1.1                          A bill for an act 
  1.2             relating to civil actions; providing for the Minnesota 
  1.3             collection enterprise; imposing duties and providing 
  1.4             powers; providing for the disclosure of certain data; 
  1.5             imposing a collection penalty; providing for venue of 
  1.6             conciliation court actions; authorizing certain 
  1.7             appearances; appropriating money; amending Minnesota 
  1.8             Statutes 1994, sections 8.16, by adding a subdivision; 
  1.9             16D.02, subdivision 6, and by adding a subdivision; 
  1.10            16D.04, subdivisions 1 and 3; 16D.06; 16D.08, 
  1.11            subdivision 2; 491A.01, subdivision 8; and 491A.02, 
  1.12            subdivision 4; proposing coding for new law in 
  1.13            Minnesota Statutes, chapter 16D. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1994, section 8.16, is 
  1.16  amended by adding a subdivision to read: 
  1.17     Subd. 1a.  [SUBPOENAS.] The attorney general may in any 
  1.18  county of the state subpoena and require the production of any 
  1.19  records relating to the location of a debtor or the assets of a 
  1.20  debtor, as that term is defined in section 16D.02, subdivision 
  1.21  4.  Subpoenas may be issued only for records that are relevant 
  1.22  to an investigation related to debt collection and exclude the 
  1.23  power to subpoena personal appearance of witnesses unless the 
  1.24  attorney general is so authorized by other statute or court rule.
  1.25     Sec. 2.  Minnesota Statutes 1994, section 16D.02, 
  1.26  subdivision 6, is amended to read: 
  1.27     Subd. 6.  [REFERRING AGENCY.] "Referring agency" means a 
  1.28  state agency, the University of Minnesota, or a court that has 
  1.29  entered into a debt qualification plan with the commissioner to 
  2.1   refer debts to the commissioner for collection. 
  2.2      Sec. 3.  Minnesota Statutes 1994, section 16D.02, is 
  2.3   amended by adding a subdivision to read: 
  2.4      Subd. 8.  [ENTERPRISE.] "Enterprise" means the Minnesota 
  2.5   collection enterprise, a separate unit established to carry out 
  2.6   the provisions of this chapter, pursuant to the commissioner's 
  2.7   authority to contract with the commissioner of revenue for 
  2.8   collection services under section 16D.04, subdivision 1.  New 
  2.9   employees of the enterprise are in unclassified positions.  
  2.10     Sec. 4.  Minnesota Statutes 1994, section 16D.04, 
  2.11  subdivision 1, is amended to read: 
  2.12     Subdivision 1.  [DUTIES.] The commissioner shall provide 
  2.13  services to the state and its agencies to collect debts owed the 
  2.14  state.  The commissioner is not a collection agency as defined 
  2.15  by section 332.31, subdivision 3, and is not licensed, bonded, 
  2.16  or regulated by the commissioner of commerce under sections 
  2.17  332.31 to 332.35 or 332.38 to 332.45.  The commissioner is 
  2.18  subject to section 332.37, except clause (9) or (10).  The 
  2.19  commissioner may contract with the commissioner of revenue for 
  2.20  collection services, and may delegate to the commissioner of 
  2.21  revenue any of the commissioner's duties and powers under this 
  2.22  chapter.  Debts referred to the commissioner of revenue for 
  2.23  collection under this section or section 256.9792 may in turn be 
  2.24  referred by the commissioner of revenue to the enterprise.  An 
  2.25  audited financial statement may not be required as a condition 
  2.26  of debt placement with a private agency if the private agency:  
  2.27  (1) has errors and omissions coverage under a professional 
  2.28  liability policy in an amount of at least $1,000,000; or (2) has 
  2.29  a fidelity bond to cover actions of its employees, in an amount 
  2.30  of at least $100,000.  In cases of debts referred under section 
  2.31  256.9792, the provisions of this chapter and section 256.9792 
  2.32  apply to the extent they are not in conflict.  If they are in 
  2.33  conflict, the provisions of section 256.9792 control.  For 
  2.34  purposes of this chapter, the referring agency for such debts 
  2.35  remains the department of human services. 
