HF 4822

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 04/02/2024 01:15pm

A bill for an act
relating to taxation; property; modifying distribution of excess proceeds from sales
of tax-forfeited property; appropriating money; amending Minnesota Statutes
2022, sections 281.23, subdivision 2; 282.01, by adding subdivisions; 282.08.

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

Section 1.

Minnesota Statutes 2022, section 281.23, subdivision 2, is amended to read:

Subd. 2.

Form.

The notice of expiration of redemption must contain the tax parcel
identification numbers and legal descriptions of parcels subject to notice of expiration of
redemption provisions prescribed under subdivision 1. The notice must also indicate the
names of taxpayers and fee owners of record in the office of the county auditor at the time
the notice is prepared and names of those parties who have filed their addresses according
to section 276.041 and the amount of payment necessary to redeem as of the date of the
notice. At the option of the county auditor, the current filed addresses of affected persons
may be included on the notice. The notice is sufficient if substantially in the following form:

"NOTICE OF EXPIRATION OF REDEMPTION

Office of the County Auditor

County of ......................., State of Minnesota.

To all persons having an interest in lands described in this notice:

You are notified that the parcels of land described in this notice and located in the county
of ................................, state of Minnesota, are subject to forfeiture to the state of Minnesota
because of nonpayment of delinquent property taxes, special assessments, penalties, interest,
and costs levied on those parcels. The time for redemption from forfeiture expires if a
redemption is not made by the later of (1) 60 days after service of this notice on all persons
having an interest in the lands of record at the office of the county recorder or registrar of
titles, or (2) by the second Monday in May. The redemption must be made in my office.

new text begin IMPORTANT: If you believe that the value of your interest in the parcels, including
any interests in iron-bearing stockpiles, minerals, or mineral interests, may exceed the total
amount of the delinquent taxes, special assessments, penalties, interest, and costs levied on
those parcels, you must provide notice before the expiration of the period of redemption by
submitting a written statement to the county auditor. If you provide the notice, you may be
entitled to monetary compensation after forfeiture. If you do not provide the notice prior to
expiration of the redemption period, all of your interests in the property will be subject to
forfeiture.
new text end

Names (and Current Filed Addresses) for the Taxpayers and Fee Owners and Those Parties Who Have Filed Their Addresses Pursuant to section 276.041		Legal Description		Tax Parcel Number		Amount Necessary to Redeem as of Date of Notice
.		.		.		.
.		.		.		.

FAILURE TO REDEEM THE LANDS PRIOR TO THE EXPIRATION

OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND

FORFEITURE TO THE STATE OF MINNESOTA.

Inquiries as to these proceedings can be made to the County Auditor for ............... County,
whose address is set forth below.

Witness my hand and official seal this ............................ day of ................, .......

		.
		County Auditor
	(OFFICIAL SEAL)
		.
		(Address)
		.
		(Telephone)."

The notice must be posted by the auditor in the auditor's office, subject to public
inspection, and must remain so posted until at least one week after the date of the last
publication of notice, as provided in this section. Proof of posting must be made by the
certificate of the auditor, filed in the auditor's office.

Sec. 2.

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

new text begin Subd. 14. new text end

new text begin Public auction mandatory when a claim for surplus proceeds is filed. new text end

new text begin (a)
If any interested party files a written statement with the county auditor after service of the
notice required in section 281.23 and before expiration of the period of redemption,
notwithstanding anything in this chapter, the county must auction the parcels, except for
any interests in iron-bearing stockpiles, minerals, or mineral interests, which are transferred
to the state. The county must auction the property by offering it for sale as provided in
section 282.02, except that the minimum sale price for a parcel sold pursuant to this
subdivision is the sum of the delinquent taxes, special assessments, penalties, interests, and
costs levied on the parcel. If the property cannot be sold for more than the sum of the
delinquent taxes, special assessments, penalties, interest, and costs levied on those parcels,
the sale may be canceled and the parcels disposed of as otherwise provided in this chapter.
If the property is sold for more than the sum of the delinquent taxes, special assessments,
penalties, interest, and costs levied on those parcels, proceeds of the sale must be apportioned
as provided in section 282.08.
new text end

