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Commerce Committee

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Update: March 24, 2004 6:30 p.m.

Updates are listed in reverse order with the most recent at the top.

Omnibus bills gain

The omnibus liquor bill and the omnibus insurance bill were both approved and advanced to the Senate floor at the Wed., Mar. 24, meeting of the Commerce Committee. The panel, chaired by Sen. Linda Scheid (DFL-Brooklyn Park), heard several additional bills at the last hearing of the session.

S.F. 2696, sponsored by Sen. Sandra Pappas (DFL-St. Paul), makes numerous changes in the state's liquor laws. Members adopted several amendments to reflect discussions that had taken place since the bill had been approved in subcommittee. The bill establishes parity between brewpubs and micro-brewers by raising the production limit for micro-breweries from 2,000 to 3,500 barrels per year and increasing the license fee to $500. Members adopted an amendment to allow a micro-brewer to obtain an off-sale license to sell 64-ounce containers know as growlers. The committee also adopted an amendment providing that brewers who manufacture more than 3,500 barrels of malt liquor a year pay a $2,500 license fee. Pappas said the amendment is revenue neutral. In addition, members adopted an amendment allowing strong beer made in Minnesota to be sold at the Minnesota State Fair. The bill allows Minnesota wine to be sold at the State Fair and the amendment adds strong beer. Currently, only 3.2 beer is sold at the fair. A final amendment, authorizing a municipality to issue a brewer who manufactures fewer than 3,500 barrels of malt liquor in a year a temporary license for the on-sale of intoxicating liquor in connection with a social event within the municipality sponsored by the brewer.

The omnibus insurance bill, S.F. 2884, sponsored by Sen. Dan Sparks (DFL-Austin), was also amended several times before gaining approval. Sparks said originally the bill was primarily a technical department bill, but that he was offering amendments that contained some policy matters. The first amendment, which the committee adopted, made a number of housekeeping changes in the provisions relating to insurance.

The second amendment contained provisions adopted in the other body. A number of people spoke to the changes, outlining the various provisions. One provision specifies that if the termination of an agency contract is the ground for nonrenewal of a policy of homeowner's insurance, the company must provide notice to the policyholder that the policy is not being renewed due to the termination of the company's contract with the agency. Another provision, which sparked considerable discussion, allows an HMO to move the assessment for Minnesota Comprehensive Health Association from administrative costs to medical costs for loss ratio calculation purposes. One provision provides that a policyholder cannot be penalized because of an inquiry about a hypothetical claim or a potential claim. Another provision sets forth procedures for the self-insurer's security fund to pay workers compensation claims from a company that has gone out of business. Finally, the amendment contains a provision providing for a Medicare Supplement Working Group. The panel adopted the amendment. A third amendment outlines procedures for notifying insureds or claimants for claims made under a policy of accident and sickness insurance and for claims submitted under a health plan. The amendment was also adopted. An amendment specifying that benefits for individuals age 19 up to the limiting age for coverage of the dependent are limited to inpatient or outpatient expenses arising from medical and dental treatment that was scheduled or initiated prior to the dependent turning age 19, was also adopted. Finally, members adopted an amendment, offered by Sen. Brian LeClair (R-Woodbury), allowing companies to offer both a high deductible health plan and a medical savings plan. The bill was then advanced to the Senate floor.

In other action, the committee approved an additional four bills. S.F. 2587, carried by Sparks, establishes risk-based capital requirements for health organizations, establishes the minimum standard of valuation for health insurances and enacts model regulations of the National Association of Insurance Commissioners. S.F. 1944, also sponsored by Sparks, authorizes the Joint Underwriting Association to issue medical malpractice insurance policies to long-term providers who are members of an activated class with limits not to exceed $2 million for each claimant and $4 million for all claimants in a year provided the association find the applicant needs the higher limits. S.F. 2078, authored by Sen. Dallas Sams (DFL-Staples), permits service cooperatives to provide group health coverage to private employers. All of the bills were advanced to the Senate floor.

