency for legal adoption, unless the adoption is not completed within two years;

(10) programs licensed by the commissioner of corrections;

(11) recreation programs for children or adults that operate for fewer than 40 calendar days in a calendar year or programs operated by a park and recreation board of a city of the first class whose primary purpose is to provide social and recreational activities to school age children, provided the program is approved by the park and recreation board;

(12) programs operated by a school as defined in section 120.101, subdivision 4, whose primary purpose is to provide child care to school-age children, provided the program is approved by the district's school board;

(13) head start nonresidential programs which operate for less than 31 days in each calendar year;

(15) nonresidential programs for nonhandicapped children provided for a cumulative total of less than 30 days in any 12-month period;

(16) residential programs for persons with mental illness, that are located in hospitals, until the commissioner adopts appropriate rules;

(17) the religious instruction of school-age children; Sabbath or Sunday schools; or the congregate care of children by a church, congregation, or religious society during the period used by the church, congregation, or religious society for its regular worship;

(18) camps licensed by the commissioner of health under Minnesota Rules, chapter 4630;

(19) mental health outpatient services for adults with mental illness or children with emotional disturbance;

(20) residential programs serving school-age children whose sole purpose is cultural or educational exchange, until the commissioner adopts appropriate rules;

(21) unrelated individuals who provide out-of-home respite care services to persons with mental retardation or related conditions from a single related family for no more than 90 days in a 12-month period and the respite care services are for the temporary relief of the person's family or legal representative;

(22) respite care services provided as a home and community-based service to a person with mental retardation or a related condition, in the person's primary residence;

(23) community support services programs as defined in section 245.462, subdivision 6, and family community support services as defined in section 245.4871, subdivision 17; or

(24) the placement of a child by a birth parent or legal guardian in a preadoptive home for purposes of adoption as authorized by section 259.47.

For purposes of clause (6), a building is directly contiguous to a building in which a nonresidential program is located if it shares a common wall with the building in which the nonresidential program is located or is attached to that building by skyway, tunnel, atrium, or common roof.

Sec. 7. Minnesota Statutes 1996, section 245A.04, subdivision 3, is amended to read:

Subd. 3. [BACKGROUND STUDY OF THE APPLICANT.] (a) Before the commissioner issues a license, the commissioner shall conduct a study of the individuals specified in paragraph (c), clauses (1) to (5), according to rules of the commissioner.

Beginning January 1, 1997, the commissioner shall also conduct a study of employees providing direct contact services for nonlicensed personal care provider organizations described in paragraph (c), clause (5).

The commissioner shall recover the cost of these background studies through a fee of no more than $12 per study charged to the personal care provider organization.

Beginning August 1, 1997, and notwithstanding Minnesota Rules, part 9543.0040, subparts 2, item A, and 3, the commissioner shall conduct all background studies required under this chapter for adult foster care providers who are licensed by the commissioner of human services and registered under chapter 144D. The commissioner shall conduct these background studies according to Minnesota Rules, parts 9543.3000 to 9543.3090.

(b) Beginning July 1, 1997 1998, the commissioner shall conduct a background study on individuals specified in paragraph (c), clauses (1) to (5), who perform direct contact services in a nursing home or a home care agency licensed under chapter 144A or a boarding care home licensed under sections 144.50 to 144.58, when the subject of the study resides outside Minnesota; the study must be at least as comprehensive as that of a Minnesota resident and include a search of information from the criminal justice data communications network in the state where the subject of the study resides.

(c) The applicant, license holder, the bureau of criminal apprehension, the commissioner of health and county agencies, after written notice to the individual who is the subject of the study, shall help with the study by giving the commissioner criminal conviction data and reports about the maltreatment of adults substantiated under section 626.557 and the maltreatment of minors in licensed programs substantiated under section 626.556. The individuals to be studied shall include:

(1) the applicant;

(2) persons over the age of 13 living in the household where the licensed program will be provided;

(3) current employees or contractors of the applicant who will have direct contact with persons served by the facility, agency, or program;

(4) volunteers or student volunteers who have direct contact with persons served by the program to provide program services, if the contact is not directly supervised by the individuals listed in clause (1) or (3); and

(5) any person who, as an individual or as a member of an organization, exclusively offers, provides, or arranges for personal care assistant services under the medical assistance program as authorized under sections 256B.04, subdivision 16, and 256B.0625, subdivision 19.

The juvenile courts shall also help with the study by giving the commissioner existing juvenile court records on individuals described in clause (2) relating to delinquency proceedings held within either the five years immediately preceding the application or the five years immediately preceding the individual's 18th birthday, whichever time period is longer. The commissioner shall destroy juvenile records obtained pursuant to this subdivision when the subject of the records reaches age 23.

For purposes of this section and Minnesota Rules, part 9543.3070, a finding that a delinquency petition is proven in juvenile court shall be considered a conviction in state district court.

For purposes of this subdivision, "direct contact" means providing face-to-face care, training, supervision, counseling, consultation, or medication assistance to persons served by a program. For purposes of this subdivision, "directly supervised" means an individual listed in clause (1), (3), or (5) is within sight or hearing of a volunteer to the extent that the individual listed in clause (1), (3), or (5) is capable at all times of intervening to protect the health and safety of the persons served by the program who have direct contact with the volunteer.

The commissioner may also conduct studies on individuals specified in clauses (3) and (4) when the studies are initiated by:

(i) personnel pool agencies;

(ii) temporary personnel agencies;

(iii) educational programs that train persons by providing direct contact services in licensed programs; and

(iv) professional services agencies that are not licensed and which contract with licensed programs to provide direct contact services or individuals who provide direct contact services.

Studies on individuals in items (i) to (iv) must be initiated annually by these agencies, programs, and individuals. Except for personal care provider organizations, no applicant, license holder, or individual who is the subject of the study shall pay any fees required to conduct the study.

(1) At the option of the licensed facility, rather than initiating another background study on an individual required to be studied who has indicated to the licensed facility that a background study by the commissioner was previously completed, the facility may make a request to the commissioner for documentation of the individual's background study status, provided that:

(i) the facility makes this request using a form provided by the commissioner;

(ii) in making the request the facility informs the commissioner that either:

(A) the individual has been continuously affiliated with a licensed facility since the individual's previous background study was completed, or since October 1, 1995, whichever is shorter; or

(B) the individual is affiliated only with a personnel pool agency, a temporary personnel agency, an educational program that trains persons by providing direct contact services in licensed programs, or a professional services agency that is not licensed and which contracts with licensed programs to provide direct contact services or individuals who provide direct contact services; and

(iii) the facility provides notices to the individual as required in paragraphs (a) to (d), and that the facility is requesting written notification of the individual's background study status from the commissioner.

(2) The commissioner shall respond to each request under paragraph (1) with a written or electronic notice to the facility and the study subject. If the commissioner determines that a background study is necessary, the study shall be completed without further request from a licensed agency or notifications to the study subject.

(3) When a background study is being initiated by a licensed facility or a foster care provider that is also registered under chapter 144D, a study subject affiliated with multiple licensed facilities may attach to the background study form a cover letter indicating the additional facilities' names, addresses, and background study identification numbers. When the commissioner receives such notices, each facility identified by the background study subject shall be notified of the study results. The background study notice sent to the subsequent agencies shall satisfy those facilities' responsibilities for initiating a background study on that individual.

of disqualifying information, the commissioner shall provide the notifications required in subdivision 3a, as appropriate to agencies on record as having initiated a background study or making a request for documentation of the background study status of the individual. This paragraph does not apply to family day care and child foster care programs.

(e) The individual who is the subject of the study must provide the applicant or license holder with sufficient information to ensure an accurate study including the individual's first, middle, and last name; home address, city, county, and state of residence for the past five years; zip code; sex; date of birth; and driver's license number. The applicant or license holder shall provide this information about an individual in paragraph (c), clauses (1) to (5), on forms prescribed by the commissioner. By January 1, 2000, for background studies conducted by the department of human services, the commissioner shall implement a system for:

(1) electronic transmission of background study information to the commissioner; and

(2) background study results to the applicant or license holder.

