Minnesota Legislature
SF 3016
3rd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
Current Version - 3rd Engrossment
1.1 A bill for an act 1.2 relating to family law; changing certain child support 1.3 enforcement provisions; providing for notices; 1.4 clarifying certain delegation of powers provisions; 1.5 amending Minnesota Statutes 1998, sections 256.979, by 1.6 adding a subdivision; 518.255; 518.64, subdivision 5; 1.7 518.68, subdivision 2; 524.5-505; 552.01, subdivision 1.8 3, and by adding a subdivision; 552.03; and 552.04, 1.9 subdivisions 4, 6, 11, and 16; Minnesota Statutes 1999 1.10 Supplement, sections 13B.06, subdivision 1; and 1.11 256.978, subdivision 1; proposing coding for new law 1.12 in Minnesota Statutes, chapter 552; repealing 1.13 Minnesota Statutes 1998, section 552.05, subdivisions 1.14 1, 2, 3, 6, 7, 8, and 9; Minnesota Statutes 1999 1.15 Supplement, section 552.05, subdivisions 4, 5, and 10; 1.16 Minnesota Rules, parts 9500.1800; 9500.1805; 1.17 9500.1810; 9500.1811; 9500.1812; 9500.1815; 9500.1817; 1.18 9500.1820; and 9500.1821. 1.19 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.20 Section 1. Minnesota Statutes 1999 Supplement, section 1.21 13B.06, subdivision 1, is amended to read: 1.22 Subdivision 1. [DEFINITIONS.] The definitions in this 1.23 subdivision apply to this section. 1.24 (a) "Account" means a demand deposit account, checking or 1.25 negotiable withdraw order account, savings account, time deposit 1.26 account, or money market mutual fund. 1.27 (b) "Account information" means the type of account, the 1.28 account number, whether the account is singly or jointly owned, 1.29 and in the case of jointly owned accounts the name and address 1.30 of the nonobligor account owner if available. 1.31 (c) "Financial institution" means any of the following that 1.32 do business within the state: 2.1 (1) federal or state commercial banks and federal or state 2.2 savings banks, including savings and loan associations and 2.3 cooperative banks; 2.4 (2) federal and state chartered credit unions; 2.5 (3) benefit associations; 2.6 (4) life insurance companies; 2.7 (5) safe deposit companies; and 2.8 (6) money market mutual funds. 2.9 (d) "Obligor" means an individual who is in arrears in 2.10 court-ordered child support or maintenance payments, or both, in 2.11 an amount equal to or greater thanthreefive times the 2.12 obligor's total monthly support and maintenance payments, and is2.13not in compliance with a written payment agreement regarding2.14both current support and arrearages approved by the court, a2.15child support magistrate, or the public authority. 2.16 (e) "Public authority" means the public authority 2.17 responsible for child support enforcement. 2.18 Sec. 2. Minnesota Statutes 1999 Supplement, section 2.19 256.978, subdivision 1, is amended to read: 2.20 Subdivision 1. [REQUEST FOR INFORMATION.] (a) The public 2.21 authority responsible for child support in this state or any 2.22 other state, in order to locate a person or to obtain 2.23 information necessary to establish paternity and child support 2.24 or to modify or enforce child support or distribute collections, 2.25 may request information reasonably necessary to the inquiry from 2.26 the records of (1)all departments, boards, bureaus, or other2.27agencies of thisstate agencies or political subdivisions of 2.28 this state, as defined in section 13.02, which shall, 2.29 notwithstanding the provisions of section 268.19 or any other 2.30 law to the contrary, provide the information necessary for this 2.31 purpose; and (2) employers, utility companies, insurance 2.32 companies, financial institutions, credit grantors, and labor 2.33 associations doing business in this state. They shall provide a 2.34 response upon written or electronic request within 30 days of 2.35 service of the request made by the public authority. 2.36 Information requested and used or transmitted by the 3.1 commissioner according to the authority conferred by this 3.2 section may be made available to other agencies, statewide 3.3 systems, and political subdivisions of this state, and agencies 3.4 of other states, interstate information networks, federal 3.5 agencies, and other entities as required by federal regulation 3.6 or law for the administration of the child support enforcement 3.7 program. 3.8 (b) For purposes of this section, "state" includes the 3.9 District of Columbia, Puerto Rico, the United States Virgin 3.10 Islands, and any territory or insular possession subject to the 3.11 jurisdiction of the United States. 