STATE OF MINNESOTA
Journal of the House
NINETY-THIRD
SESSION - 2023
_____________________
SEVENTY-SECOND
DAY
Saint Paul, Minnesota, Wednesday, May 17, 2023
The House of Representatives convened at
11:00 a.m. and was called to order by Dan Wolgamott, Speaker pro tempore.
Prayer was offered by Pastor Ben Mailhot,
Watermark Church, Stillwater, Minnesota.
The members of the House gave the pledge
of allegiance to the flag of the United States of America.
The roll was called and the following
members were present:
Acomb
Agbaje
Altendorf
Anderson, P. E.
Backer
Bahner
Bakeberg
Baker
Becker-Finn
Bennett
Berg
Bierman
Bliss
Brand
Burkel
Carroll
Cha
Clardy
Coulter
Curran
Daniels
Daudt
Davids
Davis
Demuth
Dotseth
Edelson
Elkins
Engen
Feist
Finke
Fischer
Fogelman
Franson
Frazier
Frederick
Freiberg
Garofalo
Gillman
Gomez
Greenman
Grossell
Hansen, R.
Hanson, J.
Harder
Hassan
Heintzeman
Hemmingsen-Jaeger
Her
Hicks
Hill
Hollins
Hornstein
Howard
Hudella
Hudson
Huot
Hussein
Igo
Jacob
Johnson
Jordan
Joy
Keeler
Klevorn
Knudsen
Koegel
Kotyza-Witthuhn
Kozlowski
Koznick
Kraft
Kresha
Lee, F.
Lee, K.
Liebling
Lillie
Lislegard
Long
Mekeland
Moller
Mueller
Murphy
Myers
Nadeau
Nash
Nelson, M.
Nelson, N.
Neu Brindley
Newton
Niska
Noor
Norris
Novotny
O'Driscoll
Olson, B.
Olson, L.
O'Neill
Pelowski
Pérez-Vega
Perryman
Petersburg
Pfarr
Pinto
Pryor
Pursell
Quam
Rehm
Reyer
Richardson
Robbins
Schomacker
Schultz
Scott
Sencer-Mura
Skraba
Smith
Stephenson
Swedzinski
Tabke
Urdahl
Vang
West
Wiener
Wiens
Witte
Wolgamott
Xiong
Youakim
Zeleznikar
Spk. Hortman
A quorum was present.
Anderson, P. H.; Kiel and McDonald were
excused.
Torkelson was excused until 7:30 p.m.
The Chief Clerk proceeded to read the
Journal of the preceding day. There
being no objection, further reading of the Journal was dispensed with and the
Journal was approved as corrected by the Chief Clerk.
PETITIONS AND COMMUNICATIONS
The following communications were
received:
STATE OF
MINNESOTA
OFFICE OF
THE GOVERNOR
SAINT PAUL
55155
May 16,
2023
The
Honorable Melissa Hortman
Speaker
of the House of Representatives
The
State of Minnesota
Dear Speaker Hortman:
Please be advised that I have received,
approved, signed, and deposited in the Office of the Secretary of State the
following House File:
H. F. No. 24, relating to capital
investment; establishing a grant program to replace lead drinking water service
lines; requiring a report; appropriating money.
Sincerely,
Tim
Walz
Governor
STATE OF
MINNESOTA
OFFICE OF
THE SECRETARY OF STATE
ST. PAUL
55155
The Honorable Melissa Hortman
Speaker of the House of
Representatives
The Honorable Bobby Joe Champion
President of the Senate
I have the honor to inform you that the
following enrolled Act of the 2023 Session of the State Legislature has been
received from the Office of the Governor and is deposited in the Office of the
Secretary of State for preservation, pursuant to the State Constitution,
Article IV, Section 23:
S. F. No. |
H. F. No. |
Session Laws Chapter No. |
Time and Date Approved 2023 |
Date Filed 2023 |
24 39 12:25
p.m. May 16 May 16
Sincerely,
Steve
Simon
Secretary
of State
INTRODUCTION AND FIRST READING
OF HOUSE BILLS
The
following House Files were introduced:
Hemmingsen-Jaeger introduced:
H. F. No. 3326, A bill for an act relating to environment; banning certain mercury-containing lighting; amending Minnesota Statutes 2022, section 116.92, by adding a subdivision.
The bill was read for the first time and referred to the Committee on Environment and Natural Resources Finance and Policy.
Norris and Newton introduced:
H. F. No. 3327, A bill for an act relating to taxation; individual income; providing a subtraction for foreign service retirement pay; amending Minnesota Statutes 2022, sections 290.0132, by adding a subdivision; 290.091, subdivision 2, as amended.
The bill was read for the first time and referred to the Committee on Taxes.
MESSAGES FROM THE SENATE
The
following messages were received from the Senate:
Madam Speaker:
I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:
H. F. No. 2292, A bill for an act relating to early childhood; modifying provisions for early learning scholarships, Head Start, and early education programs; providing for early childhood educator programs; requiring reports; appropriating money; amending Minnesota Statutes 2022, sections 119A.52; 121A.17, subdivision 3; 121A.19; 124D.13, by adding a subdivision; 124D.141, subdivision 2; 124D.162; 124D.165, subdivisions 2, 3, 4, 6; 125A.13; 179A.03, subdivision 18; proposing coding for new law in Minnesota Statutes, chapter 122A.
The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.
Thomas S. Bottern, Secretary of the Senate
Madam Speaker:
I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:
H. F. No. 2497, A bill for an act relating to education finance; providing funding for prekindergarten through grade 12 education; modifying provisions for general education, education excellence, literacy, American Indian education, teachers, charter schools, special education, facilities, nutrition, libraries, early childhood, community
education, grants management, and state agencies; making forecast adjustments; providing for rulemaking; requiring reports; appropriating money; amending Minnesota Statutes 2022, sections 13.32, subdivision 3; 120A.20, subdivision 1; 120A.22, subdivision 10; 120A.414, subdivision 2, by adding a subdivision; 120A.42; 120B.018, subdivision 6; 120B.021, subdivisions 1, 2, 3, 4, as amended, by adding a subdivision; 120B.022, subdivision 1; 120B.024, subdivisions 1, 2; 120B.11, subdivisions 1, 2, 3; 120B.12; 120B.122, subdivision 1; 120B.15; 120B.30, subdivisions 1, 1a; 120B.301; 120B.35, subdivision 3; 120B.36, subdivision 2; 121A.031, subdivision 6; 121A.04, subdivisions 1, 2; 121A.41, subdivision 7, by adding subdivisions; 121A.425; 121A.45, subdivision 1; 121A.46, subdivision 4, by adding a subdivision; 121A.47, subdivisions 2, 14; 121A.53, subdivision 1; 121A.55; 121A.58; 121A.582, subdivision 1; 121A.61, subdivisions 1, 3, by adding subdivisions; 122A.06, subdivisions 1, 2, 5, 6, 7, 8, by adding subdivisions; 122A.07, subdivisions 1, 2, 4, 4a, 5, 6; 122A.09, subdivisions 4, 6, 9, 10; 122A.091, subdivisions 1, 2; 122A.092, subdivision 5; 122A.15, subdivision 1; 122A.18, subdivisions 1, 2, 10, by adding a subdivision; 122A.181, subdivisions 1, 2, 3, 4, 5, by adding a subdivision; 122A.182, subdivisions 1, 4, by adding subdivisions; 122A.183, subdivisions 1, 2, by adding subdivisions; 122A.184, subdivision 1; 122A.185, subdivisions 1, 4; 122A.187, subdivisions 1, 5, by adding a subdivision; 122A.19, subdivision 4; 122A.26, subdivision 2; 122A.31, subdivision 1; 122A.40, subdivisions 3, 5, 8; 122A.41, subdivisions 2, 5, by adding a subdivision; 122A.415, subdivision 4; 122A.42; 122A.50; 122A.59; 122A.63, by adding a subdivision; 122A.635; 122A.69; 122A.70; 122A.73, subdivisions 2, 3, 5; 123B.147, subdivision 3; 123B.595, subdivisions 1, 2, 3, 4, 7, 8, 8a, 9, 10, 11; 123B.71, subdivisions 9, 12; 123B.86, subdivision 3; 123B.92, subdivision 1, by adding a subdivision; 124D.03, subdivisions 3, 5; 124D.09, subdivisions 3, 5, 12, 13; 124D.111, subdivisions 2a, 5; 124D.1158, as amended; 124D.119; 124D.128, subdivisions 1, 2; 124D.151, subdivision 6; 124D.20, subdivisions 3, 5; 124D.2211; 124D.231; 124D.42, subdivision 8; 124D.531, subdivisions 1, 4; 124D.55; 124D.56; 124D.59, subdivisions 2, 2a; 124D.65, subdivision 5; 124D.68, subdivisions 2, 3; 124D.73, by adding a subdivision; 124D.74, subdivisions 1, 3, 4, by adding a subdivision; 124D.76; 124D.78; 124D.79, subdivision 2; 124D.791, subdivision 4; 124D.81; 124D.861, subdivision 2; 124D.862, subdivision 8; 124D.98, by adding a subdivision; 124D.99, subdivision 2; 124E.02; 124E.03, subdivision 2, by adding a subdivision; 124E.05, subdivisions 4, 7; 124E.06, subdivisions 1, 4, 5; 124E.10, subdivision 1; 124E.11; 124E.12, subdivision 1; 124E.13, subdivisions 1, 3; 124E.25, subdivision 1a; 125A.03; 125A.08; 125A.0942; 125A.13; 125A.15; 125A.51; 125A.515, subdivision 3; 125A.71, subdivision 1; 125A.76, subdivisions 2c, 2e, by adding a subdivision; 126C.05, subdivisions 1, 3, as amended, 19; 126C.10, subdivisions 2, 2a, 2d, 2e, 3, 4, 13, 13a, 14, 18a, by adding subdivisions; 126C.15, subdivisions 1, 2, 5; 126C.17, by adding a subdivision; 126C.40, subdivisions 1, 6; 126C.43, subdivision 2; 126C.44; 127A.353, subdivisions 2, 4; 134.31, subdivisions 1, 4a; 134.32, subdivision 4; 134.34, subdivision 1; 134.355, subdivisions 5, 6, 7; 144.4165; 179A.03, subdivisions 14, 18, 19; 256B.0625, subdivision 26; 268.085, subdivision 7; 290.0679, subdivision 2; Laws 2021, First Special Session chapter 13, article 1, section 10, subdivisions 2, 3, 4, 5, 6, 7, 9; article 2, section 4, subdivisions 2, 3, 4, 12, 27; article 3, section 7, subdivision 7; article 5, section 3, subdivisions 2, 3, 4; article 7, section 2, subdivisions 2, 3; article 8, section 3, subdivisions 2, 3, 4; article 9, section 4, subdivisions 5, 6, 12; article 10, section 1, subdivisions 2, 8; article 11, section 4, subdivision 2; Laws 2023, chapter 18, section 4, subdivisions 2, 3; proposing coding for new law in Minnesota Statutes, chapters 120B; 121A; 122A; 124D; 125A; 126C; 127A; repealing Minnesota Statutes 2022, sections 120B.35, subdivision 5; 122A.06, subdivision 4; 122A.07, subdivision 2a; 122A.091, subdivisions 3, 6; 122A.18, subdivision 7c; 122A.182, subdivision 2; 124D.095, subdivisions 1, 2, 3, 4, 5, 6, 7, 8; 126C.05, subdivisions 3, 16; 268.085, subdivision 8; Minnesota Rules, part 8710.0500, subparts 8, 11.
The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.
Thomas S. Bottern, Secretary of the Senate
Madam Speaker:
I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:
S. F. No. 2744.
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.
Thomas S. Bottern, Secretary of the Senate
CONFERENCE COMMITTEE REPORT ON S. F. No. 2744
A bill for an act relating to commerce; establishing a biennial budget for Department of Commerce; modifying various provisions governing insurance; regulating virtual currency activities; providing for reports relating to retail sales of intermediate blends of gasoline and biofuel; prohibiting excessive price increases by pharmaceutical manufacturers; establishing a Prescription Drug Affordability Board; establishing a student loan advocate position; regulating money transmitters; making technical changes; establishing penalties; authorizing administrative rulemaking; requiring reports; appropriating money; transferring money; amending Minnesota Statutes 2022, sections 46.131, subdivision 11; 60A.14, subdivision 1; 62A.152, subdivision 3; 62D.02, by adding a subdivision; 62D.095, subdivisions 2, 3, 4, 5; 62K.10, subdivision 4; 62Q.19, subdivision 1; 62Q.46, subdivisions 1, 3; 62Q.47; 62Q.81, subdivision 4, by adding a subdivision; 151.071, subdivisions 1, 2; 239.791, subdivision 8; 256B.0631, subdivision 1; 256L.03, subdivision 5; Laws 2022, chapter 93, article 1, section 2, subdivision 5; proposing coding for new law in Minnesota Statutes, chapters 53B; 58B; 62J; 62Q; 62W; repealing Minnesota Statutes 2022, sections 53B.01; 53B.02; 53B.03; 53B.04; 53B.05; 53B.06; 53B.07; 53B.08; 53B.09; 53B.10; 53B.11; 53B.12; 53B.13; 53B.14; 53B.15; 53B.16; 53B.17; 53B.18; 53B.19; 53B.20; 53B.21; 53B.22; 53B.23; 53B.24; 53B.25; 53B.26; 53B.27, subdivisions 1, 2, 5, 6, 7.
May 15, 2023
The Honorable Bobby Joe Champion
President of the Senate
The Honorable Melissa Hortman
Speaker of the House of Representatives
We, the undersigned conferees for S. F. No. 2744 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. 2744 be further amended as follows:
Delete everything after the enacting clause and insert:
"ARTICLE 1
COMMERCE FINANCE
Section 1. APPROPRIATIONS. |
The sums shown in the
columns marked "Appropriations" are appropriated to the agencies and
for the purposes specified in this article.
The appropriations are from the general fund, or another named fund, and
are available for the fiscal years indicated for each purpose. The figures "2024" and
"2025" used in this article mean that the appropriations listed under
them are available for the fiscal year ending June 30, 2024, or June 30, 2025,
respectively. "The first year"
is fiscal year 2024. "The second
year" is fiscal year 2025. "The
biennium" is fiscal years 2024 and 2025.
If an appropriation in this act is enacted more than once in the 2023
legislative session, the appropriation must be given effect only once.
|
|
|
APPROPRIATIONS
|
|
|
|
|
Available
for the Year |
|
|
|
|
Ending
June 30 |
|
|
|
|
2024
|
2025
|
Sec. 2. DEPARTMENT
OF COMMERCE |
|
|
|
|
Subdivision 1. Total
Appropriation |
|
$33,757,000 |
|
$34,660,000 |
Appropriations by Fund |
||
|
2024 |
2025 |
General |
30,876,000 |
31,752,000 |
Workers'
Compensation Fund |
788,000 |
815,000 |
Special Revenue
|
2,093,000 |
2,093,000 |
The amounts that may be
spent for each purpose are specified in the following subdivisions.
Subd. 2. Financial
Institutions |
|
2,372,000 |
|
2,492,000 |
(a) $400,000 each year is
for a grant to Prepare and Prosper to develop, market, evaluate, and distribute
a financial services inclusion program that (1) assists low-income and
financially underserved populations to build savings and strengthen credit, and
(2) provides services to assist low-income and financially underserved
populations to become more financially stable and secure. Money remaining after the first year is
available for the second year.
(b) $254,000 each year is
to administer the requirements of Minnesota Statutes, chapter 58B.
Subd. 3. Administrative
Services |
|
10,078,000 |
|
10,104,000 |
(a) $353,000 each year is
for system modernization and cybersecurity upgrades for the unclaimed property
program.
(b) $564,000 each year is
for additional operations of the unclaimed property program.
(c) $249,000 each year is
for the senior safe fraud prevention program.
(d) $568,000 in the first
year and $537,000 in the second year are to create and maintain the Prescription
Drug Affordability Board established under Minnesota Statutes, section 62J.87. The base in fiscal year 2026 is $500,000.
(e) $150,000 each year is for a
grant to Exodus Lending to expand program and operational capacity to assist
individuals with financial stability through small dollar consumer loans,
including but not limited to resolving consumer short-term loans carrying
interest rates greater than 36 percent. Loans
issued under the program must be: (1)
interest- and fee-free; and (2) made to Minnesotans facing significant barriers
to mainstream financial products. Program
participants must be recruited through a statewide network of trusted
community-based partners. Loan payments
by borrowers must be reported to the credit bureaus. These are onetime appropriations and are
available until June 30, 2027.
(f) $200,000 in the first
year is for a grant to Exodus Lending to assist in the development of a
character-based small dollar loan program.
This is a onetime appropriation and is available until June 30, 2027.
(g) For the purposes of
paragraphs (e) and (f), the following terms have the meanings given:
(1) "barriers to
financial inclusion" means a person's financial history, credit history
and credit score requirements, scarcity of depository institutions in lower
income and communities of color, and low or irregular income flows;
(2) "character-based
lending" means the practice of issuing loans based on a borrower's
involvement in and ties to community-based organizations that provide client
services, including but not limited to financial coaching; and
(3) "mainstream
financial products" means financial products that are provided most
commonly by regulated financial institutions, including but not limited to
credit cards and installment loans.
(h) No later than July 15,
2024, and annually thereafter until the appropriations under paragraphs (e) and
(f) have been exhausted or canceled, Exodus Lending must submit a report to the
commissioner of commerce on the activities required of Exodus Lending under
paragraphs (e) and (f). Until July 15,
2027, the report must detail, at a minimum, each of the following for the prior
calendar year and, after July 15, 2027, the report must detail, at a minimum,
each of the following that relate to the activities of Exodus Lending under
paragraph (f) for the prior calendar year:
(1) the total number of
loans granted;
(2) the total number of
participants granted loans;
(3) an analysis of the
participants' race, ethnicity, gender, and geographic locations;
(4) the average loan amount;
(5) the total loan amounts
paid back by participants;
(6) a list of the trusted
community-based partners;
(7) the final criteria
developed for character-based small dollar loan program determinations under
paragraph (f); and
(8) summary data on the
significant barriers to mainstream financial products faced by participants.
(i) No later than August 15,
2024, and annually thereafter until the appropriations under paragraphs (e) and
(f) have been exhausted or canceled, the commissioner of commerce must submit a
report to the chairs and ranking minority members of the legislative committees
with primary jurisdiction over commerce and consumer protection. The report must detail the information
collected by the commissioner of commerce under paragraph (h).
(j) $12,000 each year is for
the intermediate blends of gasoline and biofuels report under Minnesota
Statutes, section 239.791, subdivision 8.
(k) The total base for
administrative services under this subdivision is $10,042,000 in fiscal year
2026 and beyond.
Subd. 4. Enforcement
|
|
7,382,000 |
|
7,670,000 |
Appropriations by Fund |
||
General |
7,174,000 |
7,455,000 |
Workers'
Compensation |
208,000 |
215,000 |
(a) $811,000 each year is for
five additional peace officers in the Commerce Fraud Bureau. Money under this paragraph is transferred
from the general fund to the insurance fraud prevention account under Minnesota
Statutes, section 45.0135, subdivision 6.
(b) $345,000 each year is
for additional staff to focus on market conduct examinations.
(c) $41,000 in the first
year and $21,000 in the second year are for body cameras worn by Commerce Fraud
Bureau agents.
(d) $208,000 in the first
year and $215,000 in the second year are from the workers' compensation fund.
(e) $100,000 in the second
year is for the creation and maintenance of the Mental Health Parity and
Substance Abuse Accountability Office under Minnesota Statutes, section 62Q.465. The base for fiscal year 2026 is $225,000.
(f) $197,000 each year is to
create and maintain a student loan advocate position under Minnesota Statutes,
section 58B.011.
(g) $283,000 each year is
for law enforcement salary increases, as authorized under Laws 2021, chapter 4,
article 9, section 1.
Subd. 5. Telecommunications
|
|
3,221,000 |
|
3,261,000 |
Appropriations by Fund |
||
General |
1,128,000 |
1,168,000 |
Special Revenue
|
2,093,000 |
2,093,000 |
$2,093,000 each year is
from the telecommunications access Minnesota fund account in the special
revenue fund for the following transfers:
(1) $1,620,000 each year is
to the commissioner of human services to supplement the ongoing operational
expenses of the Commission of Deaf, DeafBlind, and Hard-of-Hearing Minnesotans. This transfer is subject to Minnesota
Statutes, section 16A.281;
(2) $290,000 each year is
to the chief information officer to coordinate technology accessibility and
usability;
(3) $133,000 each year is
to the Legislative Coordinating Commission for captioning legislative coverage. This transfer is subject to Minnesota
Statutes, section 16A.281; and
(4) $50,000 each year is to
the Office of MN.IT Services for a consolidated access fund to provide grants
or services to other state agencies related to accessibility of web-based
services.
Subd. 6. Insurance
|
|
9,173,000 |
|
9,577,000 |
Appropriations by Fund |
||
General |
8,593,000 |
8,977,000 |
Workers'
Compensation |
580,000 |
600,000 |
(a) $136,000 each year is
to advance standardized health plan options.
(b) $318,000 each year is
to conduct a feasibility study on a proposal to offer free primary care to
Minnesotans. These are onetime
appropriations.
(c) $105,000 each year is
to evaluate legislation for new mandated health benefits under Minnesota
Statutes, section 62J.26.
(d) $180,000 each year is for
additional staff to focus on property‑ and casualty-related insurance
products.
(e) $580,000 in the first
year and $600,000 in the second year are from the workers' compensation fund.
(f) $42,000 each year is
for ensuring health plan company compliance
with Minnesota Statutes, section 62Q.47, paragraph (h).
(g) $25,000 each year is to
evaluate existing statutory health benefit mandates.
(h) $20,000 each year is to
pay membership dues for Minnesota to the National Conference of Insurance
Legislators. The appropriations in this
paragraph are onetime.
Subd. 7. Weights
and Measures Division |
|
1,531,000 |
|
1,556,000 |
Sec. 3. DEPARTMENT
OF EDUCATION |
|
|
|
|
Subdivision 1. Total
Appropriation |
|
$100,000 |
|
$-0- |
Appropriations by Fund |
||
|
2024 |
2025 |
General |
100,000 |
-0- |
$100,000 in the first year
is to issue grants of $50,000 each year to the Minnesota Council on Economic
Education. This balance does not cancel
but is available in the second year. This
appropriation is onetime.
Sec. 4. ATTORNEY
GENERAL |
|
|
|
|
Subdivision 1. Total
Appropriation |
|
$691,000 |
|
$691,000 |
Appropriations by Fund |
||
|
2024 |
2025 |
General |
691,000 |
691,000 |
The amounts that may be
spent for each purpose are specified in the following subdivisions.
Subd. 2. Excessive
Price Increases to Generic Drugs |
|
549,000 |
|
549,000 |
$549,000 each year is for
the duties under Minnesota Statutes, sections 62J.841 to 64J.845.
Subd. 3.
Report. |
|
142,000 |
|
142,000 |
(a) $142,000 each year is
for a report on the effect of new and emerging technologies on the well-being
of Minnesotans. The appropriations in
this paragraph are onetime. The report
must:
(1) evaluate the impact of
technology companies and their products on the mental health and well-being of
Minnesotans, with a focus on children;
(2) discuss proposed and
enacted consumer protection laws related to
the regulation of technology companies in other jurisdictions; and
(3) include policy
recommendations to the Minnesota legislature.
(b) The report is due
beginning February 1, 2024, and by the same date the following year and must be
filed according to Minnesota Statutes, section 3.195, with copies submitted to
the chairs and ranking minority members of the legislative committees with
jurisdiction over data and commerce.
Sec. 5. DEPARTMENT
OF HEALTH |
|
|
|
|
Subdivision 1. Total
Appropriation |
|
$74,000 |
|
$56,000 |
Appropriations by Fund |
||
|
2024 |
2025 |
General |
74,000 |
56,000 |
(a) $69,000 in the first
year and $51,000 in the second year are for the duties under Minnesota
Statutes, sections 62J.841 to 64J.845.
(b) $5,000 each year is to
evaluate existing statutory health benefit mandates.
Sec. 6. PREMIUM
SECURITY ACCOUNT TRANSFER; OUT.
$275,775,000 in fiscal
year 2026 is transferred from the premium security plan account under Minnesota
Statutes, section 62E.25, subdivision 1, to the general fund. This is a onetime transfer.
Sec. 7. TRANSFER
FROM CONSUMER EDUCATION ACCOUNT.
$100,000 in fiscal year
2024 is transferred from the consumer education account in the special revenue
fund to the general fund.
Sec. 8. Laws 2022, chapter 93, article 1, section 2, subdivision 5, is amended to read:
Subd. 5. Enforcement
and Examinations |
|
-0- |
|
522,000 |
$522,000 in fiscal year 2023 is for the auto theft prevention library under Minnesota Statutes, section 65B.84, subdivision 1, paragraph (d). This is a onetime appropriation and is available until June 30, 2024.
EFFECTIVE DATE. This
section is effective the day following final enactment.
ARTICLE 2
INSURANCE POLICY
Section 1. Minnesota Statutes 2022, section 60A.08, subdivision 15, is amended to read:
Subd. 15. Classification of insurance filings data. (a) All forms, rates, and related information filed with the commissioner under section 61A.02 shall be nonpublic data until the filing becomes effective.
(b) All forms, rates, and related information filed with the commissioner under section 62A.02 shall be nonpublic data until the filing becomes effective.
(c) All forms, rates, and related information filed with the commissioner under section 62C.14, subdivision 10, shall be nonpublic data until the filing becomes effective.
(d) All forms, rates, and related information filed with the commissioner under section 70A.06 shall be nonpublic data until the filing becomes effective.
(e) All forms, rates, and related information filed with the commissioner under section 79.56 shall be nonpublic data until the filing becomes effective.
(f) All forms, rates, and
related information filed with the commissioner under section 65A.298 are
nonpublic data until the filing becomes effective.
(f) (g) Notwithstanding
paragraphs (b) and (c), for all rate increases subject to review under section
2794 of the Public Health Services Act and any amendments to, or regulations,
or guidance issued under the act that are filed with the commissioner on or after
September 1, 2011, the commissioner:
(1) may acknowledge receipt of the information;
(2) may acknowledge that the corresponding rate filing is pending review;
(3) must provide public access from the Department of Commerce's website to parts I and II of the Preliminary Justifications of the rate increases subject to review; and
(4) must provide notice to the public on the Department of Commerce's website of the review of the proposed rate, which must include a statement that the public has 30 calendar days to submit written comments to the commissioner on the rate filing subject to review.
(g) (h) Notwithstanding
paragraphs (b) and (c), for all proposed premium rates filed with the
commissioner for individual health plans, as defined in section 62A.011,
subdivision 4, and small group health plans, as defined in section 62K.03,
subdivision 12, the commissioner must provide public access on the Department
of Commerce's
website to compiled data of the proposed changes to rates, separated by health plan and geographic rating area, within ten business days after the deadline by which health carriers, as defined in section 62A.011, subdivision 2, must submit proposed rates to the commissioner for approval.
Sec. 2. [60A.0812]
PROPERTY AND CASUALTY POLICY EXCLUSIONS.
Subdivision 1. Short
title. This section may be
cited as the "Family Protection Act."
Subd. 2. Definitions. (a) For purposes of this section, the
following terms have the meanings given.
(b) "Boat"
means a motorized or nonmotorized vessel that floats and is used for personal,
noncommercial use on waters in Minnesota.
(c) "Boat insurance
policy" means an insurance policy that provides liability coverage for
bodily injury resulting from the ownership, maintenance, or use of a boat,
although the policy may also provide for property insurance coverage for the
boat for noncommercial use.
(d) "Insured"
means an insured under a policy specified in subdivision 3, clauses (1) to (4),
including the named insured and the following persons not identified by name as
an insured while residing in the same household with the named insured:
(1) a spouse of a named
insured;
(2) a relative of a
named insured; or
(3) a minor in the
custody of a named insured, spouse of a named insured, or of a relative
residing in the same household with a named insured.
For purposes of this section, a person
resides in or is a member of the same household with the named insured if the
person's home is usually in the same family unit, even if the person is
temporarily living elsewhere.
(e) "Permitted
exclusion" means an exclusion of or limitation on liability for damages
for bodily injury resulting from fraud, intentional conduct, criminal conduct
that intentionally causes an injury, and other exclusions permitted by law,
including a permitted exclusion contained in a boat insurance policy issued in
this state pursuant to subdivision 6.
(f) "Prohibited
exclusion" means an exclusion of or limitation on liability for damages
for bodily injury because the injured person is:
(1) an insured other
than a named insured;
(2) a resident or member
of the insured's household; or
(3) related to the
insured by blood or marriage.
Subd. 3. Prohibited
exclusions. A prohibited
exclusion contained in a plan or policy identified in clauses (1) to (4) is
against public policy and is void. The
following insurance coverage issued in this state must not contain a prohibited
exclusion, unless expressly provided otherwise under this section:
(1) a plan of reparation
security, as defined under section 65B.43;
(2) a boat insurance policy;
(3) a personal excess
liability policy; and
(4) a personal umbrella
policy.
Subd. 4. Permitted
exclusions. An insurance
policy listed in this section may contain a permitted exclusion for bodily
injury to an insured.
Subd. 5. Underlying
coverage requirement. An
excess or umbrella policy may contain a requirement that coverage for family or
household members under an excess or umbrella policy governed by this section
is available only to the extent coverage is first available from an underlying
policy that provides coverage for damages for bodily injury.
Subd. 6. Election
of coverage for boat insurance policies.
(a) An insurer issuing bodily injury liability coverage for a
boat insurance policy under this section must notify a person at the time of
sale of the person's rights under this section to decline coverage for insureds
and be provided an updated quote reflecting the appropriate premium for the
coverage provided.
(b) Named insureds must
affirmatively make an election to decline coverage, in a form approved by the
commissioner, after being informed that an updated quote will be provided. The election must be signed and dated, and is
binding on all persons insured under the policy and to any renewal of the
policy.
(c) An insurer offering
an election of coverage under this subdivision must have the disclosure
approved by the commissioner. The notice
must be in 14-point bold type, in a conspicuous location of the notice
document, and contain at least the following:
ELECTION TO DECLINE
COVERAGE: YOU HAVE THE RIGHT TO DECLINE
BODILY INJURY COVERAGE FOR INJURIES TO YOUR FAMILY AND HOUSEHOLD MEMBERS FOR
WHICH YOU WOULD OTHERWISE BE ENTITLED TO UNDER MINNESOTA LAW. IF YOU ELECT TO DECLINE THIS COVERAGE, YOU
WILL RECEIVE AN UPDATED PREMIUM QUOTE BASED ON THE COVERAGE YOU ARE ELECTING TO
PURCHASE. READ YOUR POLICY CAREFULLY TO
DETERMINE WHICH FAMILY AND HOUSEHOLD MEMBERS WOULD NOT BE COVERED FOR BODILY
INJURY IF YOU ELECT TO DECLINE COVERAGE.