The commissioner may request additional information of the individual, which shall be optional for the individual to provide, such as the individual's social security number or race.

(f) Except for child foster care, adult foster care, and family day care homes, a study must include information related to names of substantiated perpetrators of maltreatment of vulnerable adults that has been received by the commissioner as required under section 626.557, subdivision 9c, paragraph (i), and the commissioner's records relating to the maltreatment of minors in licensed programs, information from juvenile courts as required in paragraph (c) for persons listed in paragraph (c), clause (2), and information from the bureau of criminal apprehension. For child foster care, adult foster care, and family day care homes, the study must include information from the county agency's record of substantiated maltreatment of adults, and the maltreatment of minors, information from juvenile courts as required in paragraph (c) for persons listed in paragraph (c), clause (2), and information from the bureau of criminal apprehension. The commissioner may also review arrest and investigative information from the bureau of criminal apprehension, the commissioner of health, a county attorney, county sheriff, county agency, local chief of police, other states, the courts, or the Federal Bureau of Investigation if the commissioner has reasonable cause to believe the information is pertinent to the disqualification of an individual listed in paragraph (c), clauses (1) to (5). The commissioner is not required to conduct more than one review of a subject's records from the Federal Bureau of Investigation if a review of the subject's criminal history with the Federal Bureau of Investigation has already been completed by the commissioner and there has been no break in the subject's affiliation with the license holder who initiated the background studies.

When the commissioner has reasonable cause to believe that further pertinent information may exist on the subject, the subject shall provide a set of classifiable fingerprints obtained from an authorized law enforcement agency. For purposes of requiring fingerprints, the commissioner shall be considered to have reasonable cause under, but not limited to, the following circumstances:

(1) information from the bureau of criminal apprehension indicates that the subject is a multistate offender;

(2) information from the bureau of criminal apprehension indicates that multistate offender status is undetermined; or

(3) the commissioner has received a report from the subject or a third party indicating that the subject has a criminal history in a jurisdiction other than Minnesota.

(g) An applicant's or license holder's failure or refusal to cooperate with the commissioner is reasonable cause to disqualify a subject, deny an a license application, or immediately suspend, suspend, or revoke a license. Failure or refusal of an individual to cooperate with the study is just cause for denying or terminating employment of the individual if the individual's failure or refusal to cooperate could cause the applicant's application to be denied or the license holder's license to be immediately suspended, suspended, or revoked.

(i) No person in paragraph (c), clause (1), (2), (3), (4), or (5) who is disqualified as a result of this section may be retained by the agency in a position involving direct contact with persons served by the program.

(j) Termination of persons in paragraph (c), clause (1), (2), (3), (4), or (5), made in good faith reliance on a notice of disqualification provided by the commissioner shall not subject the applicant or license holder to civil liability.

(k) The commissioner may establish records to fulfill the requirements of this section.

(l) The commissioner may not disqualify an individual subject to a study under this section because that person has, or has had, a mental illness as defined in section 245.462, subdivision 20.

(m) An individual who is subject to an applicant background study under this section and whose disqualification in connection with a license would be subject to the limitations on reconsideration set forth in subdivision 3b, paragraph (c), shall be disqualified for conviction of the crimes specified in the manner specified in subdivision 3b, paragraph (c). The commissioner of human services shall amend Minnesota Rules, part 9543.3070, to conform to this section.

(n) An individual subject to disqualification under this subdivision has the applicable rights in subdivision 3a, 3b, or 3c.

(n) When any background study completed under this section shows any of the following: (i) a conviction of one or more crimes listed in clauses (1) to (4); or (ii) the individual has admitted to or a preponderance of the evidence indicates the individual has committed an act or acts that meet the definition of any of the crimes listed in clauses (1) to (4); or (iii) an administrative determination listed under clause (4), then the individual shall be disqualified from any position allowing direct contact with persons receiving services from the license holder:

(1) regardless of how much time has passed since the discharge of the sentence imposed for the offense, and unless otherwise specified, regardless of the level of the conviction, the individual was convicted of any of the following offenses: sections 609.185 (murder in the first degree); 609.19 (murder in the second degree); 609.195 (murder in the third degree); 609.2661 (murder of an unborn child in the first degree); 609.2662 (murder of an unborn child in the second degree); 609.2663 (murder of an unborn child in the third degree); 609.322 (solicitation, inducement, and promotion of prostitution); 609.323 (receiving profit derived from prostitution); 609.342 (criminal sexual conduct in the first degree); 609.343 (criminal sexual conduct in the second degree); 609.344 (criminal sexual conduct in the third degree); 609.345 (criminal sexual conduct in the fourth degree); 609.352 (solicitation of children to engage in sexual conduct); 609.365 (incest); felony offense under 609.377 (malicious punishment of a child); 617.246 (use of minors in sexual performance prohibited); 617.247 (possession of pictorial representations of minors); or attempt or conspiracy to commit any of these offenses as defined in Minnesota Statutes, or an offense in any other state or country, where the elements are substantially similar to any of the offenses listed in this clause;

of parental rights); and chapter 152 (drugs; controlled substance). An attempt or conspiracy to commit any of these offenses, as each of these offenses is defined in Minnesota Statutes; or an offense in any other state or country, the elements of which are substantially similar to the elements of the offenses in this clause. If the individual studied is convicted of one of the felonies listed in this clause, but the sentence is a gross misdemeanor or misdemeanor disposition, the look-back period for the conviction is the period applicable to the disposition, that is the period for gross misdemeanors or misdemeanors;

(3) if less than ten years have passed since the discharge of the sentence imposed for the offense; and the individual has received a gross misdemeanor conviction for a violation of any of the following offenses: sections 609.224 (assault in the fifth degree); 609.2242 and 609.2243 (domestic assault); violation of an order for protection under 518B.01, subdivision 14; 609.3451 (criminal sexual conduct in the fifth degree); repeat offenses under 609.746 (interference with privacy); repeat offenses under 617.23 (indecent exposure); 617.241 (obscene materials and performances); 617.243 (indecent literature, distribution); 617.293 (harmful materials; dissemination and display to minors prohibited); 609.71 (riot); 609.66 (dangerous weapons); 609.749 (harassment; stalking; penalties); 609.224, subdivision 2, paragraph (c) (assault in the fifth degree by a caregiver against a vulnerable adult); 609.23 (mistreatment of persons confined); 609.231 (mistreatment of residents or patients); 609.2325 (criminal abuse of a vulnerable adult); 609.233 (criminal neglect of a vulnerable adult); 609.2335 (financial exploitation of a vulnerable adult); 609.234 (failure to report maltreatment of a vulnerable adult); 609.72, subdivision 3 (disorderly conduct against a vulnerable adult); 609.265 (abduction); 609.378 (neglect or endangerment of a child); 609.377 (malicious punishment of a child); 609.324, subdivision 1a (other prohibited acts; minor engaged in prostitution); 609.33 (disorderly house); 609.52 (theft); 609.582 (burglary); 609.631 (check forgery; offering a forged check); 609.275 (attempt to coerce); or an attempt or conspiracy to commit any of these offenses, as each of these offenses is defined in Minnesota Statutes; or an offense in any other state or country, the elements of which are substantially similar to the elements of any of the offenses listed in this clause. If the defendant is convicted of one of the gross misdemeanors listed in this clause, but the sentence is a misdemeanor disposition, the look-back period for the conviction is the period applicable to misdemeanors;

