PROPOSED LEGISLATIVE REVISIONS
Tennessee Association of Property Tax Professionals
September 14, 2012
NOTICE: The following draft of proposed legislative changes to
delinquent property tax statutes should be viewed as the latest version of
the proposals. The TAPTP Legislative Committee has put in many
hours reviewing and debating the merits of the proposals. The draft,
which represents a compromise by the differing members such as urban
and rural representatives, is now being posted on the association’s
website and shared with other associations representing county and city
interests for your consideration. It is very important that all of our
members and partners in the collection of delinquent property taxes
review the proposals and give us the benefit of their knowledge and
experience.
Please forward us your questions, concerns and suggestions by
October 5, 2012. The TAPTP Legislative Committee will discuss all
matters presented to it and make a final recommendation no later than
October 31, 2012 to be ready for the next session of the General
Assembly. We will work with our partners and legislative sponsors in
deciding how to best present the proposals to the legislature. Thank you
for your time and participation in the revision of our delinquent property
tax statutes.
Please send your comments and suggestions to the
TAPTP Legislative Committee via email to:
mroberts@yosrob.com and leighoneill@eplus.net
Executive Summary
Tennessee’s property tax collection statutes have been modified in a disparate, as needed fashion
for the past 200 years. This has led to a patchwork of statutes with no uniformity in their
language leading to ambiguities in the law, with issues being addressed that do not exist in the
modern era, and with the assumption of legal authority that does not exist since the entry of
certain landmark U.S. Supreme court cases.
These statutes need to be revised to be made fair, easy to understand, clearly defined, enforceable
at minimal cost, and efficient to implement. These statutes must balance the government’s need
for the prompt and efficient collection of property taxes, which are one of its main sources of
revenue, with the protection of the property rights of property owners and of the rights of the
owners of other interests such as lien holders. They must also balance those rights with the
rights of non-delinquent tax payers, whose property values may suffer as delinquent tax
properties are often blighted properties and who end up paying a larger share of the tax burden.
The Tennessee Association of Property Tax Professionals (“TAPTP”), in this document, has
diligently worked to revise Tennessee’s property tax collection statutes to strike a balance
between all of the varying rights involved and to suggest solutions to any problems that have
arisen since the laws were first written. As a result, the suggested solutions should reduce
government waste, improve property values for those individuals who buy properties at
delinquent tax sales, improve property values of those persons who own property next to parcels
sold at delinquent tax sales, improve the likelihood that title insurance companies will feel more
comfortable issuing title insurance, and still provide adequate protection to delinquent property
tax payers and others with an interest in the property.
The revisions have been broken into five sections with each one addressing issues in a different
facet of the tax collection process. The sections are: (1) Administrative Issues, (2) Tax Suit and
Civil Procedure Issues, (3) Sale Issues, (4) Post-Sale Issues, and (5) Miscellaneous Issues. Each
section is further divided into sub-sections with the relevant statute(s) noted in the sub-section’s
heading. The reasoning behind a proposed revision is set forth immediately after the subsection’s heading and is in italics. Any word or words to be deleted in a statute are denoted with
a line through them. Any word or words to be added have been highlighted or shaded.
Page 2 of 28
TABLE OF CONTENTS
TOPIC
PAGE
NUMBER
5
5
5-6
6
6-7
7
I.
ADMINISTRATIVE ISSUES
a. Definitions (67-5-105)
b. Pre-lawsuit notices (67-5-2401 and 2402)
c. Annual property list (67-5-2403)
d. Home Rule penalty & interest (67-5-2422)
e. Bar to collection (67-5-1806)
II.
TAX SUIT AND CIVIL PROCEDURE ISSUES
a. Filing suit
i. Annual mass lawsuit (67-5-2405)
ii. Municipal right to sue separately to collect taxes (6-55-202)
iii. Personal property, public utility, and other taxes (67-5-2003)
b. Delinquent Tax Attorneys
i. Attorneys’ fees when in-house counsel used (67-5-2001)
ii. Turnover of lists to attorney and additional fees in certain
circumstances (67-5-2404)
c. In rem/in personam (67-5-2103)
d. Consolidation of taxes in suit (67-5-2409)
e. Notice and service of process (67-5-2415)
f. Evidence in delinquent tax suits (67-5-2423)
g. Tax Sale Notice (67-5-2502)
h. Waiver of certain taxes and charges (67-5-2801)
8
8
8-9
9
9-11
11
11-12
12
III.
SALE ISSUES
a. General sale statutes (67-5-2501 and 2506)
b. Insolvent properties (67-5-2516)
16
16-17
17-18
IV.
POST-SALE ISSUES
a. Suits to set aside tax sales (67-5-2504)
b. Government as purchaser / re-sale
i. County or municipality as purchaser (67-5-2507)
ii. Political subdivision as purchaser (67-5-2508)
c. Tax exemptions for government-owned properties (67-5-2509)
d. Redemption
i. Procedure for redemption (67-5-2702)
ii. Notice to purchaser (67-5-2704)
iii. Excess sale proceeds (67-5-2707)
18
18-19
19
19-20
21
21-23
23
23
23-24
24-25
V.
MISCELLANEOUS ISSUES
a. Business license renewals (67-4-723)
25
25-26
12-13
13
13
14
14
15-16
Page 3 of 28
VI.
b. Personal property tax responsible parties (67-5-513 and 67-5-903)
c. Title insurance issued by local governments (56-35-134)
26-27
27
OTHER SUGGESTIONS
a. Minimum collection fee
b. De minimus threshold
c. Increased attorney’s fees
d. Accelerated filing date
e. Reduced Redemption Period
27
27
27
28
28
28
Page 4 of 28
I. ADMINISTRATIVE ISSUES
a. Definitions (67-5-105)
The existing statutes often use inconsistent terms. In some cases, it is unclear
whether a statute applies only to counties or to municipalities as well. The following
definitions are included to hopefully correct confusion. We have attempted to
substitute these defined terms in other sections as appropriate.
Section 67-5-105 Definitions
For the purpose of this chapter:
(1) “Government” shall include counties, cities, metropolitan
governments, municipal corporations, quasi-municipal corporations, political
subdivisions that are also taxing districts, and any agency of the state with the
authority to levy a property tax.
(2) “Taxpayer” shall mean any owner of property subject to taxation or
any party liable for property taxes.
(3) “Collector” shall mean in the case of any Government other than a
county that collects its own taxes, assessments, or other charges secured by
property, the officer of such Government responsible for collecting such taxes,
assessments, or charges.
b. Pre-lawsuit notices (67-5-2401 and 2402)
In Section 67-5-2401, the date is changed to February 28 in the sample notice to
match current law. In 2402, “court clerk” is changed to “clerk of court” to avoid
any confusion with the old name for County Clerks.
