HF 4822

2nd Engrossment - 93rd Legislature (2023 - 2024) Posted on 04/25/2024 10:13am

A bill for an act
relating to taxation; property; modifying distribution of excess proceeds from sales
of tax-forfeited property; appropriating money; amending Minnesota Statutes
2022, sections 281.23, subdivision 2; 282.08; 282.241, subdivision 1; proposing
coding for new law in Minnesota Statutes, chapter 282.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 281.23, subdivision 2, is amended to read:

Subd. 2.

Form.

The notice of expiration of redemption must contain the tax parcel
identification numbers and legal descriptions of parcels subject to notice of expiration of
redemption provisions prescribed under subdivision 1. The notice must also indicate the
names of taxpayers and fee owners of record in the office of the county auditor at the time
the notice is prepared and names of those parties who have filed their addresses according
to section 276.041 and the amount of payment necessary to redeem as of the date of the
notice. At the option of the county auditor, the current filed addresses of affected persons
may be included on the notice. The notice is sufficient if substantially in the following form:

"NOTICE OF EXPIRATION OF REDEMPTION

Office of the County Auditor

County of ......................., State of Minnesota.

To all persons having an interest in lands described in this notice:

You are notified that the parcels of land described in this notice and located in the county
of ................................, state of Minnesota, are subject to forfeiture to the state of Minnesota
because of nonpayment of delinquent property taxes, special assessments, penalties, interest,
and costs levied on those parcels. The time for redemption from forfeiture expires if a
redemption is not made by the later of (1) 60 days after service of this notice on all persons
having an interest in the lands of record at the office of the county recorder or registrar of
titles, or (2) by the second Monday in May. The redemption must be made in my office.

new text begin IMPORTANT: If the parcels forfeit, they will be sold. If the proceeds from the sale
exceed the total amount of the delinquent taxes, special assessments, penalties, interest, and
costs levied on those parcels, you may be entitled to the excess proceeds from the sale. If
there are excess proceeds, you will be notified and must submit the claim form included
with the notification in order to receive the proceeds.
new text end

Names (and Current Filed Addresses) for the Taxpayers and Fee Owners and Those Parties Who Have Filed Their Addresses Pursuant to section 276.041		Legal Description		Tax Parcel Number		Amount Necessary to Redeem as of Date of Notice
.		.		.		.
.		.		.		.

FAILURE TO REDEEM THE LANDS PRIOR TO THE EXPIRATION

OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND

FORFEITURE TO THE STATE OF MINNESOTA.

Inquiries as to these proceedings can be made to the County Auditor for ............... County,
whose address is set forth below.

Witness my hand and official seal this ............................ day of ................, .......

		.
		County Auditor
	(OFFICIAL SEAL)
		.
		(Address)
		.
		(Telephone)."

The notice must be posted by the auditor in the auditor's office, subject to public
inspection, and must remain so posted until at least one week after the date of the last
publication of notice, as provided in this section. Proof of posting must be made by the
certificate of the auditor, filed in the auditor's office.

Sec. 2.

new text begin [282.005] TAX-FORFEITED LAND; INITIAL SALE.
new text end

new text begin Subdivision 1. new text end

new text begin Public auction required. new text end

new text begin Prior to managing tax-forfeited lands as
otherwise provided in this chapter, a county must first offer tax-forfeited parcels for sale
pursuant to this section, except for any interests in iron-bearing stockpiles, minerals, or
mineral interests, which must be disposed of as provided under subdivision 8. If a property
cannot be sold under this section for more than the minimum bid, the sale may be canceled
and the parcels disposed of as otherwise provided in this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have the
meanings given:
new text end

new text begin (1) "interested party" means the owner of the property or any other party who has filed
their name according to section 276.041;
new text end

new text begin (2) "mineral interest" means an interest in any minerals, including but not limited to
iron, gas, coal, oil, copper, gold, or other valuable minerals; and
new text end

new text begin (3) "minimum bid" means the sum of delinquent taxes, special assessments, penalties,
interests, and costs levied on the parcel.
new text end

