HF 625

2nd Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to state government; providing for the 
  1.3             Minnesota collection enterprise; imposing duties and 
  1.4             providing powers; providing for the disclosure of 
  1.5             certain data; appropriating money; amending Minnesota 
  1.6             Statutes 1994, sections 8.16, by adding a subdivision; 
  1.7             16D.02, by adding a subdivision; 16D.04, subdivisions 
  1.8             1 and 3; 16D.06; 16D.08, subdivision 2; 491A.01, 
  1.9             subdivision 8; and 491A.02, subdivision 4; proposing 
  1.10            coding for new law in Minnesota Statutes, chapter 16D. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1994, section 8.16, is 
  1.13  amended by adding a subdivision to read: 
  1.14     Subd. 1a.  [SUBPOENAS.] The attorney general may in any 
  1.15  county of the state subpoena and require the production of any 
  1.16  records relating to the location of a debtor or the assets of a 
  1.17  debtor, as that term is defined in section 16D.02, subdivision 
  1.18  4.  Subpoenas may be issued only for records that are relevant 
  1.19  to an investigation related to debt collection. 
  1.20     Sec. 2.  Minnesota Statutes 1994, section 16D.02, is 
  1.21  amended by adding a subdivision to read: 
  1.22     Subd. 8.  [ENTERPRISE.] "Enterprise" means the Minnesota 
  1.23  collection enterprise, a separate unit established to carry out 
  1.24  the provisions of this chapter, pursuant to the commissioner's 
  1.25  authority to contract with the commissioner of revenue for 
  1.26  collection services under section 16D.04, subdivision 1. 
  1.27     Sec. 3.  Minnesota Statutes 1994, section 16D.04, 
  1.28  subdivision 1, is amended to read: 
  2.1      Subdivision 1.  [DUTIES.] The commissioner shall provide 
  2.2   services to the state and its agencies to collect debts owed the 
  2.3   state.  The commissioner is not a collection agency as defined 
  2.4   by section 332.31, subdivision 3, and is not licensed, bonded, 
  2.5   or regulated by the commissioner of commerce under sections 
  2.6   332.31 to 332.35 or 332.38 to 332.45.  The commissioner is 
  2.7   subject to section 332.37, except clause (9) or (10).  The 
  2.8   commissioner may contract with the commissioner of revenue for 
  2.9   collection services, and may delegate to the commissioner of 
  2.10  revenue any of the commissioner's duties and powers under this 
  2.11  chapter.  Debts referred to the commissioner of revenue for 
  2.12  collection under this section or section 256.9792 may in turn be 
  2.13  referred by the commissioner of revenue to the enterprise.  An 
  2.14  audited financial statement may not be required as a condition 
  2.15  of debt placement with a private agency if the private agency:  
  2.16  (1) has errors and omissions coverage under a professional 
  2.17  liability policy in an amount of at least $1,000,000; or (2) has 
  2.18  a fidelity bond to cover actions of its employees, in an amount 
  2.19  of at least $100,000.  In cases of debts referred under section 
  2.20  256.9792, the provisions of this chapter and section 256.9792 
  2.21  apply to the extent they are not in conflict.  If they are in 
  2.22  conflict, the provisions of section 256.9792 control.  For 
  2.23  purposes of this chapter, the referring agency for such debts 
  2.24  remains the department of human services. 
  2.25     Sec. 4.  Minnesota Statutes 1994, section 16D.04, 
  2.26  subdivision 3, is amended to read: 
  2.27     Subd. 3.  [SERVICES.] The commissioner shall provide 
  2.28  collection services for a state agency, and may provide for 
  2.29  collection services for the University of Minnesota or a 
  2.30  court, any of the other entities described in section 16D.02, 
  2.31  subdivision 6, in accordance with the terms and conditions of a 
  2.32  signed debt qualification plan.  
  2.33     Sec. 5.  Minnesota Statutes 1994, section 16D.06, is 
  2.34  amended to read: 
  2.35     16D.06 [DEBTOR INFORMATION.] 
