HF 2640

4th Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; creating a law enforcement 
  1.3             agency to deal with insurance fraud; prescribing its 
  1.4             powers and duties; establishing insurance assessments 
  1.5             to fund the insurance fraud prevention account; 
  1.6             providing for disclosure of certain data to the 
  1.7             Department of Commerce; transferring the automobile 
  1.8             theft prevention program to the Department of 
  1.9             Commerce; amending Minnesota Statutes 2002, sections 
  1.10            45.0135, subdivision 6, by adding subdivisions; 
  1.11            299A.75, subdivisions 1, 2, 3; 626.84, subdivision 1; 
  1.12            Minnesota Statutes 2003 Supplement, section 268.19, 
  1.13            subdivision 1; repealing Minnesota Statutes 2002, 
  1.14            section 45.0135, subdivisions 1, 2. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16                             ARTICLE 1
  1.17                     INSURANCE FRAUD PREVENTION
  1.18     Section 1.  Minnesota Statutes 2002, section 45.0135, is 
  1.19  amended by adding a subdivision to read: 
  1.20     Subd. 2a.  [AUTHORIZATION.] The commissioner may appoint 
  1.21  peace officers, as defined in section 626.84, subdivision 1, 
  1.22  paragraph (c), and establish a law enforcement agency, as 
  1.23  defined in section 626.84, subdivision 1, paragraph (h), known 
  1.24  as the Division of Insurance Fraud Prevention, to conduct 
  1.25  investigations, and to make arrests under sections 629.30 and 
  1.26  629.34.  The jurisdiction of the law enforcement agency is 
  1.27  limited to offenses related to insurance fraud. 
  1.28     Sec. 2.  Minnesota Statutes 2002, section 45.0135, is 
  1.29  amended by adding a subdivision to read: 
  1.30     Subd. 2b.  [DUTIES.] The Division of Insurance Fraud 
  2.1   Prevention shall: 
  2.2      (1) review notices and reports of insurance fraud submitted 
  2.3   by authorized insurers, their employees, and agents or 
  2.4   producers; 
  2.5      (2) respond to notifications or complaints of suspected 
  2.6   insurance fraud generated by other law enforcement agencies, 
  2.7   state or federal governmental units, or any other person; 
  2.8      (3) initiate inquiries and conduct investigations when the 
  2.9   division has reason to believe that insurance fraud has been or 
  2.10  is being committed; and 
  2.11     (4) report incidents of alleged insurance fraud disclosed 
  2.12  by its investigations to appropriate law enforcement agencies, 
  2.13  including, but not limited to, the attorney general, county 
  2.14  attorneys, or any other appropriate law enforcement or 
  2.15  regulatory agency, and shall assemble evidence, prepare charges, 
  2.16  and otherwise assist any law enforcement authority having 
  2.17  jurisdiction. 
  2.18     Sec. 3.  Minnesota Statutes 2002, section 45.0135, is 
  2.19  amended by adding a subdivision to read: 
  2.20     Subd. 2c.  [ARRESTS AND INVESTIGATIONS.] The initial 
  2.21  processing of a person arrested by the Division of Insurance 
  2.22  Fraud Prevention for an offense within its jurisdiction is the 
  2.23  responsibility of the Division of Insurance Fraud Prevention 
  2.24  unless otherwise directed by the law enforcement agency with 
  2.25  primary jurisdiction.  Subsequent investigation shall be the 
  2.26  responsibility of the Division of Insurance Fraud Prevention 
  2.27  unless otherwise directed by the law enforcement agency with 
  2.28  primary jurisdiction.  At the request of the primary 
  2.29  jurisdiction, the Division of Insurance Fraud Prevention may 
  2.30  assist in a subsequent investigation being carried out by the 
  2.31  primary jurisdiction. 
