Politicos are fond of saying, “Elections matter.” And they do. The 2010 elections gave Republicans power over both chambers of the legislature for the first time in decades, but the 2012 elections reversed the tide and swept the DFL back into control of the state House and Senate. The new legislative majorities, combined with Governor Mark Dayton, created one-party rule: a dynamic that had been absent from the Capitol for 22 years.
Although they had a firm grip on power, Democrats faced significant challenges, not least of which was a projected $627 million budget deficit, a sizeable number, albeit considerably lower than the multibillion dollar deficits that Capitol inhabitants have grown accustomed to. Lawmakers dealt with several high-profile issues during the 2013 legislative session—legalizing same sex marriage, establishing a health insurance exchange, and allowing daycare providers and personal care attendants to form unions—but the budget dominated discussions at the Capitol from the start of the session until its final moments.
Long before the legislature convened, the Dayton administration began working on a tax reform plan, but the governor’s proposal was a tightly kept secret until it was unveiled, along with his proposed budget, two weeks into the session. The governor’s blueprint called for increased funding in many areas of the state budget, including the justice system. The additional spending was backed by new revenue: higher income taxes on top earners, an increase in the cigarette tax, and a dramatic change to the state sales tax system that involved lowering the sales tax rate while expanding the base to include clothing items over $100 as well as many consumer and business-to-business services, including legal services.
The MSBA immediately sprang into action to oppose the proposed tax on legal services. The current Bar president, Robert Enger, and a former Bar president, Kent Gernander, appeared in front of the House Taxes Committee and testified that taxing legal services would be a barrier to justice and would hit people when they are most vulnerable. Fierce opposition from service providers and the business community, and tepid support from legislators, caused Gov. Dayton to retract his proposed sales tax expansion just weeks after he introduced it. But the possibility of a tax on services was not dead, because the Senate continued to express interest in sales tax reform.
As the session continued, three different tax and budget plans emerged: the governor’s, the House’s, and the Senate’s. Although all three plans shared some common elements, a compromise agreement wasn’t reached until the last week of the session. The final deal relied heavily on a new upper-tier income tax increase and a big cigarette tax hike. The agreement left most services, including legal services, exempt from taxation. The Bar was grateful for that, and very pleased that the budget deal contained much-needed funding increases for the court system, public defenders, and civil legal services.
The Bar Agenda
A total of 3,544 bills were introduced during the session (1,862 in the House and 1,682 in the Senate), but only 144 made it all the way to Gov. Dayton’s desk. Among them were three proposals from the MSBA.
The first Bar bill, which was signed into law as Chapter 10, came from the Real Property Section and was carried by a pair of smart young lawyer-legislators from the western suburbs: Rep. Ryan Winkler (D-Golden Valley) and Sen. Melisa Franzen (D-Edina). The main provision in Chapter 10 allows affidavits of survivorship to be used to change the person and address that property tax statements are sent to, alleviating a common frustration when property ownership is transferred upon death. The new law, which takes effect August 1, also includes a few other minor technical clarifications.
The second MSBA proposal came from the Probate and Trust Law Section. Practitioners wanted to address a rising number of situations in which an elderly parent creates a joint checking account with an adult child so the adult child can assist the parent with financial matters. The problem is that, when the parent dies, the entire account becomes the property of the adult child, even if there are other siblings and even if that was not the intent of the deceased parent. The other option for an elderly person is to give an adult child power of attorney, but that may be more power than is necessary for the circumstances or advisable for a particular adult child. The Probate Section’s proposal, which was included in Chapter 36, strikes a middle ground by allowing for the appointment of an agent over an account without giving the agent a property interest in the account. The House and Senate files were authored by DFL Rep. Melissa Hortman (an attorney from Brooklyn Park who has become the House expert on probate matters) and Sen. Scott Newman, a Republican lawyer-legislator from Hutchinson.
Sen. Newman also authored a bill for the Tax Law Section, which was amended onto his Probate Section bill on the Senate floor. The Tax Law Section proposal, which was carried in the House by a sharp first-year member, Rep. Barb Yarusso (D-Shoreview), addressed a 2009 Minnesota Supreme Court case, Langer v. Commissioner of Revenue, which held that Minnesota Tax Court filings are complete upon receipt by the court. But many unrepresented taxpayers mistakenly believe that their tax court filings, like their federal tax returns, simply need to be postmarked by the deadline date. To protect these pro se litigants, the Tax Law Section proposal, which was part of Chapter 36 and becomes effective August 1, creates a “postmark rule” for Minnesota Tax Court filings.
