1.1 	 A bill for an act
1.2 	relating to commerce; providing an expedited process for the judicial review 
1.3 	of financing statements; establishing civil and criminal liability for fraudulent 
1.4 	or otherwise improper financing statements; proposing coding for new law in 
1.5 	Minnesota Statutes, chapters 545; 604; 609.
1.6 	 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. [545.05] EXPEDITED PROCESS TO REVIEW AND DETERMINE 
1.8 	THE EFFECTIVENESS OF FINANCING STATEMENTS.
1.9 		Subdivision 1. Definitions. (a) As used in this section, a financing statement or 
1.10 	other record is fraudulent or otherwise improper if it is filed without the authorization of 
1.11 	the obligor, person named as debtor, or owner of collateral described or indicated in 
1.12 	the financing statement or other record, or by consent of an agent, fiduciary, or other 
1.13 	representative of that person or without the consent of the secured party of record in 
1.14 	the case of an amendment or termination.
1.15 	(b) As used in this section, filing office or filing officer refers to the office or officer 
1.16 	where a financing statement or other record is appropriately filed or recorded as provided 
1.17 	by law, including, but not limited to, the county recorder, the secretary of state, and other 
1.18 	related filing officers.
1.19 		Subd. 2. Motion. An obligor, person named as a debtor, or owner of collateral 
1.20 	described or indicated in a financing statement or other record filed under sections 
1.21 	336.9-101 to 336.9-709 (Uniform Commercial Code - Secured Transactions), who 
1.22 	has reason to believe that the financing statement or other record is fraudulent or 
1.23 	otherwise improper may complete and file at any time a motion for judicial review of the 
1.24 	effectiveness of the financing statement or other record. A secured party of record who 
2.1 	believes that an amendment or termination of a financing statement or other record is 
2.2 	fraudulent or otherwise improper may also file a motion. 
2.3 		Subd. 3.Service and filing. (a) The motion under subdivision 2 must be mailed 
2.4 	by certified United States mail to the person who is indicated as the secured party on 
2.5 	the allegedly fraudulent or improper record at the address listed on the record or, in the 
2.6 	case of a filing by the secured party of record, to the address of the person who filed 
2.7 	the amendment or termination in question, as listed on the record. The motion must be 
2.8 	accompanied by a copy of the record in question, an affidavit of mailing, the form for 
2.9 	responding to the motion under subdivision 6, and a copy of the text of this section.
2.10 	(b) On the day the motion is mailed, a copy of the materials must be filed with the 
2.11 	district court of the county in which the financing statement or other record has been filed 
2.12 	or in the county of residence of the moving party.  The motion must be supported by 
2.13 	the affidavit of the moving party or the moving party's attorney setting forth a concise 
2.14 	statement of the facts upon which the claim for relief is based. There is no filing fee for a 
2.15 	motion or a response filed under this section. 
2.16 		Subd. 4.Motion form.  The motion must be in substantially the following form:
2.17 	 In Re:  A Purported  Financing Statement in the district court of                     ............. County, 
2.18 	                 Minnesota,  Against  [Name of person who filed the financing statement] 
2.19 	MOTION FOR JUDICIAL REVIEW OF A FINANCING STATEMENT FILED 
2.20 	UNDER THE UNIFORM COMMERCIAL CODE - SECURED TRANSACTIONS 
2.21 	 .................................... (name of moving party) files this motion requesting a judicial 
2.22 	determination of the effectiveness of a financing statement or other record filed under the 
2.23 	Uniform Commercial Code - Secured Transactions in the office of the ............... (filing 
2.24 	office and location) and in support of the motion provides as follows:
2.25 	I.
2.26 	 ................. (name), the moving party, is the [obligor, person named as a debtor, or 
2.27 	owner of collateral described or indicated in] [secured party of record listed in] a financing 
2.28 	statement or other record filed under the Uniform Commercial Code.
