Committee on Commerce and Consumer Protection - Mar 24, 2026

Thank you, Mr.

I was wondering if we got clarification on what custodial versus fiduciary capacity would mean in terms of crypto assets.

Thank you, Mr. Chair. I believe the credit unions would be in a better position to answer that question.

Thank you, Mr.

Mr.

Senator Rasmussen, Ryan Smith with the Minnesota Credit Network. Custodial just means the credit unions holds them in just as a custody account. There's no fiduciary responsibility to it. Fiduciary would be, you know, if they decide to insure it, but that's, you know, a whole other thing. Custodial is just holding it in custody within the credit union core system.

Thank you, Mr.

And thank you, Mr. Smith. And what are the implications for the credit union if they have it, if they're in a fiduciary capacity? And I guess the question I'm asking is, you know, when you have someone who's acting as a fiduciary, the question is, when are they violating that fiduciary standard? So when would a credit union be violating a fiduciary standard as acting in a fiduciary capacity?

Mr.

Senator rasmussen.

Chair.

We'll bring the bill to you. Mr. Smith, are you able to answer the question?

Senator Rasmussen, thank you, Mr. Chair, and thank you, Mr. Smith. And then two, I'm also going to look at subdivision three, which is on page one, line 18, where it says safety and soundness, and it says a banking institution that engages in virtual currency custodial services must conduct the activity in a safe and sound manner and must maintain written policies and procedures governing risk management, internal control, cybersecurity, business continuity and compliance. And Mr. Chair, my, it's a concern and a question, but my concern is that basically the bill says that credit unions, banks, must conduct this in a safe and sound manner, but then doesn't say what that safe and sound manner would be. And it, to me, the bill is almost missing language because we should define what safe and sound would look like, because if you asked one credit union that might look different than the other. But I just, I want to give Mr. Smith a chance to respond because maybe I'm missing something. But to me, it's not clear what a safe and sound manner would look like.

Mr.

Senator Rasmussen, thanks for the question. Safety and sound is a little bit more of a, in this particular instance, more of a term of art. It's, you know, and we've worked on the language with the Department of Commerce to kind of get to a place where they, as the regulator for the entities chartered in Minnesota, they're satisfied with the way in which the credit union holds the accounts, maintains their security practices, all the different parts of holding any, any kind of account in custodial, including deposit accounts, safety deposit boxes, et cetera, et cetera.

Chair.

Any other questions or comments from the committee? I'm satisfied with the testimony of the credit unions and also the testimony of the Department of Commerce that this bill is ready to go to the senate floor. And if there are further reassurances required, we could offer those as a floor amendment at that time. So the question is on the motion of Senator Seberger that Senate File 3794 be recommended to pass and sent to the senate floor. All in favor say aye. Aye.

Motion is adopted.

Thank you, Mr. Chair and members, for the opportunity to present Senate file 4540. And this is the bill that has to do with both adult use and medical cannabis and streamlining, what we call streamlining the supply chain. Before we get started, Mr. Chair, did we want to adopt a couple of amendments?

Have an A2 and an A3.

I'll offer the A3 first.

Senator Seberger, on behalf of Senator dibble, offers the A3 as an author's amendment. All in favor say aye. Aye.

It is adopted. Senator Dibble.

And then after we vote, you'll explain the A2 to us?

So Senator Seberger offers the A2. Any questions on the amendment? The A2. All in favor say aye. Aye. Opposed. It is adopted, Senator Dibble.

Senator Dibble. We're gonna pause just briefly. I know first of all on this streamlining work, you have done good work to try to move it forward while discussing the issue with significantly interested parties. And I think the A2 and the A3 represent that diligent work. And this committee thanks you for it. And I think Mr. Johnson wanted to speak to the amendments at this point, so.

So I'll call forward Mr. Johnson, while

Mr. Johnson, please introduce yourself.

Thank you, Mr. Johnson. Unless there are committee member questions for Mr. Johnson, we'll go then to director Talbo. Director Talbol.

Thank you, Mr. Chair. Glad to be here. Last session in the cannabis policy bill, the legislature directed the office to develop a streamlining proposal, as senator dibble noted, that ultimately is about combining from currently a separate medical supply chain and an adult use supply chain into a single supply chain with the specific goals of addressing, you know, the difficulty of having to cultivate and manufacture on separate equipment at separate times for the two supply chains, and then importantly, preserving access to medical cannabis for rare and childhood diseases. The office took seriously the charge to ensure that we preserve the medical cannabis market for the patients who are most in need. And especially recognizing as cannabis markets grow with adult use, they tend to focus on the kind of products that adult use customers want. And so this proposal represents hundreds of hours of engagement by the office with interested constituencies to try to find a path forward for how we can ensure access for medical patients for those high need products, while also allowing our market to continue to grow and provide a good return to Minnesotans with those tax increases. And I think some of the letters with their tepid applause for the office's compromise position is great indication that we have satisfied some a bit and most a little bit. So I think we feel great about that. It's rare that you get up here and applaud tepid approval, but we do. Throughout the sort of bill, what we really try to focus on is mostly creating this new macro license, which, to be clear, is fundamentally the same as the existing medical combination business license. The big distinction, of course, is that we remove the 60,000 canopy for medical, 30,000 canopy for adult use, and combine it down with the amendment to 30 with the opportunity to grow over the course of a number of years in the individual sections throughout. You'll note then that we remove medical cannabis combination business and replace it with the macro business. And then later we'll talk a little bit about how we allow then other types of businesses to grow to the point of creating a Minnesota market where a small business can become a big business. Section three is really about limiting the distinction between medical products and adult use products. So it's all definitional and we really remove this distinction until you get to the point of sale. So people manufacture products throughout and at the point of sale, either becomes a medical product because a patient purchased it, or it becomes adult use because an adult use customer would purchase it. We Also, in Section 8, create what we call a petition process that allows the those businesses to move. The original bill had a note that people could seek a reclassification of a tier of a license. We don't have tiers in our licensure. So this is how now a micro business will move to a meso business and eventually to a macro business. The other thing that this bill does in section 20 is focus on restructuring the medical endorsement approach. So currently businesses in the AU side can ask to do medical cannabis things like cultivation and production, retail sales, but they have to invest in having separate technology access and keeping products separate, having additional employees. We remove those and create an endorsement structure that incentivizes people to participate in the market, notably by increasing things like plant canopy or the amount of product they can produce. In exchange, those businesses promise to service medical patients through, in the manufacturing case, the production of specific products that the office will identify that include things like rso, oils, products that are high in C. I don't even try to say just cbd, cbg, cbm. And so we identify those products through the office to make sure that patients have continuous access to the products they need. And then I think the other sort of key important portions that we also throughout those sort of sections like 21, 22, 23 are really about defining and authorizing those activities with the medical endorsements. Like I say, for cultivation we give extra canopy, for manufacturer we give extra capacity to manufacture. And for retail we allow for an additional retail location if you agree to open that location in what we would call an area of high medical need. So there are places in Minnesota where medical cannabis patients currently don't have access to medical cannabis because they are no, there are no nearby dispensaries. And so the idea here is we can move additional retail locations into places where medical patients exist but don't have access. We also require in this particular well in sections 24 and 25, we also try to right size some of the authorizations in the market so that, you know, different licenses that are doing similar things have similar rewards or incentives. And so in this case we would allow in sections 24 and 25, micros and mesos that obtain two medical endorsements to be able to get a transportation endorsement as well. This is something that currently the medical combination businesses are allowed to do. And so we see again, if you service the medical market, there should be additional incentives or rewards for participating in that behavior. By and large, Section 26 is really about just restructuring Section 515, which is currently the med combo license, and move it into the macro license Again, I think it's important to note that by and large, it's almost a replica of the current allowable and authorized activities of the current license type, with the exception obviously of the streamlining and the reduction in canopy to ensure that those businesses continue to primarily serve the medical market as part of their licensure. So yeah, I think the last thing we do is, as always, a fun one, a quick repeal. So we repeal the portion of the law that currently deals with the existing medical endorsement section since, since we revamp it in other places to add those specific benefits to the macro business license holders if they should get this license. So that's like the, I hope relatively quick overview recognizing the interested people in the looking for other bills. So that's I'm happy to answer any other questions or specific questions if needed, but that's kind of where we went.

