SF 1532

2nd Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to commerce; regulating the business of providing debt management
services; providing enforcement powers, civil remedies, and criminal penalties;
amending Minnesota Statutes 2006, sections 45.011, subdivision 1; 46.04,
subdivision 1; 46.05; 46.131, subdivision 2; 325E.311, subdivision 6; 325N.01;
proposing coding for new law as Minnesota Statutes, chapter 332A; repealing
Minnesota Statutes 2006, sections 332.12; 332.13; 332.14; 332.15; 332.16;
332.17; 332.18; 332.19; 332.20; 332.21; 332.22; 332.23; 332.24; 332.25; 332.26;
332.27; 332.28; 332.29.

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

Section 1.

Minnesota Statutes 2006, section 45.011, subdivision 1, is amended to read:

Subdivision 1.

Scope.

As used in chapters 45 to 83, 155A, 332, new text begin 332A, new text end 345, and
359, and sections 325D.30 to 325D.42, 326.83 to 326.991, and 386.61 to 386.78, unless
the context indicates otherwise, the terms defined in this section have the meanings given
them.

Sec. 2.

Minnesota Statutes 2006, section 46.04, subdivision 1, is amended to read:

Subdivision 1.

General.

The commissioner of commerce, referred to in chapters
46 to 59A, and deleted text begin sections 332.12 to 332.29 deleted text end new text begin chapter 332A new text end , as the commissioner, is vested
with all the powers, authority, and privileges which, prior to the enactment of Laws 1909,
chapter 201, were conferred by law upon the public examiner, and shall take over all
duties in relation to state banks, savings banks, trust companies, savings associations, and
other financial institutions within the state which, prior to the enactment of chapter 201,
were imposed upon the public examiner. The commissioner of commerce shall exercise
a constant supervision, either personally or through the examiners herein provided for,
over the books and affairs of all state banks, savings banks, trust companies, savings
associations, credit unions, industrial loan and thrift companies, and other financial
institutions doing business within this state; and shall, through examiners, examine each
financial institution at least once every 24 calendar months. In satisfying this examination
requirement, the commissioner may accept reports of examination prepared by a federal
agency having comparable supervisory powers and examination procedures. With the
exception of industrial loan and thrift companies which do not have deposit liabilities
and licensed regulated lenders, it shall be the principal purpose of these examinations to
inspect and verify the assets and liabilities of each and so far investigate the character
and value of the assets of each institution as to determine with reasonable certainty that
the values are correctly carried on its books. Assets and liabilities shall be verified in
accordance with methods of procedure which the commissioner may determine to be
adequate to carry out the intentions of this section. It shall be the further purpose of
these examinations to assess the adequacy of capital protection and the capacity of the
institution to meet usual and reasonably anticipated deposit withdrawals and other cash
commitments without resorting to excessive borrowing or sale of assets at a significant
loss, and to investigate each institution's compliance with applicable laws and rules. Based
on the examination findings, the commissioner shall make a determination as to whether
the institution is being operated in a safe and sound manner. None of the above provisions
limits the commissioner in making additional examinations as deemed necessary or
advisable. The commissioner shall investigate the methods of operation and conduct of
these institutions and their systems of accounting, to ascertain whether these methods and
systems are in accordance with law and sound banking principles. The commissioner may
make requirements as to records as deemed necessary to facilitate the carrying out of the
commissioner's duties and to properly protect the public interest. The commissioner may
examine, or cause to be examined by these examiners, on oath, any officer, director,
trustee, owner, agent, clerk, customer, or depositor of any financial institution touching
the affairs and business thereof, and may issue, or cause to be issued by the examiners,
subpoenas, and administer, or cause to be administered by the examiners, oaths. In
case of any refusal to obey any subpoena issued under the commissioner's direction,
the refusal may at once be reported to the district court of the district in which the bank
or other financial institution is located, and this court shall enforce obedience to these
subpoenas in the manner provided by law for enforcing obedience to subpoenas of the
court. In all matters relating to official duties, the commissioner of commerce has the
power possessed by courts of law to issue subpoenas and cause them to be served and
enforced, and all officers, directors, trustees, and employees of state banks, savings banks,
trust companies, savings associations, and other financial institutions within the state,
and all persons having dealings with or knowledge of the affairs or methods of these
institutions, shall afford reasonable facilities for these examinations, make returns and
reports to the commissioner of commerce as the commissioner may require; attend and
answer, under oath, the commissioner's lawful inquiries; produce and exhibit any books,
accounts, documents, and property as the commissioner may desire to inspect, and in all
things aid the commissioner in the performance of duties.

Sec. 3.

Minnesota Statutes 2006, section 46.05, is amended to read:

46.05 SUPERVISION OVER FINANCIAL INSTITUTIONS.

Every state bank, savings bank, trust company, savings association, new text begin debt
management services provider, new text end and other financial institutions shall be at all times under
the supervision and subject to the control of the commissioner of commerce. If, and
whenever in the performance of duties, the commissioner finds it necessary to make a
special investigation of any financial institution under the commissioner's supervision,
and other than a complete examination, the commissioner shall make a charge therefor to
include only the necessary costs thereof. Such a fee shall be payable to the commissioner
on the commissioner's making a request for payment.

Sec. 4.

Minnesota Statutes 2006, section 46.131, subdivision 2, is amended to read:

Subd. 2.

Assessment authority.

Each bank, trust company, savings bank, savings
association, regulated lender, industrial loan and thrift company, credit union, motor
vehicle sales finance company, debt deleted text begin prorating agency deleted text end new text begin management services provider new text end and
insurance premium finance company organized under the laws of this state or required
to be administered by the commissioner of commerce shall pay into the state treasury its
proportionate share of the cost of maintaining the Department of Commerce.

Sec. 5.

Minnesota Statutes 2006, section 325E.311, subdivision 6, is amended to read:

Subd. 6.

Telephone solicitation.

"Telephone solicitation" means any voice
communication over a telephone line for the purpose of encouraging the purchase or
rental of, or investment in, property, goods, or services, whether the communication is
made by a live operator, through the use of an automatic dialing-announcing device as
defined in section 325E.26, subdivision 2, or by other means. Telephone solicitation
does not include communications:

(1) to any residential subscriber with that subscriber's prior express invitation or
permission; or

(2) by or on behalf of any person or entity with whom a residential subscriber has a
prior or current business or personal relationship.

