1.1 	A bill for an act
1.2 	relating to dispute resolution; providing for
1.3 	mediation of disputes; adopting the Uniform Mediation
1.4 	Act; amending Minnesota Statutes 2004, sections
1.5 	115B.414, subdivision 2; 469.1771, subdivision 2b;
1.6 	572.40; 572.41, subdivision 1; proposing coding for
1.7 	new law as Minnesota Statutes, chapter 572C; repealing
1.8 	Minnesota Statutes 2004, sections 572.31; 572.33;
1.9 	572.35, subdivision 1; 572.36; 572.37; 572.39.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	ARTICLE 1
1.12 	UNIFORM MEDIATION ACT

1.13 	Section 1. [572C.01] TITLE.
1.14 	Sections 572C.01 to 572C.15 may be cited as the Uniform
1.15 	Mediation Act.

1.16 	Sec. 2. [572C.02] DEFINITIONS.
1.17 	In sections 572C.01 to 572C.15:
1.18 	(1) "Mediation" means a process in which a mediator
1.19 	facilitates communication and negotiation between parties to
1.20 	assist them in reaching a voluntary agreement regarding their
1.21 	dispute.
1.22 	(2) "Mediation communication" means a statement, whether
1.23 	oral or in a record or verbal or nonverbal, that occurs during a
1.24 	mediation or is made for purposes of considering, conducting,
1.25 	participating in, initiating, continuing, or reconvening a
1.26 	mediation or retaining a mediator.
1.27 	(3) "Mediator" means an individual who conducts a mediation.
2.1 	(4) "Nonparty participant" means a person, other than a
2.2 	party or mediator, that participates in a mediation.
2.3 	(5) "Mediation party" means a person that participates in a
2.4 	mediation and whose agreement is necessary to resolve the
2.5 	dispute.
2.6 	(6) "Person" means an individual, corporation, business
2.7 	trust, estate, trust, partnership, limited liability company,
2.8 	association, joint venture, government; governmental
2.9 	subdivision, agency, or instrumentality; public corporation, or
2.10 	any other legal or commercial entity.
2.11 	(7) "Proceeding" means:
2.12 	(A) a judicial, administrative, arbitral, or other
2.13 	adjudicative process, including related prehearing and
2.14 	posthearing motions, conferences, and discovery; or 
2.15 	(B) a legislative hearing or similar process.
2.16 	(8) "Record" means information that is inscribed on a
2.17 	tangible medium or that is stored in an electronic or other
2.18 	medium and is retrievable in perceivable form.
2.19 	(9) "Sign" means:
2.20 	(A) to execute or adopt a tangible symbol with the present
2.21 	intent to authenticate a record; or 
2.22 	(B) to attach or logically associate an electronic symbol,
2.23 	sound, or process to or with a record with the present intent to
2.24 	authenticate a record.

2.25 	Sec. 3. [572C.03] SCOPE.
2.26 	(a) Except as otherwise provided in subsection (b) or (c),
2.27 	sections 572C.01 to 572C.15 apply to a mediation in which:
2.28 	(1) the mediation parties are required to mediate by
2.29 	statute, court, or administrative agency rule or referred to
2.30 	mediation by a court, administrative agency, or arbitrator;
2.31 	(2) the mediation parties and the mediator agree to mediate
2.32 	in a record that demonstrates an expectation that mediation
2.33 	communications will be privileged against disclosure; or 
2.34 	(3) the mediation parties use as a mediator an individual
2.35 	who holds himself or herself out as a mediator or the mediation
2.36 	is provided by a person that holds itself out as providing
3.1 	mediation.
3.2 	(b) Sections 572C.01 to 572C.15 do not apply to a mediation:
3.3 	(1) relating to the establishment, negotiation,
3.4 	administration, or termination of a collective bargaining
3.5 	relationship;
3.6 	(2) relating to a dispute that is pending under or is part
3.7 	of the processes established by a collective bargaining
3.8 	agreement, except that sections 572C.01 to 572C.15 apply to a
3.9 	mediation arising out of a dispute that has been filed with an
3.10 	administrative agency or court;
3.11 	(3) conducted by a judge who might make a ruling on the
3.12 	case; or 
3.13 	(4) conducted under the auspices of:
3.14 	(A) a primary or secondary school if all the parties are
3.15 	students; or 
3.16 	(B) a correctional institution for youths if all the
3.17 	parties are residents of that institution.
3.18 	(c) If the parties agree in advance in a signed record, or
3.19 	a record of proceeding reflects agreement by the parties, that
3.20 	all or part of a mediation is not privileged, the privileges
3.21 	under sections 572C.04 to 572C.06 do not apply to the mediation
3.22 	or part agreed upon.  However, sections 572C.04 to 572C.06 apply
3.23 	to a mediation communication made by a person that has not
3.24 	received actual notice of the agreement before the communication
3.25 	is made.