  2.36     Sec. 5.  Minnesota Statutes 1994, section 16D.04, 
  3.1   subdivision 3, is amended to read: 
  3.2      Subd. 3.  [SERVICES.] The commissioner shall provide 
  3.3   collection services for a state agency, and may provide for 
  3.4   collection services for the University of Minnesota or a court, 
  3.5   in accordance with the terms and conditions of a signed debt 
  3.6   qualification plan.  
  3.7      Sec. 6.  Minnesota Statutes 1994, section 16D.06, is 
  3.8   amended to read: 
  3.9      16D.06 [DEBTOR INFORMATION.] 
  3.10     Subdivision 1.  [ACCESS TO GOVERNMENT DATA NOT PUBLIC.] 
  3.11  Notwithstanding chapter 13 or any other state law classifying or 
  3.12  restricting access to government data, upon request from the 
  3.13  commissioner or the attorney general, state agencies, political 
  3.14  subdivisions, and statewide systems shall disseminate not public 
  3.15  data to the commissioner or the attorney general for the sole 
  3.16  purpose of collecting debt.  Not public data disseminated under 
  3.17  this subdivision is limited to financial data of the debtor or 
  3.18  data related to the location of the debtor or the assets of the 
  3.19  debtor. 
  3.20     Subd. 2.  [DISCLOSURE OF DATA.] Data received, collected, 
  3.21  created, or maintained by the commissioner or the attorney 
  3.22  general to collect debts are classified as private data on 
  3.23  individuals under section 13.02, subdivision 12, or nonpublic 
  3.24  data under section 13.02, subdivision 9.  The commissioner or 
  3.25  the attorney general may disclose not public data: 
  3.26     (1) under section 13.05; 
  3.27     (2) under court order; 
  3.28     (3) under a statute specifically authorizing access to the 
  3.29  not public data; 
  3.30     (4) to provide notices required or permitted by statute; 
  3.31     (5) to an agent of the commissioner, including a law 
  3.32  enforcement person, attorney, or investigator acting for the 
  3.33  commissioner in the investigation or prosecution of a criminal 
  3.34  or civil proceeding relating to collection of a debt; 
  3.35     (6) to report names of debtors, amount of debt, date of 
  3.36  debt, and the agency to whom debt is owed to credit bureaus and 
  4.1   private collection agencies under contract with the 
  4.2   commissioner; and 
  4.3      (7) when necessary to locate the debtor, locate the assets 
  4.4   of the debtor, or to enforce or implement the collection of a 
  4.5   debt; and 
  4.6      (8) to the commissioner of revenue for tax administration 
  4.7   purposes. 
  4.8      The commissioner and the attorney general may not disclose 
  4.9   data that is not public to a private collection agency or other 
  4.10  entity with whom the commissioner has contracted under section 
  4.11  16D.04, subdivision 4, unless disclosure is otherwise authorized 
  4.12  by law. 
  4.13     Sec. 7.  Minnesota Statutes 1994, section 16D.08, 
  4.14  subdivision 2, is amended to read: 
  4.15     Subd. 2.  [POWERS.] In addition to the collection remedies 
  4.16  available to private collection agencies in this state, the 
  4.17  commissioner, with legal assistance from the attorney general, 
  4.18  may utilize any statutory authority granted to a referring 
  4.19  agency for purposes of collecting debt owed to that referring 
  4.20  agency.  The commissioner may also use the tax collection 
  4.21  remedies of the commissioner of revenue in sections 270.06, 
  4.22  clauses (7) and (17), excluding the power to subpoena witnesses; 
  4.23  270.66; 270.69, excluding subdivisions 7 and 13; 270.70, 
  4.24  excluding subdivision 14; 270.7001 to 270.72; and 290.92, 
  4.25  subdivision 23, except that a continuous wage levy under section 
  4.26  290.92, subdivision 23, is only effective for 70 days, unless no 
  4.27  competing wage garnishments, executions, or levies are served 
  4.28  within the 70-day period, in which case a wage levy is 
  4.29  continuous until a competing garnishment, execution, or levy is 
  4.30  served in the second or a succeeding 70-day period, in which 
  4.31  case a continuous wage levy is effective for the remainder of 
  4.32  that period.  A debtor who qualifies for cancellation of the 
  4.33  collection penalty under section 16D.11, subdivision 3, clause 
  4.34  (1), can apply to the commissioner for reduction or release of a 
  4.35  continuous wage levy, if the debtor establishes that he or she 
  4.36  needs all or a portion of the wages being levied upon to pay for 
  5.1   essential living expenses, such as food, clothing, shelter, 
  5.2   medical care, or expenses necessary for maintaining employment.  