Members also reconsidered a bill, S.F. 1408, authored by Sen. Geoff Michel (R-Edina), that had failed in a previous hearing. Michel offered an amendment specifying that all arbitration awards must be itemized and that a partial award of medical benefits rendered by an arbitrator and paid by an obligor will be considered full and final payment. The amendment also requires the itemization of medical services claims to include the names and addresses of all health care providers whose charges are the subject of the claims. The amendment was adopted and the bill advanced to the full Senate.

Homeowners Protection Act gains

Members of the Commerce Committee approved a consumer protection bill when the panel met Mon., Mar. 22. The measure, which specifically provides protections for homeowners, was advanced to the State and Local Government Operations Committee.

S.F. 2248, carried by Committee Chair Linda Scheid (DFL-Brooklyn Park), provides for continuing education programs for building inspectors, requires the commissioner of commerce to adopt standards for continuing education for building contractors and requires that a homeowner who successfully sues a builder of a new home or a remodeler under the statutory homeowner's warranty be awarded attorney fees and expenses.

Several homeowners shared their experiences and difficulties in dealing with mold in their homes. Dorothy Morris of Woodbury said current law provides many loopholes for owners to fall through and makes it difficult to achieve resolution. Everyone blames everyone else, from builders to window installers to stucco manufacturers, she said.

Sen. William Belanger (R-Bloomington) said the bill does not fix the fundamental problem with the building. Houses need to be allowed to breathe again, he said. Scheid acknowledged the building code needs revision, but said the measure represents a first step to addressing the issue.

Members adopted an amendment, offered by Scheid, providing for a homeowner's guide developed by the commissioner of commerce. The guide must include information on moisture problems in homes, homeowner warranties, required disclosures regarding the history and condition of property, pre-purchase inspections and other sources of information for homeowners. Under the amendment, the guide must also include space for owners to record important home information and the commissioner must encourage homeowners to transfer possession of the guide along with the home.

Sen. Lawrence Pogemiller (DFL-Mpls.) offered two amendments. One provides a property tax credit for homeowners whose homes have suffered mold damage. The other amendment provides for written, binding estimates to be made to homeowners by contractors. Both amendments were adopted.

In other action, the panel approved three additional bills. S.F. 2453, carried by Sen. Becky Lourey (DFL-Kerrick), updates provisions relating to weights and measures regulations. The bill was recommended for placement on the Consent Calendar. S.F. 2379, authored by Scheid, puts existing rules relating to real estate brokers and salespersons into statute. The bill was re-referred to the Judiciary Committee. Another Scheid bill, S.F. 2607, establishes a Division of Insurance Fraud Prevention in the Department of Commerce and provides funding for the new unit. Under the bill, insurers must pay a fee-ranging from $400 to $4,000-based on total assets and total written Minnesota premium. The measure was advanced to the State and Local Government Operations Committee.

MCHA changes gain

A bill making changes to the state's high risk insurance pool was approved by members of the Commerce Committee, Wed., Mar. 17. The panel, chaired by Sen. Linda Scheid (DFL-Brooklyn Park), sent the bill to the State and Local Government Operations Committee.

S.F. 2613, carried by Sen. Sheila Kiscaden (IP-Rochester), guarantees that certain Minnesota Comprehensive Health Association (MCHA) enrollees will be issued health plans in the individual market, raises the premium range for MCHA plans to between 115 percent and 135 percent of market rate, changes the membership of the MCHA board to include an actuary and employer representatives and authorizes MCHA to provide incentives to enrollees for their participation in chronic disease management programs. The bill also removes a requirement that MCHA offer a Medicare supplement plan, requires terminated employees to have had an income of less than 250 percent of poverty to be eligible for MCHA coverage, makes persons eligible for employer-provided dependant coverage ineligible for MCHA coverage and requires an analysis of the eligibility standards used for enrollment.

