1.1                          A bill for an act 
  1.2             relating to civil actions; changing civil penalties 
  1.3             for issuing checks that are dishonored; providing 
  1.4             civil remedies for receiving motor fuel from a motor 
  1.5             fuel retail business without paying for it; amending 
  1.6             Minnesota Statutes 2000, section 332.50; proposing 
  1.7             coding for new law in Minnesota Statutes, chapter 332. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2000, section 332.50, is 
  1.10  amended to read: 
  1.11     332.50 [CIVIL LIABILITY FOR ISSUANCE OF WORTHLESS CHECK.] 
  1.12     Subdivision 1.  [DEFINITIONS.] (a) The definitions provided 
  1.13  in this subdivision apply to this section. 
  1.14     (b) "Check" means a check, draft, order of withdrawal, or 
  1.15  similar negotiable or nonnegotiable instrument.  
  1.16     (c) "Credit" means an arrangement or understanding with the 
  1.17  drawee for the payment of the check. 
  1.18     (d) "Dishonor" has the meaning given in section 336.3-502, 
  1.19  but does not include dishonor due to a stop payment order 
  1.20  requested by an issuer who has a good faith defense to payment 
  1.21  on the check.  "Dishonor" does include a stop payment order 
  1.22  requested by an issuer if the account did not have sufficient 
  1.23  funds for payment of the check at the time of presentment, 
  1.24  except for stop payment orders on a check found to be stolen.  
  1.25     (e) "Payee" or "holder" includes an agent of the payee or 
  1.26  holder. 
  2.1      Subd. 2.  [ACTS CONSTITUTING.] Whoever issues any check 
  2.2   that is dishonored is liable for the following penalties: 
  2.3      (a) A service charge of up to $20, or actual costs of 
  2.4   collection, not to exceed $30, may be imposed immediately on any 
  2.5   dishonored check by the payee or holder of the check, regardless 
  2.6   of mailing a notice of dishonor, if notice of the service charge 
  2.7   was conspicuously displayed on the premises when the check was 
  2.8   issued.  If a law enforcement agency obtains payment of a 
  2.9   dishonored check, a service charge not to exceed $25 may be 
  2.10  imposed if the service charge is retained by the law enforcement 
  2.11  agency for its expenses.  Only one service charge may be imposed 
  2.12  under this paragraph for each dishonored check.  The displayed 
  2.13  notice must also include a provision notifying the issuer of the 
  2.14  check that civil penalties may be imposed for nonpayment. 
  2.15     (b) If the amount of the dishonored check is not paid 
  2.16  within 30 days after the payee or holder has mailed notice of 
  2.17  dishonor pursuant to section 609.535 and a description of the 
  2.18  penalties contained in this subdivision, whoever issued the 
  2.19  dishonored check is liable to the payee or holder of the check 
  2.20  for: 
  2.21     (1) the amount of the check, the service charge as provided 
  2.22  in paragraph (a), plus a civil penalty of up to $100 or the 
  2.23  value of the check, whichever is greater.  In determining the 
  2.24  amount of the penalty, the court shall consider the amount of 
  2.25  the check and the reason for nonpayment.  The civil penalty may 
  2.26  not be imposed until 30 days following the mailing of the notice 
  2.27  of dishonor.  A payee or holder of the check may make a written 
  2.28  demand for payment of the civil liability by sending a copy of 
  2.29  this section and a description of the liability contained in 
  2.30  this section to the issuer's last known address.  Notice as 
  2.31  provided in paragraph (a) must also include notification that 
  2.32  additional civil penalties will be imposed for dishonored checks 
  2.33  for nonpayment after 30 days; 
  2.34     (2) interest at the rate payable on judgments pursuant to 
  2.35  section 549.09 on the face amount of the check from the date of 
  2.36  dishonor; and 
  3.1      (3) reasonable attorney fees if the aggregate amount of 
  3.2   dishonored checks issued by the issuer to all payees within a 
  3.3   six-month period is over $1,250. 
  3.4      (c) This subdivision prevails over any provision of law 
  3.5   limiting, prohibiting, or otherwise regulating service charges 
  3.6   authorized by this subdivision, but does not nullify charges for 
  3.7   dishonored checks, which do not exceed the charges in paragraph 
  3.8   (a) or terms or conditions for imposing the charges which have 
  3.9   been agreed to by the parties in an express contract. 
  3.10     (d) A sight draft may not be used as a means of collecting 
  3.11  the civil penalties provided in this section without prior 
  3.12  consent of the issuer. 
  3.13     (e) The issuer of a dishonored check is not liable for the 
  3.14  penalties described in paragraph (b) if a pretrial diversion 
  3.15  program under section 628.69 has been established in the 
  3.16  jurisdiction where the dishonored check was issued, the issuer 
  3.17  was accepted into the program, and the issuer successfully 
  3.18  completes the program. 
  3.19     Subd. 3.  [NOTICE OF DISHONOR REQUIRED.] Notice of 
  3.20  nonpayment or dishonor that includes a citation to this section 
  3.21  and section 609.535, and a description of the penalties 
  3.22  contained in these sections, shall be sent by the payee or 
  3.23  holder of the check to the drawer by certified mail, return 
  3.24  receipt requested, or by regular mail, supported by an affidavit 
  3.25  of service by mailing, to the address printed or written on the 
  3.26  check. 