Subd. 7. No
endorsement required. An
endorsement, rider, or contract amendment is not required for this section to
be effective.
EFFECTIVE DATE. This
section is effective January 1, 2024, for plans of reparation security, as
defined under Minnesota Statutes, section 65B.43, a personal excess liability
policy, or a personal umbrella policy offered, issued, or renewed on or after
that date. This section is effective on
May 1, 2024, for a boat insurance policy covering a personal injury sustained
while using a boat.
Sec. 3. Minnesota Statutes 2022, section 60A.14, subdivision 1, is amended to read:
Subdivision 1. Fees other than examination fees. In addition to the fees and charges provided for examinations, the following fees must be paid to the commissioner for deposit in the general fund:
(a) by township mutual fire insurance companies:
(1) for filing certificate of incorporation $25 and amendments thereto, $10;
(2) for filing annual statements, $15;
(3) for each annual certificate of authority, $15;
(4) for filing bylaws $25 and amendments thereto, $10;
(b) by other domestic and foreign companies including fraternals and reciprocal exchanges:
(1) for filing an application for an initial certification of authority to be admitted to transact business in this state, $1,500;
(2) for filing certified copy of certificate of articles of incorporation, $100;
(3) for filing annual
statement, $225 $300;
(4) for filing certified copy of amendment to certificate or articles of incorporation, $100;
(5) for filing bylaws, $75 or amendments thereto, $75;
(6) for each company's
certificate of authority, $575 $750, annually;
(c) the following general fees apply:
(1) for each certificate, including certified copy of certificate of authority, renewal, valuation of life policies, corporate condition or qualification, $25;
(2) for each copy of paper on file in the commissioner's office 50 cents per page, and $2.50 for certifying the same;
(3) for license to procure insurance in unadmitted foreign companies, $575;
(4) for valuing the
policies of life insurance companies, one cent two cents per
$1,000 of insurance so valued, provided that the fee shall not exceed $13,000
$26,000 per year for any company.
The commissioner may, in lieu of a valuation of the policies of any
foreign life insurance company admitted, or applying for admission, to do
business in this state, accept a certificate of valuation from the company's
own actuary or from the commissioner of insurance of the state or territory in
which the company is domiciled;
(5) for receiving and filing certificates of policies by the company's actuary, or by the commissioner of insurance of any other state or territory, $50;
(6) for each appointment of an agent filed with the commissioner, $30;
(7) for filing forms, rates, and compliance certifications under section 60A.315, $140 per filing, or $125 per filing when submitted via electronic filing system. Filing fees may be paid on a quarterly basis in response to an invoice. Billing and payment may be made electronically;
(8) for annual renewal of
surplus lines insurer license, $300 $400.
The commissioner shall adopt rules to define filings that are subject to a fee.
Sec. 4. Minnesota Statutes 2022, section 61A.031, is amended to read:
61A.031 SUICIDE PROVISIONS.
(a) The sanity or
insanity of a person shall not be a factor in determining whether a person
committed suicide within the terms of an individual or group life insurance
policy regulating the payment of benefits in the event of the insured's suicide. This section paragraph shall
not be construed to alter present law but is intended to clarify present law.
(b) A life insurance
policy or certificate issued or delivered in this state may exclude or restrict
liability for any death benefit in the event the insured dies as a result of
suicide within one year from the date of the issue of the policy or certificate. Any exclusion or restriction shall be clearly
stated in the policy or certificate. Any
life insurance policy or certificate which contains any exclusion or
restriction under this paragraph shall also provide that in the event any death
benefit is denied because the insured dies as a result of suicide within one
year from the date of issue of the policy or certificate, the insurer shall
refund all premiums paid for coverage providing the denied death benefit on the
insured.
EFFECTIVE DATE. This section is effective January 1, 2024, and
applies to policies issued on or after that date.
Sec. 5. Minnesota Statutes 2022, section 61A.60, subdivision 3, is amended to read:
Subd. 3. Definitions. The following definitions must appear on the back of the notice forms provided in subdivisions 1 and 2:
DEFINITIONS
PREMIUMS: Premiums are the payments you make in exchange for an insurance policy or annuity contract. They are unlike deposits in a savings or investment program, because if you drop the policy or contract, you might get back less than you paid in.
CASH SURRENDER VALUE: This is the amount of money you can get in cash if you surrender your life insurance policy or annuity. If there is a policy loan, the cash surrender value is the difference between the cash value printed in the policy and the loan value. Not all policies have cash surrender values.
LAPSE: A life insurance policy may lapse when you do not pay the premiums within the grace period. If you had a cash surrender value, the insurer might change your policy to as much extended term insurance or paid-up insurance as the cash surrender value will buy. Sometimes the policy lets the insurer borrow from the cash surrender value to pay the premiums.
SURRENDER: You surrender a life insurance policy when you either let it lapse or tell the company you want to drop it. Whenever a policy has a cash surrender value, you can get it in cash if you return the policy to the company with a written request. Most insurers will also let you exchange the cash value of the policy for paid-up or extended term insurance.
CONVERT TO PAID-UP INSURANCE: This means you use your cash surrender value to change your insurance to a paid-up policy with the same insurer. The death benefit generally will be lower than under the old policy, but you will not have to pay any more premiums.
PLACE ON EXTENDED TERM: This means you use your cash surrender value to change your insurance to term insurance with the same insurer. In this case, the net death benefit will be the same as before. However, you will only be covered for a specified period of time stated in the policy.
BORROW POLICY LOAN VALUES: If your life insurance policy has a cash surrender value, you can almost always borrow all or part of it from the insurer. Interest will be charged according to the terms of the policy, and if the loan with unpaid interest ever exceeds the cash surrender value, your policy will be surrendered. If you die, the amount of the loan and any unpaid interest due will be subtracted from the death benefits.
EVIDENCE OF INSURABILITY: This means proof that you are an acceptable risk. You have to meet the insurer's standards regarding age, health, occupation, etc., to be eligible for coverage.
INCONTESTABLE CLAUSE: This says that after two years, depending on the policy or insurer, the life insurer will not resist a claim because you made a false or incomplete statement when you applied for the policy. For the early years, though, if there are wrong answers on the application and the insurer finds out about them, the insurer can deny a claim as if the policy had never existed.
SUICIDE CLAUSE: This says that if you commit complete
suicide after being insured for less than two years one year,
depending on the policy and insurer, your beneficiaries will receive only a
refund of the premiums that were paid.
EFFECTIVE DATE. This section is effective January 1, 2024, and
applies to policies issued on or after that date.
Sec. 6. Minnesota Statutes 2022, section 62A.152, subdivision 3, is amended to read:
Subd. 3. Provider discrimination prohibited. All group policies and group subscriber contracts that provide benefits for mental or nervous disorder treatments in a hospital must provide direct reimbursement for those services at a hospital or psychiatric residential treatment facility if performed by a mental health professional qualified according to section 245I.04, subdivision 2, to the extent that the services and treatment are within the scope of mental health professional licensure.
This subdivision is intended to provide payment of benefits for mental or nervous disorder treatments performed by a licensed mental health professional in a hospital or psychiatric residential treatment facility and is not intended to change or add benefits for those services provided in policies or contracts to which this subdivision applies.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 7. Minnesota Statutes 2022, section 62A.3099, is amended by adding a subdivision to read:
Subd. 18b. Open
enrollment period. "Open
enrollment period" means the time period described in Code of Federal
Regulations, title 42, section 422.62, paragraph (a), clauses (2) to (4), as
amended.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 8. Minnesota Statutes 2022, section 62A.31, subdivision 1, is amended to read:
Subdivision 1. Policy
requirements. No individual or group
policy, certificate, subscriber contract issued by a health service plan
corporation regulated under chapter 62C, or other evidence of accident and
health insurance the effect or purpose of which is to supplement Medicare
coverage, including to supplement coverage under Medicare Advantage plans
established under Medicare Part C, issued or delivered in this state or offered
to a resident of this state shall be sold or issued to an individual covered by
Medicare unless the requirements in subdivisions 1a to 1v 1w are
met.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 9. Minnesota Statutes 2022, section 62A.31, subdivision 1f, is amended to read:
Subd. 1f. Suspension based on entitlement to medical assistance. (a) The policy or certificate must provide that benefits and premiums under the policy or certificate shall be suspended for any period that may be provided by federal regulation at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to this assistance.
(b) If suspension occurs and if the policyholder or certificate holder loses entitlement to this medical assistance, the policy or certificate shall be automatically reinstated, effective as of the date of termination of this entitlement, if the policyholder or certificate holder provides notice of loss of the entitlement within 90 days after the date of the loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.
(c) The policy must provide
that upon reinstatement (1) there is no additional waiting period with
respect to treatment of preexisting conditions, (2) coverage is provided which
is substantially equivalent to coverage in effect before the date of the
suspension. If the suspended policy
provided coverage for outpatient prescription drugs, reinstitution of the
policy for Medicare Part D enrollees must be without coverage for outpatient
prescription drugs and must otherwise provide coverage substantially equivalent
to the coverage in effect before the date of suspension, and (3) premiums are
classified on terms that are at least as favorable to the policyholder or
certificate holder as the premium classification terms that would have applied
to the policyholder or certificate holder had coverage not been suspended.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 10. Minnesota Statutes 2022, section 62A.31, subdivision 1h, is amended to read:
Subd. 1h. Limitations on denials, conditions, and pricing of coverage. No health carrier issuing Medicare‑related coverage in this state may impose preexisting condition limitations or otherwise deny or condition the issuance or effectiveness of any such coverage available for sale in this state, nor may it discriminate in the pricing of such coverage, because of the health status, claims experience, receipt of health care, medical condition, or age of an applicant where an application for such coverage is submitted: (1) prior to or during the six-month period beginning with the first day of the month in which an individual first enrolled for benefits under Medicare Part B; or (2) during the open enrollment period. This subdivision applies to each Medicare-related coverage offered by a health carrier regardless of whether the individual has attained the age of 65 years. If an individual who is enrolled in Medicare Part B due to disability status is involuntarily disenrolled due to loss of disability status, the individual is eligible for another six-month enrollment period provided under this subdivision beginning the first day of the month in which the individual later becomes eligible for and enrolls again in Medicare Part B and during the open enrollment period. An individual who is or was previously enrolled in Medicare Part B due to disability status is eligible for another six-month enrollment period under this subdivision beginning the first day of the month in which the individual has attained the age of 65 years and either maintains enrollment in, or enrolls again in, Medicare Part B and during the open enrollment period. If an individual enrolled in Medicare Part B voluntarily disenrolls from Medicare Part B because the individual becomes enrolled under an employee welfare benefit plan, the individual is eligible for another six-month enrollment period, as provided in this subdivision, beginning the first day of the month in which the individual later becomes eligible for and enrolls again in Medicare Part B and during the open enrollment period.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 11. Minnesota Statutes 2022, section 62A.31, subdivision 1p, is amended to read:
Subd. 1p. Renewal
or continuation provisions. Medicare
supplement policies and certificates shall include a renewal or continuation
provision. The language or
specifications of the provision shall be consistent with the type of contract
issued. The provision shall be
appropriately captioned and shall appear on the first page of the policy or
certificate, and shall include any reservation by the issuer of the right to
change premiums. Except for riders or
endorsements by which the issuer effectuates a request made in writing by the
insured, exercises a specifically reserved right under a Medicare supplement
policy or certificate, or is required to reduce or eliminate benefits to avoid
duplication of Medicare benefits, all riders or endorsements added to a
Medicare supplement policy or certificate after the date of issue or at
reinstatement or renewal that reduce or eliminate benefits or coverage in the
policy or certificate shall require a signed acceptance by the insured. After the date of policy or certificate
issue, a rider or endorsement that increases benefits or coverage with a
concomitant increase in premium during the policy or certificate term shall be
agreed to in writing and signed by the insured, unless the benefits are
required by the minimum standards for Medicare supplement policies or if the
increased benefits or coverage is required by law. Where a separate additional premium is
charged for benefits provided in connection with riders or endorsements, the
premium charge shall be set forth in the policy, declaration page, or
certificate. If a Medicare supplement
policy or certificate contains limitations with respect to preexisting
conditions, the limitations shall appear as a separate paragraph of the policy
or certificate and be labeled as "preexisting condition limitations."
Issuers of accident and sickness policies or certificates that provide hospital or medical expense coverage on an expense incurred or indemnity basis to persons eligible for Medicare shall provide to those applicants a "Guide to Health Insurance for People with Medicare" in the form developed by the Centers for Medicare and Medicaid Services and in a type size no smaller than 12-point type. Delivery of the guide must be made whether or not such policies or certificates are advertised, solicited, or issued as Medicare supplement policies or certificates as defined in this section and section 62A.3099. Except in the case of direct response issuers, delivery of the guide must be made to the applicant at the time of application, and acknowledgment of receipt of the guide must be obtained by the issuer. Direct response issuers shall deliver the guide to the applicant upon request, but no later than the time at which the policy is delivered.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 12. Minnesota Statutes 2022, section 62A.31, subdivision 1u, is amended to read:
Subd. 1u. Guaranteed issue for eligible persons. (a)(1) Eligible persons are those individuals described in paragraph (b) who seek to enroll under the policy during the period specified in paragraph (c) and who submit evidence of the date of termination or disenrollment described in paragraph (b), or of the date of Medicare Part D enrollment, with the application for a Medicare supplement policy.
(2) With respect to eligible persons, an issuer shall not: deny or condition the issuance or effectiveness of a Medicare supplement policy described in paragraph (c) that is offered and is available for issuance to new enrollees by the issuer; discriminate in the pricing of such a Medicare supplement policy because of health status, claims experience, receipt of health care, medical condition, or age; or impose an exclusion of benefits based upon a preexisting condition under such a Medicare supplement policy.
(b) An eligible person is an individual described in any of the following:
(1) the individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare; and the plan terminates, or the plan ceases to provide all such supplemental health benefits to the individual;
(2) the individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under section 1894 of the federal Social Security Act, and there are circumstances similar to those described in this clause that would permit discontinuance of the individual's enrollment with the provider if the individual were enrolled in a Medicare Advantage plan:
(i) the organization's or plan's certification under Medicare Part C has been terminated or the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;
(ii) the individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the secretary, but not including termination of the individual's enrollment on the basis described in section 1851(g)(3)(B) of the federal Social Security Act, United States Code, title 42, section 1395w-21(g)(3)(b) (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under section 1856 of the federal Social Security Act, United States Code, title 42, section 1395w-26), or the plan is terminated for all individuals within a residence area;
(iii) the individual demonstrates, in accordance with guidelines established by the Secretary, that:
(A) the organization offering the plan substantially violated a material provision of the organization's contract in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards; or
(B) the organization, or agent or other entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual; or
(iv) the individual meets such other exceptional conditions as the secretary may provide;
(3)(i) the individual is enrolled with:
(A) an eligible organization under a contract under section 1876 of the federal Social Security Act, United States Code, title 42, section 1395mm (Medicare cost);
(B) a similar organization operating under demonstration project
authority, effective for periods before April 1, 1999;
(C) an organization under an agreement under section 1833(a)(1)(A) of the federal Social Security Act, United States Code, title 42, section 1395l(a)(1)(A) (health care prepayment plan); or
(D) an organization under a Medicare Select policy under section 62A.318
or the similar law of another state; and
(ii) the enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under clause (2);
(4) the individual is enrolled under a Medicare supplement policy, and the enrollment ceases because:
(i)(A) of the insolvency of the issuer or bankruptcy of the nonissuer organization; or
(B) of other involuntary termination of coverage or enrollment under the policy;
(ii) the issuer of the policy substantially violated a material provision of the policy; or
(iii) the issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual;
(5)(i) the individual was enrolled under a Medicare supplement policy and terminates that enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C; any eligible organization under a contract under section 1876 of the federal Social Security Act, United States Code, title 42, section 1395mm (Medicare cost); any similar organization operating under demonstration project authority; any PACE provider under section 1894 of the federal Social Security Act, or a Medicare Select policy under section 62A.318 or the similar law of another state; and
(ii) the subsequent enrollment under item (i) is terminated by the enrollee during any period within the first 12 months of the subsequent enrollment during which the enrollee is permitted to terminate the subsequent enrollment under section 1851(e) of the federal Social Security Act;
(6) the individual, upon
first enrolling for benefits under Medicare Part B, enrolls in a Medicare
Advantage plan under Medicare Part C, or with a PACE provider under section
1894 of the federal Social Security Act, and disenrolls from the plan by not
later than 12 months after the effective date of enrollment; or
(7) the individual enrolls
in a Medicare Part D plan during the initial Part D enrollment period, as
defined under United States Code, title 42, section 1395ss(v)(6)(D), and, at
the time of enrollment in Part D, was enrolled under a Medicare supplement
policy that covers outpatient prescription drugs and the individual terminates
enrollment in the Medicare supplement policy and submits evidence of enrollment
in Medicare Part D along with the application for a policy described in
paragraph (e), clause (4).; or
(8) the individual was
enrolled in a state public program and is losing coverage due to the unwinding
of the Medicaid continuous enrollment conditions, as provided by Code of
Federal Regulations, title 45, section 155.420(d)(9) and (d)(1), and Public Law
117-328, section 5131 (2022).
(c)(1) In the case of an individual described in paragraph (b), clause (1), the guaranteed issue period begins on the later of: (i) the date the individual receives a notice of termination or cessation of all supplemental health benefits or, if a notice is not received, notice that a claim has been denied because of a termination or cessation; or (ii) the date that the applicable coverage terminates or ceases; and ends 63 days after the later of those two dates.
(2) In the case of an individual described in paragraph (b), clause (2), (3), (5), or (6), whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated.
(3) In the case of an individual described in paragraph (b), clause (4), item (i), the guaranteed issue period begins on the earlier of: (i) the date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice if any; and (ii) the date that the applicable coverage is terminated, and ends on the date that is 63 days after the date the coverage is terminated.
(4) In the case of an individual described in paragraph (b), clause (2), (4), (5), or (6), who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date.
(5) In the case of an individual described in paragraph (b), clause (7), the guaranteed issue period begins on the date the individual receives notice pursuant to section 1882(v)(2)(B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Part D enrollment period and ends on the date that is 63 days after the effective date of the individual's coverage under Medicare Part D.
(6) In the case of an individual described in paragraph (b) but not described in this paragraph, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date.
(7) For all individuals
described in paragraph (b), the open enrollment period is a guaranteed issue
period.
(d)(1) In the case of an individual described in paragraph (b), clause (5), or deemed to be so described, pursuant to this paragraph, whose enrollment with an organization or provider described in paragraph (b), clause (5), item (i), is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with another such organization or provider, the subsequent enrollment is deemed to be an initial enrollment described in paragraph (b), clause (5).
(2) In the case of an individual described in paragraph (b), clause (6), or deemed to be so described, pursuant to this paragraph, whose enrollment with a plan or in a program described in paragraph (b), clause (6), is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment is deemed to be an initial enrollment described in paragraph (b), clause (6).
(3) For purposes of paragraph (b), clauses (5) and (6), no enrollment of an individual with an organization or provider described in paragraph (b), clause (5), item (i), or with a plan or in a program described in paragraph (b), clause (6), may be deemed to be an initial enrollment under this paragraph after the two-year period beginning on the date on which the individual first enrolled with the organization, provider, plan, or program.
(e) The Medicare supplement policy to which eligible persons are entitled under:
(1) paragraph (b), clauses (1) to (4), is any Medicare supplement policy that has a benefit package consisting of the basic Medicare supplement plan described in section 62A.316, paragraph (a), plus any combination of the three optional riders described in section 62A.316, paragraph (b), clauses (1) to (3), offered by any issuer;
(2) paragraph (b), clause (5), is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, any policy described in clause (1) offered by any issuer, except that after December 31, 2005, if the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, a Medicare supplement policy to which the individual is entitled under paragraph (b), clause (5), is:
(i) the policy available from the same issuer but modified to remove outpatient prescription drug coverage; or
(ii) at the election of the policyholder, a policy described in clause (4), except that the policy may be one that is offered and available for issuance to new enrollees that is offered by any issuer;
(3) paragraph (b), clause (6), is any Medicare supplement policy offered by any issuer;
(4) paragraph (b), clause (7), is a Medicare supplement policy that has a benefit package classified as a basic plan under section 62A.316 if the enrollee's existing Medicare supplement policy is a basic plan or, if the enrollee's existing Medicare supplement policy is an extended basic plan under section 62A.315, a basic or extended basic plan at the option of the enrollee, provided that the policy is offered and is available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with outpatient prescription drug coverage. The issuer must permit the enrollee to retain all optional benefits contained in the enrollee's existing coverage, other than outpatient prescription drugs, subject to the provision that the coverage be offered and available for issuance to new enrollees by the same issuer.
(f)(1) At the time of an event described in paragraph (b), because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of the individual's rights under this subdivision, and of the obligations of issuers of Medicare supplement policies under paragraph (a). The notice must be communicated contemporaneously with the notification of termination.
(2) At the time of an event described in paragraph (b), because of which an individual ceases enrollment under a contract or agreement, policy, or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of the individual's rights under this subdivision, and of the obligations of issuers of Medicare supplement policies under paragraph (a). The notice must be communicated within ten working days of the issuer receiving notification of disenrollment.
(g) Reference in this subdivision to a situation in which, or to a basis upon which, an individual's coverage has been terminated does not provide authority under the laws of this state for the termination in that situation or upon that basis.
(h) An individual's rights under this subdivision are in addition to, and do not modify or limit, the individual's rights under subdivision 1h.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 13. Minnesota Statutes 2022, section 62A.31, is amended by adding a subdivision to read:
Subd. 1w. Open
enrollment. A medicare
supplement policy or certificate must not be sold or issued to an eligible
individual outside of the time periods described in subdivision 1u.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 14. Minnesota Statutes 2022, section 62A.31, subdivision 4, is amended to read:
Subd. 4. Prohibited policy provisions. (a) A Medicare supplement policy or certificate in force in the state shall not contain benefits that duplicate benefits provided by Medicare or contain exclusions on coverage that are more restrictive than those of Medicare. Duplication of benefits is permitted to the extent permitted under subdivision 1s, paragraph (a), for benefits provided by Medicare Part D.
(b) No Medicare supplement
policy or certificate may use waivers to exclude, limit, or reduce coverage or
benefits for specifically named or described preexisting diseases or physical
conditions, except as permitted under subdivision 1b.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 15. Minnesota Statutes 2022, section 62A.44, subdivision 2, is amended to read:
Subd. 2. Questions. (a) Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another Medicare supplement or other health insurance policy or certificate in force or whether a Medicare supplement policy or certificate is intended to replace any other accident and sickness policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent containing the questions and statements may be used.
"(1) You do not need more than one Medicare supplement policy or certificate.
(2) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.
(3) You may be eligible for benefits under Medicaid and may not need a Medicare supplement policy or certificate.
(4) The benefits and premiums under your Medicare supplement policy or certificate can be suspended, if requested, during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your policy or certificate will be reinstated if requested within 90 days of losing Medicaid eligibility.
(5) Counseling services may be available in Minnesota to provide advice concerning medical assistance through state Medicaid, Qualified Medicare Beneficiaries (QMBs), and Specified Low-Income Medicare Beneficiaries (SLMBs).
To the best of your knowledge:
(1) Do you have another Medicare supplement policy or certificate in force?
(a) If so, with which company?
(b) If so, do you intend to replace your current Medicare supplement policy with this policy or certificate?
(2) Do you have any other health insurance policies that provide benefits which this Medicare supplement policy or certificate would duplicate?
(a) If so, please name the company.
(b) What kind of policy?
(3) Are you covered for medical assistance through the state Medicaid program? If so, which of the following programs provides coverage for you?
(a) Specified Low-Income Medicare Beneficiary (SLMB),
(b) Qualified Medicare Beneficiary (QMB), or
(c) full Medicaid Beneficiary?"
(b) Agents shall list any other health insurance policies they have sold to the applicant.
(1) List policies sold that are still in force.
(2) List policies sold in the past five years that are no longer in force.
(c) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant, and acknowledged by the insurer, shall be returned to the applicant by the insurer on delivery of the policy or certificate.
(d) Upon determining that a sale will involve replacement of Medicare supplement coverage, any issuer, other than a direct response issuer, or its agent, shall furnish the applicant, before issuance or delivery of the Medicare supplement policy or certificate, a notice regarding replacement of Medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except where the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy or certificate the notice regarding replacement of Medicare supplement coverage.
(e) The notice required by paragraph (d) for an issuer shall be provided in substantially the following form in no less than 12-point type:
"NOTICE TO APPLICANT REGARDING REPLACEMENT OF
MEDICARE SUPPLEMENT INSURANCE
(Insurance company's name and address)
SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
According to (your application) (information you have furnished), you intend to terminate existing Medicare supplement insurance and replace it with a policy or certificate to be issued by (Company Name) Insurance Company. Your new policy or certificate will provide 30 days within which you may decide without cost whether you desire to keep the policy or certificate.
You should review this new coverage carefully. Compare it with all accident and sickness coverage you now have. If, after due consideration, you find that purchase of this Medicare supplement coverage is a wise decision you should terminate your present Medicare supplement policy. You should evaluate the need for other accident and sickness coverage you have that may duplicate this policy.
STATEMENT TO APPLICANT BY ISSUER, AGENT, (BROKER OR OTHER REPRESENTATIVE): I have reviewed your current medical or health insurance coverage. To the best of my knowledge this Medicare supplement policy will not duplicate your existing Medicare supplement policy because you intend to terminate the existing Medicare supplement policy. The replacement policy or certificate is being purchased for the following reason(s) (check one):
Additional benefits |
|
No change in benefits, but lower premiums |
|
Fewer benefits and lower premiums |
|
Other (please specify) |
|
|
|
|
|
|
(1) Health conditions which
you may presently have (preexisting conditions) may not be immediately or fully
covered under the new policy or certificate.
This could result in denial or delay of a claim for benefits under the
new policy or certificate, whereas a similar claim might have been payable
under your present policy or certificate.
(2) State law provides that
your replacement policy or certificate may not contain new preexisting
conditions, waiting periods, elimination periods, or probationary periods. The insurer will waive any time periods
applicable to preexisting conditions, waiting periods, elimination periods, or
probationary periods in the new policy (or coverage) for similar benefits to
the extent the time was spent (depleted) under the original policy or
certificate.
(3) If you still wish to
terminate your present policy or certificate and replace it with new coverage,
be certain to truthfully and completely answer all questions on the application
concerning your medical and health history.
Failure to include all material medical information on an application
may provide a basis for the company to deny any future claims and to refund
your premium as though your policy or certificate had never been in force. After the application has been completed and
before you sign it, review it carefully to be certain that all information has
been properly recorded. (If the policy
or certificate is guaranteed issue, this paragraph need not appear.)
Do not cancel your present policy or certificate until you have received your new policy or certificate and you are sure that you want to keep it.
.........................................................................................................................................
(Signature of Agent, Broker, or Other Representative)*
.........................................................................................................................................
(Typed Name and Address of Issuer, Agent, or Broker)
.........................................................................................................................................
(Date)
.........................................................................................................................................
(Applicant's Signature)
.........................................................................................................................................
(Date)
*Signature not required for direct response sales."
(f) Paragraph (e),
clauses (1) and (2), of the replacement notice (applicable to preexisting
conditions) may be deleted by an issuer if the replacement does not involve
application of a new preexisting condition limitation.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 16. Minnesota Statutes 2022, section 62D.02, is amended by adding a subdivision to read:
Subd. 17. Preventive
items and services. "Preventive
items and services" has the meaning given in section 62Q.46, subdivision
1, paragraph (a).
Sec. 17. Minnesota Statutes 2022, section 62D.095, subdivision 2, is amended to read:
Subd. 2. Co-payments. A health maintenance contract may impose a co-payment and coinsurance consistent with the provisions of the Affordable Care Act as defined under section 62A.011, subdivision 1a, and for items and services that are not preventive items and services.
Sec. 18. Minnesota Statutes 2022, section 62D.095, subdivision 3, is amended to read:
Subd. 3. Deductibles. A health maintenance contract may must
not impose a deductible consistent with the provisions of the Affordable
Care Act as defined under section 62A.011, subdivision 1a for preventive
items and services.
Sec. 19. Minnesota Statutes 2022, section 62D.095, subdivision 5, is amended to read:
Subd. 5. Exceptions. No Co-payments or deductibles may
must not be imposed on preventive health care items and
services consistent with the provisions of the Affordable Care Act as
defined under section 62A.011, subdivision 1a.
Sec. 20. Minnesota Statutes 2022, section 62J.26, subdivision 1, is amended to read:
Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given unless the context otherwise requires:
(1) "commissioner" means the commissioner of commerce;
(2) "enrollee" has the meaning given in section 62Q.01, subdivision 2b;
(3) "health plan" means a health plan as defined in section 62A.011, subdivision 3, but includes coverage listed in clauses (7) and (10) of that definition;
(4) "mandated health benefit proposal" or "proposal" means a proposal that would statutorily require a health plan company to do the following:
(i) provide coverage or increase the amount of coverage for the treatment of a particular disease, condition, or other health care need;
(ii) provide coverage or increase the amount of coverage of a particular type of health care treatment or service or of equipment, supplies, or drugs used in connection with a health care treatment or service;
(iii) provide coverage for care delivered by a specific type of provider;
(iv) require a particular benefit design or impose conditions on cost-sharing for:
(A) the treatment of a particular disease, condition, or other health care need;
(B) a particular type of health care treatment or service; or
(C) the provision of medical equipment, supplies, or a prescription drug used in connection with treating a particular disease, condition, or other health care need; or
(v) impose limits or conditions on a contract between a health plan company and a health care provider.
(b) "Mandated
health benefit proposal" does not include health benefit proposals:
(1) amending the
scope of practice of a licensed health care professional.; or
(2) that make state law
consistent with federal law.
EFFECTIVE DATE. This
section is effective the day following final enactment.
Sec. 21. Minnesota Statutes 2022, section 62J.26, subdivision 2, is amended to read:
Subd. 2. Evaluation process and content. (a) The commissioner, in consultation with the commissioners of health and management and budget, must evaluate all mandated health benefit proposals as provided under subdivision 3.
