Minnesota Session Laws - 2004, Regular Session

                            CHAPTER 174-H.F.No. 2551 
                  An act relating to commerce; regulating safe deposit 
                  companies; modifying collateral requirements 
                  applicable to depositories of local public funds; 
                  regulating dishonored checks; amending Minnesota 
                  Statutes 2002, sections 55.15; 604.113, subdivision 2; 
                  Minnesota Statutes 2003 Supplement, section 118A.03, 
                  subdivision 2. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2002, section 55.15, is 
        amended to read: 
           55.15 [APPLICATION.] 
           This chapter shall not be held or construed as limiting, 
        restricting, or in any way affecting the operation or management 
        of safe deposit boxes or vaults, or a safe deposit business, by 
        any savings bank, bank, credit union, or trust company.  If any 
        bank, savings bank, credit union, or trust company elects to 
        transact the business of a safe deposit company under the 
        provisions of this chapter, it shall so notify the commissioner 
        of commerce and thereafter the provisions of sections 55.02 and 
        55.10 to 55.12 shall apply to such safe deposit business and 
        said bank, savings bank, credit union, or trust company shall 
        have the benefit thereof.  The provisions of sections 55.03 to 
        55.08 and the provisions of section 55.095 shall not apply to a 
        bank, savings bank, credit union, or trust company carrying on 
        the business of a safe deposit company. 
           Sec. 2.  Minnesota Statutes 2003 Supplement, section 
        118A.03, subdivision 2, is amended to read: 
           Subd. 2.  [IN LIEU OF SURETY BOND.] The following are the 
        allowable forms of collateral in lieu of a corporate surety bond:
           (1) United States government treasury bills, treasury 
        notes, treasury bonds; 
           (2) issues of United States government agencies and 
        instrumentalities as quoted by a recognized industry quotation 
        service available to the government entity; 
           (3) general obligation securities of any state or local 
        government with taxing powers which is rated "A" or better by a 
        national bond rating service, or revenue obligation securities 
        of any state or local government with taxing powers which is 
        rated "AA" or better by a national bond rating service; 
           (4) unrated general obligation securities of a local 
        government with taxing powers may be pledged as collateral 
        against funds deposited by that same local government entity; 
           (5) irrevocable standby letters of credit issued by Federal 
        Home Loan Banks to a municipality accompanied by written 
        evidence that the bank's public debt is rated "AA" or better by 
        Moody's Investors Service, Inc., or Standard & Poor's 
        Corporation; and 
           (6) time deposits that are fully insured by the Federal 
        Deposit Insurance Corporation any federal agency. 
           Sec. 3.  Minnesota Statutes 2002, section 604.113, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ACTS CONSTITUTING.] Whoever issues any check 
        that is dishonored is liable for the following penalties: 
           (a) A service charge, not to exceed $30, may be imposed 
        immediately on any dishonored check by the payee or holder of 
        the check, regardless of mailing a notice of dishonor, if notice 
        of the service charge was conspicuously displayed on the 
        premises when the check was issued.  If a law enforcement agency 
        obtains payment of a dishonored check on behalf of the payee or 
        holder, up to the entire amount of the service charge may be 
        retained by the law enforcement agency for its expenses.  Only 
        one service charge may be imposed under this paragraph for each 
        dishonored check.  The displayed notice must also include a 
        provision notifying the issuer of the check that civil penalties 
        may be imposed for nonpayment. 
           (b) If the amount of the dishonored check is not paid 
        within 30 days after the payee or holder has mailed notice of 
        dishonor pursuant to section 609.535 and a description of the 
        penalties contained in this subdivision, whoever issued the 
        dishonored check is liable to the payee or holder of the check 
        for: 
           (1) the amount of the check, the service charge as provided 
        in paragraph (a), plus a civil penalty of up to $100 or the 
        value of the check, whichever is greater.  In determining the 
        amount of the penalty, the court shall consider the amount of 
        the check and the reason for nonpayment.  The civil penalty may 
        not be imposed until 30 days following the mailing of the notice 
        of dishonor.  A payee or holder of the check may make a written 
        demand for payment of the civil liability by sending a copy of 
        this section and a description of the liability contained in 
        this section to the issuer's last known address.  Notice as 
        provided in paragraph (a) must also include notification that 
        additional civil penalties will be imposed for dishonored checks 
        for nonpayment after 30 days; 
           (2) interest at the rate payable on judgments pursuant to 
        section 549.09 on the face amount of the check from the date of 
        dishonor; and 
           (3) reasonable attorney fees if the aggregate amount of 
        dishonored checks issued by the issuer to all payees within a 
        six-month period is over $1,250. 
           (c) This subdivision prevails over any provision of law 
        limiting, prohibiting, or otherwise regulating service charges 
        authorized by this subdivision, but does not nullify charges for 
        dishonored checks, which do not exceed the charges in paragraph 
        (a) or terms or conditions for imposing the charges which have 
        been agreed to by the parties in an express contract. 
           (d) A sight draft may not be used as a means of collecting 
        the civil penalties provided in this section without prior 
        consent of the issuer. 
           (e) The issuer of a dishonored check is not liable for the 
        penalties described in paragraph (b) if a pretrial diversion 
        program under section 628.69 has been established in the 
        jurisdiction where the dishonored check was issued, the issuer 
        was accepted into the program, and the issuer successfully 
        completes the program. 
           Presented to the governor May 6, 2004 
           Signed by the governor May 10, 2004, 12:10 p.m.