1.1                          A bill for an act 
  1.2             relating to crime prevention; eliminating requirement 
  1.3             to hold DWI-related vehicle forfeiture proceeding at 
  1.4             same time as implied consent hearing; authorizing 
  1.5             secured parties to sell forfeited vehicles under 
  1.6             certain conditions; amending Minnesota Statutes 1998, 
  1.7             section 169.1217, by adding a subdivision; and 
  1.8             Minnesota Statutes 1999 Supplement, section 169.1217, 
  1.9             subdivisions 7, 7a, and 9. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.12  169.1217, subdivision 7, is amended to read: 
  1.13     Subd. 7.  [LIMITATIONS ON FORFEITURE OF MOTOR VEHICLE.] (a) 
  1.14  A vehicle is subject to forfeiture under this section only if: 
  1.15     (1) the driver is convicted of the designated offense upon 
  1.16  which the forfeiture is based; 
  1.17     (2) the driver fails to appear with respect to the 
  1.18  designated offense charge in violation of section 609.49; or 
  1.19     (3) the driver's conduct results in a designated license 
  1.20  revocation and the driver either fails to seek administrative or 
  1.21  judicial review of the revocation in a timely manner as required 
  1.22  by section 169.123, subdivision 5b or 5c, or the revocation is 
  1.23  sustained under section 169.123, subdivision 5b or 6. 
  1.24     (b) A vehicle encumbered by a bona fide security interest, 
  1.25  or subject to a lease that has a term of 180 days or more, is 
  1.26  subject to the interest of the secured party or lessor unless 
  1.27  the party or lessor had knowledge of or consented to the act 
  2.1   upon which the forfeiture is based.  However, when the proceeds 
  2.2   of the sale of a seized vehicle do not equal or exceed the 
  2.3   outstanding loan balance, the appropriate agency shall remit all 
  2.4   proceeds of the sale to the secured party.  If the sale of the 
  2.5   vehicle is conducted in a commercially reasonable manner 
  2.6   consistent with the provisions of section 336.9-504, clause (3), 
  2.7   the agency is not liable to the secured party for any amount 
  2.8   owed on the loan in excess of the sale proceeds if the secured 
  2.9   party received notification of the time and place of the sale at 
  2.10  least three days prior to the sale.  If a financial institution 
  2.11  chooses to dispose of the vehicle under subdivision 10 and the 
  2.12  sale proceeds do not equal or exceed the financial institution's 
  2.13  outstanding loan or lease balance, the financial institution may 
  2.14  retain all the sale proceeds.  
  2.15     (c) Notwithstanding paragraphs (b) and (d), the secured 
  2.16  party's, lessor's, or owner's interest in a vehicle is not 
  2.17  subject to forfeiture based solely on the secured party's, 
  2.18  lessor's, or owner's knowledge of the act or omission upon which 
  2.19  the forfeiture is based if the secured party, lessor, or owner 
  2.20  took reasonable steps to terminate use of the vehicle by the 
  2.21  offender. 
  2.22     (d) A motor vehicle is subject to forfeiture under this 
  2.23  section only if its owner knew or should have known of the 
  2.24  unlawful use or intended use. 
  2.25     (e) A vehicle subject to a security interest, based upon a 
  2.26  loan or other financing arranged by a financial institution, is 
  2.27  subject to the interest of the financial institution. 
  2.28     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
  2.29  169.1217, subdivision 7a, is amended to read: 
  2.30     Subd. 7a.  [ADMINISTRATIVE FORFEITURE PROCEDURE.] (a) A 
  2.31  motor vehicle used to commit a designated offense or used in 
  2.32  conduct resulting in a designated license revocation is subject 
  2.33  to administrative forfeiture under this subdivision. 
  2.34     (b) When a motor vehicle is seized under subdivision 2, the 
  2.35  appropriate agency shall serve the driver or operator of the 
  2.36  vehicle with a notice of the seizure and intent to forfeit the 
  3.1   vehicle.  Additionally, when a motor vehicle is seized under 
  3.2   subdivision 2, or within a reasonable time after that, all 
  3.3   persons known to have an ownership, possessory, or security 
  3.4   interest in the vehicle must be notified of the seizure and the 
  3.5   intent to forfeit the vehicle.  The notification to a person 
  3.6   known to have a security interest in the vehicle is required 
  3.7   only if the vehicle is registered under chapter 168 and the 
  3.8   interest is listed on the vehicle's title.  Notice mailed by 
  3.9   certified mail to the address shown in department of public 
  3.10  safety records is sufficient notice to the registered owner of 
  3.11  the vehicle.  Otherwise, notice may be given in the manner 
  3.12  provided by law for service of a summons in a civil action. 
