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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1985 

                        CHAPTER 306-S.F.No. 401 
           An act relating to creditor's remedies; providing for 
          an increase in the amount of farm machines and 
          implements exemption; clarifying the garnishment 
          limitation for the sale of farm products; extending 
          the effective period of a garnishee summons; modifying 
          and extending remedies for persons defaulting on 
          homesteads; making technical changes related to 
          persons buying farm products; requiring certain time 
          limits and descriptions for crop financing statements; 
          amending Minnesota Statutes 1984, sections 47.20, 
          subdivision 15; 223A.01; 336.9-307, as amended; 
          336.9-402; 336.9-403; 550.37, subdivisions 5, 7, 13, 
          14, and 24; 559.21, subdivision 6; 565.25, subdivision 
          2; 571.41, subdivisions 6 and 7; 571.42; 571.495, 
          subdivision 3; 571.55, subdivision 1; 580.031; 583.02; 
          583.03, subdivision 2; 583.04; and Laws 1983, chapter 
          215, section 16, as amended. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 47.20, 
subdivision 15, is amended to read: 
    Subd. 15.  Notwithstanding the provisions of any other law 
to the contrary, any notice of default on homestead property as 
defined in section 583.02, mailed after May 24, 1983 and prior 
to May 1, 1985 or after the effective date of this section and 
prior to May 1, 1987, shall indicate that the borrower has 60 
days from the date the notice is mailed in which to cure the 
default.  The notice shall include a statement that the borrower 
may be eligible for an extension of the time prior to 
foreclosure and execution sale under sections 583.01 to 583.12. 
    Sec. 2.  Minnesota Statutes 1984, section 550.37, 
subdivision 5, is amended to read:  
    Subd. 5.  Farm machines and implements used in farming 
operations by a debtor engaged principally in farming, 
livestock, farm produce, and standing crops, not exceeding 
$5,000 $10,000 in value. 
    Sec. 3.  Minnesota Statutes 1984, section 550.37, 
subdivision 7, is amended to read:  
    Subd. 7.  The total value of property selected by a debtor 
pursuant to subdivisions 5 and 6 shall not exceed $5,000 $10,000.
    Sec. 4.  Minnesota Statutes 1984, section 550.37, 
subdivision 13, is amended to read:  
    Subd. 13.  [WAGES EARNINGS.] All wages earnings not subject 
to garnishment by the provisions of section 571.55.  A 
subsequent attachment, garnishment or levy of execution shall 
impound only that pay period's nonexempt disposable earnings not 
subject to a prior attachment, garnishment or levy of execution, 
but in no instance shall more than an individual's total 
nonexempt disposable earnings in that pay period be subject to 
attachment, garnishment or levy of execution.  Garnishments 
shall impound the nonexempt disposable earnings in the order of 
their service upon the employer.  The disposable earnings exempt 
from garnishment are exempt as a matter of right, whether 
claimed or not by the person to whom due.  The exemptions may 
not be waived.  The exempt disposable earnings are payable by 
the employer when due.  The exempt disposable earnings shall 
also be exempt for 20 days after deposit in any financial 
institution, whether in a single or joint account.  This 20-day 
exemption also applies to any contractual set-off or security 
interest asserted by a financial institution in which the 
earnings are deposited by the individual.  In tracing the funds, 
the first-in first-out method of accounting shall be used.  The 
burden of establishing that funds are exempt rests upon the 
debtor.  As used in this section, the term "financial 
institution" includes credit unions.  Nothing in this paragraph 
shall void or supersede any valid assignment of wages earnings 
or transfer of funds held on account made prior to the 
attachment, garnishment, or levy of execution. 
    Sec. 5.  Minnesota Statutes 1984, section 550.37, 
subdivision 14, is amended to read:  
    Subd. 14.  [PUBLIC ASSISTANCE.] All relief based on need, 
and the wages earnings or salary of a person who is a recipient 
of relief based on need, shall be exempt from all claims of 
creditors including any contractual set-off or security interest 
asserted by a financial institution.  For the purposes of this 
chapter, relief based on need includes AFDC, general assistance 
medical care, supplemental security income, medical assistance, 
Minnesota supplemental assistance, and general assistance.  The 
salary or wages earnings of any debtor who is or has been a 
recipient of relief based on need, or an inmate of a 
correctional institution shall, upon his return to private 
employment or farming after having been a recipient of relief 
based on need, or an inmate of a correctional institution, be 
exempt from attachment, garnishment, or levy of execution for a 
period of six months after his return to employment or farming 
and after all public assistance has been terminated.  The 
exemption provisions contained in this subdivision also apply 
for 60 days after deposit in any financial institution, whether 
in a single or joint account.  In tracing the funds, the 
first-in first-out method of accounting shall be used.  The 
burden of establishing that funds are exempt rests upon the 
debtor.  Agencies distributing relief and the correctional 
institutions shall, at the request of creditors, inform them 
whether or not any debtor has been a recipient of relief based 
on need, or an inmate of a correctional institution, within the 
preceding six months. 
    Sec. 6.  Minnesota Statutes 1984, section 550.37, 
subdivision 24, is amended to read: 
    Subd. 24.  [EMPLOYEE BENEFITS.] The debtor's right to 
receive a payment present or future payments, or payments 
received by the debtor, under a stock bonus, pension, profit 
sharing, annuity, individual retirement account, individual 
retirement annuity, simplified employee pension, or similar plan 
or contract on account of illness, disability, death, age, or 
length of service, to the extent reasonably necessary for the 
support of the debtor and any dependent of the debtor. 
    Sec. 7.  Minnesota Statutes 1984, section 559.21, 
subdivision 6, is amended to read: 
    Subd. 6.  [TEMPORARY MINIMUM NOTICE.] (a) Notwithstanding 
the provisions of any other law to the contrary, no contract for 
conveyance of homestead property, as defined in section 583.02, 
shall terminate until 60 days after service of notice if the 
notice is served after May 24, 1983, and prior to May 1, 1985 or 
after the effective date of this section and prior to May 1, 
1987, or 90 days after service of notice if the contract was 
entered into after May 1, 1980 and the contract vendee has paid 
25 percent or more of the purchase price.  The notice shall 
specify this 60- or 90-day period.  The notice shall include a 
statement that the borrower may be eligible for an extension of 
the time prior to foreclosure and execution sale under sections 
583.01 to 583.12.  
