BY PRESIDENT STOVER:
RESOLVED, that, in accordance with M.S.A. Section 410.12, subd. 7, the council shall, upon two weeks published notice, hold a public hearing on March 12, 2007, in the council chambers at City Hall at 7:00 p.m., or as soon thereafter as hearing can be commenced, on a proposed ordinance amending Section 69 of the Charter, to eliminate penalties and interest on assessments which are levied on a property after it is forfeited for nonpayment of taxes.
BE IT FURTHER RESOLVED, that the city clerk shall cause to be published in the Duluth News Tribune a notice of said hearing, and containing the text of the proposed ordinance, as required by law; the notice to be in the following form:
NOTICE OF HEARING
Pursuant to Minnesota Statutes Annotated, Section 410.12, subd. 7, notice is hereby given by city of Duluth that on March 12, 2007, at 7:00 p.m., or as soon thereafter as hearing can be commenced, in the city council chamber at Duluth City Hall the city council of Duluth will conduct a public hearing on the question of adoption of an ordinance amending Section 69 of the City Charter in the manner set forth as follows:
[text of proposed ordinance]
STATEMENT OF PURPOSE: This resolution sets a legally required public hearing on a proposal to change the City Charter to eliminate penalties and interest on assessments levied on property that is tax forfeit at the time of the levy.
ORDINANCE NO. __________
BY PRESIDENT STOVER:
The city of Duluth does ordain:
Section 1. That Section 69 of the 1912 Charter of the city of Duluth, as amended, be amended to read as follows:
Section 69. Each assessment not paid on or before forty (40) days after the publication of the notice directing payment shall be deemed delinquent except as hereinafter provided for, and a penalty of ten percent (10%) shall thereupon be added, unless an extension of the assessment shall have been made by the council, as provided for in the next preceding Section. All installments of extended assessments shall be deemed delinquent if not paid at the time fixed for payment in the extension, and when delinquent a ten percent (10%) penalty shall in each case be added except as hereinafter provided for; provided, however, that no penalty or interest shall accrue or be charged against any property which is assessed during such time as it is owned by the state of Minnesota pursuant to forfeiture for nonpayment of real estate taxes until said property is redeemed pursuant to Minnesota Statutes, Chapter 281, or any successor statute. Every assessment shall be a lien upon the property against which the assessment is made, from the time such assessment is confirmed by the council.
Section 2. That accrued by unpaid penalties or interest or both arising under Section 69 of the 1912 Home Rule Charter of the city of Duluth, as amended, on property which is presently owned by the state of Minnesota pursuant to forfeiture for nonpayment of real estate taxes are hereby forgiven and deemed to be no longer owing.
Section 3. That this ordinance shall take effect 90 days after its passage and publication.
STATEMENT OF PURPOSE: The purpose of this ordinance is to amend the City Chater to eliminate penalties and interest on assessments which are levied after property goes tax forfeit.
Presently, if property goes tax forfeit with unpaid assessments against it, those assessments are wiped out through the forfeiture process. They can be reinstituted once the property is sold out of forfeiture but the net result is that during the time the property is tax forfeit, penalties and interest do not accrue.
However, under the present laws, if the assessment is levied after the property goes forfeit, the assessment stays in force during the time its tax forfeit (the state does not pay the assessments) and penalties and interest continue to build up, often to the point where they discourage people from buying the property out of forfeiture. This results in discouraging reuse of the property and its return to the property tax tolls.
This Charter amendment would cause the imposition of penalties and interest to be held in abeyance during the time the property was tax forfeit and owned by the state and would commence imposition of penalties and interest only after it was sold by the state to a third party. The result would be that assessment on property which goes tax forfeit during the pendency of the assessment would be treated the same, whether it went tax forfeit before the date the assessment was levied or after.