Tuesday, March 24, 2015

HB 621

Tom Jacobson
Revise tax lien, sale, and title laws related to residence tax delinquency


  1. Tyler Gernant on Mar. 24, 2015:

    In current form, Missoula County does not support or oppose this bill.

  2. Comments from MACo and the Treasurer's Association:

    Ask them to vote NO on HB 621 because it simply does not accomplish it’s intended purpose and instead makes a mess of the tax lien process. In its’ current version, it changes the interest rate ONLY on properties where the city buys a tax lien on an occupied residence; it asks the county commissioners to sell a property at auction that they do NOT have a deed or right to; it also asks the county treasurer to somehow determine if a house is owner occupied and if that owner lives in the house at least 7 months a year. They have no way of knowing this information.

    There are amendments being proposed – they actually make it even worse. The bill still requires the county treasurer to somehow determine where people live and for how long they reside there. It then requires the county commissioners to hold a sale for the right to purchase a tax deed? How is this supposed to happen? Who would pay anything for a “right to maybe buy a possible right to take a tax deed? This is not logical nor could it be accomplished. This right to possibly take a tax deed has already been sold when the tax lien was sold on assignment. The county has no standing to sell something they do not own.

    The amended version would require interest to accrue for 3 years at the standard rate and then, at the end of the process, go back and refund the interest. The interest accrued on the county system until the tax lien was sold on assignment. At that point, in our computer system, the taxes are paid in full and the money is disbursed to schools and local governments accordingly. The interest then begins to accrue due to the person that has purchased the tax lien on assignment. To retroactively change the interest rate seems unworkable and would likely make tax liens assignments difficult to sell. This will also be very difficult to apply to those that pay their property taxes late. Currently, if you forget to pay your taxes and go in 2 weeks later, the system has automatically calculated your interest and penalty and how much of that goes to each taxing jurisdiction. So, if you then declare that you live in this house, we need to lower the interest rate and “back out” the proportioned amount for each account. How would we verify that you live there 7 months per year?

    The treasurers acknowledge that, in the isolated incidents where an elderly or confused person is affected by this process, it seems like it is terribly broken. The truth is, Montana allows a person to be 3 years delinquent on their taxes before taking action. Most states are a much shorter time period. This system provides a collection method that ensures our property taxes are paid. We understand what the sponsor is attempting to address. This bill doesn’t accomplish that, but instead, simply makes the collection process unworkable.

    Please – even if amended – vote NO on HB 621


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