    (b) The notice must be in bold type, capitalized letters, 
or other form sufficient for the reader to quickly and easily 
distinguish the notice from the rest of the writing; violation 
of this requirement is a petty misdemeanor. 
    (c) This section does not apply to earnest money contracts, 
purchase agreements or exercised options. 
    Sec. 8.  Minnesota Statutes 1984, section 565.25, 
subdivision 2, is amended to read: 
    Subd. 2.  (a) Except as otherwise provided in clause (b) 
and section 9, the respondent may retain or regain possession of 
the property by filing of a bond approved by the court 
conditioned that the property shall be delivered to the 
claimant, if delivery be adjudged, and for the payment to the 
claimant of any sum adjudged against the respondent.  The bond 
shall be in an amount 1-1/4 times the fair market value of the 
property or 1-1/2 times the amount of the claimant's claim, 
whichever is less.  An order for seizure may specify a time 
limitation within which the bond must be filed.  For the purpose 
of protecting or preserving the property pending final hearing 
on the merits, the court may in extraordinary circumstances, 
which shall be specified in its order, provide that the 
respondent may not retain or regain possession of the property 
upon rebonding, or may limit or condition the right to retain or 
regain the property upon rebonding.  The costs of regaining 
possession of the property from the sheriff or the claimant 
shall be borne by respondent except as set forth in clause (b).  
    (b) If at a hearing following seizure of property pursuant 
to section 565.24 claimant fails to establish a right to 
continued possession, the court shall order the property 
returned to respondent, the costs to be borne by claimant.  The 
court may order claimant's bond to continue in an amount 
sufficient to offset damages claimed by respondent by reason of 
the seizure.  
    Sec. 9.  [565.251] [POSSESSION BY RESPONDENT WITHOUT BOND; 
STAY OF PROCEEDING.] 
    The court may allow the respondent to retain or regain 
possession of the property without filing a bond and may stay 
the action by the claimant for a reasonable period of time not 
to exceed six months if the following conditions are met: 
    (1) the respondent is unable to make the required payments 
due to unforeseen economic circumstances beyond the respondent's 
control; 
    (2) the respondent is dependent on the use of the property 
to earn a living; 
    (3) the respondent insures the property for its fair market 
value; 
    (4) the respondent makes periodic payments to the claimant 
representing the depreciation in market value of the property 
while the respondent retains possession, in an amount and during 
the times determined by the court; and 
    (5) the respondent makes periodic payments to the claimant 
representing the value of the use of the property or the cost to 
the claimant of the lost opportunity to use the property, in an 
amount and during the times determined by the court. 
    Sec. 10.  Minnesota Statutes 1984, section 571.41, 
subdivision 6, is amended to read:  
    Subd. 6.  [FORM OF NOTICE.] The ten day notice informing a 
judgment debtor that a garnishee summons may be used to garnish 
the wages earnings of an individual to enforce a judgment, shall 
be substantially in the following form: 
STATE OF MINNESOTA      )                                  
                        )  ss                              
 County of              )                ............ Court
 ...................................... (Judgment Creditor)
 ...................................... (Judgment Debtor)  
 Garnishment Exemption Notice                              
 The State of Minnesota                                    
 To the above named Judgment Debtor:                       
    Please take notice that a Garnishment Summons may be served 
upon your employer or other third parties, without any further 
court proceedings or notice to you, ten days or more from the 
date hereof.  Your wages earnings are completely exempt from 
garnishment if you are now a recipient of relief based on need, 
if you have been a recipient of relief within the last six 
months, or if you have been an inmate of a correctional 
institution in the last six months.  Relief based on need 
includes, only AFDC, general assistance medical care, 
supplemental security income, medical assistance, Minnesota 
supplemental assistance, and general assistance.  
    If you wish to claim an exemption, you should fill out the 
appropriate form below, sign it, and send it to the judgment 
creditor's attorney and the garnishee. 
    You may wish to contact the attorney for the Judgment 
Creditor in order to arrange for a settlement of the debt. 

                               PENALTIES 
    1.  Be advised that even if you claim an exemption, a 
Garnishment Summons may still be served on your employer.  If 
your wages earnings are garnished after you claim an exemption, 
you may petition the court for a determination of your 
exemption.  If the court finds that the creditor disregarded 
your claim of exemption in bad faith, you will be entitled to 
costs, reasonable attorney fees, actual damages, and an amount 
not to exceed $100. 
    2.  HOWEVER, BE WARNED if you claim an exemption, the 
creditor can also petition the court for a determination of your 
exemption, and if the court finds that you claimed an exemption 
in bad faith, you will be assessed costs and reasonable 
attorney's fees plus an amount not to exceed $100. 
    3.  If after receipt of this notice, you in bad faith take 
action to frustrate the garnishment, thus requiring the creditor 
to petition the court to resolve the problem, you will be liable 
to the creditor for costs and reasonable attorney fees plus an 
amount not to exceed $100. 
Dated: ..........    ................................ 
                     (Attorney for) Judgment Creditor 
                      Address                         
                      Telephone                       
    I hereby claim under penalty of perjury that my wages 
earnings are exempt from garnishment because: 
    (1) ...... I am presently a recipient of relief based on 
need.  (Specify the program, case number, and the county from 
which relief is being received.) 
 ...........    .........................    .........
   Program        Case Number (if known)       County 
    (2) ...... I am not now receiving relief based on need, but 
I have received relief based on need within the last six 
months.  (Specify the program, case number, and the county from 
which relief has been received.) 
...........    .........................    ..........
  Program        Case Number (if known)       County  
    (3) ...... I have been an inmate of a correctional 
institution within the last six months.  (Specify the 
correctional institution and location.) 
