Bill Text: MN HF997 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: State agency civil penalty imposition regulated, and fees and expenses awarded to prevailing parties in actions involving state agencies.
Spectrum: Partisan Bill (Republican 8-0)
Status: (Introduced - Dead) 2012-02-09 - Motion to recall and re-refer, motion prevailed Ways and Means [HF997 Detail]
Download: Minnesota-2011-HF997-Engrossed.html
1.2relating to civil actions; regulating the imposition of certain civil penalties by
1.3state agencies; awarding fees and expenses to prevailing parties in certain actions
1.4involving state agencies;amending Minnesota Statutes 2010, sections 14.045,
1.5subdivision 3; 15.471, subdivision 6, by adding a subdivision; 15.472.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 14.045, subdivision 3, is amended to read:
1.8 Subd. 3. Factors. (a) If a statute or rule gives an agency discretion over the amount
1.9of a fine or civil penalty, the agency must take the following factors into account in
1.10determining the amount of the fine or penalty:
1.11(1) the willfulness of the violation;
1.12(2) the gravity of the violation, including damage to humans, animals, and the
1.13natural resources of the state;
1.14(3) the history of past violations;
1.15(4) the number of violations;
1.16(5) the economic benefit gained by the person by allowing or committing the
1.17violation;and
1.18(6) fines or penalties that similarly situated persons have been assessed for similar
1.19violations;
1.20(7) the cooperation and responsiveness of the person, provided that a fine or penalty
1.21shall not be imposed or enhanced because a person has contested an alleged violation or
1.22asserted a right or defense provided for in law; and
1.23(6) (8) other factors that justice may require.
1.24(b) For a violation after an initial violation, the following factors must be considered
1.25in addition to the factors in paragraph (a):
2.1(1) similarity of recent previous violations to the current violation to be penalized;
2.2(2) time elapsed since the last violation;
2.3(3) number of previous violations; and
2.4(4) response of the person to the most recent previous violation identified.
2.5(c) In addition to stating the factual and legal basis for a violation, a state agency
2.6shall, in its notice, demand, order, or complaint in an administrative or civil proceeding,
2.7document the application of these considerations in determining the amount of any
2.8proposed fine or penalty. The agency shall provide this documentation to the party subject
2.9to the administrative or civil action at least 30 days prior to initiating the action, unless the
2.10alleged violation imminently and substantially endangers public safety, public health, or
2.11the environment. Nothing in this paragraph limits the ability of an agency, at any time, to
2.12seek injunctive relief related to an alleged violation.
2.13(d) A penalty or stipulation agreement may not include expenditures by the party
2.14alleged to have committed a violation for purposes that are not reasonably related to efforts
2.15to mitigate or remediate the specific violation, unless otherwise agreed to by the party.
2.16(e) A party subject to a proposed fine or penalty under this section is entitled to offer
2.17affirmative defenses including, but not limited to:
2.18(1) the number of prior contacts where a state agency offered reasonable corrective
2.19measures prior to issuing a fine or penalty;
2.20(2) the ability of the party to pay the proposed fine or penalty; and
2.21(3) other economic factors affecting the feasibility or practicality of compliance by
2.22the party.
2.23(f) As used in paragraphs (c) to (e), "party" has the meaning given in section 15.471,
2.24subdivision 6.
2.25(g) Paragraphs (c) to (e) do not apply to civil penalties assessed under chapter 10A
2.26or 211B.
2.27 Sec. 2. Minnesota Statutes 2010, section 15.471, is amended by adding a subdivision
2.28to read:
2.29 Subd. 3a. Demand. "Demand" means the express demand of the agency which led
2.30to the civil action or contested case proceeding but does not include a recitation by the
2.31agency of the maximum statutory penalty:
2.32(1) in the administrative complaint; or
2.33(2) elsewhere when accompanied by an express demand for a lesser amount.
2.34 Sec. 3. Minnesota Statutes 2010, section 15.471, subdivision 6, is amended to read:
3.1 Subd. 6. Party. (a) Except as modified by paragraph (b), "party" means a person
3.2named or admitted as a party, or seeking and entitled to be admitted as a party, in a court
3.3action or contested case proceeding, or a person admitted by an administrative law judge
3.4for limited purposes, and who is:
3.5(1) an unincorporated business, partnership, corporation, association, or
3.6organization, having not more than 500 employees at the time the civil action was filed or
3.7the contested case proceeding was initiated; and
3.8(2) an unincorporated business, partnership, corporation, association, or organization
3.9whose annual revenues did not exceed$7,000,000 $30,000,000 at the time the civil action
3.10was filed or the contested case proceeding was initiated.
3.11(b) "Party" also includes a partner, officer, shareholder, member, or owner of an
3.12entity described in paragraph (a), clauses (1) and (2).