Representatives of several business groups, including the Minnesota Business Partnership and the National Federation of Independent Business, spoke in support of the bill. MCHA is an important safety net in our system, said Carolyn Jones of the Minnesota Chamber of Commerce. The real problem with MCHA, she said, is that only 30 percent of the insurance market pays for the program. The ever-growing assessment is spread over a contracting base, Jones said. Bob Johnson said the Insurance Federation of Minnesota supports the bill but has concerns about the guaranteed coverage in the individual market. He said the provision essentially requires insurers specializing in small group coverage to enter a market, individual coverage, they have not chosen to enter. Johnson also raised concerns about how the provision would be administrated. Kiscaden said she did not intend to force small group insurers into the individual market. The provision is intended to allow people who can leave MCHA to do so with the knowledge that they can get coverage, she said. Kiscaden pledged to work with the federation on improving the language.

Committee members approved two other bills. S.F. 2134, authored by Sen. Ann Rest (DFL-New Hope), makes mostly technical changes to laws governing multiple employer welfare arrangements. The committee adopted an amendment incorporating the provisions of S.F. 1651, carried by Sen. Yvonne Prettner Solon (DFL-Duluth), into S.F. 2134. The combined bill does contain one policy change, Solon said, changing the threshold for joint plans from 1,000 employees to 1,000 enrollees. The change permits spouses and dependants to count toward the threshold. Solon said the change is helpful to joint self-insured group pools in Greater Minnesota. S.F. 2134 was sent to the full Senate.

S.F. 2265, sponsored by Sen. Dan Sparks (DFL-Austin), provides that an industrial loan and thrift company may not accept deposits if its owner is not permitted to own a federal savings association. The bill is a fairness measure, said Joe Witt of the Minnesota Bankers Association, because a similar prohibition exists for federally chartered industrial loan and thrift companies. The bill was sent to the Senate floor.

In other action, a motion to approve S.F. 1408 was defeated, on a tie, on a divided vote. The bill, carried by Sen. Geoff Michel (R-Edina), modifies provisions relating to binding arbitration in no-fault auto insurance personal injury cases. Michel said the bill draws a bright line at $10,000 for the eligibility limit for arbitration. The measure also clarifies that either party has the right to demand arbitration, he said, and prohibits the practice of balance billing by health care providers. Johnson said the bill provides much needed reforms to current problems and protects consumers. Joel Carlson, Minnesota Trial Lawyers Association, said the bill will add over 6,000 cases to the judicial caseload each year and raises issues of access to health care by prohibiting balance billing.

Tractor clock tampering ban approved

Members of the Commerce Committee, meeting Mon., Mar. 15, approved a bill prohibiting tampering with clock-hour meters on tractors. S.F. 1847, sponsored by Sen. Gary Kubly (DFL-Granite Falls), was advanced to the Crime Prevention Committee.

The bill also prohibits the sale or use of devices that cause the clock-hour meter to register false hours of operation and prohibits the sale of tractors with altered mileage unless that fact is disclosed.

The panel, chaired by Sen. Linda Scheid (DFL-Brooklyn Park), also approved two other measures. S.F. 2650, carried by Sen. Dan Sparks (DFL-Austin), requires debt collection agency employees to register with the Department of Commerce. Current law requires both agencies and their employees to be licensed. The bill maintains the licensure requirement for collection agencies. S.F. 2620, authored by Sen. Dallas Sams (DFL-Staples), makes minor technical changes to provisions requiring a notice if a standard fire insurance policy is declined. Both bills were sent to the full Senate.

Committee members also considered, but took no action on, S.F. 2653. Sponsored by Sen. John Marty (DFL-Roseville), the bill amends retaliatory provisions in insurance law. The measure increases the fines imposed by Minnesota on insurance companies of another state or nation doing business in Minnesota to match the fines, imposed by the home state of the company, on Minnesota insurers doing business in that state.

Omnibus liquor bill heard

The Commerce Subcommittee on Liquor met Fri., Mar. 12, to begin assembling the panel's omnibus liquor bill.