(4) if less than seven years have passed since the discharge of the sentence imposed for the offense; and the individual has received a misdemeanor conviction for a violation of any of the following offenses: sections 609.224 (assault in the fifth degree); 609.2242 (domestic assault); violation of an order for protection under 518B.01 (domestic abuse act); violation of an order for protection under 609.3232 (protective order authorized; procedures; penalties); 609.746 (interference with privacy); 609.79 (obscene or harassing phone calls); 609.795 (letter, telegram, or package; opening; harassment); 617.23 (indecent exposure; penalties); 609.2672 (assault of an unborn child in the third degree); 617.293 (harmful materials; dissemination and display to minors prohibited); 609.66 (dangerous weapons); 609.665 (spring guns); 609.2335 (financial exploitation of a vulnerable adult); 609.234 (failure to report maltreatment of a vulnerable adult); 609.52 (theft); 609.27 (coercion); or an attempt or conspiracy to commit any of these offenses, as each of these offenses is defined in Minnesota Statutes; or an offense in any other state or country, the elements of which are substantially similar to the elements of any of the offenses listed in this clause; serious or recurring maltreatment of a minor or vulnerable adult; failure to make required reports under section 626.556, subdivision 3, or 626.557, subdivision 3, for incidents in which: (i) the final disposition under section 626.556 or 626.557 was substantiated maltreatment, and (ii) the maltreatment was recurring or serious; or substantiated serious or recurring maltreatment of a minor under section 626.556 or of a vulnerable adult under section 626.557 for which there is a preponderance of evidence that the maltreatment occurred, and that the subject was responsible for the maltreatment. For the purposes of this section, serious maltreatment means sexual abuse; maltreatment resulting in death; or maltreatment resulting in serious injury which reasonably requires the care of a physician whether or not the care of a physician was sought, including: bruises, bites, skin laceration, or tissue damage; fractures; dislocations; evidence of internal injuries; head injuries with loss of consciousness; extensive second-degree or third-degree burns and other burns for which complications are present; irreversible mobility or separation of teeth; injuries to the eyeball; ingestion of foreign substances and objects that are harmful; near drowning; and heat exhaustion or sunstroke. For purposes of this section, recurring maltreatment means more than one incident of maltreatment for which there is a preponderance of evidence that the maltreatment occurred, and that the subject was responsible for the maltreatment.

Sec. 8. Minnesota Statutes 1996, section 245A.04, subdivision 3a, is amended to read:

The commissioner shall notify the individual studied if the information in the study indicates the individual is disqualified from direct contact with persons served by the program. The commissioner shall disclose the information causing disqualification and instructions on how to request a reconsideration of the disqualification to the individual studied. An applicant or license holder who is not the subject of the study shall be informed that the commissioner has found information that disqualifies the subject from direct contact with persons served by the program. However, the applicant or license holder shall not be told what that information is only the individual studied shall be informed of the information contained in the subject's background study unless the only basis for the disqualification is failure to cooperate, the data practices act provides for release of the information, or the individual studied authorizes the release of the information. If the commissioner determines that the individual studied has a disqualifying characteristic, the commissioner shall review the information immediately available and make a determination as to the subject's immediate risk of harm to persons served by the program where the individual studied will have direct contact. The commissioner shall consider all relevant information available, including the following factors in determining the immediate risk of harm: the recency of the disqualifying characteristic, the recency of discharge from probation for the crimes; the number of disqualifying characteristics; the intrusiveness or violence of the disqualifying characteristic; the vulnerability of the victim involved in the disqualifying characteristic; and the similarity of the victim to the persons served by the program where the individual studied will have direct contact. The commissioner may determine that the evaluation of the information immediately available gives the commissioner reason to believe one of the following:

(a) The individual poses an imminent risk of harm to persons served by the program where the individual studied will have direct contact. If the commissioner determines that an individual studied poses an imminent risk of harm to persons served by the program where the individual studied will have direct contact, the individual and the license holder shall be sent a notice of disqualification. The commissioner shall order the license holder to immediately remove the individual studied from direct contact. The notice to the individual studied shall include an explanation of the basis of this determination.

(b) The individual poses a risk of harm requiring continuous supervision while providing direct contact services during the period in which the subject may request a reconsideration. If the commissioner determines that an individual studied poses a risk of harm that requires continuous supervision, the individual and the license holder shall be sent a notice of disqualification. The commissioner shall order the license holder to assure that the individual studied is within sight or hearing of another staff person when providing direct contact services during the period in which the individual may request a reconsideration of the disqualification. If the individual studied does not submit a timely request for reconsideration, or the individual submits a timely request for reconsideration, but the disqualification is not set aside for that license holder, the license holder will be notified of the disqualification and shall be ordered to immediately remove the individual from any position allowing direct contact with persons receiving services from the license holder.

(c) The individual does not pose an imminent risk of harm or a risk of harm requiring continuous supervision while providing direct contact services during the period in which the subject may request a reconsideration. If the commissioner determines that an individual studied does not pose a risk of harm that requires continuous supervision, only the individual shall be sent a notice of disqualification. The license holder shall be sent a notice that more time is needed to complete the individual's background study. If the individual studied submits a timely request for reconsideration, and if the disqualification is set aside for that license holder, the license holder will receive the same notification received by license holders in cases where the individual studied has no disqualifying characteristic. If the individual studied does not submit a timely request for reconsideration, or the individual submits a timely request for reconsideration, but the disqualification is not set aside for that license holder, the license holder will be notified of the disqualification and shall be ordered to immediately remove the individual from any position allowing direct contact with persons receiving services from the license holder.

Sec. 9. Minnesota Statutes 1996, section 245A.04, subdivision 3b, is amended to read:

Subd. 3b. [RECONSIDERATION OF DISQUALIFICATION.] (a) Within 30 days after receiving notice of disqualification under subdivision 3a, The individual who is the subject of the study disqualification may request a reconsideration of the notice of disqualification.

reconsideration for an individual who has been sent a notice of disqualification under subdivision 3a, paragraph (c), must be submitted within 15 calendar days of the disqualified individual's receipt of the notice of disqualification. Removal of a disqualified individual from direct contact shall be ordered if the individual does not request reconsideration within the prescribed time, and for an individual who submits a timely request for reconsideration, if the disqualification is not set aside. The individual must present information to show showing that:

(1) the information the commissioner relied upon is incorrect; or

(2) the subject of the study does not pose a risk of harm to any person served by the applicant or license holder.

(1) the subject of the study does not pose a risk of harm to any person served by the applicant or license holder; or

(2) the information the commissioner relied upon is incorrect or inaccurate. If the basis of a reconsideration request is that a maltreatment determination or disposition under section 626.556 or 626.557 is incorrect, and the commissioner has issued a final order in an appeal of that determination or disposition under section 256.045, the commissioner's order is conclusive on the issue of maltreatment.

(b) The commissioner may set aside the disqualification under this section if the commissioner finds that the information the commissioner relied upon is incorrect or the individual does not pose a risk of harm to any person served by the applicant or license holder. In determining that an individual does not pose a risk of harm, the commissioner shall review consider the consequences of the event or events that could lead to disqualification, whether there is more than one disqualifying event, the vulnerability of the victim at the time of the event, the time elapsed without a repeat of the same or similar event, and documentation of successful completion by the individual studied of training or rehabilitation pertinent to the event, and any other information relevant to reconsideration. In reviewing a disqualification under this section, the commissioner shall give preeminent weight to the safety of each person to be served by the license holder or applicant over the interests of the license holder or applicant.

(c) Unless the information the commissioner relied on in disqualifying an individual is incorrect, the commissioner may not set aside the disqualification of an individual in connection with a license to provide family day care for children, foster care for children in the provider's own home, or foster care or day care services for adults in the provider's own home if:

(2) regardless of how much time has passed since the discharge of the sentence imposed for the offense, the individual was convicted of a violation of any offense listed in sections 609.185 to 609.195 (murder in the first, second, or third degree), 609.2661 to 609.2663 (murder of an unborn child in the first, second, or third degree), a felony offense under 609.377 (a felony offense of malicious punishment of a child), 609.322 (soliciting solicitation, inducement, or and promotion of prostitution), 609.323 (receiving profit derived from prostitution), 609.342 to 609.345 (criminal sexual conduct in the first, second, third, or fourth degree), 609.352 (solicitation of children to engage in sexual conduct), 617.246 (use of minors in a sexual performance), 617.247 (possession of pictorial representations of a minor), 609.365 (incest), or an attempt or conspiracy to commit any of these offenses as defined in Minnesota Statutes, or an offense in any other state, the elements of which are substantially similar to any of the foregoing offenses;

(3) within the seven years preceding the study, the individual committed an act that constitutes maltreatment of a child under section 626.556, subdivision 10e, and that resulted in substantial bodily harm as defined in section 609.02, subdivision 7a, or substantial mental or emotional harm as supported by competent psychological or psychiatric evidence; or

(4) within the seven years preceding the study, the individual was determined under section 626.557 to be the perpetrator of a substantiated incident of abuse maltreatment of a vulnerable adult that resulted in substantial bodily harm as defined in section 609.02, subdivision 7a, or substantial mental or emotional harm as supported by competent psychological or psychiatric evidence.

