1.1                          A bill for an act 
  1.2             relating to courts; authorizing use of the Revenue 
  1.3             Recapture Act for collection of certain conciliation 
  1.4             court judgments; providing for priority of claims; 
  1.5             modifying service of process requirements; 
  1.6             appropriating money; amending Minnesota Statutes 1998, 
  1.7             sections 270A.03, subdivision 7; 270A.04, subdivision 
  1.8             3; 270A.07, subdivision 5; 270A.09, subdivision 1; 
  1.9             270A.10; and 491A.01, subdivision 3; Minnesota 
  1.10            Statutes 1999 Supplement, section 270A.03, subdivision 
  1.11            2; proposing coding for new law in Minnesota Statutes, 
  1.12            chapter 491A. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.15  270A.03, subdivision 2, is amended to read: 
  1.16     Subd. 2.  [CLAIMANT AGENCY.] "Claimant agency" means any 
  1.17  state agency, as defined by section 14.02, subdivision 2, the 
  1.18  regents of the University of Minnesota, any district court of 
  1.19  the state, any county, any statutory or home rule charter city 
  1.20  presenting a claim for a municipal hospital or a public library, 
  1.21  a hospital district, a private nonprofit hospital that leases 
  1.22  its building from the county in which it is located, any public 
  1.23  agency responsible for child support enforcement, any public 
  1.24  agency responsible for the collection of court-ordered 
  1.25  restitution, and any public agency established by general or 
  1.26  special law that is responsible for the administration of a 
  1.27  low-income housing program.  Claimant agency also includes a 
  1.28  district court that has issued an order on behalf of a 
  1.29  conciliation court judgment creditor under section 491A.04.  
  2.1      Sec. 2.  Minnesota Statutes 1998, section 270A.03, 
  2.2   subdivision 7, is amended to read: 
  2.3      Subd. 7.  [REFUND.] (a) "Refund" means an individual income 
  2.4   tax refund or political contribution refund, pursuant to chapter 
  2.5   290, or a property tax credit or refund, pursuant to chapter 
  2.6   290A.  
  2.7      (b) For purposes of this chapter, lottery prizes, as set 
  2.8   forth in section 349A.08, subdivision 8, and amounts granted to 
  2.9   persons by the legislature on the recommendation of the joint 
  2.10  senate-house of representatives subcommittee on claims shall be 
  2.11  treated as refunds. 
  2.12     (c) Except as provided in paragraph (d), in the case of a 
  2.13  joint property tax refund payable to spouses under chapter 290A, 
  2.14  the refund shall be considered as belonging to each spouse in 
  2.15  the proportion of the total refund that equals each spouse's 
  2.16  proportion of the total income determined under section 290A.03, 
  2.17  subdivision 3.  In the case of a joint income tax refund under 
  2.18  chapter 289A, the refund shall be considered as belonging to 
  2.19  each spouse in the proportion of the total refund that equals 
  2.20  each spouse's proportion of the total taxable income determined 
  2.21  under section 290.01, subdivision 29.  The commissioner shall 
  2.22  remit the entire refund to the claimant agency, which shall, 
  2.23  upon the request of the spouse who does not owe the debt, 
  2.24  determine the amount of the refund belonging to that spouse and 
  2.25  refund the amount to that spouse. 
  2.26     (d) If the claimant agency is a court that has issued an 
  2.27  order under section 491A.04, in the case of a joint property tax 
  2.28  or income tax refund payable to spouses, one of whom is not the 
  2.29  judgment debtor, the refund is considered as belonging one-half 
  2.30  to each spouse and the commissioner shall submit only one-half 
  2.31  of the available refund to the court. 