The hearing began with consideration of a bill, S.F. 2209, sponsored by Sen. Yvonne Prettner Solon (DFL-Duluth), that establishes a tiered fee structure for small brewers. The measure also allows a brewer who manufactures fewer than 3,500 barrels of malt liquor to be issued an on-sale intoxicating liquor or 3.2 malt liquor license for a restaurant operated on the premises. Finally, the measure authorizes a municipality to issue a temporary on-sale license to a brewer who manufactures fewer than 3,500 barrels of malt liquor in a year. Sen. David Gaither (R-Plymouth) offered an amendment deleting the provision that allows a brewer who manufactures fewer than 3,500 barrels of malt liquor to be issued an on-sale license for a restaurant operated on the site. The amendment also provides that a brewer may provide samples of its own products on its premises to persons touring the brewery in a quantity of less than 100 milliliters of malt liquor per variety per person. The amendment was divided, but both portions were adopted. The tiered fee structure, though, was determined to have a revenue impact. Members adopted a fee structure contained in S.F. 2338. The bill, sponsored by Subcommittee Chair Sandra Pappas (DFL-St. Paul), provides for conformity in license fees and production levels for brewpubs and small brewers and is revenue neutral.

S.F. 2696, also sponsored by Pappas, clarifies the restriction on the location of retail licenses in proximity to corrections institutions by specifying the restriction does not include county jails. Members also adopted an amendment authorizing the city of Minneapolis to issue an intoxicating liquor license to an establishment located at 2200 Como Ave. SE, which currently holds an on-sale wine license. Pappas said the measure will serve as the vehicle for the omnibus bill. The panel amended the contents of S.F. 2209 onto S.F. 2696. The measure was approved and advanced to the full committee.

Members also approved a bill authorizing the city of St. Paul to issue a wine and malt liquor license for special events at the State Capitol. Chief Author Cal Larson (R-Fergus Falls) said the measure, S.F. 2749, is needed for activities planned in conjunction with the centennial anniversary of the Capitol Building. The measure was approved and advanced to the full committee.

School employees insurance plan gains

A proposal requiring school districts to provide health insurance for their employees through a statewide pool was the focus of discussion at the Wed., Mar. 10, meeting of the Commerce Committee. The panel, chaired by Sen. Linda Scheid (DFL-Brooklyn Park), forwarded the bill to the State and Local Government Operations Committee.

S.F. 2491, authored by Sen. LeRoy Stumpf (DFL-Thief River Falls), creates a 14-member board to establish and administer the health insurance pool. Board membership, under the bill, is evenly divided between members appointed by employee unions and the Minnesota School Boards Association. The measure gives the board discretion to design the pool to provide the optimal combination of coverage, cost, choice and stability. The pool may include a choice of health plans and premium rates, under the bill, but must include consumer education, wellness programs and measures to encourage wise use of health care. S.F. 2491 requires the pool to begin coverage by July 1, 2005, with details of the coverage available four months earlier.

The proposal is the result of a study, performed at the Legislature's request, examining how to reduce the high cost of health care for school employees, Stumpf said. He said the study predicted that claim costs for school districts will exceed $1 billion in the 2006-2007 school year. Adopting a mandatory pool, he said, could reduce claim costs by $700 million over six years. However, the proposal does not specify a health plan or mandate cost savings, said Grace Schwab of the Minnesota School Boards Association. The bill strips districts of local control, preventing them from innovating to save costs, she said. Schwab noted that California is shifting from a statewide insurance model to regional pools. Local control works, she said. "Change for change's sake should not be good enough," she said. One segment of the employer marketplace is getting bandage treatment, said Carolyn Jones of the Minnesota Chamber of Commerce, while the core problem is not being addressed. Employers that are fully insured will have to bear the increased costs of Minnesota Comprehensive Health Association assessments, she said, while the school district pool can choose to be self-insured.