............................    ............
  Correctional Institution        Location  
     I hereby authorize any agency that has distributed relief 
to me or any correctional institution in which I was an inmate 
to disclose to the above-named creditor or his attorney whether 
or not I was a recipient of relief based on need or an inmate of 
a correctional institution within the last six months. 
                 ..................... 
                   Judgment Debtor      
                   Address              
    Sec. 11.  Minnesota Statutes 1984, section 571.41, 
subdivision 7, is amended to read:  
    Subd. 7.  [FORM OF EXEMPTION NOTICE.] The notice informing 
a judgment debtor that a writ of attachment, garnishee summons, 
or levy of execution has been used to attach and bind funds of 
the judgment debtor to satisfy a claim shall be substantially in 
the following form: 

                            EXEMPTION NOTICE 
STATE OF MINNESOTA 
COUNTY OF                          ......................Court 
............................................(Judgment Creditor)
..............................................(Judgment Debtor)
To..................(Judgment Debtor): 
     A writ of attachment, garnishee summons, or levy of 
execution (strike inapplicable language) has been served on 
..........(Bank or other Financial Institution)...........where 
you have an account. 
    Your account balance is $.............. .  
    The amount being held is $............. . 
      However, the funds in your account will normally be exempt 
from creditors' claims if they are in one of the following 
categories:  
      (1) Relief based on need.  This includes AFDC, Medical 
Assistance, Supplemental Security Income (SSI), Minnesota 
Supplemental Assistance, General Assistance, and General 
Assistance Medical Care.  
      (2) Social Security benefits (Old Age, Survivors, or 
Disability Insurance).  
    (3) Unemployment compensation, workers' compensation, or 
veteran's benefits.  
    (4) An accident, disability, or retirement pension or 
annuity.  
    (5) Life insurance proceeds, or the earnings of your minor 
child.  
    (6) Money from a claim for damage or destruction of exempt 
property (such as household goods, farm tools, business 
equipment, a mobile home, or a car).  
    The following funds are also exempt:  
    (7) All wages earnings of a person in category (1).  
    (8) All wages earnings of a person who has received relief 
based on need, or who has been an inmate of a correctional 
institution, within the last six months.  
    (9) Seventy-five percent of every wage earner's debtor's 
after tax earnings.  
    (10) All of a wage earner's debtor's after tax earnings 
below 40 times the federal minimum wage (this equals $134 for a 
40-hour week).  
    TIME LIMIT ON EXEMPTIONS AFTER DEPOSIT IN BANK:  
    Categories (9) and (10):  20 days.  
    Categories (7) and (8):  60 days.  
    All others:  no time limit, as long as funds are traceable 
to the exempt source.  (In tracing funds, the first-in, 
first-out method is used.  This means money deposited first is 
spent first.) The money being sought by the creditor is being 
held in your account to give you a chance to claim an exemption. 
      TO CLAIM AN EXEMPTION:  
      Fill out, sign, and mail or deliver one copy of this 
exemption claim form to the institution which sent you this 
notice, and one copy to the judgment creditor.  Both copies must 
be mailed or delivered on the same day.  
      If they don't get the exemption claim back from you within 
14 days of the date they mailed or gave it to you, they will be 
free to turn the money over to the sheriff or the creditor.  If 
you are going to claim an exemption, do so as soon as possible, 
because your money may be frozen until it is decided.  
      IF YOU CLAIM AN EXEMPTION:  
     (1) Nonexempt money can be turned over to the creditor or 
sheriff;  
      (2) The financial institution will keep holding the money 
claimed to be exempt; and 
      (3) Seven days after receiving your exemption claim, the 
financial institution will release the money to you unless 
before then it receives an objection to your exemption claim.  
      IF THE CREDITOR OBJECTS TO YOUR EXEMPTION CLAIM:  
      (1) The institution will hold the money until a court 
decides if your exemption claim is valid, BUT ONLY IF the 
institution gets a copy of your court motion papers asserting 
the exemption WITHIN 10 DAYS after the objection is mailed or 
given to you.  You may wish to consult an attorney at once if 
the creditor objects to your exemption claim.  
      MOTION TO DETERMINE EXEMPTION:  
     At any time after your funds have been frozen, you may ask 
for a court decision on the validity of your exemption claim by 
filing a request for hearing which may be obtained at the office 
of the clerk of the above court.  
     PENALTIES:  
     If you claim an exemption in bad faith, or if the creditor 
wrongly objects to an exemption in bad faith, the court may 
order the person who acted in bad faith to pay costs, actual 
damages, attorney fees, and an additional amount of up to $100.  
......................        ................................ 
Date                          (Attorney for) Judgment Creditor 
                                Address 
    EXEMPTION:  
     (a) Amount of exemption claim.  
/  /  I claim ALL the funds being held are exempt.  
/  /  I claim SOME of the funds being held are exempt.  The 
exempt amount is $....... .  
     (b) Basis for exemption.  
     Of the ten categories listed above, I am in category number 
..... .  (If more than one category applies, you may fill in as 
many as apply.) The source of the exempt funds is the following: 
 .......................................................... 
 .......................................................... 
 (If the source is a type of relief based on need, list the 
case number and county:  
     case number: ...............;  
     county:  ................ .) 
 Dated: ...............        ........................... 
                                   Judgment Debtor 
                                   Address 
    Sec. 12.  Minnesota Statutes 1984, section 571.42, is 
amended to read: 
    571.42 [EFFECT OF SERVICE OF SUMMONS.] 
    Subdivision 1.  [ATTACH FOR JUDGMENT.] Except as provided 
in sections 571.43 and 571.50, service of the garnishee summons 
upon the garnishee shall attach and bind, to respond to final 
judgment in the action, all personal property of the judgment 
debtor in his possession or under his control and all 
indebtedness owing by him to the judgment debtor at the time of 
service and all nonexempt disposable earnings earned or to be 
earned within that pay period and within 30 60 days thereafter.  