3.13(c) "Party" does not include a person providing services pursuant to licensure or
3.14reimbursement on a cost basis by the Department of Health or the Department of Human
3.15Services, when that person is named or admitted or seeking to be admitted as a party in a
3.16matter which involves the licensing or reimbursement rates, procedures, or methodology
3.17applicable to those services.
3.18 Sec. 4. Minnesota Statutes 2010, section 15.472, is amended to read:
3.1915.472 FEES AND EXPENSES; CIVIL ACTION OR CONTESTED CASE
3.20PROCEEDING INVOLVING STATE.
3.21(a) If a prevailing party other than the state, in a civil action or contested case
3.22proceeding other than a tort action, brought by or against the state, shows that the position
3.23of the state was not substantially justified, the court or administrative law judge shall award
3.24fees and other expenses to the party unless special circumstances make an award unjust.
3.25(b) If, in a civil action or contested case proceeding arising from an agency action
3.26to enforce a party's compliance with a statutory or regulatory requirement, the demand
3.27by the agency is substantially in excess of the final decision of the administrative law
3.28judge or court and is unreasonable when compared with such decision under the facts and
3.29circumstances of the case, the administrative law judge or court shall award to the party
3.30the fees and other expenses related to defending against the excessive demand, unless
3.31the party has committed a willful violation of law or engaged in conduct that unduly
3.32and unreasonably protracted the final resolution of the matter in controversy, or special
3.33circumstances make an award unjust.
3.34(b) (c) A party seeking an award of fees and other expenses shall, within 30 days of
3.35final judgment in the action, submit to the court or administrative law judge an application
4.1of fees and other expenses which shows that the party is a prevailing party and is eligible
4.2to receive an award, and the amount sought, including an itemized statement from any
4.3attorney or expert witness representing or appearing on behalf of the party stating the
4.4actual time expended and the rate at which fees and other expenses were computed. The
4.5party shall also allege that the position of the state was not substantially justified.
4.6(c) (d) The court or administrative law judge may reduce the amount to be awarded
4.7under this section, or deny an award, to the extent that the prevailing party during
4.8the proceedings engaged in conduct that unduly and unreasonably protracted the final
4.9resolution of the matter in controversy. The decision of an administrative law judge under
4.10this section must be made a part of the record containing the final decision of the agency
4.11and must include written findings and conclusions.
4.12(d) (e) This section does not preclude a party from recovering costs, disbursements,
4.13fees, and expenses under other applicable law.
4.14 Sec. 5. TITLE.
4.15This act may be cited as the "Small Business Bill of Rights - Regulatory Fairness
4.16Act."
4.17 Sec. 6. EFFECTIVE DATE; APPLICATION.
4.18This act is effective August 1, 2011, and applies to administrative or civil actions
4.19commenced on or after that date.
1.3state agencies; awarding fees and expenses to prevailing parties in certain actions
1.4involving state agencies;amending Minnesota Statutes 2010, sections 14.045,
1.5subdivision 3; 15.471, subdivision 6, by adding a subdivision; 15.472.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 14.045, subdivision 3, is amended to read:
1.8 Subd. 3. Factors. (a) If a statute or rule gives an agency discretion over the amount
1.9of a fine or civil penalty, the agency must take the following factors into account in
1.10determining the amount of the fine or penalty:
1.11(1) the willfulness of the violation;
1.12(2) the gravity of the violation, including damage to humans, animals, and the
1.13natural resources of the state;
1.14(3) the history of past violations;
1.15(4) the number of violations;
1.16(5) the economic benefit gained by the person by allowing or committing the
1.17violation;
1.18(6) fines or penalties that similarly situated persons have been assessed for similar
1.19violations;
1.20(7) the cooperation and responsiveness of the person, provided that a fine or penalty
1.21shall not be imposed or enhanced because a person has contested an alleged violation or
1.22asserted a right or defense provided for in law; and
1.23
1.24(b) For a violation after an initial violation, the following factors must be considered
1.25in addition to the factors in paragraph (a):
2.1(1) similarity of recent previous violations to the current violation to be penalized;
2.2(2) time elapsed since the last violation;
2.3(3) number of previous violations; and
2.4(4) response of the person to the most recent previous violation identified.
2.5(c) In addition to stating the factual and legal basis for a violation, a state agency
2.6shall, in its notice, demand, order, or complaint in an administrative or civil proceeding,
2.7document the application of these considerations in determining the amount of any
2.8proposed fine or penalty. The agency shall provide this documentation to the party subject
2.9to the administrative or civil action at least 30 days prior to initiating the action, unless the
2.10alleged violation imminently and substantially endangers public safety, public health, or
2.11the environment. Nothing in this paragraph limits the ability of an agency, at any time, to
2.12seek injunctive relief related to an alleged violation.