Section 67-5-2401 – Notice of intent to file suit - Publication
(a) As a preliminary step toward enforcing the lien for uncollected
property taxes, the trustee or collector shall cause to be inserted in one (1) or more
newspapers of the county once a week for two (2) consecutive weeks in the month
of January a notice as follows:
You are advised that after February 28, additional penalties and costs will
be imposed in consequence of suits to be filed for enforcement of the lien
Page 5 of 28
for property taxes for prior tax years; until the filing of such suits, taxes
may be paid in my office.
_______________________
County Trustee (or other Collector)
Section 67-5-2402 Notice to property owner of delinquency
(a) The trustee or collector shall likewise prepare from the rolls held by
the trustee’s or the collector’s office, a list of taxpayers and identification of
property for which property taxes are delinquent, as of June 1 of the current
calendar year, and include the following notice or equivalent language in the
current tax bills sent to property owners appearing on either the trustee’s or the
collector’s list or the list received from the court clerk clerk of court pursuant to
67-5-2403:
IN ADDITION TO THIS AMOUNT, YOU OWE BACK TAXES.
CONTACT THIS OFFICE IMMEDIATELY OR YOUR PROPERTY
MAY BE SOLD.
_______________________
County Trustee (or other Collector)
c. Annual property list (67-5-2403)
Currently, the clerk of court must provide a list of delinquent taxes to the Trustee
every June. This makes that requirement by request only.
Section 67-5-2403 Annual list of property involved in collection suits
Additionally, it is the duty of the clerk of any court in which suits for the
enforcement of property tax liens have been filed, if requested by the trustee,
collector or by the attorney prosecuting the suit, to annually provide to the county
trustee such requesting party or parties, no earlier than June 1 nor later than July
1, a complete list of unpaid delinquent taxes pending in the court taxpayers as of
June 1 of the current calendar year, with identification of the property involved in
such suits, and the years for which taxes are delinquent.
d. Home Rule penalty, interest and costs (67-5-2422)
This statute allows any “Home Rule” governments to select their own penalty and
interest rates for delinquent taxes, and to make their own provisions for collection
costs.
Page 6 of 28
Section 67-5-2422 Interest, Penalties, and Fees set by Home Rule Governments
The legislative body of every county, municipality, or metropolitan
government authorized as a home rule government, is authorized to establish any
percentage to be applied as interest, penalties, court costs, attorney fees, and fees
to provide compensation for the prosecution of the delinquent taxes, and is
authorized to apply such percentages on its own accord, §§ 67-5-2010, 67-5-2404,
67-5-2410, and 67-5-2501 notwithstanding. If such a government has not elected
to establish and to specifically identify its own percentages, Sections 67-5-2010,
67-5-2404, 67-5-2410, and 67-5-2501 shall remain in effect until the legislative
body of the local government so acts.
e. Bar to collection (67-5-1806)
This revision is designed to curb abuse as certain individuals have managed to
forestall collection efforts for years at a time through repeated Bankruptcy filings,
frivolous appeals, etc.
Section 67-5-1806 Bar to collection after ten years
(a) All taxes assessed against real and personal property in this state shall be
barred, discharged and uncollectible after the lapse of ten (10) years from April 1
of the year following the year in which such taxes become delinquent, whether
suit be brought within that time or not to collect the taxes, and whether this statute
be pleaded in bar of such collection or not, unless the property in question be
struck off and sold within such period of ten (10) years.
(b) The bar against collection provided in subsection (a) shall be tolled:
(1) as to taxes at issue in an administrative appeal before the state board of
equalization, from the date of filing the appeal until issuance of the final
assessment certificate, or
(2) during the pendency of any appeal of an action to collect or enforce a lien for
unpaid taxes, or
(3) during the pendency of any recovery action under 67-1-901, et seq., or
(4) during the pendency of any suit to invalidate a tax sale, or
(5) during the pendency of any Bankruptcy or receivership proceedings affecting
the taxing authority’s collection rights.
Page 7 of 28
II.
TAX SUIT AND CIVIL PROCEDURE ISSUES
a. Filing suit
i. Annual mass lawsuit (67-5-2405)
Subsection (a) is changed to clarify that it applies to municipalities as well, and
allows them to follow the same procedure. The removal of “designated by the
trustee with the approval of the county mayor” does not change the process for
selecting the Delinquent Tax Attorney, as that procedure is provided for in 67-52404(a).
The changes to subsection (b) remove the 25 defendant requirement, because it
serves no purpose, (also removed from 67-5-2005, below), and split (b) into two
subsections to treat the addition of new defendants and taxes separately. In that
subsection, the new “and delinquent taxes” language is designed to clarify that
you don’t have to file an entirely different lawsuit to add on additional taxes (not
just new defendants), which comes up in situations such as a dismissal of a
Bankruptcy after the suit has been filed. This is how we interpret the statute
already, but it doesn’t hurt to clarify. The subsection is also revised to clarify
that adding defendants or taxes does not require an amended Complaint as is
normally the case.
The addition of subsection (d) gives the local governments the option to bring all
delinquent taxes current at the time of the tax sale even if they became delinquent
after the final judgment was obtained. This addition is made in conjunction with
the addition of Section 67-5-2409(b) and Section 67-5-2703.
Section 67-5-2405 Filing and prosecution of suits
(a) The attorney designated by the trustee with the approval of the county
mayor shall after February 1, and not later than April 1, file suits in the circuit or
chancery court of the county for the collection of delinquent land taxes due the
state, county and municipality, as well as the interest, penalties, and costs attached
to and a part of such taxes, which taxes, interest, penalties, and costs are declared
a lien upon the land; and, for the enforcement of this lien, suits shall be brought in
the name of the county, in its own behalf and for the use and benefit of the state,
and of any municipality or special district or other Government that has certified a
delinquent tax list, or in the name of any such Government that has certified a
delinquent tax list, in its own behalf and for its own use and benefit.
(b) (1) The bill shall be in substance and form as other bills of complaint
for the enforcement of liens and shall include not less than twenty-five (25)
defendants, if that number are delinquent; and the bill (one (1) bill) may be filed
against and contain the names of all the delinquent taxpayers in the county, and
the fact that the bill contains the names of more than one (1) defendant shall not
be considered by the court multifarious, or a misjoinder of parties.
Page 8 of 28
(2) Additional defendants and delinquent taxes may be added to the suit as
a matter of right upon the filing of a notice on behalf of the complainant to add
additional defendants and without the necessity of amending the Complaint. Upon
the filing of such notice, the additional defendants shall be served with process
pursuant to the Rules of Civil Procedure and 67-5-2415.
