SF 2238

as introduced - 90th Legislature (2017 - 2018) Posted on 03/24/2017 09:18am

A bill for an act
relating to taxation; giving county auditors additional authority; allowing counties
to sell tax-forfeited lands online; making technical and conforming changes;
amending Minnesota Statutes 2016, sections 276.017, subdivision 3; 281.173,
subdivision 2; 281.174, subdivision 3; 282.01, subdivision 4, by adding
subdivisions; 282.016; 282.018, subdivision 1; 282.02; 282.241, subdivision 1;
282.322; proposing coding for new law in Minnesota Statutes, chapter 281;
repealing Minnesota Statutes 2016, section 281.22.

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

Section 1.

Minnesota Statutes 2016, section 276.017, subdivision 3, is amended to read:

Subd. 3.

deleted text begin United States Postal Service postmark deleted text end new text begin Proof of timely payment new text end .

The
postmark new text begin or registration mark new text end of the United States Postal Service qualifies as proof of timely
mailing deleted text begin for this section. If the payment is sent by United States registered mail, the date of
registration is the postmark date. If the payment is sent by United States certified mail, the
date of the United States Postal Service postmark on the receipt given to the person presenting
the payment for delivery is the date of mailing deleted text end . Mailing, or the time of mailing, may also
be established by new text begin a delivery service's records or new text end other available evidence deleted text begin except that deleted text end new text begin . new text end The
postmark of a private postage meter new text begin or Internet stamp new text end may not be used as proof of a timely
mailing made under this section.

Sec. 2.

Minnesota Statutes 2016, section 281.173, subdivision 2, is amended to read:

Subd. 2.

Summons and complaint.

Any city, new text begin county, new text end housing and redevelopment
authority, port authority, or economic development authority, in which the premises are
located may commence an action in district court to reduce the period otherwise allowed
for redemption under this chapter. The action must be commenced by the filing of a
complaint, naming as defendants the record fee owners or the owner's personal representative,
or the owner's heirs as determined by a court of competent jurisdiction, contract for deed
purchasers, mortgagees, assigns of any of the above, the taxpayers as shown on the records
of the county auditor, the Internal Revenue Service of the United States and the Revenue
Department of the state of Minnesota if tax liens against the owners or contract for deed
purchasers have been recorded or filed; and any other person the plaintiff determines should
be made a party. The action shall be filed in district court for the county in which the premises
are located. The complaint must identify the premises by legal description. The complaint
must allege (1) that the premises are abandoned, (2) that the tax judgment sale pursuant to
section 280.01 has been made, and (3) notice of expiration of the time for redemption has
not been given.

The complaint must request an order reducing the redemption period to five weeks.
When the complaint has been filed, the court shall issue a summons commanding the person
or persons named in the complaint to appear before the court on a day and at a place stated
in the summons. The appearance date shall be not less than 15 nor more than 25 days from
the date of the issuing of the summons. A copy of the filed complaint must be attached to
the summons.

Sec. 3.

Minnesota Statutes 2016, section 281.174, subdivision 3, is amended to read:

Subd. 3.

Summons and complaint.

Any city, new text begin county, new text end housing and redevelopment
authority, port authority, or economic development authority in which the property is located
may commence an action in district court to reduce the period otherwise allowed for
redemption under this chapter from the date of the requested order. The action must be
commenced by the filing of a complaint, naming as defendants the record fee owners or the
owner's personal representative, or the owner's heirs as determined by a court of competent
jurisdiction, contract for deed purchasers, mortgagees, assigns of any of the above, the
taxpayers as shown on the records of the county auditor, the Internal Revenue Service of
the United States and the revenue department of the state of Minnesota if tax liens against
the owners or contract for deed purchasers have been recorded or filed, and any other person
the plaintiff determines should be made a party. The action shall be filed in district court
for the county in which the property is located. The complaint must identify the property
by legal description. The complaint must allege (1) that the property is vacant, (2) that the
tax judgment sale under section 280.01 has been made, and (3) notice of expiration of the
time for redemption has not been given.