new text begin Subd. 3. new text end

new text begin Redemption. new text end

new text begin Prior to the public sale required under this section, an interested
party may redeem the property by payment of the sum of all delinquent taxes and assessments
computed under section 282.251, together with penalties, interest, and costs, that accrued
or would have accrued if the parcel of land had not forfeited. A property redeemed under
this subdivision is no longer subject to the requirements of this section. All rights and
interests of all interested parties remain unaffected if a property is redeemed under this
subdivision.
new text end

new text begin Subd. 4. new text end

new text begin Public auction. new text end

new text begin (a) The county auditor must sell the property at a public auction
to the highest bidder in a manner reasonably calculated to facilitate public participation,
including by online auction. The sale must occur within six months of either the filing of
the certificate of the expiration of redemption pursuant to section 281.23, subdivision 9, or
the date the property is vacated by the occupant, whichever is later. Notice of the sale must
be provided by website publication at least 30 days before the commencement of the sale.
new text end

new text begin (b) At auction, the county auditor must calculate the minimum bid and make the figure
available to those participating in the auction. If no buyer is willing to pay the minimum
bid, the sale may be canceled and the parcels disposed of as otherwise provided in this
chapter.
new text end

new text begin Subd. 5. new text end

new text begin Sale proceeds. new text end

new text begin The auction proceeds must be collected by the county auditor
and apportioned pursuant to section 282.08, paragraph (b). Any balance remaining under
section 282.08, paragraph (b), clause (3), must be retained by the county and made available
for claims under subdivision 6.
new text end

new text begin Subd. 6. new text end

new text begin Claims for surplus proceeds. new text end

new text begin (a) If a sale under this section results in a surplus,
within 60 days of the sale, the county auditor must notify interested parties, in a manner
described in subdivision 7, of the surplus by sending notice of the surplus and a claim form
to the interested parties. The notice must indicate that the sale of the property resulted in a
surplus, the amount of the surplus, that parties with an interest in the property are entitled
to the surplus amount, and that interested parties have an obligation to submit a claim for
the surplus. Interested parties are entitled to make a claim for surplus proceeds under this
subdivision if they file a claim within six months from the date the notice is first mailed to
the interested parties, unless a county extends the claim period under paragraph (b), in which
case interested parties may make a claim for surplus proceeds within the extended period
set by the county.
new text end

new text begin (b) A county may extend beyond six months the period of time in which a claim for
surplus proceeds under this subdivision may be submitted. If a county chooses to extend
the period, interested parties must be notified of the extension in the same manner for which
notice of the surplus is provided under paragraph (a).
new text end

new text begin (c) Unless disputed by the county auditor, if a single claim is filed, the county auditor
must pay the surplus to the interested party filing the claim. A county must not pay any
claimant until after the period of time in which to file a claim has expired.
new text end

new text begin (d) If there are multiple claims for a given property, payments under this subdivision
must be divided among the claimants according to each claimant's ownership interest in
proportion to the ownership interest of all claimants. If the county auditor disputes a claim,
or if there is a dispute as to how to divide the surplus among multiple claimants, the county
auditor may deposit the surplus funds in district court and file a petition pursuant to Rule
67 of the Minnesota Rules of Civil Procedure, asking the court to determine claimants' rights
to the funds deposited. The county auditor is entitled to recover the costs it reasonably incurs
in commencing and maintaining this action from the amount of funds submitted to the court
in the action. If the court determines that no claimant is entitled to the surplus, the surplus
must be returned to the county and deposited into the county's forfeited tax sale fund.
new text end

new text begin (e) The county and the county auditor are entitled to absolute immunity related to any
claim predicated on distribution of surplus if the county auditor distributed proceeds
consistent with this subdivision.
new text end

new text begin Subd. 7. new text end

new text begin Manner of service. new text end

new text begin (a) A notice provided under subdivision 6 or 8 must be
served as follows:
new text end

new text begin (1) by certified mail to all interested parties within 60 days of the sale;
new text end

new text begin (2) if an interested party has not filed a claim, a second notice must be sent by certified
mail to all interested parties between 90 and 120 days after the sale;
new text end

new text begin (3) unless the property is vacant land, within 60 days of the sale, by first class mail to
the property addressed to the attention of the occupants of the property; and
new text end

new text begin (4) within 60 days of the sale, by publishing a list of property sales with surplus with
unexpired claims periods to the county's website.
new text end