(c) UNCHANGED
(d) At any time after suit has been filed pursuant to subsection (a), whether
delinquent tax defendants have or have not been served with a copy of such suit,
the court may amend this suit by adding delinquent taxes that became delinquent
more recently than the taxes being enforced pursuant to subsection (a) of this
section.
ii. Municipal right to sue separately to collect taxes (6-55-202)
6-55-202 deals with municipalities’ right to sue to collect taxes. It, along with 675-2405, has unnecessary provisions requiring at least 25 defendants. This change
removes that requirement (along with a similar change in 2405), and adjusts the
misjoinder reference accordingly.
Section 6-55-202 Tax Suit-Jurisdiction Tax Suit by Municipality
It is lawful for any incorporated municipality to sue in the chancery court
of the county in which it is located for taxes due the municipality upon real estate,
whenever the taxes are past due and unpaid. In such suit may be included as many
as twenty-five (25) distinct pieces or tracts of land, the owners thereof being made
defendants to the bill. Such cause The fact that the bill contains the names of
more than one (1) defendant shall not be subject the bill to an to objection for
misjoinder by reason of the distinct interests the several defendants have in the
properties proceeded against.
iii. Personal property, public utility, and other taxes (67-5-2003)
Most of our governments struggle with the collection of personal property taxes.
In many cases, delinquent personal property taxes are owed by closed businesses,
and the taxed property is often long gone. Therefore, the earlier you act on
delinquent personal property taxes, the higher your likelihood of collection. The
current language is confusing as to the procedure required to sue for delinquent
personal property taxes at a different time than real property taxes, and this
change would clarify any matters of form.
Subsection (a) is changed to clarify that the section applies to counties and
municipalities, and can apply to public utility taxes as well.
Page 9 of 28
Subsection (g) contains the provisions for actions to collect delinquent personal
property taxes by lawsuit. Due to its length and the multiple subjects involved, it
is broken up into numbered subsections for easier reference.
Subsection (g)(1) clarifies that it applies to cities as well, and clarifies how the
suit can be filed.
Subsection (g)(5) is new. It allows the delinquent tax attorney to agree to allow
personal property tax judgments to be paid in installments, but ONLY after a
judgment has been entered.
Furthermore, prior actions by counties and municipalities to collect other taxes,
such as hotel and business taxes, have always required separate individual
lawsuits for each tax item. The provision at the end of subsection (g) is designed
to make the process more efficient, saving time and expense for the court, the
government, and the taxpayer.
Subsection (h) is new. It conforms to T.C.A. § 67-5-2801(b) about waiving the
collection of delinquent public utility personal property taxes. That subsection
states that no waiver is allowed if the local assessment includes any real property.
Section 67-5-2003 Collection by distraint and sale of personalty -- Actions at
law or garnishment
(a) All delinquent personal property taxes, including but not limited to
public utility personal property taxes, may be immediately collected by the county
trustee or collector, with the assistance of the delinquent tax attorney selected
pursuant to 67-5-2404 or 67-5-2001, if such delinquent tax attorney's assistance is
requested by the trustee or collector. The tax books in the hands of the trustee or
collector and the delinquent lists furnished to deputy trustees or the collector’s
deputies, or the sheriff or constables in any county where the taxpayer or any
property liable for the taxes may be found, or the delinquent tax attorney, shall
have the force and effect of a judgment and execution from a court of record, and
shall be ample authority for the officers or delinquent tax attorney having such
taxes for collection to distrain and sell a sufficient amount of the personal
property to satisfy the delinquent taxes, interest, penalties, costs and attorneys'
fees. However, leased personal property assessed to a lessee shall not be
distrained and sold pursuant to this section.
(b) – (f) UNCHANGED
(g)(1) The trustee or collector may turn over the delinquent list thirty (30)
days after such taxes become delinquent to the delinquent tax attorney, selected
pursuant to § 67-5-2404 or 67-5-2001, to file suit to collect delinquent personal
property taxes as part of the suit to collect the prior year’s real property taxes, any
pending suit to collect real property taxes, as part of a separate mass lawsuit
Page 10 of 28
pursuant to the procedures set forth in this chapter, or as a separate lawsuit. Such
can be done without having first issued a distress warrant.
(2) In the event the trustee or collector turns over the delinquent list prior
to the mailing of the notice required by pursuant to § 67-5-2402, the trustee or
collector shall be required to forward written notice by first class mail to the last
known property owner at least ten (10) days before the delinquent list is turned
over to the delinquent tax attorney.
(3) If this procedure is used, the trustee or collector is also authorized, as
with real property tax records, to turn over records to the court clerk clerk of
court.
(4) A judgment obtained against a delinquent taxpayer may be enforced as
a lien on the property, or as any other judgment, including garnishment or sale of
property by the sheriff.
(5) Following entry of a personal judgment for delinquent personal
property taxes, a Government may enter into a written agreement for the payment
of such judgment in installments, pursuant to § 26-2-218, on such terms as the
Government may deem appropriate, provided that such agreement must provide
for payment of all taxes, interest, penalties, and costs in full, including any
interest and penalties that accrue during the term of the installment payments.
(6) Any Government may file suit to collect any other taxes it is
authorized by law to collect thirty (30) days after such taxes become delinquent,
as part of any pending suit to collect property taxes, or as a separate mass lawsuit
pursuant to the procedures set forth in this chapter.
(h) UNCHANGED
(i) Delinquent public utility taxes may not be immediately collected under
this section if the local assessment includes any real property. The trustee or
collector must confirm with the comptroller of the treasury whether the public
utility company’s local assessment includes any real property.
b. Delinquent Tax Attorneys
i. Attorneys’ fees when in-house counsel used (67-5-2001)
Subsection (e) blesses the current practice of the four largest counties/cities of
using law departments or other in-house counsel to collect taxes, and clarifies
that attorneys’ fees and litigation costs must still be collected in such situations,
and may be assigned to the employing government.
Page 11 of 28
Section 67-5-2001 Deputies collect delinquent taxes
(e) In counties with populations in excess of 336,000 or greater according
to the 2010 federal census, Governments may file and prosecute suits under this
title by and through a private attorney selected pursuant to section 67-5-2404 or a
licensed attorney employed by such Government. Fees collected for the expense
of prosecuting the suits or as compensation for the attorney’s services shall be
collected and paid as directed by such Government.
ii. Turnover of lists to attorney, and additional fees in certain circumstances
(67-5-2404)
The change regarding attorneys’ fees is designed to discourage frivolous appeals
and strategic delay, and to remedy the inequitable additional time and expense
incurred in defense of such proceedings. The date of turnover of delinquent lists
is made more flexible to encourage efficient collection.
