Purpose of the Bill

The bill aims to make changes in the definition of a "debt buyer" and to support a specific initiative to relieve medical debt for residents of Minnesota who are financially overburdened by medical expenses.

Main Provisions

1. Modification of the Definition of Debt Buyer: The bill revises Minnesota's legal definition of a "debt buyer" to specify that it refers to businesses that purchase charged-off accounts, bills, or other forms of indebtedness for the purpose of collection. This includes businesses that either directly collect these debts or hire external parties like third-party collectors or attorneys. Nonprofit organizations purchasing these debts for charitable purposes are not included under this definition.

2. Grant for Medical Debt Relief: The bill provides a one-time appropriation of $5,000,000 for the fiscal year 2026. This funding is directed from the state's general fund to the commissioner of commerce to be used as a grant for Undue Medical Debt. The purpose of the grant is to relieve the medical debt of eligible residents who faced insurmountable medical bills after hospitals had exhausted reasonable collection efforts.

3. Reporting Requirements: The organization receiving the grant, Undue Medical Debt, is required to report to the commissioner of commerce and the attorney general. This report should include detailed information on the number of residents who benefited and the characteristics of these individuals, ensuring transparency and accountability in the execution of the medical debt relief program.

Significant Changes to Existing Law

• By amending the definition of a debt buyer, the bill impacts how businesses that purchase and collect on debts are regulated in Minnesota. This change does not alter the operations of nonprofits dealing with charged-off debts for charitable reasons.
• It introduces a new financial initiative specifically aimed at reducing the burden of medical debt on Minnesota residents, marking a focused state intervention in healthcare-related financial distress.

Relevant Terms

debt buyer, medical debt relief, appropriation, grant, Undue Medical Debt, charged-off accounts, nonprofit organizations, collection purposes, reporting requirements.