3.26 	Sec. 4. [572C.04] PRIVILEGE AGAINST DISCLOSURE;
3.27 	ADMISSIBILITY; DISCOVERY.
3.28 	(a) Except as otherwise provided in section 572C.06, a
3.29 	mediation communication is privileged as provided in subsection
3.30 	(b) and is not subject to discovery or admissible in evidence in
3.31 	a proceeding unless waived or precluded as provided by section
3.32 	572C.05.
3.33 	(b) In a proceeding, the following privileges apply:
3.34 	(1) A mediation party may refuse to disclose, and may
3.35 	prevent any other person from disclosing, a mediation
3.36 	communication.
4.1 	(2) A mediator may refuse to disclose a mediation
4.2 	communication, and may prevent any other person from disclosing
4.3 	a mediation communication of the mediator.
4.4 	(3) A nonparty participant may refuse to disclose, and may
4.5 	prevent any other person from disclosing, a mediation
4.6 	communication of the nonparty participant.
4.7 	(c) Evidence or information that is otherwise admissible or
4.8 	subject to discovery does not become inadmissible or protected
4.9 	from discovery solely by reason of its disclosure or use in a
4.10 	mediation.

4.11 	Sec. 5. [572C.05] WAIVER AND PRECLUSION OF PRIVILEGE.
4.12 	(a) A privilege under section 572C.04 may be waived in a
4.13 	record or orally during a proceeding if it is expressly waived
4.14 	by all parties to the mediation and:
4.15 	(1) in the case of the privilege of a mediator, it is
4.16 	expressly waived by the mediator; and 
4.17 	(2) in the case of the privilege of a nonparty participant,
4.18 	it is expressly waived by the nonparty participant.
4.19 	(b) A person that discloses or makes a representation about
4.20 	a mediation communication which prejudices another person in a
4.21 	proceeding is precluded from asserting a privilege under section
4.22 	572C.04, but only to the extent necessary for the person
4.23 	prejudiced to respond to the representation or disclosure.
4.24 	(c) A person that intentionally uses a mediation to plan,
4.25 	attempt to commit or commit a crime, or to conceal an ongoing
4.26 	crime or ongoing criminal activity is precluded from asserting a
4.27 	privilege under section 572C.04.