Telephone solicitation also does not include communications if the caller is identified by a
caller identification service and the call is:

(i) by or on behalf of an organization that is identified as a nonprofit organization
under state or federal law new text begin , unless the organization is a debt management services provider
defined in section 332A.02 new text end ;

(ii) by a person soliciting without the intent to complete, and who does not in
fact complete, the sales presentation during the call, but who will complete the sales
presentation at a later face-to-face meeting between the solicitor who makes the call
and the prospective purchaser; or

(iii) by a political party as defined under section 200.02, subdivision 6.

Sec. 6.

Minnesota Statutes 2006, section 325N.01, is amended to read:

325N.01 DEFINITIONS.

The definitions in paragraphs (a) to (h) apply to sections 325N.01 to 325N.09.

(a) "Foreclosure consultant" means any person who, directly or indirectly, makes
any solicitation, representation, or offer to any owner to perform for compensation or
who, for compensation, performs any service which the person in any manner represents
will in any manner do any of the following:

(1) stop or postpone the foreclosure sale;

(2) obtain any forbearance from any beneficiary or mortgagee;

(3) assist the owner to exercise the right of reinstatement provided in section 580.30;

(4) obtain any extension of the period within which the owner may reinstate the
owner's obligation;

(5) obtain any waiver of an acceleration clause contained in any promissory note or
contract secured by a mortgage on a residence in foreclosure or contained in the mortgage;

(6) assist the owner in foreclosure or loan default to obtain a loan or advance
of funds;

(7) avoid or ameliorate the impairment of the owner's credit resulting from the
recording of a notice of default or the conduct of a foreclosure sale; or

(8) save the owner's residence from foreclosure.

(b) A foreclosure consultant does not include any of the following:

(1) a person licensed to practice law in this state when the person renders service
in the course of his or her practice as an attorney-at-law;

(2) a person licensed as a debt deleted text begin prorater under sections 332.12 to 332.29 deleted text end new text begin management
services provider under chapter 332A new text end , when the person is acting as a debt deleted text begin prorater deleted text end new text begin
management services provider new text end as defined in deleted text begin these sections deleted text end new text begin that chapter new text end ;

(3) a person licensed as a real estate broker or salesperson under chapter 82 when the
person engages in acts whose performance requires licensure under that chapter unless the
person is engaged in offering services designed to, or purportedly designed to, enable the
owner to retain possession of the residence in foreclosure;

(4) a person licensed as an accountant under chapter 326A when the person is acting
in any capacity for which the person is licensed under those provisions;

(5) a person or the person's authorized agent acting under the express authority
or written approval of the Department of Housing and Urban Development or other
department or agency of the United States or this state to provide services;

(6) a person who holds or is owed an obligation secured by a lien on any residence
in foreclosure when the person performs services in connection with this obligation or lien
if the obligation or lien did not arise as the result of or as part of a proposed foreclosure
reconveyance;

(7) any person or entity doing business under any law of this state, or of the United
States relating to banks, trust companies, savings and loan associations, industrial loan and
thrift companies, regulated lenders, credit unions, insurance companies, or a mortgagee
which is a United States Department of Housing and Urban Development approved
mortgagee and any subsidiary or affiliate of these persons or entities, and any agent or
employee of these persons or entities while engaged in the business of these persons
or entities;

(8) a person licensed as a residential mortgage originator or servicer pursuant to
chapter 58, when acting under the authority of that license or a foreclosure purchaser as
defined in section 325N.10;

(9) a nonprofit agency or organization that offers counseling or advice to an owner
of a home in foreclosure or loan default if they do not contract for services with for-profit
lenders or foreclosure purchasers; and

(10) a judgment creditor of the owner, to the extent that the judgment creditor's claim
accrued prior to the personal service of the foreclosure notice required by section 580.03,
but excluding a person who purchased the claim after such personal service.

(c) "Foreclosure reconveyance" means a transaction involving:

(1) the transfer of title to real property by a foreclosed homeowner during a
foreclosure proceeding, either by transfer of interest from the foreclosed homeowner or
by creation of a mortgage or other lien or encumbrance during the foreclosure process
that allows the acquirer to obtain title to the property by redeeming the property as
a junior lienholder; and

(2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest
back to the foreclosed homeowner by the acquirer or a person acting in participation with
the acquirer that allows the foreclosed homeowner to possess the real property following
the completion of the foreclosure proceeding, which interest includes, but is not limited to,
an interest in a contract for deed, purchase agreement, option to purchase, or lease.

(d) "Person" means any individual, partnership, corporation, limited liability
company, association, or other group, however organized.

(e) "Service" means and includes, but is not limited to, any of the following:

(1) debt, budget, or financial counseling of any type;

(2) receiving money for the purpose of distributing it to creditors in payment or
partial payment of any obligation secured by a lien on a residence in foreclosure;

(3) contacting creditors on behalf of an owner of a residence in foreclosure;

(4) arranging or attempting to arrange for an extension of the period within which
the owner of a residence in foreclosure may cure the owner's default and reinstate his or
her obligation pursuant to section 580.30;

(5) arranging or attempting to arrange for any delay or postponement of the time of
sale of the residence in foreclosure;

(6) advising the filing of any document or assisting in any manner in the preparation
of any document for filing with any bankruptcy court; or

(7) giving any advice, explanation, or instruction to an owner of a residence in
foreclosure, which in any manner relates to the cure of a default in or the reinstatement
of an obligation secured by a lien on the residence in foreclosure, the full satisfaction of
that obligation, or the postponement or avoidance of a sale of a residence in foreclosure,
pursuant to a power of sale contained in any mortgage.

(f) "Residence in foreclosure" means residential real property consisting of one to
four family dwelling units, one of which the owner occupies as his or her principal place
of residence, and against which there is an outstanding notice of pendency of foreclosure,
recorded pursuant to section 580.032, or against which a summons and complaint has
been served under chapter 581.

(g) "Owner" means the record owner of the residential real property in foreclosure at
the time the notice of pendency was recorded, or the summons and complaint served.

(h) "Contract" means any agreement, or any term in any agreement, between
a foreclosure consultant and an owner for the rendition of any service as defined in
paragraph (e).