  5.3   The commissioner's determination not to reduce or release a 
  5.4   continuous wage levy is appealable to district court.  The word 
  5.5   "tax" or "taxes" when used in the tax collection statutes listed 
  5.6   in this subdivision also means debts referred under this 
  5.7   chapter.  For debts other than state taxes or child support, 
  5.8   before any of the tax collection remedies listed in this 
  5.9   subdivision can be used, except for the remedies in section 
  5.10  270.06, clauses (7) and (17), if the referring agency has not 
  5.11  already obtained a judgment or filed a lien, the commissioner 
  5.12  must first obtain a judgment against the debtor.  
  5.13     Sec. 8.  [16D.11] [COLLECTION PENALTY.] 
  5.14     Subdivision 1.  [IMPOSITION.] As determined by the 
  5.15  commissioner, a penalty shall be added to the debts referred to 
  5.16  the commissioner or private collection agency for collection.  
  5.17  The penalty is collectible by the commissioner or private agency 
  5.18  from the debtor at the same time and in the same manner as the 
  5.19  referred debt.  The referring agency shall advise the debtor of 
  5.20  the penalty under this section and the debtor's right to 
  5.21  cancellation of the penalty under subdivision 3 at the time the 
  5.22  agency sends notice to the debtor under section 16D.07.  If the 
  5.23  commissioner or private agency collects an amount less than the 
  5.24  total due, the payment is applied proportionally to the penalty 
  5.25  and the underlying debt.  Penalties collected by the 
  5.26  commissioner under this subdivision or retained under 
  5.27  subdivision 6 shall be deposited in the general fund as 
  5.28  nondedicated receipts.  Penalties collected by private agencies 
  5.29  are appropriated to the referring agency to pay the collection 
  5.30  fees charged by the private agency.  Penalty collections in 
  5.31  excess of collection agency fees must be deposited in the 
  5.32  general fund as nondedicated receipts.  
  5.33     Subd. 2.  [COMPUTATION.] Beginning July 1, 1995, at the 
  5.34  time a debt is referred, the amount of the penalty is equal to 
  5.35  15 percent of the debt, or 25 percent of the debt remaining 
  5.36  unpaid if the commissioner or private collection agency has to 
  6.1   take enforced collection action by serving a summons and 
  6.2   complaint on or entering judgment against the debtor, or by 
  6.3   utilizing any of the remedies authorized under section 16D.08, 
  6.4   subdivision 2, except for the remedies in sections 270.06, 
  6.5   clause (7), and 270.66 or when referred by the commissioner for 
  6.6   additional collection activity by a private collection agency.  
  6.7   If, after referral of a debt to a private collection agency, the 
  6.8   debtor requests cancellation of the penalty under section 
  6.9   16D.11, subdivision 3, the debt must be returned to the 
  6.10  commissioner for resolution of the request. 
  6.11     Subd. 3.  [CANCELLATION.] The penalty imposed under 
  6.12  subdivision 1 shall be canceled and subtracted from the amount 
  6.13  due if: 
  6.14     (1) the debtor's household income as defined in section 
  6.15  290A.03, subdivision 5, excluding the exemption subtractions in 
  6.16  subdivision 3, paragraph (3) of that section, for the 12 months 
  6.17  preceding the date of referral is less than twice the annual 
  6.18  federal poverty guideline under United States Code, title 42, 
  6.19  section 9902, subsection (2); 
  6.20     (2) within 60 days after the first contact with the debtor 
  6.21  by the enterprise or collection agency, the debtor establishes 
  6.22  reasonable cause for the failure to pay the debt prior to 
  6.23  referral of the debt to the enterprise; 
  6.24     (3) a good faith dispute as to the legitimacy or the amount 
  6.25  of the debt is made, and payment is remitted or a payment 
  6.26  agreement is entered into within 30 days after resolution of the 
  6.27  dispute; 
  6.28     (4) good faith litigation occurs and the debtor's position 
  6.29  is substantially justified, and if the debtor does not totally 
  6.30  prevail, the debt is paid or a payment agreement is entered into 
  6.31  within 30 days after the judgment becomes final and 
  6.32  nonappealable; or 
  6.33     (5) penalties have been added by the referring agency and 
  6.34  are included in the amount of the referred debt. 