  2.32     Sec. 3.  Minnesota Statutes 1998, section 270A.04, 
  2.33  subdivision 3, is amended to read:  
  2.34     Subd. 3.  [INFORMATION REQUIRED.] For each debt submitted, 
  2.35  the claimant agency shall provide the commissioner with the name 
  2.36  and social security number of the debtor and any other 
  3.1   identifying information required by rules promulgated by the 
  3.2   commissioner.  If the claimant agency is a court that issued an 
  3.3   order under section 491A.04, the court shall provide the 
  3.4   debtor's address, and the debtor's date of birth and social 
  3.5   security number, if available, but failure to provide the date 
  3.6   of birth and social security number does not preclude the use of 
  3.7   this chapter. 
  3.8      Sec. 4.  Minnesota Statutes 1998, section 270A.07, 
  3.9   subdivision 5, is amended to read: 
  3.10     Subd. 5.  [INTEREST ON REFUNDS.] Any refund wrongfully or 
  3.11  incorrectly applied to a debt and transferred to a claimant 
  3.12  agency, other than a court that issued an order under section 
  3.13  491A.04, shall be paid by the agency to the debtor.  The sum 
  3.14  wrongfully or incorrectly withheld shall bear interest at the 
  3.15  rate specified in section 270.76, computed from the date when 
  3.16  the refund would begin to bear interest under section 289A.56, 
  3.17  subdivision 2, regardless of whether the refund is payable under 
  3.18  chapter 290 or 290A.  If the claimant agency is a state agency, 
  3.19  the payment shall be made out of the agency's appropriation.  
  3.20     Sec. 5.  Minnesota Statutes 1998, section 270A.09, 
  3.21  subdivision 1, is amended to read: 
  3.22     Subdivision 1.  [HEARING.] (a) Except as provided in 
  3.23  paragraph (b), if a claimant agency receives written notice of a 
  3.24  debtor's intention to contest at hearing the claim upon which 
  3.25  the intended setoff is based, it shall initiate a hearing 
  3.26  according to contested case procedures established in the state 
  3.27  Administrative Procedure Act not later than 30 days after 
  3.28  receipt of the debtor's request for a hearing. 
  3.29     (b) If the claimant agency is a district court that issued 
  3.30  an order under section 491A.04, upon petition of either party, 
  3.31  the court shall hold a hearing under a simplified process 
  3.32  established by the court.  The only issue to be determined by 
  3.33  the court is the amount of the judgment that is unsatisfied.  
  3.34     Sec. 6.  Minnesota Statutes 1998, section 270A.10, is 
  3.35  amended to read: 
  3.36     270A.10 [PRIORITY OF CLAIMS.] 
  4.1      If two or more debts, in a total amount exceeding the 
  4.2   debtor's refund, are submitted for setoff, the priority of 
  4.3   payment shall be as follows in the following order:  First, any 
  4.4      (1) delinquent tax obligations of the debtor which are owed 
  4.5   to the department shall be satisfied. Secondly, the refund shall 
  4.6   be applied to; 
  4.7      (2) debts for child support based on the order in time in 
  4.8   which the commissioner received the debts. Thirdly, the refund 
  4.9   shall be applied to payment of; 
  4.10     (3) restitution obligations. Fourthly, the refund shall be 
  4.11  applied to the; 
  4.12     (4) court fines and fees; 
  4.13     (5) remaining debts, other than a debt based on a court 
  4.14  order under section 491A.04, based on the order in time in which 
  4.15  the commissioner received the debts; and 
  4.16     (6) a debt based on a court order under section 491A.04. 
  4.17     Sec. 7.  Minnesota Statutes 1998, section 491A.01, 
  4.18  subdivision 3, is amended to read: 
  4.19     Subd. 3.  [JURISDICTION; GENERAL.] (a) Except as provided 
  4.20  in subdivisions 4 and 5, the conciliation court has jurisdiction 
  4.21  to hear, conciliate, try, and determine civil claims if the 
  4.22  amount of money or property that is the subject matter of the 
  4.23  claim does not exceed $6,000 or, on and after July 1, 1994, 
  4.24  $7,500, or $4,000 if the claim involves a consumer credit 
  4.25  transaction.  "Consumer credit transaction" means a sale of 
  4.26  personal property, or a loan arranged to facilitate the purchase 
  4.27  of personal property, in which: 
  4.28     (1) credit is granted by a seller or a lender who regularly 
  4.29  engages as a seller or lender in credit transactions of the same 
  4.30  kind; 
  4.31     (2) the buyer is a natural person; 
  4.32     (3) the claimant is the seller or lender in the 
  4.33  transaction; and 
  4.34     (4) the personal property is purchased primarily for a 
  4.35  personal, family, or household purpose and not for a commercial, 
  4.36  agricultural, or business purpose. 