Sen. Sheila Kiscaden (IP-Rochester) offered an amendment adding three members, appointed by the governor, to the pool board. The additional members break the deadlock situation anticipated in the bill, she said. The amendment was adopted. Kiscaden offered a second amendment requiring the board to report to the Legislature, by Jan. 15, 2005, on plan design and costs. The amendment also provides that insurance under the pool does not take effect until the Legislature approves the pool's plan design. What has been brought to us is a concept, Kiscaden said, that we need to see fleshed out before we commit to it. Sen. Ellen Anderson (DFL-St. Paul) moved to divide the amendment, separating the report provision from the legislative approval provision. The portion of the amendment requiring a report was approved, while approval of the pool's plan was defeated. Committee members then approved a motion to re-refer the bill without recommendation.

In other action, the panel considered three other measures. S.F. 2391, authored by Sen. Cal Larson (R-Fergus Falls), expands the authority of the commissioner of commerce to disclose investigative information to the National Association of Securities Dealers. The bill was re-referred to the Judiciary Committee. Sen. Ann Rest (DFL-New Hope) carried S.F. 1922, which prohibits an insurer from refusing to renew or declining to offer homeowner's insurance coverage solely because the property houses day care services. The measure was sent to the Senate floor.

Scheid carried S.F. 914, which permits wine to be sold in grocery stores. The bill was heard by the committee last year, but failed to gain committee approval. Sen. William Belanger (R-Bloomington), an admitted opponent of the proposal, moved to reconsider the bill as a favor to Scheid. The bill was then referred to the Commerce Subcommittee on Liquor.

Health care cost containment bill advanced

The lion's share of the Mon., Mar. 8, meeting of the Commerce Committee was devoted to debate on a bill aimed at curbing health care premium rate increases and modifying health care cost containment provisions.

Chief Author Sen. Linda Berglin (DFL-Mpls.) said S.F. 1760 is an attempt to slow the skyrocketing costs of health care. The bill also provides for an electronic medical record system, provides for disease management programs, makes the MinnesotaCare program available for small employers and makes changes to the Medical Assistance, General Assistance Medical Care and MinnesotaCare programs.

Berglin said 30 percent of the population uses 70 percent of the health care in Minnesota, with the top 1 percent using 30 percent of all health care in the state. In order to curb costs, she said, the bill improves best practices standards, improves disease managements and provides for electronic record keeping. Berglin offered two amendments to the measure. The first adds one percent to the premium limits for technology and subtracts one percent from the allowance for electronic medical records, specifies that premium limits apply to self-insureds and establishes expenditure limits equal to the premium limits.

The second amendment specifies that in order to operate within the premium growth limitation, a health plan company may directly reduce payments to providers in an amount equal to the difference between the Consumer Price Index formula and the amount of increase that would otherwise have been necessary to meet the pricing needs of the product in the absence of the growth limitation. The amendment also prohibits a provider from terminating an existing contract with a health plan company based solely on the payment reduction.

Testimony on the measure centered on the two amendments. Sue Stout, Minnesota Nurses Association, said the health care system is imploding and that the state needs to take a comprehensive approach now. Brad Lehto, Minnesota AFL-CIO, said every labor dispute in the last four years has involved health care benefits and the cap on premium increases will provide at least short term relief for consumers.

Julie Brunner, Minnesota Council of Health Plans, and representatives from several individual plans spoke in opposition to the premium caps. Brunner said, "Premium growth limits do not account for the complexity of cost increases such as an aging population, new drugs and new technology."

The committee adopted the two amendments and advanced the bill to the Judiciary Committee on a 10-5 roll call vote.

In other action, the committee, chaired by Sen. Linda Scheid (DFL-Brooklyn Park), heard three additional bills. S.F. 1559, authored by Sen. Linda Higgins (DFL-Mpls.), provides a process for establishing ownership of property loaned to museums and archives repositories.

David Kelliher, Minnesota Historical Society, said many museums and county historical societies have items that were loaned to them many years ago, but the institutions have lost contact with the owners or the owners' heirs. He said museums are placed in the position of having to care for the items, but not be able to display or dispose of the items. The bill sets forth a procedure for regulating loans to museums and archive repositories as well as a procedure for regulating abandoned property in the museums' or archive repositories' possession.