Thank you. Good afternoon, Chair Klein and members. My name is Maren Schroeder. I am the director of advocacy and Public affairs for the Minnesota Cannabis and Drug Policy Resource center, also known as mincan. We submitted a letter of support and I don't want to repeat all of that. So I want to testify today as a medical cannabis patient and a medical cannabis advocate. I have been at this legislature in this capitol building for the last 12 years asking for better access to medical cannabis. I am so thrilled with the office and the work that they did prioritizing patients. But as I sit here today and I hear the whisperings, the rumors, the amendments that came in were seeming maybe to be shifting back to industry as the focus. And I want to just make sure that I am reiterating to you all while I have the opportunity that this time around, please center the patients. We have centered businesses over and over and over again. I've been working on this issue for a very long time and in order to get the deals, to get the votes, that's what ends up happening. And I'm hopeful this year that maybe that's not the case. Thank you.

Thank you, Chair Klein and members of the committee. My name is Kyle Marinkovich. I'm the founder and CEO of Northern Diversified Solutions. We're a Burnsville based hemp processor and low potency hemp edible manufacturer Additionally, I serve on the Cannabis Advisory Council for the state as well as on the Board of Directors for the US Hemp Roundtable. Thank you for the opportunity to comment on Senate File 4541, the supply chain streamlining plan. Despite primarily operating in the low potency hemp edibles space, NDS for short, is proud of our partnership with Minnesota's medical cannabis industry. We provide hemp concentrate for medical cannabinoid products that contain higher concentrations of cbd, cbg, CBN and other, most importantly, non intoxicating cannabinoids. To be clear, this is about non intoxicating hemp derived cannabinoids because currently the law does not clearly authorize the use of hemp derived non intoxicants in cannabinoid products, creating unnecessary barriers to produce what we call ratioed products. So these are products that may have half and half thc, cbd, cbg, other cannabinoids. So it's allowed in the medical space, but it currently isn't allowed in the adult use space. So why is that important? The fact is most consumers look for these ratioed products because it does mitigate some of the intoxicating effects. It is about helping give them an experience that they're looking for without, you know, pardon my French, but getting high as a pie in the sky. We would like to see this extended to the, to the adult use as well because of this mitigation of the psychoactive effects and it creates more balance for the consumers. This is about wellness and balance. We appreciate Senator Dibble's engagement with NDS on the issue and hope to see the amendment, an amendment to Senate File 4541, either during this hearing or during markup to address the issue. I will note I am also a medical patient as well, and I personally prefer those ratioed products. So thank you very much to the committee for your time and appreciate your consideration of this important issue.

Thank you, Mr.

Just first, to clarify, the A3 and the A2 have been adopted, is that correct?

Thank you, Mr. Chair. Director Tobbel, one of the items I noted in the A3amendment was on page one, line two. It was changing one of the canopy limits for the new proposed macro business license from 45,000 square feet of canopy to 30,000 square feet of canopy. Is, was. Is that OCM's proposal or. I'm just trying to understand what the differences are between what OCM proposed and what was adopted, the amendment, and some of the explanation for why that was.

Thank you, Mr. Chair. Thank you, Senator Rasmussen. The reason for so the OCM proposal is, I think, as Mr. Taubel explained in his presentation, was 45,000. So under the current law, the cannabis combo, of which there are two, ultimately could move up to 90,000. But there's this very complicated way that they figure out how they divvy up that 90,000. And it has to do with prior year sales. I can't even explain and it's very hard to enforce. And the rationale for going to 45,000. Well, I'll have you explain that it has to do with, you know, because at the point of growing manufacturing and retailing, there's no distinction. And so the need for all that canopy to create these separate grow areas is reduced because there's more efficiency. So that's the reason for 45,000.

So. Oh, so then I was going to circle back to I, how we ended up at 30,000. So that, just to speak plainly, was in response to conversations that were occurring over the past couple of days, primarily at the instigation of the tribes. And you heard Mr. Johnson's testimony concerned that the medical incumbents, the combo license that will now become two new macros immediately being given 45,000 square feet of cash canopy each would allow them to dominate the market in a way that

overshadow their ability to move into the growing and supply space. Likewise, they were concerned about the micros and the mesos also being overshadowed and dominated. So they were advocating for, as you heard, postponing the entire change to 2029. I had proposed, you know, maybe we can drop down and then allow for what I call a slow build from 30 up to 45, which is what you see here in this proposal over a period of time. And so this is an attempt to kind of hang on to both of those ideas to continue that conversation. But rather than delaying to 2029, we delay to 2028, we drop down to 30, then we allow for the slow build, adding 5000 to the canopy up until they achieve 45,000 over a period of years, by which time the rest of the market has been able to, you know, get on its feet and start either cultivating or manufacturing or retailing.

Chair, appreciate some of the context. Director Tobl, can you give me a sense when we're thinking about canopy,

much canopy would there need to be to supply the Minnesota market, whether that's medical or adult use? And do you know how much today is being grown? I'm just trying to get a sense of what the scale is we're about

Director Telvill.

Senator Rasmussen, thank you, Mr.

