3rd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to mortgage registry and deed taxes; making 1.3 technical and clarifying changes; defining terms; 1.4 amending Minnesota Statutes 1998, sections 287.01; 1.5 287.03; 287.04; 287.05; 287.08; 287.10; 287.11; 1.6 287.12; 287.13, subdivision 1; 287.21, subdivision 1; 1.7 287.22; 287.23; 287.24; 287.241; 287.29, subdivision 1.8 1; 287.30; 287.31; and 287.33; proposing coding for 1.9 new law in Minnesota Statutes, chapter 287; repealing 1.10 Minnesota Statutes 1998, sections 287.06; 287.07; 1.11 287.09; 287.21, subdivisions 2 and 4; 287.34; 287.35; 1.12 and 287.36. 1.13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.14 Section 1. Minnesota Statutes 1998, section 287.01, is 1.15 amended to read: 1.16 287.01 [DEFINITIONS; MORTGAGE REGISTRY TAX.] 1.17 Subdivision 1. [WORDS, TERMS, AND PHRASES.] Unless the 1.18 language or context clearly indicates that a different meaning 1.19 is intended, the following words, terms, and phrases, for the 1.20 purposes of sections 287.01 to
287.12287.13, shall be1.21 givenhave the meanings subjoined togiven them in this 1.22 section. 1.23 Subd. 2. [ REAL PROPERTY, REAL ESTATE, AND LANDAMENDMENT.] 1.24 "Real property," "real estate," and "land," in addition to the1.25 meaning thereof contained in chapter 500, include all property a1.26 conveyance whereof may be recorded or registered by a county1.27 recorder under existing law."Amendment" means generally a 1.28 document that alters an existing mortgage without securing a new 1.29 debt, or increasing the amount of an existing debt; and, that 2.1 does not, in the case of a multistate mortgage described in 2.2 section 287.05, subdivision 1, paragraph (b), result in an 2.3 increased percentage of the real property encumbered by the 2.4 mortgage being located in this state. Specifically, a document 2.5 is considered an amendment to the extent it merely does any one 2.6 or any combination of the following: 2.7 (i) extends the time for payment of the unpaid portion of 2.8 the original debt; 2.9 (ii) changes the rate of interest applicable to the unpaid 2.10 portion of the original debt; 2.11 (iii) adds additional real property as security for the 2.12 unpaid portion of the original debt; 2.13 (iv) releases some but not all of the real property serving 2.14 as security for the unpaid portion of the debt; 2.15 (v) replaces all the real property serving as security for 2.16 the unpaid portion of the debt with other real property 2.17 regardless of value; 2.18 (vi) replaces a party previously bound by the mortgage with 2.19 a new party who becomes bound by the same amended mortgage; or 2.20 (vii) reduces the amount of the debt secured by real 2.21 property located in this state, or in the case of a multistate 2.22 mortgage described in section 287.05, subdivision 1, paragraph 2.23 (b), reduces the percentage of real property encumbered by the 2.24 mortgage that is located in this state. 2.25 Subd. 3. [ MORTGAGEDEBT.] "Mortgage" means any instrument,2.26 including a decree of marriage dissolution or an instrument made2.27 pursuant to it, creating or evidencing a lien of any kind on2.28 property, given or taken as security for a debt, notwithstanding2.29 such debt may also be secured in part by a lien upon2.30 personalty."Debt" means the principal amount of an obligation 2.31 to pay money or to perform or refrain from performing an act 2.32 that is secured in whole or in part by a mortgage of an interest 2.33 in real property. 2.34 Subd. 4. [DECREE OF MARRIAGE DISSOLUTION.] "Decree of 2.35 marriage dissolution" includes a summary real estate disposition 2.36 judgment or an instrument made pursuant tounder it. 3.1 Subd. 5. [EXTENSION.] "Extension" means any document that 3.2 alters an existing mortgage by extending the time for repayment 3.3 without increasing the amount of debt secured by real property 3.4 that is located in this state. 3.5 Subd. 6. [MORTGAGE.] "Mortgage" means any instrument, 3.6 including a decree of marriage dissolution or an instrument made 3.7 under it, creating or evidencing a lien of any kind on real 3.8 property, given by an owner of real property as security for a 3.9 debt, notwithstanding that the debt may also be secured in part 3.10 by a lien upon personalty. 3.11 Subd. 7. [MULTISTATE MORTGAGE.] "Multistate mortgage" 3.12 means a mortgage that encumbers real property located both in 3.13 and outside of this state. 3.14 Subd. 8. [PERSON.] "Person" includes any individual, 3.15 partner, officer, director, firm, partnership, joint venture, 3.16 limited liability company, association, cooperative, social 3.17 club, fraternal organization, municipal or private corporation, 3.18 whether organized for profit or not, estate, trusts, business 3.19 trusts, receiver, trustee, syndicate, the United States, a 3.20 state, any political subdivision of a state, or any group or 3.21 combination acting as a unit, and the plural as well as the 3.22 singular. The term includes any agent of any individual or 3.23 organization enumerated in this subdivision. 3.24 Subd. 9. [REAL PROPERTY, REAL ESTATE, AND LAND.] "Real 3.25 property," "real estate," and "land," have the meaning contained 3.26 in chapter 500, and include all interests in real property that 3.27 can be conveyed by a document which may be recorded. 3.28 Subd. 10. [RECORD, RECORDED, AND RECORDING.] "Record," 3.29 "recorded," and "recording" each mean that a document has been 3.30 delivered to and filed in the office of the county recorder or 3.31 registrar of titles, whichever office maintains the records for 3.32 the real property described in the document. 3.33 Sec. 2. Minnesota Statutes 1998, section 287.03, is 3.34 amended to read: 3.35 287.03 [INSTRUMENTS VALID SECURITY FOR DEBT.] 3.36 No instrument, other than a decree of marriage dissolution 4.1 or an instrument made pursuant to it, relating to real estate 4.2 shall be valid as security for any debt, unless the fact that it 4.3 is intended and the initial known amount of the debt are 4.4 expressed in it. 4.5 Sec. 3. [287.035] [IMPOSITION OF TAX.] 4.6 A tax of 23 cents is imposed upon each $100, or fraction 4.7 thereof, of the debt or portion of a debt that is secured by any 4.8 recorded mortgage of real property located in this state. The 4.9 person liable for the tax is the mortgagee. The tax is not 4.10 imposed on the lawful interest amounts that may accrue with 4.11 respect to a debt. 4.12 Sec. 4. Minnesota Statutes 1998, section 287.04, is 4.13 amended to read: 4.14 287.04 [EXEMPTIONS.] 