SF 1109

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/05/2024 09:44am

A bill for an act
relating to taxation; tax-forfeited land sales; requiring compensation to former
property owners after sale of tax-forfeited property and payment of canceled taxes
to taxing districts; amending Minnesota Statutes 2022, sections 279.091; 281.18;
282.01, subdivisions 1a, 7a; 282.05; 282.08.

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

Section 1.

Minnesota Statutes 2022, section 279.091, is amended to read:

279.091 MAILING OF NOTICE AND LIST; FAILURE TO MAIL.

On or before March 20 immediately following the filing of such list with the court
administrator of district court, the county auditor shall cause the notice and the pertinent
portion of the list of delinquent real property to be mailed to all real property taxpayers and
in addition those parties who have filed their addresses pursuant to section 276.041. deleted text begin Failure
to mail the notice and the pertinent portions of the list shall not be deemed to be a material
defect to affect the validity of the judgment and sale.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2022, section 281.18, is amended to read:

281.18 LANDS MAY BE REDEEMED.

Every parcel of land heretofore sold to the state at any tax judgment sale and now subject
to redemption shall continue subject to redemption until the expiration of the time allowed
for redemption after the giving of notice of expiration as provided by law. new text begin Subject to the
requirements of section 282.08, clause (5), new text end upon the expiration of such time absolute title
to such parcel, if not theretofore redeemed, shall vest in the state.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2022, section 282.01, subdivision 1a, is amended to read:

Subd. 1a.

Conveyance to public entities.

(a) Upon written request from a state agency
or a governmental subdivision of the state, a parcel of unsold tax-forfeited land must be
withheld from sale or lease to others for a maximum of six months. The request must be
submitted to the county auditor. Upon receipt, the county auditor must withhold the parcel
from sale or lease to any other party for six months, and must confirm the starting date of
the six-month withholding period to the requesting agency or subdivision. If the request is
from a governmental subdivision of the state, the governmental subdivision must pay the
maintenance costs incurred by the county during the period the parcel is withheld. The
county board may approve a sale or conveyance to the requesting party during the
withholding period. A conveyance of the property to the requesting party terminates the
withholding period.

A governmental subdivision of the state must not make, and a county auditor must not
act upon, a second request to withhold a parcel from sale or lease within 18 months of a
previous request for that parcel. A county may reject a request made under this paragraph
if the request is made more than 30 days after the county has given notice to the requesting
state agency or governmental subdivision of the state that the county intends to sell or
otherwise dispose of the property.

(b) Nonconservation tax-forfeited lands may be sold by the county board, for their market
value as determined by the county board, to an organized or incorporated governmental
subdivision of the state for any public purpose for which the subdivision is authorized to
acquire property. When the term "market value" is used in this section, it means an estimate
of the full and actual market value of the parcel as determined by the county board, but in
making this determination, the board and the persons employed by or under contract with
the board in order to perform, conduct, or assist in the determination, are exempt from the
licensure requirements of chapter 82B.

(c) Nonconservation tax-forfeited lands may be sold by the county board, for their market
value as determined by the county board, to a state agency for any public purpose for which
the agency is authorized to acquire property.

(d) Nonconservation tax-forfeited lands may new text begin not new text end be sold by the county board to an
organized or incorporated governmental subdivision of the state or state agency for less
than their market value deleted text begin if: deleted text end new text begin .
new text end

deleted text begin (1) the county board determines that a sale at a reduced price is in the public interest
because a reduced price is necessary to provide an incentive to correct the blighted conditions
that make the lands undesirable in the open market, or the reduced price will lead to the
development of affordable housing; and
deleted text end

deleted text begin (2) the governmental subdivision or state agency has documented its specific plans for
correcting the blighted conditions or developing affordable housing, and the specific law
or laws that empower it to acquire real property in furtherance of the plans.
deleted text end

deleted text begin If the sale under this paragraph is to a governmental subdivision of the state, the
commissioner of revenue must convey the property on behalf of the state by quitclaim deed.
If the sale under this paragraph is to a state agency, the property is released from the trust
in favor of the taxing districts and the commissioner of revenue must convey the property
on behalf of the state by quitclaim deed to the agency.
deleted text end

(e) Nonconservation tax-forfeited land held in trust in favor of the taxing districts may
be conveyed by the commissioner of revenue in the name of the state to a governmental
subdivision for an authorized public use, if an application is submitted to the commissioner
which includes a statement of facts as to the use to be made of the tract and the favorable
recommendation of the county board. For the purposes of this paragraph, "authorized public
use" means a use that allows an indefinite segment of the public to physically use and enjoy
the property in numbers appropriate to its size and use, or is for a public service facility.
Authorized public uses as defined in this paragraph are limited to:

(1) a road, or right-of-way for a road;

(2) a park that is both available to, and accessible by, the public that contains
improvements such as campgrounds, playgrounds, athletic fields, trails, or shelters;

(3) trails for walking, bicycling, snowmobiling, or other recreational purposes, along
with a reasonable amount of surrounding land maintained in its natural state;

(4) transit facilities for buses, light rail transit, commuter rail or passenger rail, including
transit ways, park-and-ride lots, transit stations, maintenance and garage facilities, and other
facilities related to a public transit system;

(5) public beaches or boat launches;

(6) public parking;

(7) civic recreation or conference facilities; and

(8) public service facilities such as fire halls, police stations, lift stations, water towers,
sanitation facilities, water treatment facilities, and administrative offices.