The committee adopted an amendment providing that, effective Aug. 1, 2004, property that is found in or on property controlled by a museum, is from an unknown source and might reasonably be assumed to have been intended as a gift to the museum is conclusively presumed to be a gift if ownership is not claimed within 90 days of its discovery and the person responsible for gifting the property has clear title to the property. The bill was approved and re-referred to the Judiciary Committee.

Members also approved S.F. 2257, sponsored by Sen. Geoff Michel (R-Edina). The bill modifies premium reserve requirements for title insurance companies. S.F. 2418, carried by Sen. Dan Sparks (DFL-Austin), extends the liability exemptions given other safe deposit companies to credit unions that are authorized safe deposit companies. Both measures were advanced to the full Senate.

Foreclosure reconveyance regulation approved

A bill regulating the practice of foreclosure reconveyance was the focus of discussion at the Wed., Mar. 3, meeting of the Commerce Committee. Foreclosure reconveyance involves a series of financial transactions transferring the title of real property by a foreclosed homeowner during a foreclosure proceeding to a third party and the conveyance of the property back to the foreclosed homeowner after the foreclosure proceedings have concluded.

Sen. Ellen Anderson (DFL-St. Paul), chief author, said S.F. 2412 is aimed at addressing fraudulent practitioners of foreclosure reconveyance, also known as "equity strippers." She said several unique factors-including rapidly rising home values and the recent recession-have combined to create a situation where many homeowners are facing the possibility of foreclosure and are being preyed upon by equity strippers. Assistant Attorney General Prentiss Cox said homeowners are losing substantial equity to equity strippers. The average loss is $50,000, though others have lost well into the six figures, he said. The bill excludes banks and credit unions, Anderson said, because those institutions are already heavily regulated. The measure creates a licensure system, under the supervision of the attorney general, for individuals involved in the business of foreclosure reconveyance, lists prohibited practices, provides for enforcement and requires homeowners to be given notices about where to obtain foreclosure advice. Cox said the bill is "targeted and will have almost zero impact on legitimate commerce." It is currently hard to litigate cases involving unethical reconveyance, he said, but the bill gives the Attorney General's Office an efficient administrative handle on the practice. Anderson noted that the issue of equity stripping has been identified as a key priority of the governor. The governor and Dept. of Commerce, she said, have their own proposal to regulate foreclosure reconveyance. "We will move forward in a cooperative spirit," she said, to address equity stripping.

"We need a bill with teeth," said Paul Satriano, vice chair of Minnesota ACORN. He said the group has engaged in consumer education efforts and held community forums on the issue of equity stripping. ACORN has identified cases of stripping in communities stretching from Cokato to the Wisconsin border and from Big Lake to Hastings, Satriano said. The problem is not just in the central cities or inner-ring suburbs, he said.

When the Department of Commerce began investigating cases of alleged equity stripping, it quickly became clear that the law needed to be strengthened, said Commissioner Glenn Wilson. He said the department's proposal takes a different approach from the bill and focuses on deterring the unethical activity. Gary LaVasseur, enforcement director in the department, said the proposal establishes an economic deterrent to equity stripping, creates a private cause of action, establishes criminal penalties and includes the vast majority of prohibited practices that are in S.F. 2412. It is difficult to get attorneys to litigate equity stripping cases, he said, because the likelihood of a court awarding damages and attorney fees is currently low. The department's proposal includes damages and attorney fees, LaVasseur said, and provides for triple damages if a court determines an exemplary damage award is appropriate. Many persons engaging in equity stripping are already licensed professionals of some sort, he said, and the department does not believe creating a new licensure structure is needed. "The way to hit these people is the economic deterrent," LaVasseur said. He said staff from the Attorney General's Office and the Department of Commerce have a meeting scheduled and hope to reach agreement on the best approach to solve the commonly identified problem.