Thank you, Director Dobble. That's really helpful. And I remember back to the original conversation around creating the Office of Cannabis Management legalizing adult use cannabis in Minnesota. And one of the big concerns was we have this medical cannabis patient population and making sure that they don't get lost. And I know Senator Dibble cares about that and has for a long time. And I guess one of My concerns with this proposal in its current format, and we'll have more opportunities to discuss it, is, you know, we're estimating the statewide demand at being one and a half million to 2 million square feet of canopy. We're currently probably at 10% of that. Right. Is kind of what we heard today, maybe less, depending on what people are utilizing that's available. And in this bill, what we're doing is we're actually reducing the amount of canopy that some of those medical providers can have in the marketplace. And I know from those original conversations, one of the reasons that basically the current law creates an incentive where for every square foot of medical cannabis is cultivated, they get more participation in the adult use market. And that was set up to make sure that as there's kind of this rush into adult use across the industry, that the medical patients still have access to product. And at least what I'm hearing right now, the state of the cannabis industry in Minnesota, it's not that there's an over glut of supply and, and there's all this high quality cultivation that's going on that people don't know what to do with. In fact, what I've been hearing is actually the opposite, that there's a shortage of kind of the high quality cultivation that market participants are looking for. I think the numbers you talked about underscore that. Right. If we're at 10% of the current demand. And so I just have concerns about having a policy response where we're reducing that canopy flow for some of the market participants that are trying to grow and expand to meet that demand while also maintaining that incentive for the medical market. And then I would say, like, set that aside. I think that's one really important policy concern is making sure there's enough supply for the medical market. But the second is just a overall sense of the Office of Cannabis Management and our laws here in Minnesota being reliable and predictable. And I think, you know, my question would be, do we have market participants who have planned on saying, well, here's our business plan for the next five years, we have a 90,000 square foot canopy limit, 60,000 of that has to be medical cannabis. And they've been making investments and plans to for those limits. And now within a couple years of the bills getting passed with this current amendment would go to one third of what that original law has. And so I just have a concern around what that means for just market stability and the signals we're sending to the marketplace as well. Because I suppose the legislature next year could cut it again or move it up again. And I just don't know if this committee wants to be governing the details of the cannabis market that closely. So those are just my concerns. I know we'll have more chance, but I appreciate the conversation, Mr. Chairman.

Senator Frantz.

Director Talbot. Mr. Chair. Senator Fernando, that's a great question. Yes, we have currently we accepted around 3,500, I think it's 3,500 cannabis applications. We, last I had checked, had issued somewhere in the neighborhood of 165 to 160. We have the bulk of the rest are in what are we call preliminary approval. So they're moving towards the market. And so certainly I think that we'll continue to see over the next six to 18 months another wave of market entrance. We're at a pretty standard clip right now of about 15 to 20 new licenses a month. And we think it'll sort of maintain at that. It's a capital intensive industry and the need for capital gets higher when you move up the supply chain. Retail is the easiest to get into. Manufacturing cultivation requires substantial investment. So those people who have been building those facilities are now really starting to come back to the market. And I think we'll start to see some of the rest of that 1.5 to 2 million square feet of canopy start to fill in over that next six to 18 months.

Thank you, Mr.

Thank you, Director. I guess I share the concern that we are telling market participants one thing and then appearing to be making some changes and just want you as the director to speak conscious that if we want to encourage investment in this state, in any business or industry, stable, predictable landscape is probably better. The more we change it, the more we send a message. We might change it the following year and the following year. And as a business owner, just want to have your commitment that that's one of the things you'll keep in mind

Fair enough, Director.

Mr. Chair, Senator Dibble.

and this is a high

Thank you, Mr.

I promise to be brief just so

Mr.

Thank you.

Thank you.

Chair and Committee members, thank you for the Opportunity to testify today. My name is Bill Haas and I represent the White Earth Tribal Nation. And it's been an interesting discussion that I've heard around the table tonight on this issue and we have several concerns and possibly some solutions. But just give you a little background. White Earth was the first tribe to start producing cannabis. And we've gone through the growing stages and the pitfalls of starting a business. Our business is called Wabagon Muskegoe, which means medicine flower in Anishinaabe language. And there are very strong feelings about their medicine flower. But we've been through the pitfalls and we're still growing. You know, we started out with only five strains of cannabis flower and they've slowly been able to grow. But we grew because all of a sudden the market dictated it and now we've started into the gummies. And so that's again a new market venture. But we did our research to make sure it happens. So what we're concerned about for not only the tribes, but also for social equity people and the non equity investors and business owners who want to enter this market, they're laying a lot of money on the line. And what is happening is by expanding this canopy, we're going to flood the market with flour and it's not going to give them an opportunity. And our concern, it was brought up earlier that you know, early on we discussed this whole can cannabis adult use was we wanted to have it Minnesota businesses, Minnesota grown and reinvest the profits back in Minnesota. That's what we wanted. But this will also open the door for the multi state operators who come in with big money. And as Colorado did, as California did, as Michigan did, they came in and crashed the market and they forced all the little guys out, you know, and, and the program was designed so social equity people could have the opportunity to start a business and have a good livelihood. But this bill is kind of going the back way. What I would suggest is I agree with the 2029 date and we've had quite a bit of discussions. I'm on the work group with the tribes in looking at this legislation. But one additional factor in 2029, why don't we have OCM do it market study first and see what is the marketplace? Because we don't want to rush and flood the market, we want to grow the market and we got to have data to do that. So if OCM would do a study and figure out what the market could bear at that point and then they would determine whether we do a 2000 or 5000 or 10,000 increase in canopy and do it on a basis based on data, not just, oh, we're going to just have a number out there and we're going to increase it. So those are my suggestions and we've talked about it in the group and I just think if we do our due diligence, we're going to have a successful market. So I appreciate your time today and have an opportunity for you to listen to our concerns.

Many, but we got three more bills to get to, so I just really, really appreciate the conversation. I'll just again signal that I'm, I think everyone has made excellent points and I'm wide open to continuing this conversation.

Thank you Mr. Chair and members. We do have an A1amendment for Senator

Aye.

Senator dibble, thank you Mr. Chair. Members, at a very high level, the Senate file 45 thank you for the opportunity to present Senate file 4540 just very quickly. At a very high level, it does three main things. It's geared towards making targeted, practical improvements to the cannabis regulatory framework, particularly around licensing, endorsements and enforcement. It clarifies and reorganizes the endorsement structure so businesses and regulators have a clearer, more consistent framework for what activities require approval. It improves licensing flexibility to allow businesses to evolve without necessary regulatory barriers, and then strengthens enforcement tools, particularly in addressing the illicit market while maintaining fairness and due process does not expand the scope of cannabis activities or increase license cash caps. It's just creating more functionality on endorsements and business activities. Currently, different license types can perform similar activities, but the statutory structure is not always clear or consistent. It creates a more uniform system where businesses apply for and obtain endorsements tied to specific activities such as cultivation, manufacturing or retail operations. Make sure that same activity is regulated, consult consistently regardless of the license type, and it allows businesses to tailor their operations in what OCM describes as a choose your own path approach, while ensuring accountability and compliance on licensing flexibility. It addresses an issue raised directly by industry participants. If current law under current law, if a business changes its legal structure from an LLC or bringing in new ownership, it may require to apply for an entire new, entirely new license. We would now, under this proposal, allow those changes to be treated as a license transfer rather than a new application to, you know, eliminate all kinds of headache and time, et cetera. On enforcement improvements, as amended, it would authorize the inspection of unlicensed commercial premises where cannabis activity is suspected. Allow the office to inspect records, investigate operations, et cetera. Provide authority to seize or embargo illicit products. Clarifies that detained products may be treated as part of enforcement action. So the goal is to target bad actors, produce compliant licensed businesses, ensure due process, et cetera. It also has some consumer environmental protections. Includes a targeted consumer environmental protection provision to prohibit cash cannabinoid products that use batteries that are not easily removable with an effective date to allow industry transition. So it's not an immediate change. People can sell off their inventory, but it does focus on waste management standards, worker safety and product usability for consumers. So that is a very high level overview of the bill.