Section 67-5-2404 Delivery of delinquent tax list to attorney
(a) through (c) UNCHANGED
(d) If a taxpayer or other adverse party to the Government appeals a
judgment or other order of the trial court in an action to collect or enforce a lien
for unpaid taxes, or files suit for recovery pursuant to § 67-1-901, et seq., or to set
aside a tax sale pursuant to § 67-5-2504, the court may, in its discretion, and upon
the Government prevailing in such action, award reasonable attorneys’ fees in
addition to the compensation set forth in this section. Any request for such fees
shall be supported by affidavit and such fees shall become additional expenses of
the tax suit for the purposes of § 67-5-2410(d), and shall be secured by the lien in
favor of the Government as costs accruing on the taxes pursuant to § 67-52101(a). Nothing in this subsection shall be construed as authorizing an award of
attorney’s fees in favor of a taxpayer or other adverse party to the Government.
c. In rem/in personam (67-5-2103)
Delinquent tax may include claims for both enforcement of tax liens and personal
liabilities for the taxes (67-5-2101(b)). This statute has always contradicted that
by saying that the suit is in rem (lien enforcement) only, and needs clarification..
Section 67-5-2103 Nature of proceedings
The whole proceeding for collection of taxes the enforcement of property
tax liens, from the assessment to sale for delinquency shall be a proceeding in
rem, and shall not be invalid on account of such land having been listed or
Page 12 of 28
assessed for taxation to anyone as owner or owners or to any person or persons
not the owner or owners or to unknown owner or owners.
d. Consolidation of taxes in suit (67-5-2409)
The addition of subsection (b) gives the local governments the option to bring all
delinquent taxes current at any time after suit is filed. This addition is made in
conjunction with the addition of Section 67-5-2405(d) and Section 67-5-2703.
Section 67-5-2409 Consolidation of actions
(a) If any other suits for delinquent taxes are pending against any
particular piece of property, such suits shall be consolidated as a matter of right
upon the filing of a notice of consolidation on behalf of the complainant. All taxes
for which any given piece of property is liable and for which suits are pending
may be included in the final decree.
(b) At any time after suit has been filed, whether delinquent tax defendants
have or have not been served with a copy of such suit, the court may amend the
suit by adding delinquent taxes that became delinquent more recently than the
taxes being enforced pursuant to subsection (a) of this section. Once amended, all
delinquent taxes, both delinquent prior to filing the complaint and added later by
amendment, will be included in the first bid submitted to purchase the property at
the tax sale. Amendment of the suit to include more recent delinquent taxes owed
shall not require the issuance of leading process and formal service upon the
defendant(s), as all property owners are already on notice pursuant to this title that
taxes are due every year and become delinquent, if not paid by March 1 of the
following year.
e. Notice and service of process (67-5-2415)
The “unclaimed” mail language is taken directly from Rule 4.04(11) of the
Tennessee Rules of Civil Procedure. The rule applies already, but this is added to
avoid confusion.
Section 67-5-2415 (e) Notice to taxpayer of suit
(e) (1) The return of the receipt signed by the defendant, spouse, or other
person deemed appropriate to receive summons or notice as provided for in the
Rules of Civil Procedure, or its return marked "refused,", “unclaimed”, or other
similar notation, as evidenced by appropriate notation of such fact by the postal
authorities, and filed as a part of the record by the clerk, with notation on the
docket of the true facts, shall be evidence of personal notice.
Page 13 of 28
f. Evidence in delinquent tax suits (67-5-2423)
This provides that certified tax rolls are sufficient evidence that property taxes are
validly assessed, due and owing. Its purpose is to assist delinquent tax attorneys
and courts in promptly disposing of answers containing general denials in
delinquent tax suits. It codifies the existing law, specifically TCA 67-5-2401
(failure to appeal to board of equalization makes assessment conclusive); Cox v.
City of Bristol, 191 S.W.2d 160, 162-163 (Tenn. 1945) (“it will be presumed that
[a tax assessment] is valid, regular and correct and that various officers charged
with the making of the assessment all performed their duties in good faith and at
the proper time and in conformity with the statutes and that other various acts
were legal and proper; and this presumption will stand until overcome by
satisfactory evidence to the contrary.” ); Louis Dreyfus Corp. v. Huddleston, 933
S.W.2d 460, 467 (Tenn. Ct. App. 1996) (“[t]ax assessments are presumed to be
valid and the burden of proof is on the taxpayer to prove that they are erroneous.
In order to overcome the assessment, the proof must be clear and convincing.”) It
is loosely based on a similar Texas statute.
Section 67-5-2423 Certified Tax Rolls as Evidence
A delinquent tax roll, certified by the appropriate collecting official, shall
constitute prima facie evidence that the underlying tax assessment has become
conclusively established pursuant to 67-5-1329 or 67-5-1401, that each person
charged with a duty relating to the imposition of the tax has complied with all
requirements of law, and that the tax, including all applicable penalties, interest,
costs, and fees, remains due and owing, and constitutes a good and valid lien on
the subject property, as well as a personal liability of the taxpayer.
g. Tax Sale Notice (67-5-2502)
The addition of this subsection provides for the filing of an informational Tax Sale
Notice with the Register of Deeds’ Office for the county in which the property is
located. Its purpose is to ensure that title searchers know when a property is or
has been placed in a tax sale but without requiring the government to prepare and
file any releases.
Section 67-5-2502 Notice of sale of land
(d) A Tax Sale Notice, which shall be the same or substantially the same as the
advertised notice, may be recorded in the Register of Deeds’ Office for the county
in which the property is located upon the setting of the tax sale date. The
recording cost shall be divided between the parcels of land listed in the Tax Sale
Notice and added as an additional court cost to each such parcel of land. This Tax
Sale Notice shall be recorded for informational purposes only and no Release
shall be required.
Page 14 of 28
h. Waiver of certain taxes and charges (67-5-2801)
The amendments to this section are intended to include public utility taxes in the
existing statute and to clarify certain language.
