1.1                          A bill for an act 
  1.2             relating to civil liability; clarifying the authority 
  1.3             of law enforcement to charge a service fee for 
  1.4             processing worthless checks; amending Minnesota 
  1.5             Statutes 2002, section 604.113, subdivision 2. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 604.113, 
  1.8   subdivision 2, is amended to read: 
  1.9      Subd. 2.  [ACTS CONSTITUTING.] Whoever issues any check 
  1.10  that is dishonored is liable for the following penalties: 
  1.11     (a) A service charge, not to exceed $30, may be imposed 
  1.12  immediately on any dishonored check by the payee or holder of 
  1.13  the check, regardless of mailing a notice of dishonor, if notice 
  1.14  of the service charge was conspicuously displayed on the 
  1.15  premises when the check was issued.  If a law enforcement agency 
  1.16  obtains payment of a dishonored check, a service charge, not to 
  1.17  exceed $30, may be imposed if the service charge is retained by 
  1.18  the law enforcement agency for its expenses.  Only one service 
  1.19  charge may be imposed under this paragraph for each dishonored 
  1.20  check.  The displayed notice must also include a provision 
  1.21  notifying the issuer of the check that civil penalties may be 
  1.22  imposed for nonpayment. 
  1.23     (b) If the amount of the dishonored check is not paid 
  1.24  within 30 days after the payee or holder has mailed notice of 
  1.25  dishonor pursuant to section 609.535 and a description of the 
  2.1   penalties contained in this subdivision, whoever issued the 
  2.2   dishonored check is liable to the payee or holder of the check 
  2.3   for: 
  2.4      (1) the amount of the check, the service charge as provided 
  2.5   in paragraph (a), plus a civil penalty of up to $100 or the 
  2.6   value of the check, whichever is greater.  In determining the 
  2.7   amount of the penalty, the court shall consider the amount of 
  2.8   the check and the reason for nonpayment.  The civil penalty may 
  2.9   not be imposed until 30 days following the mailing of the notice 
  2.10  of dishonor.  A payee or holder of the check may make a written 
  2.11  demand for payment of the civil liability by sending a copy of 
  2.12  this section and a description of the liability contained in 
  2.13  this section to the issuer's last known address.  Notice as 
  2.14  provided in paragraph (a) must also include notification that 
  2.15  additional civil penalties will be imposed for dishonored checks 
  2.16  for nonpayment after 30 days; 
  2.17     (2) interest at the rate payable on judgments pursuant to 
  2.18  section 549.09 on the face amount of the check from the date of 
  2.19  dishonor; and 
  2.20     (3) reasonable attorney fees if the aggregate amount of 
  2.21  dishonored checks issued by the issuer to all payees within a 
  2.22  six-month period is over $1,250. 
  2.23     (c) This subdivision prevails over any provision of law 
  2.24  limiting, prohibiting, or otherwise regulating service charges 
  2.25  authorized by this subdivision, but does not nullify charges for 
  2.26  dishonored checks, which do not exceed the charges in paragraph 
  2.27  (a) or terms or conditions for imposing the charges which have 
  2.28  been agreed to by the parties in an express contract. 
  2.29     (d) A sight draft may not be used as a means of collecting 
  2.30  the civil penalties provided in this section without prior 
  2.31  consent of the issuer. 
  2.32     (e) The issuer of a dishonored check is not liable for the 
  2.33  penalties described in paragraph (b) if a pretrial diversion 
  2.34  program under section 628.69 has been established in the 
  2.35  jurisdiction where the dishonored check was issued, the issuer 
  2.36  was accepted into the program, and the issuer successfully 
  3.1   completes the program.