In the case of any ground for disqualification under clauses (1) to (4), if the act was committed by an individual other than the applicant or license holder residing in the applicant's or license holder's home, the applicant or license holder may seek reconsideration when the individual who committed the act no longer resides in the home.

The disqualification periods provided under clauses (1), (3), and (4) are the minimum applicable disqualification periods. The commissioner may determine that an individual should continue to be disqualified from licensure because the license holder or applicant poses a risk of harm to a person served by that individual after the minimum disqualification period has passed.

(d) The commissioner shall respond in writing or by electronic transmission to all reconsideration requests for which the basis for the request is that the information relied upon by the commissioner to disqualify is incorrect or inaccurate within 30 working days of receipt of a request and all relevant information. If the basis for the request is that the individual does not pose a risk of harm, the commissioner shall respond to the request within 15 working days after receiving the request for reconsideration and all relevant information. If the disqualification is set aside, the commissioner shall notify the applicant or license holder in writing or by electronic transmission of the decision.

(e) Except as provided in subdivision 3c, the commissioner's decision to disqualify an individual, including the decision to grant or deny a reconsideration of rescission or set aside a disqualification under this subdivision, or to set aside or uphold the results of the study under subdivision 3 this section, is the final administrative agency action and shall not be subject to further review in a contested case under chapter 14 involving a negative licensing action appeal taken in response to the disqualification or involving an accuracy and completeness appeal under section 13.04.

Sec. 10. Minnesota Statutes 1996, section 245A.04, subdivision 3c, is amended to read:

Subd. 3c. [CONTESTED CASE.] If a disqualification is not set aside, a person who, on or after the effective date of rules adopted under subdivision 3, paragraph (i), is an employee of an employer, as defined in section 179A.03, subdivision 15, may request a contested case hearing under chapter 14. Rules adopted under this chapter may not preclude an employee in a contested case hearing for disqualification from submitting evidence concerning information gathered under subdivision 3, paragraph (e).

Sec. 11. Minnesota Statutes 1996, section 245A.04, subdivision 4, is amended to read:

Subd. 4. [INSPECTIONS; WAIVER.] (a) Before issuing a an initial license, the commissioner shall conduct an inspection of the program. The inspection must include but is not limited to:

(2) an inspection of records and documents;

(3) an evaluation of the program by consumers of the program; and

(4) observation of the program in operation.

For the purposes of this subdivision, "consumer" means a person who receives the services of a licensed program, the person's legal guardian, or the parent or individual having legal custody of a child who receives the services of a licensed program.

(b) The evaluation required in paragraph (a), clause (3) or the observation in paragraph (a), clause (4) is not required prior to issuing a provisional an initial license under subdivision 7. If the commissioner issues a provisional an initial license under subdivision 7, these requirements must be completed within one year after the issuance of a provisional an initial license. The observation in paragraph (a), clause (4) is not required if the commissioner determines that the observation would hinder the persons receiving services in benefiting from the program.

Sec. 12. Minnesota Statutes 1996, section 245A.04, subdivision 5, is amended to read:

Subd. 5. [COMMISSIONER'S RIGHT OF ACCESS.] When the commissioner is exercising the powers conferred by sections 245A.01 to 245A.15 this chapter, the commissioner must be given access to the physical plant and grounds where the program is provided, documents, persons served by the program, and staff whenever the program is in operation and the information is relevant to inspections or investigations conducted by the commissioner. The commissioner must be given access without prior notice and as often as the commissioner considers necessary if the commissioner is conducting an investigation of allegations of abuse, neglect, maltreatment, or other violation of applicable laws or rules. In conducting inspections, the commissioner may request and shall receive assistance from other state, county, and municipal governmental agencies and departments. The applicant or license holder shall allow the commissioner to photocopy, photograph, and make audio and video tape recordings during the inspection of the program at the commissioner's expense. The commissioner shall obtain a court order or the consent of the subject of the records or the parents or legal guardian of the subject before photocopying hospital medical records.

Persons served by the program have the right to refuse to consent to be interviewed, photographed, or audio or videotaped. Failure or refusal of an applicant or license holder to fully comply with this subdivision is reasonable cause for the commissioner to deny the application or immediately suspend or revoke the license.

Sec. 13. Minnesota Statutes 1996, section 245A.04, subdivision 6, is amended to read:

Subd. 6. [COMMISSIONER'S EVALUATION.] Before granting, suspending, revoking, or making probationary conditional a license, the commissioner shall evaluate information gathered under this section. The commissioner's evaluation shall consider facts, conditions, or circumstances concerning the program's operation, the well-being of persons served by the program, available consumer evaluations of the program, and information about the qualifications of the personnel employed by the applicant or license holder.

The commissioner shall evaluate the results of the study required in subdivision 3 and determine whether a risk of harm to the persons served by the program exists. In conducting this evaluation, the commissioner shall apply the disqualification standards set forth in rules adopted under this chapter. Prior to the adoption of rules establishing disqualification standards, the commissioner shall forward the proposed rules to the commissioner of human rights for review and recommendation concerning the protection of individual rights. The recommendation of the commissioner of human rights is not binding on the commissioner of human services.

Sec. 14. Minnesota Statutes 1996, section 245A.04, subdivision 7, is amended to read:

Subd. 7. [ISSUANCE OF A LICENSE; PROVISIONAL LICENSE.] (a) If the commissioner determines that the program complies with all applicable rules and laws, the commissioner shall issue a license. At minimum, the license shall state:

(2) the address of the program;

(3) the effective date and expiration date of the license;

(4) the type of license;

(5) the maximum number and ages of persons that may receive services from the program; and

(6) any special conditions of licensure.

(b) The commissioner may issue a provisional an initial license for a period not to exceed one year two years if:

(1) the commissioner is unable to conduct the evaluation or observation required by subdivision 4, paragraph (a), clauses (3) and (4), because the program is not yet operational;

(2) certain records and documents are not available because persons are not yet receiving services from the program; and

(3) the applicant complies with applicable laws and rules in all other respects.

A provisional license must not be issued except at the time that a license is first issued to an applicant.

(c) A decision by the commissioner to issue a license does not guarantee that any person or persons will be placed or cared for in the licensed program. A license shall not be transferable to another individual, corporation, partnership, voluntary association, other organization, or controlling individual, or to another location. For purposes of reimbursement for meals only, under the Child and Adult Care Food Program, Code of Federal Regulations, title 7, subtitle B, chapter II, subchapter A, part 226, relocation within the same county by a family day care provider licensed under Minnesota Rules, parts 9502.0300 to 9502.0445, shall be considered an extension of the license for a period of no more than 30 calendar days or until the new license is issued, whichever occurs first, provided the county agency has determined the family day care provider meets licensure requirements at the new location. Unless otherwise specified by statute, all licenses expire at 12:01 a.m. on the day after the expiration date stated on the license. A license holder must apply for and be granted a new license to operate the program or the program must not be operated after the expiration date.

Sec. 15. Minnesota Statutes 1996, section 245A.06, subdivision 1, is amended to read:

Subdivision 1. [CONTENTS OF CORRECTION ORDERS OR FINES.] (a) If the commissioner finds that the applicant or license holder has failed to comply with an applicable law or rule and this failure does not imminently endanger the health, safety, or rights of the persons served by the program, the commissioner may issue a correction order to or impose a fine on the applicant or license holder. The correction order or fine must state:

(1) the conditions that constitute a violation of the law or rule;

(2) the specific law or rule violated; and

(3) the time allowed to correct each violation; and

(4) if a fine is imposed, the amount of the fine.

(b) Nothing in this section prohibits the commissioner from proposing a sanction as specified in section 245A.07, prior to issuing a correction order or fine.

