HF 997

2nd Engrossment - 87th Legislature (2011 - 2012) Posted on 04/27/2011 04:42pm

A bill for an act
relating to civil actions; regulating the imposition of certain civil penalties by
state agencies; awarding fees and expenses to prevailing parties in certain actions
involving state agencies; amending Minnesota Statutes 2010, sections 15.471,
subdivision 6, by adding a subdivision; 15.472; proposing coding for new law in
Minnesota Statutes, chapter 15.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [15.062] PENALTY FACTORS.
new text end

new text begin (a) In determining the amount of civil penalty to be proposed or assessed in an
administrative or civil action by any state agency, where there is an allegation of a
violation of statute, regulation, term, condition, or any enforceable standard, the following
factors shall be considered by the state agency, delegated county administering state
authority, administrative law judge, or court:
new text end

new text begin (1) the willfulness of the violation;
new text end

new text begin (2) the gravity of the violation, including irreparable damage to humans, animals,
air, water, land, or other natural resources of the state;
new text end

new text begin (3) the number of prior contacts with the person where the state agency offered
reasonable corrective measures prior to issuing the fine;
new text end

new text begin (4) the history of past violations;
new text end

new text begin (5) the number of violations;
new text end

new text begin (6) the economic benefit gained by the person by allowing or committing the
violation;
new text end

new text begin (7) the costs incurred to correct the violation or otherwise comply;
new text end

new text begin (8) the person's ability to pay;
new text end

new text begin (9) other economic factors affecting the feasibility or practicality of compliance;
new text end

new text begin (10) penalties that similarly situated persons have paid to the state for similar
violations;
new text end

new text begin (11) the cooperation and responsiveness of the person, provided that a penalty shall
not be imposed or enhanced because a person has contested a violation or asserted their
rights or defenses; and
new text end

new text begin (12) other factors as justice or other law may require.
new text end

new text begin (b) For a violation after an initial violation, the state agency, delegated county
administering state authority, administrative law judge, or court shall, in determining the
amount of a penalty, also consider the following factors:
new text end

new text begin (1) similarity of the most recent previous violation and the violation to be penalized;
new text end

new text begin (2) time elapsed since the last violation;
new text end

new text begin (3) number of previous violations; and
new text end

new text begin (4) response of the person to the most recent previous violation identified.
new text end

new text begin (c) In addition to stating the factual and legal basis for each violation, the state
agency shall, in its notice, demand, order, or complaint in an administrative or civil
proceeding, document the application of these considerations in determining any proposed
penalty. The state agency shall provide this documentation to the person subject to the
administrative or civil action 30 days before initiating any such action, unless the alleged
violation presents an imminent and substantial endangerment to public safety, public
health, or the environment.
new text end

new text begin (d) A penalty or stipulation agreement resulting from a violation of chapters 84,
103G, 115, 115A, or 116, that pollutes, impairs, or destroys the environment may not
include expenditures by the violator for purposes that are not directly related to efforts to
mitigate or remediate the specific violation.
new text end

Sec. 2.

Minnesota Statutes 2010, section 15.471, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Demand. new text end

new text begin "Demand" means the express demand of the agency which led
to the civil action or contested case proceeding but does not include a recitation by the
agency of the maximum statutory penalty:
new text end

new text begin (1) in the administrative complaint; or
new text end

new text begin (2) elsewhere when accompanied by an express demand for a lesser amount.
new text end

Sec. 3.

Minnesota Statutes 2010, section 15.471, subdivision 6, is amended to read:

Subd. 6.

Party.

(a) Except as modified by paragraph (b), "party" means a person
named or admitted as a party, or seeking and entitled to be admitted as a party, in a court
action or contested case proceeding, or a person admitted by an administrative law judge
for limited purposes, and who is:

(1) an unincorporated business, partnership, corporation, association, or
organization, having not more than 500 employees at the time the civil action was filed or
the contested case proceeding was initiated; and

(2) an unincorporated business, partnership, corporation, association, or organization
whose annual revenues did not exceed deleted text begin $7,000,000 deleted text end new text begin $30,000,000 new text end at the time the civil action
was filed or the contested case proceeding was initiated.

(b) "Party" also includes a partner, officer, shareholder, member, or owner of an
entity described in paragraph (a), clauses (1) and (2).

(c) "Party" does not include a person providing services pursuant to licensure or
reimbursement on a cost basis by the Department of Health or the Department of Human
Services, when that person is named or admitted or seeking to be admitted as a party in a
matter which involves the licensing or reimbursement rates, procedures, or methodology
applicable to those services.

Sec. 4.

Minnesota Statutes 2010, section 15.472, is amended to read:

15.472 FEES AND EXPENSES; CIVIL ACTION OR CONTESTED CASE
PROCEEDING INVOLVING STATE.

(a) If a prevailing party other than the state, in a civil action or contested case
proceeding other than a tort action, brought by or against the state, shows that the position
of the state was not substantially justified, the court or administrative law judge shall award
fees and other expenses to the party unless special circumstances make an award unjust.

new text begin (b) If, in a civil action or contested case proceeding arising from an agency action
to enforce a party's compliance with a statutory or regulatory requirement, the demand
by the agency is substantially in excess of the decision of the administrative law judge
or court and is unreasonable when compared with such decision under the facts and
circumstances of the case, the administrative law judge or court shall award to the party
the fees and other expenses related to defending against the excessive demand, unless
the party has committed a willful violation of law or engaged in conduct that unduly
and unreasonably protracted the final resolution of the matter in controversy, or special
circumstances make an award unjust.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end A party seeking an award of fees and other expenses shall, within 30 days of
final judgment in the action, submit to the court or administrative law judge an application
of fees and other expenses which shows that the party is a prevailing party and is eligible
to receive an award, and the amount sought, including an itemized statement from any
attorney or expert witness representing or appearing on behalf of the party stating the
actual time expended and the rate at which fees and other expenses were computed. The
party shall also allege that the position of the state was not substantially justified.

deleted text begin (c) deleted text end new text begin (d) new text end The court or administrative law judge may reduce the amount to be awarded
under this section, or deny an award, to the extent that the prevailing party during
the proceedings engaged in conduct that unduly and unreasonably protracted the final
resolution of the matter in controversy. The decision of an administrative law judge under
this section must be made a part of the record containing the final decision of the agency
and must include written findings and conclusions.

deleted text begin (d) deleted text end new text begin (e) new text end This section does not preclude a party from recovering costs, disbursements,
fees, and expenses under other applicable law.

Sec. 5. new text begin TITLE.
new text end

new text begin This act may be cited as the "Small Business Bill of Rights - Regulatory Fairness
Act."
new text end

Sec. 6. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin This act is effective August 1, 2011, and applies to administrative or civil actions
commenced on or after that date.
new text end