  5.1      (b) Except as otherwise provided in this subdivision and 
  5.2   subdivisions 5 to 10, the territorial jurisdiction of 
  5.3   conciliation court is coextensive with the county in which the 
  5.4   court is established.  The summons in a conciliation court 
  5.5   action under subdivisions 6 to 10 may be served anywhere in the 
  5.6   state, and the summons in a conciliation court action under 
  5.7   subdivision 7, paragraph (b), may be served outside the state in 
  5.8   the manner provided by law.  The court administrator shall serve 
  5.9   the summons in a conciliation court action by first class mail, 
  5.10  except that if the amount of money or property that is the 
  5.11  subject of the claim exceeds $2,500, The summons must be served 
  5.12  by the plaintiff by certified mail, and service on nonresident 
  5.13  defendants must be made in accordance with applicable law or 
  5.14  rule.  Subpoenas to secure the attendance of nonparty witnesses 
  5.15  and the production of documents at trial may be served anywhere 
  5.16  within the state in the manner provided by law.  Proof of 
  5.17  service under this subdivision must be filed with the court 
  5.18  administrator.  If the summons is not properly served and proof 
  5.19  of service filed within 60 days after issuance of the summons, 
  5.20  the action must be dismissed without prejudice. 
  5.21     When a court administrator the plaintiff is required to 
  5.22  summon the defendant by certified mail under this paragraph, the 
  5.23  summons may be made by personal service in the manner provided 
  5.24  in the rules of civil procedure for personal service of a 
  5.25  summons of the district court as an alternative to service by 
  5.26  certified mail.  
  5.27     Sec. 8.  [491A.04] [ORDER FOR WITHHOLDING OF TAX REFUND 
  5.28  FROM CONCILIATION COURT JUDGMENT DEBTOR.] 
  5.29     Subdivision 1.  [PETITION.] (a) A conciliation court 
  5.30  judgment creditor may petition the district court for an order 
  5.31  providing that the amount of an unsatisfied conciliation court 
  5.32  judgment be withheld from any tax refund due the judgment debtor 
  5.33  as provided in chapter 270A, if: 
  5.34     (1) the judgment debtor is a natural person; 
  5.35     (2) the judgment has been transcribed and docketed in 
  5.36  district court; 
  6.1      (3) the judgment debtor disclosure form was mailed under 
  6.2   section 491A.02, subdivision 9, and either 30 days have elapsed 
  6.3   since the judgment debtor returned the form or the judgment 
  6.4   debtor failed to return the form within the required time; and 
  6.5      (4) the amount of the unsatisfied judgment is at least 
  6.6   $200, exclusive of costs. 
  6.7      (b) The petition served on the judgment debtor must include 
  6.8   a notice that the debtor may claim an exemption from issuance of 
  6.9   an order under this section if all of the debtor's earnings 
  6.10  would be exempt under section 550.37, subdivision 13, or if the 
  6.11  debtor is a recipient of public assistance funds that are exempt 
  6.12  under section 550.37, subdivision 14, or the debtor is a 
  6.13  recipient of food stamps, transitional child care, or 
  6.14  transitional medical assistance.  The notice must include a form 
  6.15  for claiming the exemption, which must be returned to the court 
  6.16  within 14 days of receipt of the notice. 
  6.17     (c) The state court administrator shall prepare a form for 
  6.18  use as a petition under this section that sets out in a sworn 
  6.19  affidavit a statement that the requirements of paragraph (a) are 
  6.20  satisfied and includes the notice required under paragraph (b).  