4.28 	Sec. 6. [572C.06] EXCEPTIONS TO PRIVILEGE.
4.29 	(a) There is no privilege under section 572C.04 for a
4.30 	mediation communication that is:
4.31 	(1) in an agreement evidenced by a record signed by all
4.32 	parties to the agreement;
4.33 	(2) available to the public under chapter 13 or made during
4.34 	a session of a mediation which is open, or is required by law to
4.35 	be open, to the public;
4.36 	(3) a threat or statement of a plan to inflict bodily
5.1 	injury or commit a crime of violence;
5.2 	(4) intentionally used to plan a crime, attempt to commit
5.3 	or commit a crime, or to conceal an ongoing crime or ongoing
5.4 	criminal activity;
5.5 	(5) sought or offered to prove or disprove a claim or
5.6 	complaint of professional misconduct or malpractice filed
5.7 	against a mediator;
5.8 	(6) except as otherwise provided in subsection (c), sought
5.9 	or offered to prove or disprove a claim or complaint of
5.10 	professional misconduct or malpractice filed against a mediation
5.11 	party, nonparty participant, or representative of a party based
5.12 	on conduct occurring during a mediation; or 
5.13 	(7) sought or offered to prove or disprove abuse, neglect,
5.14 	abandonment, or exploitation in a proceeding in which a child or
5.15 	adult protective services agency is a party, unless the case is
5.16 	referred by a court to mediation and a public agency
5.17 	participates.
5.18 	(b) There is no privilege under section 572C.04 if a court,
5.19 	administrative agency, or arbitrator finds, after a hearing in
5.20 	camera, that the party seeking discovery or the proponent of the
5.21 	evidence has shown that the evidence is not otherwise available,
5.22 	that there is a need for the evidence that substantially
5.23 	outweighs the interest in protecting confidentiality, and that
5.24 	the mediation communication is sought or offered in:
5.25 	(1) a court proceeding involving a felony or misdemeanor;
5.26 	or 
5.27 	(2) except as otherwise provided in subsection (c), a
5.28 	proceeding to prove a claim to rescind or reform or a defense to
5.29 	avoid liability on a contract arising out of the mediation.
5.30 	(c) A mediator may not be compelled to provide evidence of
5.31 	a mediation communication referred to in subsection (a)(6) or
5.32 	(b)(2).
5.33 	(d) If a mediation communication is not privileged under
5.34 	subsection (a) or (b), only the portion of the communication
5.35 	necessary for the application of the exception from
5.36 	nondisclosure may be admitted.  Admission of evidence under
6.1 	subsection (a) or (b) does not render the evidence, or any other
6.2 	mediation communication, discoverable or admissible for any
6.3 	other purpose.

6.4 	Sec. 7. [572C.07] PROHIBITED MEDIATOR REPORTS.
6.5 	(a) Except as required in subsection (b), a mediator may
6.6 	not make a report, assessment, evaluation, recommendation,
6.7 	finding, or other communication regarding a mediation to a
6.8 	court, administrative agency, or other authority that may make a
6.9 	ruling on the dispute that is the subject of the mediation.
6.10 	(b) A mediator may disclose:
6.11 	(1) whether the mediation occurred or has terminated,
6.12 	whether a settlement was reached, and attendance;
6.13 	(2) a mediation communication as permitted under section
6.14 	572C.06; or 
6.15 	(3) a mediation communication evidencing abuse, neglect,
6.16 	abandonment, or exploitation of an individual to a public agency
6.17 	responsible for protecting individuals against such treatment.
6.18 	(c) A communication made in violation of subsection (a) may
6.19 	not be considered by a court, administrative agency, or
6.20 	arbitrator.

6.21 	Sec. 8. [572C.08] CONFIDENTIALITY.
6.22 	Unless subject to chapter 13 or 13D, mediation
6.23 	communications are confidential to the extent agreed by the
6.24 	parties or provided by other law or rule of this state.

6.25 	Sec. 9. [572C.09] MEDIATOR'S DISCLOSURE OF CONFLICTS OF
6.26 	INTEREST; BACKGROUND.
6.27 	(a) Before accepting a mediation, an individual who is
6.28 	requested to serve as a mediator shall:
6.29 	(1) make an inquiry that is reasonable under the
6.30 	circumstances to determine whether there are any known facts
6.31 	that a reasonable individual would consider likely to affect the
6.32 	impartiality of the mediator, including a financial or personal
6.33 	interest in the outcome of the mediation and an existing or past
6.34 	relationship with a mediation party or foreseeable participant
6.35 	in the mediation; and 
6.36 	(2) disclose any such known fact to the mediation parties
7.1 	as soon as is practical before accepting a mediation.
7.2 	(b) If a mediator learns any fact described in subsection
7.3 	(a)(1) after accepting a mediation, the mediator shall disclose
7.4 	it as soon as is practicable.
7.5 	(c) At the request of a mediation party, an individual who
7.6 	is requested to serve as a mediator shall disclose the
7.7 	mediator's qualifications to mediate a dispute.
7.8 	(d) A person that violates subsection (a), (b), or (g) is
7.9 	precluded by the violation from asserting a privilege under
7.10 	section 572C.04.
7.11 	(e) Subsections (a), (b), (c), and (g) do not apply to an
7.12 	individual acting as a judge.
7.13 	(f) Sections 572C.01 to 572C.15 do not require that a
7.14 	mediator have a special qualification by background or
7.15 	profession.
7.16 	(g) A mediator must be impartial, unless after disclosure
7.17 	of the facts required in subsections (a) and (b) to be
7.18 	disclosed, the parties agree otherwise.