The complaint must request an order reducing the redemption period to five weeks.
When the complaint has been filed, the court shall issue a summons commanding the person
or persons named in the complaint to appear before the court on a day and at a place stated
in the summons. The appearance date shall be not less than 15 nor more than 25 days from
the date of the issuing of the summons, except that, when the United States of America is
a party, the date shall be set in accordance with applicable federal law. A copy of the filed
complaint must be attached to the summons.

Sec. 4.

new text begin [281.231] MAINTENANCE; EXPENDITURE OF PUBLIC FUNDS.
new text end

new text begin If the county auditor provides notice as required by section 281.23, the state, agency,
political subdivision, or other entity that becomes the fee owner or manager of a property
as a result of forfeiture due to nonpayment of real property taxes is not required to expend
public funds to maintain any servitude, agreement, easement, or other encumbrance affecting
the property. The fee owner or manager of a property may, at its discretion, spend public
funds necessary for the maintenance, security, or management of the property.
new text end

Sec. 5.

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

Subd. 4.

Sale deleted text begin : deleted text end new text begin ; new text end method deleted text begin , deleted text end new text begin ; new text end requirements deleted text begin , deleted text end new text begin ; new text end effects.

new text begin (a) new text end 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.

new text begin (b) new text end 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. The unpaid balance
of the purchase price for sales occurring after December 31, 1990, is subject to interest at
the rate determined in section 279.03, subdivision 1a. 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.

new text begin (c) Notwithstanding subdivision 7, a county board may by resolution provide for listing
and selling individual parcels by other means, including through a real estate broker.
However, if the buyer under this paragraph could have repurchased a parcel of property
under section 282.012 or 282.241, that buyer may not purchase that same parcel of property
at the sale under this subdivision for a purchase price less 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. This subdivision must be liberally construed to encourage the sale and use of
tax-forfeited land to eliminate nuisances and dangerous conditions and to increase compliance
with land use ordinances.
new text end

Sec. 6.

Minnesota Statutes 2016, section 282.01, is amended by adding a subdivision to
read:

new text begin Subd. 4a. new text end

new text begin Sale by sealed bid. new text end

new text begin Notice of public sale conducted by sealed bid must comply
with section 282.02, except that the last publication of the notice must be at least 30 days
before the date of the sale. Sealed bids must also be solicited by mailing notices to prospective
bidders who request that their names be kept on file with the appropriate county official.
Prospective bidders must renew their filing in writing every two years to remain on the list.
All bids must be sealed when they are received and must be opened in public at the hour
stated in the notice. The land must be sold to the highest bidder but in no event may the
land be sold for less than its appraised value. All original bids and all documents pertaining
to the award of a sale must be retained by the county auditor and made part of a permanent
file or record. The file or record must remain open to public inspection for ten years after
the date of the sale.
new text end

Sec. 7.

Minnesota Statutes 2016, section 282.01, is amended by adding a subdivision to
read:

new text begin Subd. 13. new text end

new text begin Online auction. new text end

new text begin A county board, or a county auditor if the auditor has been
delegated such authority under section 282.135, may sell tax-forfeited lands through an
online auction. When an online auction is used to sell tax-forfeited lands, the county auditor
must post a physical notice of the online auction and must publish a notice of the online
auction on the county's Web site not less than ten days before the online auction begins, in
addition to any other notice required.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales of tax-forfeited property that
occur on or after August 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 282.016, is amended to read:

282.016 PROHIBITED PURCHASERS.

(a) A county auditor, county treasurer, county attorney, court administrator of the district
court, county assessor, supervisor of assessments, deputy or clerk or an employee of such
officer, a commissioner for tax-forfeited lands or an assistant to such commissioner, must
not become a purchaser, either personally or as an agent or attorney for another person, of
the properties offered for sale under the provisions of this chapter in the county for which
the person performs duties. deleted text begin A person prohibited from purchasing property under this section
must not directly or indirectly have another person purchase it on behalf of the prohibited
purchaser for the prohibited purchaser's benefit or gain.
deleted text end

(b) Notwithstanding paragraph (a), such officer, deputy, clerk, or employee or
commissioner for tax-forfeited lands or assistant to such commissioner may (1) purchase
lands owned by that official at the time the state became the absolute owner thereof or (2)
bid upon and purchase forfeited property offered for sale under the alternate sale procedure
described in section 282.01, subdivision 7a.