  2.32     Sec. 4.  Minnesota Statutes 2002, section 45.0135, is 
  2.33  amended by adding a subdivision to read: 
  2.34     Subd. 2d.  [POLICY FOR NOTICE OF INVESTIGATIONS.] The 
  2.35  Division of Insurance Fraud Prevention must develop a policy for 
  2.36  notifying the law enforcement agency with primary jurisdiction 
  3.1   when it has initiated investigation of any person within the 
  3.2   jurisdiction of that agency. 
  3.3      Sec. 5.  Minnesota Statutes 2002, section 45.0135, is 
  3.4   amended by adding a subdivision to read: 
  3.5      Subd. 2e.  [CHIEF LAW ENFORCEMENT OFFICER.] The 
  3.6   commissioner shall appoint a peace officer employed full time to 
  3.7   be the chief law enforcement officer and to be responsible for 
  3.8   the management of the Division of Insurance Fraud Prevention.  
  3.9   The chief law enforcement officer shall possess the necessary 
  3.10  police and management experience to manage a law enforcement 
  3.11  agency.  The chief law enforcement officer may appoint, 
  3.12  discipline, and discharge all employees of the Division of 
  3.13  Insurance Fraud Prevention.  All police managerial and 
  3.14  supervisory personnel must be full-time employees of the 
  3.15  Division of Insurance Fraud Prevention.  Supervisory personnel 
  3.16  must be on duty and available any time peace officers of the 
  3.17  Division of Insurance Fraud Prevention are on duty. 
  3.18     Sec. 6.  Minnesota Statutes 2002, section 45.0135, is 
  3.19  amended by adding a subdivision to read: 
  3.20     Subd. 2f.  [COMPLIANCE.] Except as otherwise provided in 
  3.21  this section, the Division of Insurance Fraud Prevention shall 
  3.22  comply with all statutes and administrative rules relating to 
  3.23  the operation and management of a law enforcement agency. 
  3.24     Sec. 7.  Minnesota Statutes 2002, section 45.0135, 
  3.25  subdivision 6, is amended to read: 
  3.26     Subd. 6.  [INSURANCE FRAUD PREVENTION ACCOUNT.] The 
  3.27  insurance fraud prevention account is created in the state 
  3.28  treasury.  It consists of any appropriations made by law Money 
  3.29  received from assessments under subdivision 7 is deposited in 
  3.30  the account.  Money in this fund is appropriated to the 
  3.31  commissioner of commerce for the purposes specified in this 
  3.32  section and sections 60A.951 to 60A.956. 
  3.33     Sec. 8.  Minnesota Statutes 2002, section 45.0135, is 
  3.34  amended by adding a subdivision to read: 
  3.35     Subd. 7.  [ASSESSMENT.] Each insurer authorized to sell 
  3.36  insurance in the state of Minnesota shall remit an assessment to 
  4.1   the commissioner for deposit in the insurance fraud prevention 
  4.2   account on or before June 1 of each year.  The amount of the 
  4.3   assessment shall be based on the insurer's total assets and on 
  4.4   the insurer's total written Minnesota premium, for the preceding 
  4.5   fiscal year, as reported pursuant to section 60A.13.  The 
  4.6   assessment is calculated as follows: 
  4.7             Total Assets                      Assessment
  4.8        Less than $100,000,000                   $  200
  4.9        $100,000,000 to $1,000,000,000           $  750
  4.10       Over $1,000,000,000                      $2,000
  4.11       
  4.12       Minnesota Written Premium              Assessment 
  4.13       Less than $10,000,000                    $  200
  4.14       $10,000,000 to $100,000,000              $  750
  4.15       Over $100,000,000                        $2,000
  4.16     For purposes of this subdivision, the following entities 
  4.17  are not considered to be insurers authorized to sell insurance 
  4.18  in the state of Minnesota:  risk retention groups; township 
  4.19  mutuals organized under chapter 67A; or health maintenance 
  4.20  organizations organized under chapter 62D. 