2.13(d) A penalty or stipulation agreement may not include expenditures by the party
2.14alleged to have committed a violation for purposes that are not reasonably related to efforts
2.15to mitigate or remediate the specific violation, unless otherwise agreed to by the party.
2.16(e) A party subject to a proposed fine or penalty under this section is entitled to offer
2.17affirmative defenses including, but not limited to:
2.18(1) the number of prior contacts where a state agency offered reasonable corrective
2.19measures prior to issuing a fine or penalty;
2.20(2) the ability of the party to pay the proposed fine or penalty; and
2.21(3) other economic factors affecting the feasibility or practicality of compliance by
2.22the party.
2.23(f) As used in paragraphs (c) to (e), "party" has the meaning given in section 15.471,
2.24subdivision 6.
2.25(g) Paragraphs (c) to (e) do not apply to civil penalties assessed under chapter 10A
2.26or 211B.
2.27 Sec. 2. Minnesota Statutes 2010, section 15.471, is amended by adding a subdivision
2.28to read:
2.29 Subd. 3a. Demand. "Demand" means the express demand of the agency which led
2.30to the civil action or contested case proceeding but does not include a recitation by the
2.31agency of the maximum statutory penalty:
2.32(1) in the administrative complaint; or
2.33(2) elsewhere when accompanied by an express demand for a lesser amount.
2.34 Sec. 3. Minnesota Statutes 2010, section 15.471, subdivision 6, is amended to read:
3.1 Subd. 6. Party. (a) Except as modified by paragraph (b), "party" means a person
3.2named or admitted as a party, or seeking and entitled to be admitted as a party, in a court
3.3action or contested case proceeding, or a person admitted by an administrative law judge
3.4for limited purposes, and who is:
3.5(1) an unincorporated business, partnership, corporation, association, or
3.6organization, having not more than 500 employees at the time the civil action was filed or
3.7the contested case proceeding was initiated; and
3.8(2) an unincorporated business, partnership, corporation, association, or organization
3.9whose annual revenues did not exceed
3.10was filed or the contested case proceeding was initiated.
3.11(b) "Party" also includes a partner, officer, shareholder, member, or owner of an
3.12entity described in paragraph (a), clauses (1) and (2).
3.13(c) "Party" does not include a person providing services pursuant to licensure or
3.14reimbursement on a cost basis by the Department of Health or the Department of Human
3.15Services, when that person is named or admitted or seeking to be admitted as a party in a
3.16matter which involves the licensing or reimbursement rates, procedures, or methodology
3.17applicable to those services.
3.18 Sec. 4. Minnesota Statutes 2010, section 15.472, is amended to read:
3.1915.472 FEES AND EXPENSES; CIVIL ACTION OR CONTESTED CASE
3.20PROCEEDING INVOLVING STATE.
3.21(a) If a prevailing party other than the state, in a civil action or contested case
3.22proceeding other than a tort action, brought by or against the state, shows that the position
3.23of the state was not substantially justified, the court or administrative law judge shall award
3.24fees and other expenses to the party unless special circumstances make an award unjust.
3.25(b) If, in a civil action or contested case proceeding arising from an agency action
3.26to enforce a party's compliance with a statutory or regulatory requirement, the demand
3.27by the agency is substantially in excess of the final decision of the administrative law
3.28judge or court and is unreasonable when compared with such decision under the facts and
3.29circumstances of the case, the administrative law judge or court shall award to the party
3.30the fees and other expenses related to defending against the excessive demand, unless
3.31the party has committed a willful violation of law or engaged in conduct that unduly
3.32and unreasonably protracted the final resolution of the matter in controversy, or special
3.33circumstances make an award unjust.
3.34
3.35final judgment in the action, submit to the court or administrative law judge an application
4.1of fees and other expenses which shows that the party is a prevailing party and is eligible
4.2to receive an award, and the amount sought, including an itemized statement from any
4.3attorney or expert witness representing or appearing on behalf of the party stating the
4.4actual time expended and the rate at which fees and other expenses were computed. The
4.5party shall also allege that the position of the state was not substantially justified.
4.6
4.7under this section, or deny an award, to the extent that the prevailing party during
4.8the proceedings engaged in conduct that unduly and unreasonably protracted the final
4.9resolution of the matter in controversy. The decision of an administrative law judge under
4.10this section must be made a part of the record containing the final decision of the agency
4.11and must include written findings and conclusions.
4.12
4.13fees, and expenses under other applicable law.
4.14 Sec. 5. TITLE.
4.15This act may be cited as the "Small Business Bill of Rights - Regulatory Fairness
4.16Act."
4.17 Sec. 6. EFFECTIVE DATE; APPLICATION.
4.18This act is effective August 1, 2011, and applies to administrative or civil actions
4.19commenced on or after that date.