Sec. 7.

new text begin [332A.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin Unless a different meaning is clearly indicated by the context,
for the purposes of this chapter the terms defined in this section have the meanings given
them.
new text end

new text begin Subd. 2. new text end

new text begin Accreditation. new text end

new text begin "Accreditation" means certification to industry standards
as an accredited credit counseling provider by the International Standards Organization
or the Council on Accreditation.
new text end

new text begin Subd. 3. new text end

new text begin Attorney general. new text end

new text begin "Attorney general" means the attorney general of the
state of Minnesota.
new text end

new text begin Subd. 4. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 5. new text end

new text begin Controlling or affiliated party. new text end

new text begin "Controlling or affiliated party" means
any person directly or indirectly controlling, controlled by, or under common control
with another person.
new text end

new text begin Subd. 6. new text end

new text begin Debt management services agreement. new text end

new text begin "Debt management services
agreement" means the written contract between the debt management services provider
and the debtor.
new text end

new text begin Subd. 7. new text end

new text begin Debt management services plan. new text end

new text begin "Debt management services plan"
means the debtor's individualized package of debt management services set forth in the
debt management services agreement.
new text end

new text begin Subd. 8. new text end

new text begin Debt management services provider. new text end

new text begin "Debt management services
provider" means any person offering or providing debt management services to a debtor
domiciled in this state, regardless of whether or not a fee is charged for the services and
regardless of whether the person maintains a physical presence in the state. This term does
not include services performed by the following when engaged in the regular course of
their respective businesses and professions:
new text end

new text begin (1) attorneys at law, escrow agents, accountants, broker-dealers in securities;
new text end

new text begin (2) state or national banks, trust companies, savings associations, title insurance
companies, insurance companies, and all other lending institutions duly authorized to
transact business in Minnesota, provided no fee is charged for the service;
new text end

new text begin (3) persons who, as employees on a regular salary or wage of an employer not
engaged in the business of debt management, perform credit services for their employer;
new text end

new text begin (4) public officers acting in their official capacities and persons acting as a debt
management services provider pursuant to court order;
new text end

new text begin (5) any person while performing services incidental to the dissolution, winding up,
or liquidation of a partnership, corporation, or other business enterprise;
new text end

new text begin (6) the state, its political subdivisions, public agencies, and their employees;
new text end

new text begin (7) credit unions and collection agencies, provided no fee is charged for the service;
new text end

new text begin (8) "qualified organizations" designated as representative payees for purposes of the
Social Security and Supplemental Security Income Representative Payee System and the
federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508;
new text end

new text begin (9) accelerated mortgage payment providers. "Accelerated mortgage payment
providers" are persons who, after satisfying the requirements of sections 332.30 to
332.303, receive funds to make mortgage payments to a lender or lenders, on behalf
of mortgagors, in order to exceed regularly scheduled minimum payment obligations
under the terms of the indebtedness. The term does not include: (i) persons or entities
described in clauses (1) to (8); (ii) mortgage lenders or servicers, industrial loan and thrift
companies, or regulated lenders under chapter 56; or (iii) persons authorized to make
loans under section 47.20, subdivision 1. For purposes of this clause and sections 332.30
to 332.303, "lender" means the original lender or that lender's assignee, whichever is
the current mortgage holder; and
new text end

new text begin (10) debt settlement providers.
new text end

new text begin Subd. 9. new text end

new text begin Debt management services. new text end

new text begin "Debt management services" means the
provision of any one or more of the following:
new text end

new text begin (1) managing the financial affairs of an individual by distributing income or money
to the individual's creditors; or
new text end

new text begin (2) receiving funds for the purpose of distributing the funds among creditors in
payment or partial payment of obligations of a debtor.
new text end

new text begin Any person so engaged or holding out as so engaged is deemed to be engaged in the
provision of debt management services regardless of whether or not a fee is charged for
such services.
new text end

new text begin Subd. 10. new text end

new text begin Debt settlement service. new text end

new text begin "Debt settlement service" means the
negotiation, adjustment, or settlement of a consumer's debt with the consumer's creditor
without holding or receiving the debtor's funds or property and without paying the debtor's
funds to, or distributing the debtor's property among, creditors.
new text end

new text begin Subd. 11. new text end

new text begin Debt settlement provider. new text end

new text begin "Debt settlement provider" means any
person or entity engaging in or holding itself out as engaging in the business of debt
settlement service for compensation. The term shall not include persons or entities listed
in subdivision 8, clauses (1) to (9).
new text end

new text begin Subd. 12. new text end

new text begin Debtor. new text end

new text begin "Debtor" means the person for whom the debt management
services are performed.
new text end

new text begin Subd. 13. new text end

new text begin Person. new text end

new text begin "Person" means any individual, firm, partnership, association,
or corporation.
new text end

new text begin Subd. 14. new text end

new text begin Registrant. new text end

new text begin "Registrant" means any person registered by the
commissioner pursuant to this chapter and, where used in conjunction with an act or
omission required or prohibited by this chapter, shall mean any person performing debt
management services.
new text end

Sec. 8.

new text begin [332A.03] REQUIREMENT OF REGISTRATION.
new text end

new text begin On or after August 1, 2007, it is unlawful for any person, whether or not located in
this state, to operate as a debt management services provider or provide debt management
services, including, but not limited to, offering, advertising, or executing or causing to
be executed any debt management services or debt management services agreement,
except as authorized by law without first becoming registered as provided in this
chapter. A person who possesses a valid license as a debt prorater that was issued by the
commissioner before August 1, 2007, is deemed to be registered as a debt management
services provider until the date the debt prorater license expires, at which time the licensee
must obtain a renewal as a debt management services provider in compliance with this
chapter. Debt proraters who were not required to be licensed as debt proraters before
August 1, 2007, may continue to provide debt management services without complying
with this chapter to those debtors who entered into a contract to participate in a debt
management plan before August 1, 2007, except that the debt prorater must comply with
section 332A.13, subdivision 2.
new text end

Sec. 9.

