1.1                          A bill for an act 
  1.2             relating to debtor exemptions; modifying provisions 
  1.3             relating to exemptions for workers' compensation 
  1.4             claims, personal injury claims, and certain employee 
  1.5             benefits; amending Minnesota Statutes 2002, sections 
  1.6             176.175, subdivision 2; 550.37, subdivisions 20, 22, 
  1.7             24.  
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2002, section 176.175, 
  1.10  subdivision 2, is amended to read: 
  1.11     Subd. 2.  [NONASSIGNABILITY; EXEMPTION.] (a) No claim for 
  1.12  compensation or settlement of a claim for compensation owned by 
  1.13  an injured employee or dependents is assignable. 
  1.14     (b) Except as otherwise provided in this chapter, any claim 
  1.15  for compensation owned by an injured employee or dependents ~~is~~ 
  1.16  and the proceeds of a judgment or settlement resulting from a 
  1.17  compensation claim are exempt from seizure or sale for the 
  1.18  payment of any debt or liability. 
  1.19     Sec. 2.  Minnesota Statutes 2002, section 550.37, 
  1.20  subdivision 20, is amended to read: 
  1.21     Subd. 20.  [TRACEABLE FUNDS.] The exemption of funds from 
  1.22  creditors' claims, provided by subdivisions 9, 10, 11, 15, 22, 
  1.23  and 24, and section 176.175, shall not be affected by the 
  1.24  subsequent deposit of the funds in a bank or any other financial 
  1.25  institution, whether in a single or joint account, if the funds 
  1.26  are traceable to their exempt source.  In tracing the funds, the 
  2.1   first-in first-out method of accounting shall be used.  The 
  2.2   burden of establishing that funds are exempt rests upon the 
  2.3   debtor.  No bank or other financial institution shall be liable 
  2.4   for damages for complying with process duly issued out of any 
  2.5   court for the collection of a debt even if the funds affected by 
  2.6   the process are subsequently determined to have been exempt. 
  2.7      Sec. 3.  Minnesota Statutes 2002, section 550.37, 
  2.8   subdivision 22, is amended to read: 
  2.9      Subd. 22.  [RIGHTS OF ACTION; PROCEEDS.] Rights of action 
  2.10  for injuries to the person of the debtor or of a relative 
  2.11  whether or not resulting in death and the proceeds of a judgment 
  2.12  or settlement resulting from an action for these injuries.  
  2.13     Sec. 4.  Minnesota Statutes 2002, section 550.37, 
  2.14  subdivision 24, is amended to read: 
  2.15     Subd. 24.  [EMPLOYEE BENEFITS.] (a) The debtor's right to 
  2.16  receive present or future payments, or payments received by the 
  2.17  debtor, under: 
  2.18     (1) a stock bonus, pension, profit sharing, annuity, 
  2.19  individual retirement account, Roth IRA, individual retirement 
  2.20  annuity, or simplified employee pension~~,~~; or 
  2.21     (2) a similar plan or contract payable on account of 
  2.22  illness, disability, death, age, or length of service~~,~~. 
  2.23     This exemption is applicable to the extent of the debtor's 
  2.24  aggregate interest under all plans and contracts up to a present 
  2.25  value of $30,000 and additional amounts under all the plans and 
  2.26  contracts to the extent reasonably necessary for the support of 
  2.27  the debtor and any spouse or dependent of the debtor.  
  2.28     (b) The exemptions in paragraph (a) do not apply when the 
  2.29  debt is owed under a support order as defined in section 518.54, 
  2.30  subdivision 4a.