3.12 Sec. 3. Minnesota Statutes 1998, section 256.979, is 3.13 amended by adding a subdivision to read: 3.14 Subd. 11. [FEDERAL CHILD SUPPORT INCENTIVES.] (a) The 3.15 commissioner of human services shall distribute to the counties 3.16 the earned federal child support incentive payments using the 3.17 methodology specified in Title IV-D of the Social Security Act 3.18 and applicable federal regulations for earning federal 3.19 incentives by the states except for the paternity portion of the 3.20 incentive. The commissioner shall distribute the federal 3.21 paternity incentive earned using the IV-D paternity 3.22 establishment percentage. The commissioner shall follow the 3.23 federal transition plans in distributing the incentives to the 3.24 counties. The commissioner shall distribute to the county child 3.25 support agency estimated federal incentive payments within 60 3.26 days after the end of each calendar quarter. The commissioner 3.27 shall issue actual federal incentive payments to the county 3.28 agency within 60 days of receiving the final federal incentive 3.29 grant award from the federal agency. 3.30 (b) The county child support agency shall reinvest 3.31 incentive funds disbursed under this section in the county child 3.32 support enforcement program. These funds may not be used by a 3.33 county to reduce funding of the child support enforcement 3.34 program by the amount of the incentive earned below the base 3.35 amount allowed under the applicable federal regulations. The 3.36 county agency shall maintain a record of incentives earned and 4.1 expended according to a procedure approved by the commissioner. 4.2 The county agency shall repay any incentive erroneously issued. 4.3 Sec. 4. Minnesota Statutes 1998, section 518.255, is 4.4 amended to read: 4.5 518.255 [PROVISION OF LEGAL SERVICES BY THE PUBLIC 4.6 AUTHORITY.] 4.7 Subdivision 1. [GENERAL.] (a) The provision of services 4.8 under the child support enforcement program that includes 4.9 services by an attorney or an attorney's representative employed 4.10 by, under contract to, or representing the public authority does 4.11 not create an attorney-client relationship with any party other 4.12 than the public authority. Attorneys employed by or under 4.13 contract with the public authority have an affirmative duty to 4.14 inform applicants and recipients of services under the child 4.15 support enforcement program that no attorney-client relationship 4.16 exists between the attorney and the applicant or recipient. 4.17 This section applies to all legal services provided by the child 4.18 support enforcement program. 4.19 (b) The written notice must inform the individual applicant 4.20 or recipient of services that no attorney-client relationship 4.21 exists between the attorney and the applicant or recipient; the 4.22 rights of the individual as a subject of data under section 4.23 13.04, subdivision 2; and that the individual has a right to 4.24 have an attorney represent the individual. 4.25 (c) Data disclosed by an applicant for, or recipient of, 4.26 child support services to an attorney employed by, or under 4.27 contract with, the public authority is private data on an 4.28 individual. However, the data may be disclosed under section 4.29 13.46, subdivision 2, clauses (1) to (3) and (6) to (19), under 4.30 subdivision 2, and in order to obtain, modify or enforce child 4.31 support, medical support, and parentage determinations. 4.32 (d) An attorney employed by, or under contract with, the 4.33 public authority may disclose additional information received 4.34 from an applicant for, or recipient of, services for other 4.35 purposes with the consent of the individual applicant for, or 4.36 recipient of, child support services. 5.1 Subd. 2. [ACCESS TO ADDRESS FOR SERVICE OF PROCESS.] (a) 5.2 If there is a IV-D case as defined in section 518.54, a party 5.3 may obtain an ex parte order under this subdivision. The party 5.4 may obtain an ex parte order requiring the public authority to 5.5 serve legal documents on the other party by mail if the party 5.6 submits a sworn affidavit to the court stating that: 5.7 (1) the party needs to serve legal process in a support 5.8 proceeding and does not have access to the address of the other 5.9 party; 5.10 (2) the party has made reasonable efforts to locate the 5.11 other party; and 5.12 (3) the other party is not represented by counsel. 5.13 (b) The public authority shall serve legal documents 5.14 provided by the moving party at the last known address of the 5.15 other party upon receipt of a court order under paragraph (a). 5.16 The public authority shall provide for appropriate service and 5.17 shall certify to all parties the date of service by mail. The 5.18 public authority's proof of service must not include the place 5.19 or address of service. 5.20 (c) The state court administrator shall prepare and make 5.21 available forms for use in seeking access to an address under 5.22 this subdivision. 5.23 Sec. 5. Minnesota Statutes 1998, section 518.64, 5.24 subdivision 5, is amended to read: 5.25 Subd. 5. [FORM.] Thedepartment of human servicesstate 5.26 court administrator's office shall prepare and make available to 5.27courtscourt administrators, obligors, and persons to whom child 5.28 support is owed a form to be submitted by the obligor or the 5.29 person to whom child support is owed in support of a motion for 5.30 a modification of an order for support or maintenance or for 5.31 contempt of court. 