2.29 	II.
2.30 	 On ............. (date), in the exercise of the filing officer's official duties as .................. 
2.31 	(filing officer's position), the filing officer received and filed or recorded the financing 
2.32 	statement or other record, a copy which is attached, that purports to [perfect a security 
2.33 	interest against the obligor, person named as debtor, or the owner of collateral described or 
2.34 	indicated in the financing statement or other record] or [amend or terminate the financing 
2.35 	statement in which the moving party is listed as the secured party of record].
2.36 	III.
3.1 	The moving party alleges that the financing statement or other record is fraudulent 
3.2 	or otherwise improper and that this court should declare the financing statement or other 
3.3 	record ineffective.
3.4 	IV.
3.5 	The moving party attests that the assertions in this motion are true and correct.
3.6 	V.
3.7 	The moving party does not request the court to make a finding as to any underlying 
3.8 	claim of the parties involved and acknowledges that this motion does not seek review of 
3.9 	an effective financing statement.  The moving party further acknowledges that the moving 
3.10 	party may be subject to sanctions if this motion is determined to be frivolous.  The moving 
3.11 	party may be contacted by the respondent at:
3.12 	Mailing Address: (required) 
3.13 	Telephone Number:
3.14 	Facsimile Number: (either facsimile or e-mail contact is required) 
3.15 	E-Mail Address: (either facsimile or e-mail contact is required) 
3.16 	REQUEST FOR RELIEF
3.17 	The moving party requests the court to review the attached documentation and enter 
3.18 	an order finding that the financing statement or other record is ineffective together with 
3.19 	other findings as the court deems appropriate.
3.20 	Respectfully submitted, .......................... (Signature and typed name and address).
3.21 		Subd. 5.Motion acknowledgment form. The form for the certificate of 
3.22 	acknowledgment must be substantially as follows:
3.23 	AFFIDAVIT 
3.24 	THE STATE OF MINNESOTA    COUNTY OF .......
3.25 	BEFORE ME, the undersigned authority, personally appeared ........., who, being by 
3.26 	me duly sworn, deposed as follows:
3.27 	"My name is ...............  I am over 18 years of age, of sound mind, with personal 
3.28 	knowledge of the following facts, and fully competent to testify.
3.29 	I attest that the assertions contained in the accompanying motion are true and 
3.30 	correct." 
3.31 	SUBSCRIBED and SWORN TO before me, this ..... day of ..................
3.32 	NOTARY PUBLIC, State of [state name] 
3.33 	Notary's printed name:  .........................
3.34 	My commission expires:  .........................
4.1 	The motion must be supported by the affidavit of the moving party or the moving 
4.2 	party's attorney setting forth a concise statement of the facts upon which the claim for 
4.3 	relief is based.
4.4 		Subd. 6.Motion affidavit of mailing form. The moving party shall complete an 
4.5 	affidavit of mailing the motion to the court and to the respondent in substantially the 
4.6 	following form:
4.7 	State of Minnesota  
4.8 	County of .......... 
4.9 	............................, the moving party, being duly sworn, on oath, deposes and says 
4.10 	that on the ..... day of .........., ......., the moving party mailed the motion to the court and 
4.11 	the respondent by placing a true and correct copy of the motion in an envelope addressed 
4.12 	to them as shown by certified United States mail at ............................, Minnesota.
4.13 	Subscribed and sworn to before me this ..... day of ...................., .......
4.14 		Subd. 7.Response form. The person listed as [the secured party in] [filing] the 
4.15 	record for which the moving party has requested review may respond to the motion and 
4.16 	accompanying materials to request an actual hearing within 20 days from the mailing by 
4.17 	certified United States mail by the moving party. The form for use by the person listed as 
4.18 	[the secured party in] [filing] the record in question to respond to the motion for judicial 
4.19 	review must be in substantially the following form:
4.20 	In Re:  A Purported  Financing Statement in the district court                              of ............. County, 
4.21 	                 Minnesota,  Against  [Name of person who filed the financing statement] 
4.22 	RESPONSE TO MOTION FOR JUDICIAL REVIEW OF A FINANCING 
4.23 	STATEMENT FILED UNDER THE UNIFORM COMMERCIAL CODE 
4.24 	- SECURED TRANSACTIONS 
4.25 	 ............................ (name) files this response to a motion requesting a judicial 
4.26 	determination of the effectiveness of a financing statement or other record filed under the 
4.27 	Uniform Commercial Code - Secured Transactions in the office of the ............... (filing 
4.28 	office and location) and in support of the motion provides as follows:
4.29 	I.
4.30 	 ................. (name), the respondent, is the person listed as [the secured party in] 
4.31 	[filing] the record for which review has been requested by the moving party.
4.32 	II.
4.33 	On ............. (date), in the exercise of the filing officer's official duties as .................. 
4.34 	(filing officer's position), the filing officer received and filed or recorded the financing 
4.35 	statement or other record, a copy which is attached, that purports to [perfect a security 
4.36 	interest against] [amend or terminate a record filed by] the moving party.
5.1 	III.
5.2 	Respondent states that the financing statement or other record is not fraudulent 
5.3 	or otherwise improper and that this court should not declare the financing statement or 
5.4 	other record ineffective.
5.5 	IV.
5.6 	Respondent attests that assertions in this response are true and correct.
5.7 	V.
5.8 	Respondent does not request the court to make a finding as to any underlying claim 
5.9 	of the parties involved.  Respondent further acknowledges that respondent may be subject 
5.10 	to sanctions if this response is determined to be frivolous.
5.11 	REQUEST FOR RELIEF
5.12 	Respondent requests the court to review the attached documentation, to set a hearing 
5.13 	for no later than five days after the date of this response or as soon after that as the court 
5.14 	shall order and to enter an order finding that the financing statement or other record is 
5.15 	not ineffective together with other findings as the court deems appropriate. Respondent 
5.16 	may be contacted at:
5.17 	 Mailing Address: (required) 
5.18 	 Telephone Number:
5.19 	 Facsimile Number: (either facsimile or e-mail contact is required) 
5.20 	 E-Mail Address: (either facsimile or e-mail contact is required) 
5.21 	 Respectfully submitted, .........................
5.22 	 (Signature and typed name and address).
5.23 		Subd. 8.Response acknowledgment form. The form for the certificate of 
5.24 	acknowledgment must be substantially as follows:
5.25 	AFFIDAVIT 
5.26 	THE STATE OF MINNESOTA    COUNTY OF .......
5.27 	BEFORE ME, the undersigned authority, personally appeared ........., who, being by 
5.28 	me duly sworn, deposed as follows:
5.29 	"My name is ...............  I am over 18 years of age, of sound mind, with personal 
5.30 	knowledge of the following facts, and fully competent to testify.
5.31 	I attest that the assertions contained in the accompanying motion are true and 
5.32 	correct." 
5.33 	SUBSCRIBED and SWORN TO before me, this ..... day of ..................
5.34 	NOTARY PUBLIC, State of [state name] 
5.35 	Notary's printed name:  .........................
6.1 	My commission expires:  .........................
6.2 		Subd. 9.Response affidavit of mailing form. Respondent shall submit the 
6.3 	response by United States mail to both the court and the moving party, and also by either 
6.4 	e-mail or facsimile as provided by the moving party. The respondent shall complete an 
6.5 	affidavit of mailing the response to the court and to the moving party in substantially 
6.6 	the following form:
6.7 	State of Minnesota
6.8 	County of .......... 
6.9 	 ............................, being the responding party, being duly sworn, on oath, deposes 
6.10 	and says that on the ..... day of .........., ......., respondent mailed the response to court 
6.11 	and the moving party by placing a true and correct copy of the response in an envelope 
6.12 	addressed to them as shown depositing the same with postage prepaid, in the U.S. Mail 
6.13 	at ............................, Minnesota.