4.15 Subdivision 1. [GENERALLY.]The tax imposed by section 4.16 287.035 does not apply to: 4.17 (a) A decree of marriage dissolution or an instrument made 4.18 pursuant to it or a. 4.19 (b) A mortgage given to correct a misdescription of the 4.20 mortgaged property , or to include. 4.21 (c) A mortgage or other instrument that adds additional 4.22 security for the same indebtedness ondebt for which amortgage 4.23 registrationregistry tax has been paid , are not subject to the4.24 tax imposed by this chapter except as provided in section4.25 287.05, subdivision 2, paragraph (b). 4.26 (d) A contract for the conveyance of any interest in real 4.27 property, including a contract for deed. 4.28 (e) A mortgage secured by real property subject to the 4.29 minerals production tax of sections 298.24 to 298.28. 4.30 Subd. 2. [MORTGAGES ON PUBLIC PROPERTY.] No tax is imposed4.31 upon(f) The principal amount of bonds or other obligations 4.32 issued by the St. Paul port authority under its common revenue 4.33 bond fund if each of the following conditions are met. 4.34 (a)(1) The bonds or other obligations are secured by a 4.35 mortgage on property, title to which is held by the political 4.36 subdivision. 5.1 (b)(2) The mortgage is recorded or registeredafter the5.2 date of enactmentMay 19, 1993. 5.3 (c)(3) The bonds or other obligations are either (i) 5.4 outstanding on the date of enactmentMay 19, 1993, or (ii) 5.5 issued in exchange for or to otherwise refund bonds or other 5.6 obligations the original series of which were issued before the5.7 date of enactmentMay 19, 1993. 5.8 (g) Mortgages taken in good faith by persons or 5.9 corporations whose property is expressly exempted from taxation 5.10 by section 272.02, subdivision 1, clauses (1) to (7), or 5.11 mortgagees that are fraternal benefit societies subject to 5.12 section 64B.24. 5.13 (h) A mortgage amendment or extension, as defined in 5.14 section 287.01. 5.15 Sec. 5. Minnesota Statutes 1998, section 287.05, is 5.16 amended to read: 5.17 287.05 [DETERMINATION OF TAX ON RECORDATION OR5.18 REGISTRATION; SUPPLEMENTAL MORTGAGES; REVERSE MORTGAGESIN 5.19 SPECIAL SITUATIONS.] 5.20 Subdivision 1. [ TAX IMPOSEDREAL PROPERTY OUTSIDE 5.21 MINNESOTA.] A tax of 23 cents is imposed upon each $100, or5.22 fraction thereof, of the principal debt or obligation which is5.23 or may be secured by any mortgage of real property situated5.24 within the state executed, delivered, and recorded or5.25 registered; provided, however, that the tax shall be imposed but5.26 once upon any mortgage and extension thereof. If the mortgage5.27 describes real estate situated outside of this state, the tax5.28 shall be imposed upon that proportion of the whole debt secured5.29 thereby as the value of the real estate therein described5.30 situated in this state bears to the value of the whole of the5.31 real estate described therein. The tax imposed by this section5.32 shall not apply to a contract for the conveyance of any interest5.33 in real estate(a) When a multistate mortgage is intended to 5.34 secure only a portion of a debt amount recited or referred to in 5.35 the mortgage, the mortgage may contain the following statement, 5.36 or its equivalent, on the first page: "Notwithstanding anything 6.1 to the contrary herein, enforcement of this mortgage in 6.2 Minnesota is limited to a debt amount of $....... under chapter 6.3 287 of Minnesota Statutes." In such case, the tax shall be 6.4 imposed based only on the amount of debt so stated to be secured 6.5 by real property located in this state; and, the effect of the 6.6 mortgage, or any amendment or extension, as evidence in any 6.7 court in this state, or as notice for any purpose in this state, 6.8 shall be limited to the amount contained in the statement and 6.9 for which the tax has been paid. 6.10 (b) All multistate mortgages not taxed under paragraph (a) 6.11 shall be taxed under sections 287.01 to 287.13 as if the real 6.12 property identified in the mortgage secures payment of that 6.13 portion of the maximum debt amount referred to, or incorporated 6.14 by reference, in the mortgage that is equal to a fraction the 6.15 numerator of which is the value of the real property described 6.16 in the mortgage that is located in this state and the 6.17 denominator of which is the value of all the real property 6.18 described in the mortgage. 6.19 Subd. 1a. [REAL PROPERTY IN THIS STATE SECURES PORTION OF 6.20 DEBT.] (a) When the real property identified in a mortgage is 6.21 located entirely in this state and is intended to secure only a 6.22 portion of a debt amount recited or referred to in the mortgage, 6.23 the mortgage may contain the following statement, or its 6.24 equivalent, on the first page: "Notwithstanding anything to the 6.25 contrary herein, enforcement of this mortgage is limited to a 6.26 debt amount of $....... under chapter 287 of Minnesota 6.27 Statutes." In such case, the tax shall be imposed based only on 6.28 the amount of debt so stated to be secured by real property; 6.29 and, the effect of the mortgage, or any amendment or extension, 6.30 as evidence in any court in this state, or as notice for any 6.31 purpose in this state, shall be limited to the amount contained 6.32 in the statement and for which the tax has been paid. 6.33 (b) All mortgages that are not multistate mortgages and 6.34 that are not taxed under paragraph (a) shall be taxed under 6.35 sections 287.01 to 287.13 as if the real property identified in 6.36 the mortgage secures payment of the maximum debt amount referred 7.1 to, or incorporated by reference, in the mortgage. 