SUMMARY--Provides for sale of tax liens against parcels of real property. (BDR 32-29)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to taxation; authorizing a county to sell tax liens against parcels of real property located within the county under certain circumstances; authorizing the county treasurer to conduct a sale of tax liens under certain circumstances; requiring the county treasurer to issue a certificate of purchase for each tax lien sold; requiring the county treasurer to collect the rent from the parcel of real property which is the subject of a tax lien under certain circumstances; authorizing the purchaser of a tax lien to commence an action for the collection of the delinquent taxes, penalties, interest and costs; authorizing the executive director of the department of taxation to enter into a contract with a collection agency for the collection of any outstanding debts owed to the department; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 Chapter 360 of NRS is hereby amended by adding thereto a new section to read as follows:
The executive director may enter into a contract with a collection agency licensed pursuant to chapter 649 of NRS for the collection of any outstanding debts owed to the department.
Sec. 2. Chapter 361 of NRS is hereby amended by adding thereto the provisions set forth as sections 3 to 12, inclusive, of this act.
Sec. 3. As used in sections 3 to 12, inclusive, of this act, unless the context otherwise requires, "tax lien" means a perpetual lien which remains against a parcel of real property until the taxes assessed against that parcel for 1 year and any penalties, interest and costs which may accrue thereon are paid.
Sec. 4. 1. A county may, in lieu of the remedies for the collection of delinquent taxes set forth in NRS 361.5648 to 361.730, inclusive, sell a tax lien against a parcel of real property whose taxes are delinquent pursuant to the provisions of sections 3 to 12, inclusive, of this act.
2. A sale of a tax lien does not extinguish the tax lien or the taxes owing on that lien. The purchaser of a tax lien obtains the lien with the same priority as the county when it held the lien.
3. A sale of a tax lien does not extinguish the right of the owner of the parcel of real property to which the lien is attached to redeem the tax lien.
Sec. 5. 1. Before a county may offer for sale tax liens against parcels of real property located within the county, the board of county commissioners of that county must adopt by resolution a procedure for the sale and transfer of tax liens by the county treasurer.
2. The procedure must include:
(a) The requirements for notice of the sale of the tax lien which must be provided to the owner, as indicated on the tax roll, of the delinquent property which is the subject of the tax lien and to any other person or governmental entity that appears in the records of the county to have a lien or other interest in the property. The notice must:
(1) Be provided at least 30 days before the date of the sale; and
(2) Include the date, time and location of the sale.
(b) The manner in which:
(1) A tax lien is selected for sale;
(2) The price to purchase a tax lien is determined; and
(3) The holder of a certificate of purchase issued pursuant to section 8 of this act may collect the delinquent taxes, interest, penalties and costs on the parcel of real property which is the subject of the tax lien.
Sec. 6. 1. The board of county commissioners may, upon the request of the county treasurer, authorize the county treasurer to sell a tax lien against a parcel of real property after the first Monday in June after the taxes on that parcel become delinquent if:
(a) The parcel is on the secured roll;
(b) The taxes on the parcel are delinquent pursuant to the provisions of NRS 361.483;
(c) The tax receiver has given notice of the delinquency pursuant to NRS 361.5648; and
(d) The price for the tax lien established by the board, in consultation with the county treasurer, is at least equal to the amount of the taxes which are delinquent, including penalties and costs, for the parcel.
2. The county treasurer may sell a tax lien separately or in combination with other tax liens pursuant to the procedure adopted by the board of county commissioners pursuant to section 5 of this act.
3. Each tax lien must relate to the taxes assessed against the parcel for 1 year.
4. The county treasurer may sell a tax lien which relates to the taxes assessed against the parcel for any year of assessment, if those taxes are delinquent pursuant to the provisions of NRS 361.483.
5. If two or more parcels are assessed as a single parcel, one tax lien may be sold for that single parcel.
6. A tax lien must be purchased in cash or by certified check or money order.
7. If a tax lien which the board of county commissioners directs the county treasurer to offer for sale is not sold at the sale conducted by the county treasurer, the county may collect the delinquent taxes pursuant to the remedies for the collection of delinquent taxes set forth in NRS 361.5648 to 361.730, inclusive.