new text begin [332A.04] REGISTRATION.
new text end

new text begin Subdivision 1. new text end

new text begin Form. new text end

new text begin Application for registration to operate as a debt management
services provider in this state must be made in writing to the commissioner, under oath, in
the form prescribed by the commissioner, and must contain:
new text end

new text begin (1) the full name of each principal of the entity applying;
new text end

new text begin (2) the address, which must not be a post office box, and the telephone number and,
if applicable, e-mail address, of the applicant;
new text end

new text begin (3) identification of the trust account required under section 332A.13;
new text end

new text begin (4) consent to the jurisdiction of the courts of this state;
new text end

new text begin (5) the name and address of the registered agent authorized to accept service of
process on behalf of the applicant or appointment of the commissioner as the applicant's
agent for purposes of accepting service of process;
new text end

new text begin (6) disclosure of:
new text end

new text begin (i) whether any controlling or affiliated party has ever been convicted of a crime
or found civilly liable for an offense involving moral turpitude, including forgery,
embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to
defraud, or any other similar offense or violation, or any violation of a federal or state law
or regulation in connection with activities relating to the rendition of debt management
services or involving any consumer fraud, false advertising, deceptive trade practices, or
similar consumer protection law;
new text end

new text begin (ii) any judgments, private or public litigation, tax liens, written complaints,
administrative actions, or investigations by any government agency against the applicant
or any officer, director, manager, or shareholder owning more than five percent interest
in the applicant, unresolved or otherwise, filed or otherwise commenced within the
preceding ten years;
new text end

new text begin (iii) whether the applicant or any person employed by the applicant has had a record
of having defaulted in the payment of money collected for others, including the discharge
of debts through bankruptcy proceedings; and
new text end

new text begin (iv) whether the applicant's license or registration to provide debt management
services in any other state has ever been revoked or suspended;
new text end

new text begin (7) a copy of the applicant's standard debt management services agreement that the
applicant intends to execute with debtors;
new text end

new text begin (8) proof of accreditation of:
new text end

new text begin (i) the debt management services provider; and
new text end

new text begin (ii) all individuals employed by, under contract with, or otherwise agents of the
provider who offer to provide or provide debt management services; and
new text end

new text begin (9) any other information and material as the commissioner may require.
new text end

new text begin Subd. 2. new text end

new text begin Term and scope of registration. new text end

new text begin The registration must remain in full force
and effect for one year or until it is surrendered by the registrant or revoked or suspended
by the commissioner. The registration is limited solely to the business of providing debt
management services.
new text end

new text begin Subd. 3. new text end

new text begin Fees. new text end

new text begin The registration application must be accompanied by payment of
$1,000 as a registration fee.
new text end

new text begin Subd. 4. new text end

new text begin Bond. new text end

new text begin The registration application must be accompanied by payment of
the premium for a surety bond in which the applicant shall be the obligor, in a sum to be
determined by the commissioner but not less than $5,000, and in which an insurance
company, which is duly authorized by the state of Minnesota to transact the business of
fidelity and surety insurance, shall be a surety. However, the commissioner may accept
a deposit in cash, or securities that may legally be purchased by savings banks or for
trust funds of an aggregate market value equal to the bond requirement, in lieu of the
surety bond. The cash or securities must be deposited with the commissioner of finance.
The commissioner may also require a fidelity bond in an appropriate amount covering
employees of any applicant. Each branch office or additional place of business of an
applicant must be bonded as provided in this subdivision. In determining the bond amount
necessary for the maintenance of any office, whether it is a surety bond, fidelity bond, or
both, the commissioner shall consider the financial responsibility, experience, character,
and general fitness of the debt management services provider and its operators and owners;
the volume of business handled or proposed to be handled; the location of the office
and the geographical area served or proposed to be served; and other information the
commissioner may deem pertinent based upon past performance, previous examinations,
annual reports, and manner of business conducted in other states.
new text end

new text begin Subd. 5. new text end

new text begin Condition of bond. new text end

new text begin The bond must run to the state of Minnesota for the
use of the state and of any person or persons who may have a cause of action against the
obligor arising out of the obligor's activities as a debt management services provider to
a debtor domiciled in this state. The bond must be conditioned that the obligor will not
commit any fraudulent act and will faithfully conform to and abide by the provisions of
this chapter and of all rules lawfully made by the commissioner under this chapter and
pay to the state and to any such person or persons any and all money that may become
due or owing to the state or to such person or persons from the obligor under and by
virtue of this chapter.
new text end

new text begin Subd. 6. new text end

new text begin Right of action on bond. new text end

new text begin If the registrant has failed to account to a debtor
or distribute to the debtor's creditors the amounts required by this chapter and the debt
management services agreement between the debtor and registrant, the debtor or the
debtor's legal representative or receiver, the commissioner, or the attorney general, shall
have, in addition to all other legal remedies, a right of action in the name of the debtor
on the bond or the security given under this section, for loss suffered by the debtor, not
exceeding the face amount of the bond or security, and without the necessity of joining
the registrant in the suit or action.
new text end

new text begin Subd. 7. new text end

new text begin Registrant list. new text end

new text begin The commissioner must maintain a list of registered debt
management services providers. The list must be made available to the public in written
form upon request and on the Department of Commerce Web site.
new text end

Sec. 10.

new text begin [332A.05] NONASSIGNMENT OF REGISTRATION.
new text end

new text begin A registration must not be transferred or assigned without the consent of the
commissioner.
new text end

Sec. 11.

new text begin [332A.06] RENEWAL OF REGISTRATION.
new text end

new text begin Each year, each registrant under the provisions of this chapter must, not more than
60 nor less than 30 days before its registration is to expire, apply to the commissioner for
renewal of its registration on a form prescribed by the commissioner. The application must
be signed by the registrant under penalty of perjury, contain current information on all
matters required in the original application, and be accompanied by a payment of $250.
The registrant must maintain a continuous surety bond that satisfies the requirements of
section 332A.04, subdivision 4, provided that the commissioner may require a different
amount that is at least equal to the largest amount that has accrued in the registrant's trust
account during the previous year. The renewal is effective for one year.
new text end

Sec. 12.

new text begin [332A.07] OTHER DUTIES OF REGISTRANT.
new text end

new text begin Subdivision 1. new text end

new text begin Requirement to update information. new text end

new text begin A registrant must update any
information required by this chapter provided in its original or renewal application not
later than 90 days after the date the events precipitating the update occurred.
new text end

new text begin Subd. 2. new text end

new text begin Inspection of debtor of registration. new text end

new text begin Each registrant must maintain a
copy of its registration in its files. The registrant must allow a debtor, upon request, to
inspect the registration.
new text end

