SF 3484

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/01/2022 08:12am

A bill for an act
relating to taxation; tax-forfeited land sales; requiring that property owners be paid
just compensation for the taking and sale of tax-forfeited property; amending
Minnesota Statutes 2020, sections 279.091; 281.18; 282.01, subdivisions 1a, 2, 8;
282.04, subdivision 2; 282.08; 282.241, subdivision 1.

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

Section 1.

Minnesota Statutes 2020, 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 2020, 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 2020, 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 storm water under a storm water 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 2020, section 282.01, subdivision 2, is amended to read:

Subd. 2.

Conservation lands; county board supervision.

(a) Lands classified as
conservation lands must be new text begin purchased at the market value of the property at the time of the
forfeiture and new text end held under the supervision of the county board of the county within which
the parcels lie and must not be conveyed or sold unless the lands are:

(1) reclassified as nonconservation lands;

(2) conveyed to a governmental subdivision of the state under subdivision 1a;

(3) released from the trust in favor of the taxing districts as provided in paragraph (b);
or

(4) conveyed or sold under the authority of another general or special law.

(b) The county board may, by resolution duly adopted, resolve that certain lands classified
as conservation lands shall be devoted to conservation uses and may submit a resolution to
the commissioner of natural resources. If, upon investigation, the commissioner of natural
resources determines that the lands covered by the resolution, or any part thereof, can be
managed and developed for conservation purposes, the commissioner shall make a certificate
describing the lands and reciting the acceptance thereof on behalf of the state. The
commissioner shall transmit the certificate to the county auditor, who shall note the same
upon the auditor's records and record the same with the county recorder. The title to all
lands so accepted shall be held by the state free from any trust in favor of any and all taxing
districts and the lands shall be devoted thereafter to the purposes of forestry, water
conservation, flood control, parks, game refuges, controlled game management areas, public
shooting grounds, or other public recreational or conservation uses, and managed, controlled,
and regulated under the jurisdiction of the commissioner of natural resources and the divisions
of the department.

(c) All proceeds derived from the sale of timber, lease of crops of hay, or other revenue
from lands under the jurisdiction of the commissioner of natural resources shall be credited
to the general fund of the state.

(d) If the commissioner of natural resources determines that any tract of land acquired
by the state under paragraph (b) and situated within or adjacent to the boundaries of any
governmental subdivision of the state is suitable for use by the subdivision for any authorized
public purpose, the commissioner may convey the tract by deed in the name of the state to
the subdivision upon the filing with the commissioner of a resolution adopted by a majority
vote of all the members of the governing body thereof, stating the purpose for which the
land is desired. The deed of conveyance shall be upon a form approved by the attorney
general and must be conditioned upon continued use for the purpose stated in the resolution.

(e) The county auditor, with the approval of the county board, may lease conservation
lands remaining under the supervision of the county board and sell timber and hay stumpage
thereon in the manner hereinafter provided, and all proceeds derived therefrom shall be
distributed in the same manner as provided in section 282.04.

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 2020, section 282.01, subdivision 8, is amended to read:

Subd. 8.

Minerals in tax-forfeited land and tax-forfeited stockpiled metallic minerals
material subject to mining; procedures.

In case the commissioner of natural resources
shall notify the county auditor of any county in writing that the minerals in any tax-forfeited
land or tax-forfeited stockpiled metallic minerals material located on tax-forfeited land in
such county have been designated as a mining unit as provided by law, or that such minerals
or tax-forfeited stockpiled metallic minerals material are subject to a mining permit or lease
issued therefor as provided by law, new text begin the commissioner may lease new text end the surface of such
tax-forfeited land deleted text begin shall be subject to disposal and use deleted text end new text begin at market value new text end for mining purposes
pursuant to such designation, permit, or lease, and new text begin the net proceeds from such lease shall
be distributed proportionally pursuant to section 282.08. The surface of the land new text end shall be
withheld from sale or lease new text begin to any other entity new text end by the county auditor until new text begin the lease is
terminated or until new text end the commissioner deleted text begin shall notify deleted text end new text begin notifies new text end the county auditor that such land
has been removed from the list of mining units or that any mining permit or lease theretofore
issued thereon is no longer in force; provided, that the surface of such tax-forfeited land
may be leased by the county auditor as provided by law, with the written approval of the
commissioner, subject to deleted text begin disposal and use for mining purposes as herein provided and to
deleted text end any special conditions relating thereto that the commissioner may prescribe deleted text begin , deleted text end new text begin and new text end also subject
to deleted text begin cancellation deleted text end new text begin the commissioner's right to take over the lease new text end for mining purposes on three
months written notice from the commissioner to the county auditor.