As he did during the 2012 session, Senator Newman carried a heavy load for the Bar this year, and he had the fortitude to introduce a third MSBA bill, SF370, even though it drew some fire from his own side of the aisle. The bill, which came from the Family Law Section, would update Minnesota’s outdated Parentage Act to deal with modern assisted-reproduction techniques. The heart of the bill would give non-genetically-linked intended parents standing to contest the presumption that a surrogate is entitled to custody. The proposal wouldn’t give non-genetically-linked intended parents an advantage over surrogates; it would simply allow them to access the courts. Unfortunately, the bill died on a tie vote in the Senate Judiciary Committee. The House companion (HF291), however, made it through two committees and reached the House floor under the guidance of its chief author, well-respected lawyer-legislator Rep. Steve Simon (D-Hopkins), who has worked on the issue for many years. The proposal could be revived during the second year of the legislative biennium.
In addition to our affirmative agenda, the MSBA was involved in dozens of other bills, sometimes visibly and sometimes behind the scenes, but always seeking to apply the knowledge of the profession to prevent unintended consequences. Many thanks are due to the Bar members who volunteered their time. And although it may be unfair to single out one person when so many gave their time, Kevin Dunlevy of the Real Property Section deserves special mention after he contributed hundreds of volunteer hours, sometimes from halfway across the world. Kevin and many others displayed a sense of duty and a willingness to help that reflects the best of the legal profession.
Notable New Laws
The following is a summary of new laws that will interest attorneys in a wide variety of practice areas. If you wish to read any of them in their entirety, a list of session laws is available at http://www.house.leg.state.mn.us/bills/chapterslist.asp
Chapter 5 allows offenses of financial exploitation of vulnerable adults to be aggregated over a six-month period, and allows prosecution to occur in the county where any offense transpired as well as in a victim’s county of residence.
Chapter 6 is a technical modification to Article 4A of the Minnesota Uniform Commercial Code. It applies Article 4A to “remittance transfers” as defined by the Electronic Funds Transfer Act (EFTA), but not remittance transfers that fall under the EFTA’s definition of “electronic funds transfers.”
Chapter 7 is the Uniform Electronic Legal Material Act, which provides a process for authenticating certain electronic legal materials published by the Revisor of Statutes.
Chapter 16 modifies the Minnesota False Claims Act to fit with federal standards.
Chapter 17 clarifies the definition of “foreclosure consultant” and applies various regulations to residential mortgage originators and servicers.
Chapter 21 creates a hard deadline for contribution and indemnity claims related to services or construction to improve real property. Under the new law, such claims cannot be brought more than 14 years after construction is substantially completed.
Chapter 23 makes extensive changes to the statutory short-form power of attorney.
Chapter 24 adopts the Uniform Community Property Rights at Death Act, which provides for the disposition of community property assets.
Chapter 28 adds communications and documents used in collaborative law processes to the list of privileged and excluded testimony under Minn. Stat. §595.02.
Chapter 30, the Family Reunification Act of 2013, allows a court to reestablish a previously terminated legal parent-child relationship when the child involved is at least 15 years old.
Chapter 34 classifies as private data the identifying information of a person seeking notification of a change in custody status of an arrested, detained or confined person. It also adds stalking to the list of “violent crimes” in Minn. Stat. §611A.036, which forbids employer retaliation against employees who miss work to attend proceedings related to violent crimes. The new law also directs the Department of Public Safety to create a working group to study the restitution process.
Chapter 37 makes some relatively minor modifications to the Guardian Ad Litem Board, including allowing board members, rather than the Minnesota Supreme Court, to select the chair of the board.
Chapter 39 allows a deceased victim’s estate to request or enforce an order for restitution.
Chapter 43 contains numerous proposals from the Minnesota Department of Health, including a new radon disclosure requirement for residential real property.
Chapter 47 modifies several domestic abuse provisions, including striking the enhanced penalty requirement that a person must have “knowingly” violated an order for protection.
