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SF308 (Legislative Session 94 (2025-2026))

Homestead property confessions of judgements interest rates charged modification

Related bill: HF364

AI Generated Summary

This bill seeks to modify the interest rate associated with confessions of judgment for homestead properties in Minnesota. Specifically, it lays out a system where property owners who are late on their taxes can confess judgment and agree to pay off their tax debts in installments. The confession of judgment waives irregularities related to the tax proceedings and any defenses against it.

Under this bill, the interest rate for these installment payments will be the greater of two options: 1. A fixed rate of 5%. 2. A rate that is 2% higher than the prime rate charged by banks, as averaged during the previous six-month period ending on September 30 of each year.

However, the interest rate charged cannot exceed the maximum annual rate that is already specified under existing laws (Minnesota Statutes section 279.03, subdivision 1a). Each year, the commissioner of revenue will set this interest rate by November 1, and it will become effective on January 1 of the following year. This interest rate remains fixed for the duration of the judgment.

The property owner must pay 10% of the owed amounts initially, along with all current taxes due at that time. The remainder of the debt is then payable in either nine or four annual installments, with interest charged on the unpaid balance each year.

Notably, repurchase agreements or property repurchases that are under different statutes are not eligible for the interest rate specified in this bill.

This update aims to provide a consistent and potentially more manageable method for homeowners to resolve their delinquent property taxes and to know in advance the financial commitments involved in confessing judgment on those taxes.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
January 20, 2025SenateFloorActionIntroduction and first reading
January 20, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "A provision for setting an interest rate above the prime rate charged by banks."
      ],
      "removed": [],
      "summary": "The bill amends section 279.37 to modify interest rates on confessions of judgments for homestead property.",
      "modified": [
        "Changes the calculation method for interest rates on installment payments."
      ]
    },
    "citation": "279.37"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references section 279.03 in relation to interest calculation on installments for confessed judgments.",
      "modified": [
        "Directs the use of the interest rates as specified in section 279.03 for installment payments."
      ]
    },
    "citation": "279.03"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section 282.261 is referenced regarding repurchase agreements that are ineligible for certain interest rates.",
      "modified": [
        "Clarifies repurchase agreements are not eligible for modified interest rates under the new confession of judgment terms."
      ]
    },
    "citation": "282.261"
  }
]

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