Sec. 7. The county treasurer shall not sell or offer for sale or transfer a tax lien against a parcel of real property which is owned by a person who:
1. Is at least 62 years of age;
2. Has a permanent disability or a medically diagnosed terminal illness; or
3. Is the surviving spouse of the owner of the parcel,
if the parcel of real property is the primary residence of the person, the parcel is the only real property which the person owns and the income and assets of the person are insufficient to pay the delinquent taxes on the parcel.
Sec. 8. 1. The county treasurer shall issue a certificate of purchase to each purchaser of a tax lien. The county treasurer may establish and maintain a system of recording the issuance of certificates of purchase.
2. The purchaser shall file the certificate of purchase with the county recorder in the county in which the property is located.
3. The amount of fees, if any, charged by the county, including, but not limited to, the county treasurer, for the issuance or recordation of a certificate of purchase must be determined by the county and the purchaser of the lien.
4. The holder of a certificate of purchase is entitled to receive:
(a) The amount of the taxes which are delinquent for the year those taxes are assessed against the parcel of real property which is the subject of the tax lien and any penalties, interest and costs imposed pursuant to the provisions of this chapter; and
(b) Interest on the amount of delinquent tax described in paragraph (a) which accrues at the rate of 10 percent per annum from the date the county treasurer sells the tax lien.
5. Each certificate of purchase must include:
(a) A description of the parcel of real property which is the subject of the tax lien;
(b) The year for which the taxes which are delinquent were assessed on the parcel;
(c) The amount the county treasurer received for the tax lien;
(d) The amount of the delinquent taxes owed on the parcel and any penalties, interest and costs imposed pursuant to the provisions of this chapter; and
(e) A statement that the amount of delinquent tax indicated on the certificate pursuant to paragraph (d) bears interest at the rate of 10 percent per annum from the date the county treasurer sells the tax lien.
6. Except as otherwise provided in this subsection, the holder of a certificate of purchase shall, to enable a person to redeem a tax lien pursuant to section 11 of this act, maintain within this state:
(a) A residence or place of business; and
(b) A telephone number at which the holder may be reached at no charge by a person who desires to redeem a tax lien that the holder has pur-
chased.
A holder of a certificate of purchase who is not a resident of this state may satisfy the requirements of this subsection by maintaining within this state a resident agent, as that term is defined in NRS 86.125.
7. Notwithstanding the provisions of NRS 104.9102 and 104.9104, a security interest in a certificate of purchase may be created and perfected in the manner provided for general tangibles set forth in NRS 104.901 to 104.9507, inclusive.
Sec. 9. 1. If a tax lien against a parcel of real property has been sold in the year immediately preceding the date that taxes on that parcel again become delinquent pursuant to NRS 361.483, the county treasurer shall send a notice by certified mail to the holder of the certificate of purchase of that tax lien. The holder may, within 90 days after he receives the notice, purchase from the county treasurer a tax lien against the parcel for the current year of assessment pursuant to the provisions of section 8 of this act.
2. The county treasurer shall collect a fee of $10 from the holder who purchases the tax lien pursuant to subsection 1.
3. If the holder of a certificate of purchase fails to purchase the tax lien for the current year pursuant to subsection 1:
(a) The county treasurer may sell the tax lien to another person if the treasurer is authorized to do so by the board of county commissioners; or
(b) The county may collect the delinquent taxes pursuant to the remedies set forth in NRS 361.5648 to 361.730, inclusive.
Sec. 10. A tax lien which relates to the taxes assessed on a parcel of real property which is the subject of that tax lien for the most recent year of assessment has priority over any other tax lien which is the subject of that parcel for the collection of rents arising from that parcel.
Sec. 11. 1. Any tax lien sold pursuant to the provisions of sections 3 to 12, inclusive, of this act may be redeemed by any of the following persons, as their interests in the parcel of real property which is the subject of the tax lien may appear of record:
(a) The owner of the parcel of real property.
(b) The beneficiary under a deed of trust.
(c) The mortgagee under a mortgage.
(d) The person to whom the property was assessed.
(e) The person who holds a contract to purchase property before its conveyance to the county treasurer.