Section 67-5-2801 Personal property taxes, penalties and interest, and
attorney fees and costs -- Waiver of enforcement
(a) The local tax administrative officers, being the county trustee with
respect to county personal property taxes and the comparable tax collecting
officers in a municipality with respect to municipal property taxes, The trustee or
collector may request the delinquent tax attorney to seek court approval in order
to waive the enforcement and collection of all, but not a portion of, industrial and
commercial personal property taxes, penalties, interest, attorney’s fees and costs.
and interest in cases in which the tax collecting officers determine, after
reviewing the facts and circumstances, that: The trustee or collector must
determine and attest to three things before a court can approve a waiver:
(1) The business or enterprise that was subject to the tax levy had taxpayer
has ceased all business operations;
(2) The No personal property subject to the tax can be found. of an out-ofexistence business or enterprise cannot be located after diligent search and
inquiry; and
(3) Neither The waiver is not being sought as a result of fraud nor an
intention to avoid or avoiding the tax payment by the taxpayer. of the taxes on
the part of the business or enterprise caused the circumstances giving rise to such
waiver.
(b) Any waiver under this part shall be included and set forth as a credit in
the monthly settlement and annual statement pursuant to 67-5-1903 and 67-51904. (MOVED TO (e), BELOW) In order to waive the enforcement and
collection of public utility personal property taxes, including penalties, interest,
attorney fees and costs, the trustee or collector must first confirm with the
comptroller of the treasury that the public utility’s local assessment only includes
personal property and does not include any real property. If the public utility
company is still operating, then no waiver can be requested or approved even if
the local assessment only includes personal property and no personal property can
be found in the trustee’s or the collector’s jurisdiction. If the public utility
company has ceased all operations and the local assessment does not include any
real property, then the trustee or the collector may request a waiver in accordance
with subdivisions (a)(1)-(3).
(c) With respect to personal property taxes, penalties and interest for
which no delinquent tax lawsuit has been filed, but for which court approval has
been sought and obtained for waiver as provided in subsection (a), the local tax
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administrative officers shall provide a report to the chief executive officer of the
local government of the taxes, penalties and interest waived under this section.
(MOVED AND MODIFIED IN (c) BELOW) With respect to delinquent personal
property taxes, for which the delinquent lawsuit has been filed, the court having
jurisdiction of the delinquent tax lawsuit may, upon motion and a finding that the
factors outlined in subdivisions (a)(1)-(3) exist, order the waiver of enforcement
and collection of all, but not a portion of, such personal property taxes, penalties
and interest, and attorney fees and costs. (MOVED TO (d) BELOW)
(c) The trustee or collector is required to submit a report to the chief
executive officer of the local government and the county assessor of all waivers
approved by the court when no delinquent tax lawsuit has been filed. The report
must contain the taxpayer’s name and amount of taxes, penalties, interest,
attorney fees, and costs waived. All waivers approved by the court are to be
included and written as a credit in the monthly settlement and annual statement in
accordance with §§ 67-5-1903 and 1904.
(d) With respect to delinquent personal property taxes being waived under
this section, for which the delinquent lawsuit has been filed, the court having
jurisdiction of the delinquent tax lawsuit may, upon motion by the delinquent tax
attorney and a finding that the factors outlined in subdivisions (a)(1)-(3) or
subsection (b) exist, order the waiver of enforcement and collection of all, but not
a portion of, such personal property taxes, penalties, interest, attorney fees and
costs.
III.
SALE ISSUES
a. General sale statutes (67-5-2501 and 67-5-2506)
These are changed to remove references to specific governmental entities, and to
allow Governments to avoid assuming future liabilities.
Section 67-5-2501 Sale of land generally
(a) (1) UNCHANGED
(2) At all sales, the clerk of the court, acting for the state Governments
prosecuting the suit, shall bid the debt ascertained to be due for taxes, interest,
penalties, and the costs and fees incident to the collection thereof, where no other
bidder offers the same or larger bid; provided, that, when the county
Governments’ legislative bodyies determines that the environmental or other
liability risks are such that it is not in the best interests of the county Governments
for a minimum bid to be offered at the tax sale, the clerk shall not offer a bid on
the property at the tax sale.
(3), (4), and (b) (1) UNCHANGED
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(b) (2) At all sales, the clerk of the court, acting for the state Governments
prosecuting the suit, shall bid the debt ascertained to be due for taxes, interest,
penalties, and the costs and fees incident to the collection thereof, where no other
bidder offers the same or larger bid; provided, that, when the county
Governments’ legislative bodyies determines that the environmental or other
liability risks are such that it is not in the best interests of the county Governments
for a minimum bid to be offered at the tax sale, the clerk shall not offer a bid on
the property at the tax sale.
(3) and (4) UNCHANGED
Section 67-5-2506 Sale of land for delinquent county taxes only
(a) (1) UNCHANGED
(a) (2) It is the duty of the clerk of the court ordering the sale to bid, on
behalf of the governmental entities for which the taxes are owing, to ascertain the
amount due for taxes, interest, penalties, and costs, where no other bidder offers
the same or higher bid; provided, that, in the case of property where the county
legislative body has determined that no bid should be made on behalf of the
governmental entities to which taxes are owing due to a determination that such
property poses an environmental or other liability risk, the clerk shall not offer a
bid.
(3), (4), and (b) (1) UNCHANGED
(b) (2) It is the duty of the clerk of the court ordering the sale to bid, on
behalf of the governmental entities for which the taxes are owing, to ascertain the
amount due for taxes, interest, penalties, and costs, where no other bidder offers
the same or higher bid; provided, that, in the case of property where the county
legislative body has determined that no bid should be made on behalf of the
governmental entities to which taxes are owing due to a determination that such
property poses an environmental or other liability risk, the clerk shall not offer a
bid.
(3) and (4) UNCHANGED
b. Insolvent properties (67-5-2516)
This is the final version of the compromise bill on the HOA situation from last
session. “Government” is substituted in place of county and municipality references.
It basically says the government doesn’t have to bid if it sees a high risk of incurring
excessive HOA fees if it has to take the property in.
Section 67-5-2516 Insolvent Properties
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(a) If property subject to a tax sale is determined to be insolvent as defined
in subsection (b), this section shall constitute an alternative to other provisions of
this part requiring a bid on behalf of a Government.
(b) For purposes of this section, a property is insolvent if the total amount
of ad valorem taxes, penalties, interest, fees and costs is less than the total known
liabilities the Government would incur during the redemption period and one year
thereafter as a result of covenants running with the property that survive operation
of § 67-5-2504(b), or is less than the total amount of other governmental liabilities
secured by liens of record against the property.
(c) If the attorney prosecuting the suit believes a property is insolvent, the
attorney may file a motion with the court requesting a determination that the
property is insolvent under this section. If the court finds the property is
insolvent, it shall relieve the Government of the obligation to bid at the tax sale.