5.32 Sec. 6. Minnesota Statutes 1998, section 518.68, 5.33 subdivision 2, is amended to read: 5.34 Subd. 2. [CONTENTS.] The required notices must be 5.35 substantially as follows: 5.36 IMPORTANT NOTICE 6.1 1. PAYMENTS TO PUBLIC AGENCY 6.2 According to Minnesota Statutes, section 518.551, 6.3 subdivision 1, payments ordered for maintenance and support 6.4 must be paid to the public agency responsible for child 6.5 support enforcement as long as the person entitled to 6.6 receive the payments is receiving or has applied for public 6.7 assistance or has applied for support and maintenance 6.8 collection services. MAIL PAYMENTS TO: 6.9 2. DEPRIVING ANOTHER OF CUSTODIAL OR PARENTAL RIGHTS -- A 6.10 FELONY 6.11 A person may be charged with a felony who conceals a minor 6.12 child or takes, obtains, retains, or fails to return a 6.13 minor child from or to the child's parent (or person with 6.14 custodial or visitation rights), according to Minnesota 6.15 Statutes, section 609.26. A copy of that section is 6.16 available from any district court clerk. 6.17 3. RULES OF SUPPORT, MAINTENANCE, VISITATION 6.18 (a) Payment of support or spousal maintenance is to be as 6.19 ordered, and the giving of gifts or making purchases of 6.20 food, clothing, and the like will not fulfill the 6.21 obligation. 6.22 (b) Payment of support must be made as it becomes due, and 6.23 failure to secure or denial of rights of visitation is NOT 6.24 an excuse for nonpayment, but the aggrieved party must seek 6.25 relief through a proper motion filed with the court. 6.26 (c) Nonpayment of support is not grounds to deny 6.27 visitation. The party entitled to receive support may 6.28 apply for support and collection services, file a contempt 6.29 motion, or obtain a judgment as provided in Minnesota 6.30 Statutes, section 548.091. 6.31 (d) The payment of support or spousal maintenance takes 6.32 priority over payment of debts and other obligations. 6.33 (e) A party who accepts additional obligations of support 6.34 does so with the full knowledge of the party's prior 6.35 obligation under this proceeding. 6.36 (f) Child support or maintenance is based on annual income, 7.1 and it is the responsibility of a person with seasonal 7.2 employment to budget income so that payments are made 7.3 throughout the year as ordered. 7.4 (g) Iftherethe obligor isa layofflaid off from 7.5 employment or receives a pay reduction, support may be 7.6 reducedas of the time of the layoff or pay reduction, but 7.7 only if a motion to reduce the support is served and filed 7.8 with the courtat that time, but. Anysuchreductionmust7.9bewill take effect only if ordered by the court and may 7.10 only relate back to the time that the motion is filed. If 7.11 a motion is not filed, the support obligation will continue 7.12 at the current level. The court is not permitted to reduce 7.13 support retroactively, except as provided in Minnesota 7.14 Statutes, section 518.64, subdivision 2, paragraph (c). 7.15 (h) Reasonable visitation guidelines are contained in 7.16 Appendix B, which is available from the court administrator. 7.17 (i) The nonpayment of support may be enforced through the 7.18 denial of student grants; interception of state and federal 7.19 tax returns; suspension of driver's, recreational, and 7.20 occupational licenses; referral to the department of 7.21 revenue or private collection agencies; seizure of assets, 7.22 including bank accounts and other assets held by financial 7.23 institutions; reporting to credit bureaus; interest 7.24 charging, income withholding, and contempt proceedings; and 7.25 other enforcement methods allowed by law. 7.26 4. PARENTAL RIGHTS FROM MINNESOTA STATUTES, SECTION 518.17, 7.27 SUBDIVISION 3 7.28 Unless otherwise provided by the Court: 7.29 (a) Each party has the right of access to, and to receive 7.30 copies of, school, medical, dental, religious training, and 7.31 other important records and information about the minor 7.32 children. Each party has the right of access to 7.33 information regarding health or dental insurance available 7.34 to the minor children. Presentation of a copy of this 7.35 order to the custodian of a record or other information 7.36 about the minor children constitutes sufficient 8.1 authorization for the release of the record or information 8.2 to the requesting party. 8.3 (b) Each party shall keep the other informed as to the name 8.4 and address of the school of attendance of the minor 8.5 children. Each party has the right to be informed by 8.6 school officials about the children's welfare, educational 8.7 progress and status, and to attend school and parent 8.8 teacher conferences. The school is not required to hold a 8.9 separate conference for each party. 8.10 (c) In case of an accident or serious illness of a minor 8.11 child, each party shall notify the other party of the 8.12 accident or illness, and the name of the health care 8.13 provider and the place of treatment. 