  6.35     Subd. 4.  [APPEAL.] Decisions of the commissioner denying 
  6.36  an application to cancel the penalty under subdivision 3 are 
  7.1   subject to the contested case procedure under chapter 14. 
  7.2      Subd. 5.  [REFUND.] If a penalty is collected and then 
  7.3   canceled, the amount of the penalty shall be refunded to the 
  7.4   debtor within 30 days.  The amount necessary to pay the refunds 
  7.5   is annually appropriated to the commissioner. 
  7.6      Subd. 6.  [CHARGE TO REFERRING AGENCY.] If the penalty is 
  7.7   canceled under subdivision 3, an amount equal to the penalty is 
  7.8   retained by the commissioner from the debt collected, and is 
  7.9   accounted for and subject to the same provisions of this chapter 
  7.10  as if the penalty had been collected from the debtor. 
  7.11     Subd. 7.  [ADJUSTMENT OF RATE.] By June 1 of each year, the 
  7.12  commissioner shall determine the rate of the penalty for debts 
  7.13  referred to the enterprise during the next fiscal year.  The 
  7.14  rate is a percentage of the debts in an amount that most nearly 
  7.15  equals the costs of the enterprise necessary to process and 
  7.16  collect referred debts under this chapter.  In no event shall 
  7.17  the rate of the penalty when a debt is first referred exceed 
  7.18  three-fifths of the maximum penalty, and in no event shall the 
  7.19  rate of the maximum penalty exceed 25 percent of the debt.  
  7.20  Determination of the rate of the penalty under this section is 
  7.21  not rulemaking under chapter 14, and is not subject to the fee 
  7.22  setting requirements of section 16A.1285. 
  7.23     Sec. 9.  [16D.12] [INTEREST.] 
  7.24     Subdivision 1.  [AUTHORITY.] Unless otherwise provided by 
  7.25  contract out of which the debt arises or by state or federal 
  7.26  law, a state agency shall charge simple interest on debts owed 
  7.27  to the state at the rate provided in subdivision 2 if notice has 
  7.28  been given in accordance with this subdivision.  Interest 
  7.29  charged under this section begins to accrue on the 30th calendar 
  7.30  day following the state agency's first written demand for 
  7.31  payment that includes notification to the debtor that interest 
  7.32  will begin to accrue on the debt in accordance with this section.
  7.33     Subd. 2.  [COMPUTATION.] Notwithstanding chapter 334, the 
  7.34  rate of interest is the rate determined by the state court 
  7.35  administrator under section 549.09, subdivision 1, paragraph (c).
  7.36     Subd. 3.  [EXCLUSION.] A state agency may not charge 
  8.1   interest under this section on overpayments of assistance 
  8.2   benefits under sections 256.031 to 256.0361, 256.72 to 256.87, 
  8.3   chapters 256D and 256I, or the federal food stamp program.  
  8.4   Notwithstanding this prohibition, any debts that have been 
  8.5   reduced to judgment under these programs are subject to the 
  8.6   interest charges provided under section 549.09. 
  8.7      Sec. 10.  [16D.13] [VENUE.] 
  8.8      Subdivision 1.  [AUTHORIZATION.] The commissioner or the 
  8.9   attorney general may bring an action to recover debts owed to 
  8.10  the state in Ramsey county district court or Ramsey county 
  8.11  conciliation court at the discretion of the state.  In order to 
  8.12  bring a cause of action under this section in any county other 
  8.13  than the county where the debtor resides or where the cause of 
  8.14  action arose, the commissioner or the attorney general must 
  8.15  notify the debtor as provided in subdivisions 2 to 4, unless 
  8.16  that venue is authorized by other law. 