Chair.

Director Chauvel, any additional summary, Mr.

No. Senator Debel did a great job of going through what's in the bill. Happy to answer any questions as they may arise.

Sorry, 4519. All right, thank you Mr. Chair and members. We have an amendment for this bill as well, the A1.

Aye.

Senator DIBBBLE thank you Mr. Chair, members for the opportunity to present Senate file 4519. What this bill seeks to do is clarify the role of local governments in regulating cannabis businesses while at the same time reinforcing the legislature's original intent, which is a well regulated transparent marketplace that is available statewide and not subject to patchwork prohibitions. So first, it has four main features. First, it removes outdated provisions that allow that allowed temporary local prohibitions on cannabis business. That authority expired as the market launched and leaving it in statute has created some confusion. So this bill cleans that up. Second, it clarifies how local governments participate in the licensing process, especially around zoning, building code and fire code compliance. It ensures that applicants must meet all applicable local and state requirements requirements. And if a local government determines a business is non compliant, it provides evidence of that determination and then allows OCM to act on that. Promotes transparency and fairness for applicants. Navigating the system provides clarity and consistency around local Caps on cannabis retail registrations confirms that minimum starts at that the minimum starts at one retailer statewide, clarifies the rounding up requirement for population based caps and improves coordination between counties and cities when registration authority is shared. And fourth, the bill strengthens collaboration and oversight by requiring local governments to report the results of age verification compliance checks to the Office of Cannabis Management to help the state better understand where compliance is working and where it needs to improve.

Senator Dibble can toss it over to Mr. Talbo for anything I missed or got wrong or do the section by section walkthrough if he so desires.

Thank you, Mr. Chair and Members, for the opportunity to present. Senate file 4542. And we have. We do have an amendment for this bill as well. The A1 or the A2?

Aye.

Thank you, Mr. Chair. Members, Senate file 4542 refines how cannabis events are licensed and approved to make the application process more workable. Cleans up some technical issues, ensures that lower potency, hemp edibles, lphe business can fully participate in a clear and consistent way. Does not weaken any protections. It just simply provides for some of the regulations and administration aspects. So first, the first a provision is it fixes the 90 day requirement. Under current law, event organizers must apply at least 90 days in advance. It removes that rigid timeline, replaces it with a more practical system, has some elements of submission. Site registration gives OCM full authority to review and approve events. Local approval is still required before an event can proceed. The second key provision, creating more clear standards for approval and denial to strengthen the integrity of the process. The office may deny an application if the application is incomplete. Local approval is not obtained. There are material misstatements, fees are not paid, the site fails inspection. It allows the office to request additional information if needed. The fourth key provision, it streamlines the event. There's that word again. Streamlining. Streamlines the event licensing model. It builds on the broader restructuring recommended by ocm. It has event organizers hold an annual license for which they pay $0, but then they would apply for the approval of individual events throughout the year. Then they would pay for that individual event. At that point, it reduces duplication and cost. Instead of repeating a full application for every event. They can submit their information one time and then all of the details I talked about earlier will be submitted at that time. And then the fourth provision is a technical cleanup for the lphe business clarification that lphe businesses, like breweries producing thc beverages, can participate in offsite events and offer their full product line, not just beverages. So edibles, when authorized to correct ambiguity from last session, ensures consistent treatment across the industry. That's the bill, and I'll toss it over to Mr. Tobbel to fill in the gaps or correct my errors.

Committee Senator swadzinski would be very disappointed.

Aye.

Thank you, Mr. Chair. Members.

Thank you, Mr. Chair and members, I am very grateful for you to be hearing this important bill today. This is a straightforward clarification bill that closes an apparent loophole in an existing health care mandate on home care nursing services that has been around since 2010. This is not a new mandate. It does not add any new cost to commercial health plans or to the state budget. When the legislature passed this law in 2010, the the intent was clear. I actually went back and listened to those hearings from 2010 so I could get an understanding of that debate. And it is clear for people on medical assistance and who also have a commercial health plan, the commercial plan is responsible for covering the cost of home care nursing services. Home care nursing is a continuous, medically necessary service that keeps medically complex people with high care needs out of the hospital and in their homes. The purpose of the mandate was to stop cost shifting onto the state and to ensure that families with commercial insurance could rely on their plans to cover the care that keeps their medically complex family members, oftentimes children, cared for at home and out of the hospital. For 15 years, commercial plans have followed this mandate without issue. That changed this year. Two commercial plans have reinterpreted the statute and capped coverage of home care nursing to only 10 days per year. For this plan year 2026, 10 days per year for a service that is medically necessary on an ongoing basis is a dramatic departure from a long standing practice, from the legislature's original intent and from how plans have been honoring this law for the last 15 years. In recent discussions, plans have said that that 2010 law doesn't say that they cannot cap coverage. And so that brings me here today to just clarify the law and make it very clear. So if we don't pass this clarification, the reinterpretation will shift millions of dollars onto Medicaid. And it won't just be the cost of home care nursing. Many families choose commercial insurance specifically for. For reliable nursing hours. With only 10 days of coverage, there's not incentive for them to get a commercial plan at all. And that will shift the total cost of care, hospitalizations, medications, enteral nutrition, all of it onto the state. There are between 200 and 250 people in this dual enrollment category, and their annual care costs range from about $300,000 to a million dollars. That would be a huge cost shift shift onto the state. Do we want that level of spending shifted over to our Medicaid budget without public policy decision and debate? If there is a desire to change that policy, there's a process for that. We could bring bills and have that debate. I'm not looking to change that process. Looking to clarify the current process. This is the existing law. This, this bill. Again, this bill is not a new coverage mandate. It does not add cost to the Medicaid budget or to the commercial plans. It simply clarifies the law's original intent and maintains the payment structure that has been in place and working for the last 15 years. It protects families, it maintains provider stability and prevents that major cost shift onto Medicaid. I'll also note that it has impacts for families. You may think, well, if it gets covered one way or another, it doesn't have an impact on families, but it does it because of that cost shift. It forces them into decisions about using their waiver dollars that they may not have planned for or thought of before and limits choices that they have given that that has to be, you know, spent with those dollars there instead of as it should be covered by the health plans. So I just want to close from a quote from the 2010 House Health Committee when this provision was being discussed, Representative Huntley said, and I quote, these people who are eligible for medical assistance but have health insurance through their family, the health insurance would have to cover the cost of nursing, and the state would not pay medical assistance for that service. End quote. So the intent was clear. The commercial plans were intended to cover the full cost of home notion care and medical assistance was not to pay for it. It that 2010 mandate was a deliberate choice that this body made at that time that the plans to cover that medically necessary home nursing care which is care that is needed on day one and days 11 through 365 of the year. So would ask for your support and do have a testifier here Mr. Chair who can speak to the negative impacts of this such a drastic coverage cap.