  4.21     Sec. 9.  Minnesota Statutes 2003 Supplement, section 
  4.22  268.19, subdivision 1, is amended to read: 
  4.23     Subdivision 1.  [USE OF DATA.] (a) Except as otherwise 
  4.24  provided by this section, data gathered from any employer or 
  4.25  individual pursuant to the administration of the Minnesota 
  4.26  Unemployment Insurance Law are private data on individuals or 
  4.27  nonpublic data not on individuals as defined in section 13.02, 
  4.28  subdivisions 9 and 12, and may not be disclosed except pursuant 
  4.29  to a court order or section 13.05.  These data may be 
  4.30  disseminated to and used by the following agencies without the 
  4.31  consent of the subject of the data:  
  4.32     (1) state and federal agencies specifically authorized 
  4.33  access to the data by state or federal law; 
  4.34     (2) any agency of Minnesota or any other state; or any 
  4.35  federal agency charged with the administration of an employment 
  4.36  security law or the maintenance of a system of public employment 
  5.1   offices; 
  5.2      (3) human rights agencies within Minnesota that have 
  5.3   enforcement powers; 
  5.4      (4) the Department of Revenue must have access to 
  5.5   department private data on individuals and nonpublic data not on 
  5.6   individuals only to the extent necessary for enforcement of 
  5.7   Minnesota tax laws; 
  5.8      (5) public and private agencies responsible for 
  5.9   administering publicly financed assistance programs for the 
  5.10  purpose of monitoring the eligibility of the program's 
  5.11  recipients; 
  5.12     (6) the Department of Labor and Industry and the Department 
  5.13  of Commerce on an interchangeable basis with the department 
  5.14  subject to the following limitations and regardless of any law 
  5.15  to the contrary: 
  5.16     (i) the department must have access to private data on 
  5.17  individuals and nonpublic data not on individuals for uses 
  5.18  consistent with the administration of its duties under the 
  5.19  Minnesota Unemployment Insurance Law; and 
  5.20     (ii) the Department of Labor and Industry and the 
  5.21  Department of Commerce must have access to private data on 
  5.22  individuals and nonpublic data not on individuals for uses 
  5.23  consistent with the administration of its their duties under 
  5.24  Minnesota law; 
  5.25     (7) the Department of Employment and Economic Development 
  5.26  may have access to private data on individual employers and 
  5.27  nonpublic data not on individual employers for its internal use 
  5.28  only; when received by the Department of Employment and Economic 
  5.29  Development, the data remain private data on individuals or 
  5.30  nonpublic data; 
  5.31     (8) local and state welfare agencies for monitoring the 
  5.32  eligibility of the data subject for assistance programs, or for 
  5.33  any employment or training program administered by those 
  5.34  agencies, whether alone, in combination with another welfare 
  5.35  agency, or in conjunction with the department or to monitor and 
  5.36  evaluate the statewide Minnesota family investment program by 
  6.1   providing data on recipients and former recipients of food 
  6.2   stamps or food support, cash assistance under chapter 256, 256D, 
  6.3   256J, or 256K, child care assistance under chapter 119B, or 
  6.4   medical programs under chapter 256B, 256D, or 256L; 
  6.5      (9) local, state, and federal law enforcement agencies for 
  6.6   the sole purpose of ascertaining the last known address and 
  6.7   employment location of the data subject, provided the data 
  6.8   subject is the subject of a criminal investigation; 
  6.9      (10) the federal Immigration and Naturalization Service 
  6.10  shall have access to data on specific individuals and specific 
  6.11  employers provided the specific individual or specific employer 
  6.12  is the subject of an investigation by that agency; and 
  6.13     (11) the Department of Health may have access to private 
  6.14  data on individuals and nonpublic data not on individuals solely 
  6.15  for the purposes of epidemiologic investigations.  
  6.16     (b) Data on individuals and employers that are collected, 
  6.17  maintained, or used by the department in an investigation 
  6.18  pursuant to section 268.182 are confidential as to data on 
  6.19  individuals and protected nonpublic data not on individuals as 
  6.20  defined in section 13.02, subdivisions 3 and 13, and must not be 
  6.21  disclosed except pursuant to statute or court order or to a 
  6.22  party named in a criminal proceeding, administrative or 
  6.23  judicial, for preparation of a defense.  