7.2 Subd. 2. [SUPPLEMENTAL MORTGAGES.] Except for an amendment 7.3 or a revision to a reverse mortgage as described under 7.4 subdivision 6, any supplementaldocument that alters an existing 7.5 mortgage, not including revisions to a reverse mortgage as7.6 described under subdivision 6, securing a portion or all of the7.7 same indebtedness, whether or not additional security is7.8 included,by providing for an increase in the amount of debt 7.9 secured by real property located in this state, or, in the case 7.10 of a multistate mortgage described in subdivision 1, paragraph 7.11 (b), an increase in the percentage of Minnesota real estate as 7.12 compared to the total real estate that is encumbered by the 7.13 mortgage shall be taxed in the following manner:7.14 (a) Any additional indebtedness shall be taxed on the ratio7.15 that the value of the real estate therein described in this7.16 state bears to the value of the whole of the real estate7.17 described therein.based upon the increase in the amount of the 7.18 debt determined to be secured by real property located in this 7.19 state under either subdivision 1 or 1a. 7.20 (b) If there is no additional indebtedness but the7.21 percentage of the Minnesota real estate as compared to the total7.22 real estate secured by the previous mortgage is increased, the7.23 tax shall be recomputed and paid on the remaining indebtedness7.24 multiplied by the difference between that percentage of7.25 Minnesota real estate included in the supplemental mortgage and7.26 that percentage included in any previous mortgage.7.27 (c) In the event of both an increase in the indebtedness7.28 and a change in the Minnesota percentage of real estate given as7.29 security, the tax shall be recomputed on the portion7.30 representing new indebtedness in the manner provided in (a) and7.31 in the event of an increase in the percentage of Minnesota7.32 property included as security, the tax shall be computed on the7.33 remaining portion of the indebtedness as provided in (b).7.34 Subd. 3. [REVOLVING LINES OF CREDIT.] When a mortgage, 7.35 including a reverse mortgage, secures a revolving line of credit 7.36 under which advances, payments, and readvances may be made from 8.1 time to time, the tax imposed under subdivision 1 shallsection 8.2 287.035 must be paid on the maximum amount of the line of credit 8.3 whichthat may be secured at any one time, as expressed in the 8.4 mortgage, regardless of the time or amount of advances, 8.5 payments, or readvances. 8.6 Subd. 4. [ADVANCES BY MORTGAGEE.] No tax under subdivision8.7 1section 287.035 shall be paid on the indeterminate 8.8 amount whichthat may be advanced by the mortgagee in protection 8.9 of the mortgaged premises or the mortgage, including taxes, 8.10 assessments, charges, claims, fines, impositions, and insurance 8.11 premiums ,; the amounts due upon prior or superior mortgages and 8.12 other prior or superior liens, encumbrances, and interests ,; and 8.13 legal expenses and attorneys' fees. 8.14 Subd. 5. [INDETERMINATE AMOUNTS.] When a mortgage secures 8.15 an indeterminate amount other than those described in 8.16 subdivision 3, 4, or 6, no tax shall be paid at the time the 8.17 mortgage is recorded or registered, but the tax must be paid at 8.18 the time of recording or filingan affidavit or other document 8.19 stating the amount and time of the actual advance. 8.20 Subd. 6. [REVERSE MORTGAGES.] If real property secures a 8.21 reverse mortgage, the principal debt or obligation to which 8.22 mortgage registry tax applies is the expected total 8.23 disbursements or cash equivalent to be made under the terms of 8.24 the loan. Interest accruing on the disbursements made is not 8.25 subject to mortgage registry tax. In the case of periodic 8.26 payments made for an indefinite length of time, the expected 8.27 total disbursements must equal the product of the periodic 8.28 payment amounts and the number of payments and, if applicable, 8.29 the amount of cash distribution or its equivalent. The number 8.30 of payments must be based upon the life expectancy assumption 8.31 used in determining the payment amount. In the case of reverse 8.32 mortgages made as part of the Housing and Community Development 8.33 Act of 1987, section 255 of the National Housing Act, and 8.34 administered by the Department of Housing and Urban Development 8.35 (HUD), mortgage registry tax must not be assessed on Federal 8.36 Housing Administration mortgage insurance premiums, monthly 9.1 lender service fees, or payments to be distributed to the 9.2 borrower by HUD. 9.3 Subd. 7. [MORTGAGES TO SECURE OBLIGATIONS TO BE 9.4 ISSUED.] If a mortgage is made to a mortgagee in trust to secure 9.5 the payment of bonds or other obligations yet to be issued, a 9.6 statement may be incorporated in the mortgage stating the amount 9.7 of the obligations already issued or yet to be issued, and the 9.8 tax to be paid on filing the mortgage for recording must be 9.9 computed upon the amount so stated. The statement must be 9.10 binding and conclusive upon all persons claiming through or 9.11 under the mortgage, and no such obligation issued in excess of 9.12 the aggregate so fixed is valid for any purpose unless the 9.13 additional tax is paid and receipted by the proper county 9.14 treasurer. 9.15 Subd. 8. [AMENDMENTS.] An amendment may contain the 9.16 following statement, or its equivalent, on its first page: 9.17 "This is a mortgage amendment, as defined in Minnesota Statutes, 9.18 section 287.01, subdivision 2, and as such it does not secure a 9.19 new or an increased amount of debt." In such cases, the 9.20 document will be treated as a mortgage amendment, as defined in 9.21 section 287.01, subdivision 2, for all purposes and does not 9.22 serve to secure a new or an increased amount of debt. 9.23 Sec. 6. Minnesota Statutes 1998, section 287.08, is 9.24 amended to read: 9.25 287.08 [TAX, HOW PAYABLE; RECEIPTS.] 9.26 (a) The tax imposed by sections 287.01 to 287.12 shallmust 9.27 be paid to the treasurer of theany county in this state in 9.28 which the mortgaged landreal property or some part thereofis 9.29 situatedlocated at or before the time of filing the mortgage 9.30 for record or registration. The treasurer shall endorse receipt 9.31 on the mortgage , countersigned by the county auditor, who shall9.32 charge the amount to the treasurerand suchthe receipt shall be9.33 recorded with the mortgage, and such receipt of the record9.34 thereof shall beis conclusive proof that the tax has been 9.35 paid toin the amount thereinstated and authorizeauthorizes 9.36 any county recorder or registrar of titles to record the 10.1 mortgage. Its form, in substance, shall be "registration tax 10.2 hereon of ..................... dollars paid." If the mortgages10.3 bemortgage is exempt from taxation the endorsement shall, in 10.4 substance, be "exempt from registration tax ,." toIn either 10.5 case the receipt must be signed in either caseby the treasurer 10.6 as such, and in case of payment to be countersigned by the10.7 auditor. In case the treasurer shall beis unable to determine 10.8 whether a claim of exemption should be allowed, the tax shall10.9 must be paid as in the case of a taxable mortgage. 