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John Nephew

Maplewood City Council Policy & Politics


State Shutdown and Secretary of State

As we get closer to the likely shutdown of state government due to the budget impasse, more of the effects are coming into view.  In my work e-mail address, I received a message today from the Minnesota Secretary of State's office, sent no doubt to all Minnesota businesses that they have e-mail addresses for, about the impact on services the Secretary of State provides to the business community.

It reads:

Re: Potential Government Shutdown
From: Bert Black, Legal Advisor, Office of the Secretary of State
Date: June 21, 2011

The Office of the Secretary of State operates on a biennial budget. Funds are appropriated by the Minnesota Legislature every two years, with each fiscal year beginning on July 1 and ending on June 30 of the following calendar year. Our current biennial budget is due to end after June 30, 2011.

As you may know, the Minnesota State Legislature adjourned May 23, 2011 without appropriating money to fund the operations of state government for the fiscal year that begins July 1, 2011.

In the absence of legislation specifically appropriating funds for the continuing operations of the Office for the next biennium, we will have no or very limited authority to expend or release funds after June 30, 2011.

The Attorney General has petitioned the Ramsey County District Court for an order continuing the core functions of government, including the services provided by the Office of the Minnesota Secretary of State. Of course, there is no assurance that any specific function will continue after the close of business on June 30.

Because we do not know whether the biennial budget process will conclude in time to avoid a disruption to our operations, nor whether the court will order the Office to continue to offer its services, we must advise you that the Office of the Secretary of State may be closed. If the
Office is closed:

  • The computer systems of the office will be turned off for security reasons.
  • No Uniform Commercial Code documents can be filed, and no searches will be available. UCC services at county recorder offices will also be unavailable.
  • No filings under the Central Notification System will be made and no master lists will be distributed to buyers.
  • No business entity filings can be made, and no copies, certified copies or certificates regarding those filings will be available.
  • Substituted service of process on businesses will not be accepted.
  • No documents can be authenticated for overseas use and no apostilles will be issued.
  • There will be no bulk sales of data, and data inquiries using the computer system of the Office will be unavailable.
  • No person will be able to obtain a notary commission, and, if the shutdown lasts past August 1, renewals of notary commissions will not be processed.
  • Domestic Annual Renewals will not be accepted online or otherwise. (Renewals are not due until December 31)

In order to avoid the negative consequences of the above, the Office suggests that wherever possible, that filings (other than Domestic Annual Renewals), searches, copy orders and all other transactions be submitted as soon as possible, so that staff may complete as many as possible before any shutdown begins.

We will work to keep you informed of progress regarding legislative authorization of appropriations, and we will make every reasonable effort to issue public notices promptly when budgets are approved and the Office’s operations may be resumed. We do suggest that you monitor state websites, bulletins, and media publications for further information.

Please feel free to share this communication with your colleagues, associates and others as you deem appropriate.

The loss of these services could create some big headaches for private businesses.  For example, how willing is a bank or other lender to advance money to a small business if they do not have the ability to perfect a security interest in the collateral with a Uniform Commercial Code filing?  How many new business ventures will be delayed because it will not be possible to file articles of incorporation, reserve a business name, etc.?

For the average citizen, many of these government functions, which facilitate transactions between and among private parties, are nearly invisible.  A temporary shut-down may make a lot of folks aware of many things (certainly not limited to the Secretary of State's functions) that we take for granted, but make the smooth functioning of our economy possible.

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