8.14 (d) Each party has the right of reasonable access and 8.15 telephone contact with the minor children. 8.16 5. WAGE AND INCOME DEDUCTION OF SUPPORT AND MAINTENANCE 8.17 Child support and/or spousal maintenance may be withheld 8.18 from income, with or without notice to the person obligated 8.19 to pay, when the conditions of Minnesota Statutes, section 8.20 518.6111 have been met. A copy of those sections is 8.21 available from any district court clerk. 8.22 6. CHANGE OF ADDRESS OR RESIDENCE 8.23 Unless otherwise ordered, each party shall notify the other 8.24 party, the court, and the public authority responsible for 8.25 collection, if applicable, of the following information 8.26 within ten days of any change: the residential and mailing 8.27 address, telephone number, driver's license number, social 8.28 security number, and name, address, and telephone number of 8.29 the employer. 8.30 7. COST OF LIVING INCREASE OF SUPPORT AND MAINTENANCE 8.31 Child support and/or spousal maintenance may be adjusted 8.32 every two years based upon a change in the cost of living 8.33 (using Department of Labor Consumer Price Index .........., 8.34 unless otherwise specified in this order) when the 8.35 conditions of Minnesota Statutes, section 518.641, are met. 8.36 Cost of living increases are compounded. A copy of 9.1 Minnesota Statutes, section 518.641, and forms necessary to 9.2 request or contest a cost of living increase are available 9.3 from any district court clerk. 9.4 8. JUDGMENTS FOR UNPAID SUPPORT 9.5 If a person fails to make a child support payment, the 9.6 payment owed becomes a judgment against the person 9.7 responsible to make the payment by operation of law on or 9.8 after the date the payment is due, and the person entitled 9.9 to receive the payment or the public agency may obtain 9.10 entry and docketing of the judgment WITHOUT NOTICE to the 9.11 person responsible to make the payment under Minnesota 9.12 Statutes, section 548.091. Interest begins to accrue on a 9.13 payment or installment of child support whenever the unpaid 9.14 amount due is greater than the current support due, 9.15 according to Minnesota Statutes, section 548.091, 9.16 subdivision 1a. 9.17 9. JUDGMENTS FOR UNPAID MAINTENANCE 9.18 A judgment for unpaid spousal maintenance may be entered 9.19 when the conditions of Minnesota Statutes, section 548.091, 9.20 are met. A copy of that section is available from any 9.21 district court clerk. 9.22 10. ATTORNEY FEES AND COLLECTION COSTS FOR ENFORCEMENT OF CHILD 9.23 SUPPORT 9.24 A judgment for attorney fees and other collection costs 9.25 incurred in enforcing a child support order will be entered 9.26 against the person responsible to pay support when the 9.27 conditions of section 518.14, subdivision 2, are met. A 9.28 copy of section 518.14 and forms necessary to request or 9.29 contest these attorney fees and collection costs are 9.30 available from any district court clerk. 9.31 11. VISITATION EXPEDITOR PROCESS 9.32 On request of either party or on its own motion, the court 9.33 may appoint a visitation expeditor to resolve visitation 9.34 disputes under Minnesota Statutes, section 518.1751. A 9.35 copy of that section and a description of the expeditor 9.36 process is available from any district court clerk. 10.1 12. VISITATION REMEDIES AND PENALTIES 10.2 Remedies and penalties for the wrongful denial of 10.3 visitation rights are available under Minnesota Statutes, 10.4 section 518.175, subdivision 6. These include compensatory 10.5 visitation; civil penalties; bond requirements; contempt; 10.6 and reversal of custody. A copy of that subdivision and 10.7 forms for requesting relief are available from any district 10.8 court clerk. 10.9 Sec. 7. Minnesota Statutes 1998, section 524.5-505, is 10.10 amended to read: 10.11 524.5-505 [DELEGATION OF POWERS BY PARENT OR GUARDIAN.] 10.12 (a) A parent or a guardian of a minor or incapacitated 10.13 person, by a properly executed power of attorney, may delegate 10.14 to another person, for a period not exceeding six months, any 10.15 powers regarding care, custody, or property of the minor or 10.16 ward, except the power to consent to marriage or adoption of a 10.17 minor ward. 10.18 (b) A parent who executes a delegation of powers under this 10.19 section must mail or give a copy of the document to any other 10.20 parent within 30 days of its execution unless: 10.21 (1) the other parent does not have visitation rights or has 10.22 supervised visitation rights; or 10.23 (2) there is an existing order for protection under chapter 10.24 518B or a similar law of another state in effect against the 10.25 other parent to protect the parent executing the delegation of 10.26 powers or the child. 