SF 1391

2nd Engrossment - 92nd Legislature (2021 - 2022) Posted on 10/06/2022 11:38am

A bill for an act
relating to commerce; regulating debt settlement services providers; amending
Minnesota Statutes 2020, sections 332A.02, subdivision 8, by adding subdivisions;
332B.02, subdivision 13.

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

Section 1.

Minnesota Statutes 2020, section 332A.02, subdivision 8, is amended to read:

Subd. 8.

Debt management services provider.

"Debt management services provider"
means any person offering or providing debt management services to a debtor domiciled
in this state, regardless of whether or not a fee is charged for the services and regardless of
whether the person maintains a physical presence in the state. This term includes any person
to whom debt management services are delegated, and does not include services performed
by the following when engaged in the regular course of their respective businesses and
professions:

(1) exempt attorneys at law, escrow agents, deleted text begin accountants, deleted text end new text begin and new text end broker-dealers in securities;

new text begin (2) certified public accountants and CPA firms licensed under chapter 326A;
new text end

deleted text begin (2) deleted text end new text begin (3) new text end state or national banks, credit unions, trust companies, savings associations, title
insurers, insurance companies, and all other lending institutions duly authorized to transact
business in Minnesota;

deleted text begin (3) deleted text end new text begin (4) new text end persons who, as employees on a regular salary or wage of an employer not engaged
in the business of debt management, perform credit services for their employer;

deleted text begin (4) deleted text end new text begin (5) new text end public officers acting in their official capacities and persons acting as a debt
management services provider pursuant to court order;

deleted text begin (5) deleted text end new text begin (6) new text end any person while performing services incidental to the dissolution, winding up,
or liquidation of a partnership, corporation, or other business enterprise;

deleted text begin (6) deleted text end new text begin (7) new text end the federal government, the state, their political subdivisions, public agencies,
and employees;

deleted text begin (7) deleted text end new text begin (8) new text end collection agencies, provided that the services are provided to a creditor;

deleted text begin (8) deleted text end new text begin (9) new text end "qualified organizations" designated as representative payees for purposes of the
Social Security and Supplemental Security Income Representative Payee System and the
federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508;

deleted text begin (9) deleted text end new text begin (10) new text end accelerated mortgage payment providers. "Accelerated mortgage payment
providers" are persons who, after satisfying the requirements of sections 332.30 to 332.303,
receive funds to make mortgage payments to a lender or lenders, on behalf of mortgagors,
in order to exceed regularly scheduled minimum payment obligations under the terms of
the indebtedness. The term does not include: (i) persons or entities described in clauses (1)
to deleted text begin (8) deleted text end new text begin (9) new text end ; (ii) mortgage lenders or servicers, industrial loan and thrift companies, or regulated
lenders under chapter 56; or (iii) persons authorized to make loans under section 47.20,
subdivision 1. For purposes of this clause and sections 332.30 to 332.303, "lender" means
the original lender or that lender's assignee, whichever is the current mortgage holder;

deleted text begin (10) deleted text end new text begin (11) new text end trustees, guardians, and conservators; deleted text begin and
deleted text end

deleted text begin (11) deleted text end new text begin (12) an enrolled agent or enrolled agent firm; and
new text end

new text begin (13) new text end debt settlement services providers.

Sec. 2.

Minnesota Statutes 2020, section 332A.02, is amended by adding a subdivision to
read:

new text begin Subd. 10b. new text end

new text begin Enrolled agent. new text end

new text begin "Enrolled agent" means a person defined under Code of
Federal Regulations, title 26, section 601.502, and who is authorized to practice before the
Internal Revenue Service pursuant to Code of Federal Regulations, title 31, section 10.3.
new text end

Sec. 3.

Minnesota Statutes 2020, section 332A.02, is amended by adding a subdivision to
read:

new text begin Subd. 10c. new text end

new text begin Enrolled agent firm. new text end

new text begin "Enrolled agent firm" means an association, corporation,
partnership, or sole proprietorship:
new text end

new text begin (1) that is owned by or employs enrolled agents;
new text end

new text begin (2) whose practice, in whole or in part, involves, for a fee, assisting debtors to delay
payment of delinquent taxes owed, establish a payment plan for delinquent taxes owed, or
obtain a settlement for less than the full amount of delinquent taxes owed; and
new text end

new text begin (3) where:
new text end

new text begin (i) all contracts with debtors are reviewed and signed by an enrolled agent employed by
the firm;
new text end

new text begin (ii) an enrolled agent is responsible for all work performed under the contract and the
responsible agent obtains a power of attorney or a disclosure authorization from the debtor;
and
new text end

new text begin (iii) an enrolled agent files the power of attorney or disclosure authorization according
to all procedural requirements under the Internal Revenue Code.
new text end

Sec. 4.

Minnesota Statutes 2020, section 332B.02, subdivision 13, is amended to read:

Subd. 13.

Debt settlement services provider.

"Debt settlement services provider" means
any person offering or providing debt settlement services to a debtor domiciled in this state,
regardless of whether or not a fee is charged for the services and regardless of whether the
person maintains a physical presence in the state. The term includes any person to whom
debt settlement services are delegated. The term shall not include an exempt attorney at law
and persons listed in section 332A.02, subdivision 8, clauses (2) to deleted text begin (10) deleted text end new text begin (12) new text end , or a debt
management services provider.