Clay County Commission

Dan Haglund 

In order to fall in line with a U.S. Supreme Court ruling last year, finding the Minnesota property tax-forfeiture law was unconstitutional, Clay County Administrator Stephen Larson presented the local numbers for the county’s Board of Commissioners on Tuesday in Moorhead.

Larson explained that the former law did not allow interested parties to claim surplus value in property forfeitures. 

There are three different class-action lawsuits moving forward with this issue, Larson said.

The state in February agreed to pay $109 million to settle class action lawsuits filed on behalf of Minnesotans who lost their properties because of unpaid taxes while the counties kept the surpluses.

This after a 2023 unanimous ruling in Tyler v. Hennepin County, that found the county violated a woman’s constitutional rights when it sold her forfeited property for more than she owed in taxes and pocketed the difference, or the surplus.

“In the last legislative session, the Minnesota Legislature set aside $109 million to deal with the settlements,” Larson said. 

Larson said all of the properties within Clay County which would fall into this forfeiture category have been identified, going back to June 2016 through the end of 2023. Larson said counties would have to opt out of the settlement, but in order to remain in would require allowing the county auditor (Lori Johnson) to opt in. 

Johnson has provided a figure of $601,582 from Clay County forfeited properties in the settlement. 

Larson said there’s going to be a state claims administrator who deals with all of Minnesota’s 87 counties and their portions of the settlement. 

Larson put forward an official request to the board to approve the tax settlement obligations established by the Legislature, and allow Johnson to submit identified properties toward the settlement. 

Commissioner Jenny Mongeau, Dist. 3, was first to commend the massive amount of work that went into this effort.

“The amount of work that went into this cannot even be defined,” Mongeau said. “I had the opportunity to serve on the state committee that worked through this, and really looked at it in the most equitable way, wanting to make sure the past property owners had the opportunity to be made whole by this ruling,” 

Mongeau also stressed that the counties were also a concern for the committee, and that they weren’t left “on the hook” for settlement apportionment. 

The board unanimously approved the motion to join in the state settlement.