10.27 (c) A parent of a minor child may delegate those powers for 10.28 a period not exceeding one year by a designated caregiver 10.29 agreement under chapter 257A. 10.30 Sec. 8. Minnesota Statutes 1998, section 552.01, 10.31 subdivision 3, is amended to read: 10.32 Subd. 3. [JUDGMENT DEBTOR.] "Judgment debtor" meansa10.33partyan obligor against whom the public authority has a 10.34 judgment for the recovery of money owed pursuant to a support 10.35 order as defined in section 518.54. 10.36 Sec. 9. Minnesota Statutes 1998, section 552.01, is 11.1 amended by adding a subdivision to read: 11.2 Subd. 7. [JUDGMENT.] "Judgment" means a child support 11.3 judgment by operation of law under section 548.091, subdivision 11.4 1a, or under a proceeding under section 548.091, subdivision 2a. 11.5 Sec. 10. Minnesota Statutes 1998, section 552.03, is 11.6 amended to read: 11.7 552.03 [SCOPE OF GENERAL AND SPECIFIC PROVISIONS.] 11.8 General provisions relating to the public authority's 11.9 summary execution as authorized in this chapter are set forth in 11.10 section 552.04. Specific provisions relating to summary 11.11 execution on funds at a financial institution are set forth in 11.12 section552.05552.06. When the public authority levies against 11.13 funds at a financial institution, the specific provisions of 11.14 section552.05552.06 must be complied with in addition to the 11.15 general provisions of section 552.04 that are not inconsistent 11.16 with the specific provisions of section 552.06. Provisions 11.17 contained in the statutory forms are incorporated in this 11.18 chapter and have the same force of law as any other provisions 11.19 in this chapter. 11.20 Sec. 11. Minnesota Statutes 1998, section 552.04, 11.21 subdivision 4, is amended to read: 11.22 Subd. 4. [SERVICE OF THIRD PARTY LEVY;NOTICE AND 11.23 DISCLOSURE FORMS.] When levying upon money owed to the judgment 11.24 debtor by a third party, the public authority shall serve a copy 11.25 of the notice of support judgment levy upon the third party 11.26 either by registered or certified mail, by personal service, or 11.27 by electronic transmission. Along with a copy of the notice of 11.28 support judgment levy, the public authority shall serve upon the 11.29 third party a notice of support judgment levy and disclosure 11.30 form that must be substantially in the form set forth below. 11.31OFFICE OF ADMINISTRATIVE HEARINGSDISTRICT COURT 11.32 File No. ........... 11.33 ........ (Public authority) 11.34 against NOTICE OF SUPPORT JUDGMENT 11.35 ........ (Judgment Debtor) LEVY AND DISCLOSURE 11.36 and (OTHER THAN EARNINGS) 11.37 ........ (Third Party) 11.38 PLEASE TAKE NOTICE that pursuant to Minnesota Statutes, 12.1 chapters 518 and522552, the undersigned, as representative of 12.2 the public authority responsible for child support enforcement, 12.3 makes demand and levies execution upon all money due and owing 12.4 by you to the judgment debtor for the amount of the judgment 12.5 specified below. A copy of the notice of support judgment levy 12.6 is enclosed. The unpaid judgment balance is $...... 12.7 In responding to this levy, you are to complete the 12.8 attached disclosure form and mail it to the public authority, 12.9 together with your check payable to the public authority, for 12.10 the nonexempt amount owed by you to the judgment debtor or for 12.11 which you are obligated to the judgment debtor, within the time 12.12 limits in chapter 552. 12.13 Public Authority 12.14 Address 12.15 (........) 12.16 Phone number 12.17 12.18 DISCLOSURE 12.19 On the ... day of ......, ......., the time of service of 12.20 the execution levy herein, there was due and owing the judgment 12.21 debtor from the third party the following: 12.22 (1) Money. Enter on the line below any amounts due and 12.23 owing the judgment debtor, except earnings, from the third party. 12.24 ......................... 12.25 (2) Setoff. Enter on the line below the amount of any 12.26 setoff, defense, lien, or claim which the third party claims 12.27 against the amount set forth on line (1). State the facts by 12.28 which the setoff, defense, lien, or claim is claimed. (Any 12.29 indebtedness to you incurred by the judgment debtor within ten 12.30 days prior to the receipt of the first execution levy on a debt 12.31 may not be claimed as a setoff, defense, lien, or claim against 12.32 the amount set forth on line (1).) 12.33 ......................... 12.34 (3) Exemption. Financial institutions shall not complete 12.35 this line. Enter on the line below any amounts or property 12.36 claimed by the judgment debtor to be exempt from execution. 12.37 ......................... 13.1 (4) Adverse Interest. Enter on the line below any amounts 13.2 claimed by other persons by reason of ownership or interest in 13.3 the judgment debtor's property. 13.4 ......................... 13.5 (5) Enter on the line below the total of lines (2), (3), 13.6 and (4). 13.7 ......................... 13.8 (6) Enter on the line below the difference obtained (never 13.9 less than zero when line (5) is subtracted from the amount on 13.10 line (1)). 13.11 ......................... 