Minnesota Legislature Passes Reform on Tax-Delinquent Property Handling

Minnesota lawmakers successfully passed a crucial piece of legislation amidst the chaos of the legislative session ending late Sunday night. The bill in question focuses on reforming the state’s process for handling tax-delinquent property, a necessary fix following a U.S. Supreme Court decision last year that deemed the current system unconstitutional.

The Supreme Court ruling came after Hennepin County violated the constitutional rights of 94-year-old Geraldine Tyler, a Minneapolis resident. Tyler’s condo was sold for more than she owed in property taxes and fees, with the county keeping the excess money. The court ruled that Tyler was entitled to the surplus funds, prompting lawmakers to quickly address the issue to avoid future legal challenges.

Representative Sandra Feist, the lead House author of the bill, emphasized the importance of creating a process to return excess money to property owners after a forfeiture and ensuring clear communication with property owners throughout the process. The new legislation, included in a comprehensive omnibus bill passed just before the deadline, mandates that tax-forfeited property be auctioned publicly, with surplus funds returned to the rightful owners.

Various groups, including the AARP, Legal Aid, and the Pacific Legal Foundation representing Geraldine Tyler, supported the bill’s provisions. Kileen Lindgren, the foundation’s legal policy manager, praised the legislation as a model for other states revising their forfeiture laws in light of the Tyler decision.

While counties may no longer profit from excess funds in tax-forfeited property sales, they support the bill’s efforts to establish a fair and constitutional process moving forward. Matt Hilgart, a lobbyist for the Association of Minnesota Counties, acknowledged concerns about the bill’s implementation but expressed gratitude for the Legislature’s action in rectifying past injustices.

In addition to the reform bill, lawmakers also approved $109 million to settle class-action lawsuits stemming from the Tyler decision, providing further relief to affected property owners. Governor Tim Walz signed the bill into law, solidifying Minnesota’s commitment to upholding property rights and ensuring fair treatment in tax forfeiture cases.