Hi, my name is Kit Chambers. I live in Plymouth, Minnesota. I'm here today with my son Nash and his nurse Maddie in support of SF4502 because our ability to live safely in our community depends on home nursing care. This is true for families like ours who are caring for children with complex medical needs and developmental disabilities. SF 4502 would prohibit quantity limits on home care nursing services and clarify these services are defined in health plans for people who have both private insurance and medical assistance. Like my family, vulnerable children deserve care and care comes from educated, licensed, vetted individuals who complex medical families welcome into their homes and into the fabric of their lives. Woven into this tapestry are the appointments, the surgeries, the medication schedules and a threat of fear. We live in a liminal space between gratitude and grief where stability can change in the blink of an eye. I remember watching on a monitor in our living room as Nash's oxygen saturation dropped lower and lower as Maddie worked to clear his airway a eventually saving his life. And without our overnight nurse, we may have misdiagnosing his seizure condition. Care is around the clock and every second matters. Navigating Medicaid waivers, school supports, juggling appointments and community services is already overwhelming. I have spent hours on hold, literally and figuratively, trying to learn how to better care for my child. When services are delayed or denied, children miss therapies and parents leave jobs to manage care. I myself left a career in education to become his full time caregiver. The financial burden is immense. Families like mine rely on both private insurance and medical assistance and our lives depend on waiver services. Our private plan is now enforcing a visit Limit cap, leaving Nash with only 24 hours of nursing per week instead of the 84 hours his medical team prescribes. Our waiver budget cannot absorb this gap. If forced to use it all for nursing, Nash will lose music therapy, massage therapy, pool therapy, and respite care. I will choose between getting him to school or taking him to his weekly therapies and medical appointments. We will face an unprecedented level of hardship because the final straw will be the loss of my paid parent income, which is my source of income. The strain will not stop at my family. It will drain all waiver budgets, overwhelm medical assistance, and shift costs onto Minnesota taxpayers. Families of medically complex children have long selected high coverage plans from private insurance to share these costs. And if private insurance refuses to pay, why even have private insurance? SF 4502 will protect families like mine from sudden, arbitrary limits that strip away the nursing our children rely on. It also requires plans to consistently call these services home care nursing services so families can understand their coverage and challenge denials. We have filed appeal after appeal, trying to understand why this enforcement is happening now and the consequences for Nash are immediate and severe. For us, this isn't a paperwork issue. It determines whether he can remain safely at home in a community we fought so hard to be a part of or pushed towards hospitals and institutions. Please vote in favor of SF4502 to stop this coverage cap and harm such a drastic change that's causing families like mine so much pain. Thank you for your time and for all the work you do to support all Minnesota families.

Ms.

Chair Klein, members of the of the committee, thank you for the opportunity to testify. My name is Brandon Walter and I am from Medina, Minnesota. I'm here today on behalf of my five year old son, Chase, my family, and the many medically complex families across our state who are being harmed by unlawful home care nursing denials. I am here to urge your support for Senate file 4502. Chase was born in 2021 with a rare craniofacial syndrome. At just five days old, we were told he would not survive without a tracheostomy. A surgically placed breathing tube inserted through his neck to keep his airway open. Because of his diagnosis, Chase also depends on a feeding tube for all nutrition and is deaf due to bilateral hearing loss. These are lifelong medically complex disabilities. Chase cannot attend daycare and he cannot be safely cared for by an untrained caregiver. He requires one on one 24 hour hospital level care provided by either an RN or a parent trained to perform these critical medical interventions. Thanks to the ability of our nursing agency to staff nurses in our home, Chase was able to leave the hospital at seven weeks old. Many children are not as fortunate. They remain hospitalized for months or years because barriers prevent them from accessing the in home nursing support that would allow them to safely go home for more than a year. My family and many others across Minnesota have been fighting an escalating unlawful pattern of home care nursing denials by Medica and Health Partners. To be clear, the scale about the scale of what's happening here, Medica is attempting to cut my son's home care nursing from 4,400 hours per year to 240 hours per year. 5% Chase Chase's medical needs have not changed. Only the insurer's willingness to follow the law has. Minnesota law is not ambiguous, it is not optional and it has not changed. Under Minnesota State Statute 6.2Q545, Commercial Health Plans must cover home care nursing to the same extent as medical assistance. Home care nursing is a continuous hospital level service. It is not home health, not skilled visits, and not whatever new label insurers invented to justify denials and shift costs onto Medicaid and Minnesota taxpayers. These companies understood the law for 15 years, they followed it for 15 years and now they are pretending the statute doesn't exist. This is not confusion. It is a deliberate attempt to dismantle a mandate that protects these medically fragile children. If Medica and Health Partners are allowed to ignore 62Q545, the consequences will be catastrophic. Medically fragile children will lose the care that keeps them alive at home and out of the hospital. Parents will be forced out of the workforce. Hundreds of millions of dollars will be shifted onto Minnesota's Medicaid program and waiver budgets already stretched thin will be drained to cover services commercial plans are legally required to fund. That is why Senate File 4502 is essential. It restores the integrity of 62Q 545 by prohibiting quantity limits on home care nursing requires insurers to use the correct terminology, no more relabeling services to justify denials, and it creates a clear, medically accurate definition of home care nursing so insurers cannot distort it. The legislature already decided that medically fragile children have the right to receive this care at home. Senate File 4502 simply ensures that decision is honored. I urge this committee to vote in favor of Senate file 4502. Thank you.

Certainly. Chair Klein and members of the committee, my name is Cami Ozender and I'm the Chief Advocacy Officer with Pediatric Home Service. I'm here in support of Senate File 4502 and want to speak in particular to the stake in access to care. Home care nursing for medically complex children is hospital level care delivered in the home. To safely staff these cases, we employ nurses who carry that ICU level of skill. These professionals are trained to manage ventilators, complex medications and rapidly changing conditions of our children. To do that and to pay a competitive wage to these nurses, we rely on commercial health plan rates. These rates are higher than Medicaid and they are mutually negotiated and agreed upon between the health plan and the provider. Without that balance, agencies will have no choice but to reduce our wages paid to those nurses to Medicaid levels. And those nurses will leave, understandably so, to get the wage that they have earned at that hospital based pay. We already are in a very fragile workforce situation. A Minnesota study in 2019 showed that children were remaining in the hospital for an additional 54 days after their medically ready discharge date because of lack of access to this special type of nurse. If this continues, access will also continue to shrink. Families will lose care, children will remain hospitalized or be pushed into institutional settings. You've already heard of the significant increase to the cost of the cost to the state as well. When families lose access to home care nursing coverage through their health plan, they have no incentive to seek that coverage elsewhere. I want to be very clear on what this bill does. This bill does not create anything new. It does not expand access. It does not introduce new costs to the health plans. This bill simply enforces what already exists. It protects the access that has been relied upon for over 15 years and it ensures new costs are not transferred to the state. As said before, we urge you to support this simple clarification and that confirms the legislative intent that was passed in 2010. Thank you very much.

