<a id="pl.1.3"></a><var>1.3</var>amending Minnesota Statutes 2010, section 549.09, subdivisions 1, 2.<br/>
<a id="pl.1.4"></a><var>1.4</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.5"></a><var>1.5</var>    Section 1. Minnesota Statutes 2010, section 549.09, subdivision 1, is amended to read:<br/>
<a id="pl.1.6"></a><var>1.6</var>    Subdivision 1. <b>When owed; rate.</b> (a) When a judgment or award is for the recovery <br/>
<a id="pl.1.7"></a><var>1.7</var>of money, including a judgment for the recovery of taxes, interest from the time of <br/>
<a id="pl.1.8"></a><var>1.8</var>the verdict, award, or report until judgment is finally entered shall be computed by the <br/>
<a id="pl.1.9"></a><var>1.9</var>court administrator or arbitrator as provided in paragraph (c) and added to the judgment <br/>
<a id="pl.1.10"></a><var>1.10</var>or award.<br/>
<a id="pl.1.11"></a><var>1.11</var>(b) Except as otherwise provided by contract or allowed by law, preverdict, <br/>
<a id="pl.1.12"></a><var>1.12</var>preaward, or prereport interest on pecuniary damages shall be computed as provided <br/>
<a id="pl.1.13"></a><var>1.13</var>in paragraph (c) from the time of the commencement of the action or a demand for <br/>
<a id="pl.1.14"></a><var>1.14</var>arbitration, or the time of a written notice of claim, whichever occurs first, except as <br/>
<a id="pl.1.15"></a><var>1.15</var>provided herein. The action must be commenced within two years of a written notice of <br/>
<a id="pl.1.16"></a><var>1.16</var>claim for interest to begin to accrue from the time of the notice of claim. If either party <br/>
<a id="pl.1.17"></a><var>1.17</var>serves a written offer of settlement, the other party may serve a written acceptance or a <br/>
<a id="pl.1.18"></a><var>1.18</var>written counteroffer within 30 days. After that time, interest on the judgment or award <br/>
<a id="pl.1.19"></a><var>1.19</var>shall be calculated by the judge or arbitrator in the following manner. The prevailing <br/>
<a id="pl.1.20"></a><var>1.20</var>party shall receive interest on any judgment or award from the time of commencement <br/>
<a id="pl.1.21"></a><var>1.21</var>of the action or a demand for arbitration, or the time of a written notice of claim, or as <br/>
<a id="pl.1.22"></a><var>1.22</var>to special damages from the time when special damages were incurred, if later, until the <br/>
<a id="pl.1.23"></a><var>1.23</var>time of verdict, award, or report only if the amount of its offer is closer to the judgment or <br/>
<a id="pl.1.24"></a><var>1.24</var>award than the amount of the opposing party's offer. If the amount of the losing party's <br/>
<a id="pl.2.1"></a><var>2.1</var>offer was closer to the judgment or award than the prevailing party's offer, the prevailing <br/>
<a id="pl.2.2"></a><var>2.2</var>party shall receive interest only on the amount of the settlement offer or the judgment or <br/>
<a id="pl.2.3"></a><var>2.3</var>award, whichever is less, and only from the time of commencement of the action or a <br/>
<a id="pl.2.4"></a><var>2.4</var>demand for arbitration, or the time of a written notice of claim, or as to special damages <br/>
<a id="pl.2.5"></a><var>2.5</var>from when the special damages were incurred, if later, until the time the settlement offer <br/>
<a id="pl.2.6"></a><var>2.6</var>was made. Subsequent offers and counteroffers supersede the legal effect of earlier offers <br/>
<a id="pl.2.7"></a><var>2.7</var>and counteroffers. For the purposes of clause (2), the amount of settlement offer must <br/>
<a id="pl.2.8"></a><var>2.8</var>be allocated between past and future damages in the same proportion as determined by <br/>
<a id="pl.2.9"></a><var>2.9</var>the trier of fact. Except as otherwise provided by contract or allowed by law, preverdict, <br/>
<a id="pl.2.10"></a><var>2.10</var>preaward, or prereport interest shall not be awarded on the following:<br/>