Several homeowners urged lawmakers to be careful in their regulation of the industry. John Engelking, a Stearns County resident, and Pen Macklin, from Olmsted County, recounted their positive experiences with foreclosure reconveyance. Engelking said homeowners involved in foreclosure essentially have their options reduced to moving out or selling the house. No financial institution will refinance the home, he said. "My equity was already stripped, by the foreclosing lender," Engelking said, but the foreclosure reconveyance allowed him to keep his home. "I would have done anything or said anything to save my home," he said. Real estate attorneys and representatives of the Minnesota Responsible Property Investors (MRPI) also urged lawmakers not to overreach in their attempt to regulate the industry. Former Commerce Commissioner Jim Bernstein, a consultant representing MRPI, said the foreclosure reconveyance process does not help everyone, but it does help some. By the time a homeowner is being foreclosed on, he said, desperation has set in and reconveyance is a lifeline. Avoiding foreclosure saves families, Bernstein said, and empty houses do not help neighborhoods.

Sen. Sheila Kiscaden (IP-Rochester) moved to lay S.F. 2412 on the table. There is agreement the issue is important, she said, and that Anderson should take the lead on the Senate position. An agreement reached between the Dept. of Commerce and Attorney General's Office should come before the committee, Kiscaden said, and then move speedily forward. Anderson said she preferred to move the bill forward to avoid running afoul of committee deadlines. The motion to table the bill was defeated. S.F. 2412 was approved and re-referred to the Judiciary Committee.

Mortgage originators registration bill stalls

A bill requiring mortgage originators to register with the state hit a speed bump at the Wed., Feb. 25, meeting of the Commerce Committee. Panel members laid the bill on the table and urged interested parties to continue working out issues with the proposal.

S.F. 1083, carried by Sen. Linda Higgins (DFL-Mpls.), requires individual residential mortgage originators to register with the Department of Commerce. The bill requires an originator's employer to conduct a background check on the employee and to certify that the originator has completed at least 30 hours of continuing education within the past two years. Higgins said the bill is supported by both the industry and consumer protection groups. Wade Abed, president of the Minnesota Association of Mortgage Brokers (MAMB), said the background check provision is important because it will prevent originators with histories of illegal activity from jumping between employers. Systems are already in place to provide the continuing education and to register individual mortgage originators, Abed said. He acknowledged that employers could perform background checks now. Most MAMB member companies do perform checks, he said, but the association represents a small portion of the industry.

Deputy Commissioner Kevin Murphy, Dept. of Commerce, said the registration requirement imposes a significant burden on both the industry and the department. The bill does not include a registration fee to cover the department's costs, he said. The proposal provides no significant benefit to the public, Murphy said, but will economically benefit entities selling continuing education products. The department supports the goal of getting bad apples out of the mortgage origination business, he said, but the bill is not the way to do it.

In other action, committee members advanced four bills. S.F. 2137, authored by Sen. Gary Kubly (DFL-Granite Falls), increases the limit on cemetery perpetual care funds from $25,000 to $35,000. The measure was recommended for placement on the Consent Calendar. Sen. Steve Dille (R-Dassel) carried S.F. 1928. The bill, which increases the membership of the Minnesota Comprehensive Health Association (MCHA) Board and specifies that private insurance agents and employers must be represented, was re-referred to the State and Local Government Operations Committee. Committee Chair Linda Scheid (DFL-Brooklyn Park) carried S.F. 2138, requiring health carriers to notify persons being offered continuation policies that the continuation policy may be different from the person's COBRA policy and that the person may be eligible for MCHA. Members adopted an amendment, offered by Sen. Brian LeClair (R-Woodbury), adding notification that the person may be able to get coverage similar to the COBRA policy from another private carrier. S.F. 2138 was advanced to the full Senate. Sen. Steve Murphy (DFL-Red Wing) sponsored S.F. 521. The bill was approved by the committee in 2003 and sent to the full Senate. However, under Senate Rule 47, the bill was returned to the committee after it had not been acted up on at the end of last session. The bill-which requires that American flags, and novelty items bearing a depiction of the American flag, sold in Minnesota be made in the United States-was again sent to the full Senate.