  6.24     (c) Tape recordings and transcripts of recordings of 
  6.25  proceedings conducted in accordance with section 268.105 and 
  6.26  exhibits received into evidence at those proceedings are private 
  6.27  data on individuals and nonpublic data not on individuals and 
  6.28  must be disclosed only pursuant to the administration of section 
  6.29  268.105, or pursuant to a court order.  
  6.30     (d) The department may disseminate an employer's name, 
  6.31  address, industry code, occupations employed, and the number of 
  6.32  employees by ranges of not less than 100 for the purpose of 
  6.33  assisting individuals using the Minnesota Workforce Center 
  6.34  system in obtaining employment. 
  6.35     (e) The general aptitude test battery and the nonverbal 
  6.36  aptitude test battery as administered by the department are 
  7.1   private data on individuals or nonpublic data.  
  7.2      (f) Data gathered by the department pursuant to the 
  7.3   administration of the Minnesota unemployment insurance program 
  7.4   and the job service must not be made the subject or the basis 
  7.5   for any suit in any civil proceedings, administrative or 
  7.6   judicial, unless the action is initiated by the department. 
  7.7      Sec. 10.  Minnesota Statutes 2002, section 626.84, 
  7.8   subdivision 1, is amended to read: 
  7.9      Subdivision 1.  [DEFINITIONS.] For purposes of sections 
  7.10  626.84 to 626.863, the following terms have the meanings given 
  7.11  them: 
  7.12     (a) "Board" means the Board of Peace Officer Standards and 
  7.13  Training. 
  7.14     (b) "Director" means the executive director of the board. 
  7.15     (c) "Peace officer" means: 
  7.16     (1) an employee or an elected or appointed official of a 
  7.17  political subdivision or law enforcement agency who is licensed 
  7.18  by the board, charged with the prevention and detection of crime 
  7.19  and the enforcement of the general criminal laws of the state 
  7.20  and who has the full power of arrest, and shall also include the 
  7.21  Minnesota State Patrol, agents of the Division of Alcohol and 
  7.22  Gambling Enforcement, state conservation officers, Metropolitan 
  7.23  Transit police officers, and Department of Corrections' Fugitive 
  7.24  Apprehension Unit officers, and Department of Commerce Insurance 
  7.25  Fraud Unit officers; and 
  7.26     (2) a peace officer who is employed by a law enforcement 
  7.27  agency of a federally recognized tribe, as defined in United 
  7.28  States Code, title 25, section 450b(e), and who is licensed by 
  7.29  the board. 
  7.30     (d) "Constable" has the meaning assigned to it in section 
  7.31  367.40. 
  7.32     (e) "Deputy constable" has the meaning assigned to it in 
  7.33  section 367.40. 
  7.34     (f) "Part-time peace officer" means an individual licensed 
  7.35  by the board whose services are utilized by law enforcement 
  7.36  agencies no more than an average of 20 hours per week, not 
  8.1   including time spent on call when no call to active duty is 
  8.2   received, calculated on an annual basis, who has either full 
  8.3   powers of arrest or authorization to carry a firearm while on 
  8.4   active duty.  The term shall apply even though the individual 
  8.5   receives no compensation for time spent on active duty, and 
  8.6   shall apply irrespective of the title conferred upon the 
  8.7   individual by any law enforcement agency.  The limitation on the 
  8.8   average number of hours in which the services of a part-time 
  8.9   peace officer may be utilized shall not apply to a part-time 
  8.10  peace officer who has formally notified the board pursuant to 
  8.11  rules adopted by the board of the part-time peace officer's 
  8.12  intention to pursue the specialized training for part-time peace 
  8.13  officers who desire to become peace officers pursuant to 
  8.14  sections 626.843, subdivision 1, clause (g), and 626.845, 
  8.15  subdivision 1, clause (g). 