(b) The purpose of the evaluation is to provide the legislature with a complete and timely analysis of all ramifications of any mandated health benefit proposal. The evaluation must include, in addition to other relevant information, the following to the extent applicable:
(1) scientific and medical information on the mandated health benefit proposal, on the potential for harm or benefit to the patient, and on the comparative benefit or harm from alternative forms of treatment, and must include the results of at least one professionally accepted and controlled trial comparing the medical consequences of the proposed therapy, alternative therapy, and no therapy;
(2) public health, economic, and fiscal impacts of the mandated health benefit proposal on persons receiving health services in Minnesota, on the relative cost-effectiveness of the proposal, and on the health care system in general;
(3) the extent to which the treatment, service, equipment, or drug is generally utilized by a significant portion of the population;
(4) the extent to which insurance coverage for the mandated health benefit proposal is already generally available;
(5) the extent to which the mandated health benefit proposal, by health plan category, would apply to the benefits offered to the health plan's enrollees;
(6) the extent to which the mandated health benefit proposal will increase or decrease the cost of the treatment, service, equipment, or drug;
(7) the extent to which the mandated health benefit proposal may increase enrollee premiums; and
(8) if the proposal applies
to a qualified health plan as defined in section 62A.011, subdivision 7, the
cost to the state to defray the cost of the mandated health benefit proposal
using commercial market reimbursement rates in accordance with Code of Federal
Regulations, title 45, section 155.70 155.170.
(c) The commissioner shall consider actuarial analysis done by health plan companies and any other proponent or opponent of the mandated health benefit proposal in determining the cost of the proposal.
(d) The commissioner must
summarize the nature and quality of available information on these issues, and,
if possible, must provide preliminary information to the public. The commissioner may conduct research on
these issues or may determine that existing research is sufficient to meet the
informational needs of the legislature. The
commissioner may seek the assistance and advice of researchers, community
leaders, or other persons or organizations with relevant expertise. The commissioner must provide the public
with at least 45 days' notice when requesting information pursuant to this
section. The commissioner must notify
the chief authors of a bill when a request for information is issued.
(e) Information
submitted to the commissioner pursuant to this section that meets the
definition of trade secret information, as defined in section 13.37,
subdivision 1, paragraph (b), is nonpublic data.
Sec. 22. [62J.841]
DEFINITIONS.
Subdivision 1. Scope. For purposes of sections 62J.841 to
62J.845, the following definitions apply.
Subd. 2. Consumer
Price Index. "Consumer
Price Index" means the Consumer Price Index, Annual Average, for All Urban
Consumers, CPI-U: U.S. City Average, All
Items, reported by the United States Department of Labor, Bureau of Labor Statistics,
or its successor or, if the index is discontinued, an equivalent index reported
by a federal authority or, if no such index is reported, "Consumer Price
Index" means a comparable index chosen by the Bureau of Labor Statistics.
Subd. 3. Generic
or off-patent drug. "Generic
or off-patent drug" means any prescription drug for which any exclusive
marketing rights granted under the Federal Food, Drug, and Cosmetic Act,
section 351 of the federal Public Health Service Act, and federal patent law have
expired, including any drug-device combination product for the delivery of a
generic drug.
Subd. 4. Manufacturer. "Manufacturer" has the
meaning given in section 151.01, subdivision 14a, but does not include an
entity that must be licensed solely because the entity repackages or relabels
drugs.
Subd. 5. Prescription
drug. "Prescription
drug" means a drug for human use subject to United States Code, title 21,
section 353(b)(1).
Subd. 6. Wholesale
acquisition cost. "Wholesale
acquisition cost" has the meaning provided in United States Code, title
42, section 1395w-3a.
Subd. 7. Wholesale
distributor. "Wholesale
distributor" has the meaning provided in section 151.441, subdivision 14.
Sec. 23. [62J.842]
EXCESSIVE PRICE INCREASES PROHIBITED.
Subdivision 1. Prohibition. No manufacturer shall impose, or cause
to be imposed, an excessive price increase, whether directly or through a
wholesale distributor, pharmacy, or similar intermediary, on the sale of any
generic or off-patent drug sold, dispensed, or delivered to any consumer in the
state.
Subd. 2. Excessive
price increase. A price
increase is excessive for purposes of this section when:
(1) the price increase,
adjusted for inflation utilizing the Consumer Price Index, exceeds:
(i) 15 percent of the
wholesale acquisition cost over the immediately preceding calendar year; or
(ii) 40 percent of the
wholesale acquisition cost over the immediately preceding three calendar years;
and
(2) the price increase,
adjusted for inflation utilizing the Consumer Price Index, exceeds $30 for:
(i) a 30-day supply of
the drug; or
(ii) a course of
treatment lasting less than 30 days.
Subd. 3. Exemption. It is not a violation of this section
for a wholesale distributor or pharmacy to increase the price of a generic or
off-patent drug if the price increase is directly attributable to additional
costs for the drug imposed on the wholesale distributor or pharmacy by the
manufacturer of the drug.
Sec. 24. [62J.843]
REGISTERED AGENT AND OFFICE WITHIN THE STATE.
Any manufacturer that
sells, distributes, delivers, or offers for sale any generic or off-patent drug
in the state must maintain a registered agent and office within the state.
Sec. 25. [62J.844]
ENFORCEMENT.
Subdivision 1. Notification. (a) The commissioner of health shall
notify the manufacturer of a generic or off‑patent drug and the attorney
general of any price increase that the commissioner believes may violate
section 62J.842.
(b) The commissioner of
management and budget and any other state agency that provides or purchases a
pharmacy benefit except the Department of Human Services, and any entity under
contract with a state agency to provide a pharmacy benefit other than an entity
under contract with the Department of Human Services, may notify the
manufacturer of a generic or off-patent drug and the attorney general of any
price increase that the commissioner or entity believes may violate section
62J.842.
Subd. 2. Submission
of drug cost statement and other information by manufacturer; investigation by
attorney general. (a) Within
45 days of receiving a notice under subdivision 1, the manufacturer of the
generic or off-patent drug shall submit a drug cost statement to the attorney
general. The statement must:
(1) itemize the cost
components related to production of the drug;
(2) identify the
circumstances and timing of any increase in materials or manufacturing costs
that caused any increase during the
preceding calendar year, or preceding three calendar years as applicable, in
the price of the drug; and
(3) provide any other
information that the manufacturer believes to be relevant to a determination of
whether a violation of section 62J.842 has occurred.
(b) The attorney general
may investigate whether a violation of section 62J.842 has occurred, in
accordance with section 8.31, subdivision 2.
Subd. 3. Petition
to court. (a) On petition of
the attorney general, a court may issue an order:
(1) compelling the
manufacturer of a generic or off-patent drug to:
(i) provide the drug
cost statement required under subdivision 2, paragraph (a); and
(ii) answer
interrogatories, produce records or documents, or be examined under oath, as
required by the attorney general under subdivision 2, paragraph (b);
(2) restraining or
enjoining a violation of sections 62J.841 to 62J.845, including issuing an
order requiring that drug prices be restored to levels that comply with section
62J.842;
(3) requiring the
manufacturer to provide an accounting to the attorney general of all revenues
resulting from a violation of section 62J.842;
(4) requiring the
manufacturer to repay to all Minnesota consumers, including any third-party
payers, any money acquired as a result of a price increase that violates
section 62J.842;
(5) notwithstanding section
16A.151, requiring that all revenues generated from a violation of section
62J.842 be remitted to the state and deposited into a special fund, to be used
for initiatives to reduce the cost to consumers of acquiring prescription drugs,
if a manufacturer is unable to determine the individual transactions necessary
to provide the repayments described in clause (4);
(6) imposing a civil
penalty of up to $10,000 per day for each violation of section 62J.842;
(7) providing for the attorney
general's recovery of costs and disbursements incurred in bringing an action
against a manufacturer found in violation of section 62J.842, including the
costs of investigation and reasonable attorney's fees; and
(8) providing any other
appropriate relief, including any other equitable relief as determined by the
court.
(b) For purposes of
paragraph (a), clause (6), every individual transaction in violation of section
62J.842 is considered a separate violation.
Subd. 4. Private
right of action. Any action
brought pursuant to section 8.31, subdivision 3a, by a person injured by a
violation of section 62J.842 is for the benefit of the public.
Sec. 26. [62J.845]
PROHIBITION ON WITHDRAWAL OF GENERIC OR OFF-PATENT DRUGS FOR SALE.
Subdivision 1. Prohibition. A manufacturer of a generic or
off-patent drug is prohibited from withdrawing that drug from sale or
distribution within this state for the purpose of avoiding the prohibition on
excessive price increases under section 62J.842.
Subd. 2. Notice
to board and attorney general. Any
manufacturer that intends to withdraw a generic or off‑patent drug from
sale or distribution within the state shall provide a written notice of
withdrawal to the attorney general at least 90 days prior to the withdrawal.
Subd. 3. Financial
penalty. The attorney general
shall assess a penalty of $500,000 on any manufacturer of a generic or
off-patent drug that the attorney general determines has failed to comply with
the requirements of this section.
Sec. 27. [62J.846]
SEVERABILITY.
If any provision of
sections 62J.841 to 62J.845 or the application thereof to any person or
circumstance is held invalid for any reason in a court of competent
jurisdiction, the invalidity does not affect other provisions or any other application
of sections 62J.841 to 62J.845 that can be given effect without the invalid
provision or application.
Sec. 28. [62J.85]
CITATION.
Sections 62J.85 to
62J.95 may be cited as the "Prescription Drug Affordability Act."
Sec. 29. [62J.86]
DEFINITIONS.
Subdivision 1. Definitions. For the purposes of sections 62J.85 to
62J.95, the following terms have the meanings given.
Subd. 2. Advisory
council. "Advisory
council" means the Prescription Drug Affordability Advisory Council established
under section 62J.88.
Subd. 3. Biologic. "Biologic" means a drug that
is produced or distributed in accordance with a biologics license application
approved under Code of Federal Regulations, title 42, section 447.502.
Subd. 4. Biosimilar.
"Biosimilar" has the
meaning provided in section 62J.84, subdivision 2, paragraph (b).
Subd. 5. Board. "Board" means the
Prescription Drug Affordability Board established under section 62J.87.
Subd. 6. Brand
name drug. "Brand name
drug" means a drug that is produced or distributed pursuant to:
(1) a new drug
application approved under United States Code, title 21, section 355(c), except
for a generic drug as defined under Code of Federal Regulations, title 42,
section 447.502; or
(2) a biologics license
application approved under United States Code, title 45, section 262(a)(c).
Subd. 7. Generic
drug. "Generic
drug" has the meaning provided in section 62J.84, subdivision 2, paragraph
(e).
Subd. 8. Group
purchaser. "Group
purchaser" has the meaning given in section 62J.03, subdivision 6, and
includes pharmacy benefit managers, as defined in section 62W.02, subdivision
15.
Subd. 9. Manufacturer. "Manufacturer" means an
entity that:
(1) engages in the
manufacture of a prescription drug product or enters into a lease with another
manufacturer to market and distribute a prescription drug product under the
entity's own name; and
(2) sets or changes the
wholesale acquisition cost of the prescription drug product it manufacturers or
markets.
Subd. 10. Prescription
drug product. "Prescription
drug product" means a brand name drug, a generic drug, a biologic, or a
biosimilar.
Subd. 11. Wholesale
acquisition cost or WAC. "Wholesale
acquisition cost" or "WAC" has the meaning given in United States
Code, title 42, section 1395W-3a(c)(6)(B).
Sec. 30. [62J.87]
PRESCRIPTION DRUG AFFORDABILITY BOARD.
Subdivision 1. Establishment. The commissioner of commerce shall
establish the Prescription Drug Affordability Board, which shall be governed as
a board under section 15.012, paragraph (a), to protect consumers, state and
local governments, health plan companies, providers, pharmacies, and other
health care system stakeholders from unaffordable costs of certain prescription
drugs.
Subd. 2. Membership. (a) The Prescription Drug
Affordability Board consists of nine members appointed as follows:
(1) seven voting members
appointed by the governor;
(2) one nonvoting member
appointed by the majority leader of the senate; and
(3) one nonvoting member
appointed by the speaker of the house.
(b) All members appointed
must have knowledge and demonstrated expertise in pharmaceutical economics and
finance or health care economics and finance.
A member must not be an employee of, a board member of, or a consultant
to a manufacturer or trade association for manufacturers, or a pharmacy benefit
manager or trade association for pharmacy benefit managers.
(c) Initial appointments must
be made by January 1, 2024.
Subd. 3. Terms. (a) Board appointees shall serve
four-year terms, except that initial appointees shall serve staggered terms of
two, three, or four years as determined by lot by the secretary of state. A board member shall serve no more than two
consecutive terms.
(b) A board member may
resign at any time by giving written notice to the board.
Subd. 4. Chair;
other officers. (a) The
governor shall designate an acting chair from the members appointed by the
governor.
(b) The board shall
elect a chair to replace the acting chair at the first meeting of the board by
a majority of the members. The chair
shall serve for one year.
(c) The board shall
elect a vice-chair and other officers from its membership as it deems
necessary.
Subd. 5. Staff;
technical assistance. (a) The
board shall hire an executive director and other staff, who shall serve in the
unclassified service. The executive
director must have knowledge and demonstrated expertise in pharmacoeconomics,
pharmacology, health policy, health services research, medicine, or a related
field or discipline.
(b) The commissioner of
health shall provide technical assistance to the board. The board may also employ or contract for
professional and technical assistance as the board deems necessary to perform
the board's duties.
(c) The attorney general
shall provide legal services to the board.
Subd. 6. Compensation. The board members shall not receive
compensation but may receive reimbursement for expenses as authorized under
section 15.059, subdivision 3.
Subd. 7. Meetings. (a) Meetings of the board are subject
to chapter 13D. The board shall meet
publicly at least every three months to review prescription drug product
information submitted to the board under section 62J.90. If there are no pending submissions, the
chair of the board may cancel or postpone the required meeting. The board may meet in closed session when
reviewing proprietary information, as determined under the standards developed
in accordance with section 62J.91, subdivision 3.
(b) The board shall
announce each public meeting at least three weeks prior to the scheduled date
of the meeting. Any materials for the
meeting shall be made public at least two weeks prior to the scheduled date of
the meeting.
(c) At each public
meeting, the board shall provide the opportunity for comments from the public,
including the opportunity for written comments to be submitted to the board
prior to a decision by the board.
Sec. 31. [62J.88]
PRESCRIPTION DRUG AFFORDABILITY ADVISORY COUNCIL.
Subdivision 1. Establishment. The governor shall appoint a 18-member
stakeholder advisory council to provide advice to the board on drug cost issues
and to represent stakeholders' views. The
governor shall appoint the members of the advisory council based on the members'
knowledge and demonstrated expertise in one or more of the following areas: the pharmaceutical business; practice of
medicine; patient perspectives; health care cost trends and drivers; clinical
and health services research; and the health care marketplace.
Subd. 2. Membership. The council's membership shall consist
of the following:
(1) two members
representing patients and health care consumers;
(2) two members
representing health care providers;
(3) one member
representing health plan companies;
(4) two members
representing employers, with one member representing large employers and one
member representing small employers;
(5) one member
representing government employee benefit plans;
(6) one member
representing pharmaceutical manufacturers;
(7) one member who is a
health services clinical researcher;
(8) one member who is a pharmacologist;
(9) one member
representing the commissioner of health with expertise in health economics;
(10) one member
representing pharmaceutical wholesalers;
(11) one member
representing pharmacy benefit managers;
(12) one member from the
Rare Disease Advisory Council;
(13) one member
representing generic drug manufacturers;
(14) one member
representing pharmaceutical distributors; and
(15) one member who is
an oncologist who is not employed by, under contract with, or otherwise
affiliated with a hospital.
Subd. 3. Terms. (a) The initial appointments to the
advisory council must be made by January 1, 2024. The initial appointed advisory council
members shall serve staggered terms of two, three, or four years, determined by
lot by the secretary of state. Following
the initial appointments, the advisory council members shall serve four-year
terms.
(b) Removal and
vacancies of advisory council members shall be governed by section 15.059.
Subd. 4. Compensation. Advisory council members may be
compensated according to section 15.059, except that those advisory council
members designated in subdivision 2, clauses (10) to (15), must not be compensated.
Subd. 5. Meetings. Meetings of the advisory council are
subject to chapter 13D. The advisory
council shall meet publicly at least every three months to advise the board on
drug cost issues related to the prescription drug product information submitted
to the board under section 62J.90.
Subd. 6. Exemption. Notwithstanding section 15.059, the
advisory council shall not expire.
Sec. 32. [62J.89]
CONFLICTS OF INTEREST.
Subdivision 1. Definition. For purposes of this section, "conflict
of interest" means a financial or personal association that has the
potential to bias or have the appearance of biasing a person's decisions in
matters related to the board, the advisory council, or in the conduct of the
board's or council's activities. A
conflict of interest includes any instance in which a person, a person's
immediate family member, including a spouse, parent, child, or other legal
dependent, or an in-law of any of the preceding individuals, has received or
could receive a direct or indirect financial benefit of any amount deriving
from the result or findings of a decision or determination of the board. For purposes of this section, a financial
benefit includes honoraria, fees, stock, the value of the member's, immediate
family member's, or in-law's stock holdings, and any direct financial benefit
deriving from the finding of a review conducted under sections 62J.85 to 62J.95. Ownership of securities is not a conflict of
interest if the securities are: (1) part
of a diversified mutual or exchange traded fund; or (2) in a tax-deferred or
tax-exempt retirement account that is administered by an independent trustee.
Subd. 2. General. (a) Prior to the acceptance of an
appointment or employment, or prior to entering into a contractual agreement, a
board or advisory council member, board staff member, or third-party contractor
must disclose to the appointing authority or the board any conflicts of
interest. The information disclosed must
include the type, nature, and magnitude of the interests involved.
(b) A board member,
board staff member, or third-party contractor with a conflict of interest with
regard to any prescription drug product under review must recuse themselves
from any discussion, review, decision, or determination made by the board
relating to the prescription drug product.
(c) Any conflict of
interest must be disclosed in advance of the first meeting after the conflict
is identified or within five days after the conflict is identified, whichever
is earlier.
Subd. 3. Prohibitions. Board members, board staff, or
third-party contractors are prohibited from accepting gifts, bequeaths, or
donations of services or property that raise the specter of a conflict of
interest or have the appearance of injecting bias into the activities of the
board.
Sec. 33. [62J.90]
PRESCRIPTION DRUG PRICE INFORMATION; DECISION TO CONDUCT COST REVIEW.
Subdivision 1. Drug
price information from the commissioner of health and other sources. (a) The commissioner of health shall
provide to the board the information reported to the commissioner by drug
manufacturers under section 62J.84, subdivisions 3, 4, and 5. The commissioner shall provide this
information to the board within 30 days of the date the information is received
from drug manufacturers.
(b) The board may
subscribe to one or more prescription drug pricing files, such as Medispan or
FirstDatabank, or as otherwise determined by the board.
Subd. 2. Identification
of certain prescription drug products.
(a) The board, in consultation with the advisory council, shall
identify selected prescription drug products based on the following criteria:
(1) brand name drugs or
biologics for which the WAC increases by more than 15 percent or by more than
$3,000 during any 12-month period or course of treatment if less than 12
months, after adjusting for changes in the consumer price index (CPI);
(2) brand name drugs or
biologics with a WAC of $60,000 or more per calendar year or per course of
treatment;
(3) biosimilar drugs that have
a WAC that is not at least 20 percent lower than the referenced brand name
biologic at the time the biosimilar is introduced; and
(4) generic drugs for which the WAC:
(i) is $100 or more, after adjusting for changes in the CPI, for:
(A) a 30-day supply;
(B) a course of treatment lasting less than 30 days; or
(C) one unit of the drug, if the labeling approved by the Food and Drug Administration does not recommend a finite dosage; and
(ii) increased by 200
percent or more during the immediate preceding 12-month period, as determined
by the difference between the resulting WAC and the average WAC reported over
the preceding 12 months, after adjusting for changes in the CPI.
The board is not required to identify all
prescription drug products that meet the criteria in this paragraph.
(b) The board, in
consultation with the advisory council and the commissioner of health, may
identify prescription drug products not described in paragraph (a) that may
impose costs that create significant affordability challenges for the state
health care system or for patients, including but not limited to drugs to
address public health emergencies.
(c) The board shall make
available to the public the names and related price information of the
prescription drug products identified under this subdivision, with the
exception of information determined by the board to be proprietary under the
standards developed by the board under section 62J.91, subdivision 3, and
information provided by the commissioner of health classified as not public
data under section 13.02, subdivision 8a, or as trade secret information under
section 13.37, subdivision 1, paragraph (b), or as trade secret information
under the Defend Trade Secrets Act of 2016, United States Code, title 18,
section 1836, as amended.
Subd. 3. Determination
to proceed with review. (a)
The board may initiate a cost review of a prescription drug product identified
by the board under this section.
(b) The board shall
consider requests by the public for the board to proceed with a cost review of
any prescription drug product identified under this section.
(c) If there is no
consensus among the members of the board on whether to initiate a cost review
of a prescription drug product, any member of the board may request a vote to
determine whether to review the cost of the prescription drug product.
Sec. 34. [62J.91]
PRESCRIPTION DRUG PRODUCT REVIEWS.
Subdivision 1. General. Once a decision by the board has been
made to proceed with a cost review of a prescription drug product, the board
shall conduct the review and make a determination as to whether appropriate
utilization of the prescription drug under review, based on utilization that is
consistent with the United States Food and Drug Administration (FDA) label or
standard medical practice, has led or will lead to affordability challenges for
the state health care system or for patients.
Subd. 2. Review
considerations. In reviewing
the cost of a prescription drug product, the board may consider the following
factors:
(1) the price at which
the prescription drug product has been and will be sold in the state;
(2) manufacturer
monetary price concessions, discounts, or rebates, and drug-specific patient
assistance;
(3) the price of
therapeutic alternatives;
(4) the cost to group
purchasers based on patient access consistent with the FDA-labeled indications
and standard medical practice;
(5) measures of patient
access, including cost-sharing and other metrics;
(6) the extent to which
the attorney general or a court has determined that a price increase for a
generic or off‑patent prescription drug product was excessive under
sections 62J.842 and 62J.844;
(7) any information a
manufacturer chooses to provide; and
(8) any other factors as
determined by the board.
Subd. 3. Public
data; proprietary information. (a)
Any submission made to the board related to a drug cost review must be made
available to the public with the exception of information determined by the
board to be proprietary and information provided by the commissioner of health
classified as not public data under section 13.02, subdivision 8a, or as trade
secret information under section 13.37, subdivision 1, paragraph (b), or as
trade secret information under the Defend Trade Secrets Act of 2016, United
States Code, title 18, section 1836, as amended.
(b) The board shall
establish the standards for the information to be considered proprietary under
paragraph (a) and section 62J.90, subdivision 2, including standards for heightened
consideration of proprietary information for submissions for a cost review of a
drug that is not yet approved by the FDA.
(c) Prior to the board
establishing the standards under paragraph (b), the public shall be provided
notice and the opportunity to submit comments.
(d) The establishment of
standards under this subdivision is exempt from the rulemaking requirements
under chapter 14, and section 14.386 does not apply.
Sec. 35. [62J.92]
DETERMINATIONS; COMPLIANCE; REMEDIES.
Subdivision 1. Upper
payment limit. (a) In the
event the board finds that the spending on a prescription drug product reviewed
under section 62J.91 creates an affordability challenge for the state health
care system or for patients, the board shall establish an upper payment limit
after considering:
(1) extraordinary supply
costs, if applicable;
(2) the range of prices
at which the drug is sold in the United States according to one or more pricing
files accessed under section 62J.90, subdivision 1, and the range at which pharmacies
are reimbursed in Canada; and
(3) any other relevant
pricing and administrative cost information for the drug.
(b) An upper payment limit
applies to all purchases of, and payer reimbursements for, a prescription drug
that is dispensed or administered to individuals in the state in person, by
mail, or by other means, and for which an upper payment limit has been
established.
(c) In determining whether a drug creates an affordability challenge or determining an upper payment limit amount, the board may not use cost-effectiveness analyses that include the cost-per-quality adjusted life year or similar measure to identify subpopulations for which a treatment would be less cost-effective due to severity of illness, age, or pre-existing disability. For any treatment that extends life, if the board uses cost-effectiveness results, it must use results that weigh the value of all additional lifetime gained equally for all patients no matter their severity of illness, age, or pre-existing disability.
Subd. 2. Implementation
and administration of the upper payment limit. (a) An upper payment limit may take
effect no sooner than 120 days following the date of its public release by the
board.
(b) When setting an
upper payment limit for a drug subject to the Medicare maximum fair price under
United States Code, title 42, section 1191(c), the board shall set the upper
payment limit at the Medicare maximum fair price.
(c) Health plan
companies and pharmacy benefit managers shall report annually to the board, in
the form and manner specified by the board, on how cost savings resulting from
the establishment of an upper payment limit have been used by the health plan
company or pharmacy benefit manager to benefit enrollees, including but not
limited to reducing enrollee cost-sharing.
Subd. 3. Noncompliance. (a) The board shall, and other persons
may, notify the Office of the Attorney General of a potential failure by an
entity subject to an upper payment limit to comply with that limit.
(b) If the Office of the
Attorney General finds that an entity was noncompliant with the upper payment
limit requirements, the attorney general may pursue remedies consistent with
chapter 8 or appropriate criminal charges if there is evidence of intentional
profiteering.
(c) An entity who
obtains price concessions from a drug manufacturer that result in a lower net
cost to the stakeholder than the upper payment limit established by the board
is not considered noncompliant.
(d) The Office of the
Attorney General may provide guidance to stakeholders concerning activities
that could be considered noncompliant.
Subd. 4. Appeals. (a) Persons affected by a decision of
the board may request an appeal of the board's decision within 30 days of the
date of the decision. The board shall
hear the appeal and render a decision within 60 days of the hearing.
(b) All appeal decisions
are subject to judicial review in accordance with chapter 14.
Sec. 36. [62J.93]
REPORTS.
Beginning March 1, 2024,
and each March 1 thereafter, the board shall submit a report to the governor
and legislature on general price trends for prescription drug products and the
number of prescription drug products that were subject to the board's cost
review and analysis, including the result of any analysis as well as the number
and disposition of appeals and judicial reviews.
Sec. 37. [62J.94]
ERISA PLANS AND MEDICARE DRUG PLANS.
(a) Nothing in sections
62J.85 to 62J.95 shall be construed to require ERISA plans or Medicare Part D
plans to comply with decisions of the board.
ERISA plans or Medicare Part D plans are free to choose to exceed the
upper payment limit established by the board under section 62J.92.
(b) Providers who
dispense and administer drugs in the state must bill all payers no more than
the upper payment limit without regard to whether an ERISA plan or Medicare
Part D plan chooses to reimburse the provider in an amount greater than the
upper payment limit established by the board.
(c) For purposes of this
section, an ERISA plan or group health plan is an employee welfare benefit plan
established by or maintained by an employer or an employee organization, or
both, that provides employer sponsored health coverage to employees and the
employee's dependents and is subject to the Employee Retirement Income Security
Act of 1974 (ERISA).
Sec. 38. [62J.95]
SEVERABILITY.
If any provision of
sections 62J.85 to 62J.94 or the application thereof to any person or
circumstance is held invalid for any reason in a court of competent jurisdiction,
the invalidity does not affect other provisions or any other application of
sections 62J.85 to 62J.94 that can be given effect without the invalid
provision or application.
Sec. 39. Minnesota Statutes 2022, section 62K.10, subdivision 4, is amended to read:
Subd. 4. Network adequacy. (a) Each designated provider network must include a sufficient number and type of providers, including providers that specialize in mental health and substance use disorder services, to ensure that covered services are available to all enrollees without unreasonable delay. In determining network adequacy, the commissioner of health shall consider availability of services, including the following:
(1) primary care physician services are available and accessible 24 hours per day, seven days per week, within the network area;
(2) a sufficient number of primary care physicians have hospital admitting privileges at one or more participating hospitals within the network area so that necessary admissions are made on a timely basis consistent with generally accepted practice parameters;
(3) specialty physician service is available through the network or contract arrangement;
(4) mental health and substance use disorder treatment providers, including but not limited to psychiatric residential treatment facilities, are available and accessible through the network or contract arrangement;
(5) to the extent that primary care services are provided through primary care providers other than physicians, and to the extent permitted under applicable scope of practice in state law for a given provider, these services shall be available and accessible; and
(6) the network has available, either directly or through arrangements, appropriate and sufficient personnel, physical resources, and equipment to meet the projected needs of enrollees for covered health care services.
(b) The commissioner must
determine network sufficiency in a manner that is consistent with the
requirements of this section and may establish sufficiency by referencing any
reasonable criteria, which may include but is not limited to:
(1) provider-covered
person ratios by specialty;
(2) primary care
professional-covered person ratios;
(3) geographic
accessibility of providers;
(4) geographic variation
and population dispersion;
(5) waiting times for an
appointment with participating providers;
(6) hours of operation;
(7) the ability of the
network to meet the needs of covered persons, which may include:
(i) low-income persons;
(ii) children and adults
with serious, chronic, or complex health conditions, physical disabilities, or
mental illness; or
(iii) persons with
limited English proficiency and persons from underserved communities;
(8) other health care
service delivery system options, including telemedicine or telehealth, mobile
clinics, centers of excellence, and other ways of delivering care; and
(9) the volume of
technological and specialty care services available to serve the needs of
covered persons that need technologically advanced or specialty care services.
EFFECTIVE DATE. The
amendment to paragraph (a) is effective July 1, 2023. Paragraph (b) is effective January 1, 2025,
and applies to health plans offered, issued, or renewed on or after that date.
Sec. 40. Minnesota Statutes 2022, section 62Q.096, is amended to read:
62Q.096 CREDENTIALING OF PROVIDERS.
(a) If a health plan company has initially credentialed, as providers in its provider network, individual providers employed by or under contract with an entity that:
(1) is authorized to bill under section 256B.0625, subdivision 5;
(2) is a mental health clinic certified under section 245I.20;
(3) is designated an essential community provider under section 62Q.19; and
(4) is under contract with the health plan company to provide mental health services, the health plan company must continue to credential at least the same number of providers from that entity, as long as those providers meet the health plan company's credentialing standards.
(b) In order to ensure
timely access by patients to mental health services, between July 1, 2023, and
June 30, 2025, a health plan company must credential and enter into a contract
for mental health services with any provider of mental health services that:
(1)
meets the health plan company's credential requirements. For purposes of credentialing under this
paragraph, a health plan company may waive credentialing requirements that are
not directly related to quality of care in order to ensure patient access to
providers from underserved communities or to providers in rural areas;
(2) seeks to receive a
credential from the health plan company;
(3) agrees to the health
plan company's contract terms. The
contract shall include payment rates that are usual and customary for the
services provided;
(4) is accepting new
patients; and
(5) is not already under
a contract with the health plan company under a separate tax identification
number or, if already under a contract with the health plan company, has
provided notice to the health plan company of termination of the existing
contract.
