HF 3345

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to family law; changing certain child support 
  1.3             enforcement provisions; amending Minnesota Statutes 
  1.4             1998, sections 256.979, by adding a subdivision; 
  1.5             518.64, subdivision 5; 552.03; and 552.04, subdivision 
  1.6             11; proposing coding for new law in Minnesota 
  1.7             Statutes, chapter 518; repealing Minnesota Statutes 
  1.8             1998, section 552.05, subdivisions 1, 2, 3, 6, 7, 8, 
  1.9             and 9; Minnesota Statutes 1999 Supplement, section 
  1.10            552.05, subdivisions 4, 5, and 10; Minnesota Rules, 
  1.11            parts 9500.1800; 9500.1805; 9500.1810; 9500.1811; 
  1.12            9500.1812; 9500.1815; 9500.1817; 9500.1820; and 
  1.13            9500.1821. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1998, section 256.979, is 
  1.16  amended by adding a subdivision to read: 
  1.17     Subd. 11.  [FEDERAL CHILD SUPPORT INCENTIVES.] (a) The 
  1.18  commissioner of human services shall distribute to the counties 
  1.19  the earned federal child support incentive payments using the 
  1.20  methodology specified in Title IV-D of the Social Security Act 
  1.21  and applicable federal regulations for earning federal 
  1.22  incentives by the states except for the paternity portion of the 
  1.23  incentive.  The commissioner shall distribute the federal 
  1.24  paternity incentive earned using the IV-D paternity 
  1.25  establishment percentage.  The commissioner shall follow the 
  1.26  federal transition plans in distributing the incentives to the 
  1.27  counties.  The commissioner shall distribute to the county child 
  1.28  support agency estimated federal incentive payments within 60 
  1.29  days after the end of each calendar quarter.  The commissioner 
  2.1   shall issue actual federal incentive payments to the county 
  2.2   agency within 60 days of receiving the final federal incentive 
  2.3   grant award from the federal agency. 
  2.4      (b) The county child support agency shall reinvest 
  2.5   incentive funds disbursed under this section in the county child 
  2.6   support enforcement program.  These funds must not be used by a 
  2.7   county to reduce funding of the child support enforcement 
  2.8   program by the amount of the incentive earned below the base 
  2.9   amount allowed under the applicable federal regulations.  The 
  2.10  county agency shall maintain a record of incentives earned and 
  2.11  expended according to a procedure approved by the commissioner.  
  2.12  The county agency shall repay any incentive erroneously issued. 
  2.13     Sec. 2.  [518.6112] [FINANCIAL INSTITUTION FUNDS 
  2.14  WITHHOLDING.] 
  2.15     Subdivision 1.  [DEFINITIONS.] As used in this section: 
  2.16     (1) "account" has the meaning given in section 13B.06, 
  2.17  paragraph (a); and 
  2.18     (2) "financial institution" has the meaning given in 
  2.19  section 13B.06, paragraph (c). 
  2.20     Subd. 2.  [APPLICATION.] This section applies to an obligor 
  2.21  who is in arrears in court-ordered support payments in an amount 
  2.22  equal to or greater than three times the obligor's total support 
  2.23  order and who is not in compliance with a written payment 
  2.24  agreement regarding current support and arrearages approved by 
  2.25  the court, a child support magistrate, or the public authority. 
  2.26     Subd. 3.  [COMMENCEMENT OF FUNDS WITHHOLDING.] (a) Upon 
  2.27  receipt of information from a financial institution under 
  2.28  section 13B.06 that an obligor holds an account or accounts at 
  2.29  the financial institution, the public authority may send a 
  2.30  financial institution a notice of funds withholding. 
  2.31     (b) The notice of funds withholding must contain the name 
  2.32  of the obligor and any verifying information necessary, the 
  2.33  amount of the arrears, and the procedures necessary for the 
  2.34  financial institution to complete the funds withholding. 
  2.35     (c) The funds withholding under this section shall commence 
  2.36  without prior notice to the obligor and without the need for 
  3.1   prior judicial or administrative hearing. 
  3.2      (d) Within five business days after the public authority 
  3.3   sends the notice of funds withholding to the financial 
  3.4   institution, the public authority shall send the obligor a 
  3.5   notice of funds withholding by first class mail at the obligor's 
  3.6   last known address.  The notice must include the information 
  3.7   provided to the financial institution, a description of 
  3.8   exemptions an obligor may claim, the responsibilities of the 
  3.9   obligor under subdivision 5, and the procedure and time frames 
  3.10  to contest. 
  3.11     (e) The notice of funds withholding is valid for 90 days 
  3.12  after receipt by the financial institution.  If funds are 
  3.13  withheld within this period, the withholding remains effective 
  3.14  until the funds are transferred or released. 