  8.16     (g) "Reserve officer" means an individual whose services 
  8.17  are utilized by a law enforcement agency to provide 
  8.18  supplementary assistance at special events, traffic or crowd 
  8.19  control, and administrative or clerical assistance.  A reserve 
  8.20  officer's duties do not include enforcement of the general 
  8.21  criminal laws of the state, and the officer does not have full 
  8.22  powers of arrest or authorization to carry a firearm on duty. 
  8.23     (h) "Law enforcement agency" means: 
  8.24     (1) a unit of state or local government that is authorized 
  8.25  by law to grant full powers of arrest and to charge a person 
  8.26  with the duties of preventing and detecting crime and enforcing 
  8.27  the general criminal laws of the state; and 
  8.28     (2) subject to the limitations in section 626.93, a law 
  8.29  enforcement agency of a federally recognized tribe, as defined 
  8.30  in United States Code, title 25, section 450b(e). 
  8.31     (i) "Professional peace officer education" means a 
  8.32  postsecondary degree program, or a nondegree program for persons 
  8.33  who already have a college degree, that is offered by a college 
  8.34  or university in Minnesota, designed for persons seeking 
  8.35  licensure as a peace officer, and approved by the board. 
  8.36     Sec. 11.  [REPEALER.] 
  9.1      Minnesota Statutes 2002, section 45.0135, subdivisions 1 
  9.2   and 2, are repealed. 
  9.3      Sec. 12.  [EFFECTIVE DATE.] 
  9.4      Sections 1 to 11 are effective the day following final 
  9.5   enactment. 
  9.6                              ARTICLE 2
  9.7                        AUTO THEFT PREVENTION
  9.8      Section 1.  Minnesota Statutes 2002, section 299A.75, 
  9.9   subdivision 1, is amended to read: 
  9.10     Subdivision 1.  [PROGRAM DESCRIBED; COMMISSIONER'S DUTIES.] 
  9.11  (a) The commissioner of public safety commerce shall: 
  9.12     (1) develop and sponsor the implementation of statewide 
  9.13  plans, programs, and strategies to combat automobile theft, 
  9.14  improve the administration of the automobile theft laws, and 
  9.15  provide a forum for identification of critical problems for 
  9.16  those persons dealing with automobile theft; 
  9.17     (2) coordinate the development, adoption, and 
  9.18  implementation of plans, programs, and strategies relating to 
  9.19  interagency and intergovernmental cooperation with respect to 
  9.20  automobile theft enforcement; 
  9.21     (3) annually audit the plans and programs that have been 
  9.22  funded in whole or in part to evaluate the effectiveness of the 
  9.23  plans and programs and withdraw funding should the commissioner 
  9.24  determine that a plan or program is ineffective or is no longer 
  9.25  in need of further financial support from the fund; 
  9.26     (4) develop a plan of operation including: 
  9.27     (i) an assessment of the scope of the problem of automobile 
  9.28  theft, including areas of the state where the problem is 
  9.29  greatest; 
  9.30     (ii) an analysis of various methods of combating the 
  9.31  problem of automobile theft; 
  9.32     (iii) a plan for providing financial support to combat 
  9.33  automobile theft; 
  9.34     (iv) a plan for eliminating car hijacking; and 
  9.35     (v) an estimate of the funds required to implement the 
  9.36  plan; and 
 10.1      (5) distribute money, in consultation with the commissioner 
 10.2   of public safety, pursuant to subdivision 3 from the automobile 
 10.3   theft prevention special revenue account for automobile theft 
 10.4   prevention activities, including: 
 10.5      (i) paying the administrative costs of the program; 
 10.6      (ii) providing financial support to the State Patrol and 
 10.7   local law enforcement agencies for automobile theft enforcement 
 10.8   teams; 
 10.9      (iii) providing financial support to state or local law 
 10.10  enforcement agencies for programs designed to reduce the 
 10.11  incidence of automobile theft and for improved equipment and 
 10.12  techniques for responding to automobile thefts; 
 10.13     (iv) providing financial support to local prosecutors for 
 10.14  programs designed to reduce the incidence of automobile theft; 
 10.15     (v) providing financial support to judicial agencies for 
 10.16  programs designed to reduce the incidence of automobile theft; 
 10.17     (vi) providing financial support for neighborhood or 
 10.18  community organizations or business organizations for programs 
 10.19  designed to reduce the incidence of automobile theft and to 
 10.20  educate people about the common methods of automobile theft, the 
 10.21  models of automobiles most likely to be stolen, and the times 
 10.22  and places automobile theft is most likely to occur; and 
 10.23     (vii) providing financial support for automobile theft 
 10.24  educational and training programs for state and local law 
 10.25  enforcement officials, driver and vehicle services exam and 
 10.26  inspections staff, and members of the judiciary. 
