SF 625

as introduced - 90th Legislature (2017 - 2018) Posted on 02/07/2017 08:38am

A bill for an act
relating to taxation; property; modifying interest rates; amending Minnesota Statutes
2016, sections 279.03, subdivision 2; 279.37, subdivision 2; 282.01, subdivision
4; 282.261, subdivision 2.

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

Section 1.

Minnesota Statutes 2016, section 279.03, subdivision 2, is amended to read:

Subd. 2.

new text begin Rate for new text end composite judgment new text begin ; rate for homestead composite judgment,
repurchase of forfeited homestead property, and sale of forfeited property new text end .

(a) Except
as provided in paragraph (b), amounts included in composite judgments authorized by
section 279.37, subdivision 1, are subject to interest at the rate calculated under subdivision
1a. During each calendar year, interest shall accrue on the unpaid balance of the composite
judgment from the time it is confessed until it is paid. The interest rate established at the
time the judgment is confessed is fixed for the duration of that judgment.

deleted text begin (b) A confession of judgment covering any part of a parcel classified as 1a or 1b, and
used as the homestead of the owner, is subject to interest at the rate provided in section
279.37, subdivision 2, paragraph (b). This paragraph does not apply to a relative homestead
under section 273.124, subdivision 1, paragraph (c).
deleted text end

new text begin (b) The following amounts are subject to interest as provided in paragraph (c):
new text end

new text begin (1) amounts included in composite judgments on parcels classified as 1a or 1b and used
as the homestead of the owner;
new text end

new text begin (2) amounts in contracts for repurchase of property classified as 1a or 1b at the time of
forfeiture or at the time that the repurchase application is approved; and
new text end

new text begin (3) sales of forfeited property pursuant to section 282.01, subdivision 4.
new text end

new text begin (c) By October 15 each year the commissioner shall set the interest rate under this
subdivision at the greater of (1) five percent, or (2) two percent above 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 per annum rate
specified under section 279.03, subdivision 1a. By November 1 of each year the
commissioner must certify the rate to the county auditor. 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.
new text end

new text begin (d) For the purposes of this subdivision, "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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for composite judgments, repurchase
contracts, and sales of forfeited property occurring after July 1, 2018.
new text end

Sec. 2.

Minnesota Statutes 2016, 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) deleted text begin 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 two percent above 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. deleted text end new text begin
Amounts entered in judgment bear interest at the rate provided in section 279.03, subdivision
1a, unless the parcel is classified as 1a or 1b, and is used as the homestead of the owner, in
which case the rate provided in section 279.03, subdivision 2, shall apply. A parcel that is
classified as relative homestead under section 273.124, subdivision 1, paragraph (c), is
subject to interest at the rate provided in section 279.03, subdivision 1a.
new text end

new text begin (c) Interest shall begin accruing with the date the judgment is entered. During each
calendar year, interest shall accrue on the unpaid balance of the composite judgment from
the time it is confessed until it is paid. The interest rate established at the time the judgment
is confessed is fixed for the duration of that judgment.
new text end

new text begin (d) If a default occurs in the payments under any confessed judgment, the taxes and
penalties due are subject to the interest rate specified in section 279.03, subdivision 1a,
regardless of the classification of the parcel. new text end For the purposes of this subdivision deleted text begin :
deleted text end

deleted text begin (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
deleted text end

deleted text begin (2) deleted text end "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.

deleted text begin (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.
deleted text end

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

deleted text begin (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).
deleted text end

(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,
Minnesota:

.............................. 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 for sales and repurchases occurring after
January 1, 2018.
new text end

Sec. 3.

Minnesota Statutes 2016, section 282.01, subdivision 4, is amended to read:

Subd. 4.

Sale: method, requirements, effects.

The sale authorized under subdivision
3 must be conducted by the county auditor at the county seat of the county in which the
parcels lie, except that in St. Louis and Koochiching Counties, the sale may be conducted
in any county facility within the county. The sale must not be for less than the appraised
value except as provided in subdivision 7a. The parcels must be sold for cash only, unless
the county board of the county has adopted a resolution providing for their sale on terms,
in which event the resolution controls with respect to the sale. When the sale is made on
terms other than for cash only (1) a payment of at least ten percent of the purchase price
must be made at the time of purchase, and the balance must be paid in no more than ten
equal annual installments, or (2) the payments must be made in accordance with county
board policy, but in no event may the board require more than 12 installments annually,
and the contract term must not be for more than ten years. Standing timber or timber products
must not be removed from these lands until an amount equal to the appraised value of all
standing timber or timber products on the lands at the time of purchase has been paid by
the purchaser. If a parcel of land bearing standing timber or timber products is sold at public
auction for more than the appraised value, the amount bid in excess of the appraised value
must be allocated between the land and the timber in proportion to their respective appraised
values. In that case, standing timber or timber products must not be removed from the land
until the amount of the excess bid allocated to timber or timber products has been paid in
addition to the appraised value of the land. The purchaser is entitled to immediate possession,
subject to the provisions of any existing valid lease made in behalf of the state.

deleted text begin For sales occurring on or after July 1, 1982, the unpaid balance of the purchase price is
subject to interest at the rate determined pursuant to section 549.09. deleted text end The unpaid balance of
the purchase price deleted text begin for sales occurring after December 31, 1990, deleted text end is subject to interest at the
rate deleted text begin determined deleted text end new text begin provided new text end in section 279.03, subdivision deleted text begin 1a deleted text end new text begin 2, paragraph (c) new text end . deleted text begin The interest
rate is subject to change each year on the unpaid balance in the manner provided for rate
changes in section 549.09 or 279.03, subdivision 1a, whichever, is applicable. Interest on
the unpaid contract balance on sales occurring before July 1, 1982, is payable at the rate
applicable to the sale at the time that the sale occurred.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales occurring after January 1, 2018.
new text end

Sec. 4.

Minnesota Statutes 2016, section 282.261, subdivision 2, is amended to read:

Subd. 2.

Interest rate.

The unpaid balance on any repurchase contract approved by the
county board new text begin for property classified as 1a or 1b and used as the homestead of the owner at
the time of forfeiture or at the time that the repurchase application is approved new text end is subject to
interest at the rate determined in section 279.03, subdivision deleted text begin 1a deleted text end new text begin 2 new text end . deleted text begin The interest rate is subject
to change each year on the unpaid balance in the manner provided for rate changes in section
279.03, subdivision 1a. deleted text end new text begin The unpaid balance on any other repurchase contract approved by
the county board is subject to interest at the rate determined in section 279.03, subdivision
1a, which is subject to change each year in the manner provided for in section 279.03,
subdivision 1a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for repurchases occurring after January
1, 2018.
new text end