Court ruling may affect tax-forfeited forest land in Minnesota

St. Paul — The U.S. Supreme Court’s decision on May 25 in the Tyler vs. Hennepin County case eliminated some provisions of Minnesota’s property tax forfeiture law. Supreme Court justices ruled unanimously that the case violated the takings clause in the Fifth Amendment of the U.S. Constitution.

The reversal in the case concerns the Minnesota Forest Resources Council because it could affect 2.8 million acres of previously forfeited forest lands managed under county governments across the state.

“They started using this asset as a county land asset as a way that they could annually manage,” said Eric Schenck, MFRC executive director. “They could cut timber and generate some income and that they could also then hold in trust for the people as a public value. A place that the public could go hunt and fish and recreate on. It became … the county forest.”

David Deerson, a Pacific Legal attorney who was on Tyler’s case, said the Tyler vs. Hennepin County case was based on Geraldine Tyler, a 94-year-old widow whose home was seized by Hennepin County because she couldn’t pay the $15,000 of debt from property taxes, penalties, interest, and fees. Deerson added that the home was valued at $40,000, and instead of giving the difference of $25,000 to Tyler, the county kept the entire $40,000.

Minnesota law allowed the county to keep everything, but the Fifth Amendment of the U.S. Constitution says, “nor shall private property be taken for public use, without just compensation.”

The U.S. Supreme Court ruled that “just compensation” is required per the Constitution. It also stated that state laws aren’t the only source to define property rights and that state governments can’t take private property without compensation for that property.

Kory Cease, land commissioner for Itasca County, said state tax-forfeited land laws were created in the 1930s after land in some areas of the state, mostly in northern Minnesota, was cut over but later abandoned during the Great Depression. About 8 million acres of land was deemed tax-delinquent, and counties began to realize the value of these acres for renewing soils and growing trees.

Cease said most private property that’s seized today is sold to a private party and not sold to the state for public purposes. Most of the 2.8 million acres of forest land is in the northern part of Minnesota, and Cease said there’s about 300,000 acres in Itasca County alone.

“It’s our northern counties that manage the 2.8 million acres of tax-forfeited trust land,” Cease said. “We’re unique from other counties in that we have this land base of tax-forfeit lands that were forfeited – most (if not) all of them many decades ago.”

MFRC is concerned that about 2.8 million acres of tax-forfeited forest land will be taken away depending on how the state law will be updated because of the recent Supreme Court decision. Rick Horton, Minnesota Forest Industries’ executive vice president, said there would be huge problems if the state didn’t own those millions of acres because it’s great land for hiking, hunting, birdwatching, and other outdoor activities.

The MFRC planned to meet earlier this week (after Outdoor News’ deadline) to discuss a resolution that would have the Minnesota Legislature focus on new forfeitures and not old forfeitures. Most of the forfeited forest land was seized almost a century ago, and it would be difficult to find the appropriate owners.

“(State legislators) need to focus on the portion of the statute that relates to how new forfeitures are handled … and not get too far into the weeds on the old forfeitures and the dispensation of those proceeds from the timber sales,” Horton said.

The net proceeds from a sale of tax-forfeited land can be beneficial for the outdoors. According to Minnesota Statute 282.08, a county board can set aside no more than 30% of the net proceeds for “forest development on tax-forfeited land and dedicated memorial forests.”

The statute says a county board can set aside no more than 20% of the net proceeds for “acquisition and maintenance of county parks or recreational areas.” The rest of the net proceeds must be appropriated to the school districts and cities.

Dollars from net proceeds of tax-forfeited land has benefited forests and county land for many years. The reversal in the case could shut down these benefits for future support to the forfeited forest lands.

Cease said the 2.8 million acres of forfeited forest land is important to keep because of the timber proceeds. The state uses the lands to cut trees and sell timber, and some of the money generated by the sales goes back to helping the forests thrive and grow.

The MFRC will develop a resolution and advocate for it during the legislative session that starts in February of 2024. Horton said there were five bills made during 2023’s session that referred to tax-forfeited property laws and none of them received a hearing. He expects similar bills to be introduced in 2024.

“These lands are important to Minnesota and to Minnesotans,” Horton said. “That’s some of the best hunting land out there because the counties are pretty active at timber management. There’s an abundance of ruffed grouse habitat and deer habitat and turkey habitat on those county lands.”