(c) A health plan
company shall not refuse to credential these providers on the grounds that
their provider network has:
(1) a sufficient
number of providers of that type, including but not limited to the provider
types identified in paragraph (a); or
(2) a sufficient number of providers of mental health services in the aggregate.
Sec. 41. Minnesota Statutes 2022, section 62Q.19, subdivision 1, is amended to read:
Subdivision 1. Designation. (a) The commissioner shall designate essential community providers. The criteria for essential community provider designation shall be the following:
(1) a demonstrated ability to integrate applicable supportive and stabilizing services with medical care for uninsured persons and high-risk and special needs populations, underserved, and other special needs populations; and
(2) a commitment to serve low-income and underserved populations by meeting the following requirements:
(i) has nonprofit status in accordance with chapter 317A;
(ii) has tax-exempt status in accordance with the Internal Revenue Service Code, section 501(c)(3);
(iii) charges for services on a sliding fee schedule based on current poverty income guidelines; and
(iv) does not restrict access or services because of a client's financial limitation;
(3) status as a local government unit as defined in section 62D.02, subdivision 11, a hospital district created or reorganized under sections 447.31 to 447.37, an Indian Tribal government, an Indian health service unit, or a community health board as defined in chapter 145A;
(4) a former state hospital that specializes in the treatment of cerebral palsy, spina bifida, epilepsy, closed head injuries, specialized orthopedic problems, and other disabling conditions;
(5) a sole community hospital. For these rural hospitals, the essential community provider designation applies to all health services provided, including both inpatient and outpatient services. For purposes of this section, "sole community hospital" means a rural hospital that:
(i) is eligible to be classified as a sole community hospital according to Code of Federal Regulations, title 42, section 412.92, or is located in a community with a population of less than 5,000 and located more than 25 miles from a like hospital currently providing acute short-term services;
(ii) has experienced net operating income losses in two of the previous three most recent consecutive hospital fiscal years for which audited financial information is available; and
(iii) consists of 40 or fewer licensed beds;
(6) a birth center licensed
under section 144.615; or
(7) a hospital and affiliated specialty clinics that predominantly serve patients who are under 21 years of age and meet the following criteria:
(i) provide intensive specialty pediatric services that are routinely provided in fewer than five hospitals in the state; and
(ii) serve children from at
least one-half of the counties in the state.; or
(8) a psychiatric
residential treatment facility, as defined in section 256B.0625, subdivision
45a, paragraph (b), that is certified by the commissioner of health and
licensed by the commissioner of human services.
(b) Prior to designation, the commissioner shall publish the names of all applicants in the State Register. The public shall have 30 days from the date of publication to submit written comments to the commissioner on the application. No designation shall be made by the commissioner until the 30-day period has expired.
(c) The commissioner may designate an eligible provider as an essential community provider for all the services offered by that provider or for specific services designated by the commissioner.
(d) For the purpose of this subdivision, supportive and stabilizing services include at a minimum, transportation, child care, cultural, and linguistic services where appropriate.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 42. Minnesota Statutes 2022, section 62Q.46, subdivision 1, is amended to read:
Subdivision 1. Coverage
for preventive items and services. (a)
"Preventive items and services" has the meaning specified in the Affordable
Care Act. Preventive items and
services includes:
(1) evidence-based items
or services that have in effect a rating of A or B in the current
recommendations of the United States Preventive Services Task Force with
respect to the individual involved;
(2) immunizations for
routine use in children, adolescents, and adults that have in effect a
recommendation from the Advisory Committee on Immunization Practices of the
Centers for Disease Control and Prevention with respect to the individual
involved. For purposes of this clause, a
recommendation from the Advisory Committee on Immunization Practices of the
Centers for Disease Control and Prevention is considered in effect after the
recommendation has been adopted by the Director of the Centers for Disease
Control and Prevention, and a recommendation is considered to be for routine
use if the recommendation is listed on the Immunization Schedules of the
Centers for Disease Control and Prevention;
(3)
with respect to infants, children, and adolescents, evidence-informed
preventive care and screenings provided for in comprehensive guidelines
supported by the Health Resources and Services Administration;
(4) with respect to
women, additional preventive care and screenings that are not listed with a
rating of A or B by the United States Preventive Services Task Force but that
are provided for in comprehensive guidelines supported by the Health Resources
and Services Administration;
(5) all contraceptive
methods established in guidelines published by the United States Food and Drug
Administration;
(6) screenings for human
immunodeficiency virus for:
(i) all individuals at
least 15 years of age but less than 65 years of age; and
(ii) all other
individuals with increased risk of human immunodeficiency virus infection
according to guidance from the Centers for Disease Control;
(7) all preexposure
prophylaxis when used for the prevention or treatment of human immunodeficiency
virus, including but not limited to all preexposure prophylaxis, as defined in
any guidance by the United States Preventive Services Task Force or the Centers
for Disease Control, including the June 11, 2019, Preexposure Prophylaxis for
the Prevention of HIV Infection United States Preventive Services Task Force Recommendation
Statement; and
(8) all postexposure
prophylaxis when used for the prevention or treatment of human immunodeficiency
virus, including but not limited to all postexposure prophylaxis as defined in
any guidance by the United States Preventive Services Task Force or the Centers
for Disease Control.
(b) A health plan company must provide coverage for preventive items and services at a participating provider without imposing cost-sharing requirements, including a deductible, coinsurance, or co-payment. Nothing in this section prohibits a health plan company that has a network of providers from excluding coverage or imposing cost‑sharing requirements for preventive items or services that are delivered by an out-of-network provider.
(c) A health plan company is not required to provide coverage for any items or services specified in any recommendation or guideline described in paragraph (a) if the recommendation or guideline is no longer included as a preventive item or service as defined in paragraph (a). Annually, a health plan company must determine whether any additional items or services must be covered without cost-sharing requirements or whether any items or services are no longer required to be covered.
(d) Nothing in this section prevents a health plan company from using reasonable medical management techniques to determine the frequency, method, treatment, or setting for a preventive item or service to the extent not specified in the recommendation or guideline.
(e) This section does not apply to grandfathered plans.
(f) This section does not apply to plans offered by the Minnesota Comprehensive Health Association.
Sec. 43. Minnesota Statutes 2022, section 62Q.46, subdivision 3, is amended to read:
Subd. 3. Additional
services not prohibited. Nothing in
this section prohibits a health plan company from providing coverage for
preventive items and services in addition to those specified in the
Affordable Care Act under subdivision 1, paragraph (a), or from
denying coverage for preventive items and services that are not recommended as
preventive items and services specified under the Affordable Care Act
subdivision 1, paragraph (a). A
health
plan company may impose
cost-sharing requirements for a treatment not described in the Affordable
Care Act under subdivision 1, paragraph (a), even if the treatment
results from a preventive item or service described in the Affordable Care
Act under subdivision 1, paragraph (a).
Sec. 44. [62Q.465]
MENTAL HEALTH PARITY AND SUBSTANCE ABUSE ACCOUNTABILITY OFFICE.
(a) The Mental Health Parity and Substance Abuse Accountability Office is established within the Department of Commerce to create and execute effective strategies for implementing the requirements under:
(1) section 62Q.47;
(2) the federal Mental
Health Parity Act of 1996, Public Law 104-204;
(3) the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, Public Law 110-343, division C, sections 511 and 512;
(4) the Affordable Care
Act, as defined under section 62A.011, subdivision 1a; and
(5) amendments made to,
and federal guidance or regulations issued or adopted under, the acts listed
under clauses (2) to (4).
(b) The office may
oversee compliance reviews, conduct and lead stakeholder engagement, review
consumer and provider complaints, and serve as a resource for ensuring health
plan compliance with mental health and substance abuse requirements.
Sec. 45. Minnesota Statutes 2022, section 62Q.47, is amended to read:
62Q.47 ALCOHOLISM, MENTAL HEALTH, AND CHEMICAL DEPENDENCY SERVICES.
(a) All health plans, as defined in section 62Q.01, that provide coverage for alcoholism, mental health, or chemical dependency services, must comply with the requirements of this section.
(b) Cost-sharing requirements and benefit or service limitations for outpatient mental health and outpatient chemical dependency and alcoholism services, except for persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to 9530.6655, must not place a greater financial burden on the insured or enrollee, or be more restrictive than those requirements and limitations for outpatient medical services.
(c) Cost-sharing requirements and benefit or service limitations for inpatient hospital mental health services, psychiatric residential treatment facility services, and inpatient hospital and residential chemical dependency and alcoholism services, except for persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to 9530.6655, must not place a greater financial burden on the insured or enrollee, or be more restrictive than those requirements and limitations for inpatient hospital medical services.
(d) A health plan company must not impose an NQTL with respect to mental health and substance use disorders in any classification of benefits unless, under the terms of the health plan as written and in operation, any processes, strategies, evidentiary standards, or other factors used in applying the NQTL to mental health and substance use disorders in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the NQTL with respect to medical and surgical benefits in the same classification.
(e) All health plans must meet the requirements of the federal Mental Health Parity Act of 1996, Public Law 104-204; Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008; the Affordable Care Act; and any amendments to, and federal guidance or regulations issued under, those acts.
(f) The commissioner may require information from health plan companies to confirm that mental health parity is being implemented by the health plan company. Information required may include comparisons between mental health and substance use disorder treatment and other medical conditions, including a comparison of prior authorization requirements, drug formulary design, claim denials, rehabilitation services, and other information the commissioner deems appropriate.
(g) Regardless of the health care provider's professional license, if the service provided is consistent with the provider's scope of practice and the health plan company's credentialing and contracting provisions, mental health therapy visits and medication maintenance visits shall be considered primary care visits for the purpose of applying any enrollee cost-sharing requirements imposed under the enrollee's health plan.
(h) All health plan
companies offering health plans that provide coverage for alcoholism, mental
health, or chemical dependency benefits shall provide reimbursement for the
benefits delivered through the psychiatric Collaborative Care Model, which must
include the following Current Procedural Terminology or Healthcare Common
Procedure Coding System billing codes:
(1) 99492;
(2) 99493;
(3) 99494;
(4) G2214; and
(5) G0512.
This paragraph does not apply to managed
care plans or county-based purchasing plans when the plan provides coverage to
public health care program enrollees under chapter 256B or 256L.
(i) The commissioner of
commerce shall update the list of codes in paragraph (h) if any alterations or
additions to the billing codes for the psychiatric Collaborative Care Model are
made.
(j) "Psychiatric
Collaborative Care Model" means the evidence-based, integrated behavioral
health service delivery method described at Federal Register, volume 81, page
80230, which includes a formal collaborative arrangement among a primary care
team consisting of a primary care provider, a care manager, and a psychiatric
consultant, and includes but is not limited to the following elements:
(1) care directed by the
primary care team;
(2) structured care
management;
(3) regular assessments
of clinical status using validated tools; and
(4) modification of
treatment as appropriate.
(h) (k) By June 1 of each year, beginning June 1, 2021, the commissioner of commerce, in consultation with the commissioner of health, shall submit a report on compliance and oversight to the chairs and ranking minority members of the legislative committees with jurisdiction over health and commerce. The report must:
(1) describe the commissioner's process for reviewing health plan company compliance with United States Code, title 42, section 18031(j), any federal regulations or guidance relating to compliance and oversight, and compliance with this section and section 62Q.53;
(2) identify any enforcement actions taken by either commissioner during the preceding 12-month period regarding compliance with parity for mental health and substance use disorders benefits under state and federal law, summarizing the results of any market conduct examinations. The summary must include: (i) the number of formal enforcement actions taken; (ii) the benefit classifications examined in each enforcement action; and (iii) the subject matter of each enforcement action, including quantitative and nonquantitative treatment limitations;
(3) detail any corrective action taken by either commissioner to ensure health plan company compliance with this section, section 62Q.53, and United States Code, title 42, section 18031(j); and
(4) describe the information provided by either commissioner to the public about alcoholism, mental health, or chemical dependency parity protections under state and federal law.
The report must be written in nontechnical, readily understandable language and must be made available to the public by, among other means as the commissioners find appropriate, posting the report on department websites. Individually identifiable information must be excluded from the report, consistent with state and federal privacy protections.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 46. [62Q.481]
COST-SHARING FOR PRESCRIPTION DRUGS AND RELATED MEDICAL SUPPLIES TO TREAT
CHRONIC DISEASE.
Subdivision 1. Cost-sharing
limits. (a) A health plan
must limit the amount of any enrollee cost-sharing for prescription drugs
prescribed to treat a chronic disease to no more than: (1) $25 per one-month supply for each prescription
drug, regardless of the amount or type of medication required to fill the
prescription; and (2) $50 per month in total for all related medical supplies. The cost-sharing limit for related medical
supplies does not increase with the number of chronic diseases for which an
enrollee is treated. Coverage under this
section shall not be subject to any deductible.
(b) If application of
this section before an enrollee has met the enrollee's plan deductible results
in: (1) health savings account ineligibility
under United States Code, title 26, section 223; or (2) catastrophic health
plan ineligibility under United States Code, title 42, section 18022(e), this
section applies to the specific prescription drug or related medical supply
only after the enrollee has met the enrollee's plan deductible.
Subd. 2. Definitions. (a) For purposes of this section, the
following definitions apply.
(b) "Chronic
disease" means diabetes, asthma, and allergies requiring the use of
epinephrine auto-injectors.
(c)
"Cost-sharing" means co-payments and coinsurance.
(d)
"Related medical supplies" means syringes, insulin pens, insulin
pumps, test strips, glucometers, continuous glucose monitors, epinephrine
auto-injectors, asthma inhalers, and other medical supply items necessary to
effectively and appropriately treat a chronic disease or administer a
prescription drug prescribed to treat a chronic disease.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 47. Minnesota Statutes 2022, section 62Q.735, subdivision 1, is amended to read:
Subdivision 1. Contract disclosure. (a) Before requiring a health care provider to sign a contract, a health plan company shall give to the provider a complete copy of the proposed contract, including:
(1) all attachments and exhibits;
(2) operating manuals;
(3) a general description of the health plan company's health service coding guidelines and requirement for procedures and diagnoses with modifiers, and multiple procedures; and
(4) all guidelines and treatment parameters incorporated or referenced in the contract.
(b) The health plan company shall make available to the provider the fee schedule or a method or process that allows the provider to determine the fee schedule for each health care service to be provided under the contract.
(c) Notwithstanding
paragraph (b), a health plan company that is a dental plan organization, as
defined in section 62Q.76, shall disclose information related to the individual
contracted provider's expected reimbursement from the dental plan organization. Nothing in this section requires a dental
plan organization to disclose the plan's aggregate maximum allowable fee table
used to determine other providers' fees.
The contracted provider must not release this information in any way
that would violate any state or federal antitrust law.
Sec. 48. Minnesota Statutes 2022, section 62Q.735, subdivision 5, is amended to read:
Subd. 5. Fee
schedules. (a) A health plan
company shall provide, upon request, any additional fees or fee schedules
relevant to the particular provider's practice beyond those provided with the
renewal documents for the next contract year to all participating providers,
excluding claims paid under the pharmacy benefit. Health plan companies may fulfill the
requirements of this section by making the full fee schedules available through
a secure web portal for contracted providers.
(b) A dental
organization may satisfy paragraph (a) by complying with section 62Q.735,
subdivision 1, paragraph (c).
Sec. 49. Minnesota Statutes 2022, section 62Q.76, is amended by adding a subdivision to read:
Subd. 9. Third
party. "Third
party" means a person or entity that enters into a contract with a dental
organization or with another third party to gain access to the dental care
services or contractual discounts under a dental provider contract. Third party does not include an enrollee of a
dental organization or an employer or other group for whom the dental
organization provides administrative services.
Sec. 50. Minnesota Statutes 2022, section 62Q.78, is amended by adding a subdivision to read:
Subd. 7. Method
of payments. A dental
provider contract must include a method of payment for dental care services in
which no fees associated with the method of payment, including credit card fees
and fees related to payment in the form of digital or virtual currency, are
incurred by the dentist or dental clinic.
Any fees that may be incurred from a payment must be disclosed to a
dentist prior to entering into or renewing a dental provider contract. For purposes of this section, fees related to
a provider's electronic claims processing vendor, financial institution, or
other vendor used by a provider to facilitate the submission of claims are
excluded.
Sec. 51. Minnesota Statutes 2022, section 62Q.78, is amended by adding a subdivision to read:
Subd. 8. Network
leasing. (a) A dental
organization may grant a third party access to a dental provider contract or a
provider's dental care services or contractual discounts provided pursuant to a
dental provider contract if, at the time the dental provider contract is
entered into or renewed, the dental organization allows a dentist to choose not
to participate in third-party access to the dental provider contract, without
any penalty to the dentist. The
third-party access provision of the dental provider contract must be clearly
identified. A dental organization must
not grant a third party access to the dental provider contract of any dentist
who does not participate in third-party access to the dental provider contract.
(b) Notwithstanding paragraph (a), if a dental organization exists solely for the purpose of recruiting dentists for dental provider contracts that establish a network to be leased to third parties, the dentist waives the right to choose whether to participate in third-party access.
(c) A dental
organization may grant a third party access to a dental provider contract, or a
dentist's dental care services or contractual discounts under a dental provider
contract, if the following requirements are met:
(1) the dental
organization lists all third parties that may have access to the dental
provider contract on the dental organization's website, which must be updated
at least once every 90 days;
(2) the dental provider
contract states that the dental organization may enter into an agreement with a
third party that would allow the third party to obtain the dental
organization's rights and responsibilities as if the third party were the
dental organization, and the dentist chose to participate in third-party access
at the time the dental provider contract was entered into; and
(3) the third party
accessing the dental provider contract agrees to comply with all applicable
terms of the dental provider contract.
(d) A dentist is not
bound by and is not required to perform dental care services under a dental
provider contract granted to a third party in violation of this section.
(e) This subdivision
does not apply when:
(1) the dental provider
contract is for dental services provided under a public health plan program,
including but not limited to medical assistance, MinnesotaCare, Medicare, or
Medicare Advantage; or
(2) access to a dental
provider contract is granted to a dental organization, an entity operating in
accordance with the same brand licensee program as the dental organization or
other entity, or to an entity that is an affiliate of the dental organization,
provided the entity agrees to substantially similar terms and conditions as the
originating dental provider contract between the dental organization and the
dentist or dental clinic. A list of the
dental organization's affiliates must be posted on the dental organization's
website.
Sec. 52. Minnesota Statutes 2022, section 62Q.81, subdivision 4, is amended to read:
Subd. 4. Essential health benefits; definition. For purposes of this section, "essential health benefits" has the meaning given under section 1302(b) of the Affordable Care Act and includes:
(1) ambulatory patient services;
(2) emergency services;
(3) hospitalization;
(4) laboratory services;
(5) maternity and newborn care;
(6) mental health and substance use disorder services, including behavioral health treatment;
(7) pediatric services, including oral and vision care;
(8) prescription drugs;
(9) preventive and wellness services and chronic disease management;
(10) rehabilitative and habilitative services and devices; and
(11) additional essential health benefits included in the EHB-benchmark plan, as defined under the Affordable Care Act, and preventive items and services, as defined under section 62Q.46, subdivision 1, paragraph (a).
Sec. 53. Minnesota Statutes 2022, section 62Q.81, is amended by adding a subdivision to read:
Subd. 7. Standard
plans. (a) A health plan
company that offers individual health plans must ensure that no less than one
individual health plan at each level of coverage described in subdivision 1,
paragraph (b), clause (3), that the health plan company offers in each
geographic rating area the health plan company serves conforms to the standard
plan parameters determined by the commissioner under paragraph (e).
(b) An individual health
plan offered under this subdivision must be:
(1) clearly and
appropriately labeled as standard plans to aid the purchaser in the selection
process;
(2) marketed as standard
plans and in the same manner as other individual health plans offered by the
health plan company; and
(3) offered for purchase
to any individual.
(c) This subdivision
does not apply to catastrophic plans, grandfathered plans, small group health
plans, large group health plans, health savings accounts, qualified high deductible
health benefit plans, limited health benefit plans, or short-term
limited-duration health insurance policies.
(d) Health plan
companies must meet the requirements in this subdivision separately for plans
offered through MNsure under chapter 62V and plans offered outside of MNsure.
(e) The commissioner of
commerce, in consultation with the commissioner of health, must annually
determine standard plan parameters, including but not limited to cost-sharing
structure and covered benefits, that comprise a standard plan in Minnesota.
(f) Notwithstanding
section 62A.65, subdivision 2, a health plan company may discontinue offering a
health plan under this subdivision if, three years after the date the plan is
initially offered, the plan has fewer than 75 enrollees. A health plan company discontinuing a health
plan under this paragraph may discontinue a health plan that has fewer than 75
enrollees if it:
(1) provides notice of
the plan's discontinuation in writing, in a form prescribed by the commissioner,
to each enrollee of the plan at least 90 calendar days before the date the
coverage is discontinued;
(2) offers on a
guaranteed issue basis to each enrollee the option to purchase an individual
health plan currently being offered by the health plan company for individuals
in that geographic rating area. An
enrollee who does not select an option shall be automatically enrolled in the
individual health plan closest in actuarial value to the enrollee's current
plan; and
(3) acts uniformly
without regard to any health status-related factor of an enrollee or an
enrollee's dependents who may become eligible for coverage.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to individual health plans
offered, issued, or renewed on or after that date.
Sec. 54. [62W.15]
CLINICIAN-ADMINISTERED DRUGS.
Subdivision 1. Definition. (a) For purposes of this section, the
following definition applies.
(b)
"Clinician-administered drug" means an outpatient prescription drug
other than a vaccine that:
(1) cannot reasonably be
self-administered by the enrollee to whom the drug is prescribed or by an
individual assisting the enrollee with self-administration; and
(2) is typically
administered:
(i) by a health care
provider authorized to administer the drug, including when acting under a
physician's delegation and supervision; and
(ii) in a physician's
office, hospital outpatient infusion center, or other clinical setting.
Subd. 2. Safety
and care requirements for clinician-administered drugs. (a) A specialty pharmacy that ships a
clinician-administered drug to a health care provider or pharmacy must:
(1) comply with all
federal laws regulating the shipment of drugs, including but not limited to the
U.S. Pharmacopeia General Chapter 800;
(2) in response to
questions from a health care provider or pharmacy, provide access to a
pharmacist or nurse employed by the specialty pharmacy 24 hours a day, 7 days a
week;
(3) allow an enrollee
and health care provider to request a refill of a clinician-administered drug
on behalf of an enrollee, in accordance with the pharmacy benefit manager or
health carrier's utilization review procedures; and
(4)
adhere to the track and trace requirements, as defined by the federal Drug
Supply Chain Security Act, United States Code, title 21, section 360eee, et
seq., for a clinician-administered drug that needs to be compounded or
manipulated.
(b) For any
clinician-administered drug dispensed by a specialty pharmacy selected by the
pharmacy benefit manager or health carrier, the requesting health care provider
or their designee must provide the requested date, approximate time, and place
of delivery of a clinician-administered drug at least five business days before
the date of delivery. The specialty
pharmacy must require a signature upon receipt of the shipment when shipped to
a health care provider.
(c) A pharmacy benefit
manager or health carrier who requires dispensing of a clinician-administered
drug through a specialty pharmacy shall establish and disclose a process which
allows the health care provider or pharmacy to appeal and have exceptions to
the use of a specialty pharmacy when:
(1) a drug is not
delivered as specified in paragraph (b); or
(2) an attending health
care provider reasonably believes an enrollee may experience immediate and
irreparable harm without the immediate, onetime use of clinician-administered
drug that a health care provider or pharmacy has in stock.
(d) A pharmacy benefit
manager or health carrier shall not require a specialty pharmacy to dispense a
clinician‑administered drug directly to an enrollee with the intention
that the enrollee will transport the clinician‑administered drug to a
health care provider for administration.
(e) A pharmacy benefit
manager, health carrier, health care provider, or pharmacist shall not require
and may not deny the use of a home infusion or infusion site external to the
enrollee's provider office or clinic to administer a clinician-administered
drug when requested by an enrollee and such services are covered by the health
plan and are available and clinically
appropriate as determined by the health care provider and delivered in
accordance with state law.
EFFECTIVE DATE. This
section is effective January 1, 2024, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 55. [65A.298]
HOMEOWNER'S INSURANCE; FORTIFIED PROGRAM STANDARDS.
Subdivision 1. Definitions. (a) For purposes of this section the
following term has the meaning given.
(b) "Insurable
property" means a residential property designated as meeting Fortified
program standards that include a hail supplement as administered by the
Insurance Institute for Business and Home Safety (IBHS).
Subd. 2. Fortified
new property. (a) An insurer
must provide a premium discount or an insurance rate reduction to an owner who
builds or locates a new insurable property in Minnesota.
(b) An owner of
insurable property claiming a premium discount or rate reduction under this
subdivision must submit and maintain a certificate issued by IBHS showing proof
of compliance with the Fortified program standards to the insurer prior to
receiving the premium discount or rate reduction. At the time of policy renewal an insurer may
require evidence that the issued certificate remains in good standing.
Subd. 3. Fortified
existing property. (a) An
insurer must provide a premium discount or insurance rate reduction to an owner
who retrofits an existing property to meet the requirements to be an insurable
property in Minnesota.
(b) An owner of insurable
property claiming a premium discount or rate reduction under this subdivision
must submit a certificate issued by IBHS showing proof of compliance with the
Fortified program standards to the insurer prior to receiving the premium
discount or rate reduction.
Subd. 4. Insurers. (a) A participating insurer must
submit to the commissioner actuarially justified rates and a rating plan for a
person who builds or locates a new insurable property in Minnesota.
(b) A participating
insurer must submit to the commissioner actuarially justified rates and a
rating plan for a person who retrofits an existing property to meet the
requirements to be an insurable property.
(c) A participating
insurer may offer, in addition to the premium discount and insurance rate
reductions required under subdivisions 2 and 3, more generous mitigation
adjustments to an owner of insurable property.
(d) Any premium
discount, rate reduction, or mitigation adjustment offered by an insurer under
this section applies only to policies that include wind coverage and may be
applied to: (1) only the portion of the
premium for wind coverage; or (2) the total premium, if the insurer does not
separate the premium for wind coverage in the insurer's rate filing.
(e) A rate and rating
plan submitted to the commissioner under this section must not be used until 60
days after the rate and rating plan has been filed with the commissioner,
unless the commissioner approves the rate and rating plan before that time. A rating plan, rating classification, and
territories applicable to insurance written by a participating insurer and any
related statistics are subject to chapter 70A.
When the commissioner is evaluating rate and rating plans submitted under
this section, the commissioner must evaluate:
(i) evidence of cost
savings directly attributable to the Fortified program standards as
administered by IBHS; and
(ii) whether the cost
savings are passed along in full to qualified policyholders.
(f) A participating
insurer must resubmit a rate and rating plan at least once every five years
following the initial submission under this section.
(g) The commissioner may
annually publish the premium savings that policyholders experience pursuant to
this section.
(h) An insurer must
provide the commissioner with all requested information necessary for the
commissioner to meet the requirements of this subdivision.
Sec. 56. [65A.299]
STRENGTHEN MINNESOTA HOMES PROGRAM.
Subdivision 1. Short
title. This section may be
cited as the "Strengthen Minnesota Homes Act."
Subd. 2. Definitions. (a) For purposes of this section, the
terms in this subdivision have the meanings given.
(b) "Insurable
property" has the meaning given in section 65A.298, subdivision 1.
(c) "Program"
means the Strengthen Minnesota Homes program established under this section.
Subd. 3. Program
established; purpose, permitted activities.
The Strengthen Minnesota Homes program is established within the
Department of Commerce. The purpose of
the program is to provide grants to retrofit insurable property to resist loss
due to common perils, including but not limited to tornadoes or other
catastrophic windstorm events.
Subd. 4. Strengthen
Minnesota homes account; appropriation.
(a) A strengthen Minnesota homes account is created as a separate
account in the special revenue fund of the state treasury. The account consists of money provided by law
and any other money donated, allotted, transferred, or otherwise provided to
the account. Earnings, including
interest, dividends, and any other earnings arising from assets of the account,
must be credited to the account. Money
remaining in the account at the end of a fiscal year does not cancel to the
general fund and remains in the account until expended. The commissioner must manage the account.
(b) Money in the account
is appropriated to the commissioner to pay for (1) grants issued under the
program, and (2) the reasonable costs incurred by the commissioner to
administer the program.
Subd. 5. Use
of grants. (a) A grant under
this section must be used to retrofit an insurable property.
(b) Grant money provided
under this section must not be used for maintenance or repairs, but may be used
in conjunction with repairs or reconstruction necessitated by damage from wind
or hail.
(c) A project funded by
a grant under this section must be completed within three months of the date
the grant is approved. Failure to
complete the project in a timely manner may result in forfeiture of the grant.
Subd. 6. Applicant eligibility. The commissioner must develop (1) administrative procedures to implement this section, and (2) criteria used to determine whether an applicant is eligible for a grant under this section.
Subd. 7. Contractor
eligibility; conflicts of interest. (a)
To be eligible to work as a contractor on a projected funded by a grant under
this section, the contractor must meet all of the following program
requirements and must maintain a current copy of all certificates, licenses,
and proof of insurance coverage with the program office. The eligible contractor must:
(1) hold a valid
residential building contractor and residential remodeler license issued by the
commissioner of labor and industry;
(2) not be subject to
disciplinary action by the commissioner of labor and industry;
(3) hold any other valid
state or jurisdictional business license or work permits required by law;
(4) possess an in-force
general liability policy with $1,000,000 in liability coverage;
(5) possess an in-force
workers compensation policy;
(6) possess a
certificate of compliance from the commissioner of revenue;
(7) successfully
complete the Fortified Roof for High Wind and Hail training provided by the
IBHS and maintain an active certification.
The training may be offered as separate courses;
(8) agree to the terms
and successfully register as a vendor with the commissioner of management and
budget and receive direct deposit of payment for mitigation work performed
under the program;
(9) maintain Internet
access and keep a valid email address on file with the program and remain
active in the commissioner of management and budget's vendor and supplier
portal while working on the program;
(10) maintain an active
email address for the communication with the program;
(11) successfully
complete the program training; and
(12) agree to follow program
procedures and rules established under this section and by the commissioner.
(b) An eligible
contractor must not have a financial interest, other than payment on behalf of
the homeowner, in any project for which the eligible contractor performs work
toward a fortified designation under the program. An eligible contractor is prohibited from
acting as the evaluator for a fortified designation on any project funded by
the program. An eligible contractor must
report to the commissioner regarding any potential conflict of interest before
work commences on any job funded by the program.
Subd. 8. Evaluator
eligibility; conflicts of interest. (a)
To be eligible to work on the program as an evaluator, the evaluator must meet
all program eligibility requirements and must submit to the commissioner and
maintain a copy of all current certificates and licenses. The evaluator must:
(1) be in good standing
with IBHS and maintain an active certification as a fortified home evaluator
for high wind and hail or a successor certification;
(2) possess a Minnesota
business license and be registered with the secretary of state; and
(3) successfully complete
the program training.