Ms. Under. Can you make room please for Chelsea Olson? Mr. Smith, on behalf of the Department

Thank you. Mr. Smith, can you make room for Kelly Wolf? Ms. Olson, please introduce yourself and go ahead.

to those who shared their stories today.

we hear you and that our members

Thank you.

Thank you. Hi, my name is Kelly Wolf. I'm the Senior Director of Government Relations at Medica. We are a nonprofit health insurer that covers 1.4 million members in Minnesota and across the Midwest. Thank you for the opportunity to share some concerns with Senate File 4502. First, let me say that we fully recognize how important home care services are for children with complex medical conditions. We share the goal of ensuring that those children continue to receive the care that they need. In the fall of 2024, we made a decision to reevaluate the administration of extended home health benefits for individuals who are also enrolled in Minnesota's medical assistance program beginning in 2026. And we did that with the understanding that Medicaid would continue to provide the nursing services that these children qualify for. Medicaid provides the most comprehensive benefit set of any insurance, including the lowest cost to the patient due to patients not being subject to cost sharing. In fact, nearly nearly 70% of home care nationally, including private duty nursing, is paid for by Medicaid, which has historically been the provider of comprehensive medical services, particularly for children with medical conditions and complex conditions. Medicaid also provides a level of consistency that some insurance plans or employer sponsored insurance that could change due to temporary due to employment transitions or other life events. So as a safety net, Medicaid is often the most suitable insurance in these circumstances. Our state has created a system to help support these families with a combination of comprehensive Medicaid services and various waiver programs. The Medicaid waivers are designed to cover extended services such as private home nursing care. If there is an issue with families accessing their waivers or or insufficient waiver budgets or even Medicaid rates, then we would be open to exploring those alternative solutions. We provided advance notice to county case managers so they could budget for the 2026 year and we gave families advance notice to help prepare due to the change as well. We are open to further collaboration with the counties and families to ensure that any future needs are met. We are having conversations in the next few few weeks with the involved stakeholders and we are hopeful that we can come to an agreement that allows these families continuity of care and coverage. Thank you for your time.

Thank you, Mr. Chair, members of the committee, I'm Barbara Cox here representing Health Partners. I know the committee has had a long time, so I will not repeat some of what the last testimony was about the complexity of this issue. Importantly, I just want you to know that we do understand the committee's deep concern for families with needs for intensive home health and nursing services for their children. We want to work with policymakers, as others have said, to support these families with a smooth transition from when they meet their commercial benefit visits to medical assistance. We are concerned that the unlimited benefits in this bill will have an impact on the individual market. And for that reason we do support additional Medicaid benefits. And should the legislature choose to raise reimbursement rates for home health services and Medicaid, we are supportive of that as well. And we're also a part of upcoming conversations and in touch with our members and other stakeholders and other hope to continue to work towards a sustainable solution for families.

Thank you, Mr. Chair, and thank you, Senator Bolden. I appreciate the conversation on what's a really important topic and I think for me it's very clear that we need to make sure that these children have access to the services they need. And as a member of the Senate Human Services Committee, it's brought up, I think, this interesting debate over what a commercial medical benefit covers and what state funded disability services would cover. And the only comment I would make is as I think the work on this bill continues, I'd be interested in hearing feedback from the Department of Human Services in terms of how their benefits differ from what is currently offered by the commercial plans. And then additionally, what I'm always curious about, because the fully insured commercial market is relatively small to where everyone else gets their health insurance. What are families doing if their employer is self insured? What are employers doing or what are individuals doing if they're not in that fully insured market? And just trying to understand that interplay because I think the trade off here is what we don't want is we don't want the individual market to basically collapse. Right. And we saw that unfortunately this last year with UCARE going under, right, where Minnesotans lost that as an option, they lost benefits were transferred to different health plans that might have had a different benefit set. And so I think just, I think we want to make sure these kids get the services they need, but we also have to make sure that the fully insured market can remain healthy and it just doesn't continue shrinking in Minnesota. And I would be glad to be a part of conversations with Department of Human Services to understand what those families do that aren't in the fully insured market.

Chair. I want to thank the families who came to share their stories and thank you for your consideration. Again, I just want to reiterate this. We, I'm not asking to change anything. I'm asking what the original intent of the law passed in 2010 that just to maintain that original intent, we can have debates on and I'm Senator Rasmussen, I'm happy to have those conversations and we can have debates on, you know, should we, should we be doing something different, should something change? But that's not what this is about. This is about just maintaining the original intent of the law that this body passed in 2010 and holding insurance plans accountable that they, they can't just decide to not do it and not follow the law. They need to maintain what was, what was the law as it is, as it stands and as it was passed so these kids can get the care that they need to stay in their homes. So thank you.

Thank you Mr. Chair. Thank you for having me. Members, proud to present Senate file 4444 this is a credit union bill that would allow credit unions to expand the way they protect depositors insurance. Many of you may know that under current law, credit unions must maintain federal insurance under the National Credit Union Act. The proposed change here is very simple. It would allow the credit unions the option to purchase private insurance. An oversight commission, the Commissioner of Commerce can prohibit a private insurer from operating in the state if it's found unable to adequately protect members deposits. So members, what I'm asking for is flexibility to support the credit union industry. Many of you know that new credit unions cannot receive a certificate of approval unless they have secured either federal insurance or private insurance that meets federal requirements. Again, the private insurance in this bill would meet federal requirements protecting the depositors in the same fashion under the same terms. I'd ADD members that 10 states have already taken this step and that so far no member has lost money through a privately insured credit union. I think the reason it matters now, Mr. Chair, is that we want to provide flexibility. The financial services industry is evolving and this will give our Minnesota credit unions the tools and flexibility to adapt multiple pathways. Empowers the boards, Mr. Chair, to make the best decision for the vision they have for that particular credit union. And the private deposit insurance program is funded collectively by participating credit unions, meaning that diversify the risk. And I think that's an important concept that we apply across many of the Commerce Committee jurisdictions. With that I'd like to ask my testifiers to have an opportunity to present to the committee. Thank you, Mr. Chair.

Thank you, Mr. Chair and members. Again for the record, Ryan Smith here on behalf of Minnesota Credit Network, just here to speak in support of Senate file 4444. We did already submit a letter for the record, so I'll be briefing my comments. But I did want to mention that at its heart, basically as Senator Friend said, this bill is about choice and resilience. The bill allows well capitalized and secure state charter credit unions based in Minnesota an additional optional tool by allowing access to private deposit insurance instead of only having federal insurance through the ncua. By allowing more than one path to protecting member deposits, we strengthen the overall system and reduce reliance on a single model. Private deposit insurance is not a new idea. It's been successfully used for over 40 years in 10 other states with a couple of more pending over the next couple of years and operates under clear standards and supervision. For credit union members, nothing changes. Their deposits remain protected at the same levels and their local not for profit credit union remains focused on serving them, not shareholders. The Department of Commerce. As Senator Friends said, the Department of Commerce retains the ability to approve any credit union's petition to opt for private insurance and the bill has been written with their input and approval. Credit unions ultimately are built on a simple idea. People coming together to help one another achieve financial stability. At the heart of that trust is making sure that members know their hard earned earnings are Safe. Senate File 4444 maintains that trust, safety and soundness while also giving well run credit unions the option to pursue an insurance that better meets the needs of the organization. Just want to thank the Department of Commerce for their input and happy to answer any questions the members might have.