 10.27     (b) The commissioner may not spend in any fiscal year more 
 10.28  than ten percent of the money in the fund for the program's 
 10.29  administrative and operating costs.  The commissioner is 
 10.30  annually appropriated and must distribute the amount of the 
 10.31  proceeds credited to the automobile theft prevention special 
 10.32  revenue account each year, less the transfer of $1,300,000 each 
 10.33  year to the general fund described in section 168A.40, 
 10.34  subdivision 4. 
 10.35     Sec. 2.  Minnesota Statutes 2002, section 299A.75, 
 10.36  subdivision 2, is amended to read: 
 11.1      Subd. 2.  [ANNUAL REPORT.] By January 15 of each year, the 
 11.2   commissioner shall report to the governor and legislature the 
 11.3   chairs and ranking minority members of the house and senate 
 11.4   committees having jurisdiction over the Departments of Commerce 
 11.5   and Public Safety on the activities and expenditures in the 
 11.6   preceding year. 
 11.7      Sec. 3.  Minnesota Statutes 2002, section 299A.75, 
 11.8   subdivision 3, is amended to read: 
 11.9      Subd. 3.  [GRANT CRITERIA; APPLICATION.] (a) A county 
 11.10  attorney's office, law enforcement agency, neighborhood 
 11.11  organization, community organization, or business organization 
 11.12  may apply for a grant under this section.  Multiple offices or 
 11.13  agencies within a county may apply for a grant under this 
 11.14  section. 
 11.15     (b) The commissioner, in consultation with the commissioner 
 11.16  of public safety, must develop criteria for the fair 
 11.17  distribution of grants from the automobile theft prevention 
 11.18  account that address the following factors: 
 11.19     (1) the number of reported automobile thefts per capita in 
 11.20  a city, county, or region, not merely the total number of 
 11.21  automobile thefts; 
 11.22     (2) the population of the jurisdiction of the applicant 
 11.23  office or agency; 
 11.24     (3) the total funds distributed within a county or region; 
 11.25  and 
 11.26     (4) the statewide interest in automobile theft reduction. 
 11.27     (c) The commissioner may give priority to: 
 11.28     (1) offices and agencies engaged in a collaborative effort 
 11.29  to reduce automobile theft; and 
 11.30     (2) counties or regions with the greatest rates of 
 11.31  automobile theft. 
 11.32     (d) The minimum amount of a grant award is $5,000.  After 
 11.33  considering the automobile theft rate and total population of an 
 11.34  applicant's jurisdiction, if a grant award, as determined under 
 11.35  the criteria and priorities in this subdivision, would be less 
 11.36  than $5,000, it must not be awarded. 
 12.1      Sec. 4.  [TRANSFER OF POWERS.] 
 12.2      The powers and duties of the Department of Public Safety 
 12.3   under Minnesota Statutes, section 299A.75, are transferred to 
 12.4   the Department of Commerce.  Minnesota Statutes, section 15.039, 
 12.5   applies to this transfer of powers. 
 12.6      Sec. 5.  [REVISOR INSTRUCTION.] 
 12.7      The revisor of statutes shall recodify Minnesota Statutes, 
 12.8   section 299A.75, into a chapter of Minnesota Statutes dealing 
 12.9   with the Department of Commerce. 
 12.10     Sec. 6.  [EFFECTIVE DATE.] 
 12.11     This article is effective July 1, 2004.