6.14 	Subscribed and sworn to before me this ..... day of ...................., .......
6.15 		Subd. 10.Hearing. (a) If a hearing is timely requested, the court shall hold that 
6.16 	hearing within five days after the mailing of the response by the respondent or as soon 
6.17 	after that as ordered by the court.  After the hearing, the court shall enter appropriate 
6.18 	findings of fact and conclusions of law regarding the financing statement or other record 
6.19 	filed under the Uniform Commercial Code. 
6.20 	 (b) If a hearing request under subdivision 7 is not received by the court by the 
6.21 	20th day following the mailing of the original motion, the court's finding may be made 
6.22 	solely on a review of the documentation attached to the motion and without hearing any 
6.23 	testimonial evidence.  After that review, which must be conducted no later than five days 
6.24 	after the 20-day period has expired, the court shall enter appropriate findings of fact and 
6.25 	conclusions of law as provided in subdivision 11 regarding the financing statement or 
6.26 	other record filed under the Uniform Commercial Code. 
6.27 	(c) A copy of the findings of fact and conclusions of law must be sent to the moving 
6.28 	party, the respondent, and the person who filed the financing statement or other record at 
6.29 	the address listed in the motion or response of each person within seven days of the date 
6.30 	that the findings of fact and conclusions of law are issued by the court.
6.31 	(d) In all cases, the moving party shall file or record an attested copy of the findings 
6.32 	of fact and conclusions of law in the filing office in the appropriate class of records in 
6.33 	which the original financing statement or other record was filed or recorded.  The filing 
6.34 	officer shall not collect a filing fee for filing a court's finding of fact and conclusion of 
6.35 	law as provided in this section except as specifically directed by the court in its findings 
6.36 	and conclusions.  
7.1 		Subd. 11.Order form; no hearing. The findings of fact and conclusion of law 
7.2 	for an expedited review where no hearing has been requested must be in substantially 
7.3 	the following form:
7.4 	MISCELLANEOUS DOCKET No.  ...........
7.5 	In Re:  A purported  Financing Statement in the district court of ........... ................ 
7.6 	County,                           Minnesota, Against  [Name of person who filed financing statement] 
7.7 	Judicial Finding of Fact and Conclusion of Law Regarding a Financing Statement or 
7.8 	Other Record Filed Under the Uniform Commercial Code - Secured Transactions 
7.9 	On the (number) day of (month), (year), in the above entitled and numbered cause, 
7.10 	this court reviewed a motion, verified by affidavit, of (name) and the documentation 
7.11 	attached.  The respondent did not respond within the required 20-day period.  No testimony 
7.12 	was taken from any party, nor was there any notice of the court's review, the court 
7.13 	having made the determination that a decision could be made solely on review of the 
7.14 	documentation as provided in Minnesota Statutes, section 545.05.
7.15 	The court finds as follows (only an item or subitem checked and initialed is a valid 
7.16 	court ruling):
7.17 	[..] The documentation attached to the motion IS filed or recorded with the 
7.18 	authorization of the obligor, person named as debtor, or owner of collateral described or 
7.19 	indicated in the financing statement or other record, or by consent of an agent, fiduciary, or 
7.20 	other representative of that person, or with the authorization of the secured party of record 
7.21 	in the case of an amendment or termination.
7.22 	[..] The documentation attached to the motion IS NOT filed or recorded with the 
7.23 	authorization of the obligor, person named as debtor, or owner of collateral described or 
7.24 	indicated in the documentation, or by consent of an agent, fiduciary, or other representative 
7.25 	of that person, or with the authorization of the secured party of record in the case of an 
7.26 	amendment or termination and, IS NOT an effective financing statement or other record 
7.27 	under the Uniform Commercial Code - Secured Transactions law of this state.