<a id="pl.2.11"></a><var>2.11</var>(1) judgments, awards, or benefits in workers' compensation cases, but not including <br/>
<a id="pl.2.12"></a><var>2.12</var>third-party actions;<br/>
<a id="pl.2.13"></a><var>2.13</var>(2) judgments or awards for future damages;<br/>
<a id="pl.2.14"></a><var>2.14</var>(3) punitive damages, fines, or other damages that are noncompensatory in nature;<br/>
<a id="pl.2.15"></a><var>2.15</var>(4) judgments or awards not in excess of the amount specified in section 
         <statute_ref>491A.01</statute_ref>; <br/>
<a id="pl.2.16"></a><var>2.16</var>and<br/>
<a id="pl.2.17"></a><var>2.17</var>(5) that portion of any verdict, award, or report which is founded upon interest, or <br/>
<a id="pl.2.18"></a><var>2.18</var>costs, disbursements, attorney fees, or other similar items added by the court or arbitrator.<br/>
<a id="pl.2.19"></a><var>2.19</var>(c)(1) For a judgment or award of $50,000 or less or a judgment or award for or <br/>
<a id="pl.2.20"></a><var>2.20</var>against the state or a political subdivision of the state, regardless of the amount, The <br/>
<a id="pl.2.21"></a><var>2.21</var>interest shall be computed as simple interest per annum. The rate of interest shall be based <br/>
<a id="pl.2.22"></a><var>2.22</var>on the secondary market yield of one year United States Treasury bills, calculated on a <br/>
<a id="pl.2.23"></a><var>2.23</var>bank discount basis as provided in this section.<br/>
<a id="pl.2.24"></a><var>2.24</var>On or before the 20th day of December of each year the state court administrator <br/>
<a id="pl.2.25"></a><var>2.25</var>shall determine the rate from the one-year constant maturity treasury yield for the most <br/>
<a id="pl.2.26"></a><var>2.26</var>recent calendar month, reported on a monthly basis in the latest statistical release of the <br/>
<a id="pl.2.27"></a><var>2.27</var>board of governors of the Federal Reserve System. This yield, rounded to the nearest one <br/>
<a id="pl.2.28"></a><var>2.28</var>percent, or four percent, whichever is greater, shall be the annual interest rate during the <br/>
<a id="pl.2.29"></a><var>2.29</var>succeeding calendar year. The state court administrator shall communicate the interest <br/>
<a id="pl.2.30"></a><var>2.30</var>rates to the court administrators and sheriffs for use in computing the interest on verdicts <br/>
<a id="pl.2.31"></a><var>2.31</var>and shall make the interest rates available to arbitrators.<br/>
<a id="pl.2.32"></a><var>2.32</var>This clause applies to any section that references section 
<statute_ref>549.09</statute_ref> by citation for the <br/>
<a id="pl.2.33"></a><var>2.33</var>purposes of computing an interest rate on any amount owed to or by the state or a political <br/>
<a id="pl.2.34"></a><var>2.34</var>subdivision of the state, regardless of the amount.<br/>
<a id="pl.3.1"></a><var>3.1</var>(2) For a judgment or award over $50,000, other than a judgment or award for or <br/>
<a id="pl.3.2"></a><var>3.2</var>against the state or a political subdivision of the state, the interest rate shall be ten percent <br/>
<a id="pl.3.3"></a><var>3.3</var>per year until paid.<br/>
<a id="pl.3.4"></a><var>3.4</var>(3) When a judgment creditor, or the judgment creditor's attorney or agent, has <br/>
<a id="pl.3.5"></a><var>3.5</var>received a payment after entry of judgment, whether the payment is made voluntarily by <br/>
<a id="pl.3.6"></a><var>3.6</var>or on behalf of the judgment debtor, or is collected by legal process other than execution <br/>
<a id="pl.3.7"></a><var>3.7</var>levy where a proper return has been filed with the court administrator, the judgment <br/>
<a id="pl.3.8"></a><var>3.8</var>creditor, or the judgment creditor's attorney, before applying to the court administrator <br/>
<a id="pl.3.9"></a><var>3.9</var>for an execution shall file with the court administrator an affidavit of partial satisfaction. <br/>
<a id="pl.3.10"></a><var>3.10</var>The affidavit must state the dates and amounts of payments made upon the judgment after <br/>