  8.17     Subd. 2.  [CONCILIATION COURT; CLAIMS FOR $2,500 OR 
  8.18  LESS.] (a) Before bringing a conciliation court action for a 
  8.19  claim for $2,500 or less under this section in any county other 
  8.20  than where the debtor resides or where the cause of action 
  8.21  arose, the commissioner or the attorney general shall send a 
  8.22  form by first class mail to the debtor's last known address 
  8.23  notifying the debtor of the intent to bring an action in Ramsey 
  8.24  county.  The commissioner or attorney general must enclose a 
  8.25  form for the debtor to use to request that the action not be 
  8.26  brought in Ramsey county and a self-addressed, postage paid 
  8.27  envelope.  The form must advise the debtor of the right to 
  8.28  request that the action not be brought in Ramsey county and that 
  8.29  the debtor has 30 days from the date of the form to make this 
  8.30  request. 
  8.31     (b) If the debtor timely returns the form requesting the 
  8.32  action not be brought in Ramsey county, the commissioner or 
  8.33  attorney general may only file the action in the county of the 
  8.34  debtor's residence, the county where the cause of action arose, 
  8.35  or as provided by other law.  The commissioner or attorney 
  8.36  general shall notify the debtor of the action taken.  If the 
  9.1   debtor does not timely return the form, venue is as chosen by 
  9.2   the commissioner or attorney general as authorized under this 
  9.3   section. 
  9.4      (c) If a judgment is obtained in Ramsey county conciliation 
  9.5   court when the form was sent by first class mail under this 
  9.6   subdivision and the debtor reasonably demonstrates that the 
  9.7   debtor did not reside at the address where the form was sent or 
  9.8   that the debtor did not receive the form, the commissioner or 
  9.9   the attorney general shall vacate the judgment without prejudice 
  9.10  and return any funds collected as a result of enforcement of the 
  9.11  judgment.  Evidence of the debtor's correct address include, but 
  9.12  are not limited to, a driver's license, homestead declaration, 
  9.13  school registration, utility bills, or a lease or rental 
  9.14  agreement. 
  9.15     Subd. 3.  [CONCILIATION COURT CLAIMS EXCEEDING $2,500.] (a) 
  9.16  In order to bring a conciliation court claim that exceeds $2,500 
  9.17  under this section in a county other than where the debtor 
  9.18  resides or where the cause of action arose, the commissioner or 
  9.19  the attorney general shall serve with the conciliation court 
  9.20  claim a change of venue form for the debtor to use to request 
  9.21  that venue be changed and a self-addressed, postage paid return 
  9.22  envelope.  This form must advise the debtor that the form must 
  9.23  be returned within 30 days of the date of service or venue will 
  9.24  remain in Ramsey county. 
  9.25     (b) If the debtor timely returns the change of venue form 
  9.26  requesting a change of venue, the commissioner or attorney 
  9.27  general shall change the venue of the action to the county of 
  9.28  the debtor's residence, the county where the cause of action 
  9.29  arose, as provided by other law, or dismiss the action.  The 
  9.30  commissioner or attorney general must notify the debtor of the 
  9.31  action taken.  If the debtor does not timely return the form, 
  9.32  venue is as chosen by the commissioner or attorney general as 
  9.33  authorized under this section.  The commissioner or the attorney 
  9.34  general shall file the signed return receipt card or the proof 
  9.35  of service with the court. 
  9.36     Subd. 4.  [DISTRICT COURT.] (a) In order to bring a 
 10.1   district court action under this section in any county other 
 10.2   than where the debtor resides or where the cause of action 
 10.3   arose, the commissioner or attorney general shall serve the 
 10.4   change of venue form with the summons and complaint or petition 
 10.5   commencing the collection action.  Two copies of the form must 
 10.6   be served along with a self-addressed, postage paid return 
 10.7   envelope.  The form must advise the debtor that the form must be 
 10.8   returned within 20 days of the date of service or venue will 
 10.9   remain in Ramsey county.  If the debtor timely returns the 
 10.10  change of venue form, the time to answer the summons and 
 10.11  complaint or petition runs from the date of debtor's request for 
 10.12  change of venue. 