7.28 	[..] This court makes no finding as to any underlying claims of the parties involved 
7.29 	and expressly limits its findings of fact and conclusions of law to the review of a 
7.30 	ministerial act. The filing officer shall remove the subject financing statement or other 
7.31 	record so that the record is not reflected in or obtained as a result of any search, standard 
7.32 	or otherwise, conducted of those records, but shall retain them and these findings of fact 
7.33 	and conclusions of law in the filing office for the duration of the period for which they 
7.34 	would have otherwise been filed.
7.35 	SIGNED ON THIS THE ...... DAY of .......
7.36 	............. District Judge 
8.1 	............. District 
8.2 	............. County, Minnesota 
8.3 		Subd. 12.Hearing determination. If a determination is made after a hearing, the 
8.4 	court may award the prevailing party all costs related to the entire review, including, but 
8.5 	not limited to, filing fees, attorney fees, administrative costs, and other costs. 
8.6 		Subd. 13.Subsequent motion. If the moving party files a subsequent motion under 
8.7 	this section against a person filing a financing statement or other record that is reviewed 
8.8 	under this section and found to be filed or recorded with the authorization of the obligor, 
8.9 	person named as debtor, or owner of collateral described or indicated in the financing 
8.10 	statement or other record, or by consent of an agent, fiduciary, or other representative of 
8.11 	that person, or with the authorization of the secured party of record in the case of an 
8.12 	amendment or termination, the court may, in addition to assessing costs, order other 
8.13 	equitable relief against the moving party or enter other sanctions against the moving party.
8.14 		Subd. 14.Judicial officers. The chief judge of a district court may order that any 
8.15 	or all proceedings under this section be conducted and heard by other judicial officers of 
8.16 	that district court.

8.17 	Sec. 2. [604.18] CIVIL LIABILITY FOR FRAUDULENT OR OTHERWISE 
8.18 	IMPROPER FINANCING STATEMENTS.
8.19 		Subdivision 1.Definitions. For purposes of this section:
8.20 	(1) "financing statement" has the meaning given in section 336.9-102(a) of the 
8.21 	Uniform Commercial Code; and 
8.22 	(2) "filing officer" is defined as Uniform Commercial Code filing officer in each 
8.23 	jurisdiction.
8.24 		Subd. 2.Liability. (a) A person shall not knowingly cause to be presented for filing 
8.25 	or promote the filing of a financing statement that the person knows:
8.26 	(1) is forged;
8.27 	(2) is not:
8.28 	(i) related to a valid lien or security agreement; or 
8.29 	(ii) filed pursuant to section 336.9-502(d); and 
8.30 	(3) is for an improper purpose or purposes, such as to harass, hinder, defraud, or 
8.31 	otherwise interfere with any person.
8.32 	(b) A person who violates paragraph (a) is liable to each injured person for:
8.33 	(1) the greater of:
8.34 	(i) nominal damages up to $10,000; or 
8.35 	(ii) the actual damages caused by the violation;
9.1 	(2) court costs;
9.2 	(3) reasonable attorney fees;
9.3 	(4) related expenses of bringing the action, including investigative expenses; and 
9.4 	(5) exemplary damages in the amount determined by the court.
9.5 		Subd. 3.Cause of action. (a) The following persons may bring an action to enjoin 
9.6 	violation of this section or to recover damages under this section:
9.7 	(1) the obligor, the person named as the debtor, any person who owns an interest 
9.8 	in the collateral described or indicated in the financing statement, or any person harmed 
9.9 	by the filing of the financing statement;
9.10 	(2) the attorney general;
9.11 	(3) a county attorney;
9.12 	(4) a city attorney; and 
9.13 	(5) a person who has been damaged as a result of an action taken in reliance on the 
9.14 	filed financing statement.
9.15 	(b) A filing officer may refer a matter to the attorney general or other appropriate 
9.16 	person for filing the legal actions under this section.
9.17 		Subd. 4.Venue. An action under this section may be brought in any district court in 
9.18 	the county in which the financing statement is presented for filing or in a county where 
9.19 	any of the persons named in subdivision 3, paragraph (a), clause (1), resides.