Sec. 13.

new text begin [332A.08] DENIAL OF REGISTRATION.
new text end

new text begin The commissioner, with notice to the applicant by certified mail sent to the address
listed on the application, may deny an application for a registration upon finding that
the applicant:
new text end

new text begin (1) has submitted an application required under section 332A.04 that contains
incorrect, misleading, incomplete, or materially untrue information. An application is
incomplete if it does not include all the information required in section 332A.04;
new text end

new text begin (2) has failed to pay any fee or pay or maintain any bond required by this chapter,
or failed to comply with any order, decision, or finding of the commissioner made under
and within the authority of this chapter;
new text end

new text begin (3) has violated any provision of this chapter or any rule or direction lawfully made
by the commissioner under and within the authority of this chapter;
new text end

new text begin (4) or any controlling or affiliated party has ever been convicted of a crime or found
civilly liable for an offense involving moral turpitude, including forgery, embezzlement,
obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any
other similar offense or violation, or any violation of a federal or state law or regulation
in connection with activities relating to the rendition of debt management services or
any consumer fraud, false advertising, deceptive trade practices, or similar consumer
protection law;
new text end

new text begin (5) has had a registration or license previously revoked or suspended in this state or
any other state or the applicant or registrant has been permanently or temporarily enjoined
by any court of competent jurisdiction from engaging in or continuing any conduct or
practice involving any aspect of the debt management services provider business; or
any controlling or affiliated party has been an officer, director, manager, or shareholder
owning more than a ten percent interest in a debt management services provider whose
registration has previously been revoked or suspended in this state or any other state, or
who has been permanently or temporarily enjoined by any court of competent jurisdiction
from engaging in or continuing any conduct or practice involving any aspect of the debt
management services provider business;
new text end

new text begin (6) has made any false statement or representation to the commissioner;
new text end

new text begin (7) is insolvent;
new text end

new text begin (8) refuses to fully comply with an investigation or examination of the debt
management services provider by the commissioner;
new text end

new text begin (9) has improperly withheld, misappropriated, or converted any money or properties
received in the course of doing business;
new text end

new text begin (10) has failed to have a trust account with an actual cash balance equal to or greater
than the sum of the escrow balances of each debtor's account;
new text end

new text begin (11) has defaulted in making payments to creditors on behalf of debtors as required
by agreements between the provider and debtor; or
new text end

new text begin (12) has used fraudulent, coercive, or dishonest practices, or demonstrated
incompetence, untrustworthiness, or financial irresponsibility in this state or elsewhere.
new text end

Sec. 14.

new text begin [332A.09] SUSPENDING, REVOKING, OR REFUSING TO RENEW
REGISTRATION.
new text end

new text begin Subdivision 1. new text end

new text begin Procedure. new text end

new text begin The commissioner may revoke, suspend, or refuse
to renew any registration issued under this chapter, or may levy a civil penalty under
section 45.027, or any combination of actions, if the debt management services provider
or any controlling or affiliated person has committed any act or omission for which the
commissioner could have refused to issue an initial registration or renew an existing
registration. Revocation of or refusal to renew a registration must be upon notice and
hearing as prescribed in the Administrative Procedure Act, sections 14.57 to 14.69. The
notice must set a time for hearing before the commissioner not less than 20 nor more than
30 days after service of the notice, provided the registrant may waive the 20-day minimum.
The commissioner may, in the notice, suspend the registration for a period not to exceed 60
days. Unless the notice states that the registration is suspended, pending the determination
of the main issue, the registrant may continue to transact business until the final decision of
the commissioner. If the registration is suspended, the commissioner shall hold a hearing
and render a final determination within ten days of a request by the registrant. If the
commissioner fails to do so, the suspension shall terminate and be of no force or effect.
new text end

new text begin Subd. 2. new text end

new text begin Notification of interested persons. new text end

new text begin After the notice and hearing required
in subdivision 1, upon issuing an order suspending or revoking a registration or refusing to
renew a registration, the commissioner may notify all individuals who have contracts with
the affected registrant and all creditors who have agreed to a debt management services
plan that the registration has been revoked and that the order is subject to appeal.
new text end

new text begin Subd. 3. new text end

new text begin Receiver for funds of sanctioned registrant. new text end

new text begin When an order is issued
revoking or refusing to renew a registration, the commissioner may apply for, and the
district court must appoint, a receiver to temporarily or permanently receive the assets of
the registrant pending a final determination of the validity of the order.
new text end

Sec. 15.

new text begin [332A.10] WRITTEN DEBT MANAGEMENT SERVICES
AGREEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Written agreement required. new text end

new text begin A debt management services provider
may not perform any debt management services or receive any money related to a debt
management plan until the provider has obtained a debt management services agreement
that contains all terms of the agreement between the debt management services provider
and the debtor. A debt management services agreement must be in writing, dated, and
signed by the debt management services provider and the debtor. The registrant must
furnish the debtor with a copy of the signed contract upon execution.
new text end

new text begin Subd. 2. new text end

new text begin Actions prior to written agreement. new text end

new text begin No person may provide debt
management services for a debtor unless the person first has:
new text end

new text begin (1) provided the debtor individualized counseling and educational information
that, at a minimum, addresses managing household finances, managing credit and debt,
budgeting, and personal savings strategies;
new text end

new text begin (2) prepared in writing and provided to the debtor, in a form that the debtor may
keep, an individualized financial analysis and a proposed debt management plan listing the
debtor's known debts with specific recommendations regarding actions the debtor should
take to reduce or eliminate the amount of the debts, including written disclosure that
debt management services are not suitable for all debtors and that there are other ways,
including bankruptcy, to deal with indebtedness;
new text end

new text begin (3) made a determination supported by an individualized financial analysis that the
debtor can reasonably meet the requirements of the proposed debt management plan
and that there is a net tangible benefit to the debtor of entering into the proposed debt
management plan; and
new text end

new text begin (4) prepared, in a form the debtor may keep, a written list identifying all known
creditors of the debtor that the provider reasonably expects to participate in the plan
and the creditors, including secured creditors, that the provider reasonably expects not
to participate.
new text end

new text begin Subd. 3. new text end

new text begin Required terms. new text end

new text begin (a) Each debt management services agreement must
contain the following terms, which must be disclosed prominently and clearly in bold print
on the front page of the agreement, segregated by bold lines from all other information on
the page:
new text end