(b) An evaluator must
not have a financial interest in any project that the evaluator inspects for
designation purposes for the program. An
evaluator must not be an eligible contractor or supplier of any material,
product, or system installed in any home that the evaluator inspects for
designation purposes for the program. An
evaluator must not be a sales agent for any home being designated for the
program. An evaluator must inform the
commissioner of any potential conflict of interest impacting the evaluator's
participation in the program.
Subd. 9. Grant
approval; allocation. (a) The
commissioner must review all applications for completeness and must perform
appropriate audits to verify (1) the accuracy of the information on the
application, and (2) that the applicant meets all eligibility rules. All verified applicants must be placed in the
order the application was received. Grants
must be awarded on a first-come, first-served basis, subject to availability of
money for the program.
(b) When a grant is
approved, an approval letter must be sent to the applicant.
(c) An eligible
contractor is prohibited from beginning work until a grant is approved.
(d) In order to assure
equitable distribution of grants in proportion to the income demographics in
counties where the program is made available, grant applications must be
accepted on a first-come, first-served basis.
The commissioner may establish pilot projects as needed to establish a
sustainable program distribution system in any geographic area within
Minnesota.
Subd. 10. Grant
award process; release of grant money.
(a) After a grant application is approved, the eligible
contractor selected by the homeowner may begin the mitigation work.
(b) Once the mitigation
work is completed, the eligible contractor must submit a copy of the signed
contract to the commissioner, along with an invoice seeking payment and an
affidavit stating the fortified standards were met by the work.
(c) The IBHS evaluator
must conduct all required evaluations, including a required interim inspection
during construction and the final inspection, and must confirm that the work
was completed according to the mitigation specifications.
(d)
Grant money must be released on behalf of an approved applicant only after a
fortified designation certificate has been issued for the home. The program or another designated entity
must, on behalf of the homeowner, directly pay the eligible contractor that
performed the mitigation work. The program
or the program's designated entity must pay the eligible contractor the costs
covered by the grant. The homeowner must
pay the eligible contractor for the remaining cost after receiving an IBHS
fortified certificate.
(e) The program must
confirm that the homeowner's insurer provides the appropriate premium discount.
(f) The program must
conduct random reinspections to detect any fraud and must submit any
irregularities to the attorney general.
Subd. 11. Limitations. (a) This section does not create an
entitlement for property owners or obligate the state of Minnesota to pay for
residential property in Minnesota to be inspected or retrofitted. The program under this section is subject to
legislative appropriations, the receipt of federal grants or money, or the
receipt of other sources of grants or money.
The department may obtain grants or other money from the federal
government or other funding sources to support and enhance program activities.
(b) All mitigation under
this section is contingent upon securing all required local permits and
applicable inspections to comply with local building codes and applicable
Fortified program standards. A
mitigation project receiving a grant under this section is subject to random
reinspection at a later date.
Sec. 57. [65A.303]
HOMEOWNER'S LIABILITY INSURANCE; DOGS.
Subdivision 1. Discrimination
prohibited. An insurer
writing homeowner's insurance for property is prohibited from (1) refusing to
issue or renew an insurance policy or contract, or (2) canceling an insurance
policy or contract based solely on the fact that the homeowner harbors or owns
one dog of a specific breed or mixture of breeds.
Subd. 2. Exception. (a) Subdivision 1 does not prohibit an
insurer from (1) refusing to issue or renew an insurance policy or contract,
(2) canceling an insurance policy or contract, or (3) imposing a reasonably
increased premium or rate for an insurance policy or contract based on a dog
meeting the criteria of a dangerous dog or potentially dangerous dog under
section 347.50, or based on sound underwriting and actuarial principles that
are reasonably related to actual or anticipated loss experience.
(b) Subdivision 1 does
not prohibit an insurer from (1) refusing to issue or renew an insurance policy
or contract, (2) canceling an insurance policy or contract, or (3) imposing a
reasonably increased premium or rate for an insurance policy or contract if the
dog has a history of causing bodily injury or if the dog owner has a history of
owning other animals who caused bodily injury.
EFFECTIVE DATE. This
section is effective April 1, 2024, and applies to insurance policies and
contracts offered, issued, or sold after that date.
Sec. 58. Minnesota Statutes 2022, section 65B.49, is amended by adding a subdivision to read:
Subd. 10. Time
limitations. (a) Unless
expressly provided for in this chapter, a plan of reparation security must
conform to the six-year time limitation provided under section 541.05,
subdivision 1, clause (1).
(b) The time limitation
for commencing a cause of action relating to underinsured motorist coverage
under subdivision 3a is four years from the date of accrual.
EFFECTIVE DATE. This
section is effective August 1, 2023, and applies to contracts issued or renewed
on or after that date.
Sec. 59. Minnesota Statutes 2022, section 151.071, subdivision 1, is amended to read:
Subdivision 1. Forms of disciplinary action. When the board finds that a licensee, registrant, or applicant has engaged in conduct prohibited under subdivision 2, it may do one or more of the following:
(1) deny the issuance of a license or registration;
(2) refuse to renew a license or registration;
(3) revoke the license or registration;
(4) suspend the license or registration;
(5) impose limitations, conditions, or both on the license or registration, including but not limited to: the limitation of practice to designated settings; the limitation of the scope of practice within designated settings; the imposition of retraining or rehabilitation requirements; the requirement of practice under supervision; the requirement of participation in a diversion program such as that established pursuant to section 214.31 or the conditioning of continued practice on demonstration of knowledge or skills by appropriate examination or other review of skill and competence;
(6) impose a civil penalty not exceeding $10,000 for each separate violation, except that a civil penalty not exceeding $25,000 may be imposed for each separate violation of section 62J.842, the amount of the civil penalty to be fixed so as to deprive a licensee or registrant of any economic advantage gained by reason of the violation, to discourage similar violations by the licensee or registrant or any other licensee or registrant, or to reimburse the board for the cost of the investigation and proceeding, including but not limited to, fees paid for services provided by the Office of Administrative Hearings, legal and investigative services provided by the Office of the Attorney General, court reporters, witnesses, reproduction of records, board members' per diem compensation, board staff time, and travel costs and expenses incurred by board staff and board members; and
(7) reprimand the licensee or registrant.
Sec. 60. Minnesota Statutes 2022, section 151.071, subdivision 2, is amended to read:
Subd. 2. Grounds for disciplinary action. The following conduct is prohibited and is grounds for disciplinary action:
(1) failure to demonstrate the qualifications or satisfy the requirements for a license or registration contained in this chapter or the rules of the board. The burden of proof is on the applicant to demonstrate such qualifications or satisfaction of such requirements;
(2) obtaining a license by fraud or by misleading the board in any way during the application process or obtaining a license by cheating, or attempting to subvert the licensing examination process. Conduct that subverts or attempts to subvert the licensing examination process includes, but is not limited to: (i) conduct that violates the security of the examination materials, such as removing examination materials from the examination room or having unauthorized possession of any portion of a future, current, or previously administered licensing examination; (ii) conduct that violates the standard of test administration, such as communicating with another examinee during administration of the examination, copying another examinee's answers, permitting another examinee to copy one's answers, or possessing unauthorized materials; or (iii) impersonating an examinee or permitting an impersonator to take the examination on one's own behalf;
(3) for a pharmacist, pharmacy technician, pharmacist intern, applicant for a pharmacist or pharmacy license, or applicant for a pharmacy technician or pharmacist intern registration, conviction of a felony reasonably related to the practice of pharmacy. Conviction as used in this subdivision includes a conviction of an offense that if committed in this state would be deemed a felony without regard to its designation elsewhere, or a criminal proceeding where a finding or verdict of guilt is made or returned but the adjudication of guilt is either withheld or not entered thereon. The board may delay the issuance of a new license or registration if the applicant has been charged with a felony until the matter has been adjudicated;
(4) for a facility, other than a pharmacy, licensed or registered by the board, if an owner or applicant is convicted of a felony reasonably related to the operation of the facility. The board may delay the issuance of a new license or registration if the owner or applicant has been charged with a felony until the matter has been adjudicated;
(5) for a controlled substance researcher, conviction of a felony reasonably related to controlled substances or to the practice of the researcher's profession. The board may delay the issuance of a registration if the applicant has been charged with a felony until the matter has been adjudicated;
(6) disciplinary action taken by another state or by one of this state's health licensing agencies:
(i) revocation, suspension, restriction, limitation, or other disciplinary action against a license or registration in another state or jurisdiction, failure to report to the board that charges or allegations regarding the person's license or registration have been brought in another state or jurisdiction, or having been refused a license or registration by any other state or jurisdiction. The board may delay the issuance of a new license or registration if an investigation or disciplinary action is pending in another state or jurisdiction until the investigation or action has been dismissed or otherwise resolved; and
(ii) revocation, suspension, restriction, limitation, or other disciplinary action against a license or registration issued by another of this state's health licensing agencies, failure to report to the board that charges regarding the person's license or registration have been brought by another of this state's health licensing agencies, or having been refused a license or registration by another of this state's health licensing agencies. The board may delay the issuance of a new license or registration if a disciplinary action is pending before another of this state's health licensing agencies until the action has been dismissed or otherwise resolved;
(7) for a pharmacist, pharmacy, pharmacy technician, or pharmacist intern, violation of any order of the board, of any of the provisions of this chapter or any rules of the board or violation of any federal, state, or local law or rule reasonably pertaining to the practice of pharmacy;
(8) for a facility, other than a pharmacy, licensed by the board, violations of any order of the board, of any of the provisions of this chapter or the rules of the board or violation of any federal, state, or local law relating to the operation of the facility;
(9) engaging in any unethical conduct; conduct likely to deceive, defraud, or harm the public, or demonstrating a willful or careless disregard for the health, welfare, or safety of a patient; or pharmacy practice that is professionally incompetent, in that it may create unnecessary danger to any patient's life, health, or safety, in any of which cases, proof of actual injury need not be established;
(10) aiding or abetting an unlicensed person in the practice of pharmacy, except that it is not a violation of this clause for a pharmacist to supervise a properly registered pharmacy technician or pharmacist intern if that person is performing duties allowed by this chapter or the rules of the board;
(11) for an individual licensed or registered by the board, adjudication as mentally ill or developmentally disabled, or as a chemically dependent person, a person dangerous to the public, a sexually dangerous person, or a person who has a sexual psychopathic personality, by a court of competent jurisdiction, within or without this state. Such adjudication shall automatically suspend a license for the duration thereof unless the board orders otherwise;
(12) for a pharmacist or pharmacy intern, engaging in unprofessional conduct as specified in the board's rules. In the case of a pharmacy technician, engaging in conduct specified in board rules that would be unprofessional if it were engaged in by a pharmacist or pharmacist intern or performing duties specifically reserved for pharmacists under this chapter or the rules of the board;
(13) for a pharmacy, operation of the pharmacy without a pharmacist present and on duty except as allowed by a variance approved by the board;
(14) for a pharmacist, the inability to practice pharmacy with reasonable skill and safety to patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type of material or as a result of any mental or physical condition, including deterioration through the aging process or loss of motor skills. In the case of registered pharmacy technicians, pharmacist interns, or controlled substance researchers, the inability to carry out duties allowed under this chapter or the rules of the board with reasonable skill and safety to patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type of material or as a result of any mental or physical condition, including deterioration through the aging process or loss of motor skills;
(15) for a pharmacist, pharmacy, pharmacist intern, pharmacy technician, medical gas dispenser, or controlled substance researcher, revealing a privileged communication from or relating to a patient except when otherwise required or permitted by law;
(16) for a pharmacist or pharmacy, improper management of patient records, including failure to maintain adequate patient records, to comply with a patient's request made pursuant to sections 144.291 to 144.298, or to furnish a patient record or report required by law;
(17) fee splitting, including without limitation:
(i) paying, offering to pay, receiving, or agreeing to receive, a commission, rebate, kickback, or other form of remuneration, directly or indirectly, for the referral of patients;
(ii) referring a patient to any health care provider as defined in sections 144.291 to 144.298 in which the licensee or registrant has a financial or economic interest as defined in section 144.6521, subdivision 3, unless the licensee or registrant has disclosed the licensee's or registrant's financial or economic interest in accordance with section 144.6521; and
(iii) any arrangement through which a pharmacy, in which the prescribing practitioner does not have a significant ownership interest, fills a prescription drug order and the prescribing practitioner is involved in any manner, directly or indirectly, in setting the price for the filled prescription that is charged to the patient, the patient's insurer or pharmacy benefit manager, or other person paying for the prescription or, in the case of veterinary patients, the price for the filled prescription that is charged to the client or other person paying for the prescription, except that a veterinarian and a pharmacy may enter into such an arrangement provided that the client or other person paying for the prescription is notified, in writing and with each prescription dispensed, about the arrangement, unless such arrangement involves pharmacy services provided for livestock, poultry, and agricultural production systems, in which case client notification would not be required;
(18) engaging in abusive or fraudulent billing practices, including violations of the federal Medicare and Medicaid laws or state medical assistance laws or rules;
(19) engaging in conduct with a patient that is sexual or may reasonably be interpreted by the patient as sexual, or in any verbal behavior that is seductive or sexually demeaning to a patient;
(20) failure to make reports as required by section 151.072 or to cooperate with an investigation of the board as required by section 151.074;
(21) knowingly providing false or misleading information that is directly related to the care of a patient unless done for an accepted therapeutic purpose such as the dispensing and administration of a placebo;
(22) aiding suicide or aiding attempted suicide in violation of section 609.215 as established by any of the following:
(i) a copy of the record of criminal conviction or plea of guilty for a felony in violation of section 609.215, subdivision 1 or 2;
(ii) a copy of the record of a judgment of contempt of court for violating an injunction issued under section 609.215, subdivision 4;
(iii) a copy of the record of a judgment assessing damages under section 609.215, subdivision 5; or
(iv) a finding by the board that the person violated section 609.215, subdivision 1 or 2. The board must investigate any complaint of a violation of section 609.215, subdivision 1 or 2;
(23) for a pharmacist,
practice of pharmacy under a lapsed or nonrenewed license. For a pharmacist intern, pharmacy technician,
or controlled substance researcher, performing duties permitted to such
individuals by this chapter or the rules of the board under a lapsed or
nonrenewed registration. For a facility
required to be licensed under this chapter, operation of the facility under a
lapsed or nonrenewed license or registration; and
(24) for a pharmacist,
pharmacist intern, or pharmacy technician, termination or discharge from the
health professionals services program for reasons other than the satisfactory
completion of the program.; and
(25) for a manufacturer,
a violation of section 62J.842 or 62J.845.
Sec. 61. Minnesota Statutes 2022, section 256B.0631, subdivision 1, is amended to read:
Subdivision 1. Cost-sharing. (a) Except as provided in subdivision 2,
the medical assistance benefit plan shall include the following cost-sharing
for all recipients, effective for services provided on or after September 1,
2011:
(1) $3 per nonpreventive visit, except as provided in paragraph (b). For purposes of this subdivision, a visit means an episode of service which is required because of a recipient's symptoms, diagnosis, or established illness, and which is delivered in an ambulatory setting by a physician or physician assistant, chiropractor, podiatrist, nurse midwife, advanced practice nurse, audiologist, optician, or optometrist;
(2) $3.50 for nonemergency visits to a hospital-based emergency room, except that this co-payment shall be increased to $20 upon federal approval;
(3) $3 per brand-name drug prescription, $1 per generic drug prescription, and $1 per prescription for a brand‑name multisource drug listed in preferred status on the preferred drug list, subject to a $12 per month maximum for prescription drug co-payments. No co-payments shall apply to antipsychotic drugs when used for the treatment of mental illness;
(4) a family deductible
equal to $2.75 per month per family and adjusted annually by the percentage
increase in the medical care component of the CPI-U for the period of September
to September of the preceding calendar year, rounded to the next higher
five-cent increment; and
(5) total monthly cost-sharing
must not exceed five percent of family income.
For purposes of this paragraph, family income is the total earned and
unearned income of the individual and the individual's spouse, if the spouse is
enrolled in medical assistance and also subject to the five percent limit on
cost-sharing. This paragraph does not
apply to premiums charged to individuals described under section 256B.057,
subdivision 9.; and
(6) cost-sharing for
prescription drugs and related medical supplies to treat chronic disease must
comply with the requirements of section 62Q.481.
(b) Recipients of medical assistance are responsible for all co-payments and deductibles in this subdivision.
(c) Notwithstanding paragraph (b), the commissioner, through the contracting process under sections 256B.69 and 256B.692, may allow managed care plans and county-based purchasing plans to waive the family deductible under paragraph (a), clause (4). The value of the family deductible shall not be included in the capitation payment to managed care plans and county-based purchasing plans. Managed care plans and county-based purchasing plans shall certify annually to the commissioner the dollar value of the family deductible.
(d) Notwithstanding paragraph (b), the commissioner may waive the collection of the family deductible described under paragraph (a), clause (4), from individuals and allow long-term care and waivered service providers to assume responsibility for payment.
(e) Notwithstanding paragraph (b), the commissioner, through the contracting process under section 256B.0756 shall allow the pilot program in Hennepin County to waive co-payments. The value of the co-payments shall not be included in the capitation payment amount to the integrated health care delivery networks under the pilot program.
EFFECTIVE DATE. This
section is effective January 1, 2024.
Sec. 62. Minnesota Statutes 2022, section 256B.69, subdivision 5a, is amended to read:
Subd. 5a. Managed care contracts. (a) Managed care contracts under this section and section 256L.12 shall be entered into or renewed on a calendar year basis. The commissioner may issue separate contracts with requirements specific to services to medical assistance recipients age 65 and older.
(b) A prepaid health plan providing covered health services for eligible persons pursuant to chapters 256B and 256L is responsible for complying with the terms of its contract with the commissioner. Requirements applicable to managed care programs under chapters 256B and 256L established after the effective date of a contract with the commissioner take effect when the contract is next issued or renewed.
(c) The commissioner shall withhold five percent of managed care plan payments under this section and county‑based purchasing plan payments under section 256B.692 for the prepaid medical assistance program pending completion of performance targets. Each performance target must be quantifiable, objective, measurable, and reasonably attainable, except in the case of a performance target based on a federal or state law or rule. Criteria for assessment of each performance target must be outlined in writing prior to the contract effective date. Clinical or utilization performance targets and their related criteria must consider evidence-based research and reasonable interventions when available or applicable to the populations served, and must be developed with input from external clinical experts and stakeholders, including managed care plans, county-based purchasing plans, and providers. The managed care or county-based purchasing plan must demonstrate, to the commissioner's satisfaction, that the data submitted regarding attainment of the performance target is accurate. The commissioner shall periodically change the administrative measures used as performance targets in order to improve plan performance across a broader range of administrative services. The performance targets must include measurement of plan efforts to contain spending on health care services and administrative activities. The commissioner may adopt
plan‑specific performance targets that take into account factors affecting only one plan, including characteristics of the plan's enrollee population. The withheld funds must be returned no sooner than July of the following year if performance targets in the contract are achieved. The commissioner may exclude special demonstration projects under subdivision 23.
(d) The commissioner shall require that managed care plans:
(1) use the assessment and
authorization processes, forms, timelines, standards, documentation, and data
reporting requirements, protocols, billing processes, and policies consistent
with medical assistance fee-for-service or the Department of Human Services
contract requirements for all personal care assistance services under section
256B.0659 and community first services and supports under section 256B.85; and
(2) by January 30 of each
year that follows a rate increase for any aspect of services under section
256B.0659 or 256B.85, inform the commissioner and the chairs and ranking
minority members of the legislative committees with jurisdiction over rates
determined under section 256B.851 of the amount of the rate increase that is
paid to each personal care assistance provider agency with which the plan has a
contract.; and
(3) use a six-month
timely filing standard and provide an exemption to the timely filing timeliness
for the resubmission of claims where there has been a denial, request for more
information, or system issue.
(e) Effective for services rendered on or after January 1, 2012, the commissioner shall include as part of the performance targets described in paragraph (c) a reduction in the health plan's emergency department utilization rate for medical assistance and MinnesotaCare enrollees, as determined by the commissioner. For 2012, the reduction shall be based on the health plan's utilization in 2009. To earn the return of the withhold each subsequent year, the managed care plan or county-based purchasing plan must achieve a qualifying reduction of no less than ten percent of the plan's emergency department utilization rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, compared to the previous measurement year until the final performance target is reached. When measuring performance, the commissioner must consider the difference in health risk in a managed care or county-based purchasing plan's membership in the baseline year compared to the measurement year, and work with the managed care or county-based purchasing plan to account for differences that they agree are significant.
The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if the managed care plan or county-based purchasing plan demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate was achieved. The commissioner shall structure the withhold so that the commissioner returns a portion of the withheld funds in amounts commensurate with achieved reductions in utilization less than the targeted amount.
The withhold described in this paragraph shall continue for each consecutive contract period until the plan's emergency room utilization rate for state health care program enrollees is reduced by 25 percent of the plan's emergency room utilization rate for medical assistance and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate with the health plans in meeting this performance target and shall accept payment withholds that may be returned to the hospitals if the performance target is achieved.
(f) Effective for services rendered on or after January 1, 2012, the commissioner shall include as part of the performance targets described in paragraph (c) a reduction in the plan's hospitalization admission rate for medical assistance and MinnesotaCare enrollees, as determined by the commissioner. To earn the return of the withhold each year, the managed care plan or county-based purchasing plan must achieve a qualifying reduction of no less than five percent of the plan's hospital admission rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, compared to the previous calendar year until the final performance target is reached. When measuring performance, the commissioner must consider the difference in
health risk in a managed care or county-based purchasing plan's membership in the baseline year compared to the measurement year, and work with the managed care or county-based purchasing plan to account for differences that they agree are significant.
The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if the managed care plan or county-based purchasing plan demonstrates to the satisfaction of the commissioner that this reduction in the hospitalization rate was achieved. The commissioner shall structure the withhold so that the commissioner returns a portion of the withheld funds in amounts commensurate with achieved reductions in utilization less than the targeted amount.
The withhold described in this paragraph shall continue until there is a 25 percent reduction in the hospital admission rate compared to the hospital admission rates in calendar year 2011, as determined by the commissioner. The hospital admissions in this performance target do not include the admissions applicable to the subsequent hospital admission performance target under paragraph (g). Hospitals shall cooperate with the plans in meeting this performance target and shall accept payment withholds that may be returned to the hospitals if the performance target is achieved.
(g) Effective for services rendered on or after January 1, 2012, the commissioner shall include as part of the performance targets described in paragraph (c) a reduction in the plan's hospitalization admission rates for subsequent hospitalizations within 30 days of a previous hospitalization of a patient regardless of the reason, for medical assistance and MinnesotaCare enrollees, as determined by the commissioner. To earn the return of the withhold each year, the managed care plan or county-based purchasing plan must achieve a qualifying reduction of the subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, of no less than five percent compared to the previous calendar year until the final performance target is reached.
The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if the managed care plan or county-based purchasing plan demonstrates to the satisfaction of the commissioner that a qualifying reduction in the subsequent hospitalization rate was achieved. The commissioner shall structure the withhold so that the commissioner returns a portion of the withheld funds in amounts commensurate with achieved reductions in utilization less than the targeted amount.
The withhold described in this paragraph must continue for each consecutive contract period until the plan's subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, is reduced by 25 percent of the plan's subsequent hospitalization rate for calendar year 2011. Hospitals shall cooperate with the plans in meeting this performance target and shall accept payment withholds that must be returned to the hospitals if the performance target is achieved.
(h) Effective for services rendered on or after January 1, 2013, through December 31, 2013, the commissioner shall withhold 4.5 percent of managed care plan payments under this section and county-based purchasing plan payments under section 256B.692 for the prepaid medical assistance program. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following year. The commissioner may exclude special demonstration projects under subdivision 23.
(i) Effective for services rendered on or after January 1, 2014, the commissioner shall withhold three percent of managed care plan payments under this section and county-based purchasing plan payments under section 256B.692 for the prepaid medical assistance program. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following year. The commissioner may exclude special demonstration projects under subdivision 23.
(j) A managed care plan or a county-based purchasing plan under section 256B.692 may include as admitted assets under section 62D.044 any amount withheld under this section that is reasonably expected to be returned.
(k) Contracts between the commissioner and a prepaid health plan are exempt from the set-aside and preference provisions of section 16C.16, subdivisions 6, paragraph (a), and 7.
(l) The return of the withhold under paragraphs (h) and (i) is not subject to the requirements of paragraph (c).
(m) Managed care plans and county-based purchasing plans shall maintain current and fully executed agreements for all subcontractors, including bargaining groups, for administrative services that are expensed to the state's public health care programs. Subcontractor agreements determined to be material, as defined by the commissioner after taking into account state contracting and relevant statutory requirements, must be in the form of a written instrument or electronic document containing the elements of offer, acceptance, consideration, payment terms, scope, duration of the contract, and how the subcontractor services relate to state public health care programs. Upon request, the commissioner shall have access to all subcontractor documentation under this paragraph. Nothing in this paragraph shall allow release of information that is nonpublic data pursuant to section 13.02.
Sec. 63. Minnesota Statutes 2022, section 256L.03, subdivision 5, is amended to read:
Subd. 5. Cost-sharing. (a) Co-payments, coinsurance, and deductibles do not apply to children under the age of 21 and to American Indians as defined in Code of Federal Regulations, title 42, section 600.5.
(b) The commissioner shall adjust co-payments, coinsurance, and deductibles for covered services in a manner sufficient to maintain the actuarial value of the benefit to 94 percent. The cost-sharing changes described in this paragraph do not apply to eligible recipients or services exempt from cost-sharing under state law. The cost-sharing changes described in this paragraph shall not be implemented prior to January 1, 2016.
(c) The cost-sharing changes authorized under paragraph (b) must satisfy the requirements for cost-sharing under the Basic Health Program as set forth in Code of Federal Regulations, title 42, sections 600.510 and 600.520.
(d) Cost-sharing for
prescription drugs and related medical supplies to treat chronic disease must
comply with the requirements of section 62Q.481.
EFFECTIVE DATE. This
section is effective January 1, 2024.
Sec. 64. AUTOMOTIVE
SELF-INSURANCE; RULES AMENDMENT; EXPEDITED RULEMAKING.
Subdivision 1. Self-insurance working capital condition. The commissioner of commerce must amend Minnesota Rules, part 2770.6500, subpart 2, item B, subitem (5), to require the commissioner's grant of self‑insurance authority to an applicant to be based on the applicant's net working capital in lieu of the applicant's net funds flow.
Subd. 2. Commissioner
discretion to grant self-insurance authority. The commissioner of commerce must
amend Minnesota Rules, part 2770.6500, subpart 2, item D, to, notwithstanding
any other provision of Minnesota Rules, part 2770.6500, permit the commissioner
to grant self-insurance authority to an applicant that is not a political
subdivision and that has not had positive net income or positive working
capital in at least three years of the last five-year period if the applicant's
working capital, debt structure, profitability, and overall financial integrity
of the applicant and its parent company, if one exists, demonstrate a
continuing ability of the applicant to satisfy any financial obligations that
have been and might be incurred under the no-fault act.
Subd. 3. Working
capital. The commissioner of
commerce must define working capital for the purposes of Minnesota Rules, part
2770.6500.
Subd. 4. Commissioner
discretion to revoke self-insurance authority. The commissioner of commerce must
amend Minnesota Rules, part 2770.7300, to permit, in lieu of require, the
commissioner to revoke a self-insurer's authorization to self-insure based on
the commissioner's determinations under Minnesota Rules, part 2770.7300, items
A and B.
Subd. 5. Expedited
rulemaking authorized. The
commissioner of commerce may use the expedited rulemaking process under
Minnesota Statutes, section 14.389, to amend rules under this section.
EFFECTIVE DATE. This
section is effective the day following final enactment.
Sec. 65. EVALUATION
OF EXISTING STATUTORY HEALTH BENEFIT MANDATES.
Subdivision 1. Evaluation
process and content. Beginning
August 1, 2023, and annually thereafter for the next five calendar years, the
commissioner of commerce shall conduct an evaluation of the economic cost and
health benefits of one state-required benefit included in Minnesota's
EHB-benchmark plan, as defined in Code of Federal Regulations, title 45,
section 156.20. The mandated benefit to
be studied each year must be chosen from a list developed by the chairs of the
house of representatives and senate commerce committees, in consultation with
the ranking minority members of the house of representatives and senate
commerce committees. The chairs and
ranking minority members of the house of representatives and senate commerce
committees must agree upon and inform the commissioner of at least one mandate
to be reviewed for the period between August 1, 2023, and August 1, 2024. The commissioner shall consult with the
commissioner of health and clinical and actuarial experts to assist in the
evaluation and synthesis of available evidence.
The commissioner may obtain public input as part of the evaluation. At a minimum, the evaluation must consider
the following:
(1) cost for services;
(2) the share of
Minnesotans' health insurance premiums that are tied to each current mandated
benefit;
(3) utilization of
services;
(4) contribution to
individual and public health;
(5) extent to which the
mandate conforms with existing standards of care in terms of appropriateness or
evidence-based medicine;
(6) the historical context
in which the mandate was enacted, including how the mandate interacts with
other required benefits; and
(7) other relevant
criteria of effectiveness and efficacy as determined by the commissioner in
consultation with the commissioner of health.
Subd. 2. Report
to legislature. The
commissioner must submit a written report on the evaluation to the chairs and
ranking minority members of the legislative committees with jurisdiction over
health insurance policy and finance no later than 180 days after the
commissioner receives notification from a chair, as required under Minnesota
Statutes, section 62J.26, subdivision 3.
Sec. 66. REPEALER.
Minnesota Statutes 2022,
section 62A.31, subdivisions 1b and 1i, are repealed.
EFFECTIVE DATE. This
section is effective August 1, 2025, and applies to policies offered, issued,
or renewed on or after that date.
ARTICLE 3
FINANCIAL INSTITUTIONS
Section 1. Minnesota Statutes 2022, section 46.131, subdivision 11, is amended to read:
Subd. 11. Financial institutions account; appropriation. (a) The financial institutions account is created as a separate account in the special revenue fund. Earnings, including interest, dividends, and any other earnings arising from account assets, must be credited to the account.
(b) The account consists of
funds received from assessments under subdivision 7, examination fees under
subdivision 8, and funds received pursuant to subdivision 10 and the following
provisions: sections 46.04; 46.041;
46.048, subdivision 1; 47.101; 47.54, subdivision 1; 47.60, subdivision 3;
47.62, subdivision 4; 48.61, subdivision 7, paragraph (b); 49.36, subdivision
1; 52.203; 53B.09; 53B.11, subdivision 1; 53B.38; 53B.41; 53B.43;
53C.02; 56.02; 58.10; 58A.045, subdivision 2; 59A.03; 216C.437, subdivision 12;
332A.04; and 332B.04.