  3.13     (c) The notice must be in writing and contain:  
  3.14     (1) a description of the vehicle seized; 
  3.15     (2) the date of seizure; and 
  3.16     (3) notice of the right to obtain judicial review of the 
  3.17  forfeiture and of the procedure for obtaining that judicial 
  3.18  review, printed in English, Hmong, and Spanish.  Substantially 
  3.19  the following language must appear conspicuously:  "IF YOU DO 
  3.20  NOT DEMAND JUDICIAL REVIEW EXACTLY AS PRESCRIBED IN MINNESOTA 
  3.21  STATUTES, SECTION 169.1217, SUBDIVISION 7a, YOU LOSE THE RIGHT 
  3.22  TO A JUDICIAL DETERMINATION OF THIS FORFEITURE AND YOU LOSE ANY 
  3.23  RIGHT YOU MAY HAVE TO THE ABOVE DESCRIBED PROPERTY.  YOU MAY NOT 
  3.24  HAVE TO PAY THE FILING FEE FOR THE DEMAND IF DETERMINED YOU ARE 
  3.25  UNABLE TO AFFORD THE FEE.  IF THE PROPERTY IS WORTH $7,500 OR 
  3.26  LESS, YOU MAY FILE YOUR CLAIM IN CONCILIATION COURT.  YOU DO NOT 
  3.27  HAVE TO PAY THE CONCILIATION COURT FILING FEE IF THE PROPERTY IS 
  3.28  WORTH LESS THAN $500." 
  3.29     (d) Within 30 days following service of a notice of seizure 
  3.30  and forfeiture under this subdivision, a claimant may file a 
  3.31  demand for a judicial determination of the forfeiture.  The 
  3.32  demand must be in the form of a civil complaint and must be 
  3.33  filed with the court administrator in the county in which the 
  3.34  seizure occurred, together with proof of service of a copy of 
  3.35  the complaint on the prosecuting authority having jurisdiction 
  3.36  over the forfeiture, and the standard filing fee for civil 
  4.1   actions unless the petitioner has the right to sue in forma 
  4.2   pauperis under section 563.01.  If the value of the seized 
  4.3   property is $7,500 or less, the claimant may file an action in 
  4.4   conciliation court for recovery of the seized vehicle.  If the 
  4.5   value of the seized property is less than $500, the claimant 
  4.6   does not have to pay the conciliation court filing fee.  No 
  4.7   responsive pleading is required of the prosecuting authority and 
  4.8   no court fees may be charged for the prosecuting authority's 
  4.9   appearance in the matter.  Except as provided in this section, 
  4.10  judicial reviews and hearings are governed by section 169.123, 
  4.11  subdivisions 5c and 6, and shall, at the option of the 
  4.12  prosecuting authority, may take place at the same time as any 
  4.13  judicial review of the person's license revocation under section 
  4.14  169.123.  If the judicial review and hearing under this section 
  4.15  do not take place at the same time as the judicial review of the 
  4.16  person's license revocation under section 169.123, the review 
  4.17  and hearing must take place at the earliest practicable date.  
  4.18  The proceedings may be combined with any hearing on a petition 
  4.19  filed under section 169.123, subdivision 5c, and are governed by 
  4.20  the rules of civil procedure.  
  4.21     (e) The complaint must be captioned in the name of the 
  4.22  claimant as plaintiff and the seized vehicle as defendant, and 
  4.23  must state with specificity the grounds on which the claimant 
  4.24  alleges the vehicle was improperly seized and the plaintiff's 
  4.25  interest in the vehicle seized.  Notwithstanding any law to the 
  4.26  contrary, an action for the return of a vehicle seized under 
  4.27  this section may not be maintained by or on behalf of any person 
  4.28  who has been served with a notice of seizure and forfeiture 
  4.29  unless the person has complied with this subdivision. 
  4.30     (f) If the claimant makes a timely demand for a judicial 
  4.31  determination under this subdivision, the appropriate agency 
  4.32  must conduct the forfeiture under subdivision 8.  
  4.33     (g) If a demand for judicial determination of an 
  4.34  administrative forfeiture is filed under this subdivision and 
  4.35  the court orders the return of the seized vehicle, the court 
  4.36  shall order that filing fees be reimbursed to the person who 
  5.1   filed the demand.  In addition, the court may order sanctions 
  5.2   under section 549.211.  