(f) The successor in interest of any person specified in this subsection.
2. A person who redeems a tax lien for which a certificate of purchase of the tax lien has been issued must pay to the holder of the certificate the amount stated on the certificate, including interest at the rate stated on the certificate and any fees paid by the holder of the certificate, to the county for which he was to be reimbursed upon redemption of the tax lien.
3. If the person who redeems the tax lien has been served with a summons pursuant to NRS 361.670, he must pay the costs incurred by the holder of the certificate to commence the action.
4. The county treasurer shall issue a certificate of redemption to each person who redeems a tax lien pursuant to this section.
5. A certificate of redemption issued pursuant to subsection 4 must include:
(a) A description of the parcel of real property which is the subject of the tax lien;
(b) The date the tax lien is redeemed;
(c) The name and address of the person who redeems the tax lien; and
(d) The amount paid to redeem the tax lien.
6. A certificate of redemption must be recorded in the office of the county recorder.
Sec. 12. If a tax lien against a parcel of real property which is sold pursuant to the provisions of sections 2 to 12, inclusive, of this act is not redeemed within 2 years after the date on which taxes on that parcel became delinquent pursuant to NRS 361.483, the holder of the certificate of purchase may commence an action for the collection of the delinquent taxes, penalties, interest and costs pursuant to NRS 361.645 to 361.715, inclusive.
Sec. 13. NRS 361.5648 is hereby amended to read as follows:
361.5648 1. Within 30 days after the first Monday in March of each year, with respect to each property on which the tax is delinquent, the tax receiver of the county shall mail notice of the delinquency by first-class mail to:
(a) The owner or owners of the property;
(b) The person or persons listed as the taxpayer or taxpayers on the tax rolls, at their last known addresses, if the names and addresses are known; and
(c) Each holder of a recorded security interest if the holder has made a request in writing to the tax receiver for the notice, which identifies the secured property by the parcel number assigned to it in accordance with the provisions of NRS 361.189.
2. The notice of delinquency must state:
(a) The name of the owner of the property, if known.
(b) The description of the property on which the taxes are a lien.
(c) The amount of the taxes due on the property and the penalties and costs as provided by law.
(d) That if the amount is not paid by the taxpayer or his successor in interest [the] :
(1) The tax receiver will, at 5 p.m. on the first Monday in June of the current year, issue to the county treasurer, as trustee for the state and county, a certificate authorizing him to hold the property, subject to redemption within 2 years after the date of the issuance of the certificate, by payment of the taxes and accruing taxes, penalties and costs, together with interest on the taxes at the rate of 10 percent per annum from date due until paid as provided by law and that redemption may be made in accordance with the provisions of chapter 21 of NRS in regard to real property sold under execution.
(2) If the property is a parcel of real property and the board of county commissioners so directs, a tax lien may be sold against the parcel pursuant to the provisions of sections 3 to 12, inclusive, of this act.
3. Within 30 days after mailing the original notice of delinquency, the tax receiver shall issue his personal affidavit to the board of county commissioners affirming that due notice has been mailed with respect to each parcel. The affidavit must recite the number of letters mailed, the number of letters returned, and the number of letters finally determined to be undeliverable. Until the period of redemption has expired, the tax receiver shall maintain detailed records which contain such information as the department may prescribe in support of his affidavit.
4. A second copy of the notice of delinquency must be sent by certified mail, not less than 60 days before the expiration of the period of redemption as stated in the notice.
5. The cost of each mailing must be charged to the delinquent taxpayer.
Sec. 14. NRS 361.645 is hereby amended to read as follows:
361.645 [The delinquent list or a copy thereof certified by the county treasurer showing unpaid taxes against any person or property shall be prima facie evidence in any court to prove:
1. The assessment.
2. The property assessed.
3. The delinquency.
4. The amount of taxes due and unpaid.
5. That all the forms of law in relation to the assessment and levy of such taxes have been complied with.] A certificate of purchase of a tax lien or a copy thereof which is certified by the holder and which indicates the sale of a tax lien to collect unpaid taxes on a parcel of real property is prima facie evidence in any court in an action commenced by the holder of the certificate of purchase to prove:
1. The assessment.
2. The property assessed.
3. The delinquency.
4. The amount of taxes, penalties, interest and costs due and unpaid by the defendant.
5. That all the forms of law in relation to the assessment and levy of those taxes and the sale of the tax lien have been complied with.