10.10 (b) Upon written application of the taxpayer, the county 10.11 treasurer may refund in whole or in part any tax whichthat has 10.12 been erroneously paid, or a person having paid a mortgage 10.13 registry tax amount may seek a refund of suchthe tax, or other 10.14 appropriate relief, by bringing an action in tax court in the 10.15 county in which the tax was paid, within 60 days of the 10.16 payment. The action is commenced by the serving of a petition 10.17 for relief on the county treasurer, and by filing a copy with 10.18 the court. The county attorney shall defend the action. The 10.19 county treasurer shall notify the treasurer of each county that 10.20 has or would receive a portion of the tax as paid. 10.21 (c) If the county treasurer determines a refund should be 10.22 paid, or if a refund is ordered by the court, the county 10.23 treasurer of each county that actually received a portion of the 10.24 tax shall immediately pay a proportionate share of three percent 10.25 of the refund using any available county funds. The county 10.26 treasurer of each county whichthat received, or would have 10.27 received, a portion of the tax shall also pay their county's 10.28 proportionate share of the remaining 97 percent of the 10.29 court-ordered refund on or before the tenth20th day of the 10.30 following month using solely the mortgage registry tax funds 10.31 that would be paid to the commissioner of revenue on that date 10.32 under section 287.12. If the funds on hand under this procedure 10.33 are insufficient to fully fund 97 percent of the court-ordered 10.34 refund, the county treasurer of the county in which the action 10.35 was brought shall file a claim with the commissioner of revenue 10.36 under section 16A.48 for the remaining portion of 97 percent of 11.1 the refund, and shall pay over the remaining portion upon 11.2 receipt of a warrant from the state issued pursuant to the claim. 11.3 (d) When any suchmortgage covers real property situate11.4 located in more than one county in this state the whole of such11.5 total tax shallmust be paid to the treasurer of the county 11.6 where the mortgage is first presented for record or registration11.7 recording, and the payment shallmust be receipted and11.8 countersignedas aboveprovided in paragraph (a). If the 11.9 principal debt or obligation secured by such a multiple county 11.10 mortgage exceeds $1,000,000, the nonstate portion of the tax 11.11 shallmust be divided and paid over by the county treasurer 11.12 receiving the sameit, on or before the tenth20th day of each 11.13 month after receipt thereof, to the county or counties 11.14 entitled theretoin the ratio whichthat the market value of the 11.15 real property covered by the mortgage in each county bears to 11.16 the market value of all the real property in this state 11.17 described in the mortgage. In making suchthe division and 11.18 payment the county treasurer shall send therewitha statement 11.19 giving the description of the real property described in the 11.20 mortgage and the market value of the part thereof situate11.21 located in each county. For thethis purpose aforesaid, the 11.22 treasurer of any county may require the treasurer of any other 11.23 county to certify to the former the market valuation of any 11.24 tract of landreal property in any suchmortgage. 11.25 Sec. 7. Minnesota Statutes 1998, section 287.10, is 11.26 amended to read: 11.27 287.10 [PREPAYMENT OF TAX; EVIDENCE; NOTICE.] 11.28 A mortgage or papersdocuments relating to its foreclosure, 11.29 assignment, or satisfaction, must not be recorded or registered11.30 unless the tax has been paid. AExcept as provided in section 11.31 582.25, a document or any record of the mortgage may not be 11.32 received in evidence in any court, and is not valid notice, 11.33 unless the tax has been paid. If the tax is paid, an error in 11.34 computation or ascertainment of the amount does not affect the 11.35 validity of the mortgage or the record or foreclosure. This 11.36 section does not apply to a mortgage that is exempt 12.1 from taxationthe tax imposed under section 287.04 or 287.05,12.2 subdivision 1287.035. 12.3 Sec. 8. Minnesota Statutes 1998, section 287.11, is 12.4 amended to read: 12.5 287.11 [MORTGAGES RECORDED OR REGISTERED PRIOR TO PASSAGE 12.6 OF SECTIONS 287.01 TO 287.12.] 12.7 All mortgages of real estateproperty recorded or12.8 registeredprior to the passage of sections 287.01 to 12.9 287.12 shall beare taxable as provided by lawunder the 12.10 provisions of law relating theretoexisting prior to the 12.11 enactment hereofof sections 287.01 to 287.12; provided, that 12.12 the holder of any such mortgage may pay to the treasurer of the 12.13 proper county, or the state treasurer, or both,the tax therein12.14 prescribedbased upon the amount of the debt secured by suchthe 12.15 mortgage at the time of suchthe payment as stated by the 12.16 affidavit of the owner of suchthe mortgage , to. The affidavit 12.17 may be filed with the county treasurer, and havein which case 12.18 the treasurer's receipt , countersigned by the auditor,must be 12.19 endorsed thereonon it. The county recorder or secretary of12.20 state, as the case may be,or registrar of titles on 12.21 presentation of suchthe receipt, shall note on the margin of12.22 the mortgagemake a record of the date and amount of suchthe 12.23 payment. Thereafter suchthe mortgage debtlien shall not be 12.24 otherwise taxable. 12.25 Sec. 9. Minnesota Statutes 1998, section 287.12, is 12.26 amended to read: 12.27 287.12 [TAXES, HOW APPORTIONED.] 12.28 (a) All taxes paid to the county treasurer under the 12.29 provisions of sections 287.01 to 287.12 shallmust be 12.30 apportioned, 97 percent to the general fund of the state, and 12.31 three percent to the county revenue fund. 12.32 (b) On or before the tenth20th day of each month the 12.33 county treasurer shall determine and pay to the commissioner of 12.34 revenue for deposit in the state treasury and credit to the 12.35 general fund the state's portion of the receipts from the 12.36 mortgage registrationregistry tax during the preceding month 13.1 subject to the electronic funds transfer requirements of section 13.2 270.771. The county treasurer shall provide any related reports 13.3 requested by the commissioner of revenue. 