Minnesota lawmakers could OK $109 million for property owners over sales of forfeited parcels
Updated: 12:30 p.m. March 26 | Posted: 12:39 p.m. March 25
State lawmakers plan to put up $109 million to help Minnesota counties pay back property owners who lost out on earnings when their forfeited properties were sold.
The move comes after a unanimous 2023 U.S. Supreme Court ruling that Hennepin County violated a Minneapolis woman’s rights when it sold her property for more than she owed in taxes and kept the windfall.
The ruling prompted class-action lawsuits in Minnesota and beyond as property owners aimed to recoup lost earnings.
Last week, Gov. Tim Walz and legislative leaders put forth their $541 million spending plan for the next three years. Included in it is a line item labeled the “Tyler settlement,” referring to the name of the case Tyler v. Hennepin County.
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Senate Majority Leader Erin Murphy, DFL-St. Paul, said the funds would help counties pay back property owners for the funds counties pocketed in excess of the amount that the property owners owed in taxes.
“The state has some obligation as to the counties. And in our budget, we’re going to make sure that we’re fulfilling our obligation,” Murphy said.
Because the tax forfeiture process is laid out in state law, the state is required to help Minnesota counties that enforce it, said Sen. Grant Hauschild, DFL-Hermantown. The $109 million is expected to pay back people whose properties were seized within seven years of the Tyler ruling.
Matt Hilgart, government relations manager for the Association of Minnesota Counties, said the funding could allow county governments to repay thousands of property owners. He said it was critical that the state shoulder some of the financial burden since counties followed state forfeiture law.
“We were not under the illusion that this was a broken system until the Supreme Court ruled that it was. And we are not, very humbly, in a position that we have the resources to pay back that total financial liability,” Hilgart said. “So this is good news for us.”
Hilgart said that assuming the funding gets approved at the Legislature, property owners would be able to submit a claim to a third-party administrator to be eligible for a refund.
The effort appears to have bipartisan backing at the Capitol. Sen. Warren Limmer, R-Maple Grove, said the property owners should be paid back.
“The $109 million — it’s a settlement — it’s not always going to satisfy every single property owner equally,” Limmer said. “But at the same time, it does bring an element of justice to the property owners that in some cases, through no fault of their own, couldn’t make their property tax payments.”
Lawmakers are also working on rewrites to the state’s forfeiture laws that would put them in line with the court’s ruling. Republican and Democratic legislators have introduced bills to iron out constitutional concerns with Minnesota’s law.