new text begin (1) the fee amount to be paid by the debtor and whether the initial fee amount is
refundable or nonrefundable;
new text end

new text begin (2) the monthly fee amount or percentage to be paid by the debtor; and
new text end

new text begin (3) the total amount of fees reasonably anticipated to be paid by the debtor over
the term of the agreement.
new text end

new text begin (b) Each debt management services agreement must also contain the following:
new text end

new text begin (1) a disclosure that if the amount of debt owed is increased by interest, late fees,
over the limit fees, and other amounts imposed by the creditors, the length of the debt
management services agreement will be extended and remain in force and that the total
dollar charges agreed upon may increase at the rate agreed upon in the original contract
agreement;
new text end

new text begin (2) a prominent statement describing the terms upon which the debtor may cancel
the contract as set forth in section 332A.11;
new text end

new text begin (3) a detailed description of all services to be performed by the debt management
services provider for the debtor;
new text end

new text begin (4) the debt management services provider's refund policy; and
new text end

new text begin (5) the debt management services provider's principal business address and the name
and address of its agent in this state authorized to receive service of process.
new text end

new text begin Subd. 4. new text end

new text begin Prohibited terms. new text end

new text begin The following terms shall not be included in the debt
management services agreement:
new text end

new text begin (1) a hold harmless clause;
new text end

new text begin (2) a confession of judgment, or a power of attorney to confess judgment against the
debtor or appear as the debtor in any judicial proceeding;
new text end

new text begin (3) a waiver of the right to a jury trial, if applicable, in any action brought by
or against a debtor;
new text end

new text begin (4) an assignment of or an order for payment of wages or other compensation for
services;
new text end

new text begin (5) a provision in which the debtor agrees not to assert any claim or defense arising
out of the debt management services agreement;
new text end

new text begin (6) a waiver of any provision of this chapter or a release of any obligation required
to be performed on the part of the debt management services provider; or
new text end

new text begin (7) a mandatory arbitration clause.
new text end

new text begin Subd. 5. new text end

new text begin New debt management services agreements; modification of existing
agreements. new text end

new text begin (a) Separate and additional debt management services agreements that
comply with this chapter may be entered into by the debt management services provider
and the debtor provided that no additional initial fee may be charged by the debt
management services provider.
new text end

new text begin (b) Any modification of an existing debt management services agreement, including
any increase in the number or amount of debts included in the debt management services,
must be in writing and signed by both parties. No fees, charges, or other consideration
may be demanded from the debtor for the modification, other than an increase in the
amount of the monthly maintenance fee established in the original debt management
services agreement.
new text end

Sec. 16.

new text begin [332A.11] RIGHT TO CANCEL.
new text end

new text begin Subdivision 1. new text end

new text begin Debtor's right to cancel. new text end

new text begin A debtor has the right to cancel the debt
management services agreement without cause at any time upon ten days' written notice to
the debt management services provider. In the event of cancellation, the debt management
services provider must, within ten days of the cancellation, notify the debtor's creditors of
the cancellation and provide a refund of all unexpended funds paid by or for the debtor to
the debt management services provider.
new text end

new text begin Subd. 2. new text end

new text begin Notice of debtor's right to cancel. new text end

new text begin A debt management services
agreement must contain, on its face, in an easily readable typeface immediately adjacent
to the space for signature by the debtor, the following notice: "Right To Cancel: You have
the right to cancel this contract at any time on ten days' written notice."
new text end

new text begin Subd. 3. new text end

new text begin Automatic termination. new text end

new text begin Upon the payment of all listed debts and
fees, the debt management services agreement must automatically terminate, and all
unexpended funds paid by or for the debtor to the debt management services provider
must be immediately returned to the debtor.
new text end

new text begin Subd. 4. new text end

new text begin Debt management services provider's right to cancel. new text end

new text begin A debt
management services provider may cancel a debt management services agreement
with good cause upon 30 days' written notice to the debtor. Within ten days after the
cancellation, the debt management services provider must: (1) notify the debtor's creditors
of the cancellation; and (2) return to the debtor all unexpended funds paid by or for the
debtor.
new text end

Sec. 17.

new text begin [332A.12] BOOKS, RECORDS, AND INFORMATION.
new text end

new text begin Subdivision 1. new text end

new text begin Records retention. new text end

new text begin Every registrant must keep, and use in the
registrant's business, such books, accounts, and records, including electronic records, as
will enable the commissioner to determine whether the registrant is complying with this
chapter and of the rules, orders, and directives adopted by the commissioner under this
chapter. Every registrant must preserve such books, accounts, and records for at least six
years after making the final entry on any transaction recorded therein. Examinations of
the books, records, and method of operations conducted under the supervision of the
commissioner shall be done at the cost of the registrant. The cost must be assessed as
determined under section 46.131.
new text end

new text begin Subd. 2. new text end

new text begin Statements to debtors. new text end

new text begin Each registrant must maintain and must make
available records and accounts that will enable each debtor to ascertain the amounts
paid to the creditors of the debtor. A statement showing amounts received from the
debtor, disbursements to each creditor, amounts which any creditor has agreed to accept
as payment in full for any debt owed the creditor by the debtor, charges deducted by
the registrant, and such other information as the commissioner may prescribe, must be
furnished by the registrant to the debtor at least monthly and, in addition, upon any
cancellation or termination of the contract. In addition to the statements required by
this subdivision, each debtor must have reasonable access, without cost, by electronic
or other means, to information in the registrant's files applicable to the debtor. These
statements, records, and accounts must not be disclosed except to duly authorized state
and government officials, the commissioner, the attorney general, the debtor, and the
debtor's representative and designees. Each registrant must prepare and retain in the file of
each debtor a written analysis of the debtor's income and expenses to substantiate that the
plan of payment is feasible and practicable.
new text end

Sec. 18.