13.4 Sec. 10. Minnesota Statutes 1998, section 287.13, 13.5 subdivision 1, is amended to read: 13.6 Subdivision 1. [FAILURE TO PAY FULL AMOUNT.] Any person 13.7 liable for the tax imposed by section 287.05287.035 who fails 13.8 to pay the full amount of mortgage registry tax imposed under 13.9 sections 287.01 to 287.12this chapter, unless suchthe failure 13.10 is shown to be due to reasonable cause, is liable for a civil 13.11 penalty of $250 or 100 percent of the tax for each such failure, 13.12 whichever is less. 13.13 Sec. 11. [287.20] [DEFINITIONS; DEED TAX.] 13.14 Subdivision 1. [WORDS, TERMS, AND PHRASES.] Unless the 13.15 language or context clearly indicates that a different meaning 13.16 is intended, the following words, terms, and phrases, for the 13.17 purposes of sections 287.21 to 287.31, have the meanings given 13.18 to them in this section. 13.19 Subd. 2. [CONSIDERATION.] (a) "Consideration" means 13.20 generally the total monetary value that is given in return for a 13.21 conveyance of real property in this state and includes all 13.22 lump-sum payments, all prior or future installment payments that 13.23 are required under the agreement between the parties, and the 13.24 fair market value of any property taken, or to be taken, in 13.25 exchange. 13.26 (b) Consideration does not include the reasonable and 13.27 lawful amounts of interest paid for the privilege of paying the 13.28 purchase price in installments and the fair market value of any 13.29 items of intangible personal property that are conveyed by the 13.30 taxable instrument. 13.31 (c) Consideration does not include the amount paid for the 13.32 personal property located on the real property being conveyed 13.33 and transferred as a part of the total consideration, except 13.34 that the amount paid for the personal property located on the 13.35 real property being conveyed must be included if the real 13.36 property being conveyed is a one-, two-, or three-unit 14.1 residential structure. 14.2 (d) When a conveyance of real property is made pursuant to 14.3 a contract for deed, the consideration is the price for the real 14.4 property reflected in the contract; except that, subject to the 14.5 limitations under section 287.221, when the conveyance is made 14.6 by a person engaged in the business of land sales or 14.7 construction of buildings and other improvements, or by an 14.8 affiliated person, then the consideration is the amount paid for 14.9 the land and the improvements. By January 1, 2001, the 14.10 commissioner shall adopt rules that define the phrases "engaged 14.11 in the business of land sales or construction of buildings and 14.12 other improvements" and "affiliated person" as those phrases are 14.13 used in this paragraph. 14.14 (e) "Total consideration" has the same meaning as 14.15 consideration. 14.16 (f) "Consideration, exclusive of the value of any lien or 14.17 encumbrance remaining at the time of sale" or "net 14.18 consideration" means the amount of consideration as reduced by 14.19 the amount outstanding under any lien that attached to the real 14.20 property prior to the time of sale and that is not released or 14.21 satisfied as a result of the sale. 14.22 Subd. 3. [CONSOLIDATION OR MERGER.] "Consolidation" or 14.23 "merger" means the combination of all of the assets of two or 14.24 more corporations, limited liability companies, or partnerships, 14.25 or any combination of these entities, whether or not title to 14.26 the assets is taken by a newly created entity or by a 14.27 preexisting entity that survives the consolidation or merger in 14.28 an altered form. 14.29 Subd. 4. [DOCUMENTARY STAMPS.] "Documentary stamps" means 14.30 all stamps issued by the county for use in payment of the taxes 14.31 imposed by sections 287.21 to 287.37. 14.32 Subd. 5. [LIEN.] "Lien" means any legal claim, other than 14.33 an easement, created by contract, statute, or law on the real 14.34 property of another as security for a debt or obligation. For 14.35 purposes of the deed tax, the term "encumbrance" is synonymous 14.36 with the term "lien" and an easement is not a lien. 15.1 Subd. 6. [PERSON.] "Person" includes any individual, 15.2 partner, officer, director, firm, partnership, joint venture, 15.3 limited liability company, association, cooperative, social 15.4 club, fraternal organization, municipal or private corporation, 15.5 whether organized for profit or not, estate, trusts, business 15.6 trusts, receiver, trustee, syndicate, the United States, a 15.7 state, any political subdivision of a state, or any group or 15.8 combination acting as a unit, and the plural as well as the 15.9 singular. The term includes directors and officers of 15.10 corporations, governors and managers of a limited liability 15.11 company, or members of partnerships who, either individually or 15.12 jointly with others, have control, supervision, or 15.13 responsibility of making or authorizing payment of the tax 15.14 imposed by section 287.21. The term includes any agent of any 15.15 individual or organization enumerated in this subdivision. 15.16 Subd. 7. [REAL PROPERTY, REAL ESTATE, AND LAND.] "Real 15.17 property," "real estate," and "land" mean any fee simple estate, 15.18 and any estate for life, as defined in chapter 500, and the 15.19 purchaser's interest under a contract for the conveyance of such 15.20 an estate. 15.21 Subd. 8. [RECORD, RECORDED, AND RECORDING.] "Record," 15.22 "recorded," and "recording" each mean that a document has been 15.23 delivered to and filed in the office of the county recorder or 15.24 registrar of titles, whichever office maintains the records for 15.25 the real property described in the document. 15.26 Subd. 9. [REORGANIZATION.] "Reorganization" means the 15.27 transfer of substantially all of the assets of a corporation, a 15.28 limited liability company, or a partnership not in the usual or 15.29 regular course of business. 15.30 Sec. 12. Minnesota Statutes 1998, section 287.21, 15.31 subdivision 1, is amended to read: 15.32 Subdivision 1. [DETERMINATION OF TAX.] There(a) A tax is 15.33 herebyimposed on each deed ,or instrument , or writingby which 15.34 any lands, tenements, or other realtyreal property in this 15.35 state shall beis granted, assigned, transferred, or otherwise 15.36 conveyed , a tax determined in the following manner. The tax 16.1 applies against the net consideration. 