(c) Funds in the account are annually appropriated to the commissioner of commerce for activities under this section.
Sec. 2. Minnesota Statutes 2022, section 47.0153, subdivision 1, is amended to read:
Subdivision 1. Emergency closings. When the officers of a financial institution are of the opinion that an emergency exists, or is impending, which affects, or may affect, a financial institution's offices, they shall have the authority, in the reasonable exercise of their discretion, to determine not to open any of its offices on any business day or, if having opened, to close an office during the continuation of the emergency, even if the commissioner does not issue a proclamation of emergency. The office closed shall remain closed until the time that the officers determine the emergency has ended, and for the further time reasonably necessary to reopen. No financial institution office shall remain closed for more than 48 consecutive hours in a Monday through Friday period, excluding other legal holidays, without the prior approval of the commissioner.
Sec. 3. Minnesota Statutes 2022, section 47.59, subdivision 2, is amended to read:
Subd. 2. Application. Extensions of credit or purchases of
extensions of credit by financial institutions under sections 47.20, 47.21,
47.201, 47.204, 47.58, 47.60, 48.153, 48.185, 48.195, 59A.01 to 59A.15,
334.01, 334.011, 334.012, 334.022, 334.06, and 334.061 to 334.19 may, but need
not, be made according to those sections in lieu of the authority set forth in
this section to the extent those sections authorize the financial institution
to make extensions of credit or purchase extensions of credit under those
sections. If a financial institution
elects to make an extension of credit or to purchase an extension of credit
under those other sections, the extension of credit or the purchase of an
extension of credit is subject to those sections and not this section, except
this subdivision, and except as expressly provided in those sections. A financial institution may also charge an
organization a rate of interest and any charges agreed to by the organization
and may calculate and collect finance and other charges in any manner agreed to
by that organization. Except for
extensions of credit a financial institution elects to make under section
334.01, 334.011, 334.012, 334.022, 334.06, or 334.061 to 334.19, chapter 334
does not apply to extensions of credit made according to this section or the
sections listed in this subdivision. This
subdivision does not authorize a financial institution to extend credit or
purchase an extension of credit under any of the sections
listed in this subdivision if the financial institution is not authorized to do so under those sections. A financial institution extending credit under any of the sections listed in this subdivision shall specify in the promissory note, contract, or other loan document the section under which the extension of credit is made.
EFFECTIVE DATE; APPLICATION.
This section is effective January 1, 2024, and applies to
consumer small loans and consumer short-term loans originated on or after that
date.
Sec. 4. Minnesota Statutes 2022, section 47.60, subdivision 1, is amended to read:
Subdivision 1. Definitions. For purposes of this section, the terms defined have the meanings given them:
(a) "Consumer small loan" is a loan transaction in which cash is advanced to a borrower for the borrower's own personal, family, or household purpose. A consumer small loan is a short-term, unsecured loan to be repaid in a single installment. The cash advance of a consumer small loan is equal to or less than $350. A consumer small loan includes an indebtedness evidenced by but not limited to a promissory note or agreement to defer the presentation of a personal check for a fee.
(b) "Consumer small loan lender" is a financial institution as defined in section 47.59 or a business entity registered with the commissioner and engaged in the business of making consumer small loans.
(c) "Annual
percentage rate" means a measure of the cost of credit, expressed as a
yearly rate, that relates the amount and timing of value received by the
consumer to the amount and timing of payments made. Annual percentage interest rate includes all
interest, finance charges, and fees. The
annual percentage rate must be determined in accordance with either the
actuarial method or the United States Rule method.
EFFECTIVE DATE; APPLICATION.
This section is effective January 1, 2024, and applies to
consumer small loans and consumer short-term loans originated on or after that
date.
Sec. 5. Minnesota Statutes 2022, section 47.60, subdivision 2, is amended to read:
Subd. 2. Authorization,
terms, conditions, and prohibitions. (a)
In lieu of the interest, finance charges, or fees in any other law connection
with a consumer small loan, a consumer small loan lender may charge the
following: an annual percentage
rate of up to 50 percent. No other
charges or payments are permitted or may be received by the lender in
connection with a consumer small loan.
(1) on any amount up to
and including $50, a charge of $5.50 may be added;
(2) on amounts in excess
of $50, but not more than $100, a charge may be added equal to ten percent of
the loan proceeds plus a $5 administrative fee;
(3) on amounts in excess
of $100, but not more than $250, a charge may be added equal to seven percent
of the loan proceeds with a minimum of $10 plus a $5 administrative fee;
(4) for amounts in
excess of $250 and not greater than the maximum in subdivision 1, paragraph
(a), a charge may be added equal to six percent of the loan proceeds with a
minimum of $17.50 plus a $5 administrative fee.
(b) The term of a loan made under this section shall be for no more than 30 calendar days.
(c) After maturity, the contract rate must not exceed 2.75 percent per month of the remaining loan proceeds after the maturity date calculated at a rate of 1/30 of the monthly rate in the contract for each calendar day the balance is outstanding.
(d) No insurance charges or other charges must be permitted to be charged, collected, or imposed on a consumer small loan except as authorized in this section.
(e) On a loan transaction in which cash is advanced in exchange for a personal check, a return check charge may be charged as authorized by section 604.113, subdivision 2, paragraph (a). The civil penalty provisions of section 604.113, subdivision 2, paragraph (b), may not be demanded or assessed against the borrower.
(f) A loan made under this section must not be repaid by the proceeds of another loan made under this section by the same lender or related interest. The proceeds from a loan made under this section must not be applied to another loan from the same lender or related interest. No loan to a single borrower made pursuant to this section shall be split or divided and no single borrower shall have outstanding more than one loan with the result of collecting a higher charge than permitted by this section or in an aggregate amount of principal exceed at any one time the maximum of $350.
(g) A loan made under
this section with an annual percentage rate that exceeds 36 percent must comply
with section 47.603.
EFFECTIVE DATE; APPLICATION.
This section is effective January 1, 2024, and applies to
consumer small loans and consumer short-term loans originated on or after that
date.
Sec. 6. Minnesota Statutes 2022, section 47.60, is amended by adding a subdivision to read:
Subd. 8. No
evasion. (a) A person must
not engage in any device, subterfuge, or pretense to evade the requirements of
this section, including but not limited to:
(1) making loans
disguised as a personal property sale and leaseback transaction;
(2) disguising loan
proceeds as a cash rebate for the pretextual installment sale of goods or
services; or
(3) making, offering,
assisting, or arranging for a debtor to obtain a loan with a greater rate or
amount of interest, consideration, charge, or payment than is permitted by this
section through any method, including mail, telephone, Internet, or any
electronic means, regardless of whether a person has a physical location in
Minnesota.
(b) A person is a
consumer small loan lender subject to the requirements of this section
notwithstanding the fact that a person purports to act as an agent or service
provider, or acts in another capacity for another person that is not subject to
this section, if a person:
(1) directly or
indirectly holds, acquires, or maintains the predominant economic interest,
risk, or reward in a loan or lending business; or
(2) both: (i) markets, solicits, brokers, arranges, or
facilitates a loan; and (ii) holds or holds the right, requirement, or first
right of refusal to acquire loans, receivables, or other direct or interest in
a loan.
(c) A person is a
consumer small loan lender subject to the requirements of this section if the
totality of the circumstances indicate that a person is a lender and the
transaction is structured to evade the requirements of this section. Circumstances that weigh in favor of a person
being a lender in a transaction include but are not limited to instances where
a person:
(1) indemnifies,
insures, or protects a person not subject to this section from any costs or
risks related to a loan;
(2) predominantly
designs, controls, or operates lending activity;
(3) holds the trademark or
intellectual property rights in the brand, underwriting system, or other core
aspects of a lending business; or
(4) purports to act as an
agent or service provider, or acts in another capacity, for a person not
subject to this section while acting directly as a lender in one or more
states.
EFFECTIVE DATE; APPLICATION.
This section is effective January 1, 2024, and applies to
consumer small loans and consumer short-term loans originated on or after that
date.
Sec. 7. Minnesota Statutes 2022, section 47.601, subdivision 1, is amended to read:
Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in this subdivision have the meanings given.
(b) "Annual
percentage rate" has the meaning given in section 47.60, subdivision 1.
(b) (c) "Borrower"
means an individual who obtains a consumer short-term loan primarily for
personal, family, or household purposes.
(c) (d) "Commissioner"
means the commissioner of commerce.
(d) (e) "Consumer
short-term loan" means a loan to a borrower which has a principal amount,
or an advance on a credit limit, of $1,000 $1,300 or less and
requires a minimum payment within 60 days of loan origination or credit advance
of more than 25 percent of the principal balance or credit advance. For the purposes of this section, each new
advance of money to a borrower under a consumer short-term loan agreement
constitutes a new consumer short-term loan.
A "consumer short-term loan" does not include any transaction
made under chapter 325J or a loan made by a consumer short-term lender where,
in the event of default on the loan, the sole recourse for recovery of the
amount owed, other than a lawsuit for damages for the debt, is to proceed
against physical goods pledged by the borrower as collateral for the loan.
(e) (f) "Consumer
short-term lender" means an individual or entity engaged in the business
of making or arranging consumer short-term loans, other than a state or
federally chartered bank, savings bank, or credit union. For the purposes of this paragraph,
arranging consumer short-term loans includes but is not limited to any substantial
involvement in facilitating, marketing, lead-generating, underwriting,
servicing, or collecting consumer short-term loans.
EFFECTIVE DATE; APPLICATION.
This section is effective January 1, 2024, and applies to
consumer small loans and consumer short-term loans originated on or after that
date.
Sec. 8. Minnesota Statutes 2022, section 47.601, subdivision 2, is amended to read:
Subd. 2. Consumer short-term loan contract. (a) No contract or agreement between a consumer short-term loan lender and a borrower residing in Minnesota may contain the following:
(1) a provision selecting a law other than Minnesota law under which the contract is construed or enforced;
(2) a provision choosing a forum for dispute resolution other than the state of Minnesota; or
(3) a provision limiting class actions against a consumer short-term lender for violations of subdivision 3 or for making consumer short-term loans:
(i) without a required license issued by the commissioner; or
(ii)
in which interest rates, fees, charges, or loan amounts exceed those allowable
under section 47.59, subdivision 6, or 47.60, subdivision 2, other
than by de minimis amounts if no pattern or practice exists.
(b) Any provision prohibited by paragraph (a) is void and unenforceable.
(c) A consumer short-term loan lender must furnish a copy of the written loan contract to each borrower. The contract and disclosures must be written in the language in which the loan was negotiated with the borrower and must contain:
(1) the name; address, which may not be a post office box; and telephone number of the lender making the consumer short-term loan;
(2) the name and title of the individual employee or representative who signs the contract on behalf of the lender;
(3) an itemization of the fees and interest charges to be paid by the borrower;
(4) in bold, 24-point type, the annual percentage rate as computed under United States Code, chapter 15, section 1606; and
(5) a description of the borrower's payment obligations under the loan.
(d) The holder or assignee of a check or other instrument evidencing an obligation of a borrower in connection with a consumer short-term loan takes the instrument subject to all claims by and defenses of the borrower against the consumer short-term lender.
(e) In connection with a
consumer short-term loan, a consumer short-term loan lender may charge an
annual percentage rate of up to 50 percent.
No other charges or payments are permitted or may be received by the
lender in connection with a consumer short-term loan.
(f) A loan made under
this section with an annual percentage rate that exceeds 36 percent must comply
with section 47.603.
EFFECTIVE DATE; APPLICATION.
This section is effective January 1, 2024, and applies to
consumer small loans and consumer short-term loans originated on or after that
date.
Sec. 9. Minnesota Statutes 2022, section 47.601, is amended by adding a subdivision to read:
Subd. 5a. No
evasion. (a) A person must
not engage in any device, subterfuge, or pretense to evade the requirements of
this section, including but not limited to:
(1) making loans
disguised as a personal property sale and leaseback transaction;
(2) disguising loan
proceeds as a cash rebate for the pretextual installment sale of goods or
services; or
(3) making, offering,
assisting, or arranging for a debtor to obtain a loan with a greater rate or
amount of interest, consideration, charge, or payment than is permitted by this
section through any method, including mail, telephone, Internet, or any
electronic means, regardless of whether a person has a physical location in
Minnesota.
(b) A person is a
consumer short-term loan lender subject to the requirements of this section
notwithstanding the fact that a person purports to act as an agent or service
provider, or acts in another capacity for another person that is not subject to
this section, if a person:
(1) directly or indirectly
holds, acquires, or maintains the predominant economic interest, risk, or
reward in a loan or lending business; or
(2) both: (i) markets, solicits, brokers, arranges, or
facilitates a loan; and (ii) holds or holds the right, requirement, or first
right of refusal to acquire loans, receivables, or other direct or interest in
a loan.
(c) A person is a
consumer short-term loan lender subject to the requirements of this section if
the totality of the circumstances indicate that a person is a lender and the
transaction is structured to evade the requirements of this section. Circumstances that weigh in favor of a person
being a lender in a transaction include but are not limited to instances where
a person:
(1) indemnifies, insures,
or protects a person not subject to this section from any costs or risks
related to a loan;
(2) predominantly
designs, controls, or operates lending activity;
(3) holds the trademark
or intellectual property rights in the brand, underwriting system, or other
core aspects of a lending business; or
(4) purports to act as an
agent or service provider, or acts in another capacity, for a person not
subject to this section while acting directly as a lender in one or more
states.
EFFECTIVE DATE; APPLICATION.
This section is effective January 1, 2024, and applies to
consumer small loans and consumer short-term loans originated on or after that
date.
Sec. 10. Minnesota Statutes 2022, section 47.601, subdivision 6, is amended to read:
Subd. 6. Penalties
for violation; private right of action. (a)
Except for a "bona fide error" as set forth under United States Code,
chapter 15, section 1640, subsection (c), an individual or entity who violates
subdivision 2 or, 3, or 5a is liable to the borrower for:
(1) all money collected or received in connection with the loan;
(2) actual, incidental, and consequential damages;
(3) statutory damages of up to $1,000 per violation;
(4) costs, disbursements, and reasonable attorney fees; and
(5) injunctive relief.
(b) In addition to the remedies provided in paragraph (a), a loan is void, and the borrower is not obligated to pay any amounts owing if the loan is made:
(1) by a consumer short-term lender who has not obtained an applicable license from the commissioner;
(2) in violation of any provision of subdivision 2 or 3; or
(3) in which interest, fees,
charges, or loan amounts exceed the interest, fees, charges, or loan amounts
allowable under sections 47.59, subdivision 6, and section 47.60,
subdivision 2.
EFFECTIVE DATE; APPLICATION.
This section is effective January 1, 2024, and applies to
consumer small loans and consumer short-term loans originated on or after that
date.
Sec. 11. [47.603]
ABILITY TO REPAY ANALYSIS.
Subdivision 1. Definitions. (a) For purposes of this section, the
following terms have the meanings given.
(b) "Annual
percentage rate" has the meaning given in section 47.60, subdivision 1.
(c) "Basic living
expenses" means expenditures, other than payments for major financial
obligations, that a borrower makes for goods and services that are necessary to
maintain: (1) the borrower's health,
welfare, and ability to produce income; and (2) the health and welfare of the
members of the borrower's household who are financially dependent on the
borrower.
(d) "Borrower"
means an individual who seeks to obtain a payday loan or a payday advance.
(e) "Consumer
credit report" means a consumer report, as defined in section 603(d) of
the Fair Credit Reporting Act, United States Code, title 15, section 1681a(d),
obtained from a consumer reporting agency that compiles and maintains files on
consumers on a nationwide basis, as defined in section 603(p) of the Fair
Credit Reporting Act, United States Code, title 15, section 1681a(p).
(f) "Debt-to-income
ratio" means the ratio, expressed as a percentage, comparing (1) the sum
of the debt amounts that the lender projects will be payable by the borrower,
including major financial obligations, outstanding loans other than the payday
loan, the payday loan payment, all other debt obligations, and basic living expenses,
to (2) the net income that the lender projects the borrower will receive during
the loan period.
(g) "Major
financial obligations" means the sum of:
(1) a borrower's housing
expense;
(2) outstanding loans,
including any other payday loans or payday advances; and
(3) all other debt
obligations, including without limitation child support and alimony
obligations.
(h) "Net
income" means the total amount of income received by the borrower during
the loan period, as demonstrated by documentation evidencing proof of income.
(i) "Payday
lender" means a consumer small lender under section 47.60 or consumer
short-term lender under section 47.601.
(j) "Payday
loan" means a consumer small loan under section 47.60 or a consumer
short-term loan under section 47.601.
(k) "Payday
advance" means a consumer small loan under section 47.60 or a consumer
short-term loan under section 47.601 that is offered under a line of credit.
(l) "Payday loan
payment" means the total payment due for the payday loan at the end of the
payday loan period. Payday loan payment
includes all principal, interest, charges, and fees.
Subd. 2. Applicability. This section applies to all payday
loans with an annual percentage rate that exceeds 36 percent.
Subd. 3. Ability
to repay determination required. A
payday lender must not make a payday loan or permit a borrower to obtain a
payday advance unless the lender first determines, based on an analysis that
complies with subdivision 5, that the borrower has the ability to make the payday
loan payment when the payday loan payment comes due at the end of the loan
period. For purposes of this
subdivision, each payday advance constitutes a new loan and requires a new
ability to repay determination.
Subd. 4. Ability
to repay; borrower information determination required. (a) To conduct an ability to repay
analysis, a payday lender must first obtain commercially reasonable documented
evidence of the borrower's net income, major financial obligations, and basic
living expenses. To the extent
documentation is not available for any of the borrower's basic living expenses,
the lender may reasonably rely on a written, signed statement by the borrower
indicating the specific basic living expenses.
(b) If the payday lender
obtains a borrower's consumer credit report, there is a presumption that a
payday lender has obtained commercially reasonable documented evidence of:
(1) outstanding loans
other than the payday loan or payday advance; and
(2) all other debt
obligations, without limitation, except for child support and alimony
obligations.
(c) For a borrower's
required payments under child support or alimony obligations, the lender must
obtain a consumer credit report. If the
report does not include a child support or spousal maintenance obligation, as
applicable, the lender may reasonably rely on a written, signed statement by
the borrower indicating the child support payment or spousal maintenance
payments, as applicable.
Subd. 5. Ability
to pay analysis; determination of ability to pay. (a) A payday lender's determination of
a borrower's ability to repay a payday loan or payday advance must be based on
the calculation of the borrower's debt‑to-income ratio for the loan
period.
(b) A payday lender's
ability to repay determination is reasonable if, based on the calculated
debt-to-income ratio for the loan period, the borrower can make payments for
all major financial obligations, make all payments under the loan, and meet
basic living expenses during the period ending 30 days after repayment of the
loan.
Subd. 6. Violations. A payday lender that fails to comply
with this section is subject to: (1) the
penalties and enforcement under section 47.601, subdivisions 6 and 7; and (2)
revocation of a filing or license, as provided under section 47.60, subdivision
3, or section 45.027, subdivision 7.
EFFECTIVE DATE; APPLICATION.
This section is effective January 1, 2024, and applies to payday
loans and payday advances originated on or after that date.
Sec. 12. [48.591]
CLIMATE RISK DISCLOSURE SURVEY.
Subdivision 1. Requirement. By July 30 each year, a banking
institution with more than $1,000,000,000 in assets must submit a completed
climate risk disclosure survey to the commissioner. The commissioner must provide the form used to
submit a climate risk disclosure survey.
Subd. 2. Data. Data submitted to the commissioner
under this section are public, except that trade secret information is
nonpublic under section 13.37.
Sec. 13. [52.065]
CLIMATE RISK DISCLOSURE SURVEY.
Subdivision 1. Requirement. By July 30 each year, a credit union
with more than $1,000,000,000 in assets must submit a completed climate risk
disclosure survey to the commissioner. The
commissioner must provide the form used to submit a climate risk disclosure
survey.
Subd. 2. Data. Data submitted to the commissioner
under this section are public, except that trade secret information is
nonpublic under section 13.37.
Sec. 14. Minnesota Statutes 2022, section 53.04, subdivision 3a, is amended to read:
Subd. 3a. Loans. (a) The right to make loans, secured or
unsecured, at the rates and on the terms and other conditions permitted under
chapters 47 and 334. Loans made under
this authority must be in amounts in compliance with section 53.05, clause (7). A licensee making a loan under this chapter
secured by a lien on real estate shall comply with the requirements of section
47.20, subdivision 8. A licensee
making a loan that is a consumer small loan, as defined in section 47.60,
subdivision 1, paragraph (a), must comply with section 47.60. A licensee making a loan that is a consumer
short-term loan, as defined in section 47.601, subdivision 1, paragraph (d),
must comply with section 47.601.
(b) Loans made under this subdivision may be secured by real or personal property, or both. If the proceeds of a loan secured by a first lien on the borrower's primary residence are used to finance the purchase of the borrower's primary residence, the loan must comply with the provisions of section 47.20.
(c) An agency or instrumentality of the United States government or a corporation otherwise created by an act of the United States Congress or a lender approved or certified by the secretary of housing and urban development, or approved or certified by the administrator of veterans affairs, or approved or certified by the administrator of the Farmers Home Administration, or approved or certified by the Federal Home Loan Mortgage Corporation, or approved or certified by the Federal National Mortgage Association, that engages in the business of purchasing or taking assignments of mortgage loans and undertakes direct collection of payments from or enforcement of rights against borrowers arising from mortgage loans, is not required to obtain a certificate of authorization under this chapter in order to purchase or take assignments of mortgage loans from persons holding a certificate of authorization under this chapter.
(d) This subdivision does not authorize an industrial loan and thrift company to make loans under an overdraft checking plan.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 15. [53B.28]
DEFINITIONS.
Subdivision 1. Terms. For the purposes of this chapter, the
terms defined in this section have the meanings given them.
Subd. 2. Acting
in concert. "Acting in
concert" means persons knowingly acting together with a common goal of
jointly acquiring control of a licensee, whether or not pursuant to an express
agreement.
Subd. 3. Authorized
delegate. "Authorized
delegate" means a person a licensee designates to engage in money
transmission on behalf of the licensee.
Subd. 4. Average
daily money transmission liability. "Average
daily money transmission liability" means the amount of the licensee's
outstanding money transmission obligations in Minnesota at the end of each day
in a given period of time, added together, and divided by the total number of
days in the given period of time. For
purposes of calculating average daily money transmission liability under this
chapter for any licensee required to do so, the given period of time shall be
the quarters ending March 31, June 30, September 30, and December 31.
Subd. 5. Bank
Secrecy Act. "Bank
Secrecy Act" means the Bank Secrecy Act under United States Code, title
31, section 5311, et seq., and the Bank Secrecy Act's implementing regulations,
as amended and recodified from time to time.
Subd. 6. Closed
loop stored value. "Closed
loop stored value" means stored value that is redeemable by the issuer
only for a good or service provided by the issuer, the issuer's affiliate, the
issuer's franchisees, or an affiliate of the issuer's franchisees, except to
the extent required by applicable law to be redeemable in cash for the good or
service's cash value.
Subd. 7. Control. "Control" means:
(1) the power to vote,
directly or indirectly, at least 25 percent of the outstanding voting shares or
voting interests of a licensee or person in control of a licensee;
(2) the power to elect
or appoint a majority of key individuals or executive officers, managers,
directors, trustees, or other persons exercising managerial authority of a
person in control of a licensee; or
(3) the power to
exercise, directly or indirectly, a controlling influence over the management
or policies of a licensee or person in control of a licensee.
Subd. 8. Eligible
rating. "Eligible
rating" means a credit rating of any of the three highest rating
categories provided by an eligible rating service, whereby each category may
include rating category modifiers such as "plus" or "minus"
or the equivalent for any other eligible rating service. Long-term credit ratings are deemed eligible
if the rating is equal to A- or higher or the equivalent from any other
eligible rating service. Short-term
credit ratings are deemed eligible if the rating is equal to or higher than A-2
or SP-2 by S&P, or the equivalent from any other eligible rating service. In the event that ratings differ among
eligible rating services, the highest rating shall apply when determining
whether a security bears an eligible rating.
Subd. 9. Eligible
rating service. "Eligible
rating service" means any Nationally Recognized Statistical Rating
Organization (NRSRO), as defined by the United States Securities and Exchange
Commission and any other organization designated by the commissioner by rule or
order.
Subd. 10. Federally
insured depository financial institution.
"Federally insured depository financial institution"
means a bank, credit union, savings and loan association, trust company,
savings association, savings bank, industrial bank, or industrial loan company
organized under the laws of the United States or any state of the United
States, when the bank, credit union, savings and loan association, trust
company, savings association, savings bank, industrial bank, or industrial loan
company has federally insured deposits.
Subd. 11. In
Minnesota. "In Minnesota"
means at a physical location within the state of Minnesota for a transaction
requested in person. For a transaction
requested electronically or by telephone, the provider of money transmission
may determine if the person requesting the transaction is in Minnesota by
relying on other information provided by the person regarding the location of
the individual's residential address or a business entity's principal place of
business or other physical address location, and any records associated with
the person that the provider of money transmission may have that indicate the
location, including but not limited to an address associated with an account.
Subd. 12. Individual. "Individual" means a natural
person.
Subd. 13. Key
individual. "Key individual"
means any individual ultimately responsible for establishing or directing
policies and procedures of the licensee, including but not limited to as an
executive officer, manager, director, or trustee.
Subd. 14. Licensee. "Licensee" means a person
licensed under this chapter.
Subd. 15. Material
litigation. "Material
litigation" means litigation that, according to United States generally
accepted accounting principles, is significant to a person's financial health
and would be required to be disclosed in the person's annual audited financial
statements, report to shareholders, or similar records.
Subd. 16. Money. "Money" means a medium of
exchange that is authorized or adopted by the United States or a foreign
government. Money includes a monetary
unit of account established by an intergovernmental organization or by
agreement between two or more governments.
Subd. 17. Monetary
value. "Monetary
value" means a medium of exchange, whether or not redeemable in money.
Subd. 18. Money
transmission. (a) "Money
transmission" means:
(1) selling or issuing
payment instruments to a person located in this state;
(2) selling or issuing
stored value to a person located in this state; or
(3) receiving money for
transmission from a person located in this state.
(b) Money includes
payroll processing services. Money does
not include the provision solely of online or telecommunications services or
network access.
Subd. 19. Money
services business accredited state or MSB accredited state. "Money services businesses
accredited state" or "MSB accredited state" means a state agency
that is accredited by the Conference of State Bank Supervisors and Money
Transmitter Regulators Association for money transmission licensing and
supervision.
Subd. 20. Multistate
licensing process. "Multistate
licensing process" means any agreement entered into by and among state
regulators relating to coordinated processing of applications for money
transmission licenses, applications for the acquisition of control of a
licensee, control determinations, or notice and information requirements for a
change of key individuals.
Subd. 21. NMLS. "NMLS" means the Nationwide
Multistate Licensing System and Registry developed by the Conference of State
Bank Supervisors and the American Association of Residential Mortgage
Regulators and owned and operated by the State Regulatory Registry, LLC, or any
successor or affiliated entity, for the licensing and registration of persons
in financial services industries.
Subd. 22. Outstanding
money transmission obligations. (a)
"Outstanding money transmission obligations" must be established and
extinguished in accordance with applicable state law and means:
(1) any payment
instrument or stored value issued or sold by the licensee to a person located
in the United States or reported as sold by an authorized delegate of the
licensee to a person that is located in the United States that has not yet been
paid or refunded by or for the licensee, or escheated in accordance with
applicable abandoned property laws; or
(2) any money received for
transmission by the licensee or an authorized delegate in the United States
from a person located in the United States that has not been received by the
payee or refunded to the sender, or escheated in accordance with applicable
abandoned property laws.
(b) For purposes of this
subdivision, "in the United States" includes, to the extent
applicable, a person in any state, territory, or possession of the United
States; the District of Columbia; the Commonwealth of Puerto Rico; or a U.S. military
installation that is located in a foreign country.
Subd. 23. Passive
investor. "Passive
investor" means a person that:
(1) does not have the
power to elect a majority of key individuals or executive officers, managers,
directors, trustees, or other persons exercising managerial authority of a
person in control of a licensee;
(2) is not employed by
and does not have any managerial duties of the licensee or person in control of
a licensee;
(3) does not have the power
to exercise, directly or indirectly, a controlling influence over the
management or policies of a licensee or person in control of a licensee; and
(4) attests to clauses
(1), (2), and (3), in a form and in a medium prescribed by the commissioner, or
commits to the passivity characteristics under clauses (1), (2), and (3) in a
written document.
Subd. 24. Payment
instrument. (a) "Payment
instrument" means a written or electronic check, draft, money order,
traveler's check, or other written or electronic instrument for the
transmission or payment of money or monetary value, whether or not negotiable.
(b) Payment instrument
does not include stored value or any instrument that is: (1) redeemable by the issuer only for goods
or services provided by the issuer, the issuer's affiliate, the issuer's
franchisees, or an affiliate of the issuer's franchisees, except to the extent
required by applicable law to be redeemable in cash for its cash value; or (2)
not sold to the public but issued and distributed as part of a loyalty,
rewards, or promotional program.
Subd. 25. Payroll
processing services. "Payroll
processing services" means receiving money for transmission pursuant to a
contract with a person to deliver wages or salaries, make payment of payroll
taxes to state and federal agencies, make payments relating to employee benefit
plans, or make distributions of other authorized deductions from wages or
salaries. The term payroll processing
services does not include an employer performing payroll processing services on
the employer's own behalf or on behalf of the employer's affiliate, or a
professional employment organization subject to regulation under other
applicable state law.
Subd. 26. Person. "Person" means any
individual, general partnership, limited partnership, limited liability
company, corporation, trust, association, joint stock corporation, or other
corporate entity identified by the commissioner.
Subd. 27. Receiving
money for transmission or money received for transmission. "Receiving money for
transmission" or "money received for transmission" means
receiving money or monetary value in the United States for transmission within
or outside the United States by electronic or other means.
Subd. 28. Stored
value. (a) "Stored
value" means monetary value representing a claim against the issuer
evidenced by an electronic or digital record, and that is intended and accepted
for use as a means of redemption for money or monetary value, or payment for
goods or services. Stored value includes
but is not limited to prepaid access, as
defined under Code of Federal Regulations, title 31, part 1010.100, as amended
or recodified from time to time.
(b)
Notwithstanding this subdivision, stored value does not include: (1) a payment instrument or closed loop
stored value; or (2) stored value not sold to the public but issued and
distributed as part of a loyalty, rewards, or promotional program.
Subd. 29. Tangible
net worth. "Tangible net
worth" means the aggregate assets of a licensee excluding all intangible
assets, less liabilities, as determined in accordance with United States
generally accepted accounting principles.