Thank you Chair Klein and thank you Minority Leader Dames and the members of the committee. Good afternoon. My name is Jake Dorsch. I serve as CFO of First Lines Credit Union based in Rochester, Minnesota. We are proud to serve nearly 22,000 members across 14 counties in southeast Minnesota and I appreciate the opportunity to speak in support of SF4444. Confidence and deposit insurance is a cornerstone of our financial system. SF4444 preserves that confidence by maintaining that same $250,000 coverage requirement that exists today. This legislation simply provides state chartered credit unions like our own with a choice. Meet that requirement through NCUA federal program or through a private insurer approved and supervised by the Minnesota Department of Commerce. To be clear, we are not seeking to loosen oversight. Operationally, our credit union will continue to function under the same capital standards, governance requirements and rigorous regulatory scrutiny from the Department of Commerce that apply today. Why do we want this option? Simple flexibility. As a cfo, I must plan across economic cycles and systemic shifts. Being able to evaluate different insurance structures allows our board to align coverage with our specific risk, appetite and growth strategy. Furthermore, many private insurers offer more robust protection than the NCUA by covering $250,000 per account rather than per member or by offering excess share insurance protect millions of deposits per member. This superior coverage allows us to attract local deposits and keep Minnesota deposits in Minnesota and provides a critical safety valve during adverse economic environments. Allowing credit unions to choose between well regulated models enhances resilience by diversifying risk, mitigating potential deposit losses and reducing reliance on a single federal system. For these reasons, F4444 gives Minnesota credit unions a responsible, well written option to protect our members while remaining stable and competitive. I respectfully ask for your support to allow Minnesota to join 10 other states in offering dual track insurance. Thank you for your time and thoughtful consideration.

Thank you very much, Mr. Chairman and members of the Committee. My name is Kurt Loess. I serve as a Chief Operations Officer at American Share Insurance, or asi. ASI is a credit union owned share guarantee corporation that operates across multiple states and insures over $20 billion in deposits that are held by more than 1.25 million credit union members in the United States. Since our founding in 1974, no member has ever lost money in an a ASI insured deposit account. The protection of member deposits and the stability of an insured institution always comes first and remains at the central focus of ASI's mission and our operating model throughout our 50 plus year history. ASI operates within a strong regulatory framework. We are regulated by both the Ohio Department of Insurance and the Ohio Department of Commerce. While the credit unions that we insure remain supervised and regulated by their respective state credit union authority. We are also subject to the oversight of the credit union regulators in each of the states that we operate in. Our financial statements are audited annually by a Big four accounting firm and we are subject to an independent actuarial analysis every year regarding the loss reserves and our capital adequacy. ASI's equity ratio, which is a key indicator of an insurance company's financial health, is higher than that reported by the comparable federal insurance program. And our reserves as a percentage of the insured deposits are nearly 10 times higher than that at the federal program for credit unions. Today, ASI operates across 10 states under strong regulatory oversight, maintains robust reserves, access to more than $400 million of liquidity through large multi large regional financial institutions such as U.S. bank and the Federal Home Loan bank system. And we continue to operate with a focus on ensuring the member deposits and stability of the financial system. Thank you very much for the opportunity to speak today. Happy to answer any questions.

Thank you Mr. Chair and I appreciate the conversation I had with the credit unions on this bill. I had the opportunity to express my concerns with it and I bring perhaps a unique perspective to this as a customer of a failed bank. So I was a customer of a bank that went into receivership by the fdic. And a couple takeaways from that experience. One is that financial institution failure happens quickly and unexpectedly. And there's a reason for that because if people anticipated that in the future there would be A financial institutional failure. That failure happens today because people would take their money out to try to avoid that risk. And then the second experience is I was really glad that there was insurance from the FDIC and that if the FDIC ran out of money, the deposits at that bank were backed by the full faith and credit of the United States. And my concern with this is by allowing Minnesota's credit unions to convert from federal deposit insurance to private deposit insurance, we are removing that federal backstop. And I have a letter here from the NCUA which is the federal depositor talking about this process for converting to private share insurance. And they state, their General Counsel states in this letter, the key distinction between federal account insurance and private account insurance is that the full faith and credit of the United States government backs shares that are insured by the National Credit Union Share Insurance Fund, just as it backs accounts insured by the Federal Deposit Insurance Corporation. And it goes on to continue, shares insured by asi, the organization here today, have no government guarantee. No government guarantee. And on top of that, we also have a concentration issue where there is only one organization in the United States that does this. And their backstop is that they're self owned by credit unions. And so basically we're asking the credit union industry that decides to go into this to self insure their own deposits. And most of the time that will be okay. Just like the vast majority of the time banks don't run into issues with deposit insurance. But when something bad happens, if there is one credit union failure and consumers get concerned about, well, is there going to be another? And if there's another, is ASI going to have enough money to cover that? And all those concerns can compound really quickly. And I just don't know if the benefit that the credit unions gain from this additional flexibility is worth introducing the systemic risk that we have in here. And while ASI has had a successful track record to date, there are a number of private deposit insurers who have gone under in the last hundred years in America. And that's why we have the system that we do where you have a system that deposits are backed by the full faith and credit of the United States government. So that if something bad happens, there's someone there to make sure that people get their deposits.

I sure can. Thank you, Mr. Chair. Thank you, Senator Rasmussen. Glad to report One feature of ASI is that they don't own owe $38 trillion and that their reserves are superior to the federal government. Therefore, by most financial Standards a safer bet. We've also had testimony that there hasn't been a single American who's lost a penny with this type of insurance. And while I might not be a banker myself, Mr. Chair, I'm familiar with the Minnesota Department of Commerce who supports the bill. It also has bipartisan authorship. So both parties have had a bite at this apple and I might guess that it will have bipartisan yes votes to send it to the floor.

So I appreciate the concern, Senator Rasmussen, even though I don't share it. Thank you, Mr. Chair.

Thank you, Mr. Chair. I would move Senate file 4444 be sent to the floor with recommendation to pass.

Thank you, Mr.

Thank you, members.

Thank you, Mr.