Chapter 49 enacts a recommendation made by the Office of the Legislative Auditor to distinguish sex offender commitments from other types of civil commitments.
Chapter 56 dictates that petitions for judicial review of final decisions in contested cases must be served on all parties.
Chapter 61 bars private employers from inquiring into a job applicant’s criminal history until the applicant has been interviewed or a conditional offer of employment has been extended.
Chapter 65 provides that, in the absence of good cause to the contrary, courts shall transfer to tribal courts proceedings involving preadoptive or adoptive placement of an Indian child.
Chapter 70 modifies a variety of workers’ compensation provisions.
Chapter 72 requires the Department of Human Rights to issue certificates of compliance and notices of denial or deficiency within 15 days.
Chapter 76 modifies procedures and data privacy standards related to the Safe-At-Home program.
Chapter 78 updates Minnesota’s Code of Military Justice.
Chapter 80 provides that money used or intended to be used to facilitate prostitution or sex-trafficking offenses is subject to forfeiture.
Chapter 82, the omnibus data practices bill, contains a provision that expands witness data available to public defenders to include “custody status, custody history, aliases and known monikers, race, probation status, identity of probation officer, and booking photos.”
Chapter 85 contains new requirements for contract-for-deed transactions as well as an allocation to the Office of Collaboration and Dispute Resolution for grants and public policy collaboration.
Chapter 86, the omnibus public safety bill, creates new background check and reporting requirements for guardians and conservators. It also establishes a 36-month presumptive sentence for certain repeat sex offenders, and would allow a court to stay the sentence only if “a professional assessment indicates the offender is accepted by and can respond to treatment at a long-term inpatient program.”
Chapter 142, the omnibus state government finance and veteran affairs bill, contains language that establishes honorable discharge from the military as a presumption of rehabilitation for employment and licensure under Chapter 364.
Chapter 143, the omnibus tax bill, institutes a gift tax, corrects significant problems with the farm and small business estate tax exclusions, and reinstates expired mortgage registry and deed taxes in Hennepin and Ramsey counties for deeds and mortgages acknowledged on or after July 1, 2013.
Note: This article was written shortly after the legislature adjourned, and Gov. Dayton had not yet acted on the following chapters at the time this issue of Bench & Bar went to press. The website listed above will show whether these chapters were signed or vetoed.
Chapter 88 voids, with several exemptions, building and construction contract provisions that require a party to cover one or more other parties for negligence or intentional acts or omissions.
Chapter 89 modifies the limitations period for civil actions related to sexual abuse of minors. It allows commencement of an action at any time for victims under age 18, but if the abuser was under 14 years old, actions must commence before the plaintiff turns 24. Vicarious liability or respondeat superior claims must commence within six years, or, if the victim was under age 18, before the plaintiff reaches age 24. There are various effective dates related to the type of claim and whether it was time-barred under previous law.
Chapter 90 adds sexual orientation and marital status to the list of reasons that citizens cannot be excluded from jury service under Minn. Stat. §593.32.
Chapter 91 modifies debt settlement fee provisions, defines “exempt attorney at law,” and excludes such attorneys from provisions related to debt management and debt settlement services.
Chapter 94 gives a homicide victim’s family the ability to seek an order to preserve personal property.
Chapter 100 modifies landlord/tenant law, including imposing a $500 civil penalty when landlords fail to notify tenants of an impending foreclosure or cancellation of a contract-for-deed, and removes the sunset provisions for eviction proceedings involving contract-for-deed and foreclosed residential properties.
Chapter 104 requires debt buyers to provide certain evidence when seeking default judgment and sets a six-year limitations period for actions arising out of consumer debt for personal, family or household purposes.
Chapter 106 aligns Minnesota’s securities and franchise registration laws with federal standards.
Chapter 112 provides immunity to underage drinkers who call 911 to seek medical assistance for themselves or others.
Chapter 115 modifies foreclosure proceedings to require compliance with dual tracking and loss-mitigation provisions.
Chapter 118 voids liability waivers for conduct constituting greater than ordinary negligence (but does not apply to claims against the state or a municipality).
Chapter 132 incorporates attorney fees, loss of an ongoing concern, and relocation and appraisal costs into the “Buy The Farm” law.