  3.15     Subd. 4.  [RESPONSIBILITIES OF FINANCIAL INSTITUTION.] (a) 
  3.16  Upon receipt of the notice of funds withholding, the financial 
  3.17  institution shall withhold all funds up to and including the 
  3.18  amount contained in the notice or notices in the obligor's 
  3.19  accounts and: 
  3.20     (1) if there is no contest, 30 days after the financial 
  3.21  institution receives the notice of funds withholding and each 30 
  3.22  days thereafter, the financial institution shall transfer the 
  3.23  funds to the public authority; or 
  3.24     (2) if the obligor contests the funds withholding, continue 
  3.25  to withhold all funds up to the amount of the notice or notices 
  3.26  during the period of contest; and, upon receipt of a notice to 
  3.27  release from the public authority, transfer the funds according 
  3.28  to the notice of release.  The amount withheld must equal the 
  3.29  amount contained in the notice or the total funds in the 
  3.30  obligor's accounts, whichever is less.  The amount must be 
  3.31  withheld for 30 days. 
  3.32     (b) A financial institution that withholds funds of an 
  3.33  obligor who has multiple accounts within the financial 
  3.34  institution shall withhold funds in as many accounts of the 
  3.35  obligor as is necessary to equal the amount of arrears contained 
  3.36  in the notice or notices of funds withholding. 
  4.1      (c) The financial institution shall continue to withhold 
  4.2   funds up to the amount of the notice or notices during any 
  4.3   period in which the obligor contests any withholding notice or 
  4.4   notices inclusive of any applicable appeal time. 
  4.5      (d) The Consumer Credit Protection Act, United States Code, 
  4.6   title 15, section 1673(b), does not apply to funds withheld by a 
  4.7   financial institution under this section. 
  4.8      Subd. 5.  [INFORMAL RESOLUTIONS OF DISPUTES.] (a) After the 
  4.9   obligor receives the notice of funds withholding, the obligor 
  4.10  may contact the public authority with information regarding a 
  4.11  mistake of fact or the basis for claiming the funds are exempt.  
  4.12  Contact by the obligor under this subdivision does not 
  4.13  constitute a contest to the withholding under subdivision 7.  
  4.14  The time frame to contest the funds withholding under 
  4.15  subdivision 7 is not stayed while the obligor contacts the 
  4.16  public authority.  The obligor may contest pursuant to 
  4.17  subdivision 7. 
  4.18     (b) In the event an obligor's contact with the public 
  4.19  authority results in a resolution of the matter, the public 
  4.20  authority shall promptly notify the financial institution to 
  4.21  terminate funds withholding. 
  4.22     Subd. 6.  [RESPONSIBILITIES OF THE PUBLIC AUTHORITY.] (a) 
  4.23  If an obligor serves the public authority with a notice of 
  4.24  motion and motion pursuant to subdivision 7, the public 
  4.25  authority shall immediately notify: 
  4.26     (1) the financial institution to continue withholding the 
  4.27  funds pending resolution of the matter; and 
  4.28     (2) the obligee of the scheduled hearing date and time by 
  4.29  first class mail at the obligee's last known address. 
  4.30     (b) Upon final resolution of the matter, including the 
  4.31  applicable appeal times, the public authority shall forward to 
  4.32  the financial institution a notice of release regarding the 
  4.33  appropriate transfer of funds. 
  4.34     (c) Funds received by the public authority must be applied 
  4.35  to the arrears balance for the case identified in the notice of 
  4.36  funds withholding in compliance with federal regulations. 
  5.1      (d) In the event that multiple notices result in an amount 
  5.2   of withheld funds which is insufficient to satisfy all of the 
  5.3   withholding notices, the public authority shall distribute funds 
  5.4   to satisfy each withholding notice in the order in which they 
  5.5   were sent to the financial institution. 
  5.6      Subd. 7.  [CONTEST.] (a) The obligor may contest 
  5.7   withholding on the limited grounds that the withholding or the 
  5.8   amount withheld is improper due to mistake of fact or that the 
  5.9   funds held in the account or accounts are exempt from 
  5.10  withholding for child support purposes under state or federal 
  5.11  law.  
  5.12     (b) If the obligor chooses to contest the withholding, 
  5.13  within 15 calendar days of notice of funds withholding, the 
  5.14  obligor shall: 
  5.15     (i) file a motion in district court, including in the 
  5.16  motion the alleged mistake of fact or the basis for any claim 
  5.17  that the funds are exempt from withholding; 
  5.18     (ii) obtain a hearing date from the court administrator; 
  5.19  and 
  5.20     (iii) serve the public authority, either personally or by 
  5.21  fax, with a copy of the motion no later than two business days 
  5.22  after obtaining a hearing date. 