I appreciate the opportunity to have a hearing on this bill today. Minnesota, like many states, allow sweepstakes as a promotional marketing tool. One example that Minnesotans might be familiar with is McDonald's Monopoly game that they run where if you go to McDonald's, buy a product, you get entered to win a potential prize. It could be another hamburger, it could be a cash prize, maybe a car, something else. But that's a sweepstakes. That's a promotional marketing tool. However, we have seen online companies that are using Minnesota sweepstakes law to effectively offer online gambling. These are dual currency systems where consumers are able to buy what's called gold coins, which would be similar to getting the hamburger at McDonald's while getting as a bonus, these sweeps coins. These sweeps coins can be played for, for real cash prizes. And they're played on casino games like slots, blackjack and roulette. And effectively it allows online gambling to occur in Minnesota. And if we think about what is gambling, the standard test is that there is some consideration. You're putting money in, there's a game of chance, a casino style game, and that you have that chance to win a prize on the back end. And that's what's happening with these games. Minnesotans can effectively use these apps to play slots, blackjack, or other casino styled games. The bill before the committee would clarify what is a sweepstakes, what is a proper sweepstakes in Minnesota, and it would ban dual currency online sweepstakes games, joining a number of other states who have also addressed this loophole. To be clear, it would not ban social casino games. Minnesotans that want to play a social casino game for free, you know, free blackjack, where they're not putting money in, they're not winning prizes on the back end, they would still be able to do that. And I think it's also important to take into consideration the organizations that are supporting this bill. Mr. Chair, there's a number of letters included in members packets, including from the Minnesota Catholic Conference, Minnesota Family Council, the American Legions of Minnesota, the Joint Religious Legislative Council, Citizens Against Gambling Expansion, Canterbury Park Allied Charities in Minnesota, and the Minnesota Indian Gaming Association. And so there's broad concern, both from entities who conduct gambling in the state of Minnesota and those who are concerned with this expansion, asking that this loophole be closed here in Minnesota.

Thank you. Mr. Chairman, my name is Andy Plato and I serve as the Executive Director of the Minnesota Indian Gaming association, representing nine tribal nations. Thank you to Senator Rasmussen and his co authors, including Chairman Klein, for bringing this bill forward. Sweepstakes casinos use a deceptive dual currency model to claim legality. But these are casinos for real money without any authorization from the state. I hope the following brief video helps demonstrate the products this bill rightfully intends to clarify as illegal.

Gambling is illegal in Minnesota, despite this, dozens of companies.

Internet gambling is illegal in Minnesota despite this, dozens of companies.

I do apologize for this. I know it is posted on the. On the website. Is that correct? If you could just give me one

Patrick Meyer, please come forward. Welcome to the committee. Mr. Fechtmeyer, please introduce yourself and proceed.

Go ahead.

Thank you, Mr. Fechtmeier. Back to Mr. Plato.

Chair. Here we go.

The process is simple.

Thank you, Mr. Chairman.

Hi, Good afternoon. Chairman Klein and members of the committee, thank you for the opportunity to testify today. My name is Lexi Morgan and I am appearing on behalf of the Social Gaming Leadership Alliance. Respectfully, we rise in opposition to SF4474. Our association includes the largest, most established and most innovative companies in the Social plus industry, some of which have been operating in Minnesota for well over a decade. Our members share a commitment to ensuring that the more than 220,000 Minnesota adults who play these games are protected. SGLA members operate under strict internal advertising standards along with robust consumer protections including 21 plus age requirements, identity verification, geolocation and responsible social gameplay tools. If this bill is passed, it will push our association's long standing responsible Social plus companies out of the state only to be replaced by illegal operators with exploitative business practices. I want to address some of the statements made by the supporters of this bill. There is a lot of confusion about this topic and with respect, an incomplete understanding of our industry. Social plus games are regulated. SGLA members comply with Minnesota Sweepstakes laws and every facet of Minnesota consumer protection law. Additionally, our industry is regulated at the federal level by the FTC, FCC, U.S. postal Service and DOJ Consumer Protection Division. We do believe that Minnesota Sweepstakes laws should be updated for the digital age to provide further guardrails. We want to engage with the state and a regulatory and taxing framework which could generate significant revenue for the state, Social plus games do not compete against casinos and charitable organizations. The way people participate in these games is entirely different than real money gambling. No money or consideration is ever required for a player to enter the sweepstakes. More than half of the participants never spend money to play these games. The bill was introduced last Monday and unfortunately, there is not enough time for this nuanced discussion to address all of the misconceptions, which is why we are asking this committee to give this issue further opportunity for study before enacting a counterproductive ban. We want to work with members of this committee in the coming months to create legislation that will protect Minnesota customers and generate substantial tax revenue. We hope to continue this productive conversation and I'd be happy to stand for questions.

I'm Tim Angstrom. I'm the communications director for the American Legion Department of Minnesota and I am a gambling manager for the Bloomington American Legion. So I am going to be brief. I gave some written testimony, but I just want to say that there are around 280 Legion and VFW posts that are involved with charitable gambling. And so you heard the list of organizations that are supporting this. I want to point out that the VFW is also in support of it, along with us. And Barry Hendrickson from the VFW headquarters across the lawn is here to show that. I also want to kind of point out that this isn't that confusing as people are making it out to be. It's like the classic example of the guy that was selling sandwiches on campus and they came to him and said, hey, you need a food permit to sell sandwiches. And he said, I'm giving away the sandwiches. I'm only charging for the plastic bag. So, you know, we need to have regulation. When people are trying to get around the consideration of gambling. Consideration is the first part where you provide payment. And if they're getting around that with dual currency, it makes sense that we should prevent that. It's getting around, you know, the tax revenue that the state and the charities are in together to provide, as well as there's no guarantee of payment, there's no guarantee of fairness, no likely way of getting your money back if wronged, and there's no way of knowing what your wager is supporting. We would rather have the people at our posts engaged in the etabs and other forms of legal gambling than on their cell phone engaging in shady gambling. Thank you.

Thank you.

Why, thank you, Mr. Chair. Hello, Senator Rasmussen. How are you doing today?

Good.

Yes.

Chair, Senator Friends. The bill before the committee would ban these online sweepstakes casinos.

I got that, Senator friends.

Senator Rasmussen.

Chair.

Senator France, Senator Rasmussen. That's just what I'm looking for. If I find one that thinks they may have lost their invitation to sit down, you're open to that.

Mr. Chair and Senator Friends. Yes. I'm happy to continue meeting with proponents and opponents of the bill.

Chair.

Senator Prince, further committee questions or comments? Closing comments from the author.

Chair.

That is the correct motion. All in favor say aye.

Opposed? Senator Rasmussen, your motion is adopted. Senator Duckworth.

Oh, I don't know if I have this one in my packet.

How are you?

I'm doing well.

Good.

Members, this bill, which we're going to hear now on behalf of Senator Duckworth, is not actually in front of the Commerce Committee, it's in front of state government. But we're going to get our testimony out of the way and be prepared to move on it when we're able to do so. In the meantime, can you tell us about Senate file 4515, Senator Duckworth?

Chair.

Mr.

Thank you.

Thank you. Ms. Jackson, please introduce yourself and go ahead.

That sounds good to me, Ms. Jackson. Senator Duckworth, where's the best place for a meat raffle in Lakeville, Minnesota?

It'll be great for us.

Chair, sounds good to you?

Just briefly, Mr. Chair, I appreciate it. I know it's not as exciting maybe as sports wagering or sweepstakes or the prediction markets, but I can predict if we don't get this bill passed this session, we're going to have some people a little upset with us. So let's give the people what they want and hopefully get this one passed. Thank you very much, members.

Thank you very much.