Commerce Committee approves omnibus commerce budget bill

This week the Senate Commerce and Consumer Protection Committee approved a bill providing budget appropriations for the Department of Commerce. Under the bill, the appropriations for the Department of Commerce for the next biennium match the level of funding estimated from the 2017 February Forecast at $44.568 million. The Governor’s recommendations for the Department of Commerce are slightly higher with total funding for the department of $54.807 million for the next biennium.

The bill increases several commerce-related fees, which were also recommended by the Governor, including:

  • Money transmitter renewal of license fee from $2,500 to $3,030
  • Mortgage originator renewal of license fee from $500 to $780
  • Broker-dealer agent fee from $50 to $60
  • Weights and measures inspection fee increase of 10% on metrology fees and a 10% increase on all other fees including scales, petroleum lab fees, and package checking.

The bill redirects $1.3 million from the auto theft prevention program that is currently deposited into the general fund to the insurance fraud prevention account. The auto theft prevention account is a special revenue account from the 50-cent surcharge collected by auto insurers on all vehicles with comprehensive insurance coverage every six months. The account is used to fund Minnesota’s Auto Theft Prevention Program to reduce auto theft in the state and provide grants for local law enforcement auto theft reduction projects. Of the revenue currently collected in the auto theft account, $1.3 million must be transferred to the general fund each year. This bill redirects the $1.3 million from the general fund and instead transfers the funds to the insurance fraud prevention account. The transfer to the general fund was a Pawlenty-era budget transfer, and there have been several attempts in recent years to return the funds to the insurance fraud prevention account.

The bill also moves the Financial Institutions Division from the General Fund to a financial institutions account. This move gives the division the funding flexibility they need to maintain safety in Minnesota banks and lending institutions and match market wages.

Notably absent from the bill is a significant consumer protection recommendation from the Governor on pay day lending regulation that would close the industrial loan and thrift loophole. Large pay day lending companies are currently obtaining their licenses through the Industrial Loan and Thrift statute that allows them to charge significantly higher rates than allowed under the Small Consumer Loan statutes. The Governor’s proposal would prohibit industrial loan and thrift companies from making short-term loans under any section other than the small consumer loan statute. This would generate one-time, general fund revenue of $11,250 due to companies changing their registration. The proposal would also limit borrowers to no more than four short-term loans within a 12-month period and would limit their short-term loan debt to no more than 90 days. (SF 2078)