  5.23     (c) The date for hearing the contest shall be set at the 
  5.24  earliest practicable time, but the matter must be heard no later 
  5.25  than 14 calendar days from the date a request for hearing is 
  5.26  made.  The district court administrator may schedule these cases 
  5.27  in district court if the availability of the child support 
  5.28  magistrate does not permit a contest to occur within the time 
  5.29  frames of this section. 
  5.30     Subd. 8.  [APPLICABILITY OF SECTION 518.5513.] Provisions 
  5.31  of section 518.5513 apply to this section, except when in 
  5.32  conflict with the specific provisions of this section, in which 
  5.33  case this section applies. 
  5.34     Subd. 9.  [INCONSISTENT TIMES.] Time frames set out in the 
  5.35  Rules of Civil Procedure that are inconsistent with this section 
  5.36  do not apply to this section. 
  6.1      Subd. 10.  [FORM PREPARATION.] The supreme court 
  6.2   administrator's office shall prepare and make available to the 
  6.3   courts and obligors a form to be submitted by the obligor in 
  6.4   support of a motion to contest funds withholding under this 
  6.5   section. 
  6.6      Sec. 3.  Minnesota Statutes 1998, section 518.64, 
  6.7   subdivision 5, is amended to read: 
  6.8      Subd. 5.  [FORM.] The department of human services supreme 
  6.9   court administrator's office shall prepare and make available to 
  6.10  courts, obligors and persons to whom child support is owed a 
  6.11  form to be submitted by the obligor or the person to whom child 
  6.12  support is owed in support of a motion for a modification of an 
  6.13  order for support or maintenance or for contempt of court.  
  6.14     Sec. 4.  Minnesota Statutes 1998, section 552.03, is 
  6.15  amended to read: 
  6.16     552.03 [SCOPE OF GENERAL AND SPECIFIC PROVISIONS.] 
  6.17     General provisions relating to the public authority's 
  6.18  summary execution as authorized in this chapter are set forth in 
  6.19  section 552.04.  Specific provisions relating to summary 
  6.20  execution on funds withholding at a financial institution are 
  6.21  set forth in section 552.05 518.6112.  When the public authority 
  6.22  levies against funds at a financial institution, the specific 
  6.23  provisions of section 552.05 must be complied with in addition 
  6.24  to the general provisions of section 552.04.  Provisions 
  6.25  contained in the statutory forms are incorporated in this 
  6.26  chapter and have the same force of law as any other provisions 
  6.27  in this chapter.  
  6.28     Sec. 5.  Minnesota Statutes 1998, section 552.04, 
  6.29  subdivision 11, is amended to read: 
  6.30     Subd. 11.  [BAD FAITH CLAIM.] If, in a proceeding brought 
  6.31  under section 552.05 518.6112, subdivision 9 7, or a similar 
  6.32  proceeding under this chapter to determine a claim of exemption, 
  6.33  the claim of exemption is not upheld, and the court finds that 
  6.34  it was asserted in bad faith, the public authority shall be 
  6.35  awarded actual damages, costs, reasonable attorney's fees 
  6.36  resulting from the additional proceedings, and an amount not to 
  7.1   exceed $100.  If the claim of exemption is upheld, and the court 
  7.2   finds that the public authority disregarded the claim of 
  7.3   exemption in bad faith, the judgment debtor shall be awarded 
  7.4   actual damages, costs, reasonable attorney's fees resulting from 
  7.5   the additional proceedings, and an amount not to exceed $100.  
  7.6   The underlying judgment shall be modified to reflect assessment 
  7.7   of damages, costs, and attorney's fees.  However, if the party 
  7.8   in whose favor a penalty assessment is made is not actually 
  7.9   indebted to that party's attorney for fees, the attorney's fee 
  7.10  award shall be made directly to the attorney, and if not paid, 
  7.11  an appropriate judgment in favor of the attorney shall be 
  7.12  entered.  Any action by a public authority made in bad faith and 
  7.13  in violation of this chapter renders the execution levy void and 
  7.14  the public authority liable to the judgment debtor named in the 
  7.15  execution levy in the amount of $100, actual damages, and 
  7.16  reasonable attorney's fees and costs.  
  7.17     Sec. 6.  [REPEALER.] 
  7.18     (a) Minnesota Statutes 1998, section 552.05, subdivisions 
  7.19  1, 2, 3, 6, 7, 8, and 9; and Minnesota Statutes 1999 Supplement, 
  7.20  section 552.05, subdivisions 4, 5, and 10, are repealed. 
  7.21     (b) Minnesota Rules, parts 9500.1800; 9500.1805; 9500.1810; 
  7.22  9500.1811; 9500.1812; 9500.1815; 9500.1817; 9500.1820; and 
  7.23  9500.1821, are repealed effective October 1, 2001.