 10.13     (b) If the debtor timely returns the change of venue form 
 10.14  requesting that the action not be brought in Ramsey county, the 
 10.15  commissioner or attorney general shall change the venue of the 
 10.16  action to the county of the debtor's residence, the county where 
 10.17  the cause of action arose, as provided by other law, or dismiss 
 10.18  the action.  The commissioner or attorney general shall notify 
 10.19  the debtor of the action taken.  If the debtor is served the 
 10.20  form to change venue along with the district court summons and 
 10.21  complaint or petition, in accordance with court rules, but does 
 10.22  not return the form within the statutory timelines, venue is as 
 10.23  chosen by the commissioner or attorney general as authorized 
 10.24  under this section.  The commissioner or attorney general shall 
 10.25  file the proof of service along with the summons and complaint 
 10.26  or petition commencing the lawsuit. 
 10.27     Subd. 5.  [FEES.] No court filing fees, docketing fees, or 
 10.28  release of judgment fees may be assessed against the state for 
 10.29  collection actions filed under this chapter. 
 10.30     Sec. 11.  [16D.14] [COMPROMISE OF DEBT.] 
 10.31     Unless expressly prohibited by other federal or state law, 
 10.32  a state agency may compromise debts owed to the state, whether 
 10.33  reduced to judgment or not, where the state agency determines 
 10.34  that it is in the best interests of the state to do so. 
 10.35     Sec. 12.  [16D.16] [SETOFFS.] 
 10.36     Subdivision 1.  [AUTHORIZATION.] The commissioner or a 
 11.1   state agency may automatically deduct the amount of a debt owed 
 11.2   to the state from any state payment due to the debtor, except 
 11.3   tax refunds, earned income tax credit, child care tax credit, 
 11.4   prejudgment debts of $5,000 or less, funds exempt under section 
 11.5   550.37, or funds owed an individual who receives assistance 
 11.6   under the provisions of chapter 256 are not subject to setoff 
 11.7   under this chapter.  If a debtor has entered into a written 
 11.8   payment plan with respect to payment of a specified debt, the 
 11.9   right of setoff may not be used to satisfy that debt.  
 11.10  Notwithstanding section 181.79, the state may deduct from the 
 11.11  wages due or earned by a state employee to collect a debt, 
 11.12  subject to the limitations in section 571.922. 
 11.13     Subd. 2.  [NOTICE AND HEARING.] Before setoff, the 
 11.14  commissioner or state agency shall mail written notice to the 
 11.15  debtor, addressed to the debtor's last known address, that the 
 11.16  commissioner or state agency intends to set off a debt owed to 
 11.17  the state by the debtor against future payments due the debtor 
 11.18  from the state.  For debts owed to the state that have not been 
 11.19  reduced to judgment, if no opportunity to be heard or 
 11.20  administrative appeal process has yet been made available to the 
 11.21  debtor to contest the validity or accuracy of the debt, before 
 11.22  setoff for a prejudgment debt, the notice to the debtor must 
 11.23  advise that the debtor has a right to make a written request for 
 11.24  a contested case hearing on the validity of the debt or the 
 11.25  right to setoff.  The debtor has 30 days from the date of that 
 11.26  notice to make a written request for a contested case hearing to 
 11.27  contest the validity of the debt or the right to setoff.  The 
 11.28  debtor's request must state the debtor's reasons for contesting 
 11.29  the debt or the right to setoff.  If the commissioner or state 
 11.30  agency desires to pursue the right to setoff following receipt 
 11.31  of the debtor's request for a hearing, the commissioner or state 
 11.32  agency shall schedule a contested case hearing within 30 days of 
 11.33  the receipt of the request for the hearing.  If the commissioner 
 11.34  or state agency decides not to pursue the right to setoff, the 
 11.35  debtor must be notified of that decision. 
