Minnesota House Bill HF1392

Minnesota 2025-2026 Regular Session

• Introduced: 2/24/25
• Refer: 2/24/25

Caption

Consumer protection restitution account established, report required, and money appropriated.

Summary

HF1392 creates a new “consumer protection restitution account” in the special revenue fund and directs a portion of certain consumer-enforcement recoveries obtained by the attorney general into that account. The account is intended to hold money recovered in consumer enforcement actions that is owed to consumers but has not been distributed, so it can later be paid out to eligible consumers who were directly harmed by unlawful acts or practices. The bill also authorizes the attorney general to appoint an account administrator, sets rules for when distributions are impractical or unreasonable, limits administrative costs to 3 percent of available funds, and requires an annual public report on account activity. The bill also amends existing law governing where state-recovered money goes. It changes the general rule for undistributed consumer-protection recoveries so that some funds may be deposited into the new account rather than solely into the general fund, and it clarifies that the new account is excluded from the general disposition rules in section 16A.151. In addition, it adds a tax subtraction for consumer enforcement public compensation payments received by eligible consumers, retroactive to tax years beginning after December 31, 2023. The bill includes a retroactive effective date for that tax provision. In practical terms, the bill would change how Minnesota handles certain restitution-like recoveries in attorney general consumer enforcement cases. Instead of all unclaimed or undistributed amounts going to the general fund, half of qualifying state-payable recoveries would be reserved for later consumer restitution, with the rest still going to the general fund. It also preserves the attorney general’s ability to continue collection efforts against wrongdoers even after money has been distributed from the account. The overall sentiment reflected in the available materials is neutral to supportive, but limited by the absence of committee testimony or recorded votes. The bill’s structure suggests a policy goal of improving consumer restitution and ensuring harmed consumers can still receive compensation even when direct distribution is difficult. No formal opposition is documented in the provided record. The main points of potential contention are administrative and fiscal rather than ideological. Questions could arise over diverting money away from the general fund, the attorney general’s discretion to deem distributions impractical or unreasonable, the use of an administrator, and whether the reporting and oversight provisions are sufficient. Another possible issue is the retroactive tax subtraction, which benefits recipients of these payments and may affect state revenue.

Impact

The bill amends Minnesota’s consumer protection and state finance statutes by creating a dedicated consumer protection restitution account, changing the disposition of certain attorney general recoveries, and exempting that account from the general rule that undistributed recoveries go to the general fund. It also adds a state income tax subtraction for consumer enforcement public compensation payments and makes that subtraction retroactive to tax years beginning after December 31, 2023. The bill affects the attorney general, eligible consumers in consumer enforcement actions, the Department of Revenue, and the state treasury by redirecting and tracking restitution-related funds.

Sentiment

No committee transcript or vote record was provided, so there is no documented floor or committee debate to measure directly. Based on the bill text, the measure appears to be framed as a consumer-protection and restitution improvement bill, with a generally favorable policy posture toward returning money to harmed consumers rather than leaving it in the general fund. The lack of recorded opposition or amendments in the supplied materials suggests no clearly documented controversy in the available record.

Contention

Potential contention centers on the fiscal tradeoff of sending 50 percent of certain recoveries to the new restitution account instead of the general fund, and on the attorney general’s broad discretion to decide when distributions are impractical, unreasonable, or too costly to pursue. Some may also question the need for an account administrator, the 3 percent administrative cap, and whether the annual reporting requirements provide enough legislative oversight. The retroactive tax subtraction could also draw scrutiny because it reduces taxable income for recipients of these payments.