Liquor bills heard

The Commerce Subcommittee on Liquor met Wed., Feb. 18, to consider several measures for inclusion in the panel's omnibus liquor bill. The subcommittee, chaired by Sen. Sandra Pappas (DFL-St. Paul), also heard presentations on administrative penalties for alcohol sales to underage persons and small brewer license fees.

S.F. 1783, authored by Sen. Thomas Bakk (DFL-Cook), authorizes an on-sale wine and malt liquor license for Wade Municipal Stadium for use during baseball games and other events sponsored by the Duluth Huskies. S.F. 1821, sponsored by Pappas, changes the issuer of an on-sale license for Minnesota produced wine for sale at the State Fair from the city of St. Paul to Ramsey County. S.F. 2017, carried by Sen. Claire Robling (R-Jordan), provides that the on-sale license for Elko Speedway authorizes sales on all days of the week.

S.F. 1800, authored by Sen. Mark Ourada (R-Buffalo), provides for uniform off-sale hours statewide. Specifically, the bill allows off-sale intoxicating liquor sales until 10 p.m. Monday through Saturday. The measure also allows the on-sale of 3.2 percent malt liquor after 10 a.m. on Sundays. Current law prohibits the sale before noon on Sundays. The measure removes a requirement for a public hearing before a municipality issues a license for on-sales of intoxicating liquor on Sundays and allows the sale beginning at 10 a.m.

All four bills were approved and laid over for inclusion in an omnibus liquor bill.

Wilson confirmed as commissioner

Members of the Commerce Committee, chaired by Sen. Linda Scheid (DFL-Brooklyn Park), confirmed Glenn Wilson as commissioner of the Dept. of Commerce, Mon., Feb. 9. The panel advanced the appointment to the Senate on a voice vote.

Wilson was named commissioner by Gov. Tim Pawlenty on the governor's first day in office, Jan. 6, 2003. Previously, he was an executive with several home mortgage firms and served as president of Ginnie Mae under President Ronald Reagan. Wilson reviewed the department's activity for the past year and his goals for the agency. He said he has sought increased productivity from the department, especially through greater use of the Internet. "My first year was, with the exception of a few bumps, a very positive one," Wilson said.

Sen. Ellen Anderson (DFL-St. Paul) noted that several high-ranking officials in the Pawlenty administration have connections to the telecommunications industry. She sought assurances that the department takes consumer protection seriously and that Wilson will not accommodate the administration's friends at the expense of consumers. The commissioner said the telecommunications industry is evolving rapidly and the state must decide if it wants to get in front of the movement and direct it, or wait for the changes to happen and react. Wilson said his preference is to get in front. He also assured the panel that he does not intend to change his values to suit the requests of any industry. Sen. William Belanger (R-Bloomington) said he has known the commissioner for 11 years. Wilson, he said, has had an enviable and distinguished career and has brought dignity and respect to the Department of Commerce. Sen. David Gaither (R-Plymouth) also spoke in support of confirming the appointment, saying Wilson is a man of high integrity and is well prepared for the job in front of him.

Organizational meeting held

Sen. Linda Scheid (DFL-Brooklyn Park) called a brief meeting of the Commerce Committee Wed., Feb. 4, to go over organizational matters with the members. Scheid, who previously chaired the Jobs, Housing and Community Development Committee, is the new chair of Commerce. The former chair, Sen. Ellen Anderson (DFL-St. Paul), is now the chair of the Jobs, Energy and Community Development Committee.

Scheid explained that the committee jurisdictions have also changed somewhat and that bills relating to tobacco issues would no longer originate in the Commerce Committee, but in the Health and Family Security Committee instead. Utility issues, including telecommunications, will now be under the jurisdication of the Jobs, Energy and Community Development Committee, she said. In addition, Scheid said that Sen. Dan Sparks (DFL-Austin) will chair a Subcommittee on Consumer Protection, Banking and Insurance and that Sen. Sandra Pappas (DFL-St. Paul) will chair a Subcommittee on Liquor.

 


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