Sec. 16. Minnesota Statutes 1996, section 245A.06, subdivision 3, is amended to read:

Sec. 17. Minnesota Statutes 1996, section 245A.06, subdivision 4, is amended to read:

Subd. 4. [NOTICE OF FINE; APPEAL RECONSIDERATION OF FINE.] A license holder who is ordered to pay a fine must be notified of the order by certified mail. The notice must be mailed to the address shown on the application or the last known address of the license holder. The notice must state the reasons the fine was ordered and must inform the license holder of the responsibility for payment of fines in subdivision 7 and the right to a contested case hearing under chapter 14 request reconsideration of the fine. The license holder may appeal request reconsideration of the order to forfeit a fine by notifying the commissioner by certified mail within 15 20 calendar days after receiving the order. A timely appeal request for reconsideration shall stay forfeiture of the fine until the commissioner issues a final order under section 245A.08, subdivision 5. decision on the request for reconsideration. The request for reconsideration must be in writing and:

(1) specify the parts of the violation that are alleged to be in error;

(2) explain why they are in error;

(3) include documentation to support the allegation of error; and

(4) any other information relevant to the fine or the amount of the fine.

The commissioner's disposition of a request for reconsideration is final and not subject to appeal under chapter 14.

Sec. 18. Minnesota Statutes 1996, section 245A.06, subdivision 5, is amended to read:

Subd. 5. [FORFEITURE OF FINES.] The license holder shall pay the fines assessed on or before the payment date specified in the commissioner's order. If the license holder fails to fully comply with the order, the commissioner shall issue a second fine or suspend the license until the license holder complies. If the license holder receives state funds, the state, county, or municipal agencies or departments responsible for administering the funds shall withhold payments and recover any payments made while the license is suspended for failure to pay a fine.

Sec. 19. Minnesota Statutes 1996, section 245A.06, subdivision 5a, is amended to read:

Subd. 5a. [ACCRUAL OF FINES.] A license holder shall promptly notify the commissioner of human services, in writing, when a violation specified in an order to forfeit is corrected. A fine assessed for a violation shall stop accruing when the commissioner receives the written notice. The commissioner shall reinspect the program within three working days after receiving the notice. If upon reinspection the commissioner determines that a violation has not been corrected as indicated by the order to forfeit, accrual of the daily fine resumes on the date of reinspection and the amount of fines that otherwise would have accrued between the date the commissioner received the notice and date of the reinspection is added to the total assessment due from the license holder the commissioner may issue a second fine. The commissioner shall notify the license holder by certified mail that accrual of the a second fine has resumed been assessed. The license holder may challenge the resumption in a contested case under chapter 14 by written request within 15 days after receipt of the notice of resumption. Recovery of the resumed fine must be stayed if a controlling individual or a legal representative on behalf of the license holder makes a written request for a hearing. The request for hearing, however, may not stay accrual of the daily fine for violations that have not been corrected. The cost of reinspection conducted under this subdivision for uncorrected violations must be added to the total amount of accrued fines due from the license holder request reconsideration of the second fine under the provisions of subdivision 4.

Sec. 20. Minnesota Statutes 1996, section 245A.06, subdivision 6, is amended to read:

Subd. 6. [AMOUNT OF FINES.] Until the commissioner adopts one or more schedules of fines, Fines shall be assessed as follows:

(2) the license holder shall forfeit $200 $100 for each occurrence of a violation of law or rule governing matters of health, safety, or supervision, including but not limited to the provision of adequate staff to child or adult ratios, except that the holder of a family or group family day care license shall forfeit $100 for a violation under this clause; and

(3) the license holder shall forfeit $100 $50 for each occurrence of a violation of law or rule other than those included in clauses (1) and (2), except that the holder of a family or group family day care license shall forfeit $50 for a violation under this clause.

For the purposes of this section, "occurrence" means each calendar day or part of a day that a violation continues to exist after the date set for correction identified in the commissioner's correction forfeiture order.

Sec. 21. Minnesota Statutes 1996, section 245A.06, subdivision 7, is amended to read:

Subd. 7. [RESPONSIBILITY FOR PAYMENT OF FINES.] When a fine has been assessed, the license holder may not avoid payment by closing, selling, or otherwise transferring the licensed program to a third party. In such an event, the license holder will be personally liable for payment. In the case of a corporation, each controlling individual is personally and jointly liable for payment.

Fines for child care centers shall be assessed according to this section.

Sec. 22. Minnesota Statutes 1996, section 245A.07, subdivision 1, is amended to read:

Subdivision 1. [SANCTIONS AVAILABLE.] In addition to ordering forfeiture of fines, the commissioner may propose to suspend, revoke, or make probationary conditional the license or secure an injunction against the continuing operation of the program of a license holder who does not comply with applicable law or rule. When applying sanctions authorized under this section, the commissioner shall consider the nature, chronicity, or severity of the violation of law or rule and the effect of the violation on the health, safety, or rights of persons served by the program.

Sec. 23. Minnesota Statutes 1996, section 245A.07, subdivision 3, is amended to read:

Subd. 3. [SUSPENSION, REVOCATION, PROBATION DENIAL, CONDITIONAL LICENSE.] The commissioner may suspend, revoke, or make probationary conditional, or deny a license if an applicant or a license holder fails to comply fully with applicable laws or rules, or knowingly withholds relevant information from or gives false or misleading information to the commissioner in connection with an application for a license or during an investigation. A license holder who has had a license suspended, revoked, or made probationary conditional must be given notice of the action by certified mail. The notice must be mailed to the address shown on the application or the last known address of the license holder. The notice must state the reasons the license was suspended, revoked, or made probationary conditional.

(a) If the license was suspended or revoked, the notice must inform the license holder of the right to a contested case hearing under chapter 14. The license holder may appeal an order suspending or revoking a license. The appeal of an order suspending or revoking a license must be made in writing by certified mail and must be received by the commissioner within ten calendar days after the license holder receives notice that the license has been suspended or revoked.

(b) If the license was made probationary conditional, the notice must inform the license holder of the right to request a reconsideration by the commissioner. The request for reconsideration must be made in writing by certified mail and must be received by the commissioner within ten calendar days after the license holder receives notice that the license has been made probationary conditional. The license holder may submit with the request for reconsideration written argument or evidence in support of the request for reconsideration. The commissioner's disposition of a request for reconsideration is final and is not subject to appeal under chapter 14.

Sec. 24. Minnesota Statutes 1996, section 245A.08, subdivision 1, is amended to read:

Sec. 25. Minnesota Statutes 1996, section 245A.08, subdivision 2, is amended to read:

Subd. 2. [CONDUCT OF HEARINGS.] At any hearing provided for by sections section 245A.05 to or 245A.07, the appellant may be represented by counsel and has the right to call, examine, and cross-examine witnesses. The administrative law judge may require the presence of witnesses and evidence by subpoena on behalf of any party.

Sec. 26. Minnesota Statutes 1996, section 245A.09, subdivision 7, is amended to read:

Subd. 7. [REGULATORY METHODS.] (a) Where appropriate and feasible the commissioner shall identify and implement alternative methods of regulation and enforcement to the extent authorized in this subdivision. These methods shall include:

(1) expansion of the types and categories of licenses that may be granted;

(2) when the standards of another state or federal governmental agency or an independent accreditation body have been shown to predict compliance with the rules, the commissioner shall consider compliance with the governmental or accreditation standards to be equivalent to partial compliance with the rules; and

(3) use of an abbreviated inspection that employs key standards that have been shown to predict full compliance with the rules.

For programs and services for people with developmental disabilities, the commissioner of human services shall develop demonstration projects to use the standards of the commission on accreditation of rehabilitation facilities and the standards of the accreditation council on services to persons with disabilities during the period of July 1, 1993 to December 31, 1994, and incorporate the alternative use of these standards and methods in licensing rules where appropriate. If the commissioner determines that the methods in clause (2) or (3) can be used in licensing a program, the commissioner may reduce any fee set under section 245A.10 by up to 50 percent. The commissioner shall present a plan by January 31, 1995, to accept accreditation by either the accreditation council on services to people with disabilities or the commission on the accreditation of rehabilitation services as evidence of being in compliance where applicable with state licensing.

