HF1646

Purpose of the Bill

The purpose of this bill is to modify the definition of a "debt buyer" in Minnesota law and to establish a grant aimed at relieving medical debt for residents who have faced difficulty in paying their medical bills.

Main Provisions

• Modification of "Debt Buyer" Definition: The bill clarifies the term "debt buyer" to mean a business entity engaged in purchasing charged-off accounts, bills, or other debts specifically for collection purposes. This includes whether the business collects the debts themselves, hires a third party, or employs an attorney for collection through litigation. However, nonprofit organizations purchasing such debts for charitable purposes are excluded from this definition.

• Medical Debt Relief Grant: The bill appropriates $5,000,000 from the general fund for the fiscal year 2026 to the commissioner of commerce. This is designated for a grant to an organization named Undue Medical Debt, intended to relieve the medical debt of eligible residents. The condition is that these individuals must have failed to pay their medical bills even after hospitals made reasonable collection efforts.

Significant Changes

• The amendment to Minnesota Statutes 2024, section 332.31 subdivision 8, refines the definition of "debt buyer" to better specify who is included and excluded, notably distinguishing for-profit debt-buying entities from nonprofits engaged in charity.
• It introduces a targeted financial measure aimed at addressing the burden of medical debt on Minnesota residents by providing direct financial relief.

Relevant Terms

• Debt buyer
• Charged-off account
• Nonprofit organization
• Medical debt relief
• Appropriation
• General fund
• Collections
• Grant