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SF 5440

as introduced - 93rd Legislature (2023 - 2024) Posted on 04/16/2024 09:09am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to taxation; property; modifying interest rate charged on confessions of
judgments for homestead property; amending Minnesota Statutes 2022, section
279.37, subdivision 2.


Section 1.

Minnesota Statutes 2022, section 279.37, subdivision 2, is amended to read:

Subd. 2.

Installment payments.

(a) The owner of any such parcel, or any person to
whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
make and file with the county auditor of the county in which the parcel is located a written
offer to pay the current taxes each year before they become delinquent, or to contest the
taxes under chapter 278 and agree to confess judgment for the amount provided, as
determined by the county auditor. By filing the offer, the owner waives all irregularities in
connection with the tax proceedings affecting the parcel and any defense or objection which
the owner may have to the proceedings, and also waives the requirements of any notice of
default in the payment of any installment or interest to become due pursuant to the composite
judgment to be so entered. Unless the property is subject to subdivision 1a, with the offer,
the owner shall (i) tender one-tenth of the amount of the delinquent taxes, costs, penalty,
and interest, and (ii) tender all current year taxes and penalty due at the time the confession
of judgment is entered. In the offer, the owner shall agree to pay the balance in nine equal
installments, with interest as provided in section 279.03, payable annually on installments
remaining unpaid from time to time, on or before December 31 of each year following the
year in which judgment was confessed.

(b) For property which qualifies under section 279.03, subdivision 2, paragraph (b), each
year the commissioner shall set the interest rate for offers made under paragraph (a) at the
greater of five percent or deleted text begin two percent abovedeleted text end the prime rate charged by banks during the
six-month period ending on September 30 of that year, rounded to the nearest full percent,
provided that the rate must not exceed the maximum annum rate specified under section
279.03, subdivision 1a. The rate of interest becomes effective on January 1 of the immediately
succeeding year. The commissioner's determination under this subdivision is not a rule
subject to the Administrative Procedure Act in chapter 14, including section 14.386. If a
default occurs in the payments under any confessed judgment entered under this paragraph,
the taxes and penalties due are subject to the interest rate specified in section 279.03.

For the purposes of this subdivision:

(1) the term "prime rate charged by banks" means the average predominant prime rate
quoted by commercial banks to large businesses, as determined by the Board of Governors
of the Federal Reserve System; and

(2) "default" means the cancellation of the confession of judgment due to nonpayment
of the current year tax or failure to make any installment payment required by this confessed
judgment within 60 days from the date on which payment was due.

(c) The interest rate established at the time judgment is confessed is fixed for the duration
of the judgment. By October 15 of each year, the commissioner of revenue must determine
the rate of interest as provided under paragraph (b) and, by November 1 of each year, must
certify the rate to the county auditor.

(d) A qualified property owner eligible to enter into a second confession of judgment
may do so at the interest rate provided in paragraph (b).

(e) Repurchase agreements or contracts for repurchase for properties being repurchased
under section 282.261 are not eligible to receive the interest rate under paragraph (b).

(f) The offer must be substantially as follows:

"To the court administrator of the district court of ........... county, I, ....................., am
the owner of the following described parcel of real estate located in .................... county,

.............................. Upon that real estate there are delinquent taxes for the year ........., and
prior years, as follows: (here insert year of delinquency and the total amount of delinquent
taxes, costs, interest, and penalty). By signing this document I offer to confess judgment in
the sum of $...... and waive all irregularities in the tax proceedings affecting these taxes and
any defense or objection which I may have to them, and direct judgment to be entered for
the amount stated above, minus the sum of $............, to be paid with this document, which
is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and interest stated above.
I agree to pay the balance of the judgment in nine or four equal, annual installments, with
interest as provided in section 279.03, payable annually, on the installments remaining
unpaid. I agree to pay the installments and interest on or before December 31 of each year
following the year in which this judgment is confessed and current taxes each year before
they become delinquent, or within 30 days after the entry of final judgment in proceedings
to contest the taxes under chapter 278.

Dated .............., ......."

new text begin EFFECTIVE DATE. new text end

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