(b) The commissioner shall work with the commissioners of health, public safety, administration, and children, families, and learning in consolidating duplicative licensing and certification rules and standards if the commissioner determines that consolidation is administratively feasible, would significantly reduce the cost of licensing, and would not reduce the protection given to persons receiving services in licensed programs. Where administratively feasible and appropriate, the commissioner shall work with the commissioners of health, public safety, administration, and children, families, and learning in conducting joint agency inspections of programs.

(c) The commissioner shall work with the commissioners of health, public safety, administration, and children, families, and learning in establishing a single point of application for applicants who are required to obtain concurrent licensure from more than one of the commissioners listed in this clause.

(d) The commissioner may specify in rule periods of licensure up to two years.

Sec. 27. Minnesota Statutes 1996, section 245A.11, subdivision 2, is amended to read:

Sec. 28. Minnesota Statutes 1996, section 245A.16, subdivision 2, is amended to read:

Subd. 2. [INVESTIGATIONS.] (a) The county or private agency shall conduct timely investigations of allegations of abuse or neglect maltreatment of children or adults in programs for which the county or private agency is the commissioner's designated representative and record a disposition of each complaint in accordance with applicable law or rule. The county or private agency shall conduct similar investigations of allegations of violations of rules governing licensure of the program.

(b) If an investigation conducted under clause (a) results in evidence that the commissioner should deny an application or suspend, revoke, or make probationary conditional a license, the county or private agency shall make that recommendation to the commissioner within ten working days.

Sec. 29. [245A.22] [INDEPENDENT LIVING ASSISTANCE FOR YOUTH.]

Subdivision 1. [INDEPENDENT LIVING ASSISTANCE FOR YOUTH.] "Independent living assistance for youth" means a nonresidential program that provides a system of services that includes training, counseling, instruction, supervision, and assistance provided to youth according to the youth's independent living plan, when the placements in the program are made by the county agency. Services may include assistance in locating housing, budgeting, meal preparation, shopping, personal appearance, counseling, and related social support services needed to meet the youth's needs and improve the youth's ability to conduct such tasks independently. Such services shall not extend to youths needing 24-hour per day supervision and services. Youths needing a 24-hour per day program of supervision and services shall not be accepted or retained in an independent living assistance program.

Subd. 2. [ADMISSION.] The license holder shall accept as clients in the independent living assistance program only individuals specified under section 256E.115.

Subd. 3. [INDEPENDENT LIVING PLAN.] Unless an independent living plan has been developed by the local agency, the license holder shall develop a plan based on the client's individual needs that specifies objectives for the client. The services provided shall include those specified in this section and the services specified under section 256E.115, subdivision 2, paragraph (a). The plan shall identify the persons responsible for implementation of each part of the plan. The plan shall be reviewed as necessary, but at least annually.

Subd. 4. [RECORDS.] The license holder shall maintain a record for each client.

(a) [REQUIRED RECORDS.] For each client the record maintained by the license holder shall document the following:

(1) admission information;

(2) the independent living plan;

(3) delivery of the services required of the license holder in the independent living plan;

(4) the client's progress toward obtaining the objectives identified in the independent living plan; and

(5) a termination summary after service is terminated.

(b) [MONEY RECORDS.] If the license holder manages the client's money, the record maintained by the license holder shall also include the following:

(1) written permission from the client or the client's legal guardian to manage the client's money;

(2) the reasons the license holder is to manage the client's money; and

Subd. 5. [SERVICE TERMINATION PLAN.] The license holder, in conjunction with the county agency, shall establish a service termination plan that specifies how independent living assistance services will be terminated and the actions to be performed by the involved agencies, including necessary referrals for other ongoing services.

Subd. 6. [PLACE OF RESIDENCE PROVIDED BY PROGRAM.] When a client's place of residence is provided by the license holder as part of the independent living assistance program, the place of residence is not subject to separate licensure.

Subd. 7. [GENERAL LICENSING REQUIREMENTS APPLY.] In addition to the requirements of this section, providers of independent living assistance are subject to general licensing requirements of this chapter.

Sec. 30. [245B.01] [RULE CONSOLIDATION.]

This chapter establishes new methods to ensure the quality of services to persons with mental retardation or related conditions, and streamlines and simplifies regulation of services and supports for persons with mental retardation or related conditions. Sections 245B.02 to 245B.07 establish new standards that eliminate duplication and overlap of regulatory requirements by consolidating and replacing rule parts from four program rules. Section 245B.08 authorizes the commissioner of human services to develop and use new regulatory strategies to maintain compliance with the streamlined requirements. Sections 245B.02 to 245B.07 remain in effect until a rule is adopted to govern these services.

Sec. 31. [245B.02] [DEFINITIONS.]

Subdivision 1. [SCOPE.] The terms used in this chapter have the meanings given them.

Subd. 2. [APPLICANT.] "Applicant" has the meaning given in section 245A.02, subdivision 3.

Subd. 3. [CASE MANAGER.] "Case manager" means the individual designated by the county board under rules of the commissioner to provide case management services as delineated in section 256B.092 or successor provisions.

Subd. 4. [CONSUMER.] "Consumer" means a person who has been determined eligible to receive and is receiving services or support for persons with mental retardation or related conditions.

Subd. 5. [COMMISSIONER.] "Commissioner" means the commissioner of the department of human services or the commissioner's designated representative.

Subd. 6. [DAY TRAINING AND HABILITATION SERVICES FOR ADULTS WITH MENTAL RETARDATION OR RELATED CONDITIONS.] "Day training and habilitation services for adults with mental retardation or related conditions" has the meaning given in sections 252.40 to 252.46.

Subd. 7. [DEPARTMENT.] "Department" means the department of human services.

Subd. 8. [DIRECT SERVICE.] "Direct service" means, for a consumer receiving residential-based services, day training and habilitation services, or respite care services, one or more of the following: supervision, assistance, or training.

Subd. 9. [HEALTH SERVICES.] "Health services" means any service or treatment consistent with the health needs of the consumer, such as medication administration and monitoring, medical, dental, nutritional, health monitoring, wellness education, and exercise.

Subd. 10. [INCIDENT.] "Incident" means any serious injury as determined by section 245.91, subdivision 6; accident; reports of a child or vulnerable adult maltreatment; circumstances that involve a law enforcement agency; or a consumer's death.

Subd. 12. [INDIVIDUAL WHO IS RELATED.] "Individual who is related" has the meaning given in section 245A.02, subdivision 13.

Subd. 13. [INTERMEDIATE CARE FACILITY FOR PERSONS WITH MENTAL RETARDATION OR RELATED CONDITIONS OR ICF/MR.] "Intermediate care facility" for persons with mental retardation or related conditions or ICF/MR means a residential program licensed to provide services to persons with mental retardation or related conditions under section 252.28 and chapter 245A and a physical facility licensed as a supervised living facility under chapter 144, which together are certified by the department of health as an intermediate care facility for persons with mental retardation or related conditions.

Subd. 14. [LEAST RESTRICTIVE ENVIRONMENT.] "Least restrictive environment" means an environment where services:

(1) are delivered with minimum limitation, intrusion, disruption, or departure from typical patterns of living available to persons without disabilities;

(2) do not subject the consumer or others to unnecessary risks to health or safety; and

(3) maximize the consumer's level of independence, productivity, and inclusion in the community.

Subd. 15. [LEGAL REPRESENTATIVE.] "Legal representative" means the parent or parents of a consumer who is under 18 years of age or a guardian, conservator, or guardian ad litem authorized by the court, or other legally authorized representative to make decisions about services for a consumer.

Subd. 16. [LICENSE.] "License" has the meaning given in section 245A.02, subdivision 8.

Subd. 17. [LICENSE HOLDER.] "License holder" has the meaning given in section 245A.02, subdivision 9.

Subd. 18. [PERSON WITH MENTAL RETARDATION OR A RELATED CONDITION.] "Person with mental retardation" means a person who has been diagnosed under section 256B.092 as having substantial limitations in present functioning, manifested as significantly subaverage intellectual functioning, existing concurrently with demonstrated deficits in adaptive behavior, and who manifests these conditions before the person's 22nd birthday. A person with a "related condition" means a person who meets the diagnostic definition under section 252.27, subdivision 1a.