(d) At any tax sale involving an insolvent property, no bid shall be placed
on behalf of the Government, and the clerk shall open the bidding to private
bidders at a minimum bid amount that shall include the total amount of ad
valorem taxes, penalties, interest, fees and costs, and the total amount of other
governmental liabilities secured by liens of record against the property. If no
private bids are placed, the clerk may reduce the minimum bid amount in
increments of ten percent (10%) until bidding begins. In the event that the
winning bid amount is less than the initial minimum bid amount, the proceeds
shall be applied in the same order as § 67-5-2501, then to any other governmental
liens in their lawful priority.
IV.
POST-SALE ISSUES
a. Suits to set aside tax sales (67-5-2504)
This change clarifies when the cause of action accrues, clarifies that the first period
is a statute of limitations, adds a "discovery rule" allowing delinquent taxpayers the
benefit of having the limitations period run from the discovery of the problem, rather
than the sale itself, and adds a statute of repose. In addition, the statute of limitations
is reduced to one year but that one year period runs from the date of discovery rather
than three years from sale. The three year statute of limitations is now a three year
statute of repose. In consideration of In re Estate of Davis, 308 S.W.3d 832, 837
(Tenn. 2010), the duration of the statute of repose may need to be lengthened to four
years. Beyond that point, a taxpayer would still have the right to claim excess
proceeds that had escheated to the state. This is an extremely important change from
the perspective of parties interested in bidding at tax sales, and from title insurers, in
that it provides certainty, while allowing taxpayers a period that runs from discovery
of the sale, not the sale itself.
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NOTICE: The proposed revisions of this section are some of the most significant
being raised and your thoughts after review of the above-referenced case are greatly
needed.
Section 67-5-2504 Attacks on sale of land -- Rights of purchaser
(a) – (c) UNCHANGED
(d) (1) A No suit shall be commenced in any court of the state to
invalidate any tax title to land shall be commenced within one (1) year from the
date the cause of action accrued, which is the date of the entry of the Order
confirming the tax sale. after three (3) years from the time the land was sold for
taxes, except in case of persons under disability, who shall have one (1) year in
which to bring suit after such disability is removed.
(2) The statute of limitations to invalidate the sale of any tax title shall be
one (1) year as set forth is subsection (d)(1) above, except that it may be extended
to one (1) year after the plaintiff discovered or with the exercise of reasonable due
diligence should have discovered the existence of such cause of action.
(3) In no event shall any action to invalidate any tax sale title be brought
more than three (3) years after the entry of the Order confirming the tax sale.
(4) This subsection (d) shall not be construed to prevent or delay issuance
of an order quieting title to land at the suit of a delinquent tax sale purchaser.
After expiration of the period of redemption provided in § 67-5-2702, the
delinquent tax sale purchaser may file suit to quiet title, notwithstanding the
deadline for tax sale challenges provided in this subsection (d).
(5) Nothing in this subsection (d) shall limit the time in which a motion for
excess proceeds may be filed pursuant to § 67-5-2707.
(e) UNCHANGED
b. Government as purchaser / re-sale
It is not entirely clear why both 67-5-2507 and 2508 exist. Nonetheless, both are
retained to avoid unintended consequences.
i. County or municipality as purchaser (67-5-2507)
This is a source of confusion for many counties and cities – what to do with
properties taken in at tax sales? Under the suggested changes, counties and
municipalities are covered by the same rules. Governments may, upon majority
approval of their legislature, re-sell properties for less than their bid amount at
the tax sale, or choose to keep the property. A new subsection (12) is offered as
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an alternative means of dealing with the HOA issue. A new subsection (13) is to
make this statute non-applicable to Metro Nashville.
Section 67-5-2507 Sale of land -- County as purchaser
(a)(1) and (2) UNCHANGED
(3) After the period of redemption has elapsed, it shall be the duty of the
county mayor to arrange to sell for the disposition of every tract of such land as
expeditiously and advantageously as possible.
(b)(1) and (2) UNCHANGED
(3) In no event shall any No tract of land shall be sold for an amount less
than the total amount of the taxes, penalty, cost and interest, unless the county
legislative body, upon application, determines that it is impossible to sell the tract
of land for this amount, and grants permission to offer the land for sale at some
amount to be fixed by such legislative body.
(4) UNCHANGED
(5) Combined with (3), above
(6) through (10) UNCHANGED
(11) The county may, upon a majority vote of its legislative body
determining it in the best interests of the county to use the property for a public
purpose, decide to retain ownership and possession of such property.
(12) No private contractual development, or development fees or
assessments shall accrue against the governmental entity owning such property,
provided the entity pursues and follows the provisions of the statute. If the
private entity which claims an assessment or due against the property is not
willing to allow that property to be fee or assessment free while it’s in the
possession of the governmental entity at the option of that entity, they may elect
in lieu thereof to purchase the property from the governmental entity for the
amount necessary under the statute to satisfy the back taxes, costs, and fees
applicable to the delinquent property sale. If they do so, a deed shall be given to
the entity. If they fail to do so, it constitutes a waiver of their claim for such fees
and assessments.
(13) This section shall not apply in any county having a metropolitan
government and a population in excess of five hundred thousand (500,000)
according to the 1990 federal census or any subsequent federal census.
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ii. Political subdivision as purchaser (67-5-2508)
This statute appears to fill in the gaps for municipalities buying properties at tax
sales, and joint purchases and re-sales involving counties and cities. (c)(3) and
(d)(4) are added to allow counties and municipalities to retain properties. A new
subsection (e) is offered as an alternative means of dealing with the HOA issue.
Section 67-5-2508 Sale of property -- Political subdivision as purchaser
(a)(1) through (c)(2) UNCHANGED
(c)(3) The municipality may, upon a majority vote of its legislative body
determining it in the best interests of the municipality to use the property for a
public purpose, decide to retain ownership and possession of such property.
(d) through (d)(3) UNCHANGED
(d)(4) The county or municipality may, upon a majority vote of its
legislative body determining it in the best interests of such county or municipality
to use the property for a public purpose, decide to retain ownership and
possession of such property. The county or municipality wishing to retain the
property shall pay to the other governmental entity its pro rata share of the joint
bid amount at the tax sale, upon receipt of which the other governmental entity
shall execute a quitclaim deed conveying its interest in the property.
(e) No private contractual development, or development fees or
assessments shall accrue against the governmental entity owning such property,
provided the entity pursues and follows the provisions of the statute. If the
private entity which claims an assessment or due against the property is not
willing to allow that property to be fee or assessment free while it’s in the
possession of the governmental entity at the option of that entity, they may elect
in lieu thereof to purchase the property from the governmental entity for the
amount necessary under the statute to satisfy the back taxes, costs, and fees
applicable to the delinquent property sale. If they do so, a deed shall be given to
the entity. If they fail to do so, it constitutes a waiver of their claim for such fees
and assessments.
c. Tax exemptions for government-owned properties (67-5-2509)
The existing version of subsection (a) misstates the redemption period (it is one year,
not two). Subsection (b) is redundant, as this is already covered by §§ 67-5-2505,
2507, and 2508. Reference to these statutes is added in the subsection now identified
as (d).