    Subd. 2.  [PROPERTY ATTACHED.] Subject to the provisions of 
sections 550.37 and 571.55 all moneys, all nonexempt disposable 
earnings earned or to be earned within that pay period and 
within 30 60 days thereafter and other personal property 
including property of any kind due from or in the hands of an 
executor, administrator, receiver or trustee and all written 
evidences of indebtedness whether negotiable or not or under or 
overdue may be attached by garnishment, and money or any other 
thing due or belonging to the judgment debtor may be attached by 
this process before it has become payable if its payment or 
delivery does not depend upon any contingency, but the garnishee 
shall not be compelled to pay or deliver it before the time 
appointed by the contract. 
    Sec. 13.  Minnesota Statutes 1984, section 571.495, 
subdivision 3, is amended to read:  
    Subd. 3.  [FORM OF DISCLOSURE.] A garnishment disclosure 
form must be served upon the garnishee.  The disclosure shall be 
substantially in the following form: 

 STATE OF MINNESOTA    )                        
                       ) ss                     
 County of............ )   ............... Court
 .......................                        
    Judgment Creditor                           
           vs.                                  
 .......................                        
    Judgment Debtor                             
          and                                   
 .......................                        
       Garnishee                                
    I am the ........................... of the garnishee 
herein, and duly authorized to disclose for said garnishee. 
    On the ..... day of .........., 19.., the time of service 
of garnishee summons herein on said garnishee, there was due and 
owing the judgment debtor above named from said garnishee the 
following: 
    (1) Earnings.  For the purposes of garnishment, "earnings" 
means compensation paid or payable for personal service or 
compensation paid or payable to the producer for the sale of 
agricultural products; livestock or livestock products; milk or 
milk products; or fruit or other horticultural products produced 
when the producer is operating a family farm, a family farm 
corporation, or an authorized farm corporation, as defined in 
section 500.24, subdivision 2, whether denominated as wages, 
salary, commission, bonus or otherwise, and includes periodic 
payments pursuant to a pension or retirement program.  
"Disposable earnings" means that part of the earnings of an 
individual remaining after the deduction from those earnings of 
amounts required by law to be withheld.  If the garnishee 
summons was served upon you at a time when earnings from a prior 
completed pay period were owing but not paid, complete the 
following disclosure for earnings from both that past pay period 
and the current pay period. 
    (a) Enter on the line below the amount of disposable 
earnings earned or to be earned by the judgment debtor within 
the judgment debtor's pay periods which may be subject to 
garnishment. 
    .............................. 
    (b) Enter on the line below 40 times the hourly federal 
minimum wage times the number of work weeks within the judgment 
debtor's pay periods which may be subject to garnishment.  When 
such pay periods consists of other than a whole number of work 
weeks, each day of a pay period in excess of the number of 
completed work weeks shall be counted as a fraction of a work 
week equal to the number of work days divided by the number of 
work days in the normal work week. 
    .............................. 
    (c) Enter on the line below the difference obtained (never 
less than zero) when line (b) is subtracted from line (a). 
    .............................. 
    (d) Enter on the line below 25 percent of line (a). 
    .............................. 
    (e) Enter on the line below the lesser of line (c) and line 
(d). 
    .............................. 
    (2) Money.  Enter on the line below any amounts due and 
owing the judgment debtor, except earnings, from the garnishee. 
    .............................. 
    (3) Property.  Describe on the line below any personal 
property, instruments or papers belonging to the judgment debtor 
and in the possession of the garnishee. 
    .............................. 
    (4) Set-off.  Enter on the line below the amount of any 
set-off, defense, lien or claim which the garnishee claims 
against the amount set forth on lines (1)(e), (2) and (3) 
above.  Allege the facts by which such set-off, defense, lien or 
claim is claimed.  (Any indebtedness to a garnishee-employer 
garnishee incurred by the judgment debtor within 10 days prior 
to the receipt of the first garnishment on a debt is void and 
should be disregarded.) 
    .............................. 
    (5) Exemption.  Enter on the line below any amounts or 
property claimed by the judgment debtor to be exempt from 
execution. 
    .............................. 
    (6) Adverse Interest.  Enter on the line below any amounts 
claimed by other persons by reason of ownership or interest in 
the judgment debtor's property.  (Any assignment of wages made 
by the judgment debtor within 10 days prior to the receipt of 
the first garnishment on a debt is void and should be 
disregarded.  State the names and addresses of such persons and 
the nature of their claim, if known.) 
    .............................. 
    (7) Enter on the line below the total of lines (4), (5) and 
(6). 
    .............................. 
    (8) Enter on the line below the difference obtained (never 
less than zero) when line (7) is subtracted from the sum of 
lines (1)(e), (2) and (3). 
    .............................. 
    (9) Enter on the line below 110 percent of the amount of 
the judgment creditor's judgment which remains unpaid. 
    .............................. 
    (10) Enter on the line below the lesser of line (8) and 
line (9).  As garnishee, you are hereby instructed to retain 
this amount only if it is $10 or more. 
    .............................. 

                     ......................................
                     Authorized Representative of Garnishee
                     ......................................
                                     Title                 
 Subscribed and sworn to before me                         
 This ...... day of ........, 19...                        
 ..................................                        
          Notary Public                                    
 ........... County, Minnesota.                            
    Sec. 14.  Minnesota Statutes 1984, section 571.55, 
subdivision 1, is amended to read:  
    Subdivision 1.  For the purposes of this section, 
"earnings" means compensation paid or payable for personal 
service or compensation paid or payable to the producer for the 
sale of agricultural products; livestock or livestock products; 
milk or milk products; or fruit or other horticultural products 
produced when the producer is operating a family farm, a family 
farm corporation, or an authorized farm corporation, as defined 
in section 500.24, subdivision 2, whether denominated as wages, 
salary, commissions, bonus, or otherwise, and includes periodic 
payments pursuant to a pension or retirement program.  
"Disposable earnings" means that part of the earnings of an 
individual remaining after the deduction from those earnings of 
amounts required by law to be withheld. 
