1.1                          A bill for an act 
  1.2             relating to financial institutions; requiring that 
  1.3             checks be processed in numerical sequence, unless the 
  1.4             customer has selected a different method; amending 
  1.5             Minnesota Statutes 1998, section 336.4-303. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 336.4-303, is 
  1.8   amended to read: 
  1.9      336.4-303 [WHEN ITEMS SUBJECT TO NOTICE, STOP-PAYMENT 
  1.10  ORDER, LEGAL PROCESS, OR SETOFF; ORDER IN WHICH ITEMS MAY BE 
  1.11  CHARGED OR CERTIFIED.] 
  1.12     (a) Any knowledge, notice, or stop-payment order received 
  1.13  by, legal process served upon, or setoff exercised by a payor 
  1.14  bank comes too late to terminate, suspend, or modify the bank's 
  1.15  right or duty to pay an item or to charge its customer's account 
  1.16  for the item if the knowledge, notice, stop-payment order, or 
  1.17  legal process is received or served and a reasonable time for 
  1.18  the bank to act thereon expires or the setoff is exercised after 
  1.19  the earliest of the following: 
  1.20     (1) the bank accepts or certifies the item; 
  1.21     (2) the bank pays the item in cash; 
  1.22     (3) the bank settles for the item without having a right to 
  1.23  revoke the settlement under statute, clearinghouse rule, or 
  1.24  agreement; 
  1.25     (4) the bank becomes accountable for the amount of the item 
  2.1   under section 336.4-302 dealing with the payor bank's 
  2.2   responsibility for late return of items; or 
  2.3      (5) with respect to checks, a cutoff hour no earlier than 
  2.4   one hour after the opening of the next banking day after the 
  2.5   banking day on which the bank received the check and no later 
  2.6   than the close of that next banking day or, if no cutoff hour is 
  2.7   fixed, the close of the next banking day after the banking day 
  2.8   on which the bank received the check.  
  2.9      (b) Subject to subsection (a), checks received during a 
  2.10  banking day must be charged to the indicated account in sequence 
  2.11  by check number, unless the bank has offered the customer the 
  2.12  choice of having checks charged by that method or by another 
  2.13  method, and the customer has affirmatively selected the other 
  2.14  method. 
  2.15     (c) Subject to ~~subsection~~ subsections (a) and (b), items 
  2.16  may be accepted, paid, certified, or charged to the indicated 
  2.17  account of its customer in any order.  
  2.18     Sec. 2.  [EFFECTIVE DATE.] 
  2.19     Section 1 is effective January 1, 2001.