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Section 67-5-2509 Exemption from taxation -- Land purchased, resold or
rented by state or political subdivision
(a) Whenever land is purchased at a tax sale by the state, by a county, or
by a municipality of the state or by a county and a municipality, as tenants in
common, and the state, a county or municipality, or a county and municipality,
goes into or takes actual possession of such land, the land shall, after the
expiration of the two-year period of redemption provided in § 67-5-2702, be
exempt from taxation, as property held for a public, county or municipal purpose,
and no taxes shall be collected thereon, and no assessment shall be made thereon,
so long as the property is held for the purpose of realizing therefrom the taxes and
assessments that have been lost by the several tax funds entitled thereto as result
of the failure of the former owner of the property to pay the taxes for which the
sale was held.
(b) (1) It shall be the duty of the proper officers of the state, the county
and the municipality, or any or all of the officers who have an interest in the
property, promptly, upon its acquisition, to offer the property for sale to private
purchasers by appropriate means and to make diligent effort to sell the property at
its reasonable market value.
(2) In case the property is owned by a county, or a municipality, or by a
county and a municipality as tenants in common, such property may be sold upon
credit with the land as security for any deferred purchase money by authority of
an appropriate resolution of the governing body of the county or municipality, or
both, if both have an interest in the property.
(c) (b) When the state, a county or a municipality, or any or all of them,
has recovered from the sale or rental of any property purchased by them, or any
one, or any combination of them, moneys sufficient to pay the taxes for which the
property was sold, it shall be the duty of the officers of the state, the county and/or
municipality, charged with the handling of the property, to report the recovery to
the assessors of the county and municipality for assessment, it being the declared
intention of the general assembly that such property is not held for a public,
county and municipal purpose after the taxes, for which the sale was held, and
subsequently accruing taxes through the period of redemption have been realized
from the collection of net income therefrom or from the net sale price thereof,
unless in the meantime the property shall have become devoted by the state, or by
a county or a municipality, to a use otherwise recognized by law as a state or
municipal purpose.
(c) (d)(1) In lieu of the sale to private purchasers as provided in subsection
(b) sections 67-5-2505, 67-5-2507, and 67-5-2508, the proper officers of the state,
the county, and the municipality, or any or all of the officers who have an interest
in the property, may convey the property to any other governmental entity
meeting the conditions specified below, at any terms deemed appropriate to such
officers. In order to receive property under this subsection (d), a governmental
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entity must certify to such officers that the property is to be used for purposes that
would make the property subject to condemnation by the governmental entity
under its powers of eminent domain.
(2) through (5) UNCHANGED
d. Redemption
i. Procedure for redemption (67-5-2702)
The changes to this section clarify that the one year begins running upon entry of
the Order of confirmation of sale. The 90 day period for Shelby County would no
longer be necessary if Section 67-5-2707 is passed and has therefore been
removed.
Section 67-5-2702 Procedure for redemption - Previously redeemed property
(a) Persons entitled to redeem property may do so by paying the moneys
to the clerk as required by 67-5-2703 within one (1) year from the date of entry of
the order of confirmation of sale, as evidenced by the records in the office of the
clerk of the court responsible for the sale.; provided, that, in any county having a
charter form of government and having a population of less than four hundred
thousand (400,000), according to the 1990 federal census or any subsequent
federal census, persons entitled to redeem property may do so within ninety (90)
days after the entry of the order confirming the tax sale, if all owners of record of
the property have signed a waiver of the owner's interest in the property.
(b) A taxpayer may redeem property that has been previously redeemed
by paying to the clerk the moneys as required by 67-5-2703 within one (1) year
from the date the property was sold, as evidenced by entry of the order of
confirmation of sale. Upon the entry of the order of redemption using the
procedure outlined in 67-5-2704, the clerk shall disburse the moneys paid to
redeem, plus interest at a rate of ten percent (10%) per annum computed from the
date of the order of the previous redemption to the person previously redeeming
as ordered by the court.; provided, that, in any county having a charter form of
government and having a population of less than four hundred thousand
(400,000), according to the 1990 federal census or any subsequent federal census,
persons entitled to redeem property may do so within ninety (90) days after entry
of an order of confirmation of the tax sale by the court, if all owners of record of
the property have signed a waiver of such owner's interest in the property.
ii. Notice to purchaser (67-5-2704)
The change suggested for this Section is made to clarify the meaning of “lawful
charges”.
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Section 67-5-2704(a) Notice to purchaser - Contents - Procedure for
redemption
(a) Within ten (10) days of receipt of the money required for redemption
as set forth in 67-5-2703 and, if required, the statement setting forth the basis
under which a person is entitled to redeem the property, the clerk shall send a
notice to the purchaser of the property at the tax sale. This notice shall state that
money to redeem the property has been tendered, the date of the tender, and that
the purchaser shall have thirty (30) days from the date of the tender to file a
motion requesting additional amounts to be paid to compensate the purchaser for
any other lawful charges or moneys, including property taxes due or delinquent
on the property, expended to preserve the value of the property or to otherwise
protest the redemption. If the court finds that the purchaser has paid additional
moneys, including property taxes due or delinquent on the property, for lawful
charges in order to preserve the value of the property, the court shall order the
person requesting to redeem the property to pay such additional sums to the clerk
of court. “Lawful charges” as used in this subsection (a) include, but are not
limited to, reasonable payments made for maintenance and insurance. In addition,
the court shall direct the person entitled to redeem to pay a fee to the Clerk and
Master or Delinquent Tax Attorney for the preparation of the notices, motions,
and orders required to give effect to the request to redeem the property. After any
additional sums have been paid to the clerk, the court shall order that the
redemption has been properly made, and the clerk shall disburse the purchase
price with interest at a rate of ten percent (10%) per annum computed from the
date of the tax sale to the purchaser. If the court finds that no additional sums are
owing in order to redeem, or upon expiration of the thirty-day period for the
purchaser to file a motion to protest the redemption or to request additional
moneys, the court shall order that redemption has been properly made, and the
clerk shall disburse the purchase price, plus interest at a rate of ten percent (10%)
per annum computed from the date of the sale, and any other moneys so ordered
by the court to the purchaser.
iii. Excess sale proceeds (67-5-2707)
This is a new section that is intended to clarify what happens with excess sale
proceeds.