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 2020, section 282.04, subdivision 2, is amended to read:

Subd. 2.

Rights before sale; improvements, insurance, demolition.

(a) Before the
sale of a parcel of forfeited land the county auditor may, with the approval of the county
board of commissioners, provide for the repair and improvement of any building or structure
located upon the parcel, and may provide for maintenance of tax-forfeited lands, if it is
determined by the county board that such repairs, improvements, or maintenance are
necessary for the operation, use, preservation, and safety of the building or structure.

(b) If so authorized by the county board, the county auditor may insure the building or
structure against loss or damage resulting from fire or windstorm, may purchase workers'
compensation insurance to insure the county against claims for injury to the persons employed
in the building or structure by the county, and may insure the county, its officers and
employees against claims for injuries to persons or property because of the management,
use, or operation of the building or structure.

(c) The county auditor may, with the approval of the county board, provide:

(1) for the demolition of the building or structure, which has been determined by the
county board new text begin in specific, written findings supported by evidence new text end to be especially liable to
fire or so situated as to endanger life or limb or other buildings or property in the vicinity
because of age, dilapidated condition, defective chimney, defective electric wiring, any gas
connection, heating apparatus, or other defect; and

(2) for the sale of salvaged materials from the building or structure new text begin , the proceeds of
which shall be disposed of pursuant to section 282.08 new text end .

(d) Notwithstanding any law to the contrary, the county auditor, with the approval of
the county board, may provide for the sale deleted text begin or disposal deleted text end of personal property remaining after
the certificate under section 281.23, subdivision 9, has been recorded. The county auditor
must make reasonable efforts to provide at least 28 days' notice of the sale or disposal to
the former owner, taxpayer, and any occupants at the time of forfeiture. new text begin If not claimed and
costs for storage paid by the owner, new text end a sale may be made by the sheriff using the procedures
for the sale of new text begin the property and disposition of the surplus provided for in section 277.21. If
the owner new text end abandoned new text begin the new text end property new text begin , the county may use the procedure new text end in section 345.15 or
deleted text begin by deleted text end the county auditor deleted text begin using deleted text end new text begin may use new text end a sale procedure approved by the county board. A
county may contract with a third party to assist with removal, disposal, or sale of personal
property. The net proceeds from any sale of the personal property, salvaged materials, timber
or other products, or leases made under this law must be new text begin first used to pay the costs of the
storage and sale, and then new text end deposited in the forfeited tax sale fund and must be distributed
new text begin under section 282.08 new text end in the same manner as if the parcel had been sold.

(e) The county auditor, with the approval of the county board, may provide for the
demolition of any structure on tax-forfeited lands, if in the opinion of the county board, the
county auditor, and the land commissioner, if there is one, the sale of the land with the
structure on it, or the continued existence of the structure by reason of age, dilapidated
condition or excessive size as compared with nearby structures, will result in a material
lessening of net tax capacities of real estate in the vicinity of the tax-forfeited lands, or if
the demolition of the structure or structures will aid in disposing of the tax-forfeited property. new text begin
If demolition decreases the value of the property, the county board must account to the
taxing authorities and the former owner for the difference when distributing proceeds
pursuant to section 282.08.
new text end

(f) Before the sale of a parcel of forfeited land located in an urban area, the county auditor
may with the approval of the county board provide for the grading of the land by filling or
the removal of any surplus material from it. If the physical condition of forfeited lands is
such that a reasonable grading of the lands is necessary for the protection and preservation
of the property of any adjoining owner, the adjoining property owner or owners may apply
to the county board to have the grading done. If, after considering the application, the county
board believes that the grading will enhance the value of the forfeited lands commensurate
with the cost involved, it may approve it, and the work must be performed under the
supervision of the county or city engineer, as the case may be, and the expense paid from
the forfeited tax sale fund.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2020, 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 the former owner of the property 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; and

(4) deleted text begin any balance deleted text end new text begin the county, town or city, and school district must be paid 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. 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

Sec. 8.

Minnesota Statutes 2020, section 282.241, subdivision 1, is amended to read:

Subdivision 1.

Repurchase requirements.

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. new text begin Upon an application by such interested party to repurchase such forfeited property, new text end
the parcel of land deleted text begin may be repurchased deleted text end new text begin must be sold to the applicant new text end 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. deleted text begin 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. deleted text end 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.

new text begin EFFECTIVE DATE. new text end

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