13.12 (7) Enter on the line below 100 percent of the amount of 13.13 the public authority's claim which remains unpaid. 13.14 ......................... 13.15 (8) Enter on the line below the lesser of line (6) and line 13.16 (7). You are instructed to remit this amount only if it is $10 13.17 or more. 13.18 ......................... 13.19 AFFIRMATION 13.20 I, .......... (person signing Affirmation), am the third 13.21 party or I am authorized by the third party to complete this 13.22 nonearnings disclosure, and have done so truthfully and to the 13.23 best of my knowledge. 13.24 Dated:.......... Signature 13.25 .......... 13.26 Title 13.27 .......... 13.28 Telephone Number 13.29 Sec. 12. Minnesota Statutes 1998, section 552.04, 13.30 subdivision 6, is amended to read: 13.31 Subd. 6. [ORAL DISCLOSURE.] Before or after the service of 13.32 a written disclosure by a third party under subdivision 5, upon 13.33 a showing by affidavit upon information and belief that an oral 13.34 examination of the third party would provide a complete 13.35 disclosure of relevant facts, any party to the execution 13.36 proceedings may obtain an ex parte order requiring the third 13.37 party, or a representative of the third party designated by name 13.38 or by title, to appear for oral examination before the courtor14.1a referee appointed by the court. Notice of the examination 14.2 must be given to all parties. This subdivision does not apply 14.3 to financial institutions complying with section 552.06. 14.4 Sec. 13. Minnesota Statutes 1998, section 552.04, 14.5 subdivision 11, is amended to read: 14.6 Subd. 11. [BAD FAITH CLAIM.] If, in a proceedingbrought14.7under section 552.05, subdivision 9, or a similar proceeding14.8under this chapterto determine a claim of exemption, the claim 14.9 of exemption is not upheld, and the court finds that it was 14.10 asserted in bad faith, the public authority shall be awarded 14.11 actual damages, costs, reasonable attorney's fees resulting from 14.12 the additional proceedings, and an amount not to exceed $100. 14.13 If the claim of exemption is upheld, and the court finds that 14.14 the public authority disregarded the claim of exemption in bad 14.15 faith, the judgment debtor shall be awarded actual damages, 14.16 costs, reasonable attorney's fees resulting from the additional 14.17 proceedings, and an amount not to exceed $100. If the exemption 14.18 claim of the judgment debtor is found to be in bad faith, the 14.19 underlying judgment shall be modified to reflect assessment of 14.20 damages, costs, and attorney's fees. However, if the party in 14.21 whose favor a penalty assessment is made is not actually 14.22 indebted to that party's attorney for fees, the attorney's fee 14.23 award shall be made directly to the attorney, and if not paid, 14.24 an appropriate judgment in favor of the attorney shall be 14.25 entered. Any action by a public authority made in bad faith and 14.26 in violation of this chapter renders the execution levy void and 14.27 the public authority liable to the judgment debtor named in the 14.28 execution levy in the amount of $100, actual damages, and 14.29 reasonable attorney's fees and costs. 14.30 Sec. 14. Minnesota Statutes 1998, section 552.04, 14.31 subdivision 16, is amended to read: 14.32 Subd. 16. [PRIORITY OF LEVY.] Notwithstanding section 14.33 52.12, a levy by the public authority made under this section on 14.34an obligor'sa judgment debtor's funds on deposit in a financial 14.35 institution located in this state has priority over any 14.36 unexercised right of setoff of the financial institution to 15.1 apply the levied funds toward the balance of an outstanding loan 15.2 or loans owed by theobligorjudgment debtor to the financial 15.3 institution. A claim by the financial institution that it 15.4 exercised its right to setoff prior to the levy by the public 15.5 authority must be substantiated by evidence of the date of the 15.6 setoff and must be verified by the sworn statement of a 15.7 responsible corporate officer of the financial institution. For 15.8 purposes of determining the priority of a levy made under this 15.9 section, the levy must be treated as if it were an execution 15.10 made under chapter 550. 15.11 Sec. 15. [552.06] [SUMMARY EXECUTION OF SUPPORT JUDGMENT 15.12 UPON FUNDS AT A FINANCIAL INSTITUTION.] 15.13 Subdivision 1. [COMMENCEMENT OF SUMMARY EXECUTION.] (a) 15.14 This section applies to a judgment debtor who is in arrears in 15.15 court-ordered support payments in an amount equal to or greater 15.16 than five times the judgment debtor's total support order. 15.17 (b) Section 518.5513 applies to this section, except if it 15.18 conflicts with the specific provisions of this section, this 15.19 section applies. 15.20 (c) Time frames set out in the rules of civil procedure 15.21 that are inconsistent with this section do not apply to this 15.22 section. 