1.1                          A bill for an act 
  1.2             relating to traffic regulations; modifying disposition 
  1.3             of vehicle forfeiture sale proceeds; amending 
  1.4             Minnesota Statutes 1998, section 169.1217, subdivision 
  1.5             7. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 169.1217, 
  1.8   subdivision 7, is amended to read: 
  1.9      Subd. 7.  [LIMITATIONS ON FORFEITURE OF MOTOR VEHICLE.] (a) 
  1.10  A vehicle is subject to forfeiture under this section only if: 
  1.11     (1) the driver is convicted of the designated offense upon 
  1.12  which the forfeiture is based; 
  1.13     (2) the driver fails to appear with respect to the 
  1.14  designated offense charge in violation of section 609.49; or 
  1.15     (3) the driver's conduct results in a designated license 
  1.16  revocation and the driver either fails to seek administrative or 
  1.17  judicial review of the revocation in a timely manner as required 
  1.18  by section 169.123, subdivision 5b or 5c, or the revocation is 
  1.19  sustained under section 169.123, subdivision 5b or 6. 
  1.20     (b) A vehicle encumbered by a bona fide security interest, 
  1.21  or subject to a lease that has a term of 180 days or more, is 
  1.22  subject to the interest of the secured party or lessor unless 
  1.23  the party or lessor had knowledge of or consented to the act 
  1.24  upon which the forfeiture is based.  However, when the proceeds 
  1.25  of the sale of a seized vehicle do not equal or exceed the 
  2.1   outstanding loan balance, the appropriate agency shall remit all 
  2.2   proceeds of the sale to the secured party and is not liable to 
  2.3   the secured party for any amount owed on the loan in excess of 
  2.4   the sale proceeds.  
  2.5      (c) Notwithstanding paragraph (b), the secured party's or 
  2.6   lessor's interest in a vehicle is not subject to forfeiture 
  2.7   based solely on the secured party's or lessor's knowledge of the 
  2.8   act or omission upon which the forfeiture is based if the 
  2.9   secured party or lessor took reasonable steps to terminate use 
  2.10  of the vehicle by the offender. 
  2.11     (d) A motor vehicle is subject to forfeiture under this 
  2.12  section only if its owner knew or should have known of the 
  2.13  unlawful use or intended use. 
  2.14     (e) A vehicle subject to a security interest, based upon a 
  2.15  loan or other financing arranged by a financial institution, is 
  2.16  subject to the interest of the financial institution.