Section 67-5-2707 Excess Sale Proceeds
(a) Following entry of the Order of Confirmation of Sale, any Persons
Entitled to Redeem Property, as defined in section 67-5-2701, may file a motion
with the court setting forth a claim to any excess sale proceeds.
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(b) A copy of such motion shall be served, in the manner prescribed by the
Tennessee Rules of Civil Procedure, on all parties to the underlying action, no
later than thirty (30) days prior to the hearing date of the motion.
(c) At the hearing, the court shall order that any remaining redemption
period shall be terminated as to the Movant and as to any other person entitled to
redeem property who consents to such termination as evidenced by their signature
on such Order, and any excess proceeds be paid according to the following
priorities to each party that establishes its claim to the proceeds:
(1) To the Governments prosecuting the delinquent tax sale, for any
remaining or subsequent outstanding taxes that are a lien against the property.
(2) To any lienholder, private or public, holding a claim against the
property at the time of the tax sale, for the amount proven to be due under such
lien, in accordance with priorities established by applicable law;
(3) To any lienholder, private or public, holding a claim against the
property arising after the tax sale, for the amount proven to be due under such
lien, in accordance with priorities established by applicable law;
(4) To any taxpayer, according to such taxpayer’s interest at the time of
the tax sale, provided that such taxpayer was a defendant in the underlying action,
or acquired by will or intestate succession the interest in the property of a former
taxpayer that was a defendant in the underlying action.
(5) If no such motion is filed within the period set forth in Section 67-52504(d), any such excess proceeds shall escheat to the State of Tennessee
pursuant to the Unclaimed Properties Act.
V.
MISCELLANEOUS ISSUES
a. Business license renewals (67-4-723)
The addition of Subsection (e) gives local governments another means to ensure the
collection of personal property taxes. It will not place a significant burden on the
state as the state is already verifying the payment of personal property taxes with its
business license renewal form for its discount program. This change was suggested
in the 2011 Legislative Session (SB 1560/HB 1282) and was referred to House and
Senate sub-committees.
Page 25 of 28
Section 67-4-723 License – Issuance and renewal – Duty to exhibit license
(e) Prior to the initial issuance or renewal of any business license, the Government
shall require the taxpayer to show evidence of payment of its personal property
taxes.
b. Personal property tax responsible parties (67-5-513 and 67-5-903)
The revision to Section 67-5-513 is to bring the statute current since the passage of
the Tennessee Limited Liability Company Act and thereby avoid any confusion. The
revision to Section 67-5-903 is to clarify the party responsible in the event of a
business’s dissolution pursuant to Section 67-5-513(a), which exists to protect the
taxpaying public from having delinquent tax liens fall on empty shells of dissolved
businesses.
Section 67-5-513(a) Sale or termination of business
(a) If any individual operating for the purpose of making a profit as a business or
profession, partnership, joint venture, corporation, limited liability company,
manufacturer or other legal entity having personal property, tangible or intangible,
assessable by the county assessor or other authority, shall sell the business or
terminate it, the individual shall notify the assessor and trustee and make payment
within fifteen (15) days after the date of selling or terminating the business, of any
taxes, interest and penalties due and owing and the taxes of the current year in
accordance with the assessment records, which shall be based on the last
assessment and rate fixed, according to law, and the trustee shall accept payment
of the amount determined to be owing.
Section 67-5-903 Schedules -- Property used for business, professions,
manufacturing
(b) It is the duty of the taxpayer to list fully such tangible personal property used,
or held for use, in the taxpayer's business or profession on such schedule,
including such other information relating thereto as may be required by the
assessor, place its correct value thereon, sign the schedule, and return it to the
assessor on or before March 1 of each year. In lieu of detailing acquisition cost on
the reporting schedule, the taxpayer may certify that the depreciated value of
tangible personal property otherwise reportable on the form is one thousand
dollars ($1,000) or less. The assessor shall accept the certification, subject to
audit, and fix the value of tangible personal property assessable to the taxpayer
pursuant to the schedule, at one thousand dollars ($1,000). This value shall be
subject to equalization pursuant to 67-5-1509. The certification stated on the
schedule shall warn the taxpayer that it is made subject to penalties for perjury
and subject to statutory penalty and costs if proven false. The taxpayer shall
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designate on the schedule one or more individuals as owner(s) of the business, or
responsible person(s) in the event of dissolution of a corporate or limited liability
entity, for the purposes of § 67-5-513(a).
c. Title insurance issued by local governments (56-35-134)
The addition of Section 56-35-134 allows governments to issue their own title
insurance for properties sold or bought at tax sales. This revision would ensure that
governments with blighted properties in particular have a means to deal with them
even if title insurance companies refuse to issue title insurance.
Section 56-35-134 Title Insurance Issued by Local Governments
Counties and municipalities are authorized to issue title insurance policies on
properties that were acquired in a tax sale or offered for sale at a tax sale
conducted by the government issuing the title insurance. A county or
municipality issuing such title insurance shall not be deemed to be a title
insurance company, title insurance business, title insurance agent, or title
insurance agency but shall be subject to such regulations as may be promulgated
by the Commissioner of Commerce and Insurance.
VI.
OTHER SUGGESTIONS
NOTICE: The TAPTP Legislative Committee does not recommend a particular
position on the following issues at this time. These are issues that were raised by
various committees and individuals after the compilation of the foregoing revisions,
or that the Legislative Committee either did not reach a consensus on, or did not act
upon after discussion. They have been included to ensure that all suggested
legislative revisions are considered in either the upcoming legislative session or the
next one. Please let us know if you have strong feelings about proceeding forward on
any of these ideas.
a. Minimum collection fee
Under this proposed change, a minimum collection fee of $25.00 would be added for
the collection of personal property taxes.
b. De minimus threshold
Under this proposed change, a “de minimus” threshold would be permitted such that a
government did not have to file its lawsuit on a parcel until it had been met.
Page 27 of 28
c. Increased attorney’s fees
There was some discussion about increasing the attorney’s fee provision from a
maximum of 10% to a higher percentage, or allowing the rate to be set by each
Government. A primary reason for this change might be to make personal property
tax collection more feasible.
d. Accelerated filing date
Earlier drafts of the proposals included provisions allowing the suit for delinquent
real property taxes to be filed as early as 30 days after delinquency (as is already
allowed for personal property taxes), while leaving in a deadline, such as the current
deadline of April 1 of the second year.
e. Reduced redemption period
The committee discussed several options for reducing, or even eliminating, the
redemption period following sale.
.
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