HF4867

Purpose

This bill modifies how money recovered by the state in consumer protection cases is handled and paid out to consumers who have unpaid consumer enforcement compensation. It changes the way funds are deposited into the consumer protection restitution account and expands/clarifies rules for distributing money to eligible consumers.

Key Provisions

• Deposits into the restitution account (Sec. 1)

  • 50% of money recovered by the attorney general in a consumer enforcement action that is payable to the state (and not designated for other purposes) must be deposited into the consumer protection restitution account, but only up to the first $5,000,000 each fiscal year.
  • The remaining 50% of such money goes to the general fund.
  • The amount deposited into the restitution account is determined at the time the money would have been deposited into the general fund.

• Distributions to eligible consumers (Sec. 2)

  • Money in the restitution account may be distributed to any eligible consumer with an identified amount of unpaid consumer enforcement public compensation.
  • If funds are not enough to pay all eligible consumers, distributions are made first to those with unpaid compensation based on the oldest final order date.
  • If the attorney general projects ongoing insufficiency of funds, the attorney general may recommend a legislated formula to prorate or cap payments so more consumers receive some payment.
  • Per-claimant payment limits:
  • The full identified amount up to $50,000 must be paid in full.
  • For the portion over $50,000, only 50% of that excess may be paid, and this excess payment is capped so the total per claimant is limited (effectively up to a maximum of $100,000 per claimant).

• Additional context

  • The bill refers to “unpaid consumer enforcement public compensation” and to “final orders” of actions.
  • The changes involve both deposit rules (how much money goes into the restitution account vs. the general fund) and distribution rules (who gets paid first, and how much each eligible consumer can receive).

Significant Changes to Existing Law

• Changes the deposit allocation from consumer enforcement recoveries to the consumer protection restitution account with a cap ($5,000,000 per fiscal year) before funds go to the general fund.
• Establishes explicit distribution rules to eligible consumers, including a prioritization method (oldest final orders) and a per-claimant payment cap structure (up to $50,000 in full, plus up to half of the excess above $50,000, with an overall cap that limits total payments per claimant).
• Allows the attorney general to propose prorating or capping formulas if ongoing funding is insufficient, effectively creating a framework for adjusting payments to maximize the number of claimants who receive some restitution.

Implementation Notes

• The distribution framework relies on the existence of unpaid compensation amounts and “final orders” from consumer enforcement actions.
• The formula for prorating/capping would be determined by legislative action if the fund remains insufficient, potentially changing how much each eligible consumer may receive over time.

Relevant Terms - consumer protection restitution account - consumer enforcement public compensation - attorney general - general fund - eligible consumer - unpaid consumer enforcement public compensation - final order - oldest date - prorating - capping payments - maximum per-claimant payment - unpaid compensation - money recovered in a consumer enforcement action - Minnesota Statutes 2025 Supplement section 8.37 subdivisions 3 and 5