9.20 		Subd. 5.Filing fee. (a) The fee for filing an action under this chapter is $.......  The 
9.21 	plaintiff must pay the fee to the clerk of the court in which the action is filed.  Except as 
9.22 	provided by paragraph (b), the plaintiff may not be assessed any other fee, cost, charge, or 
9.23 	expense by the clerk of the court or other public official in connection with the action.
9.24 	(b) The fee for service of notice of an action under this section charged to the 
9.25 	plaintiff may not exceed:
9.26 	(1) $....... if the notice is delivered in person; or 
9.27 	(2) the cost of postage if the service is by registered or certified mail.
9.28 	(c) A plaintiff who is unable to pay the filing fee and fee for service of notice may file 
9.29 	with the court an affidavit of inability to pay under the Minnesota Rules of Civil Procedure.
9.30 	(d) If the fee imposed under paragraph (a) is less than the filing fee the court imposes 
9.31 	for filing other similar actions and the plaintiff prevails in the action, the court may order a 
9.32 	defendant to pay to the court the differences between the fee paid under paragraph (a) and 
9.33 	the filing fee the court imposes for filing other similar actions.
9.34 		Subd. 6.Other remedies. (a) An obligor, person named as a debtor,  owner of 
9.35 	collateral, or any other person harmed by the filing of a financing statement in violation of 
9.36 	subdivision 2, paragraph (a), also may request specific relief, including, but not limited 
10.1 	to, terminating the financing statement and removing the debtor named in the financing 
10.2 	statement from the index under the provisions of section 545.05, paragraph (c), such that it 
10.3 	will not appear in a search under that debtor name.
10.4 	(b) This law is cumulative of other law under which a person may obtain judicial 
10.5 	relief with respect to any filed or recorded document.

10.6 	Sec. 3. [609.7475] FRAUDULENT OR OTHERWISE IMPROPER FINANCING 
10.7 	STATEMENTS.
10.8 		Subdivision 1.Definition. As used in this section, "record" has the meaning given 
10.9 	in section 336.9-102.
10.10 		Subd. 2.Crime described.  A person who: 
10.11 	(1) knowingly causes to be presented for filing or promotes the filing of a record that:
10.12 	(i) is not:
10.13 	(A)  related to a valid lien or security agreement; or
10.14 	(B) filed pursuant to section 336.9-502(d); or
10.15 	(ii) contains a forged signature or is based upon a document containing a forged 
10.16 	signature; or
10.17 	(2) presents for filing or causes to be presented for filing a record with the intent that 
10.18 	it be used to harass or defraud any other person;
10.19 	is guilty of a crime and may be sentenced as provided in subdivision 3.
10.20 		Subd. 3.Penalties. (a) Except as provided in paragraph (b), a person who violates 
10.21 	subdivision 2 is guilty of a gross misdemeanor.
10.22 	(b) A person who violates subdivision 2 is guilty of a felony and may be sentenced 
10.23 	to imprisonment for not more than five years or to payment of a fine of not more than 
10.24 	$10,000, or both, if the person: 
10.25 	(1) commits the offense with intent to influence or otherwise tamper with a juror or a 
10.26 	judicial proceeding or with intent to retaliate against a judicial officer, as defined in section 
10.27 	609.415, or a prosecutor, defense attorney, or officer of the court, because of that person's 
10.28 	performance of official duties in connection with a judicial proceeding; or
10.29 	(2) commits the offense after having been previously convicted of a violation 
10.30 	of this section.
10.31 		Subd. 4.Venue. A violation of this section may be prosecuted in either the county 
10.32 	of residence of the individual listed as debtor or the county in which the filing is made.

10.33 	EFFECTIVE DATE. This section is effective August 1, 2006, and applies to crimes 
10.34 	committed on or after that date.

11.1 	Sec. 4. EFFECTIVE DATE.
 11.2 	Sections 1 and 2 are effective the day following final enactment.