 11.36     Sec. 13.  Minnesota Statutes 1994, section 491A.01, 
 12.1   subdivision 8, is amended to read: 
 12.2      Subd. 8.  [JURISDICTION; MULTIPLE DEFENDANTS VENUE.] The 
 12.3   conciliation court also has jurisdiction to determine a civil 
 12.4   action commenced against two one or more defendants in the 
 12.5   county in which one or more of the defendants resides or where 
 12.6   the cause of action, or some part of it, arose.  Counterclaims 
 12.7   may be commenced in the county where the original action was 
 12.8   commenced. 
 12.9      Sec. 14.  Minnesota Statutes 1994, section 491A.02, 
 12.10  subdivision 4, is amended to read: 
 12.11     Subd. 4.  [REPRESENTATION.] (a) A corporation, partnership, 
 12.12  limited liability company, sole proprietorship, or association 
 12.13  may be represented in conciliation court by an officer, manager, 
 12.14  or partner or an agent in the case of a condominium, 
 12.15  cooperative, or townhouse association, or may appoint a natural 
 12.16  person who is an employee or commercial property manager to 
 12.17  appear on its behalf or settle a claim in conciliation 
 12.18  court.  The state or a political subdivision of the state may be 
 12.19  represented in conciliation court by an employee of the 
 12.20  pertinent governmental unit without a written authorization.  
 12.21  This Representation under this subdivision does not constitute 
 12.22  the practice of law for purposes of section 481.02, subdivision 
 12.23  8.  In the case of an officer, employee, commercial property 
 12.24  manager, or agent of a condominium, cooperative, or townhouse 
 12.25  association, an authorized power of attorney, corporate 
 12.26  authorization resolution, corporate bylaw, or other evidence of 
 12.27  authority acceptable to the court must be filed with the claim 
 12.28  or presented at the hearing.  This subdivision also applies to 
 12.29  appearances in district court by a corporation or limited 
 12.30  liability company with five or fewer shareholders or members and 
 12.31  to any condominium, cooperative, or townhouse association, if 
 12.32  the action was removed from conciliation court. 
 12.33     (b) "Commercial property manager" means a corporation, 
 12.34  partnership, or limited liability company or its employees who 
 12.35  are hired by the owner of commercial real estate to perform a 
 12.36  broad range of administrative duties at the property including 
 13.1   tenant relations matters, leasing, repairs, maintenance, the 
 13.2   negotiation and resolution of tenant disputes, and related 
 13.3   matters.  In order to appear in conciliation court, a property 
 13.4   manager's employees must possess a real estate license under 
 13.5   section 82.20 and be authorized by the owner of the property to 
 13.6   settle all disputes with tenants and others within the 
 13.7   jurisdictional limits of conciliation court. 
 13.8      (c) A commercial property manager who is appointed to 
 13.9   settle a claim in conciliation court may not charge or collect a 
 13.10  separate fee for services rendered under paragraph (a). 
 13.11     Sec. 15.  [PILOT PROGRAM.] 
 13.12     The commissioner of finance shall initiate a pilot program 
 13.13  to compare effectiveness and efficiencies of the Minnesota 
 13.14  collection enterprise and private collection agencies.  The 
 13.15  commissioner shall issue a request for proposals and place at 
 13.16  least $35,000,000 of state debt with private collection agencies 
 13.17  licensed by the commissioner of commerce under Minnesota 
 13.18  Statutes, chapter 332 no later than January 1, 1996.  In placing 
 13.19  debt with private collection agencies, the commissioner must 
 13.20  consider the following factors in comparison to the enterprise; 
 13.21  age and size of the debt, type of debt, and direct and indirect 
 13.22  costs of collecting the debt.  Eligible private collection 
 13.23  agencies include those not currently under contract with the 
 13.24  commissioner.  The commissioner shall report back to the 
 13.25  legislature by February 1, 1997. 
 13.26     Sec. 16.  [EFFECTIVE DATE.] 
 13.27     Sections 1 to 6, 11, 14, and 15 are effective the day 
 13.28  following final enactment.  Section 7 is effective for debts 
 13.29  previously referred or referred on or after the day following 
 13.30  final enactment.  Section 8 is effective for debts referred on 
 13.31  or after July 1, 1995.  Sections 9, 10, 12, and 13 are effective 
 13.32  July 1, 1995.