Duluth’s tax-forfeited land
When property taxes are not collected on a piece of land it becomes confiscated by the state. In St. Louis County there is 4.5 million acres of land. Of that 4.5 million acres almost 900,000 of it is tax-forfeited land and almost 5,500 of that land is located in the City of Duluth.
Confiscating land is a last resort measure that the citizens of Minnesota allow the government and courts to do in order to reimburse the taxing districts for the loss of revenue.
According to the St. Louis County website, “the complex set of provisions gives the taxpayer every chance to pay and makes the taxpayer clearly aware of the consequences of not paying the taxes before the confiscation of the real property.”
Mark Weber, Land Commissioner for St. Louis County Land and Minerals Department, explained the process from delinquent taxes to forfeiture:
1. Taxes become delinquent as of January the year following when the taxes were due.
2. Notification to the taxpayer of record is given.
3. District Court enters judgment against the property.
4. Judgment is entered as of April in the delinquent year.
5. “Period of redemption” begins — depending on ownership, use and location of the property, the period of redemption is one or three years from judgment. During this period, the owner, or anyone else having interests in the property, can pay the delinquent taxes and forfeiture will not occur.
6. If the property taxes remain unpaid after the statutory “expiration of redemption period”, the land forfeits to the State of Minnesota. The county is then responsible for management of the tax forfeited land.
After land is forfeited there is a time period in which the land can be repurchased by the previous owner. If the owner chooses not to repurchase the land it is then classified as either public or private ownership. If they decide to have the land as private it will go up for auction.
Should the previous owner decide to repurchase the land they have to go through the repurchase process. During the time that the land is forfeited the owner will have to pay all the taxes, assessments, and maintenance costs obtained by the county. They will also have to fill out an application for repurchase.
During the classification process, according to the 2016 Minnesota Statute,: “When acting on behalf of the state under laws allowing the county board to classify and manage tax-forfeited lands held by the state in trust for the local units as provided in section 281.25, the county board has the discretion to decide that some lands in public ownership should be retained and managed for public benefits while other lands should be returned to private ownership.”
Mark Weber explained it more simply; “The County Board has the discretion to decide that some lands in public ownership should be retained and managed for public benefits, while other lands should be returned to private ownership.”
Public ownership is also known as conservation and private ownership as non-conservation. Mark Weber further explained conservation and non-conservation; “Large, contiguous blocks of tax-forfeited land are generally classified as conservation and are to be retained for management and public benefits while smaller, isolated parcels located with access and utilities are generally more suitable for sale, and therefore are classified as non-conservation.”
When determining whether the land will be conservation or non-conservation, according to the 2016 Minnesota Statute, they look at the following: “the board shall consider the present use of adjacent lands, the productivity of the soil, the character of forest or other growth, accessibility of lands to established roads, schools, and other public services, their peculiar suitability or desirability for particular uses, and the suitability of the forest resources on the land for multiple use and sustained yield management. The classification, furthermore, must: (1) encourage and foster a mode of land utilization that will facilitate the economical and adequate provision of transportation, roads, water supply, drainage, sanitation, education, and recreation; (2) facilitate reduction of governmental expenditures; (3) conserve and develop the natural resources; and (4) foster and develop agriculture and other industries in the districts and places best suited to them.”
The 2016 Minnesota Statute stated non-conservation tax-forfeited land can be used by the public if it is authorized by the commissioner of revenue. The following is considered as ‘authorized public use’:
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(1) a road, or right-of-way for a road;
(2) a park that is both available to, and accessible by, the public that contains improvements such as campgrounds, playgrounds, athletic fields, trails, or shelters;
(3) trails for walking, bicycling, snowmobiling, or other recreational purposes, along with a reasonable amount of surrounding land maintained in its natural state;
(4) transit facilities for buses, light rail transit, commuter rail or passenger rail, including transit ways, park-and-ride lots, transit stations, maintenance and garage facilities, and other facilities related to a public transit system;
(5) public beaches or boat launches;
(6) public parking;
(7) civic recreation or conference facilities; and
(8) public service facilities such as fire halls, police stations, lift stations, water towers, sanitation facilities, water treatment facilities, and administrative offices.
Conservation tax-forfeited land is described as the following in the 2016 Minnesota Statute: (1) creation or preservation of wetlands; (2) drainage or storage of storm water under a storm water management plan; or (3) preservation, or restoration and preservation, of the land in its natural state. If the land is used for one of the latter it can be sold for less than market value.
The Minnesota Statute stated that, “conservation lands must be held under the supervision of the county board of the county within which the parcels lie and must not be conveyed or sold unless the lands are:
(1) reclassified as nonconservation lands;
(2) conveyed to a governmental subdivision of the state under subdivision 1a;
(3) released from the trust in favor of the taxing districts as provided in paragraph (b); or
(4) conveyed or sold under the authority of another general or special law.”
The county board may hold a meeting for the purpose of reclassifying tax-forfeited land that has not been sold or released from the trust if it is deemed appropriate. The procedures for reclassification are the same as those required for an original classification, according to the 2016 Minnesota Statute. It is also stated that the county board must give notice, no more than 90 days and no less than 60 days before the date of the meeting, of its intent to meet for the purpose of reclassifying tax-forfeited land.
According to the 2016 Minnesota Statute, “The sale authorized under subdivision 3 (non-conservation land) 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 Land and Minerals Department are responsible for tax-forfeited land put up the auctions three times in a year, the highest bidder gets the land. If land is not sold at auction it then goes up for sale on a first-come, first-serve basis.
According to the St. Louis County website, “For each parcel sold, a down payment of 10% of the purchase price or $500, whichever is greater. For those parcels for which there is an estimated volume of timber, the appraised value of the timber must be paid in full at the time of purchase, in addition to the down payment.”
Mark Weber explained the effect tax-forfeited land has on Duluth’s economy,
“Tax forfeited lands are held in trust for the local taxing districts. The Land Commissioner has a fiduciary responsibility to ensure financial return to the County and taxing districts through the sale of land, timber, gravel, peat, minerals and other commodities. Tax forfeited lands provide timber for the forest products industry and other raw materials for local industry. The net proceeds from the sale or rental of tax forfeited land, or from the sale of products from tax forfeited land are apportioned to the local taxing districts (county, city or town, and school district) as required by Minnesota Statute 282.08.”
When asked what the biggest pros and cons about tax-forfeited land were Mark Weber said,
“Tax forfeited lands are considered ‘public lands’ and therefore are open for all forms of public recreation. These lands also provide raw material for our timber, mining and other local industries, while providing financial return to the local taxing districts. St. Louis County has so much public land (federal, state and county) that there is less private land available to generate tax revenue to pay for goods and services.”
The next auction will be held on June 8th at 10:00 a.m. at the ADD Shriners Center. A list of the current available land sale list is available here. The St. Louis County tax-forfeited land booklet is available here.