15.23 (d) The public authority may not proceed with a summary 15.24 execution of support judgment proceeding: 15.25 (1) if the judgment debtor is in compliance with a 15.26 previously executed written payment agreement approved by the 15.27 public authority or the court; and 15.28 (2) until after the judgment has been submitted for federal 15.29 or state tax intercept. 15.30 (e) Upon receipt of information under section 13B.06 that a 15.31 judgment debtor holds an account at the financial institution, 15.32 the public authority may send the financial institution a notice 15.33 of support judgment levy. 15.34 (f) The support judgment levy and accompanying 15.35 documentation must contain the name of the judgment debtor, the 15.36 judgment debtor's social security number, any necessary 16.1 verifying information, the amount of the judgment, and the 16.2 procedures necessary for the financial institution to process 16.3 the notice of support judgment levy and complete the disclosure 16.4 form. 16.5 (g) Notice of support judgment levy under this section 16.6 commences without notice to the judgment debtor and without the 16.7 need for prior judicial notice or hearing. 16.8 (h) Within three business days after the public authority 16.9 sends the notice of support judgment levy to the financial 16.10 institution, the public authority shall send the judgment debtor 16.11 a copy of the notice of support judgment levy by first class 16.12 mail at the judgment debtor's last known address. In addition 16.13 to the copy of the notice of support judgment levy, information 16.14 must be provided that describes the exemptions a judgment debtor 16.15 may claim and the form and procedure for claiming an exemption, 16.16 the informal resolution process, the responsibilities of the 16.17 judgment debtor, and the procedure and time frames to contest 16.18 the levy. 16.19 Subd. 2. [RESPONSIBILITIES OF THE FINANCIAL 16.20 INSTITUTION.] (a) Upon receipt by the financial institution of a 16.21 notice of support judgment levy, the financial institution shall 16.22 seize all funds up to and including the amount contained in the 16.23 notice from the judgment debtor's account. 16.24 (b) Forty-five days after receiving the levy, the financial 16.25 institution shall complete the notice of support judgment levy 16.26 and disclosure form and forward it together with the amount 16.27 indicated on line 8 of the disclosure form, not to exceed the 16.28 total amount seized, to the public authority at the address 16.29 indicated in the notice of support judgment levy. 16.30 (c) When the judgment debtor and the public authority 16.31 informally resolve a dispute under subdivision 3 and the public 16.32 authority sends a notice of release to the financial 16.33 institution, the financial institution shall release seized 16.34 funds in accordance with the notice of release. 16.35 (d) If the financial institution receives notice of a 16.36 contest of the summary execution of support judgment, the 17.1 financial institution shall continue to hold the funds during 17.2 the period of contest inclusive of any applicable appeal period 17.3 and, upon receipt of notice to release from the public 17.4 authority, shall send the lesser of the amount indicated in the 17.5 notice of release, or the amount indicated on line 8 of the 17.6 notice of support judgment levy and disclosure form not to 17.7 exceed the total amount seized. 17.8 (e) If a judgment debtor has multiple accounts within the 17.9 financial institution, the financial institution shall seize 17.10 funds in as many accounts of the judgment debtor as is necessary 17.11 to equal the amount contained in the notice of support judgment 17.12 levy. 17.13 (f) A financial institution that receives more than one 17.14 notice of support judgment levy under this section shall 17.15 withhold sufficient funds to satisfy all notices of support 17.16 judgment levy, if possible. 17.17 (g) The Consumer Credit Protection Act, United States Code, 17.18 title 15, section 1673(b), does not apply to funds withheld by a 17.19 financial institution under this section. 17.20 (h) The public authority shall pay a fee of $15 per levy to 17.21 the financial institution. Financial institutions and the 17.22 commissioner of human services shall establish procedures to 17.23 automate the payment of this fee to the maximum extent 17.24 possible. The fee may be recovered by the public authority from 17.25 the judgment debtor as an allowable cost. 17.26 (i) No financial institution is liable for damages for 17.27 complying with this section. The financial institution may rely 17.28 on the date of mailing or delivery of a notice to it in 17.29 computing any time periods in this section. 17.30 Subd. 3. [INFORMAL RESOLUTIONS OF DISPUTES.] (a) After the 17.31 judgment debtor receives a notice of support judgment levy, the 17.32 judgment debtor may contact the public authority with 17.33 information regarding a mistake of fact or claim of exemption. 