    Sec. 15.  Minnesota Statutes 1984, section 580.031, is 
amended to read: 
    580.031 [TEMPORARY MINIMUM NOTICE.] 
    (a) Notwithstanding the provisions of any other law to the 
contrary, eight weeks' published notice must be given prior to 
the foreclosure sale of a homestead, as defined in section 
583.02, if the notice is published for the first time after May 
24, 1983 and prior to May 1, 1985 or after the effective date of 
this section and prior to May 1, 1987.  The notice must contain 
the information specified in section 580.04.  
    (b) The notice must be in bold type, capitalized letters, 
or other form sufficient for the reader to quickly and easily 
distinguish the notice from the rest of the writing; violation 
of this requirement is a petty misdemeanor. 
    (c) At least eight weeks before the appointed time of sale, 
a copy of the notice must be served upon the person in 
possession of the mortgaged premises, if the premises are 
actually occupied.  
    Sec. 16.  Minnesota Statutes 1984, section 583.02, is 
amended to read: 
    583.02 [DEFINITIONS.] 
    As used in sections 583.01 to 583.12 this chapter, the term 
"homestead" means residential or agricultural real estate, a 
portion or all of which, at the time of the filing of the 
petition under section 583.04, is occupied by the owner and is 
entitled to receive homestead credit under section 
273.13, subdivision 15a or would be entitled to receive the 
credit if it remained the residence of the owner on June 1 of 
the current year or January 2 of the next year.  
    Sec. 17.  Minnesota Statutes 1984, section 583.03, 
subdivision 2, is amended to read: 
    Subd. 2.  [GENERAL EXCLUSION.] The provisions of sections 
47.20, subdivision 15, 559.21, subdivision 6, 580.031, and 
583.01 to 583.12 do not apply to mortgages or contracts for deed 
made after May 24, 1983 the effective date of this act, nor to 
mortgages or contracts for deed made before May 24, 1983, the 
effective date of this act which are renewed or extended 
after May 24, 1983 the effective date of this act, for a period 
longer than one year, nor to mortgages, judgments, or contracts 
for deed, regardless of when made, if a second or subsequent 
mortgage is made against the property after May 24, 1983 the 
effective date of this act.  
    No court shall allow a stay, or postponement, or extension 
of time that would cause any right to be lost or adversely 
affected by any statute of limitation.  
    Sec. 18.  Minnesota Statutes 1984, section 583.04, is 
amended to read: 
    583.04 [MORTGAGOR MAY APPLY TO DISTRICT COURT FOR RELIEF.] 
    Any mortgagor, or owner in possession of the mortgaged 
premises including farm homestead premises, or anyone claiming 
under the mortgage, or anyone liable for the mortgage debt, may 
at any time after the issuance of the notice of the foreclosure 
proceedings default and prior to the sale, petition the district 
court of the county where the foreclosure proceedings are 
pending, serving a summons and verified complaint petition 
requesting that the sale in foreclosure be postponed for up to 
six months or, in the case of a farm homestead located on more 
than ten acres, for up to 12 months.  A contract for deed vendee 
or anyone claiming under the contract or liable for the contract 
payment, in any case where the contract has not yet been 
terminated as of May 24, 1983, may petition the district court 
in the same manner, requesting that the contract termination 
be delayed postponed for up to 90 days.  Upon receiving the 
petition, the court shall order a stay in the foreclosure 
proceedings or contract termination until after the hearing on 
the petition.  As a condition precedent to the postponement of 
the foreclosure sale, the party serving the verified complaint 
shall file it and pay to the clerk for the person foreclosing 
the mortgage the actual costs incurred, including attorney's 
fees, in the foreclosure proceeding before postponement.  As a 
condition precedent to delay of the contract termination, the 
party seeking relief shall file the verified complaint and pay 
to the clerk for the person canceling the contract, the actual 
costs, including attorney's fees incurred in the cancellation.  
If payment is made by other than cash or certified check, the 
order postponing the sale or termination is not final until 
after the check or other negotiable instrument has been 
paid.  The court may order costs and attorney fees to be paid by 
the person applying for relief.  If the court orders attorney 
fees to be paid, the amount may not exceed $150 or one-half of 
the attorney fees allowed in section 582.01, whichever is less.  
The court may order the attorney fees to be prorated and 
combined with payments ordered under section 583.08.  The court 
may not order attorney fees to be paid by the person applying 
for relief, if the person is receiving public assistance or 
legal aid for their own legal representation. 
    Sec. 19.  Minnesota Statutes 1984, section 583.05, is 
amended to read: 
    583.05 [COURT MAY ORDER DELAY IN POSTPONEMENT OF SALE; 
FINDINGS.] 
    The court may consider the following criteria in 
determining whether or not to order a delay in postponement of 
the sale or contract termination:  
    (1) that the petitioner is unemployed, underemployed, 
facing catastrophic medical expenses, or facing economic 
problems due to low farm commodity prices; and 
    (2) that the petitioner has an inability to make payments 
on the mortgage or contract for deed.  
    If the court grants or denies a delay in postponement of 
the sale, the mortgagee shall publish notice of the new sale 
date as provided in section 580.03.  If the court grants a 
postponement of the sale, the mortgagee shall not publish notice 
of a new sale date as provided in section 580.03 until the 
postponement period has expired, except as provided in section 
583.08.  Section 580.07 does not apply to foreclosure sales 
postponed by a court pursuant to sections 583.01 to 583.12. 
    Sec. 20.  Minnesota Statutes 1984, section 583.07, is 
amended to read: 
    583.07 [REDUCTION OF REDEMPTION PERIOD.] 
    If the court grants a delay in postponement of the 
foreclosure sale pursuant to sections 583.01 to 583.12, the 
redemption period pursuant to section 580.23 shall may be 
reduced by an equivalent period of time provided, that in no 
event shall the redemption period be less than 30 days.  If the 
court does not grant a delay in postponement of the foreclosure 
sale, the redemption period shall be as provided in section 
580.23.  
    Sec. 21.  Minnesota Statutes 1984, section 583.10, is 
amended to read: 
    583.10 [HEARING.] 