Sec. 16. [53B.29]
EXEMPTIONS.
This chapter does not
apply to:
(1) an operator of a
payment system, to the extent the operator of a payment system provides
processing, clearing, or settlement services between or among persons exempted
by this section or licensees in connection with wire transfers, credit card
transactions, debit card transactions, stored-value transactions, automated
clearing house transfers, or similar funds transfers;
(2) a person appointed
as an agent of a payee to collect and process a payment from a payor to the
payee for goods or services, other than money transmission itself, provided to
the payor by the payee, provided that:
(i) there exists a
written agreement between the payee and the agent directing the agent to
collect and process payments from payors on the payee's behalf;
(ii) the payee holds the agent out to the public as accepting payments
for goods or services on the payee's behalf; and
(iii) payment for the
goods and services is treated as received by the payee upon receipt by the
agent so that the payor's obligation is extinguished and there is no risk of
loss to the payor if the agent fails to remit the funds to the payee;
(3) a person that acts
as an intermediary by processing payments between an entity that has directly
incurred an outstanding money transmission obligation to a sender, and the
sender's designated recipient, provided that the entity:
(i) is properly licensed
or exempt from licensing requirements under this chapter;
(ii) provides a receipt,
electronic record, or other written confirmation to the sender identifying the
entity as the provider of money transmission in the transaction; and
(iii) bears sole
responsibility to satisfy the outstanding money transmission obligation to the
sender, including the obligation to make the sender whole in connection with
any failure to transmit the funds to the sender's designated recipient;
(4) the United States; a
department, agency, or instrumentality of the United States; or an agent of the
United States;
(5) money transmission
by the United States Postal Service or by an agent of the United States Postal
Service;
(6) a state; county;
city; any other governmental agency, governmental subdivision, or
instrumentality of a state; or the state's agent;
(7) a federally insured
depository financial institution; bank holding company; office of an
international banking corporation; foreign bank that establishes a federal
branch pursuant to the International Bank Act, United States Code, title 12,
section 3102, as amended or recodified from time to time; corporation organized
pursuant to the Bank Service Corporation Act, United States Code, title 12,
sections 1861 to 1867, as amended or recodified from time to time; or
corporation organized under the Edge Act, United States Code, title 12,
sections 611 to 633, as amended or recodified from time to time;
(8) electronic funds
transfer of governmental benefits for a federal, state, county, or governmental
agency by a contractor on behalf of the United States or a department, agency,
or instrumentality thereof, or on behalf of a state or governmental
subdivision, agency, or instrumentality thereof;
(9) a board of trade
designated as a contract market under the federal Commodity Exchange Act,
United States Code, title 7, sections 1 to 25, as amended or recodified from
time to time; or a person that in the ordinary course of business provides
clearance and settlement services for a board of trade to the extent of its
operation as or for a board;
(10) a registered futures
commission merchant under the federal commodities laws, to the extent of the
registered futures commission merchant's operation as a merchant;
(11) a person registered
as a securities broker-dealer under federal or state securities laws, to the
extent of the person's operation as a securities broker-dealer;
(12) an individual
employed by a licensee, authorized delegate, or any person exempted from the
licensing requirements under this chapter when acting within the scope of
employment and under the supervision of the licensee, authorized delegate, or
exempted person as an employee and not as an independent contractor;
(13) a person expressly
appointed as a third-party service provider to or agent of an entity exempt
under clause (7), solely to the extent that:
(i) the service provider
or agent is engaging in money transmission on behalf of and pursuant to a
written agreement with the exempt entity that sets forth the specific functions
that the service provider or agent is to perform; and
(ii) the exempt entity
assumes all risk of loss and all legal responsibility for satisfying the
outstanding money transmission obligations owed to purchasers and holders of
the outstanding money transmission obligations upon receipt of the purchaser's
or holder's money or monetary value by the service provider or agent; or
(14) a person exempt by
regulation or order if the commissioner finds that (i) the exemption is in the
public interest, and (ii) the regulation of the person is not necessary for the
purposes of this chapter.
Sec. 17. [53B.30]
AUTHORITY TO REQUIRE DEMONSTRATION OF EXEMPTION.
The commissioner may
require any person that claims to be exempt from licensing under section 53B.29
to provide to the commissioner information and documentation that demonstrates
the person qualifies for any claimed exemption.
Sec. 18. [53B.31]
IMPLEMENTATION.
Subdivision 1. General
authority. In order to carry
out the purposes of this chapter, the commissioner may, subject to section
53B.32, paragraphs (a) and (b):
(1) enter into agreements
or relationships with other government officials or federal and state regulatory
agencies and regulatory associations in order to (i) improve efficiencies and
reduce regulatory burden by standardizing methods or procedures, and (ii) share
resources, records, or related information obtained under this chapter;
(2)
use, hire, contract, or employ analytical systems, methods, or software to
examine or investigate any person subject to this chapter;
(3) accept from other
state or federal government agencies or officials any licensing, examination,
or investigation reports made by the other state or federal government agencies
or officials; and
(4) accept audit reports
made by an independent certified public accountant or other qualified
third-party auditor for an applicant or licensee and incorporate the audit
report in any report of examination or investigation.
Subd. 2. Administrative
authority. The commissioner
is granted broad administrative authority to:
(1) administer, interpret, and enforce this chapter; (2) adopt
regulations to implement this chapter; and (3) recover the costs incurred to
administer and enforce this chapter by imposing and collecting proportionate
and equitable fees and costs associated with applications, examinations,
investigations, and other actions required to achieve the purpose of this chapter.
Sec. 19. [53B.32]
CONFIDENTIALITY.
(a) All information or
reports obtained by the commissioner contained in or related to an examination
that is prepared by, on behalf of, or for the use of the commissioner are
confidential and are not subject to disclosure under section 46.07.
(b) The commissioner may
disclose information not otherwise subject to disclosure under paragraph (a) to
representatives of state or federal agencies pursuant to section 53B.31,
subdivision 1.
(c) This section does not
prohibit the commissioner from disclosing to the public a list of all licensees
or the aggregated financial or transactional data concerning those licensees.
Sec. 20. [53B.33]
SUPERVISION.
(a) The commissioner may
conduct an examination or investigation of a licensee or authorized delegate or
otherwise take independent action authorized by this chapter, or by a rule
adopted or order issued under this chapter, as reasonably necessary or
appropriate to administer and enforce this chapter, rules implementing this
chapter, and other applicable law, including the Bank Secrecy Act and the USA
PATRIOT Act, Public Law 107-56. The
commissioner may:
(1) conduct an
examination either on site or off site as the commissioner may reasonably
require;
(2) conduct an examination
in conjunction with an examination conducted by representatives of other state
agencies or agencies of another state or of the federal government;
(3) accept the
examination report of another state agency or an agency of another state or of
the federal government, or a report prepared by an independent accounting firm,
which on being accepted is considered for all purposes as an official report of
the commissioner; and
(4) summon and examine
under oath a key individual or employee of a licensee or authorized delegate
and require the person to produce records regarding any matter related to the
condition and business of the licensee or authorized delegate.
(b) A licensee or
authorized delegate must provide, and the commissioner has full and complete
access to, all records the commissioner may reasonably require to conduct a
complete examination. The records must
be provided at the location and in the format specified by the commissioner. The commissioner may use multistate record
production standards and examination procedures when the standards reasonably
achieve the requirements of this paragraph.
(c) Unless otherwise directed
by the commissioner, a licensee must pay all costs reasonably incurred in
connection with an examination of the licensee or the licensee's authorized
delegates.
Sec. 21. [53B.34]
NETWORKED SUPERVISION.
(a) To efficiently and
effectively administer and enforce this chapter and to minimize regulatory
burden, the commissioner is authorized to participate in multistate supervisory
processes established between states and coordinated through the Conference of
State Bank Supervisors, the Money Transmitter Regulators Association, and the
affiliates and successors of the Conference of State Bank Supervisors and the
Money Transmitter Regulators Association for all licensees that hold licenses
in this state and other states. As a
participant in multistate supervision, the commissioner may:
(1) cooperate,
coordinate, and share information with other state and federal regulators in
accordance with section 53B.32;
(2) enter into written
cooperation, coordination, or information-sharing contracts or agreements with
organizations the membership of which is made up of state or federal
governmental agencies; and
(3) cooperate,
coordinate, and share information with organizations the membership of which is
made up of state or federal governmental agencies, provided that the
organizations agree in writing to maintain the confidentiality and security of
the shared information in accordance with section 53B.32.
(b) The commissioner is
prohibited from waiving, and nothing in this section constitutes a waiver of,
the commissioner's authority to conduct an examination or investigation or
otherwise take independent action authorized by this chapter, or a rule adopted
or order issued under this chapter, to enforce compliance with applicable state
or federal law.
(c) A joint examination
or investigation, or acceptance of an examination or investigation report, does
not waive an examination fee provided for in this chapter.
Sec. 22. [53B.35]
RELATIONSHIP TO FEDERAL LAW.
(a) In the event state
money transmission jurisdiction is conditioned on a federal law, any
inconsistencies between a provision of this chapter and the federal law
governing money transmission is governed by the applicable federal law to the
extent of the inconsistency.
(b) In the event of any
inconsistencies between this chapter and a federal law that governs pursuant to
paragraph (a), the commissioner may provide interpretive guidance that:
(1) identifies the
inconsistency; and
(2) identifies the
appropriate means of compliance with federal law.
Sec. 23. [53B.36]
LICENSE REQUIRED.
(a) A person is
prohibited from engaging in the business of money transmission, or advertising,
soliciting, or representing that the person provides money transmission, unless
the person is licensed under this chapter.
(b)
Paragraph (a) does not apply to:
(1) a person that is an
authorized delegate of a person licensed under this chapter acting within the
scope of authority conferred by a written contract with the licensee; or
(2) a person that is
exempt under section 53B.29 and does not engage in money transmission outside
the scope of the exemption.
(c) A license issued
under section 53B.40 is not transferable or assignable.
Sec. 24. [53B.37]
CONSISTENT STATE LICENSING.
(a) To establish
consistent licensing between Minnesota and other states, the commissioner is
authorized to:
(1) implement all
licensing provisions of this chapter in a manner that is consistent with (i)
other states that have adopted substantially similar licensing requirements, or
(ii) multistate licensing processes; and
(2) participate in
nationwide protocols for licensing cooperation and coordination among state
regulators, provided that the protocols are consistent with this chapter.
(b) In order to fulfill
the purposes of this chapter, the commissioner is authorized to establish
relationships or contracts with NMLS or other entities designated by NMLS to
enable the commissioner to:
(1) collect and maintain
records;
(2) coordinate
multistate licensing processes and supervision processes;
(3) process fees; and
(4) facilitate
communication between the commissioner and licensees or other persons subject
to this chapter.
(c) The commissioner is
authorized to use NMLS for all aspects of licensing in accordance with this
chapter, including but not limited to license applications, applications for
acquisitions of control, surety bonds, reporting, criminal history background
checks, credit checks, fee processing, and examinations.
(d) The commissioner is
authorized to use NMLS forms, processes, and functions in accordance with this
chapter. If NMLS does not provide
functionality, forms, or processes for a requirement under this chapter, the
commissioner is authorized to implement the requirements in a manner that
facilitates uniformity with respect to licensing, supervision, reporting, and
regulation of licensees which are licensed in multiple jurisdictions.
(e) For the purpose of
participating in the NMLS registry, the commissioner is authorized to, by rule
or order: (1) waive or modify, in whole
or in part, any or all of the requirements; and (2) establish new requirements
as reasonably necessary to participate in the NMLS registry.
Sec. 25. [53B.38]
APPLICATION FOR LICENSE.
(a) An applicant for a
license must apply in a form and in a medium as prescribed by the commissioner. The application must state or contain, as
applicable:
(1) the legal name and
residential and business addresses of the applicant and any fictitious or trade
name used by the applicant in conducting business;
(2) a list of any criminal
convictions of the applicant and any material litigation in which the applicant
has been involved in the ten-year period next preceding the submission of the
application;
(3) a description of any
money transmission previously provided by the applicant and the money
transmission that the applicant seeks to provide in this state;
(4) a list of the
applicant's proposed authorized delegates and the locations in this state where
the applicant and the applicant's authorized delegates propose to engage in
money transmission;
(5) a list of other
states in which the applicant is licensed to engage in money transmission and
any license revocations, suspensions, or other disciplinary action taken
against the applicant in another state;
(6) information
concerning any bankruptcy or receivership proceedings affecting the licensee or
a person in control of a licensee;
(7) a sample form of
contract for authorized delegates, if applicable;
(8) a sample form of
payment instrument or stored value, as applicable;
(9) the name and address
of any federally insured depository financial institution through which the
applicant plans to conduct money transmission; and
(10) any other
information the commissioner or NMLS reasonably requires with respect to the
applicant.
(b) If an applicant is a
corporation, limited liability company, partnership, or other legal entity, the
applicant must also provide:
(1) the date of the
applicant's incorporation or formation and state or country of incorporation or
formation;
(2) if applicable, a
certificate of good standing from the state or country in which the applicant
is incorporated or formed;
(3) a brief description
of the structure or organization of the applicant, including any parents or
subsidiaries of the applicant, and whether any parents or subsidiaries are
publicly traded;
(4) the legal name, any
fictitious or trade name, all business and residential addresses, and the
employment, as applicable, in the ten-year period next preceding the submission
of the application of each key individual and person in control of the
applicant;
(5) a list of any
criminal convictions and material litigation in which a person in control of
the applicant that is not an individual has been involved in the ten-year
period preceding the submission of the application;
(6) a copy of audited
financial statements of the applicant for the most recent fiscal year and for
the two-year period next preceding the submission of the application or, if the
commissioner deems acceptable, certified unaudited financial statements for the
most recent fiscal year or other period acceptable to the commissioner;
(7) a certified copy of
unaudited financial statements of the applicant for the most recent fiscal
quarter;
(8) if the applicant is
a publicly traded corporation, a copy of the most recent report filed with the
United States Securities and Exchange Commission under section 13 of the
federal Securities Exchange Act of 1934, United States Code, title 15, section
78m, as amended or recodified from time to time;
(9)
if the applicant is a wholly owned subsidiary of:
(i) a corporation
publicly traded in the United States, a copy of audited financial statements
for the parent corporation for the most recent fiscal year or a copy of the
parent corporation's most recent report filed under section 13 of the
Securities Exchange Act of 1934, United States Code, title 15, section 78m, as
amended or recodified from time to time; or
(ii) a corporation
publicly traded outside the United States, a copy of similar documentation
filed with the regulator of the parent corporation's domicile outside the
United States;
(10) the name and
address of the applicant's registered agent in this state; and
(11) any other
information the commissioner reasonably requires with respect to the applicant.
(c) A nonrefundable
application fee of $4,000 must accompany an application for a license under
this section.
(d) The commissioner
may: (1) waive one or more requirements
of paragraphs (a) and (b); or (2) permit an applicant to submit other
information in lieu of the required information.
Sec. 26. [53B.39]
INFORMATION REQUIREMENTS; CERTAIN INDIVIDUALS.
Subdivision 1. Individuals
with or seeking control. Any
individual in control of a licensee or applicant, any individual that seeks to
acquire control of a licensee, and each key individual must furnish to the
commissioner through NMLS:
(1) the individual's
fingerprints for submission to the Federal Bureau of Investigation and the
commissioner for a national criminal history background check, unless the
person currently resides outside of the United States and has resided outside
of the United States for the last ten years; and
(2) personal history and
business experience in a form and in a medium prescribed by the commissioner,
to obtain:
(i) an independent
credit report from a consumer reporting agency;
(ii) information related
to any criminal convictions or pending charges; and
(iii) information
related to any regulatory or administrative action and any civil litigation
involving claims of fraud, misrepresentation, conversion, mismanagement of
funds, breach of fiduciary duty, or breach of contract.
Subd. 2. Individuals
having resided outside the United States.
(a) If an individual has resided outside of the United States at
any time in the last ten years, the individual must also provide an
investigative background report prepared by an independent search firm that
meets the requirements of this subdivision.
(b) At a minimum, the
search firm must:
(1) demonstrate that the
search firm has sufficient knowledge, resources, and employs accepted and
reasonable methodologies to conduct the research of the background report; and
(2) not be affiliated
with or have an interest with the individual the search firm is researching.
(c) At a minimum, the
investigative background report must be written in English and must contain:
(1) if available in the
individual's current jurisdiction of residency, a comprehensive credit report,
or any equivalent information obtained or generated by the independent search
firm to accomplish a credit report, including a search of the court data in the
countries, provinces, states, cities, towns, and contiguous areas where the
individual resided and worked;
(2) criminal records
information for the past ten years, including but not limited to felonies,
misdemeanors, or similar convictions for violations of law in the countries,
provinces, states, cities, towns, and contiguous areas where the individual
resided and worked;
(3) employment history;
(4) media history,
including an electronic search of national and local publications, wire
services, and business applications; and
(5) financial
services-related regulatory history, including but not limited to money
transmission, securities, banking, consumer finance, insurance, and
mortgage-related industries.
Sec. 27. [53B.40]
LICENSE ISSUANCE.
(a) When an application
for an original license under this chapter includes all of the items and
addresses all of the matters that are required, the application is complete and
the commissioner must promptly notify the applicant in a record of the date on
which the application is determined to be complete.
(b) The commissioner's
determination that an application is complete and accepted for processing means
only that the application, on the application's face, appears to include all of
the items, including the criminal background check response from the Federal
Bureau of Investigation, and address all of the matters that are required. The commissioner's determination that an
application is complete is not an assessment of the substance of the
application or of the sufficiency of the information provided.
(c) When an application
is filed and considered complete under this section, the commissioner must
investigate the applicant's financial condition and responsibility, financial
and business experience, character, and general fitness. The commissioner may conduct an investigation
of the applicant, the reasonable cost of which the applicant must pay. The commissioner must issue a license to an
applicant under this section if the commissioner finds:
(1) the applicant has
complied with sections 53B.38 and 53B.39; and
(2) the financial
condition and responsibility; financial and business experience, competence,
character, and general fitness of the applicant; and the competence,
experience, character, and general fitness of the key individuals and persons
in control of the applicant indicate that it is in the interest of the public
to permit the applicant to engage in money transmission.
(d) If an applicant
avails itself of or is otherwise subject to a multistate licensing process:
(1) the commissioner is
authorized to accept the investigation results of a lead investigative state
for the purposes of paragraph (c); or
(2) if Minnesota is a
lead investigative state, the commissioner is authorized to investigate the
applicant pursuant to paragraph (c) and the time frames established by
agreement through the multistate licensing process, provided that the time
frame complies with the application review period provided under paragraph (e).
(e)
The commissioner must approve or deny the application within 120 days after the
date the application is deemed complete.
If the application is not approved or denied within 120 days after the
completion date, the application is approved and the license takes effect on
the first business day after the 120-day period expires.
(f) The commissioner
must issue a formal written notice of the denial of a license application
within 30 days of the date the decision to deny the application is made. The commissioner must set forth in the notice
of denial the specific reasons for the denial of the application. An applicant whose application is denied by
the commissioner under this paragraph may appeal within 30 days of the date the
written notice of the denial is received.
The commissioner must set a hearing date that is not later than 60 days
after service of the response, unless a later date is set with the consent of
the denied applicant.
(g) The initial license
term begins on the day the application is approved. The license expires on December 31 of the
year in which the license term began, unless the initial license date is
between November 1 and December 31, in which case the initial license term runs
through December 31 of the following year.
If a license is approved between
November 1 and December 31, the applicant is subject to the renewal fee under
section 53B.31, paragraph (a).
Sec. 28. [53B.41]
LICENSE RENEWAL.
(a) A license under this
chapter must be renewed annually. An
annual renewal fee of $2,500 must be paid no more than 60 days before the
license expires. The renewal term is a
period of one year and begins on January 1 each year after the initial license
term. The renewal term expires on
December 31 of the year the renewal term begins.
(b) A licensee must
submit a renewal report with the renewal fee, in a form and in a medium
prescribed by the commissioner. The
renewal report must state or contain a description of each material change in
information submitted by the licensee in the licensee's original license
application that has not been previously reported to the commissioner.
(c) The commissioner may
grant an extension of the renewal date for good cause.
(d) The commissioner is
authorized to use the NMLS to process license renewals, provided that the NMLS
functionality is consistent with this section.
Sec. 29. [53B.42]
MAINTENANCE OF LICENSE.
(a) If a licensee does
not continue to meet the qualifications or satisfy the requirements that apply
to an applicant for a new money transmission license, the commissioner may
suspend or revoke the licensee's license in accordance with the procedures
established by this chapter or other applicable state law for license
suspension or revocation.
(b) An applicant for a
money transmission license must demonstrate that the applicant meets or will
meet, and a money transmission licensee must at all times meet, the
requirements in sections 53B.59 to 53B.61.
Sec. 30. [53B.43]
ACQUISITION OF CONTROL.
(a) Any person, or group
of persons acting in concert, seeking to acquire control of a licensee must
obtain the commissioner's written approval before acquiring control. An individual is not deemed to acquire
control of a licensee and is not subject to these acquisition of control
provisions when that individual becomes a key individual in the ordinary course
of business.
(b) For the purpose of this
section, a person is presumed to exercise a controlling influence when the
person holds the power to vote, directly or indirectly, at least ten percent of
the outstanding voting shares or voting interests of a licensee or person in
control of a licensee. A person presumed
to exercise a controlling influence as defined by this subdivision can rebut
the presumption of control if the person is a passive investor.
(c) For purposes of
determining the percentage of a person controlled by any other person, the
person's interest must be aggregated with the interest of any other immediate
family member, including the person's spouse, parents, children, siblings,
mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and
sisters-in-law, and any other person who shares the person's home.
(d) A person, or group
of persons acting in concert, seeking to acquire control of a licensee must, in
cooperation with the licensee:
(1) submit an
application in a form and in a medium prescribed by the commissioner; and
(2) submit a
nonrefundable fee of $4,000 with the request for approval.
(e) Upon request, the
commissioner may permit a licensee or the person, or group of persons acting in
concert, to submit some or all information required by the commissioner
pursuant to paragraph (d), clause (1), without using NMLS.
(f) The application
required by paragraph (d), clause (1), must include information required by
section 53B.39 for any new key individuals that have not previously completed
the requirements of section 53B.39 for a licensee.
(g) When an application
for acquisition of control under this section appears to include all of the
items and address all of the matters that are required, the application is
considered complete and the commissioner must promptly notify the applicant in
a record of the date on which the application was determined to be complete.
(h) The commissioner
must approve or deny the application within 60 days after the completion date. If the application is not approved or denied
within 60 days after the completion date, the application is approved and the
person, or group of persons acting in concert, are not prohibited from
acquiring control. The commissioner may
extend the application period for good cause.
(i) The commissioner's
determination that an application is complete and is accepted for processing
means only that the application, on the application's face, appears to include
all of the items and address all of the matters that are required. The commissioner's determination that an
application is complete is not an assessment of the application's substance or
of the sufficiency of the information provided.
(j) When an application
is filed and considered complete under paragraph (g), the commissioner must
investigate the financial condition and responsibility; the financial and
business experience; character; and the general fitness of the person, or group
of persons acting in concert, seeking to acquire control. The commissioner must approve an acquisition
of control under this section if the commissioner finds:
(1) the requirements of
paragraphs (d) and (f) have been met, as applicable; and
(2) the financial
condition and responsibility, financial and business experience, competence,
character, and general fitness of the person, or group of persons acting in
concert, seeking to acquire control; and the competence, experience, character,
and general fitness of the key individuals and persons that control the
licensee after the acquisition of control indicate that it is in the interest
of the public to permit the person, or group of persons acting in concert, to
control the licensee.
(k)
If an applicant avails itself of or is otherwise subject to a multistate
licensing process:
(1) the commissioner is
authorized to accept the investigation results of a lead investigative state
for the purposes of paragraph (j); or
(2) if Minnesota is a
lead investigative state, the commissioner is authorized to investigate the
applicant under paragraph (j) and consistent with the time frames established
by agreement through the multistate licensing process.
(l) The commissioner
must issue a formal written notice of the denial of an application to acquire
control. The commissioner must set forth
in the notice of denial the specific reasons the application was denied. An applicant whose application is denied by
the commissioner under this paragraph may appeal the denial within 30 days of
the date the written notice of the denial is received. Chapter 14 applies to appeals under this
paragraph.
(m) Paragraphs (a) and
(d) do not apply to:
(1) a person that acts
as a proxy for the sole purpose of voting at a designated meeting of the
shareholders or holders of voting shares or voting interests of a licensee or a
person in control of a licensee;
(2) a person that
acquires control of a licensee by devise or descent;
(3) a person that acquires
control of a licensee as a personal representative, custodian, guardian,
conservator, or trustee, or as an officer appointed by a court of competent
jurisdiction or by operation of law;
(4) a person that is
exempt under section 53B.29, clause (7);
(5) a person that the
commissioner determines is not subject to paragraph (a), based on the public
interest;
(6) a public offering of
securities of a licensee or a person in control of a licensee; or
(7) an internal
reorganization of a person controlling the licensee, where the ultimate person
controlling the licensee remains the same.
(n) A person identified
in paragraph (m), clause (2), (3), (4), or (6), that is cooperating with the
licensee must notify the commissioner within 15 days of the date the acquisition
of control occurs.
(o) Paragraphs (a) and
(d) do not apply to a person that has complied with and received approval to
engage in money transmission under this chapter, or that was identified as a
person in control in a prior application filed with and approved by the
commissioner or by another state pursuant to a multistate licensing process,
provided that:
(1) the person has not
had a license revoked or suspended or controlled a licensee that has had a
license revoked or suspended while the person was in control of the licensee in
the previous five years;
(2) if the person is a
licensee, the person is well managed and has received at least a satisfactory
rating for compliance at the person's most recent examination by an
MSB-accredited state if a rating was given;
(3) the licensee to be
acquired is projected to meet the requirements of sections 53B.59 to 53B.61
after the acquisition of control is completed, and if the person acquiring
control is a licensee, the acquiring licensee is also projected to meet the
requirements of sections 53B.59 to 53B.61 after the acquisition of control is
completed;
(4) the licensee to be acquired
does not implement any material changes to the acquired licensee's business
plan as a result of the acquisition of control, and if the person acquiring
control is a licensee, the acquiring licensee does not implement any material changes to the acquiring licensee's business
plan as a result of the acquisition of control; and
(5) the person provides
notice of the acquisition in cooperation with the licensee and attests to
clauses (1), (2), (3), and (4) in a form and in a medium prescribed by the
commissioner.
(p) If the notice under
paragraph (o), clause (5), is not disapproved within 30 days after the date on
which the notice was determined to be complete, the notice is deemed approved.
(q) Before filing an
application for approval to acquire control of a licensee, a person may request
in writing a determination from the commissioner as to whether the person would
be considered a person in control of a licensee upon consummation of a proposed
transaction. If the commissioner
determines that the person would not be a person in control of a licensee, the
proposed person and transaction is not subject to paragraphs (a) and (d).
(r) If a multistate
licensing process includes a determination pursuant to paragraph (q) and an
applicant avails itself or is otherwise subject to the multistate licensing
process:
(1) the commissioner is
authorized to accept the control determination of a lead investigative state
with sufficient staffing, expertise, and minimum standards for the purposes of
paragraph (q); or
(2) if Minnesota is a
lead investigative state, the commissioner is authorized to investigate the
applicant under paragraph (q) and consistent with the time frames established
by agreement through the multistate licensing process.
Sec. 31. [53B.44]
CHANGE OF KEY INDIVIDUALS; NOTICE AND INFORMATION REQUIREMENTS.
(a) A licensee that adds
or replaces any key individual must:
(1) provide notice, in a
manner prescribed by the commissioner, within 15 days after the effective date
of the key individual's appointment; and
(2) provide the
information required under section 53B.39 within 45 days of the effective date
of the key individual's appointment.
(b) Within 90 days of the
date on which the notice provided under section 53B.44, paragraph (a), was
determined to be complete, the commissioner may issue a notice of disapproval
of a key individual if the commissioner finds that the competence, business
experience, character, or integrity of the individual is not in the best
interests of the public or the customers of the licensee.
(c) A notice of
disapproval must contain a statement of the basis for disapproval and must be
sent to the licensee and the disapproved individual. A licensee may appeal a notice of disapproval
pursuant to chapter 14 within 30 days of the date the notice of disapproval is
received.
(d) If the notice
provided under paragraph (a) is not disapproved within 90 days after the date
on which the notice was determined to be complete, the key individual is deemed
approved.
(e) If a multistate
licensing process includes a key individual notice review and disapproval
process under this section and the licensee avails itself of or is otherwise
subject to the multistate licensing process:
(1) the commissioner is
authorized to accept the determination of another state if the investigating
state has sufficient staffing, expertise, and minimum standards for the
purposes of this section; or
(2)
if Minnesota is a lead investigative state, the commissioner is authorized to
investigate the applicant under paragraph (b) and the time frames established
by agreement through the multistate licensing process.
Sec. 32. [53B.45]
REPORT OF CONDITION.
(a) Each licensee must
submit a report of condition within 45 days of the end of the calendar quarter,
or within any extended time the commissioner prescribes.
(b) The report of
condition must include:
(1) financial
information at the licensee level;
(2) nationwide and
state-specific money transmission transaction information in every jurisdiction
in the United States where the licensee is licensed to engage in money
transmission;
(3) a permissible
investments report;
(4) transaction
destination country reporting for money received for transmission, if
applicable; and
(5) any other information the commissioner reasonably requires with respect to the licensee.
(c) The commissioner is
authorized to use NMLS to submit the report required under paragraph (a).
(d) The information
required by paragraph (b), clause (4), must only be included in a report of
condition submitted within 45 days of the end of the fourth calendar quarter.
Sec. 33. [53B.46]
AUDITED FINANCIAL STATEMENTS.
(a) Each licensee must,
within 90 days after the end of each fiscal year, or within any extended time
the commissioner prescribes, file with the commissioner:
(1) an audited financial
statement of the licensee for the fiscal year prepared in accordance with
United States generally accepted accounting principles; and
(2) any other
information the commissioner may reasonably require.
(b) The audited
financial statements must be prepared by an independent certified public
accountant or independent public accountant who is satisfactory to the
commissioner.
(c) The audited
financial statements must include or be accompanied by a certificate of opinion
prepared by the independent certified public accountant or independent public accountant
that is satisfactory in form and content to the commissioner. If the certificate or opinion is qualified,
the commissioner may order the licensee to take any action the commissioner
finds necessary to enable the independent or certified public accountant or
independent public accountant to remove the qualification.
Sec. 34. [53B.47]
AUTHORIZED DELEGATE REPORTING.
(a) Each licensee must
submit a report of authorized delegates within 45 days of the end of the
calendar quarter. The commissioner is
authorized to use NMLS to submit the report required by this paragraph,
provided that the functionality is consistent with the requirements of this
section.