Subd. 19. [PSYCHOTROPIC MEDICATION USE CHECKLIST.] "Psychotropic medication use checklist" means the checklist and manual developed as part of the Welch vs. Gardebring Negotiated Settlement, United States District Court, District of Minnesota, Fourth Division, No. 4-72 Civil 451, 1987, Part V, Section B, to govern the administration of psychotropic medications. The commissioner of human services may revise or update the psychotropic medication use checklist to comply with legal requirements or to meet professional standards or guidelines in the area of developmental disabilities. For the purposes of this chapter, psychotropic medication means any medication prescribed to treat mental illness and associated behaviors or to control or alter behavior. The major classes of psychotropic medication are antipsychotic (neuroleptic), antidepressant, antianxiety, antimania, stimulant, and sedative or hypnotic. Other miscellaneous medications are considered to be a psychotropic medication when they are specifically prescribed to treat a mental illness or to control or alter behavior.

Subd. 20. [RESIDENTIAL-BASED HABILITATION.] "Residential-based habilitation" means care, supervision, and training provided primarily in the consumer's own home or place of residence but also including community-integrated activities following the individual service plan. Residential habilitation services are provided in coordination with the provision of day training and habilitation services for those persons receiving day training and habilitation services under sections 252.40 to 252.46.

Subd. 21. [RESPITE CARE.] "Respite care" has the meaning given in section 245A.02, subdivision 15.

Subd. 23. [SEMI-INDEPENDENT LIVING SERVICES OR SILS] "Semi-independent living services" or "SILS" has the meaning given in section 252.275.

Subd. 24. [VOLUNTEER.] "Volunteer" means an individual who, under the direction of the license holder, provides direct services without pay to consumers served by the license holder.

Sec. 32. [245B.03] [APPLICABILITY AND EFFECT.]

Subdivision 1. [APPLICABILITY.] The standards in this chapter govern services to persons with mental retardation or related conditions receiving services from license holders providing residential-based habilitation; day training and habilitation services for adults; semi-independent living services; residential programs that serve more than four consumers, including intermediate care facilities for persons with mental retardation; and respite care provided outside the consumer's home for more than four consumers at the same time at a single site.

Subd. 2. [RELATIONSHIP TO OTHER STANDARDS GOVERNING SERVICES FOR PERSONS WITH MENTAL RETARDATION OR RELATED CONDITIONS.] (a) ICFs/MR are exempt from:

(1) section 245B.04;

(2) section 245B.06, subdivisions 4 and 6; and

(3) section 245B.07, subdivisions 4, paragraphs (b) and (c); 7; and 8, paragraphs (a), clause (4), and (b), clause (1).

(b) License holders also licensed under chapter 144 as a supervised living facility are exempt from section 245B.04.

(c) Residential service sites controlled by license holders licensed under chapter 245B for home and community-based waivered services for four or fewer adults are exempt from compliance with Minnesota Rules, parts 9543.0040, subpart 2, item C; 9555.5505; 9555.5515, items B and G; 9555.5605; 9555.5705; 9555.6125, subparts 3, item C, subitem (2), and 4 to 6; 9555.6185; 9555.6225, subpart 8; 9555.6245; 9555.6255; and 9555.6265. The commissioner may approve alternative methods of providing overnight supervision using the process and criteria for granting a variance in section 245A.04, subdivision 9. This chapter does not apply to foster care homes that do not provide residential habilitation services funded under the home and community-based waiver programs defined in section 256B.092.

(d) The commissioner may exempt license holders from applicable standards of this chapter when the license holder meets the standards under section 245A.09, subdivision 7. License holders that are accredited by an independent accreditation body shall continue to be licensed under this chapter.

(e) License holders governed by sections 245B.02 to 245B.07 must also meet the licensure requirements in chapter 245A.

(f) Nothing in this chapter prohibits license holders from concurrently serving consumers with and without mental retardation or related conditions provided this chapter's standards are met as well as other relevant standards.

(g) The documentation that sections 245B.02 to 245B.07 require of the license holder meets the individual program plan required in section 256B.092 or successor provisions.

Sec. 33. [245B.04] [CONSUMER RIGHTS.]

Subdivision 1. [LICENSE HOLDER'S RESPONSIBILITY FOR CONSUMERS' RIGHTS.] The license holder must:

(1) provide the consumer or the consumer's legal representative a copy of the consumer's rights on the day that services are initiated and an explanation of the rights in subdivisions 2 and 3 within five working days of service initiation. Reasonable accommodations shall be made by the license holder to provide this information in other formats as needed to facilitate understanding of the rights by the consumer and the consumer's legal representative, if any;

(3) ensure the exercise and protection of the consumer's rights in the services provided by the license holder and authorized in the individual service plan.

Subd. 2. [SERVICE-RELATED RIGHTS.] A consumer's service-related rights include the right to:

(1) refuse or terminate services and be informed of the consequences of refusing or terminating services;

(2) know, in advance, limits to the services available from the license holder;

(3) know conditions and terms governing the provision of services, including those related to initiation and termination;

(4) know what the charges are for services, regardless of who will be paying for the services, and be notified of changes in those charges;

(5) know, in advance, whether services are covered by insurance, government funding, or other sources, and be told of any charges the consumer or other private party may have to pay; and

(6) receive licensed services from individuals who are competent and trained, who have professional certification or licensure, as required, and who meet additional qualifications identified in the individual service plan.

Subd. 3. [PROTECTION-RELATED RIGHTS.] The consumer's protection-related rights include the right to:

(1) have personal, financial, services, and medical information kept private, and be advised of the license holder's policies and procedures regarding disclosure of such information;

(2) access records and recorded information;

(3) be free from maltreatment;

(4) be treated with courtesy and respect for the consumer's individuality, mode of communication, and culture, and receive respectful treatment of the consumer's property;

(5) voice grievances, know the contact persons responsible for addressing problems and how to contact those persons;

(6) any procedures for grievance or complaint resolution and the right to appeal under section 256.045;

(7) know the name and address of the state, county, or advocacy agency to contact for additional information or assistance;

(8) assert these rights personally, or have them asserted by the consumer's family or legal representative, without retaliation;

(9) give or withhold written informed consent to participate in any research or experimental treatment;

(10) have daily, private access to and use of a noncoin- operated telephone for local calls and long-distance calls made collect or paid for by the resident;

(11) receive and send uncensored, unopened mail;

(12) marital privacy for visits with the consumer's spouse and, if both are residents of the site, the right to share a bedroom and bed;

(13) associate with other persons of the consumer's choice;

(14) personal privacy; and

Sec. 34. [245B.05] [CONSUMER PROTECTION STANDARDS.]

Subdivision 1. [ENVIRONMENT.] The license holder must:

(1) ensure that services are provided in a safe and hazard-free environment when the license holder is the owner, lessor, or tenant of the service site. All other license holders shall inform the consumer or the consumer's legal representative and case manager about any environmental safety concerns in writing;

(2) lock doors only to protect the safety of consumers and not as a substitute for staff supervision or interactions with consumers;

(3) follow procedures that minimize the consumer's health risk from communicable diseases; and

(4) maintain equipment, vehicles, supplies, and materials owned or leased by the license holder in good condition.

Subd. 2. [LICENSED CAPACITY FOR FACILITY-BASED DAY TRAINING AND HABILITATION SERVICES.] Licensed capacity of day training and habilitation service sites must be determined by the amount of primary space available, the scheduling of activities at other service sites, and the space requirements of consumers receiving services. Primary space does not include hallways, stairways, closets, utility areas, bathrooms, kitchens, and floor areas beneath stationary equipment. A minimum of 40 square feet of primary space must be available for each consumer who is engaged in a day training and habilitation activity at the site for which the licensed capacity must be determined.