new text begin (b) If there are multiple claimants for a given property, payments under this subdivision
must be divided among the claimants according to each claimants' ownership interest in
proportion to the ownership interest of all claimants. To resolve multiple competing claims,
a county may bring an action of interpleader prior to making any payments to the claimants
under this subdivision. A county may add costs reasonably incurred in commencing and
maintaining an interpleader action to the delinquent taxes due. If a county believes that a
claimant made a claim to these proceeds in error, the county may deny the claim and the
claimant may bring a civil action in district court to challenge the county's denial.
new text end

new text begin (c) If an interested party files a written statement for a claim on surplus proceeds related
to the transfer of interests in iron-bearing stockpiles, minerals, or mineral interests to the
state with the county auditor after service of the notice required in section 281.23 and before
expiration of the period of redemption, notwithstanding anything in this chapter, the county
must commence proceedings pursuant to subdivision 15.
new text end

new text begin (d) Property subject to public auction under this subdivision may still be repurchased
prior to the sale pursuant to sections 282.012 and 282.241 to 282.324.
new text end

Sec. 3.

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

new text begin Subd. 15. new text end

new text begin Proceedings on claims for mineral interests; payments; appropriation. new text end

new text begin (a)
When required by subdivision 14, paragraph (c), a county must consult with the commissioner
of natural resources to determine if the value of a claimant's iron-bearing stockpiles, minerals,
or mineral interests transferred to the state under subdivision 14, paragraph (a), exceeds the
sum of the delinquent taxes, special assessments, penalties, interest, and costs levied on the
parcels. The commissioner of natural resources must determine the value of the claimant's
mineral interests. If the value of the iron-bearing stockpiles, minerals, or mineral rights in
a claim does not exceed the sum of the delinquent taxes, special assessments, penalties,
interest, and costs levied on the parcels, the claimant is not entitled to any payment under
this subdivision. If the value of the iron-bearing stockpiles, minerals, or mineral rights in a
claim exceeds the sum of the delinquent taxes, special assessments, penalties, interest, and
costs levied on the parcels, the claimant is entitled to a payment from the commissioner of
natural resources equal to this excess amount.
new text end

new text begin (b) If there are multiple claimants for a given property, payments under this subdivision
must be divided among the claimants according to each claimants' ownership interest in
proportion to the ownership interest of all claimants. To resolve multiple competing claims,
a county may bring an action of interpleader prior to making any payments to the claimants
under this subdivision. A county may add costs reasonably incurred in commencing and
maintaining an interpleader action to the delinquent taxes due. If a county believes that a
claimant made a claim to these proceeds in error, the county may deny the claim and the
claimant may bring a civil action in district court to challenge the county's denial.
new text end

new text begin (c) An amount necessary to make payments under this subdivision is annually
appropriated from the general fund to the commissioner of natural resources.
new text end

Sec. 4.

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

282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.

new text begin (a) new text end 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 deleted text begin to the
taxing districts interested in the land, deleted 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) any balance must be apportioned as follows:

(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.

(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.

(iii) Any balance remaining must be apportioned as follows: 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.

new text begin (b) If a property is sold pursuant to section 282.01, subdivision 14, after sale, and
apportionment pursuant to paragraph (a), clauses (1) to (3), any additional proceeds must
be apportioned as follows:
new text end

new text begin (1) the portion required to pay the sum of all delinquent taxes and assessments not paid
under paragraph (a) that accrued or would have accrued if the parcel had not forfeited to
the state, together with penalties, costs, and interest at the rate fixed by law for the respective
years, must be apportioned to the governmental subdivisions entitled to it;
new text end

new text begin (2) the portion required to pay attorney fees and costs reasonably incurred or expended
in connection with the delinquency proceedings and tax sale must be apportioned to the
governmental subdivision entitled to it; and
new text end

new text begin (3) any balance must be returned to the interested party making a claim to the proceeds.
If the county disputes a party's claim to the proceeds, it may interplead the funds in the
district court. Any funds returned to the county following interpleader may be apportioned
as provided in paragraph (a), clause (4). A county may add costs reasonably incurred in
commencing and maintaining an interpleader action to the delinquent taxes due. The county
may collect these costs prior to apportioning proceeds under this clause.
new text end