  2.36     Subdivision 1.  [ACCESS TO GOVERNMENT DATA NOT PUBLIC.] 
  3.1   Notwithstanding chapter 13 or any other state law classifying or 
  3.2   restricting access to government data, upon request from the 
  3.3   commissioner or the attorney general, state agencies, political 
  3.4   subdivisions, and statewide systems shall disseminate not public 
  3.5   data to the commissioner or the attorney general for the sole 
  3.6   purpose of collecting debt.  Not public data disseminated under 
  3.7   this subdivision is limited to financial data of the debtor or 
  3.8   data related to the location of the debtor or the assets of the 
  3.9   debtor. 
  3.10     Subd. 2.  [DISCLOSURE OF DATA.] Data received, collected, 
  3.11  created, or maintained by the commissioner or the attorney 
  3.12  general to collect debts are classified as private data on 
  3.13  individuals under section 13.02, subdivision 12, or nonpublic 
  3.14  data under section 13.02, subdivision 9.  The commissioner or 
  3.15  the attorney general may disclose not public data: 
  3.16     (1) under section 13.05; 
  3.17     (2) under court order; 
  3.18     (3) under a statute specifically authorizing access to the 
  3.19  not public data; 
  3.20     (4) to provide notices required or permitted by statute; 
  3.21     (5) to an agent of the commissioner, including a law 
  3.22  enforcement person, attorney, or investigator acting for the 
  3.23  commissioner in the investigation or prosecution of a criminal 
  3.24  or civil proceeding relating to collection of a debt; 
  3.25     (6) to report names of debtors, amount of debt, date of 
  3.26  debt, and the agency to whom debt is owed to credit bureaus and 
  3.27  private collection agencies under contract with the 
  3.28  commissioner; and 
  3.29     (7) when necessary to locate the debtor, locate the assets 
  3.30  of the debtor, or to enforce or implement the collection of a 
  3.31  debt; and 
  3.32     (8) to the commissioner of revenue for tax administration 
  3.33  purposes. 
  3.34     The commissioner and the attorney general may not disclose 
  3.35  data that is not public to a private collection agency or other 
  3.36  entity with whom the commissioner has contracted under section 
  4.1   16D.04, subdivision 4, unless disclosure is otherwise authorized 
  4.2   by law. 
  4.3      Sec. 6.  Minnesota Statutes 1994, section 16D.08, 
  4.4   subdivision 2, is amended to read: 
  4.5      Subd. 2.  [POWERS.] In addition to the collection remedies 
  4.6   available to private collection agencies in this state, the 
  4.7   commissioner, with legal assistance from the attorney general, 
  4.8   may utilize any statutory authority granted to a referring 
  4.9   agency for purposes of collecting debt owed to that referring 
  4.10  agency.  The commissioner may also use the tax collection 
  4.11  remedies of the commissioner of revenue in sections 270.06, 
  4.12  clauses (7) and (17), excluding the power to subpoena witnesses; 
  4.13  270.66; 270.69, excluding subdivisions 7 and 13; 270.70, 
  4.14  excluding subdivision 14; 270.7001 to 270.72; and 290.92, 
  4.15  subdivision 23, except that a continuous wage levy under section 
  4.16  290.92, subdivision 23, is only effective for 70 days, unless no 
  4.17  competing wage garnishments, executions, or levies are served 
  4.18  within the 70-day period, in which case a wage levy is 
  4.19  continuous until a competing garnishment, execution, or levy is 
  4.20  served in the second or a succeeding 70-day period, in which 
  4.21  case a continuous wage levy is effective for the remainder of 
  4.22  that period.  A debtor who qualifies for cancellation of the 
  4.23  collection penalty under section 16D.11, subdivision 3, clause 
  4.24  (1), can apply to the commissioner for reduction or release of a 
  4.25  continuous wage levy, if the debtor establishes that he or she 
  4.26  needs all or a portion of the wages being levied upon to pay for 
  4.27  essential living expenses, such as food, clothing, shelter, 
  4.28  medical care, or expenses necessary for maintaining employment.  
  4.29  The commissioner's determination not to reduce or release a 
  4.30  continuous wage levy is appealable to district court.  The word 
  4.31  "tax" or "taxes" when used in the tax collection statutes listed 
  4.32  in this subdivision also means debts referred under this 
  4.33  chapter.  For debts other than state taxes or child support, 
  4.34  before any of the tax collection remedies listed in this 
  4.35  subdivision can be used, except for the remedies in section 
  4.36  270.06, clauses (7) and (17), if the referring agency has not 
  5.1   already obtained a judgment or filed a lien, the commissioner 
  5.2   must first obtain a judgment against the debtor. 
