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HF 997

4th Engrossment - 87th Legislature (2011 - 2012) Posted on 02/09/2012 03:49pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/09/2011
1st Engrossment Posted on 04/14/2011
2nd Engrossment Posted on 04/27/2011
3rd Engrossment Posted on 05/02/2011
4th Engrossment Posted on 05/14/2011

Current Version - 4th Engrossment

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A bill for an act
relating to civil actions; regulating the imposition of certain civil penalties by
state agencies; awarding fees and expenses to prevailing parties in certain actions
involving state agencies; amending Minnesota Statutes 2010, sections 14.045,
subdivision 3; 15.471, subdivision 6, by adding a subdivision; 15.472.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 14.045, subdivision 3, is amended to read:


Subd. 3.

Factors.

(a) If a statute or rule gives an agency discretion over the amount
of a finenew text begin or civil penaltynew text end , the agency must take the following factors into account in
determining the amount of the finenew text begin or penaltynew text end :

(1) the willfulness of the violation;

(2) the gravity of the violation, including damage to humans, animals, and the
natural resources of the state;

(3) the history of past violations;

(4) the number of violations;

(5) the economic benefit gained by the person by allowing or committing the
violation; deleted text begin and
deleted text end

new text begin (6) fines or penalties that similarly situated persons have been assessed for similar
violations;
new text end

new text begin (7) the cooperation and responsiveness of the person, provided that a fine or penalty
shall not be imposed or enhanced because a person has contested an alleged violation or
asserted a right or defense provided for in law; and
new text end

deleted text begin (6)deleted text end new text begin (8)new text end other factors that justice may require.

(b) For a violation after an initial violation, the following factors must be considered
in addition to the factors in paragraph (a):

(1) similarity of new text begin recent new text end previous violations to the current violation to be penalized;

(2) time elapsed since the last violation;

(3) number of previous violations; and

(4) response of the person to the most recent previous violation identified.

new text begin (c) In addition to stating the factual and legal basis for a violation, a state agency
shall, in its notice, demand, order, or complaint in an administrative or civil proceeding,
document the application of these considerations in determining the amount of any
proposed fine or penalty. The agency shall provide this documentation to the party subject
to the administrative or civil action at least 30 days prior to initiating the action, unless the
alleged violation imminently and substantially endangers public safety, public health, or
the environment. Nothing in this paragraph limits the ability of an agency, at any time, to
seek injunctive relief related to an alleged violation.
new text end

new text begin (d) A penalty or stipulation agreement may not include expenditures by the party
alleged to have committed a violation for purposes that are not reasonably related to efforts
to mitigate or remediate the specific violation, unless otherwise agreed to by the party.
new text end

new text begin (e) A party subject to a proposed fine or penalty under this section is entitled to offer
affirmative defenses including, but not limited to:
new text end

new text begin (1) the number of prior contacts where a state agency offered reasonable corrective
measures prior to issuing a fine or penalty;
new text end

new text begin (2) the ability of the party to pay the proposed fine or penalty; and
new text end

new text begin (3) other economic factors affecting the feasibility or practicality of compliance by
the party.
new text end

new text begin (f) As used in paragraphs (c) to (e), "party" has the meaning given in section 15.471,
subdivision 6.
new text end

new text begin (g) Paragraphs (c) to (e) do not apply to civil penalties assessed under chapter 10A
or 211B.
new text end

Sec. 2.

Minnesota Statutes 2010, section 15.471, is amended by adding a subdivision
to read:


new text begin Subd. 3a. new text end

new text begin Demand. new text end

new text begin "Demand" means the express demand of the agency which led
to the civil action or contested case proceeding but does not include a recitation by the
agency of the maximum statutory penalty:
new text end

new text begin (1) in the administrative complaint; or
new text end

new text begin (2) elsewhere when accompanied by an express demand for a lesser amount.
new text end

Sec. 3.

Minnesota Statutes 2010, section 15.471, subdivision 6, is amended to read:


Subd. 6.

Party.

(a) Except as modified by paragraph (b), "party" means a person
named or admitted as a party, or seeking and entitled to be admitted as a party, in a court
action or contested case proceeding, or a person admitted by an administrative law judge
for limited purposes, and who is:

(1) an unincorporated business, partnership, corporation, association, or
organization, having not more than 500 employees at the time the civil action was filed or
the contested case proceeding was initiated; and

(2) an unincorporated business, partnership, corporation, association, or organization
whose annual revenues did not exceed deleted text begin $7,000,000deleted text end new text begin $30,000,000new text end at the time the civil action
was filed or the contested case proceeding was initiated.

(b) "Party" also includes a partner, officer, shareholder, member, or owner of an
entity described in paragraph (a), clauses (1) and (2).

(c) "Party" does not include a person providing services pursuant to licensure or
reimbursement on a cost basis by the Department of Health or the Department of Human
Services, when that person is named or admitted or seeking to be admitted as a party in a
matter which involves the licensing or reimbursement rates, procedures, or methodology
applicable to those services.

Sec. 4.

Minnesota Statutes 2010, section 15.472, is amended to read:


15.472 FEES AND EXPENSES; CIVIL ACTION OR CONTESTED CASE
PROCEEDING INVOLVING STATE.

(a) If a prevailing party other than the state, in a civil action or contested case
proceeding other than a tort action, brought by or against the state, shows that the position
of the state was not substantially justified, the court or administrative law judge shall award
fees and other expenses to the party unless special circumstances make an award unjust.

new text begin (b) If, in a civil action or contested case proceeding arising from an agency action
to enforce a party's compliance with a statutory or regulatory requirement, the demand
by the agency is substantially in excess of the final decision of the administrative law
judge or court and is unreasonable when compared with such decision under the facts and
circumstances of the case, the administrative law judge or court shall award to the party
the fees and other expenses related to defending against the excessive demand, unless
the party has committed a willful violation of law or engaged in conduct that unduly
and unreasonably protracted the final resolution of the matter in controversy, or special
circumstances make an award unjust.
new text end

deleted text begin (b)deleted text end new text begin (c) new text end A party seeking an award of fees and other expenses shall, within 30 days of
final judgment in the action, submit to the court or administrative law judge an application
of fees and other expenses which shows that the party is a prevailing party and is eligible
to receive an award, and the amount sought, including an itemized statement from any
attorney or expert witness representing or appearing on behalf of the party stating the
actual time expended and the rate at which fees and other expenses were computed. The
party shall also allege that the position of the state was not substantially justified.

deleted text begin (c)deleted text end new text begin (d) new text end The court or administrative law judge may reduce the amount to be awarded
under this section, or deny an award, to the extent that the prevailing party during
the proceedings engaged in conduct that unduly and unreasonably protracted the final
resolution of the matter in controversy. The decision of an administrative law judge under
this section must be made a part of the record containing the final decision of the agency
and must include written findings and conclusions.

deleted text begin (d)deleted text end new text begin (e) new text end This section does not preclude a party from recovering costs, disbursements,
fees, and expenses under other applicable law.

Sec. 5. new text begin TITLE.
new text end

new text begin This act may be cited as the "Small Business Bill of Rights - Regulatory Fairness
Act."
new text end

Sec. 6. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin This act is effective August 1, 2011, and applies to administrative or civil actions
commenced on or after that date.
new text end