new text begin (c) In addition to the persons identified in paragraph (a), a county auditor may prohibit
other persons and entities from becoming a purchaser, either personally or as an agent or
attorney for another person or entity, of the properties offered for sale under this chapter in
the following circumstances:
new text end

new text begin (1) the person or entity owns another property within the county for which there are
delinquent taxes owing;
new text end

new text begin (2) the person or entity has held a rental license in the county and the license has been
revoked within the last five years;
new text end

new text begin (3) the person or entity has been the vendee of a contract for purchase of a property
offered for sale under this chapter, which contract has been canceled within the last five
years;
new text end

new text begin (4) the person or entity owns another property within the county for which there is an
unresolved housing code violation, including an unpaid charge or fine; or
new text end

new text begin (5) the person or entity has acted as a seller in four or more contracts for deed involving
residential real property during the 12-month period that precedes either:
new text end

new text begin (i) the date on which the purchaser executes a purchase agreement under section 559.202;
or
new text end

new text begin (ii) if there is no purchase agreement, the date on which the purchaser executes a contract
for deed under section 559.202.
new text end

new text begin (d) A person prohibited from purchasing property under this section must not directly
or indirectly have another person purchase the property on behalf of the prohibited purchaser
for the prohibited purchaser's benefit or gain.
new text end

Sec. 9.

Minnesota Statutes 2016, section 282.018, subdivision 1, is amended to read:

Subdivision 1.

Land on or adjacent to public waters.

(a) All land which is the property
of the state as a result of forfeiture to the state for nonpayment of taxes, regardless of whether
the land is held in trust for taxing districts, and which borders on or is adjacent to meandered
lakes and other public waters and watercourses, and the live timber growing or being thereon,
is hereby withdrawn from sale except as hereinafter provided. The authority having
jurisdiction over the timber on any such lands may sell the timber as otherwise provided by
law for cutting and removal under such conditions as the authority may prescribe in
accordance with approved, sustained yield forestry practices. The authority having jurisdiction
over the timber shall reserve such timber and impose such conditions as the authority deems
necessary for the protection of watersheds, wildlife habitat, shorelines, and scenic features.
Within the area in Cook, Lake, and St. Louis counties described in the Act of Congress
approved July 10, 1930 (46 Stat. 1020), the timber on tax-forfeited lands shall be subject
to like restrictions as are now imposed by that act on federal lands.

(b) Of all tax-forfeited land bordering on or adjacent to meandered lakes and other public
waters and watercourses and so withdrawn from sale, a strip two rods in width, the ordinary
high-water mark being the waterside boundary thereof, and the land side boundary thereof
being a line drawn parallel to the ordinary high-water mark and two rods distant landward
therefrom, hereby is reserved for public travel thereon, and whatever the conformation of
the shore line or conditions require, the authority having jurisdiction over such lands shall
reserve a wider strip for such purposes.

(c) Any tract or parcel of land which has 150 feet or less of waterfront may be sold by
the authority having jurisdiction over the land, in the manner otherwise provided by law
for the sale of such lands, if the authority determines that it is in the public interest to do
so. If the authority having jurisdiction over the land is not the commissioner of natural
resources, the land may not be offered for sale without the prior approval of the commissioner
of natural resources.

(d) Where the authority having jurisdiction over lands withdrawn from sale under this
section is not the commissioner of natural resources, the authority may submit proposals
for disposition of the lands to the commissioner. The commissioner of natural resources
shall evaluate the lands and their public benefits and make recommendations on the proposed
dispositions to the committees of the legislature with jurisdiction over natural resources.
The commissioner shall include any recommendations of the commissioner for disposition
of lands withdrawn from sale under this section over which the commissioner has jurisdiction.
The commissioner's recommendations may include a public sale, sale to a private party,
acquisition by the Department of Natural Resources for public purposes, or a cooperative
management agreement with, or transfer to, another unit of government.

new text begin (e) Notwithstanding this subdivision, a county may sell property governed by this section
upon written authorization from the commissioner of natural resources. Before selling or
conveying lands under this subdivision, the county board must give notice of its intent to
meet for that purpose as provided in section 282.01, subdivision 1.
new text end

Sec. 10.