No monetary compensation or consideration is required for the conveyance, except as
provided in subdivision 1g, but the conveyance is subject to the conditions provided in law,
including, but not limited to, the reversion provisions of subdivisions 1c and 1d.

(f) The commissioner of revenue shall convey a parcel of nonconservation tax-forfeited
land to a local governmental subdivision of the state by quitclaim deed on behalf of the state
upon the favorable recommendation of the county board if the governmental subdivision
has certified to the board that prior to forfeiture the subdivision was entitled to the parcel
under a written development agreement or instrument, but the conveyance failed to occur
prior to forfeiture. No compensation or consideration is required for, and no conditions
attach to, the conveyance.

(g) The commissioner of revenue shall convey a parcel of nonconservation tax-forfeited
land to the association of a common interest community by quitclaim deed upon the favorable
recommendation of the county board if the association certifies to the board that prior to
forfeiture the association was entitled to the parcel under a written agreement, but the
conveyance failed to occur prior to forfeiture. No compensation or consideration is required
for, and no conditions attach to, the conveyance.

(h) Conservation tax-forfeited land may be sold to a governmental subdivision of the
state for less than its market value for either: (1) creation or preservation of wetlands; (2)
drainage or storage of stormwater under a stormwater management plan; or (3) preservation,
or restoration and preservation, of the land in its natural state. The deed must contain a
restrictive covenant limiting the use of the land to one of these purposes for 30 years or
until the property is reconveyed back to the state in trust. At any time, the governmental
subdivision may reconvey the property to the state in trust for the taxing districts. The deed
of reconveyance is subject to approval by the commissioner of revenue. No part of a purchase
price determined under this paragraph shall be refunded upon a reconveyance, but the
amount paid for a conveyance under this paragraph may be taken into account by the county
board when setting the terms of a future sale of the same property to the same governmental
subdivision under paragraph (b) or (d). If the lands are unplatted and located outside of an
incorporated municipality and the commissioner of natural resources determines there is a
mineral use potential, the sale is subject to the approval of the commissioner of natural
resources.

(i) A park and recreation board in a city of the first class is a governmental subdivision
for the purposes of this section.

(j) Tax-forfeited land held in trust in favor of the taxing districts may be conveyed by
the commissioner of revenue in the name of the state to a governmental subdivision for a
school forest under section 89.41. An application that includes a statement of facts as to the
use to be made of the tract and the favorable recommendation of the county board and the
commissioner of natural resources must be submitted to the commissioner of revenue. No
monetary compensation or consideration is required for the conveyance, but the conveyance
is subject to the conditional use and reversion provisions of subdivisions 1c and 1d, paragraph
(e). At any time, the governmental subdivision may reconvey the property back to the state
in trust for the taxing districts. The deed of reconveyance is subject to approval by the
commissioner of revenue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2022, section 282.01, subdivision 7a, is amended to read:

Subd. 7a.

City sales; alternate procedures.

Land located in a home rule charter or
statutory city, or in a town which cannot be improved because of noncompliance with local
ordinances regarding minimum area, shape, frontage or access may be sold by the county
auditor pursuant to this subdivision if the auditor determines that a nonpublic sale will
encourage the approval of sale of the land by the city or town and promote its return to the
tax rolls. If the physical characteristics of the land indicate that its highest and best use will
be achieved by combining it with an adjoining parcel and the city or town has not adopted
a local ordinance governing minimum area, shape, frontage, or access, the land may also
be sold pursuant to this subdivision. If the property consists of an undivided interest in land
or land and improvements, the property may also be sold to the other owners under this
subdivision. The sale of land pursuant to this subdivision shall be subject to any conditions
imposed by the county board pursuant to section 282.03. The governing body of the city or
town may recommend to the county board conditions to be imposed on the sale. The county
auditor may restrict the sale to owners of lands adjoining the land to be sold. The county
auditor shall conduct the sale by sealed bid or may select another means of sale. The land
shall be sold to the highest bidder and may be sold for less than its appraised value new text begin , but the
purchase price must be more than the sum of all taxes, assessments, penalties, interest, and
costs due at the time of forfeiture computed under section 282.251, and any special
assessments for improvements certified as of the date of sale new text end . All owners of land adjoining
the land to be sold shall be given a written notice at least 30 days prior to the sale.

This subdivision shall be liberally construed to encourage the sale and utilization of
tax-forfeited land, to eliminate nuisances and dangerous conditions and to increase
compliance with land use ordinances.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2022, section 282.05, is amended to read:

282.05 PROCEEDS APPORTIONED.

The net proceeds received from the sale or rental of forfeited lands shall be apportioned
to the general funds of the state or municipal subdivision thereof new text begin , and to the former owner
of the property at the time the property forfeited to the state new text end , in the manner provided in
section 282.08.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

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

282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.

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 to the taxing
districts interested in the land new text begin and to the former owner of the property at the time the property
forfeited to the state new 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; deleted text begin and
deleted text end

(4) deleted text begin any balance deleted text end new text begin the portion required to pay the county, town or city, and school district
the amount of taxes that were canceled at the forfeiture of the property. The county must
be reimbursed for actual costs. Penalties and interest owed at the time of forfeiture new text end must be
apportioned as follows:

deleted text begin (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.
deleted text end

deleted text begin (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.
deleted text end

deleted text begin (iii) Any balance remaining must be apportioned as follows: deleted text end 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 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (5) any balance must be returned to the former owner of the property at the time the
property was forfeited to the state. If anyone other than the titleholder, including lienholders,
submits a claim to a share of the proceeds, the county may deposit the funds with a court
and let the court determine who is entitled to the funds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end