16.2 (b) The tax is determined in the following manner: (1) 16.3 when transfers are made by instruments pursuant to mergers, 16.4 consolidations, sales, or transfers of substantially all of the 16.5 assets of corporationsthe entities as defined in section 16.6 287.20, subdivision 9, pursuant to plans of reorganization or, 16.7 the tax is $1.65; (2) when there is no consideration or when the 16.8 consideration, exclusive of the value of any lien or encumbrance 16.9 remaining thereon at the time of sale, is $500 or less, the 16.10 tax shall beis $1.65 .; or (3) when the consideration, exclusive 16.11 of the value of any lien or encumbrance remaining thereonat the 16.12 time of sale, exceeds $500, the tax shall beis $1.65 plus $1.65 16.13 for each additional $500 or fraction of that amount. 16.14 The tax applies against the total consideration, including16.15 the fair market value consideration for any personal property16.16 located on the real property conveyed by the deed and16.17 transferred as part of the total consideration, but excluding16.18 the value of any lien or encumbrance remaining on the property16.19 at the time of sale.16.20 (c) The tax is due at the time a taxable deed or instrument 16.21 is presented for recording. 16.22 Sec. 13. Minnesota Statutes 1998, section 287.22, is 16.23 amended to read: 16.24 287.22 [ EXCEPTIONSEXEMPTIONS.] 16.25 The tax imposed by section 287.21 shalldoes not apply to: 16.26 A. Any(1) An executory contract for the sale of landreal 16.27 property under which the vendeepurchaser is entitled to or does 16.28 take possession thereofof the real property, or any assignment 16.29 or cancellation thereof.of the contract; 16.30 B. Any(2) A mortgage or anyan amendment, assignment, 16.31 extension, partial release, or satisfaction thereof.of a 16.32 mortgage; 16.33 C. Any(3) A will .; 16.34 D. Any(4) A plat .; 16.35 E. Any(5) A lease ., amendment of lease, assignment of 16.36 lease, or memorandum of lease; 17.1 F. Any(6) A deed, instrument, or writing in which the 17.2 United States or any agency or instrumentality thereof is the 17.3 grantor, assignor, transferor, conveyor, grantee, or assignee .; 17.4 G. Deeds(7) A deed for a cemetery lot or lots .; 17.5 H. Deeds(8) A deed of distribution by a personal 17.6 representatives.representative; 17.7 I. Deeds(9) A deed to or from coownersa co-owner 17.8 partitioning their undivided interestsinterest in the same 17.9 piece of real property .; 17.10 J. Any(10) A deed or other instrument of conveyance 17.11 issued pursuant to a permanent school fund land exchange under 17.12 section 92.121 and related laws .; 17.13 K.(11) A referee's or sheriff's certificate of sale in a 17.14 mortgage or lien foreclosure sale .; 17.15 L.(12) A referee's or, sheriff's, or certificate 17.16 holder's certificate of redemption from a mortgage or lien 17.17 foreclosure sale issued to the redeeming mortgagor or lienee .; 17.18 M. Any(13) A deed, instrument, or writing which grants, 17.19 creates, modifies, or cancelsterminates an easement .; and 17.20 N.(14) A decree of marriage dissolution, as defined in 17.21 section 287.01, subdivision 4, or anya deed or other instrument 17.22 between the parties to the dissolution made pursuant to the 17.23 terms of the decree. 17.24 Sec. 14. [287.2205] [TAX-FORFEITED LAND.] 17.25 Before a state deed for tax-forfeited land may be issued, 17.26 the deed tax must be paid by the purchaser of tax-forfeited land 17.27 whether the purchase is the result of a public auction or 17.28 private sale or a repurchase of tax-forfeited land. State 17.29 agencies and local units of government that acquire 17.30 tax-forfeited land by purchase or any other means are subject to 17.31 this section. 17.32 Sec. 15. Minnesota Statutes 1998, section 287.23, is 17.33 amended to read: 17.34 287.23 [REAL PROPERTY OUTSIDE COUNTY OR STATE.] 17.35 Subdivision 1. [REAL PROPERTY OUTSIDE COUNTY.] If any 17.36 taxable deed or instrument describes any real property located 18.1 in more than one county in this state, the total tax must be 18.2 paid to the treasurer of the county where the document is first 18.3 presented for recording, and the payment must be receipted as 18.4 provided in section 287.08. If the net consideration exceeds 18.5 $700,000, the nonstate portion of the tax must be divided and 18.6 paid over by the county treasurer receiving it, on or before the 18.7 20th day of each month after receipt, to the county or counties 18.8 entitled in the ratio which the market value of the real 18.9 property covered by the document in each county bears to the 18.10 market value of all the real property in this state described in 18.11 the document. In making the division and payment the county 18.12 treasurer shall send a statement to the other involved counties 18.13 giving the description of the real property described in the 18.14 document and the market value of the part located in each 18.15 county. The treasurer of any county may require the treasurer 18.16 of any other county to certify to the former the market 18.17 valuation of any parcel of real property for this purpose. 18.18 Subd. 2. [REAL PROPERTY OUTSIDE STATE.] If any deed ,or 18.19 instrument , or writing shall describedescribes any real estate18.20 situateproperty located outside of this state, the tax imposed 18.21 by section 287.21 shallmust be measured upon such proportion of 18.22 the consideration, (exclusive of the value of any lien or 18.23 encumbrance remaining thereonat the time of sale ), as the value 18.24 of the real estate thereinproperty described situatein this 18.25 state bears to the value of the whole of the real estate18.26 property described thereinin the deed or instrument. 18.27 Sec. 16. Minnesota Statutes 1998, section 287.24, is 18.28 amended to read: 18.29 287.24 [PERSONS LIABLE.] 18.30 Subdivision 1. [GENERAL RULE.] Any person who grants, 18.31 assigns, transfers, or conveys any land, tenement, or realty18.32 real property by a deed , writing,or instrument subject to the 18.33 tax imposed by section 287.21 shall be liable for such tax but 18.34 no public official shall be liable for a tax with respect to any 18.35 instrument executed by the official in connection with official 18.36 duties. 19.1 Subd. 2. [OTHER RESPONSIBLE PERSONS.] If an underpayment 19.2 is assessable by the commissioner of revenue against a grantor 19.3 pursuant to section 287.37, and the grantor is a business entity 19.4 no longer in existence, any person who, either individually or 19.5 jointly with others, had control over, supervision of, or 19.6 responsibility for making the statement of tax due or exemption 19.7 from tax that was submitted to the county treasurer under 19.8 section 287.241, subdivision 1, can be assessed and held liable 19.9 by the commissioner for the underpayment. 