17.34 In the event the matter is resolved, the public authority shall 17.35 contact the financial institution and forward to the financial 17.36 institution a notice of release regarding the appropriate 18.1 transfer of funds and send a copy to the judgment debtor. 18.2 (b) Contact by the judgment debtor under this subdivision 18.3 does not constitute a contest to the levy under subdivision 5. 18.4 The time frame to contest the support judgment levy under 18.5 subdivision 5 is not stayed while the judgment debtor contacts 18.6 the public authority. The judgment debtor may contest the levy 18.7 under subdivision 5. 18.8 Subd. 4. [RESPONSIBILITIES OF THE PUBLIC AUTHORITY.] (a) 18.9 If a judgment debtor serves the public authority with a notice 18.10 of motion and motion under subdivision 5, the public authority 18.11 shall immediately notify: 18.12 (1) the financial institution, directing the financial 18.13 institution to continue holding the funds pending resolution of 18.14 the matter; and 18.15 (2) the obligee, by mailing by first class mail a copy of 18.16 the notice of motion and motion. 18.17 (b) Upon final resolution of the matter, including the 18.18 applicable appeal times, the public authority shall forward to 18.19 the financial institution a notice of release regarding the 18.20 appropriate transfer of funds. 18.21 (c) Funds received by the public authority must be applied 18.22 to the judgment identified in the support judgment levy notice 18.23 in compliance with federal regulations. 18.24 (d) In the event that multiple notices result in an amount 18.25 of seized funds that is insufficient to satisfy all of the 18.26 support judgment levies, the public authority shall distribute 18.27 funds to satisfy each support judgment levy in the order in 18.28 which they were sent to the financial institution. 18.29 Subd. 5. [EXEMPTION AND CONTEST.] (a) [PROCESS TO CLAIM 18.30 EXEMPTION.] If the judgment debtor elects to claim an exemption, 18.31 the judgment debtor shall complete the applicable portion of the 18.32 exemption form, sign it under penalty of perjury, and deliver 18.33 one copy to the public authority within 20 calendar days of the 18.34 date postmarked on the correspondence mailed to the judgment 18.35 debtor. Failure of the judgment debtor to deliver the executed 18.36 exemption does not constitute a waiver of any claimed right to 19.1 an exemption. Upon timely receipt of a claim of exemption by 19.2 the public authority, funds not claimed to be exempt by the 19.3 judgment debtor remain subject to the support judgment levy. If 19.4 a claim of exemption is resolved informally, the public 19.5 authority shall proceed according to subdivision 3. 19.6 (b) [PROCESS TO CONTEST.] (1) The judgment debtor may 19.7 contest a support judgment levy on the limited grounds that the 19.8 seizure or the amount seized is improper due to mistake of fact 19.9 or that the funds held in the account are exempt from levy for 19.10 child support purposes under state or federal law. 19.11 (2) If the judgment debtor chooses to contest the 19.12 withholding, within 30 calendar days of notice of support 19.13 judgment levy, the debtor shall: 19.14 (i) file a motion with the court administrator, including 19.15 in the motion the alleged mistake of fact or the basis for any 19.16 claim that the funds are exempted from withholding; 19.17 (ii) obtain a hearing date from the court administrator; 19.18 and 19.19 (iii) serve the public authority, either personally or by 19.20 fax, with a copy of the notice of motion and motion no later 19.21 than two business days after obtaining a hearing date. 19.22 (c) [HEARING.] The hearing date shall be set at the 19.23 earliest practicable time, but the matter must be heard no later 19.24 than ten calendar days from the date a request for hearing is 19.25 made. The court administrator shall schedule these matters to 19.26 be heard in the expedited process before a child support 19.27 magistrate, but may schedule these cases in district court if 19.28 the availability of child support magistrate does not permit a 19.29 hearing to occur within the time frames of this section. 19.30 Subd. 6. [FORM.] The state court administrator's office 19.31 shall prepare and make available to the court administrators and 19.32 judgment debtors a form to be submitted by the judgment debtor 19.33 in support of a motion to contest the support judgment levy 19.34 under this section. 19.35 Sec. 16. [INSTRUCTION TO REVISOR.] 19.36 In the next edition of Minnesota Statutes, the revisor of 20.1 statutes shall change references to section 552.05 to section 20.2 552.06. 20.3 Sec. 17. [REPEALER.] 20.4 (a) Minnesota Statutes 1998, section 552.05, subdivisions 20.5 1, 2, 3, 6, 7, 8, and 9, are repealed. 20.6 (b) Minnesota Statutes 1999 Supplement, section 552.05, 20.7 subdivisions 4, 5, and 10, are repealed. 20.8 (c) Minnesota Rules, parts 9500.1800; 9500.1805; 9500.1810; 20.9 9500.1811; 9500.1812; 9500.1815; 9500.1817; 9500.1820; and 20.10 9500.1821, are repealed effective October 1, 2001.