Subd. 3. [RESIDENTIAL SERVICE SITES FOR MORE THAN FOUR CONSUMERS; FOUR-BED ICFS/MR.] Residential service sites licensed to serve more than four consumers and four-bed ICFs/MR must meet the fire protection provisions of either the Residential Board and Care Occupancies Chapter or the Health Care Occupancies Chapter of the Life Safety Code (LSC), National Fire Protection Association, 1985 edition, or its successors. Sites meeting the definition of a residential board and care occupancy for 16 or less beds must have the emergency evacuation capability of residents evaluated in accordance with Appendix F of the LSC or its successors, except for those sites that meet the LSC Health Care Occupancies Chapter or its successors.

Subd. 4. [MEETING FIRE AND SAFETY CODES.] An applicant or license holder under sections 245A.01 to 245A.16 must document compliance with applicable building codes, fire and safety codes, health rules, and zoning ordinances, or document that an appropriate waiver has been granted.

Subd. 5. [CONSUMER HEALTH.] The license holder is responsible for meeting the health service needs assigned to the license holder in the individual service plan and for bringing health needs as discovered by the license holder promptly to the attention of the consumer, the consumer's legal representative, and the case manager. The license holder is required to maintain documentation on how the consumer's health needs will be met, including a description of procedures the license holder will follow for the consumer regarding medication monitoring and administration and seizure monitoring, if needed. The medication administration procedures are those procedures necessary to implement medication and treatment orders issued by appropriately licensed professionals, and must be established in consultation with a registered nurse, nurse practitioner, physician's assistant, or medical doctor.

Subd. 6. [FIRST AID.] When the license holder is providing direct service and supervision to a consumer who requires a 24-hour plan of care and receives services at a site licensed under this chapter, the license holder must have available a staff person trained in first aid, and, if needed under section 245B.07, subdivision 6, paragraph (d), cardiopulmonary resuscitation from a qualified source, as determined by the commissioner.

Subd. 7. [REPORTING INCIDENTS AND EMERGENCIES.] The license holder must report the following incidents to the consumer's legal representative, caregiver, and case manager within 24 hours of the occurrence, or within 24 hours of receipt of the information:

(1) the death of a consumer;

(3) a consumer's unauthorized absence; or

(4) any fires and incidents involving a law enforcement agency.

Death or serious injury of the consumer must also be reported to the commissioner and the ombudsman, as required under sections 245.91 to 245.99.

Sec. 35. [245B.06] [SERVICE STANDARDS.]

Subdivision 1. [OUTCOME-BASED SERVICES.] (a) The license holder must provide outcome-based services in response to the consumer's identified needs as specified in the individual service plan.

(b) Services must be based on the needs and preferences of the consumer and the consumer's personal goals and be consistent with the principles of least restrictive environment, self-determination, and consistent with:

(1) the recognition of each consumer's history, dignity, and cultural background;

(2) the affirmation and protection of each consumer's civil and legal rights;

(3) the provision of services and supports for each consumer which:

(i) promote community inclusion and self-sufficiency;

(ii) provide services in the least restrictive environment;

(iii) promote social relationships, natural supports, and participation in community life;

(iv) allow for a balance between safety and opportunities; and

(v) provide opportunities for the development and exercise of age-appropriate skills, decision making and choice, personal advocacy, and communication; and

(4) the provision of services and supports for families which address the needs of the consumer in the context of the family and support family self-sufficiency.

(c) The license holder must make available to the consumer opportunities to participate in the community, functional skill development, reduced dependency on care providers, and opportunities for development of decision-making skills. "Outcome" means the behavior, action, or status attained by the consumer that can be observed, measured, and can be determined reliable and valid. Outcomes are the equivalent of the long-range goals and short-term goals referenced in section 256B.092, and any rules promulgated under that section.

Subd. 2. [RISK MANAGEMENT PLAN.] The license holder must develop and document in writing a risk management plan that incorporates the individual abuse prevention plan as required in chapter 245C. License holders jointly providing services to a consumer shall coordinate and use the resulting assessment of risk areas for the development of this plan. Upon initiation of services, the license holder will have in place an initial risk management plan that identifies areas in which the consumer is vulnerable, including health, safety, and environmental issues and the supports the provider will have in place to protect the consumer and to minimize these risks. The plan must be changed based on the needs of the individual consumer and reviewed at least annually.

Subd. 3. [ASSESSMENTS.] (a) The license holder shall assess and reassess the consumer within stated time lines and assessment areas specified in the individual service plan or as requested in writing by the case manager.

(c) All assessments must include information about the consumer that is descriptive of:

(1) the consumer's strengths and functional skills; and

(2) the level of support and supervision the consumer needs to achieve the outcomes in subdivision 1.

Subd. 4. [SUPPORTS AND METHODS.] The license holder, in coordination with other service providers, shall meet with the consumer, the consumer's legal representative, case manager, and other members of the interdisciplinary team within 45 days of service initiation. Within ten working days after the meeting, the license holder shall develop and document in writing:

(1) the methods that will be used to support the individual or accomplish the outcomes in section 245B.06, subdivision 1, including information about physical and social environments, the equipment and materials required, and techniques that are consistent with the consumer's communication mode and learning style specified as the license holder's responsibility in the individual service plan;

(2) the projected starting date for service supports and the criteria for identifying when the desired outcome has been achieved and when the service supports need to be reviewed; and

(3) the names of the staff, staff position, or contractors responsible for implementing each outcome.

Subd. 5. [PROGRESS REVIEWS.] The license holder must participate in progress review meetings following stated time lines established in the consumer's individual service plan or as requested in writing by the consumer, the consumer's legal representative, or the case manager, at a minimum of once a year. The license holder must summarize the progress toward achieving the desired outcomes and make recommendations in a written report sent to the consumer or the consumer's legal representative and case manager prior to the review meeting. For consumers under public guardianship, the license holder is required to provide quarterly written progress review reports to the consumer, designated family member, and case manager.

Subd. 6. [REPORTS.] The license holder shall provide written reports regarding the consumer's status as requested by the consumer, or the consumer's legal representative and case manager.

Subd. 7. [STAFFING REQUIREMENTS.] The license holder must provide supervision to ensure the health, safety, and protection of rights of each consumer and to be able to implement each consumer's individual service plan. Day training and habilitation programs must meet the minimum staffing requirements as specified in sections 252.40 to 252.46 and rules promulgated under those sections.

Subd. 8. [LEAVING THE RESIDENCE.] As specified in each consumer's individual service plan, each consumer requiring a 24-hour plan of care must leave the residence to participate in regular education, employment, or community activities. License holders, providing services to consumers living in a licensed site, shall ensure that they are prepared to care for consumers whenever they are at the residence during the day because of illness, work schedules, or other reasons.

Subd. 9. [DAY TRAINING AND HABILITATION SERVICE DAYS.] Day training and habilitation services must meet a minimum of 195 available service days.

Subd. 10. [PROHIBITION.] Psychotropic medication and the use of aversive and deprivation procedures, as referenced in section 245.825 and rules promulgated under that section, cannot be used as a substitute for adequate staffing, as punishment, or for staff convenience.

Sec. 36. [245B.07] [MANAGEMENT STANDARDS.]

Subdivision 1. [CONSUMER DATA FILE.] The license holder must maintain the following information for each consumer:

(2) consumer health information, including individual medication administration and monitoring information;

(3) the consumer's individual service plan. When a consumer's case manager does not provide a current individual service plan, the license holder shall make a written request to the case manager to provide a copy of the individual service plan and inform the consumer or the consumer's legal representative of the right to an individual service plan and the right to appeal under section 256.045;

(4) copies of assessments, analyses, summaries, and recommendations;

(5) progress review reports;

(6) incident and emergency reports involving the consumer;

(7) discharge summary, when applicable;

(8) record of other license holders serving the consumer that includes a contact person and telephone numbers, services being provided, services that require coordination between two license holders, and name of staff responsible for coordination; and

(9) incidents involving verbal and physical aggression between consumers and self-abuse affecting the consumer.

Subd. 2. [ACCESS TO RECORDS.] The license holder must ensure that the following people have access to the information in subdivision 1:

(1) the consumer, the consumer's legal representative, and anyone properly authorized by the consumer or the legal representative of the consumer;

(2) the consumer's case manager;