19.10 Sec. 17. Minnesota Statutes 1998, section 287.241, is 19.11 amended to read: 19.12 287.241 [STATEMENT OF TAX DUE OR EXEMPTION; RECORDING OR 19.13 REGISTERING OF DOCUMENTS.] 19.14 Subdivision 1. [STATEMENT OF TAX DUE OR EXEMPTION.] No 19.15 deed ,or instrument , or writing, taxable under the provisions of 19.16 section 287.21, shall be recorded or registered by the county19.17 recorder or the registrar of titlesunless it shall contain19.18 contains the statement of the grantor or grantee, or any 19.19 successor in interest, setting forth the amount of tax due under 19.20 this chapter or that it is exempt from tax. The county recorder 19.21 or registrar of titles shall record or registerany such19.22 documentdeed or instrument when the statement sets forth that 19.23 the transfer is tax exempt, and shall refuse to record or19.24 register any such document on whichor when documentary stamps 19.25 in the amount stated thereon have not been affixedor the 19.26 treasurer's receipt appear for the amount of deed tax recited in 19.27 the statement. The validity or effectiveness of ana deed or 19.28 instrument as between the parties thereto, and as to any person 19.29 who would otherwise be bound thereby, shallis not beaffected 19.30 by the failure to comply herewith; norwith this section. If an19.31 a deed or instrument is accepted for recording or filing19.32 contrary to the provisions hereofthis section, shallthe 19.33 failure to comply herewithdoes not destroy or impair the record 19.34 thereofof the deed or instrument as notice. 19.35 Subd. 2. [NOTICE OF CERTIFICATE OF VALUE.] No deed or 19.36 instrument providing for the transfer of title to real estate as20.1 property that is subject to the tax as provided in section 20.2 287.21, and no executory contract for the sale of land, shall be 20.3 recorded in the office of the county recorder or the registrar20.4 of titlesunless such deed or instrument shall beis accompanied 20.5 by a notice from the county auditor that a certificate of value 20.6 was filed in the auditor's office as provided in section 272.115. 20.7 Sec. 18. Minnesota Statutes 1998, section 287.29, 20.8 subdivision 1, is amended to read: 20.9 Subdivision 1. [APPOINTMENT AND PAYMENT OF TAX PROCEEDS.] 20.10 (a) The proceeds of the taxes levied and collected under 20.11 sections 287.21 to 287.36 must be apportioned, 97 percent to the 20.12 general fund of the state, and three percent to the county 20.13 revenue fund. 20.14 (b) On or before the tenth20th day of each month, the 20.15 county treasurer shall determine and pay to the commissioner of 20.16 revenue for deposit in the state treasury and credit to the 20.17 general fund the state's portion of the receipts for deed tax 20.18 from the sale of documentary stamps duringthe preceding month 20.19 subject to the electronic transfer requirements of section 20.20 270.771. The county treasurer shall provide any related reports 20.21 requested by the commissioner of revenue. 20.22 Sec. 19. Minnesota Statutes 1998, section 287.30, is 20.23 amended to read: 20.24 287.30 [COUNTY TREASURER; DUTIES.] 20.25 The care of documentary stamps entrusted to county 20.26 treasurers and the duties imposed upon county treasurers by 20.27 sections 287.21 to 287.33 shall bethis chapter are within the 20.28 duties of such office and shall beare within the coverage of 20.29 any official bond delivered to the state, conditioned that any 20.30 such officer shall faithfully execute the duties of office. The 20.31 county board may by resolution require the county auditor to 20.32 perform any duty imposed on the county treasurer under this 20.33 chapter. 20.34 Sec. 20. Minnesota Statutes 1998, section 287.31, is 20.35 amended to read: 20.36 287.31 [VIOLATIONS; CIVIL PENALTIES.] 21.1 Subdivision 1. [FAILURE TO COMPLYPAY FULL AMOUNT.] Any 21.2 person liable for the tax imposed by section 287.21 who fails to 21.3 comply with the provisions of section 287.25pay the full amount 21.4 of deed tax imposed under this chapter, unless suchthe failure 21.5 is shown to be due to reasonable cause, shall beis liable to a 21.6 civil penalty of $250, or 100 percent of the tax, for each such 21.7 failure, whichever is less. 21.8 Subd. 2. [WILLFUL EVASION.] Any person who willfully 21.9 attempts in any manner to evade or defeat any such tax or the 21.10 payment thereof, shallis, in addition to other penalties 21.11 provided by law, beliable to a penalty of 50 percent of the 21.12 total amount of the underpayment of the tax. 21.13 Sec. 21. [287.325] [VIOLATIONS; CRIMINAL PENALTIES.] 21.14 Any person who in any manner intentionally attempts to 21.15 evade a tax imposed by this chapter, or who intentionally aids 21.16 or abets in the evasion or attempted evasion of such tax is 21.17 guilty of a gross misdemeanor. 21.18 Sec. 22. Minnesota Statutes 1998, section 287.33, is 21.19 amended to read: 21.20 287.33 [EXPENSES OF ADMINISTRATION.] 21.21 Expenses of administration of sections 287.21 to 287.3421.22 this chapter to be paid out of county funds include fees and 21.23 expenses incurred by the county attorney in connection 21.24 with sections 287.21 to 287.34this chapter and all other costs 21.25 and expenses. 21.26 Sec. 23. [287.38] [LIMITATIONS ON TIME FOR ASSESSMENT OF 21.27 TAX.] 21.28 Subdivision 1. [GENERAL RULE.] Except as otherwise 21.29 provided in this section, the amount of taxes assessable under 21.30 this chapter must be assessed within 3-1/2 years after the date 21.31 the document is recorded. 21.32 Subd. 2. [OMISSION IN EXCESS OF 25 PERCENT.] Additional 21.33 taxes may be assessed within 6-1/2 years after the document was 21.34 recorded, if the taxpayer underpays the tax due on the filing of 21.35 that document by more than 25 percent or the document was 21.36 erroneously treated as exempt. 22.1 Subd. 3. [FRAUD.] Notwithstanding the limitations under 22.2 subdivision 1, additional taxes may be assessed at any time if a 22.3 document is presented for recording with a fraudulent intent to 22.4 underpay the taxes imposed by this chapter. 22.5 Sec. 24. [287.385] [INTEREST.] 22.6 Subdivision 1. [INTEREST RATE.] If an interest assessment 22.7 is required under this section, interest is computed at the rate 22.8 specified in section 270.75. 