7.19 	Sec. 10. [572C.10] PARTICIPATION IN MEDIATION.
7.20 	An attorney or other individual designated by a party may
7.21 	accompany the party to and participate in a mediation.  A waiver
7.22 	of participation given before the mediation may be rescinded.

7.23 	Sec. 11. [572C.11] INTERNATIONAL COMMERCIAL MEDIATION.
7.24 	(a) In this section, "Model Law" means the Model Law on
7.25 	International Commercial Conciliation adopted by the United
7.26 	Nations Commission on International Trade Law on June 28, 2002,
7.27 	and recommended by the United Nations General Assembly in a
7.28 	resolution (A/RES/57/18) dated November 19, 2002, and
7.29 	"international commercial mediation" means an international
7.30 	commercial conciliation as defined in Article 1 of the Model Law.
7.31 	(b) Except as otherwise provided in subsections (c) and
7.32 	(d), if a mediation is an international commercial mediation,
7.33 	the mediation is governed by the Model Law.
7.34 	(c) Unless the parties agree in accordance with section
7.35 	572C.03, paragraph (c), that all or part of an international
7.36 	commercial mediation is not privileged, sections 572C.04,
8.1 	572C.05, and 572C.06, and any applicable definitions in section
8.2 	572C.02 also apply to the mediation and nothing in Article 10 of
8.3 	the Model Law derogates from sections 572C.04, 572C.05, and
8.4 	572C.06.
8.5 	(d) If the parties to an international commercial mediation
8.6 	have agreed under Article 1, subsection (7), of the Model Law
8.7 	that the Model Law shall not apply, sections 572C.01 to 572C.15
8.8 	apply.

8.9 	Sec. 12. [572C.12] RELATION TO ELECTRONIC SIGNATURES IN
8.10 	GLOBAL AND NATIONAL COMMERCE ACT.
8.11 	Sections 572C.01 to 572C.15 modify, limit, or supersede the
8.12 	federal Electronic Signatures in Global and National Commerce
8.13 	Act, United States Code, title 15, section 7001 et seq., but
8.14 	sections 572C.01 to 572C.15 do not modify, limit, or supersede
8.15 	section 7001(c) of that act or authorize electronic delivery of
8.16 	any of the notices described in section 7003(b) of that act.

8.17 	Sec. 13. [572C.13] UNIFORMITY OF APPLICATION AND
8.18 	CONSTRUCTION.
8.19 	In applying and construing sections 572C.01 to 572C.15,
8.20 	consideration should be given to the need to promote uniformity
8.21 	of the law with respect to its subject matter among states that
8.22 	enact it.

8.23 	Sec. 14. [572C.14] SEVERABILITY CLAUSE.
8.24 	If any provision of sections 572C.01 to 572C.15 or their
8.25 	application to any person or circumstance is held invalid, the
8.26 	invalidity does not affect other provisions or applications of
8.27 	sections 572C.01 to 572C.15 which can be given effect without
8.28 	the invalid provision or application, and to to this end the
8.29 	provisions of sections 572C.01 to 572C.15 are severable.

8.30 	Sec. 15. [572C.15] APPLICATION TO EXISTING AGREEMENTS OR
8.31 	REFERRALS.
8.32 	(a) Sections 572C.01 to 572C.15 govern a mediation pursuant
8.33 	to a referral or an agreement to mediate made on or after August
8.34 	1, 2005.
8.35 	(b) On or after August 1, 2005, sections 572C.01 to 572C.15
8.36 	govern an agreement to mediate whenever made.

9.1 	Sec. 16. REPEALER.
 9.2 	Minnesota Statutes 2004, sections 572.31; 572.33; 572.35,
9.3 	subdivision 1; 572.36; 572.37; and 572.39, are repealed.