    The court shall schedule and hold a hearing on the petition 
must be held within 30 days after the filing of the petition.  
The order therein must be made and filed within five days after 
the hearing.  Review by the supreme court may be had by 
certiorari, if application for the writ is made within 15 days 
after notice of the order.  The writ is returnable within 30 
days after the filing of the order. 
    Sec. 22.  Minnesota Statutes 1984, section 223A.01, as 
added by S.F. No. 919, section 6, if enacted by the 1985 regular 
session, is amended to read: 
    223A.01 [FARM PRODUCTS THAT ARE BOUGHT SUBJECT TO A 
SECURITY INTEREST.] 
    Subdivision 1.  [REGISTERED BUYER TAKES FREE OF SECURITY 
INTEREST UNLESS NOTIFIED.] A buyer in the ordinary course of 
business who is a registered buyer in the county of the seller's 
residence under section 386.42, and who purchases farm products 
from a person engaged in farming operations takes free of a 
security interest created by the seller even though the security 
interest is perfected and the buyer knows of its existence, 
unless the buyer is notified of the security interest as 
provided in subdivision 4 3. 
    Subd. 2.  [BUYERS THAT PURCHASE SUBJECT TO A SECURITY 
INTEREST.] A buyer in the ordinary course of business that is 
registered under section 386.42 in the seller's county of 
residence who is notified by a secured party as provided under 
subdivision 3, purchases farm products from a person engaged in 
farming operations subject to the perfected security interest.  
A buyer who is not registered under section 386.42 in the 
seller's county of residence purchases farm products from a 
person engaged in farming operations subject to perfected 
security interests.  
    A buyer who purchases farm products subject to a security 
interest under this section subdivision shall include the name 
of the secured party as joint payee on any check or other 
instrument issued in payment for the farm products, unless the 
secured party gives the buyer written notice of waiver of this 
requirement.  Issuance of joint payment as herein required 
relieves the buyer of any further liability to the secured party.
    Subd. 3.  [NOTIFICATION OF SECURITY INTEREST.] A secured 
party may, by certified mail or another method by which receipt 
can be verified, notify a buyer that a debtor has farm products 
subject to a security interest. 
    The notification is effective upon receipt until September 
1 after the notification is made; or for a notification made 
after August 20 but before September 1, the notification is 
effective for one year beginning September 1.  A buyer who 
receives notification from a secured party under this 
subdivision shall not publicly post or disseminate to any 
person, other than its agents and employees who reasonably 
require the information for purposes related to this act 
section, any information contained in the notification. 
    A secured party that furnishes to a buyer a list of debtors 
who have farm products subject to a security interest is not 
liable to a debtor whose name is on the list for furnishing the 
list. 
    Subd. 4.  [COMMISSION MERCHANT.] Notwithstanding section 
336.1-201, subsection (9), a commission merchant or selling 
agent who sells farm products for another for a fee, that is a 
registered buyer under section 386.42, is a buyer in the 
ordinary course of business under this chapter and section 
336.9-307, subsection (1), for transactions involving farm 
products. 
    Sec. 23.  Minnesota Statutes 1984, section 336.9-307, as 
amended by S.F. No. 919, section 7, if enacted by the 1985 
regular session, is amended to read: 
    336.9-307 [PROTECTION OF BUYERS OF GOODS.] 
    (1) A buyer in ordinary course of business (subsection (9) 
of section 336.1-201) takes free of a security interest created 
by his seller even though the security interest is perfected and 
even though the buyer knows of its existence, except that a 
buyer in the ordinary course of business who purchases farm 
products from a person engaged in farming operations is subject 
to section 386.42 223A.01.  
    (2) In the case of consumer goods, a buyer takes free of a 
security interest even though perfected if he buys without 
knowledge of the security interest, for value and for his own 
personal, family or household purposes unless prior to the 
purchase the secured party has filed a financing statement 
covering such goods. 
    (3) A buyer other than a buyer in ordinary course of 
business (subsection (1) of this section) takes free of a 
security interest to the extent that it secures future advances 
made after the secured party acquires knowledge of the purchase, 
or more than 45 days after the purchase, whichever first occurs, 
unless made pursuant to a commitment entered into without 
knowledge of the purchase and before the expiration of the 45 
day period. 
    Sec. 24.  Minnesota Statutes 1984, section 336.9-402, is 
amended to read: 
    336.9-402 [FORMAL REQUISITES OF FINANCING STATEMENT; 
AMENDMENTS; MORTGAGE AS FINANCING STATEMENT.] 
    (1) A financing statement is sufficient if it gives the 
name of the debtor and the secured party, is signed by the 
debtor, gives an address of the secured party from which 
information concerning the security interest may be obtained, 
gives a mailing address of the debtor and contains a statement 
indicating the types or describing the items, of collateral.  A 
financing statement may be filed before a security agreement is 
made or a security interest otherwise attaches.  When the 
financing statement covers crops growing or to be grown, the 
statement must also contain a description of the real estate 
concerned and the name of the record owner thereof.  The 
financing statement may only cover the crops grown by a debtor 
in a single growing season and may not cover other collateral.  
When the financing statement covers timber to be cut or covers 
minerals or the like (including oil and gas) or accounts subject 
to subsection (5) of section 336.9-103, or when the financing 
statement is filed as a fixture filing (section 336.9-313) and 
the collateral is goods which are or are to become fixtures, the 
statement must also comply with subsection (5).  A copy of the 
security agreement is sufficient as a financing statement if it 
contains the above information and is signed by the debtor.  A 
carbon, photographic or other reproduction of a security 
agreement or a financing statement is sufficient as a financing 
statement if the security agreement so provides or if the 
original has been filed in this state. 