22.9 Subd. 2. [LATE PAYMENT.] If a tax is not paid within the 22.10 time specified by law for payment, the unpaid tax bears interest 22.11 from the date the tax should have been paid until the date the 22.12 tax is paid. 22.13 Subd. 3. [EXTENSIONS.] If an extension of time for payment 22.14 has been granted, interest must be paid from the date the 22.15 payment should have been made if no extension had been granted, 22.16 until the date the tax is paid. 22.17 Subd. 4. [ADDITIONAL ASSESSMENTS.] If a taxpayer is liable 22.18 for additional taxes because of a redetermination by the 22.19 commissioner of revenue, or for any other reason, the additional 22.20 taxes bear interest from the time the tax should have been paid, 22.21 without regard to any extension allowed, until the date the tax 22.22 is paid. 22.23 Subd. 5. [REFUNDS.] (a) Interest must be paid at the rate 22.24 specified in section 270.75 on an overpayment that is refunded 22.25 or credited to a taxpayer more than 30 days after a refund 22.26 request is made. Interest does not apply to the 30-day period. 22.27 (b) In the case of an erroneous refund, interest accrues 22.28 from the date the refund was paid unless the erroneous refund 22.29 results from a mistake of the department of revenue or the 22.30 county, then no interest or penalty is imposed unless the 22.31 deficiency assessment is not satisfied within 60 days of the 22.32 order. 22.33 Subd. 6. [INTEREST ON JUDGMENTS.] Notwithstanding section 22.34 549.09, if judgment is entered in favor of the commissioner of 22.35 revenue or a county with regard to any tax under this chapter, 22.36 the judgment bears interest at the rate specified in section 23.1 270.75 from the date the judgment is entered until the date of 23.2 payment. 23.3 Subd. 7. [INTEREST ON PENALTIES.] A penalty imposed under 23.4 this chapter bears interest from the date payment was required 23.5 to be paid, including any extensions, to the date of payment of 23.6 the penalty. 23.7 Sec. 25. [287.39] [ADMINISTRATIVE REVIEW.] 23.8 Subdivision 1. [TAXPAYER RIGHT TO RECONSIDERATION.] Under 23.9 this section, a taxpayer may obtain reconsideration by the 23.10 commissioner of revenue of: 23.11 (1) an order of the commissioner assessing tax; 23.12 (2) a denial by the commissioner of a request for abatement 23.13 of penalty; or 23.14 (3) a denial by the commissioner of a claim for refund of 23.15 money paid to the commissioner as a result of an assessment or 23.16 order issued by the commissioner under this chapter, by filing 23.17 an administrative appeal as provided in subdivision 4. 23.18 A taxpayer cannot obtain reconsideration if the action taken by 23.19 the commissioner of revenue is the outcome of an administrative 23.20 appeal. 23.21 Subd. 2. [APPEAL BY TAXPAYER.] A taxpayer who wishes to 23.22 seek administrative review shall follow the procedure in 23.23 subdivision 4. 23.24 Subd. 3. [NOTICE DATE.] For purposes of this section, 23.25 "notice date" means the date of the order adjusting the tax or 23.26 order denying a request for abatement or, in the case of a 23.27 denied refund, the date of the notice of denial. 23.28 Subd. 4. [TIME AND CONTENT FOR ADMINISTRATIVE APPEAL.] 23.29 Within 60 days after the notice date, the taxpayer shall file a 23.30 written appeal with the commissioner of revenue. The appeal 23.31 need not be in any particular form, but must contain the 23.32 following information: 23.33 (1) name and address of the taxpayer; 23.34 (2) if a corporation, the state of incorporation of the 23.35 taxpayer, and the principal place of business of the 23.36 corporation; 24.1 (3) the Minnesota identification number or social security 24.2 number of the taxpayer; 24.3 (4) the type of tax involved; 24.4 (5) the date; 24.5 (6) the tax periods involved and the amount of tax involved 24.6 for each period; 24.7 (7) the findings in the notice that the taxpayer disputes; 24.8 (8) a summary statement that the taxpayer relies on for 24.9 each exception; and 24.10 (9) the taxpayer's signature or the signature of the 24.11 taxpayer's duly authorized agent. 24.12 Subd. 5. [EXTENSIONS.] If requested in writing and within 24.13 the time allowed for filing an administrative appeal, the 24.14 commissioner may extend the time for filing an appeal for a 24.15 period of not more that 30 days from the expiration of the 60 24.16 days from the notice date. 24.17 Subd. 6. [DETERMINATION OF APPEAL.] On the basis of 24.18 applicable law and available information, the commissioner shall 24.19 determine the validity, if any, in whole or part of the appeal 24.20 and notify the taxpayer of the decision. This notice must be in 24.21 writing and contain the basis for the determination. 24.22 Subd. 7. [AGREEMENT DETERMINING TAX LIABILITY.] If the 24.23 commissioner determines that it is in the best interests of the 24.24 state, the commissioner may settle taxes, penalties, or interest 24.25 that the commissioner has under consideration by virtue of an 24.26 appeal filed under this section. An agreement must be in 24.27 writing and signed by the commissioner and the taxpayer or the 24.28 taxpayer's representative authorized by the taxpayer to enter 24.29 into an agreement. The agreement is final and conclusive and, 24.30 except upon a showing of fraud or malfeasance, or 24.31 misrepresentation of a material fact, the case shall not be 24.32 reopened as to the matters agreed upon. 24.33 Subd. 8. [APPEAL OF AN ADMINISTRATIVE DETERMINATION.] 24.34 Following the determination of an appeal and notwithstanding any 24.35 period of limitations for making assessments or other 24.36 determinations to the contrary, the commissioner shall issue an 25.1 order reflecting that disposition. If the statute of 25.2 limitations for making assessments or other determinations would 25.3 have expired before the issuance of this order, except for this 25.4 section, the order is limited to issues or matters contained in 25.5 the appealed determination. The order is appealable to the 25.6 Minnesota tax court under section 271.06. 25.7 Subd. 9. [APPEAL WHERE NO DETERMINATION.] If the 25.8 commissioner does not make a determination within six months of 25.9 the filing of an administrative appeal, the taxpayer may elect 25.10 to appeal to tax court. 25.11 Subd. 10. [EXEMPTION FROM ADMINISTRATIVE PROCEDURE 25.12 ACT.] This section is not subject to chapter 14. 25.13 Sec. 26. [REPEALER.] 25.14 Minnesota Statutes 1998, sections 287.06; 287.07; 287.09; 25.15 287.21, subdivisions 2 and 4; 287.34; 287.35; and 287.36, are 25.16 repealed. 25.17 Sec. 27. [EFFECTIVE DATE.] 25.18 Sections 1 to 26 are effective for documents executed, 25.19 recorded, or registered after June 30, 1999.