Sec. 15. NRS 361.650 is hereby amended to read as follows:
361.650 1. [Actions authorized by NRS 361.635 shall be commenced in the name of the State of Nevada against the person or persons so delinquent, and against all owners, known or unknown.
2. Such actions] An action authorized by section 12 of this act must be commenced in the name of the holder of the certificate of purchase of the tax lien against the person or persons delinquent in the payment of the taxes on the parcel of real property which is the subject of the tax lien and against all owners, known or unknown, of that parcel.
2. Any action described in subsection 1 may be commenced in the county where the assessment is made, before any court in the county having jurisdiction of the amount thereof . [, and such jurisdiction shall] The jurisdiction must be determined solely by the amount of delinquent taxes, exclusive of penalties and costs sued for, without regard to the location of the lands or other property as to townships, cities or districts, and without regard to the residence of the person or persons, or owner or owners, known or unknown.
Sec. 16. NRS 361.695 is hereby amended to read as follows:
361.695 The defendant may answer by a verified pleading:
1. That the taxes [and penalties] , penalties, interest and costs have been paid before suit.
2. That the taxes [with penalties] , penalties, interest and costs have been paid since suit, or that [such] the property is exempt from taxation [under] pursuant to the provisions of this chapter.
3. Denying all claim, title or interest in the property assessed at the time of the assessment.
4. [That the land is situate in, and has been assessed in, another county, and the taxes thereon paid.
5. Fraud] Alleging fraud in the assessment, or that the assessment is out of proportion to and above the taxable value of the property assessed. [Where] If the defense is based upon the ground that the assessment is above the taxable value of the property, the defense is only [effectual] valid as to the proportion of the tax based upon [such] the excess of valuation , [;] but in no such case may an entire assessment be declared void.
5. If the action is brought by the holder of a certificate of purchase of a tax lien, that the defendant is the owner of a parcel of real property against which a tax lien may not be sold pursuant to section 7 of this act.
6. If the action is brought by the holder of a certificate of purchase of a tax lien, that the defendant has redeemed the tax lien pursuant to section 11 of this act. The defendant shall file the certificate of redemption issued pursuant to section 11 of this act with his answer.
Sec. 17. NRS 541.240 is hereby amended to read as follows:
541.240 If the taxes and assessments levied are not paid as [herein provided, then] provided in this section, the real property, if not redeemed within the time allowed by law, [shall] must be sold and conveyed for the payment of taxes, assessments, interest and penalties in the manner provided by [chapter 361 of] NRS 361.5648 to 361.600, inclusive, and 361.605 to 361.730, inclusive, for the sale of real property after default in payment of general taxes.
Sec. 18. NRS 361.635 and 361.640 are hereby repealed.
TEXT OF REPEALED SECTIONS
361.635 Preparation and delivery of certified lists of delinquencies to district attorney; commencement of action.
1. Within 3 days after making the publication required by NRS 361.565, or after the last publication if more than one is made, the county treasurer:
(a) Shall prepare and deliver to the district attorney of his county a list certified to by him of all accumulated delinquent taxes, exclusive of penalties and assessments of benefits of irrigation districts, of the sum of $3,000 or more.
(b) May prepare and deliver to the district attorney of his county, a list certified to by him of all accumulated delinquent taxes, exclusive of penalties and assessments of benefits of irrigation districts, of the sum of $1,000 or more but less than $3,000.
2. If the delinquent taxes specified in the certified list and penalties and costs are not paid to the county treasurer as ex officio tax receiver within 20 days after the date of delivery of the certified list to the district attorney, the district attorney may, and shall when directed by the board of county commissioners, immediately commence an action for the collection of the delinquent taxes, penalties and costs.
3. The remedy prescribed by this section is in addition to any other remedies provided by law for the collection of delinquent taxes.
361.640 Additional bond of district attorney. Before receiving the delinquent list as provided in NRS 361.635, the district attorney shall enter into such additional bond as may be required by the board of county commissioners.