new text begin (b) In addition, solely at the discretion of the county, the summons may be published in
the county's designated newspaper for publication of required public notices.
new text end

new text begin Subd. 8. new text end

new text begin Claims for mineral interests; payments; appropriation. new text end

new text begin (a) Upon forfeiture,
any iron-bearing stockpiles, minerals, and mineral interests shall be sold to the state for $50.
The county auditor must notify interested parties within 60 days of the sale by sending
notice and a claim form. Notice must be provided in a manner described in subdivision 7.
An interested party may submit a claim alleging that the value of the iron-bearing stockpiles,
minerals, or mineral interests in the property exceeds $50. Claims must be submitted within
six months from the date the notice under this subdivision is first mailed to the interested
parties, unless a county extends the claim period under paragraph (b), in which case interested
parties may make a claim for surplus proceeds within the extended period set by the county.
new text end

new text begin (b) A county may extend beyond six months the period of time in which a claim under
this subdivision may be submitted. If a county chooses to extend the period, interested
parties must be notified of the extension in the same manner for which notice is provided
under paragraph (a).
new text end

new text begin (c) If a claim is filed under this subdivision, the commissioner of natural resources must
determine the value of the forfeited iron-bearing stockpiles, minerals, and mineral interests.
If the value of the iron-bearing stockpiles, minerals, and mineral interests does not exceed
the minimum bid, the claimant is not entitled to any payment under this subdivision. If the
value of the iron-bearing stockpiles, minerals, and mineral interests exceeds the minimum
bid, the claimant is entitled to a payment from the commissioner of natural resources equal
to this excess amount.
new text end

new text begin (d) If there are multiple claims, payments under this subdivision must be divided among
the claimants according to each claimant's ownership interest in proportion to the ownership
interest of all claimants. If the county auditor disputes a claim, or if there is a dispute as to
how to divide the surplus among multiple claimants, the commissioner of natural resources
must transfer the amount due to the claimants under this subdivision to the county auditor.
The county auditor must then deposit the transferred amount in district court and file a
petition pursuant to Rule 67 of the Minnesota Rules of Civil Procedure, asking the court to
determine claimants' rights to the funds deposited. The county auditor is entitled to recover
the costs it reasonably incurs in commencing and maintaining this action from the amount
of funds submitted to the court in the action. If the court determines that no party that filed
a claim is entitled to the surplus, the payment must be returned to the commissioner of
natural resources and is canceled to the general fund.
new text end

new text begin (e) An amount necessary to make payments under this subdivision is annually
appropriated from the general fund to the commissioner of natural resources.
new text end

new text begin Subd. 9. new text end

new text begin Expiration of surplus. new text end

new text begin If a sale under this section results in a surplus and either
(1) no interested party makes a claim for the proceeds within the time allowed under
subdivision 6, or (2) it is determined that no claimant was entitled to the surplus proceeds,
then interested parties are no longer eligible to receive payment of any surplus. Once
interested parties are no longer eligible to receive payment of any surplus, the proceeds
must be returned to the county's forfeited tax sale fund.
new text end

new text begin Subd. 10. new text end

new text begin Rights affected by forfeiture. new text end

new text begin The forfeiture of the property extinguishes all
liens, claims, and encumbrances other than:
new text end

new text begin (1) the rights of interested parties to surplus proceeds under this section;
new text end

new text begin (2) rights of redemption provided under federal law;
new text end

new text begin (3) easements and rights-of-way holders who are not interested parties; and
new text end

new text begin (4) benefits or burdens of any real covenants filed of record as of the date of forfeiture.
new text end

new text begin Subd. 11. new text end

new text begin Property bought by the state. new text end

new text begin Property purchased by the state pursuant to
this chapter shall be held in trust for the benefit of the taxing districts. All land becoming
property of the state pursuant to this chapter shall be managed in accordance with chapters
93 and 282 and other applicable law.
new text end

Sec. 3.