9.4 	Sec. 17. EFFECTIVE DATE.
 9.5 	Sections 1 to 16 are effective August 1, 2005.

9.6 	ARTICLE 2
9.7 	CONFORMING AMENDMENTS

9.8 	Section 1. Minnesota Statutes 2004, section 115B.414,
9.9 	subdivision 2, is amended to read:
9.10 		Subd. 2.Mediation.  A third-party claim or group of
9.11 	third-party claims that all arise from the same facility may be
9.12 	submitted to the Minnesota Office of Dispute Resolution for
9.13 	mediation under the Minnesota Civil Mediation Act,sections
9.14 	572.31 to 572.40572C.01 to 572C.15.  The costs of mediation
9.15 	must be allocated equally between the person or persons against
9.16 	whom the claims are made and the person or persons making the
9.17 	claims.

9.18 	Sec. 2. Minnesota Statutes 2004, section 469.1771,
9.19 	subdivision 2b, is amended to read:
9.20 		Subd. 2b.Action to suspend tif authority.  (a) Upon
9.21 	receipt of a notification from the state auditor under
9.22 	subdivision 1, paragraph (d), the attorney general shall review
9.23 	the materials submitted by the auditor and any materials
9.24 	submitted by the municipality and development authority.  If the
9.25 	attorney general finds that the municipality or development
9.26 	authority violated a provision of the law enumerated in
9.27 	subdivision 1 and that the violation was substantial, the
9.28 	attorney general shall file a petition in the Tax Court to
9.29 	suspend the authority of the municipality and development
9.30 	authority to exercise tax increment financing powers.
9.31 	(b) Before filing a petition under this subdivision, the
9.32 	attorney shall attempt to resolve the matter using appropriate
9.33 	alternative dispute resolution procedures, such as those under
9.34 	sections 572.31 to 572.40572C.01 to 572C.15.
9.35 	(c) If the Tax Court finds that the municipality or
9.36 	development authority failed to comply with the law and that the
10.1 	noncompliance was substantial, the court shall suspend the
10.2 	authority of the municipality or development to exercise tax
10.3 	increment financing powers.  The court shall set the period of
10.4 	the suspension for a period not to exceed five years.  In
10.5 	determining the length of the suspension, the court may consider:
10.6 	(1) the substantiality of the violation or violations;
10.7 	(2) the dollar amount of the violation or violations;
10.8 	(3) the sophistication of the municipality or development
10.9 	authority;
10.10 	(4) the extent to which the municipality or development
10.11 	authority violated a clear and unambiguous requirement of the
10.12 	law;
10.13 	(5) whether the municipality or development authority
10.14 	continued to violate the law after receiving notification from
10.15 	the state auditor that it was not in compliance with the law;
10.16 	(6) the extent to which the municipality or development
10.17 	authority engaged in a pattern of violations; and
10.18 	(7) any other factors the court determines are relevant to
10.19 	whether the municipality or development authority's authority to
10.20 	exercise tax increment financing powers should be suspended.
10.21 	(d) For purposes of this subdivision, the exercise of tax
10.22 	increment financing powers means:
10.23 	(1) the authority to request certification of a new tax
10.24 	increment financing district or the addition of area to an
10.25 	existing tax increment financing district;
10.26 	(2) the authority to issue bonds under section 469.178;
10.27 	(3) the authority to amend a tax increment financing plan
10.28 	to authorize new activities or expenditures.

10.29 	Sec. 3. Minnesota Statutes 2004, section 572.40, is
10.30 	amended to read:
10.31 	572.40 SCOPE.
10.32 	Sections 572.31 to 572.36572C.01 to 572C.15do not apply
10.33 	to proceedings relating to the determination of criminal
10.34 	liability or proceedings brought under chapters 518, 518A, 518B,
10.35 	and 518C, or proceedings relating to guardianship,
10.36 	conservatorship, or civil commitment.

11.1 	Sec. 4. Minnesota Statutes 2004, section 572.41,
11.2 	subdivision 1, is amended to read:
11.3 		Subdivision 1.General.  The debtor and creditor in any
11.4 	transaction may request the other party to the transaction to
11.5 	enter mediation concerning possible adjustment, refinancing, or
11.6 	payment under this section and sections 572.31 to 572.40572C.01
11.7 	to 572C.15.