<a id="pl.3.11"></a><var>3.11</var>the most recent affidavit of partial satisfaction filed, if any; the part of each payment that <br/>
<a id="pl.3.12"></a><var>3.12</var>is applied to taxable disbursements and to accrued interest and to the unpaid principal <br/>
<a id="pl.3.13"></a><var>3.13</var>balance of the judgment; and the accrued, but the unpaid interest owing, if any, after <br/>
<a id="pl.3.14"></a><var>3.14</var>application of each payment.<br/>
<a id="pl.3.15"></a><var>3.15</var>(d) This section does not apply to arbitrations between employers and employees <br/>
<a id="pl.3.16"></a><var>3.16</var>under chapter 179 or 179A. An arbitrator is neither required to nor prohibited from <br/>
<a id="pl.3.17"></a><var>3.17</var>awarding interest under chapter 179 or under section 
         <statute_ref>179A.16</statute_ref> for essential employees.<br/>
<a id="pl.3.18"></a><var>3.18</var>(e) For purposes of this subdivision:<br/>
<a id="pl.3.19"></a><var>3.19</var>(1) "state" includes a department, board, agency, commission, court, or other entity <br/>
<a id="pl.3.20"></a><var>3.20</var>in the executive, legislative, or judicial branch of the state; and<br/>
<a id="pl.3.21"></a><var>3.21</var>(2) "political subdivision" includes a town, statutory or home rule charter city, <br/>
<a id="pl.3.22"></a><var>3.22</var>county, school district, or any other political subdivision of the state.<br/>
<a id="pl.3.23"></a><var>3.23</var>(e) This section does not apply to a judgment or award upon which interest is entitled <br/>
<a id="pl.3.24"></a><var>3.24</var>to be recovered under section 60A.0811.<br/>
<a id="pl.3.25"></a><var>3.25</var><b>EFFECTIVE DATE.</b>This section is effective August 1, 2012, and applies to <br/>
<a id="pl.3.26"></a><var>3.26</var>judgments and awards entered on or after that date.<br/>
<br/>
<a id="bill.0.2.0"></a><a id="pl.3.27"></a><var>3.27</var>    Sec. 2. Minnesota Statutes 2010, section 549.09, subdivision 2, is amended to read:<br/>
<a id="pl.3.28"></a><var>3.28</var>    Subd. 2. <b>Accrual of interest.</b> (a) During each calendar year, interest shall accrue <br/>
<a id="pl.3.29"></a><var>3.29</var>on the unpaid balance of the judgment or award from the time that it is entered or made <br/>
<a id="pl.3.30"></a><var>3.30</var>until it is paid, at the annual rate provided in subdivision 1 or paragraph (b). The court <br/>
<a id="pl.3.31"></a><var>3.31</var>administrator shall compute and add the accrued interest to the total amount to be collected <br/>
<a id="pl.3.32"></a><var>3.32</var>when the execution is issued and compute the amount of daily interest accruing during the <br/>
<a id="pl.3.33"></a><var>3.33</var>calendar year. The person authorized by statute to make the levy shall compute and add <br/>
<a id="pl.3.34"></a><var>3.34</var>interest from the date that the writ of execution was issued to the date of service of the writ <br/>
<a id="pl.4.1"></a><var>4.1</var>of execution and shall direct the daily interest to be computed and added from the date of <br/>
<a id="pl.4.2"></a><var>4.2</var>service until any money is collected as a result of the levy.<br/>
<a id="pl.4.3"></a><var>4.3</var>(b) For a judgment or award over $50,000, other than a judgment or award for or <br/>
<a id="pl.4.4"></a><var>4.4</var>against the state or a political subdivision of the state, the interest rate is ten percent per <br/>
<a id="pl.4.5"></a><var>4.5</var>year. This paragraph does not apply to a section that references section 549.09 by citation <br/>
<a id="pl.4.6"></a><var>4.6</var>for the purpose of computing an interest rate on any amount owed to or by the state or a <br/>
<a id="pl.4.7"></a><var>4.7</var>political subdivision of the state, regardless of the amount.<br/>
<a id="pl.4.8"></a><var>4.8</var><b>EFFECTIVE DATE.</b>This section is effective August 1, 2012, and applies to <br/>
<a id="pl.4.9"></a><var>4.9</var>judgments and awards entered on or after that date.<br/>