     (2) A financing statement which otherwise complies with 
subsection (1) is sufficient when it is signed by the secured 
party instead of the debtor when it is filed to perfect a 
security interest in 
     (a) collateral already subject to a security interest in 
another jurisdiction when it is brought into this state, or when 
the debtor's location is changed to this state.  Such a 
financing statement must state that the collateral was brought 
into this state or that the debtor's location was changed to 
this state under such circumstances; or 
     (b) proceeds under section 336.9-306 if the security 
interest in the original collateral was perfected.  Such a 
financing statement must describe the original collateral; or 
     (c) collateral as to which the filing has lapsed within one 
year; or 
     (d) collateral acquired after a change of name, identity or 
corporate structure of the debtor (subsection (7)); or 
     (e) a lien filed pursuant to Minnesota Statutes, chapter 
514; or 
      (f) collateral which is subject to a filed judgment.  
     (2a) Except for documents filed under clauses (e) and (f), 
the reason for the omission of the debtor signature must be 
stated on the front of the financing statement.  
     (3) A form substantially as follows is sufficient to comply 
with subsection (1): 
     Name of debtor (or assignor) 
     .............................. 
     Address 
     .............................. 
     Name of secured party (or assignee) 
     .............................. 
     Address 
     .............................. 
     1.  This financing statement covers the following types (or 
items) of property: 
     (Describe) 
     .............................. 
     2.  (If collateral is crops) The above described crops are 
growing or are to be grown on: 
     (Describe real estate and the name of the record owner 
thereof) ...... 
     ....................................................... ....
     3.  (If applicable) The above goods are to become fixtures 
on 
     (Describe real estate).......................... and this 
financing statement is to be filed for record in the real estate 
records.  (If the debtor does not have an interest of record) 
The name of a record owner is ................. 
     4.  (If products of collateral are claimed) 
     Products of the collateral are also covered. 
     Use whichever signature line is applicable. 
     Signature of debtor (or assignor) 
     ......................... 
     Signature of secured party (or assignee) 
     ......................... 
     (4) A financing statement may be amended by filing a 
writing signed by both the debtor and the secured party.  If the 
sole purpose of the amendment is to change the name or address 
of the secured party, only the secured party need sign the 
amendment.  A writing is sufficient if it sets forth the name 
and address of the debtor and secured party as those items 
appear on the original financing statement or the most recently 
filed amendment, the file number and date of filing of the 
financing statement.  An amendment does not extend the period of 
effectiveness of a financing statement.  If any amendment adds 
collateral, it is effective as to the added collateral only from 
the filing date of the amendment.  In this article, unless the 
context otherwise requires, the term "financing statement" means 
the original financing statement and any amendments. 
     (5) A financing statement covering timber to be cut or 
covering minerals or the like (including oil and gas) or 
accounts subject to subsection (5) of section 336.9-103, or a 
financing statement filed as a fixture filing (section 
336.9-313) where the debtor is not a transmitting utility, must 
show that it covers this type of collateral, must recite that it 
is to be filed for record in the real estate records, and the 
financing statement must contain a description of the real 
estate sufficient if it were contained in a mortgage of the real 
estate to give constructive notice of the mortgage under the law 
of this state.  If the debtor does not have an interest of 
record in the real estate, the financing statement must show the 
name of a record owner.  No description of the real estate or 
the name of the record owner thereof is required for a fixture 
filing where the debtor is a transmitting utility. 
Notwithstanding the foregoing a general description of the real 
estate is sufficient for a fixture filing where a railroad is 
the record owner of the real estate on which the fixtures are or 
are to be located; and for the purposes of this subsection, the 
requirement of a general description is satisfied if the fixture 
filing (1) identifies the section, township and range numbers of 
the county in which the land is located; (2) identifies the 
quarter-quarter of the section that the land is located in; (3) 
indicates the name of the record owner of the real estate; and 
(4) states the street address of the real estate if one exists. 
     (6) A mortgage is effective as a financing statement filed 
as a fixture filing from the date of its recording if (a) the 
goods are described in the mortgage by item or type, (b) the 
goods are or are to become fixtures related to the real estate 
described in the mortgage, (c) the mortgage complies with the 
requirements for a financing statement in this section other 
than a recital that it is to be filed in the real estate 
records, and (d) the mortgage is duly recorded.  No fee with 
reference to the financing statement is required other than the 
regular recording and satisfaction fees with respect to the 
mortgage. 
    (7) A financing statement sufficiently shows the name of 
the debtor if it gives the individual, partnership or corporate 
name of the debtor, whether or not it adds other trade names or 
the names of partners.  Where the debtor so changes his name or 
in the case of an organization its name, identity or corporate 
structure that a filed financing statement becomes seriously 
misleading, the filing is not effective to perfect a security 
interest in collateral acquired by the debtor more than four 
months after the change, unless a new appropriate financing 
statement is filed before the expiration of that time.  A filed 
financing statement remains effective with respect to collateral 
transferred by the debtor even though the secured party knows of 
or consents to the transfer. 
    (8) A financing statement, amendment, continuation, 
assignment, release, or termination substantially complying with 
the requirements of this section is effective even though it 
contains minor errors which are not seriously misleading. 
    Sec. 25.  Minnesota Statutes 1984, section 336.9-403, is 
amended to read: 
    336.9-403 [WHAT CONSTITUTES FILING; DURATION OF FILING; 
EFFECT OF LAPSED FILING; DUTIES OF FILING OFFICER.] 
     (1) Presentation for filing of a financing statement and 
tender of the filing fee or acceptance of the statement by the 
filing officer constitutes filing under this article. 
    (2) Except as provided in subsection subsections (6) and 
(9) a filed financing statement is effective for a period of 
five years from the date of filing.  The effectiveness of a 
filed financing statement lapses on the expiration of the five 
year period unless a continuation statement is filed prior to 
the lapse.  If a security interest perfected by filing exists at 
the time insolvency proceedings are commenced by or against the 
debtor, the security interest remains perfected until 
termination of the insolvency proceedings and thereafter for a 
period of 60 days or until expiration of the five year period, 
whichever occurs later regardless of whether the financing 
statement filed as to that security interest is destroyed by the 
filing officer pursuant to subsection (3).  Upon lapse the 
security interest becomes unperfected, unless it is perfected 
without filing.  If the security interest becomes unperfected 
upon lapse, it is deemed to have been unperfected as against a 
person who became a purchaser or lien creditor before lapse. 
