1.1                          A bill for an act 
  1.2             relating to state government; regulating the recovery 
  1.3             of costs and attorney fees from the state of 
  1.4             Minnesota; establishing specific procedures for 
  1.5             application of fees; amending Minnesota Statutes 1998, 
  1.6             sections 15.471, subdivisions 4, 5, and 6; and 15.472. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1998, section 15.471, 
  1.9   subdivision 4, is amended to read: 
  1.10     Subd. 4.  [EXPENSES.] "Expenses" means the costs incurred 
  1.11  by the party in the litigation, including: 
  1.12     (1) filing fees; 
  1.13     (2) subpoena fees and mileage; 
  1.14     (3) transcript costs and court reporter fees; 
  1.15     (4) expert witness fees; 
  1.16     (5) the reasonable cost of any study, analysis, engineering 
  1.17  report, test, or project; 
  1.18     (6) photocopying and printing costs; 
  1.19     (6) (7) postage and delivery costs; and 
  1.20     (7) (8) service of process fees. 
  1.21     Sec. 2.  Minnesota Statutes 1998, section 15.471, 
  1.22  subdivision 5, is amended to read: 
  1.23     Subd. 5.  [FEES.] "Fees" means the reasonable attorney fees 
  1.24  or reasonable fees charged by a person not an attorney who is 
  1.25  authorized by law or rule to represent the party and may include 
  1.26  reasonable charges by the party, the party's employee, or 
  2.1   agent.  The amount of fees must be based upon prevailing market 
  2.2   rates for the kind and quality of the services furnished, 
  2.3   subject to the following limitations: 
  2.4      (a) In a court action, an expert witness may not be 
  2.5   compensated at a rate in excess of the highest rate of 
  2.6   compensation for expert witnesses paid by the United States 
  2.7   state. 
  2.8      (b) In a contested case proceeding, an expert witness may 
  2.9   not be compensated at a rate in excess of the highest rate of 
  2.10  compensation for expert witnesses paid by the state agency 
  2.11  involved. 
  2.12     (c) Attorney or agent fees may not be awarded in excess of 
  2.13  $100 $125 per hour unless the court or administrative law judge 
  2.14  determines that an increase in the cost of living or a special 
  2.15  factor, such as the limited availability of qualified attorneys 
  2.16  or agents for the proceedings involved, justifies a higher fee.  
  2.17     Sec. 3.  Minnesota Statutes 1998, section 15.471, 
  2.18  subdivision 6, is amended to read: 
  2.19     Subd. 6.  [PARTY.] (a) Except as modified by paragraph (b), 
  2.20  "party" means a person named or admitted as a party, or seeking 
  2.21  and entitled to be admitted as a party, in a court action or 
  2.22  contested case proceeding, or a person admitted by an 
  2.23  administrative law judge for limited purposes, and who is: 
  2.24     (1) an unincorporated business, partnership, corporation, 
  2.25  association, or organization, having not more than 50 500 
  2.26  employees at the time the civil action was filed or the 
  2.27  contested case proceeding was initiated; and 
  2.28     (2) an unincorporated business, partnership, corporation, 
  2.29  association, or organization whose annual revenues did not 
  2.30  exceed $4,000,000 $7,000,000 at the time the civil action was 
  2.31  filed or the contested case proceeding was initiated. 
  2.32     (b) "Party" also includes a partner, officer, shareholder, 
  2.33  member, or owner of an entity described in paragraph (a), 
  2.34  clauses (1) and (2). 
  2.35     (c) "Party" does not include a person providing services 
  2.36  pursuant to licensure or reimbursement on a cost basis by the 
  3.1   department of health or the department of human services, when 
  3.2   that person is named or admitted or seeking to be admitted as a 
  3.3   party in a matter which involves the licensing or reimbursement 
  3.4   rates, procedures, or methodology applicable to those services. 
  3.5      Sec. 4.  Minnesota Statutes 1998, section 15.472, is 
  3.6   amended to read: 
  3.7      15.472 [FEES AND EXPENSES; CIVIL ACTION OR CONTESTED CASE 
  3.8   PROCEEDING INVOLVING STATE.] 
  3.9      (a) If a prevailing party other than the state, in a civil 
  3.10  action or contested case proceeding other than a tort action, 
  3.11  brought by or against the state, shows that the position of the 
  3.12  state was not substantially justified, the court or 
  3.13  administrative law judge shall award fees and other expenses to 
  3.14  the party unless special circumstances make an award unjust. 
  3.15     (b) A party seeking an award of fees and other expenses 
  3.16  shall, within 30 days of final judgment in the action, submit to 
  3.17  the court or administrative law judge an application of fees and 
  3.18  other expenses which shows that the party unless special 
  3.19  circumstances make an award unjust. is a prevailing party and is 
  3.20  eligible to receive an award, and the amount sought, including 
  3.21  an itemized statement from any attorney or expert witness 
  3.22  representing or appearing on behalf of the party stating the 
  3.23  actual time expended and the rate at which fees and other 
  3.24  expenses were computed.  The party shall also allege that the 
  3.25  position of the state was not substantially justified.  
  3.26     (b) (c) The court or administrative law judge may reduce 
  3.27  the amount to be awarded under this section, or deny an award, 
  3.28  to the extent that the prevailing party during the proceedings 
  3.29  engaged in conduct that unduly and unreasonably protracted the 
  3.30  final resolution of the matter in controversy.  The decision of 
  3.31  an administrative law judge under this section must be made a 
  3.32  part of the record containing the final decision of the agency 
  3.33  and must include written findings and conclusions. 
  3.34     (c) (d) This section does not preclude a party from 
  3.35  recovering costs, disbursements, fees, and expenses under other 
  3.36  applicable law. 
  4.1      Sec. 5.  [EFFECTIVE DATE; APPLICATION.] 
  4.2      This act is effective August 1, 2000, and applies to any 
  4.3   civil action or contested case proceeding which is commenced on 
  4.4   or after that date.