  6.21  The state court administrator shall establish procedures to 
  6.22  notify judgment creditors of the option of obtaining an order 
  6.23  under this section.  The court administrator shall make the form 
  6.24  available upon request.  
  6.25     Subd. 2.  [ORDER; FEES AND INTEREST.] If the judgment 
  6.26  debtor claims an exemption and the judgment creditor objects, 
  6.27  either party may petition the court for a hearing.  If the court 
  6.28  finds after a hearing that the requirements of subdivision 1 are 
  6.29  met and the debtor has not disclosed an exemption under 
  6.30  subdivision 1, paragraph (b), or is not entitled to an 
  6.31  exemption, the court shall order that the judgment be withheld 
  6.32  from any tax refund due the judgment debtor and forward the 
  6.33  order to the department of revenue.  The order shall include any 
  6.34  fees and costs allowed by law to be added to the judgment and 
  6.35  any interest that has accrued as of the effective date of the 
  6.36  order, but no additional interest may accrue on the judgment.  
  7.1   If the total amount due is not satisfied, interest will continue 
  7.2   to accrue on the district court judgment from the date of 
  7.3   docketing.  The court is not liable for inaccurate information 
  7.4   provided by the judgment creditor to the court.  
  7.5      Subd. 3.  [REMEDY EXCLUSIVE.] The judgment creditor may not 
  7.6   use other collection remedies while an order under this section 
  7.7   is in effect and the court may not issue any other writ of 
  7.8   execution or garnishment.  If at any time the creditor chooses 
  7.9   to cancel the withholding order under this section to pursue 
  7.10  other collection remedies, a petition to cancel the order and 
  7.11  proposed ex parte order must be filed with the court.  The 
  7.12  procedures in subdivisions 1 and 2 must be followed and the 
  7.13  filing fee paid for each time the judgment creditor petitions 
  7.14  the court to obtain a withholding order under this section.  An 
  7.15  order under this section is valid at the department of revenue 
  7.16  for six years.  
  7.17     Subd. 4.  [PAYMENT AND ENTRY OF SATISFACTION OF JUDGMENT.] 
  7.18  Upon receipt of money withheld under chapter 270A, the court 
  7.19  administrator shall transmit the payment to the judgment 
  7.20  creditor and enter partial or full satisfaction of the judgment 
  7.21  in the court's records.  Upon filing by the judgment creditor of 
  7.22  a signed partial or full satisfaction of judgment with the 
  7.23  court, the court administrator's office shall inform the 
  7.24  department of revenue of that satisfaction.  
  7.25     Subd. 5.  [FILING FEE.] The fee for filing a petition under 
  7.26  this section is $40.  The filing fee shall be transmitted to the 
  7.27  state treasurer for deposit in the state treasury and credited 
  7.28  to the general fund.  The fee payable to the commissioner of 
  7.29  revenue must be deducted from any setoff under chapter 270A 
  7.30  before it is transmitted to the court. 
  7.31     Subd. 6.  [APPLICATION.] This section is effective July 1, 
  7.32  2000, in the second judicial district and July 1, 2002, in the 
  7.33  remaining judicial districts.  This section applies to 
  7.34  conciliation court judgments that are entered on or after its 
  7.35  effective date in a judicial district.  
  7.36     Sec. 9.  [EVALUATION.] 
  8.1      The state court administrator, in consultation with the 
  8.2   commissioner of revenue, shall evaluate the use of the Revenue 
  8.3   Recapture Act for the collection of conciliation court judgments 
  8.4   in the second judicial district and report to the legislature by 
  8.5   January 15, 2002.  The state court administrator shall also 
  8.6   consult with representatives of the Minnesota association of 
  8.7   court administration to evaluate possible changes in the program 
  8.8   and resource needs for statewide implementation. 
  8.9      Sec. 10.  [APPROPRIATION.] 
  8.10     $200,000 is appropriated from the general fund to the 
  8.11  supreme court for purposes of sections 8 and 9, to be available 
  8.12  until June 30, 2001.