new text begin [332A.13] FEES, PAYMENTS, AND CONSENT OF CREDITORS.
new text end

new text begin Subdivision 1. new text end

new text begin Origination fee. new text end

new text begin The registrant may charge a nonrefundable
origination fee of not more than $50, which may be retained by the registrant from the
initial amount paid by the debtor to the registrant.
new text end

new text begin Subd. 2. new text end

new text begin Monthly maintenance fee. new text end

new text begin The registrant may charge a periodic fee for
account maintenance or other purposes, but only if the fee is reasonable for the services
provided and does exceed the lesser of 15 percent of the monthly payment amount or $75.
new text end

new text begin Subd. 3. new text end

new text begin Additional fees unauthorized. new text end

new text begin A registrant may not impose any fee or
other charge or receive any funds or other payment other than the initial fee or monthly
maintenance fee authorized by this section.
new text end

new text begin Subd. 4. new text end

new text begin Amount of periodic payments retained. new text end

new text begin The registrant may retain as
payment for the fees authorized by this section no more than 15 percent of any periodic
payment made to the registrant by the debtor. The remaining 85 percent must be disbursed
to listed creditors under and in accordance with the debt management services agreement.
No fees or charges may be received or retained by the registrant for any handling of
recurring payments. Recurring payments include current rent, mortgage, utility, telephone,
maintenance as defined in section 518.27, child support, insurance premiums, and such
other payments as the commissioner may by rule prescribe.
new text end

new text begin Subd. 5. new text end

new text begin Advance payments. new text end

new text begin No fees or charges may be received or retained for
any payments by the debtor made more than the following number of days in advance
of the date specified in the debt management services agreement on which they are due:
(1) 42 days in the case of contracts requiring monthly payments; (2) 15 days in the case
of agreements requiring biweekly payments; or (3) seven days in the case of agreements
requiring weekly payments. For those agreements which do not require payments in
specified amounts, a payment is deemed an advance payment to the extent it exceeds
twice the average regular payment previously made by the debtor under that contract. This
subdivision does not apply when the debtor intends to use the advance payments to satisfy
future payment of obligations due within 30 days under the contract. This subdivision
supersedes any inconsistent provision of this chapter.
new text end

new text begin Subd. 6. new text end

new text begin Consent of creditors. new text end

new text begin A registrant must actively seek to obtain the consent
of all creditors to the debt management services plan set forth in the debt management
services agreement. Consent by a creditor may be express and in writing, or may be
evidenced by acceptance of a payment made under the debt management services plan
set forth in the contract. The registrant must notify the debtor within ten days after any
failure to obtain the required consent and of the debtor's right to cancel without penalty.
The notice must be in a form as the commissioner shall prescribe. Nothing contained in
this section is deemed to require the return of any origination fee and any fees earned by
the registrant prior to cancellation or default.
new text end

new text begin Subd. 7. new text end

new text begin Withdrawal of creditor. new text end

new text begin Whenever a creditor withdraws from a debt
management services plan, or refuses to participate in a debt management services plan,
the registrant must promptly notify the debtor of the withdrawal or refusal. In no case
may this notice be provided more than 15 days after the debt management services plan
learns of the creditor's decision to withdraw from or refuse to participate in a plan. This
notice must include the identity of the creditor withdrawing from the plan, the amount of
the monthly payment to that creditor, and the right of the debtor to cancel the agreement
under section 332A.11.
new text end

new text begin Subd. 8. new text end

new text begin Payments held in trust. new text end

new text begin The registrant must maintain a separate trust
account and deposit in the account all payments received from the moment that they are
received, except that the registrant may commingle the payment with the registrant's
own property or funds, but only to the extent necessary to ensure the maintenance of a
minimum balance if the financial institution at which the trust account is held requires
a minimum balance to avoid the assessment of fees or penalties for failure to maintain
a minimum balance. All disbursements, whether to the debtor or to the creditors of the
debtor, or to the registrant, must be made from such account.
new text end

new text begin Subd. 9. new text end

new text begin Timely payment of creditors. new text end

new text begin The registrant must disburse any funds
paid by or on behalf of a debtor to creditors of the consumer within 42 days after receipt
of the funds, or earlier if necessary to comply with the due date in the contract between
the debtor and the creditor, unless the reasonable payment of one or more of the debtor's
obligations requires that the funds be held for a longer period so as to accumulate a sum
certain, or where the debtor's payment is returned for insufficient funds or other reason
that makes the withholding of such payments in the net interest of the debtor.
new text end

Sec. 19.

new text begin [332A.14] PROHIBITIONS.
new text end

new text begin A registrant shall not:
new text end

new text begin (1) purchase from a creditor any obligation of a debtor;
new text end

new text begin (2) use, threaten to use, seek to have used, or seek to have threatened the use of any
legal process, including but not limited to garnishment and repossession of personal
property, against any debtor while the debt management services agreement between the
registrant and the debtor remains executory;
new text end

new text begin (3) advise a debtor to stop paying a creditor until a debt management services plan is
in place;
new text end

new text begin (4) require as a condition of performing debt management services the purchase of
any services, stock, insurance, commodity, or other property or any interest therein either
by the debtor or the registrant;
new text end

new text begin (5) compromise any debts unless the prior written approval of the debtor has been
obtained to such compromise and unless such compromise inures solely to the benefit
of the debtor;
new text end

new text begin (6) receive from any debtor as security or in payment of any fee a promissory note
or other promise to pay or any mortgage or other security, whether as to real or personal
property;
new text end

new text begin (7) lend money or provide credit to any debtor if any interest or fee is charged,
or directly or indirectly collect any fee for referring, advising, procuring, arranging, or
assisting a consumer in obtaining any extension of credit or other debtor service from a
lender or service provider;
new text end

new text begin (8) structure a debt management services agreement that would result in negative
amortization of any debt in the plan;
new text end

new text begin (9) engage in any unfair, deceptive, or unconscionable act or practice in connection
with any service provided to any debtor;
new text end

new text begin (10) offer, pay, or give any material cash fee, gift, bonus, premium, reward, or other
compensation to any person for referring any prospective customer to the registrant or for
enrolling a debtor in a debt management services plan, or provide any other incentives
for employees or agents of the debt management services provider to induce debtors to
enter into a debt management plan;
new text end

new text begin (11) receive any cash, fee, gift, bonus, premium, reward, or other compensation
from any person other than the debtor or a person on the debtor's behalf in connection
with activities as a registrant, provided that this paragraph does not apply to a registrant
which is a bona fide nonprofit corporation duly organized under chapter 317A or under
the similar laws of another state;
new text end

new text begin (12) enter into a contract with a debtor unless a thorough written budget analysis
indicates that the debtor can reasonably meet the requirements of the financial adjustment
plan and will be benefited by the plan;
new text end

new text begin (13) in any way charge or purport to charge or provide any debtor credit insurance in
conjunction with any contract or agreement involved in the debt management services
plan;
new text end

new text begin (14) operate or employ a person who is an employee or owner of a collection agency
or process-serving business; or
new text end

new text begin (15) require or attempt to require payment of a sum that the registrant states,
discloses, or advertises to be a voluntary contribution from the debtor.
new text end