Minnesota Statutes 2022, section 282.08, is amended to read:

282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.

new text begin (a) new text end The net proceeds from the sale or rental of any parcel of forfeited land, or from the
sale of products from the forfeited land, must be apportioned by the county auditor deleted text begin to the
taxing districts interested in the land, deleted text end as follows:

(1) the portion required to pay any amounts included in the appraised value under section
282.01, subdivision 3, as representing increased value due to any public improvement made
after forfeiture of the parcel to the state, but not exceeding the amount certified by the
appropriate governmental authority must be apportioned to the governmental subdivision
entitled to it;

(2) the portion required to pay any amount included in the appraised value under section
282.019, subdivision 5, representing increased value due to response actions taken after
forfeiture of the parcel to the state, but not exceeding the amount of expenses certified by
the Pollution Control Agency or the commissioner of agriculture, must be apportioned to
the agency or the commissioner of agriculture and deposited in the fund from which the
expenses were paid;

(3) the portion of the remainder required to discharge any special assessment chargeable
against the parcel for drainage or other purpose whether due or deferred at the time of
forfeiture, must be apportioned to the governmental subdivision entitled to it; and

(4) any balance must be apportioned as follows:

(i) The county board may annually by resolution set aside no more than 30 percent of
the receipts remaining to be used for forest development on tax-forfeited land and dedicated
memorial forests, to be expended under the supervision of the county board. It must be
expended only on projects improving the health and management of the forest resource.

(ii) The county board may annually by resolution set aside no more than 20 percent of
the receipts remaining to be used for the acquisition and maintenance of county parks or
recreational areas as defined in sections 398.31 to 398.36, to be expended under the
supervision of the county board.

(iii) Any balance remaining must be apportioned as follows: county, 40 percent; town
or city, 20 percent; and school district, 40 percent, provided, however, that in unorganized
territory that portion which would have accrued to the township must be administered by
the county board of commissioners.

new text begin (b) If a property is sold pursuant to section 282.005, after sale, and apportionment
pursuant to paragraph (a), clauses (1) to (3), any additional proceeds must be apportioned
as follows:
new text end

new text begin (1) the portion required to pay the sum of all delinquent taxes and assessments not paid
under paragraph (a) that accrued or would have accrued if the parcel had not forfeited to
the state, together with penalties, costs, and interest at the rate fixed by law for the respective
years, must be apportioned to the governmental subdivisions entitled to it;
new text end

new text begin (2) the portion required to pay attorney fees and costs reasonably incurred or expended
in connection with the delinquency proceedings and tax sale must be apportioned to the
governmental subdivision entitled to it; and
new text end

new text begin (3) any balance must be made available for return to an interested party making a claim
under section 282.005, subdivision 6.
new text end

Sec. 4.

Minnesota Statutes 2022, section 282.241, subdivision 1, is amended to read:

Subdivision 1.

Repurchase requirements.

new text begin For properties forfeited prior to January 1,
2024, new text end the owner at the time of forfeiture, or the owner's heirs, devisees, or representatives,
or any person to whom the right to pay taxes was given by statute, mortgage, or other
agreement, may repurchase any parcel of land claimed by the state to be forfeited to the
state for taxes unless before the time repurchase is made the parcel is sold under installment
payments, or otherwise, by the state as provided by law, or is under mineral prospecting
permit or lease, or proceedings have been commenced by the state or any of its political
subdivisions or by the United States to condemn the parcel of land. The parcel of land may
be repurchased for the sum of all delinquent taxes and assessments computed under section
282.251, together with penalties, interest, and costs, that accrued or would have accrued if
the parcel of land had not forfeited to the state. Except for property which was homesteaded
on the date of forfeiture, repurchase is permitted during six months only from the date of
forfeiture, and in any case only after the adoption of a resolution by the board of county
commissioners determining that by repurchase undue hardship or injustice resulting from
the forfeiture will be corrected, or that permitting the repurchase will promote the use of
the lands that will best serve the public interest. If the county board has good cause to believe
that a repurchase installment payment plan for a particular parcel is unnecessary and not in
the public interest, the county board may require as a condition of repurchase that the entire
repurchase price be paid at the time of repurchase. A repurchase is subject to any easement,
lease, or other encumbrance granted by the state before the repurchase, and if the land is
located within a restricted area established by any county under Laws 1939, chapter 340,
the repurchase must not be permitted unless the resolution approving the repurchase is
adopted by the unanimous vote of the board of county commissioners.

The person seeking to repurchase under this section shall pay all maintenance costs
incurred by the county auditor during the time the property was tax-forfeited.