Minnesota Statutes 2016, section 282.02, is amended to read:

282.02 LIST OF LANDS FOR SALE; NOTICE new text begin ; ONLINE AUCTIONS
PERMITTED new text end .

new text begin (a) new text end Immediately after classification and appraisal of the land, and after approval by the
commissioner of natural resources when required pursuant to section 282.01, subdivision
3, the county board shall provide and file with the county auditor a list of parcels of land to
be offered for sale. This list shall contain a description of the parcels of land and the appraised
value thereof. The auditor shall publish a notice of the intended public sale of such parcels
of land and a copy of the resolution of the county board fixing the terms of the sale, if other
than for cash only, by publication once a week for two weeks in the official newspaper of
the county, the last publication to be not less than ten days previous to the commencement
of the sale.

new text begin (b) new text end The notice shall include the parcel's description and appraised value. The notice shall
also indicate the amount of any special assessments which may be the subject of a
reassessment or new assessment or which may result in the imposition of a fee or charge
pursuant to sections 429.071, subdivision 4, 435.23, and 444.076. The county auditor shall
also mail notice to the owners of land adjoining the parcel to be sold. For purposes of this
section, "owner" means the taxpayer as listed in the records of the county auditor.

new text begin (c) new text end If the county board deleted text begin of St. Louis or Koochiching Counties deleted text end determines that the sale
shall take place in a county facility other than the courthouse, the notice shall specify the
facility and its location. new text begin If the county board determines that the sale shall take place as an
online auction under section 282.01, subdivision 13, the notice must specify the auction
Web site and the date of the auction.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales of tax-forfeited property that
occur on or after August 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 282.241, subdivision 1, is amended to read:

Subdivision 1.

Repurchase requirements.

new text begin (a) new text end 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. The parcel of land may be repurchased 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. Except
for property deleted text begin which deleted text end new text begin that new text end was homesteaded on the date of forfeiture, repurchase is permitted
during deleted text begin one year deleted text end new text begin six months new text end 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. 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.

new text begin (b) new text end 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 January 1, 2018.
new text end

Sec. 12.

Minnesota Statutes 2016, section 282.322, is amended to read:

282.322 FORFEITED LANDS LIST.

The county board of any county may file a list of forfeited lands with the county auditor,
if the board is of the opinion that such lands may be acquired by the state or any municipal
subdivision deleted text begin thereof deleted text end new text begin of the state new text end for public purposes. Upon the filing of deleted text begin such deleted text end new text begin the new text end list new text begin of
forfeited lands, new text end the county auditor shall withhold said lands from repurchase. If no proceeding
deleted text begin shall be deleted text end new text begin is new text end started to acquire such lands by the state or some municipal subdivision deleted text begin thereof deleted text end new text begin
of the state new text end within one year after the filing of deleted text begin such deleted text end new text begin the new text end list new text begin of forfeited lands, new text end the county
board shall withdraw deleted text begin said deleted text end new text begin the new text end list and thereafter new text begin , if the property was classified as
nonhomestead at the time of forfeiture, new text end the owner deleted text begin shall have one year deleted text end new text begin has not more than six
months new text end in which to repurchase.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 13. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 281.22, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 17-4288

281.22 COUNTY AUDITOR TO GIVE NOTICE.

In case any parcel of land bid in for the state at any tax judgment sale heretofore held has not been sold or assigned to an actual purchaser by one year before the expiration of the stated period of redemption of such parcel, it shall be the duty of the county auditor thereupon forthwith to give notice of expiration of the time for redemption of such parcel, as herein provided. Such notice shall be given and all other things done with respect to all such parcels, as provided by section 281.23, except that the notice shall state that the time for redemption will expire one year after service of notice and the filing of proof thereof, instead of 60 days. Otherwise, all the provisions of section 281.23 shall apply to and govern the corresponding matters under this section.

The time for redemption of any parcel of land as to which notice of expiration has been given, as provided in this section, shall expire one year after the giving of such notice and the filing of proof thereof in the office of the county auditor, unless such parcel shall theretofore be assigned to an actual purchaser, as herein provided.