  5.3      Sec. 7.  [16D.12] [INTEREST.] 
  5.4      Subdivision 1.  [AUTHORITY.] Unless otherwise provided by 
  5.5   contract out of which the debt arises or by state or federal 
  5.6   law, a state agency shall charge simple interest on debts owed 
  5.7   to the state at the rate provided in subdivision 2 if notice has 
  5.8   been given in accordance with this subdivision.  Interest 
  5.9   charged under this section begins to accrue on the 30th calendar 
  5.10  day following the state agency's first written demand for 
  5.11  payment that includes notification to the debtor that interest 
  5.12  will begin to accrue on the debt in accordance with this section.
  5.13     Subd. 2.  [COMPUTATION.] Notwithstanding chapter 334, the 
  5.14  rate of interest is the rate determined by the state court 
  5.15  administrator under section 549.09, subdivision 1, paragraph (c).
  5.16     Subd. 3.  [EXCLUSION.] A state agency may not charge 
  5.17  interest under this section on overpayments of assistance 
  5.18  benefits under sections 256.031 to 256.0361, 256.72 to 256.87, 
  5.19  chapters 256D and 256I, or the federal food stamp program.  
  5.20  Notwithstanding this prohibition, any debts that have been 
  5.21  reduced to judgment under these programs are subject to the 
  5.22  interest charges provided under section 549.09. 
  5.23     Sec. 8.  [16D.13] [VENUE.] 
  5.24     The commissioner or attorney general may bring an action to 
  5.25  recover debts owed to the state in Ramsey county district court 
  5.26  or Ramsey county conciliation court, or a district or 
  5.27  conciliation court of any other county at the discretion of the 
  5.28  state.  Before bringing an action under this section in any 
  5.29  county other than the county in which the defendant resides or 
  5.30  where the cause of action arose, the commissioner or the 
  5.31  attorney general must notify the debtor, by certified mail, of 
  5.32  the intent to bring an action in the specified county and 
  5.33  enclose a form for the debtor to use to request that the action 
  5.34  be brought in the county of either the debtor's residence or the 
  5.35  county where the cause of action arose.  If the debtor, within 
  5.36  30 days of the receipt of the notice of intent to bring an 
  6.1   action in a specified county, requests in writing that the 
  6.2   action be brought in the county of either the debtor's residence 
  6.3   or the county where the cause of action arose, that request must 
  6.4   be granted by the commissioner or the attorney general, and any 
  6.5   subsequent action must be venued in accordance with the request 
  6.6   of the debtor.  If the debtor does not make a timely request 
  6.7   under this section, venue is as chosen by the commissioner or 
  6.8   attorney general. 
  6.9      Sec. 9.  [16D.14] [COMPROMISE OF DEBT.] 
  6.10     Unless expressly prohibited by other federal or state law, 
  6.11  a state agency may compromise debts owed to the state, whether 
  6.12  reduced to judgment or not, where the state agency determines 
  6.13  that it is in the best interests of the state to do so. 
  6.14     Sec. 10.  [16D.16] [SETOFFS.] 
  6.15     Subdivision 1.  [AUTHORIZATION.] The commissioner or a 
  6.16  state agency may automatically deduct the amount of a debt owed 
  6.17  to the state from any state payment of $5,000 or more due to the 
  6.18  debtor, except that funds exempt under section 550.37 or funds 
  6.19  owed an individual who receives assistance under the provisions 
  6.20  of chapter 256 are not subject to setoff.  If a debtor has 
  6.21  entered into a written payment plan with respect to payment of a 
  6.22  specified debt, the right of setoff may not be used to satisfy 
  6.23  that debt.  Notwithstanding section 181.79, the state may deduct 
  6.24  from the wages due or earned by a state employee to collect a 
  6.25  debt, subject to the limitations in section 571.922. 