Sec. 20.

new text begin [332A.16] ADVERTISEMENT OF DEBT MANAGEMENT SERVICES
PLANS.
new text end

new text begin No debt management services provider may make false, deceptive, misleading
statements, or omissions about the rates, terms, or conditions of an actual or proposed
debt management services plan or its debt management services, or create the likelihood
of consumer confusion or misunderstanding regarding its services, including, but not
limited to, the following:
new text end

new text begin (1) represent that the debt management services provider is a nonprofit, not-for-profit,
or has similar status or characteristics if some or all of the debt management services will
be provided by a for-profit company that is a controlling or affiliated party to the debt
management services provider; or
new text end

new text begin (2) make any communication that gives the impression that the debt management
services provider is acting on behalf of a government agency.
new text end

Sec. 21.

new text begin [332A.17] DEBT MANAGEMENT SERVICES AGREEMENT
RESCISSION.
new text end

new text begin Any debtor has the right to rescind any debt management services agreement with
a debt management services provider that commits a material violation of this chapter.
On rescission, all fees paid to the debt management services provider or any other person
other than creditors of the debtor must be returned to the debtor entering into the debt
management services agreement within ten days of rescission of the debt management
services agreement.
new text end

Sec. 22.

new text begin [332A.18] DEBT SETTLEMENT PROVIDER.
new text end

new text begin (a) No person shall engage in debt settlement services in this state without providing
to the commissioner evidence of insurance in the amount of not less than $100,000 against
the risks of dishonesty, fraud, theft, and other misconduct on the part of the debt settlement
provider or a director, employee, or agent of the debt settlement provider. The insurance
shall be issued by an insurance company authorized to do business in this state and rated
at least A- by a nationally recognized rating organization. The insurance shall have no
greater than a $10,000 deductible. The insurance shall not be subject to cancellation by
the debt settlement provider without a replacement policy in place.
new text end

new text begin (b) A debt settlement provider may not charge fees in the aggregate that exceed 15
percent of the principal amount of the debt. In the event of cancellation of the contract by
the debtor prior to its successful completion, the debt settlement provider shall refund 50
percent of any collected fees for the settlement of debts remaining unsettled at the time of
the termination of the contract.
new text end

new text begin (c) It shall be unlawful for a debt settlement provider to engage in acts prohibited
by section 332A.14.
new text end

Sec. 23.

new text begin [332A.19] ENFORCEMENT; REMEDIES.
new text end

new text begin Subdivision 1. new text end

new text begin Violation a deceptive practice. new text end

new text begin A violation of any of the provisions
of this chapter is considered an unfair or deceptive trade practice under section 8.31,
subdivision 1. A private right of action under section 8.31 by an aggrieved debtor is in
the public interest.
new text end

new text begin Subd. 2. new text end

new text begin Private right of action. new text end

new text begin (a) A debt management services provider who
fails to comply with any of the provisions of this chapter is liable under this section in
an individual action for the sum of: (1) actual, incidental, and consequential damages
sustained by the debtor as a result of the failure; and (2) statutory damages of up to $1,000.
new text end

new text begin (b) A debt management services provider who fails to comply with any of the
provisions of this chapter is liable under this section in a class action for the sum of: (1)
the amount that each named plaintiff could recover under paragraph (a), clause (1); and (2)
such amount as the court may allow for all other class members.
new text end

new text begin (c) In determining the amount of statutory damages, the court shall consider, among
other relevant factors:
new text end

new text begin (1) the frequency, nature, and persistence of noncompliance;
new text end

new text begin (2) the extent to which the noncompliance was intentional; and
new text end

new text begin (3) in the case of a class action, the number of debtors adversely affected.
new text end

new text begin (d) A plaintiff or class successful in a legal or equitable action under this section is
entitled to the costs of the action, plus reasonable attorney fees.
new text end

new text begin Subd. 3. new text end

new text begin Injunctive relief. new text end

new text begin A debtor may sue a debt management services provider
for temporary or permanent injunctive or other appropriate equitable relief to prevent
violations of any provision of this chapter. A court may grant injunctive relief on a
showing that the debt management services provider has violated any provision of this
chapter, or in the case of a temporary injunction, on a showing that the debtor is likely to
prevail on allegations that the debt management services provider violated any provision
of this chapter.
new text end

new text begin Subd. 4. new text end

new text begin Remedies cumulative. new text end

new text begin The remedies provided in this section are
cumulative and do not restrict any remedy that is otherwise available. The provisions
of this chapter are not exclusive and are in addition to any other requirements, rights,
remedies, and penalties provided by law.
new text end

new text begin Subd. 5. new text end

new text begin Public enforcement. new text end

new text begin The attorney general shall enforce this chapter
under section 8.31.
new text end

Sec. 24.

new text begin [332A.20] INVESTIGATION.
new text end

new text begin The commissioner may examine the books and records of every debt settlement
provider and registrant and of any person engaged in the business of providing debt
management services as defined in section 332A.02 at any reasonable time. The
commissioner once during any calendar year may require the submission of an audit
prepared by a certified public accountant of the books and records of each registrant. If
the registrant has, within one year previous to the commissioner's demand, had an audit
prepared for some other purpose, this audit may be submitted to satisfy the requirement
of this section. The commissioner may investigate any complaint concerning violations
of this chapter and may require the attendance and sworn testimony of witnesses and the
production of documents.
new text end

Sec. 25. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, sections 332.12; 332.13; 332.14; 332.15; 332.16; 332.17;
332.18; 332.19; 332.20; 332.21; 332.22; 332.23; 332.24; 332.25; 332.26; 332.27; 332.28;
and 332.29, new text end new text begin are repealed.
new text end

Sec. 26. new text begin EFFECTIVE DATE.
new text end

new text begin This act is effective January 1, 2008.
new text end