      (3) A continuation statement may be filed by the secured 
party within six months prior to the expiration of the five year 
period specified in subsection (2).  Any such continuation 
statement must be signed by the secured party, set forth the 
name and address of the debtor and secured party as those items 
appear on the original financing statement or the most recently 
filed amendment, identify the original statement by file number 
and filing date, and state that the original statement is still 
effective.  A continuation statement signed by a person other 
than the secured party of record must be accompanied by a 
separate written statement of assignment signed by the secured 
party of record and complying with subsection (2) of section 
336.9-405, including payment of the required fee.  Upon timely 
filing of the continuation statement, the effectiveness of the 
original statement is continued for five years after the last 
date to which the filing was effective whereupon it lapses in 
the same manner as provided in subsection (2) unless another 
continuation statement is filed prior to such lapse. Succeeding 
continuation statements may be filed in the same manner to 
continue the effectiveness of the original statement. Unless a 
statute on disposition of public records provides otherwise, the 
filing officer may remove a lapsed statement from the files and 
destroy it immediately if he has retained a microfilm or other 
photographic record, or in other cases after one year after the 
lapse.  The filing officer shall so arrange matters by physical 
annexation of financing statements to continuation statements or 
other related filings, or by other means, that if he physically 
destroys the financing statements of a period more than five 
years past, those which have been continued by a continuation 
statement or which are still effective under subsection (6) 
shall be retained.  If insolvency proceedings are commenced by 
or against the debtor, the secured party shall notify the filing 
officer both upon commencement and termination of the 
proceedings, and the filing officer shall not destroy any 
financing statements filed with respect to the debtor until 
termination of the insolvency proceedings.  The security 
interest remains perfected until termination of the insolvency 
proceedings and thereafter for a period of 60 days or until 
expiration of the five year period, whichever occurs later. 
      (4) Except as provided in subsection (7) a filing officer 
shall mark each statement with a file number and with the date 
and hour of filing and shall hold the statement or a microfilm 
or other photographic copy thereof for public inspection.  In 
addition the filing officer shall index the statements according 
to the name of the debtor and shall note in the index the file 
number and the address of the debtor given in the statement. 
      (5) The secretary of state shall prescribe uniform forms 
for statements and samples thereof shall be furnished to all 
filing officers in the state.  The uniform fee for filing and 
indexing and for stamping a copy furnished by the secured party 
to show the date and place of filing for an original financing 
statement or for a continuation statement shall be $5 if the 
statement is in the standard form prescribed by the secretary of 
state and otherwise shall be $10, plus in each case, if the 
financing statement is subject to subsection (5) of section 
336.9-402, $5.  An additional fee of $5 shall be collected if 
more than one name is required to be indexed or if the secured 
party, at his option, shows a trade name for any debtor listed.  
There shall be no fee collected for the filing of an amendment 
to a financing statement if the amendment is in the standard 
form prescribed by the secretary of state and does not add 
additional debtor names to the financing statement.  The fee for 
an amendment adding additional debtor names shall be $5 if the 
amendment is in the form prescribed by the secretary of state 
and, if otherwise, $10.  The fee for an amendment which is not 
in the form prescribed by the secretary of state but which does 
not add additional names shall be $5.  
    The secretary of state shall adopt rules for filing, 
amendment, continuation, termination, removal, and destruction 
of financing statements. 
    (6) If the debtor is a transmitting utility (subsection (5) 
of section 336.9-401) and a filed financing statement so states, 
it is effective until a termination statement is filed.  A real 
estate mortgage which is effective as a fixture filing under 
subsection (6) of section 336.9-402 remains effective as a 
fixture filing until the mortgage is released or satisfied of 
record or its effectiveness otherwise terminates as to the real 
estate. 
     (7) When a financing statement covers timber to be cut or 
covers minerals or the like (including oil and gas) or accounts 
subject to subsection (5) of section 336.9-103, or is filed as a 
fixture filing, it shall be filed for record and the filing 
officer shall index it under the names of the debtor and any 
owner of record shown on the financing statement in the same 
fashion as if they were the mortgagors in a mortgage of the real 
estate described, and, to the extent that the law of this state 
provides for indexing of mortgages under the name of the 
mortgagee, under the name of the secured party as if he were the 
mortgagee thereunder, or, for filing offices other than the 
secretary of state, where indexing is by description in the same 
fashion as if the financing statement were a mortgage of the 
real estate described.  If requested of the filing officer on 
the financing statement, a financing statement filed for record 
as a fixture filing in the same office where nonfixture filings 
are made is effective, without a dual filing, as to collateral 
listed thereon for which filing is required in such office 
pursuant to section 336.9-401 (1) (a); in such case, the filing 
officer shall also index the recorded statement in accordance 
with subsection (4) using the recording data in lieu of a file 
number. 
    (8) The fees provided for in this article shall supersede 
the fees for similar services otherwise provided for by law 
except in the case of security interests filed in connection 
with a certificate of title on a motor vehicle. 
    (9) A financing statement that covers crops growing or to 
be grown is effective for a period of two years.  A continuation 
statement may be filed for the products of the crop covered in 
the original financing statement.  A continuation statement is 
effective for a period of two years and may be filed within six 
months prior to the expiration of the two-year period for the 
financing statement. 
    Sec. 26.  Laws 1983, chapter 215, section 16, as amended by 
Laws 1984, chapter 474, section 7, is amended to read:  
    Sec. 16.  [REPEALER.] 
    Sections 1 to 15 are repealed effective July 1, 1985 1987, 
but any postponement or other relief ordered by a court 
continues to be valid for the period ordered by the court.  
    Sec. 27.  [EFFECTIVE DATE.] 
    Sections 4 to 6, and 8 to 14 are effective July 1, 1985.  
Sections 24 and 25 are effective for crops planted after 
September 1, 1985.  The remaining sections of this act are 
effective the day following final enactment. 
    Approved June 7, 1985