(b) The authorized delegate
report must include, at a minimum, each authorized delegate's:
(1) company legal name;
(2) taxpayer employer
identification number;
(3) principal provider
identifier;
(4) physical address;
(5) mailing address;
(6) any business
conducted in other states;
(7) any fictitious or
trade name;
(8) contact person name,
telephone number, and email;
(9) start date as the
licensee's authorized delegate;
(10) end date acting as
the licensee's authorized delegate, if applicable;
(11) court orders under
section 53B.53; and
(12) any other
information the commissioner reasonably requires with respect to the authorized
delegate.
Sec. 35. [53B.48]
REPORTS OF CERTAIN EVENTS.
(a) A licensee must file
a report with the commissioner within ten business days after the licensee has
reason to know any of the following events has occurred:
(1) a petition by or
against the licensee under the United States Bankruptcy Code, United States
Code, title 11, sections 101 to 110, as amended or recodified from time to
time, for bankruptcy or reorganization has been filed;
(2) a petition by or
against the licensee for receivership, the commencement of any other judicial
or administrative proceeding for the licensee's dissolution or reorganization,
or the making of a general assignment for the benefit of the licensee's creditors
has been filed; or
(3) a proceeding to
revoke or suspend the licensee's license in a state or country in which the
licensee engages in business or is licensed has been commenced.
(b) A licensee must file
a report with the commissioner within ten business days after the licensee has
reason to know any of the following events has occurred:
(1) the licensee or a
key individual or person in control of the licensee is charged with or
convicted of a felony related to money transmission activities; or
(2) an authorized
delegate is charged with or convicted of a felony related to money transmission
activities.
Sec. 36. [53B.49]
BANK SECRECY ACT REPORTS.
A licensee and an
authorized delegate must file all reports required by federal currency
reporting, record keeping, and suspicious activity reporting requirements as
set forth in the Bank Secrecy Act and other federal and state laws pertaining
to money laundering. A licensee and
authorized delegate that timely files with the appropriate federal agency a complete
and accurate report required under this section is deemed to comply with the
requirements of this section.
Sec. 37. [53B.50]
RECORDS.
(a) A licensee must
maintain the following records, for purposes of determining the licensee's compliance
with this chapter, for at least three years:
(1) a record of each
outstanding money transmission obligation sold;
(2) a general ledger
posted at least monthly containing all asset, liability, capital, income, and
expense accounts;
(3) bank statements and
bank reconciliation records;
(4) records of
outstanding money transmission obligations;
(5) records of each
outstanding money transmission obligation paid within the three-year period;
(6) a list of the last
known names and addresses of all of the licensee's authorized delegates; and
(7) any other records
the commissioner reasonably requires by administrative rule.
(b) The items specified
in paragraph (a) may be maintained in any form of record.
(c) The records
specified in paragraph (a) may be maintained outside of Minnesota if the
records are made accessible to the commissioner upon seven business-days'
notice that is sent in a record.
(d) All records
maintained by the licensee as required under paragraphs (a) to (c) are open to
inspection by the commissioner under section 53B.33, paragraph (a).
Sec. 38. [53B.51]
RELATIONSHIP BETWEEN LICENSEE AND AUTHORIZED DELEGATE.
(a) For purposes of this
section, "remit" means to make direct payments of money to (1) a
licensee, or (2) a licensee's representative authorized to receive money or to
deposit money in a bank in an account specified by the licensee.
(b) Before a licensee is
authorized to conduct business through an authorized delegate or allows a
person to act as the licensee's authorized delegate, the licensee must:
(1) adopt, and update as
necessary, written policies and procedures reasonably designed to ensure that
the licensee's authorized delegates comply with applicable state and federal
law;
(2) enter into a written
contract that complies with paragraph (d); and
(3) conduct a reasonable
risk-based background investigation sufficient for the licensee to determine
whether the authorized delegate has complied and will likely comply with
applicable state and federal law.
(c) An authorized delegate must
operate in full compliance with this chapter.
(d) The written contract
required by paragraph (b) must be signed by the licensee and the authorized
delegate. The written contract must, at
a minimum:
(1) appoint the person signing
the contract as the licensee's authorized delegate with the authority to
conduct money transmission on behalf of the licensee;
(2) set forth the nature
and scope of the relationship between the licensee and the authorized delegate
and the respective rights and responsibilities of the parties;
(3) require the
authorized delegate to agree to fully comply with all applicable state and
federal laws, rules, and regulations pertaining to money transmission,
including this chapter and regulations implementing this chapter, relevant
provisions of the Bank Secrecy Act and the USA PATRIOT Act, Public Law 107-56;
(4) require the
authorized delegate to remit and handle money and monetary value in accordance
with the terms of the contract between the licensee and the authorized
delegate;
(5) impose a trust on
money and monetary value net of fees received for money transmission for the
benefit of the licensee;
(6) require the
authorized delegate to prepare and maintain records as required by this chapter
or administrative rules implementing this chapter, or as reasonably requested
by the commissioner;
(7) acknowledge that the
authorized delegate consents to examination or investigation by the
commissioner;
(8) state that the
licensee is subject to regulation by the commissioner and that as part of that
regulation the commissioner may (1) suspend or revoke an authorized delegate
designation, or (2) require the licensee to terminate an authorized delegate
designation; and
(9) acknowledge receipt
of the written policies and procedures required under paragraph (b), clause
(1).
(e) If the licensee's
license is suspended, revoked, surrendered, or expired, within five business
days the licensee must provide documentation to the commissioner that the licensee
has notified all applicable authorized delegates of the licensee whose names
are in a record filed with the commissioner of the suspension, revocation,
surrender, or expiration of a license. Upon
suspension, revocation, surrender, or expiration of a license, applicable
authorized delegates must immediately cease to provide money transmission as an
authorized delegate of the licensee.
(f) An authorized
delegate of a licensee holds in trust for the benefit of the licensee all money
net of fees received from money transmission.
If an authorized delegate commingles any funds received from money
transmission with other funds or property owned or controlled by the authorized
delegate, all commingled funds and other property are considered held in trust
in favor of the licensee in an amount equal to the amount of money net of fees
received from money transmission.
(g) An authorized
delegate is prohibited from using a subdelegate to conduct money transmission
on behalf of a licensee.
Sec. 39. [53B.52]
UNAUTHORIZED ACTIVITIES.
A person is prohibited
from engaging in the business of money transmission on behalf of a person not
licensed under this chapter or not exempt under sections 53B.29 and 53B.30. A person that engages in the business of
money transmission on behalf of a person that is not licensed under this
chapter or not exempt under sections 53B.29 and 53B.30 provides money
transmission to the same extent as if the person were a licensee, and is
jointly and severally liable with the unlicensed or nonexempt person.
Sec. 40. [53B.53]
PROHIBITED AUTHORIZED DELEGATES.
(a) The district court
in an action brought by a licensee has jurisdiction to grant appropriate
equitable or legal relief, including without limitation prohibiting the
authorized delegate from directly or indirectly acting as an authorized
delegate for any licensee in Minnesota and the payment of restitution, damages,
or other monetary relief, if the district court finds that an authorized
delegate failed to remit money in accordance with the written contract required
by section 53B.51, paragraph (b), or as otherwise directed by the licensee or
required by law.
(b) If the district
court issues an order prohibiting a person from acting as an authorized
delegate for any licensee under paragraph (a), the licensee that brought the
action must report the order to the commissioner within 30 days of the date of
the order and must report the order through NMLS within 90 days of the date of
the order.
Sec. 41. [53B.54]
TIMELY TRANSMISSION.
(a) Every licensee must
forward all money received for transmission in accordance with the terms of the
agreement between the licensee and the sender, unless the licensee has a
reasonable belief or a reasonable basis to believe that the sender may be a
victim of fraud or that a crime or violation of law, rule, or regulation has
occurred, is occurring, or may occur.
(b) If a licensee fails
to forward money received for transmission as provided under this section, the
licensee must respond to inquiries by the sender with the reason for the
failure, unless providing a response would violate a state or federal law,
rule, or regulation.
Sec. 42. [53B.55]
REFUNDS.
(a) This section does
not apply to:
(1) money received for
transmission that is subject to the federal remittance rule under Code of
Federal Regulations, title 12, part 1005, subpart B, as amended or recodified
from time to time; or
(2) money received for
transmission pursuant to a written agreement between the licensee and payee to
process payments for goods or services provided by the payee.
(b) A licensee must
refund to the sender within ten days of the date the licensee receives the
sender's written request for a refund of any and all money received for
transmission, unless:
(1) the money has been
forwarded within ten days of the date on which the money was received for
transmission;
(2) instructions have
been given committing an equivalent amount of money to the person designated by
the sender within ten days of the date on which the money was received for
transmission;
(3) the agreement
between the licensee and the sender instructs the licensee to forward the money
at a time that is beyond ten days of the date on which the money was received
for transmission. If money has not been
forwarded in accordance with the terms of the agreement between the licensee
and the sender, the licensee must issue a refund in accordance with the other
provisions of this section; or
(4) the refund is
requested for a transaction that the licensee has not completed based on a
reasonable belief or a reasonable basis to believe that a crime or violation of
law, rule, or regulation has occurred, is occurring, or may occur.
(c) A refund request does not
enable the licensee to identify:
(1) the sender's name
and address or telephone number; or
(2) the particular
transaction to be refunded in the event the sender has multiple transactions
outstanding.
Sec. 43. [53B.56]
RECEIPTS.
Subdivision 1. Definition. For purposes of this section,
"receipt" means a paper receipt, electronic record, or other written
confirmation.
Subd. 2. Exemption. This section does not apply to:
(1) money received for
transmission that is subject to the federal remittance rule under Code of
Federal Regulations, title 12, part 1005, subpart B, as amended or recodified
from time to time;
(2) money received for
transmission that is not primarily for personal, family, or household purposes;
(3) money received for
transmission pursuant to a written agreement between the licensee and payee to
process payments for goods or services provided by the payee; or
(4) payroll processing
services.
Subd. 3. Transaction
types; receipts form. For a
transaction conducted in person, the receipt may be provided electronically if
the sender requests or agrees to receive an electronic receipt. For a transaction conducted electronically or
by telephone, a receipt may be provided electronically. All electronic receipts must be provided in a
retainable form.
Subd. 4. Receipts
required. (a) Every licensee
or the licensee's authorized delegate must provide the sender a receipt for
money received for transmission.
(b) The receipt must
contain, as applicable:
(1) the name of the
sender;
(2) the name of the
designated recipient;
(3) the date of the transaction;
(4) the unique
transaction or identification number;
(5) the name of the
licensee, NMLS Unique ID, the licensee's business address, and the licensee's
customer service telephone number;
(6) the transaction
amount, expressed in United States dollars;
(7) any fee the licensee
charges the sender for the transaction; and
(8) any taxes the
licensee collects from the sender for the transaction.
(c)
The receipt required by this section must be provided in (1) English, and (2)
the language principally used by the licensee or authorized delegate to
advertise, solicit, or negotiate, either orally or in writing, for a
transaction conducted in person, electronically, or by telephone, if the
language principally used is a language other than English.
Sec. 44. [53B.57]
NOTICE.
Every licensee or
authorized delegate must include on a receipt or disclose on the licensee's
website or mobile application the name and telephone number of the department
and a statement that the licensee's customers can contact the department with
questions or complaints about the licensee's money transmission services.
Sec. 45. [53B.58]
PAYROLL PROCESSING SERVICES; DISCLOSURES.
(a) A licensee that
provides payroll processing services must:
(1) issue reports to
clients detailing client payroll obligations in advance of the payroll funds
being deducted from an account; and
(2) make available
worker pay stubs or an equivalent statement to workers.
(b) Paragraph (a) does
not apply to a licensee providing payroll processing services if the licensee's
client designates the intended recipients to the licensee and is responsible
for providing the disclosures required by paragraph (a), clause (2).
Sec. 46. [53B.59]
NET WORTH.
(a) A licensee under
this chapter must maintain at all times a tangible net worth that is the
greater of: (1) $100,000; or (2) three
percent of total assets for the first $100,000,000; two percent of additional
assets between $100,000,000 to $1,000,000,000; and one-half percent of
additional assets over $1,000,000,000.
(b) Tangible net worth
must be demonstrated in the initial application by the applicant's most recent
audited or unaudited financial statements under section 53B.38, paragraph (b),
clause (6).
(c) Notwithstanding
paragraphs (a) and (b), the commissioner has the authority, for good cause
shown, to exempt any applicant or licensee in-part or in whole from the
requirements of this section.
Sec. 47. [53B.60]
SURETY BOND.
(a) An applicant for a
money transmission license must provide, and a licensee must at all times
maintain (1) security consisting of a surety bond in a form satisfactory to the
commissioner, or (2) with the commissioner's approval, a deposit instead of a
bond in accordance with this section.
(b) The amount of the
required security under this section is:
(1) the greater of (i)
$100,000, or (ii) an amount equal to one hundred percent of the licensee's
average daily money transmission liability in Minnesota, calculated for the
most recently completed three-month period, up to a maximum of $500,000; or
(2) in the event that
the licensee's tangible net worth exceeds ten percent of total assets, the
licensee must maintain a surety bond of $100,000.
(c) A licensee that maintains a
bond in the maximum amount provided for in paragraph (b), clause (1) or (2), as
applicable, is not required to calculate the licensee's average daily money
transmission liability in Minnesota for purposes of this section.
(d) A licensee may exceed the maximum required bond amount pursuant to
section 53B.62, paragraph (a), clause (5).
(e) The security device
remains effective until cancellation, which may occur only after 30 days'
written notice to the commissioner. Cancellation
does not affect the rights of any claimant for any liability incurred or
accrued during the period for which the bond was in force.
(f) The security device
must remain in place for no longer than five years after the licensee ceases
money transmission operations in Minnesota.
Notwithstanding this paragraph, the commissioner may permit the security
device to be reduced or eliminated before that time to the extent that the
amount of the licensee's payment instruments outstanding in Minnesota are
reduced. The commissioner may also
permit a licensee to substitute a letter of credit or other form of security
device acceptable to the commissioner for the security device in place at the
time the licensee ceases money transmission operations in Minnesota.
Sec. 48. [53B.61]
MAINTENANCE OF PERMISSIBLE INVESTMENTS.
(a) A licensee must
maintain at all times permissible investments that have a market value computed
in accordance with United States generally accepted accounting principles of
not less than the aggregate amount of all of the licensee's outstanding money
transmission obligations.
(b) Except for
permissible investments enumerated in section 53B.62, paragraph (a), the
commissioner may by administrative rule or order, with respect to any licensee,
limit the extent to which a specific investment maintained by a licensee within
a class of permissible investments may be considered a permissible investment,
if the specific investment represents undue risk to customers not reflected in
the market value of investments.
(c) Permissible
investments, even if commingled with other assets of the licensee, are held in
trust for the benefit of the purchasers and holders of the licensee's
outstanding money transmission obligations in the event of insolvency; the
filing of a petition by or against the licensee under the United States
Bankruptcy Code, United States Code, title 11, sections 101 to 110, as amended
or recodified from time to time, for bankruptcy or reorganization; the filing
of a petition by or against the licensee for receivership; the commencement of
any other judicial or administrative proceeding for the licensee's dissolution
or reorganization; or in the event of an action by a creditor against the
licensee who is not a beneficiary of this statutory trust. No permissible investments impressed with a
trust pursuant to this paragraph are subject to attachment, levy of execution,
or sequestration by order of any court, except for a beneficiary of the
statutory trust.
(d) Upon the
establishment of a statutory trust in accordance with paragraph (c), or when
any funds are drawn on a letter of credit pursuant to section 53B.62, paragraph
(a), clause (4), the commissioner must notify the applicable regulator of each
state in which the licensee is licensed to engage in money transmission, if
any, of the establishment of the trust or the funds drawn on the letter of
credit, as applicable. Notice is deemed
satisfied if performed pursuant to a multistate agreement or through NMLS. Funds drawn on a letter of credit, and any
other permissible investments held in trust for the benefit of the purchasers
and holders of the licensee's outstanding money transmission obligations, are
deemed held in trust for the benefit of the purchasers and holders of the
licensee's outstanding money transmission obligations on a pro rata and
equitable basis in accordance with statutes pursuant to which permissible
investments are required to be held in Minnesota and other states, as defined
by a substantially similar statute in the other state. Any statutory trust established under this
section terminates upon extinguishment of all of the licensee's outstanding
money transmission obligations.
(e)
The commissioner may by rule or by order allow other types of investments that
the commissioner determines are of sufficient liquidity and quality to be a
permissible investment. The commissioner
is authorized to participate in efforts with other state regulators to
determine that other types of investments are of sufficient liquidity and
quality to be a permissible investment.
Sec. 49. [53B.62]
PERMISSIBLE INVESTMENTS.
Subdivision 1. Certain
investments permissible. The
following investments are permissible under section 53B.61:
(1) cash, including
demand deposits, savings deposits, and funds in accounts held for the benefit
of the licensee's customers in a federally insured depository financial
institution; and cash equivalents, including ACH items in transit to the
licensee and ACH items or international wires in transit to a payee, cash in
transit via armored car, cash in smart safes, cash in licensee-owned locations,
debit card or credit card funded transmission receivables owed by any bank, or
money market mutual funds rated AAA or the equivalent from any eligible rating
service;
(2) certificates of
deposit or senior debt obligations of an insured depository institution, as
defined in section 3 of the Federal Deposit Insurance Act, United States Code,
title 12, section 1813, as amended or recodified from time to time, or as
defined under the federal Credit Union Act, United States Code, title 12,
section 1781, as amended or recodified from time to time;
(3) an obligation of the
United States or a commission, agency, or instrumentality thereof; an
obligation that is guaranteed fully as to principal and interest by the United
States; or an obligation of a state or a governmental subdivision, agency, or
instrumentality thereof;
(4) the full drawable
amount of an irrevocable standby letter of credit, for which the stated
beneficiary is the commissioner, that stipulates that the beneficiary need only
draw a sight draft under the letter of credit and present the sight draft to
obtain funds up to the letter of credit amount within seven days of
presentation of the items required by subdivision 2, paragraph (c); and
(5) one hundred percent
of the surety bond or deposit provided for under section 53B.60 that exceeds
the average daily money transmission liability in Minnesota.
Subd. 2. Letter
of credit; requirements. (a)
A letter of credit under subdivision 1, clause (4), must:
(1) be issued by a
federally insured depository financial institution, a foreign bank that is
authorized under federal law to maintain a federal agency or federal branch
office in a state or states, or a foreign bank that is authorized under state
law to maintain a branch in a state that:
(i) bears an eligible rating or whose parent company bears an eligible
rating; and (ii) is regulated, supervised, and examined by United States
federal or state authorities having regulatory authority over banks, credit unions,
and trust companies;
(2) be irrevocable,
unconditional, and indicate that it is not subject to any condition or
qualifications outside of the letter of credit;
(3) not contain
reference to any other agreements, documents, or entities, or otherwise provide
for any security interest in the licensee; and
(4) contain an issue
date and expiration date, and expressly provide for automatic extension without
a written amendment, for an additional period of one year from the present or
each future expiration date, unless the issuer of the letter of credit notifies
the commissioner in writing by certified or registered mail or courier mail or
other receipted means, at least 60 days before any expiration date, that the
irrevocable letter of credit will not be extended.
(b) In the event of any notice
of expiration or nonextension of a letter of credit issued under paragraph (a),
clause (4), the licensee must demonstrate to the satisfaction of the
commissioner, 15 days before the letter or credit's expiration, that the
licensee maintains and will maintain permissible investments in accordance with
section 53B.61, paragraph (a), upon the expiration of the letter of credit. If the licensee is not able to do so, the
commissioner may draw on the letter of credit in an amount up to the amount
necessary to meet the licensee's requirements to maintain permissible
investments in accordance with section 53B.61, paragraph (a). Any draw under this paragraph must be offset
against the licensee's outstanding money transmission obligations. The drawn funds must be held in trust by the
commissioner or the commissioner's designated agent, to the extent authorized
by law, as agent for the benefit of the purchasers and holders of the
licensee's outstanding money transmission obligations.
(c) The letter of credit
must provide that the issuer of the letter of credit must honor, at sight, a
presentation made by the beneficiary to the issuer of the following documents
on or before the expiration date of the letter of credit:
(1) the original letter
of credit, including any amendments; and
(2) a written statement
from the beneficiary stating that any of the following events have occurred:
(i) the filing of a
petition by or against the licensee under the United States Bankruptcy Code,
United States Code, title 11, sections 101 to 110, as amended or recodified
from time to time, for bankruptcy or reorganization;
(ii) the filing of a
petition by or against the licensee for receivership, or the commencement of
any other judicial or administrative proceeding for the licensee's dissolution
or reorganization;
(iii) the seizure of
assets of a licensee by a commissioner of any other state pursuant to an
emergency order issued in accordance with applicable law, on the basis of an
action, violation, or condition that has caused or is likely to cause the
insolvency of the licensee; or
(iv) the beneficiary has
received notice of expiration or nonextension of a letter of credit and the
licensee failed to demonstrate to the satisfaction of the beneficiary that the
licensee will maintain permissible investments in accordance with section
53B.61, paragraph (a), upon the expiration or nonextension of the letter of
credit.
(d) The commissioner may
designate an agent to serve on the commissioner's behalf as beneficiary to a
letter of credit, provided the agent and letter of credit meet requirements the
commissioner establishes. The
commissioner's agent may serve as agent for multiple licensing authorities for
a single irrevocable letter of credit if the proceeds of the drawable amount
for the purposes of subdivision 1, clause (4), and this subdivision are
assigned to the commissioner.
(e) The commissioner is
authorized to participate in multistate processes designed to facilitate the
issuance and administration of letters of credit, including but not limited to
services provided by the NMLS and State Regulatory Registry, LLC.
Subd. 3. Other
permissible investments. Unless
the commissioner by administrative rule or order otherwise permits an
investment to exceed the limit set forth in this subdivision, the following
investments are permissible under section 53B.61 to the extent specified:
(1) receivables that are
payable to a licensee from its authorized delegates in the ordinary course of
business that are less than seven days old, up to 50 percent of the aggregate
value of the licensee's total permissible investments;
(2) of the receivables
permissible under clause (1), receivables that are payable to a licensee from a
single authorized delegate in the ordinary course of business may not exceed
ten percent of the aggregate value of the licensee's total permissible
investments;
(3)
the following investments are permissible up to 20 percent per category and
combined up to 50 percent of the aggregate value of the licensee's total
permissible investments:
(i) a short-term
investment of up to six months bearing an eligible rating;
(ii) commercial paper
bearing an eligible rating;
(iii) a bill, note,
bond, or debenture bearing an eligible rating;
(iv) United States
tri-party repurchase agreements collateralized at 100 percent or more with
United States government or agency securities, municipal bonds, or other
securities bearing an eligible rating;
(v) money market mutual
funds rated less than "AAA" and equal to or higher than
"A-" by S&P, or the equivalent from any other eligible rating
service; and
(vi) a mutual fund or
other investment fund composed solely and exclusively of one or more
permissible investments listed in subdivision 1, clauses (1) to (3); and
(4) cash, including
demand deposits, savings deposits, and funds in accounts held for the benefit
of the licensee's customers, at foreign depository institutions are permissible
up to ten percent of the aggregate value of the licensee's total permissible
investments, if the licensee has received a satisfactory rating in the
licensee's most recent examination and the foreign depository institution:
(i) has an eligible
rating;
(ii) is registered under
the Foreign Account Tax Compliance Act, Public Law 111-147;
(iii) is not located in
any country subject to sanctions from the Office of Foreign Asset Control; and
(iv) is not located in a
high-risk or noncooperative jurisdiction, as designated by the Financial Action
Task Force.
Sec. 50. [53B.63]
SUSPENSION; REVOCATION.
(a) The commissioner may
suspend or revoke a license or order a licensee to revoke the designation of an
authorized delegate if:
(1) the licensee
violates this chapter, or an administrative rule adopted or an order issued
under this chapter;
(2) the licensee does
not cooperate with an examination or investigation conducted by the
commissioner;
(3) the licensee engages
in fraud, intentional misrepresentation, or gross negligence;
(4) an authorized
delegate is convicted of a violation of a state or federal statute prohibiting
money laundering, or violates an administrative rule adopted or an order issued
under this chapter, as a result of the licensee's willful misconduct or willful
blindness;
(5) the competence,
experience, character, or general fitness of the licensee, authorized delegate,
person in control of a licensee, key individual, or responsible person of the
authorized delegate indicates that it is not in the public interest to permit
the person to provide money transmission;
(6) the licensee engages in an
unsafe or unsound practice;
(7) the licensee is
insolvent, suspends payment of the licensee's obligations, or makes a general
assignment for the benefit of the licensee's creditors; or
(8) the licensee does
not remove an authorized delegate after the commissioner issues and serves upon
the licensee a final order that includes a finding that the authorized delegate
has violated this chapter.
(b) When determining
whether a licensee is engaging in an unsafe or unsound practice, the
commissioner may consider the size and condition of the licensee's money
transmission, the magnitude of the loss, the gravity of the violation of this
chapter, and the previous conduct of the person involved.
Sec. 51. [53B.64]
AUTHORIZED DELEGATES; SUSPENSION AND REVOCATION.
(a) The commissioner may
issue an order suspending or revoking the designation of an authorized delegate
if the commissioner finds:
(1) the authorized
delegate violated this chapter, or an administrative rule adopted or an order
issued under this chapter;
(2) the authorized
delegate did not cooperate with an examination or investigation conducted by
the commissioner;
(3) the authorized
delegate engaged in fraud, intentional misrepresentation, or gross negligence;
(4) the authorized
delegate is convicted of a violation of a state or federal anti-money
laundering statute;
(5) the competence,
experience, character, or general fitness of the authorized delegate or a
person in control of the authorized delegate indicates that it is not in the
public interest to permit the authorized delegate to provide money
transmission; or
(6) the authorized
delegate is engaging in an unsafe or unsound practice.
(b) When determining
whether an authorized delegate is engaging in an unsafe or unsound practice,
the commissioner may consider the size and condition of the authorized
delegate's provision of money transmission, the magnitude of the loss, the
gravity of the violation of this chapter, or an administrative rule adopted or
order issued under this chapter, and the previous conduct of the authorized
delegate.
(c) An authorized
delegate may apply for relief from a suspension or revocation of designation as
an authorized delegate in the same manner as a licensee.
Sec. 52. [53B.65]
ENFORCEMENT.
Section 45.027 applies
to this chapter.
Sec. 53. [53B.66]
CRIMINAL PENALTIES.
(a) A person who
intentionally makes a false statement, misrepresentation, or false
certification in a record filed or required to be maintained under this chapter
or that intentionally makes a false entry or omits a material entry in a record
filed or required to be maintained under this chapter is guilty of a felony.
(b)
A person who knowingly engages in an activity for which a license is required
under this chapter without being licensed under this chapter, and who receives
more than $1,000 in compensation within a 30-day period from the activity, is
guilty of a felony.
(c) A person who
knowingly engages in an activity for which a license is required under this
chapter without being licensed under this chapter, and who receives more than
$500 but less than $1,000 in compensation within a 30-day period from the
activity, is guilty of a gross misdemeanor.
(d) A person who
knowingly engages in an activity for which a license is required under this
chapter without being licensed under this chapter, and who receives no more
than $500 in compensation within a 30-day period from the activity, is guilty
of a misdemeanor.
Sec. 54. [53B.67]
SEVERABILITY.
If any provision of this
chapter or the chapter's application to any person or circumstance is held
invalid, the invalidity does not affect other provisions or applications of
this chapter that can be given effect without the invalid provision or
application.
Sec. 55. [53B.68]
TRANSITION PERIOD.
(a) A person licensed in
Minnesota to engage in the business of money transmission is not subject to the
provisions of this chapter to the extent that this chapter's provisions
conflict with current law or establish new requirements not imposed under
current law until the licensee renews the licensee's current license or for
five months after the effective date of this chapter, whichever is later.
(b) Notwithstanding paragraph
(a), a licensee is only required to amend the licensee's authorized delegate
contracts for contracts entered into or amended after the effective date or the
completion of any transition period contemplated under paragraph (a). Nothing in this section limits an authorized
delegate's obligations to operate in full compliance with this chapter, as
required under section 53B.51, paragraph (c).
Sec. 56. [53B.69]
DEFINITIONS.
Subdivision 1. Terms. For purposes of sections 53B.70 to
53B.74, the following terms have the meaning given them.
Subd. 2. Control
of virtual currency. "Control
of virtual currency," when used in reference to a transaction or
relationship involving virtual currency, means the power to execute
unilaterally or prevent indefinitely a virtual currency transaction.
Subd. 3. Exchange. "Exchange," used as a verb,
means to assume control of virtual currency from or on behalf of a person, at
least momentarily, to sell, trade, or convert:
(1) virtual currency for
money, bank credit, or one or more forms of virtual currency; or
(2) money or bank credit
for one or more forms of virtual currency.
Subd. 4. Transfer. "Transfer" means to assume
control of virtual currency from or on behalf of a person and to:
(1) credit the virtual
currency to the account of another person;
(2) move the virtual
currency from one account of a person to another account of the same person; or
(3) relinquish control of
virtual currency to another person.
Subd. 5. United
States dollar equivalent of virtual currency. "United States dollar equivalent
of virtual currency" means the equivalent value of a particular virtual
currency in United States dollars shown on a virtual‑currency exchange
based in the United States for a particular date or period specified in this
chapter.
Subd. 6. Virtual
currency. (a) "Virtual
currency" means a digital representation of value that:
(1) is used as a medium
of exchange, unit of account, or store of value; and
(2) is not money,
whether or not denominated in money.
(b) Virtual currency
does not include:
(1) a transaction in
which a merchant grants, as part of an affinity or rewards program, value that
cannot be taken from or exchanged with the merchant for money, bank credit, or
virtual currency; or
(2) a digital
representation of value issued by or on behalf of a publisher and used solely
within an online game, game platform, or family of games sold by the same
publisher or offered on the same game platform.
Subd. 7. Virtual-currency
administration. "Virtual-currency
administration" means issuing virtual currency with the authority to
redeem the currency for money, bank credit, or other virtual currency.
Subd. 8. Virtual-currency
business activity. "Virtual-currency
business activity" means:
(1) exchanging,
transferring, or storing virtual currency or engaging in virtual-currency
administration, whether directly or through an agreement with a
virtual-currency control-services vendor;
(2) holding electronic
precious metals or electronic certificates representing interests in precious
metals on behalf of another person or issuing shares or electronic certificates
representing interests in precious metals; or
(3) exchanging one or
more digital representations of value used within one or more online games,
game platforms, or family of games for:
(i) virtual currency offered by or on behalf of the s