1.1                          A bill for an act 
  1.2             relating to commerce; regulating safe deposit 
  1.3             companies; modifying collateral requirements 
  1.4             applicable to depositories of local public funds; 
  1.5             regulating dishonored checks; amending Minnesota 
  1.6             Statutes 2002, sections 55.15; 604.113, subdivision 2; 
  1.7             Minnesota Statutes 2003 Supplement, section 118A.03, 
  1.8             subdivision 2. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2002, section 55.15, is 
  1.11  amended to read: 
  1.12     55.15 [APPLICATION.] 
  1.13     This chapter shall not be held or construed as limiting, 
  1.14  restricting, or in any way affecting the operation or management 
  1.15  of safe deposit boxes or vaults, or a safe deposit business, by 
  1.16  any savings bank, bank, credit union, or trust company.  If any 
  1.17  bank, savings bank, credit union, or trust company elects to 
  1.18  transact the business of a safe deposit company under the 
  1.19  provisions of this chapter, it shall so notify the commissioner 
  1.20  of commerce and thereafter the provisions of sections 55.02 and 
  1.21  55.10 to 55.12 shall apply to such safe deposit business and 
  1.22  said bank, savings bank, credit union, or trust company shall 
  1.23  have the benefit thereof.  The provisions of sections 55.03 to 
  1.24  55.08 and the provisions of section 55.095 shall not apply to a 
  1.25  bank, savings bank, credit union, or trust company carrying on 
  1.26  the business of a safe deposit company. 
  1.27     Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  2.1   118A.03, subdivision 2, is amended to read: 
  2.2      Subd. 2.  [IN LIEU OF SURETY BOND.] The following are the 
  2.3   allowable forms of collateral in lieu of a corporate surety bond:
  2.4      (1) United States government treasury bills, treasury 
  2.5   notes, treasury bonds; 
  2.6      (2) issues of United States government agencies and 
  2.7   instrumentalities as quoted by a recognized industry quotation 
  2.8   service available to the government entity; 
  2.9      (3) general obligation securities of any state or local 
  2.10  government with taxing powers which is rated "A" or better by a 
  2.11  national bond rating service, or revenue obligation securities 
  2.12  of any state or local government with taxing powers which is 
  2.13  rated "AA" or better by a national bond rating service; 
  2.14     (4) unrated general obligation securities of a local 
  2.15  government with taxing powers may be pledged as collateral 
  2.16  against funds deposited by that same local government entity; 
  2.17     (5) irrevocable standby letters of credit issued by Federal 
  2.18  Home Loan Banks to a municipality accompanied by written 
  2.19  evidence that the bank's public debt is rated "AA" or better by 
  2.20  Moody's Investors Service, Inc., or Standard & Poor's 
  2.21  Corporation; and 
  2.22     (6) time deposits that are fully insured by the Federal 
  2.23  Deposit Insurance Corporation any federal agency. 
  2.24     Sec. 3.  Minnesota Statutes 2002, section 604.113, 
  2.25  subdivision 2, is amended to read: 
  2.26     Subd. 2.  [ACTS CONSTITUTING.] Whoever issues any check 
  2.27  that is dishonored is liable for the following penalties: 
  2.28     (a) A service charge, not to exceed $30, may be imposed 
  2.29  immediately on any dishonored check by the payee or holder of 
  2.30  the check, regardless of mailing a notice of dishonor, if notice 
  2.31  of the service charge was conspicuously displayed on the 
  2.32  premises when the check was issued.  If a law enforcement agency 
  2.33  obtains payment of a dishonored check on behalf of the payee or 
  2.34  holder, up to the entire amount of the service charge may be 
  2.35  retained by the law enforcement agency for its expenses.  Only 
  2.36  one service charge may be imposed under this paragraph for each 
  3.1   dishonored check.  The displayed notice must also include a 
  3.2   provision notifying the issuer of the check that civil penalties 
  3.3   may be imposed for nonpayment. 
  3.4      (b) If the amount of the dishonored check is not paid 
  3.5   within 30 days after the payee or holder has mailed notice of 
  3.6   dishonor pursuant to section 609.535 and a description of the 
  3.7   penalties contained in this subdivision, whoever issued the 
  3.8   dishonored check is liable to the payee or holder of the check 
  3.9   for: 
  3.10     (1) the amount of the check, the service charge as provided 
  3.11  in paragraph (a), plus a civil penalty of up to $100 or the 
  3.12  value of the check, whichever is greater.  In determining the 
  3.13  amount of the penalty, the court shall consider the amount of 
  3.14  the check and the reason for nonpayment.  The civil penalty may 
  3.15  not be imposed until 30 days following the mailing of the notice 
  3.16  of dishonor.  A payee or holder of the check may make a written 
  3.17  demand for payment of the civil liability by sending a copy of 
  3.18  this section and a description of the liability contained in 
  3.19  this section to the issuer's last known address.  Notice as 
  3.20  provided in paragraph (a) must also include notification that 
  3.21  additional civil penalties will be imposed for dishonored checks 
  3.22  for nonpayment after 30 days; 
  3.23     (2) interest at the rate payable on judgments pursuant to 
  3.24  section 549.09 on the face amount of the check from the date of 
  3.25  dishonor; and 
  3.26     (3) reasonable attorney fees if the aggregate amount of 
  3.27  dishonored checks issued by the issuer to all payees within a 
  3.28  six-month period is over $1,250. 
  3.29     (c) This subdivision prevails over any provision of law 
  3.30  limiting, prohibiting, or otherwise regulating service charges 
  3.31  authorized by this subdivision, but does not nullify charges for 
  3.32  dishonored checks, which do not exceed the charges in paragraph 
  3.33  (a) or terms or conditions for imposing the charges which have 
  3.34  been agreed to by the parties in an express contract. 
  3.35     (d) A sight draft may not be used as a means of collecting 
  3.36  the civil penalties provided in this section without prior 
  4.1   consent of the issuer. 
  4.2      (e) The issuer of a dishonored check is not liable for the 
  4.3   penalties described in paragraph (b) if a pretrial diversion 
  4.4   program under section 628.69 has been established in the 
  4.5   jurisdiction where the dishonored check was issued, the issuer 
  4.6   was accepted into the program, and the issuer successfully 
  4.7   completes the program.