  6.26     Subd. 2.  [NOTICE AND HEARING.] The commissioner or state 
  6.27  agency shall mail written notice, by certified mail, to the 
  6.28  debtor, addressed to the debtor's last known address, that the 
  6.29  commissioner or state agency intends to set off a debt owed to 
  6.30  the state by the debtor against future payments due the debtor 
  6.31  from the state.  The commissioner or state agency shall notify 
  6.32  the debtor within ten days that a setoff has occurred.  If the 
  6.33  debt owed to the state has not been reduced to judgment or a 
  6.34  lien, the notice to the debtor must indicate that the debtor has 
  6.35  the right to make a written request for a contested case hearing 
  6.36  on the validity of the debt or the right to setoff.  The debtor 
  7.1   has 30 days from the date of that notice to make a written 
  7.2   request for a contested case hearing to contest the validity of 
  7.3   the prejudgment debt or the right to setoff.  The debtor's 
  7.4   request must state the debtor's reasons for contesting the debt 
  7.5   or the right to setoff.  If the commissioner or state agency 
  7.6   desires to pursue the right to setoff following receipt of the 
  7.7   debtor's request for a hearing under this section, the 
  7.8   commissioner or state agency shall schedule a contested case 
  7.9   hearing within 30 days of the receipt of the request for the 
  7.10  hearing.  If the commissioner or state agency decides not to 
  7.11  pursue the right to setoff, the debtor must be notified of that 
  7.12  decision. 
  7.13     Sec. 11.  Minnesota Statutes 1994, section 491A.01, 
  7.14  subdivision 8, is amended to read: 
  7.15     Subd. 8.  [JURISDICTION; MULTIPLE DEFENDANTS VENUE.] The 
  7.16  conciliation court also has jurisdiction to determine a civil 
  7.17  action commenced against two one or more defendants in the 
  7.18  county in which one or more of the defendants resides or where 
  7.19  the cause of action, or some part thereof, arose.  Counterclaims 
  7.20  may be commenced in the county where the original action was 
  7.21  commenced. 
  7.22     Sec. 12.  Minnesota Statutes 1994, section 491A.02, 
  7.23  subdivision 4, is amended to read: 
  7.24     Subd. 4.  [REPRESENTATION.] (a) A corporation, partnership, 
  7.25  limited liability company, sole proprietorship, or association 
  7.26  may be represented in conciliation court by an officer, manager, 
  7.27  or partner or an agent in the case of a condominium, 
  7.28  cooperative, or townhouse association, or may appoint a natural 
  7.29  person who is an employee or commercial property manager to 
  7.30  appear on its behalf or settle a claim in conciliation 
  7.31  court.  The state or a political subdivision of the state may be 
  7.32  represented in conciliation court by an employee of the 
  7.33  pertinent governmental unit without written authorization 
  7.34  required.  This representation does not constitute the practice 
  7.35  of law for purposes of section 481.02, subdivision 8.  In the 
  7.36  case of an officer, employee, commercial property manager, or 
  8.1   agent of a condominium, cooperative, or townhouse association, 
  8.2   an authorized power of attorney, corporate authorization 
  8.3   resolution, corporate bylaw, or other evidence of authority 
  8.4   acceptable to the court must be filed with the claim or 
  8.5   presented at the hearing.  This subdivision also applies to 
  8.6   appearances in district court by a corporation or limited 
  8.7   liability company with five or fewer shareholders or members and 
  8.8   to any condominium, cooperative, or townhouse association, if 
  8.9   the action was removed from conciliation court. 
  8.10     (b) "Commercial property manager" means a corporation, 
  8.11  partnership, or limited liability company or its employees who 
  8.12  are hired by the owner of commercial real estate to perform a 
  8.13  broad range of administrative duties at the property including 
  8.14  tenant relations matters, leasing, repairs, maintenance, the 
  8.15  negotiation and resolution of tenant disputes, and related 
  8.16  matters.  In order to appear in conciliation court, a property 
  8.17  manager's employees must possess a real estate license under 
  8.18  section 82.20 and be authorized by the owner of the property to 
  8.19  settle all disputes with tenants and others within the 
  8.20  jurisdictional limits of conciliation court. 
  8.21     (c) A commercial property manager who is appointed to 
  8.22  settle a claim in conciliation court may not charge or collect a 
  8.23  separate fee for services rendered under paragraph (a). 
  8.24     Sec. 13.  [EFFECTIVE DATE.] 
  8.25     Sections 1 to 5 are effective the day following final 
  8.26  enactment.  Section 6 is effective for debts previously referred 
  8.27  or referred on or after the day following final enactment.