  3.27     The issuance of a check with an address printed or written 
  3.28  on it is a representation by the drawer that the address is the 
  3.29  correct address for receipt of mail concerning the check.  
  3.30  Failure of the drawer to receive a regular or certified mail 
  3.31  notice sent to that address is not a defense to liability under 
  3.32  this section, if the drawer has had actual notice for 30 days 
  3.33  that the check has been dishonored.  
  3.34     An affidavit of service by mailing shall be retained by the 
  3.35  payee or holder of the check.  
  3.36     Subd. 4.  [PROOF OF IDENTITY.] The check is prima facie 
  4.1   evidence of the identity of the drawer issuer if the person 
  4.2   receiving the check:  
  4.3      (a) records the following information about the drawer 
  4.4   issuer on the check, unless it is printed on the face of the 
  4.5   check:  
  4.6      (1) name; 
  4.7      (2) home or work address; 
  4.8      (3) home or work telephone number; and 
  4.9      (4) identification number issued pursuant to section 
  4.10  171.07; 
  4.11     (b) compares the drawer's issuer's physical appearance, 
  4.12  signature, and the personal information recorded on the check 
  4.13  with the drawer's issuer's identification card issued pursuant 
  4.14  to section 171.07; and 
  4.15     (c) initials the check to indicate compliance with these 
  4.16  requirements.  
  4.17     Subd. 5.  [DEFENSES.] Any defense otherwise available to 
  4.18  the drawer issuer also applies to liability under this section. 
  4.19     Sec. 2.  [332.505] [CIVIL LIABILITY FOR RECEIVING MOTOR 
  4.20  FUEL WITHOUT PAYING.] 
  4.21     Subdivision 1.  [DEFINITIONS.] For purposes of this section:
  4.22     (1) "motor fuel" means a liquid, regardless of its 
  4.23  properties, used to propel a vehicle; 
  4.24     (2) "retailer" means a person that sells motor fuel at 
  4.25  retail; and 
  4.26     (3) "vehicle" means a motor vehicle or watercraft that is 
  4.27  self-propelled and that uses motor fuel for propulsion. 
  4.28     Subd. 2.  [ACTS CONSTITUTING.] (a) The owner of a vehicle 
  4.29  that receives motor fuel that was not paid for is liable to the 
  4.30  retailer for the price of the motor fuel received and a service 
  4.31  charge of up to $20, or the actual costs of collection not to 
  4.32  exceed $30.  This charge may be imposed upon the mailing of the 
  4.33  notice under subdivision 3, if notice of the service charge was 
  4.34  conspicuously displayed on the premises from which the motor 
  4.35  fuel was received.  The notice must include a statement that 
  4.36  civil penalties will be imposed if payment is not received 
  5.1   within 30 days.  Only one service charge may be imposed under 
  5.2   this paragraph for each incident. 
  5.3      (b) If the price of the motor fuel received is not paid 
  5.4   within 30 days after the retailer has mailed notice under 
  5.5   subdivision 3, the owner is liable to the retailer for the price 
  5.6   of the motor fuel received, the service charge as provided in 
  5.7   paragraph (a), plus a civil penalty not to exceed $100 or the 
  5.8   price of the motor fuel, whichever is greater.  The civil 
  5.9   penalty may not be imposed until 30 days after the mailing of 
  5.10  the notice under subdivision 3.  
  5.11     Subd. 3.  [NOTICE OF NONPAYMENT.] Notice of nonpayment that 
  5.12  includes a citation to this section and a description of the 
  5.13  penalties contained in it shall be sent by the retailer to the 
  5.14  owner by regular mail, supported by an affidavit of service by 
  5.15  mailing, to the address indicated by records on the vehicle 
  5.16  under section 86B.401 or 168.346.  The notice must include a 
  5.17  signed statement by the employee who reported the act describing 
  5.18  what the employee observed and the license number of the motor 
  5.19  vehicle, if known.  Failure of the owner to receive a notice is 
  5.20  not a defense to liability under this section. 
  5.21     An affidavit of service by mailing must be retained by the 
  5.22  retailer. 
  5.23     Subd. 4.  [NOTICE OF DISPUTE.] If, within the 30-day period 
  5.24  referred to in subdivision 2, paragraph (b), the owner sends 
  5.25  written notice to the retailer disputing the retailer's claim 
  5.26  that the owner received motor fuel from the retailer without 
  5.27  paying for it, the retailer may collect the price of the motor 
  5.28  fuel and the civil penalties imposed by this section only 
  5.29  pursuant to a judgment rendered by a court of competent 
  5.30  jurisdiction. 
  5.31     Upon receipt of the notice, the retailer shall cease all 
  5.32  collection efforts.  
  5.33     Sec. 3.  [EFFECTIVE DATE; APPLICATION.] 
  5.34     Section 1 is effective August 1, 2001, and applies to 
  5.35  checks issued on or after that date.  Section 2 is effective 
  5.36  August 1, 2001, for causes of action arising on or after that 
  6.1   date.