  5.3      Sec. 3.  Minnesota Statutes 1999 Supplement, section 
  5.4   169.1217, subdivision 9, is amended to read: 
  5.5      Subd. 9.  [DISPOSITION OF FORFEITED VEHICLE BY GOVERNMENT 
  5.6   AGENCY.] (a) Except as otherwise provided in subdivision 10, if 
  5.7   the vehicle is administratively forfeited under subdivision 7a, 
  5.8   or if the court finds under subdivision 8 that the vehicle is 
  5.9   subject to forfeiture under subdivisions 6 and 7, the 
  5.10  appropriate agency shall: 
  5.11     (1) sell the vehicle and distribute the proceeds under 
  5.12  paragraph (b); or 
  5.13     (2) keep the vehicle for official use.  If the agency keeps 
  5.14  a forfeited motor vehicle for official use, it shall make 
  5.15  reasonable efforts to ensure that the motor vehicle is available 
  5.16  for use by the agency's officers who participate in the drug 
  5.17  abuse resistance education program. 
  5.18     (b) The proceeds from the sale of forfeited vehicles, after 
  5.19  payment of seizure, storage, forfeiture, and sale expenses, and 
  5.20  satisfaction of valid liens against the property, must be 
  5.21  forwarded to the treasury of the political subdivision that 
  5.22  employs the appropriate agency responsible for the forfeiture 
  5.23  for use in DWI-related enforcement, training and education.  If 
  5.24  the appropriate agency is an agency of state government, the net 
  5.25  proceeds must be forwarded to the state treasury and credited to 
  5.26  the following funds: 
  5.27     (1) if the forfeited vehicle is a motorboat, the net 
  5.28  proceeds must be credited to the water recreation account in the 
  5.29  natural resources fund; 
  5.30     (2) if the forfeited vehicle is a snowmobile, the net 
  5.31  proceeds must be credited to the snowmobile trails and 
  5.32  enforcement account in the natural resources fund; 
  5.33     (3) if the forfeited vehicle is an all-terrain vehicle, the 
  5.34  net proceeds must be credited to the all-terrain vehicle account 
  5.35  in the natural resources fund; 
  5.36     (4) if the forfeited vehicle is an off-highway motorcycle, 
  6.1   the net proceeds must be credited to the off-highway motorcycle 
  6.2   account in the natural resources fund; 
  6.3      (5) if the forfeited vehicle is an off-road vehicle, the 
  6.4   net proceeds must be credited to the off-road vehicle account in 
  6.5   the natural resources fund; and 
  6.6      (6) if otherwise, the net proceeds must be credited to the 
  6.7   general fund. 
  6.8      Sec. 4.  Minnesota Statutes 1998, section 169.1217, is 
  6.9   amended by adding a subdivision to read: 
  6.10     Subd. 10.  [SALE OF FORFEITED VEHICLE BY SECURED 
  6.11  PARTY.] (a) A financial institution with a valid security 
  6.12  interest in or a valid lease covering a forfeited vehicle may 
  6.13  choose to dispose of the vehicle under this subdivision, in lieu 
  6.14  of the appropriate agency disposing of the vehicle under 
  6.15  subdivision 9.  A financial institution wishing to dispose of a 
  6.16  vehicle under this subdivision shall notify the appropriate 
  6.17  agency of its intent, in writing, within 30 days after receiving 
  6.18  notice of the seizure and forfeiture.  The appropriate agency 
  6.19  shall release the vehicle to the financial institution or its 
  6.20  agent after the financial institution presents proof of its 
  6.21  valid security agreement or of its lease agreement and the 
  6.22  financial institution agrees not to sell the vehicle to a member 
  6.23  of the violator's household, unless the violator is not 
  6.24  convicted of the offense on which the forfeiture is based.  The 
  6.25  financial institution shall dispose of the vehicle in a 
  6.26  commercially reasonable manner as defined in section 336.9-504. 
  6.27     (b) After disposing of the forfeited vehicle, the financial 
  6.28  institution shall reimburse the appropriate agency for its 
  6.29  seizure, storage, and forfeiture costs.  The financial 
  6.30  institution may then apply the proceeds of the sale to its 
  6.31  storage costs, to its sale expenses, and to satisfy the lien or 
  6.32  the lease on the vehicle.  If any proceeds remain, the financial 
  6.33  institution shall forward the proceeds to the state treasury, 
  6.34  which shall credit the appropriate fund as specified in 
  6.35  subdivision 9. 
  6.36     Sec. 5.  [EFFECTIVE DATE.] 
  7.1      Sections 1 to 4 are effective the day following final 
  7.2   enactment.