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Lawmakers debate giving homestead status higher priority over tax liens; counties and cities oppose
Summary
House Bill 1343 would grant homestead protections and change tax‑lien priority so primary residences rank immediately after child‑support claims; supporters framed it as protecting homeowners, while county and city associations warned it could shift costs to other taxpayers and complicate collections.
Representative Ben Koppelman introduced House Bill 1343 to clarify homestead protections and change the priority of tax liens on primary residences. He told the committee the bill would prevent forced sale of a primary residence for unpaid taxes in many circumstances and place county or city tax liens behind child‑support claims in lien priority.
Koppelman said the bill’s intent is to protect homeowners from losing their homes for unpaid taxes and described sections that would let an owner declare a homestead and that would set notice requirements for tax liens. He told members the change is “a simple concept” intended to prioritize a person’s right to remain in their home.
Committee members raised practical concerns. One member asked how local governments would provide services if property owners stopped paying taxes; Koppelman replied that statutory interest, lenders’ actions and existing collection tools would remain incentives to pay. County and city witnesses testified in opposition. Aaron Burst of the Association of Counties said county data show very few actual forcible removals of occupied homes for nonpayment and warned that eliminating or severely limiting foreclosure would shift costs to other taxpayers and to political subdivisions. Stephanie Ingebretson of the North Dakota League of Cities expressed similar concerns about blighted properties and fiscal impacts.
Witnesses and members also discussed interactions with Medicaid estate recovery and mortgage lenders, with multiple members asking what happens if taxes compound and a property is later sold. Koppelman said the hammer remains the compounding interest and the mortgage company’s incentives to keep taxes current to protect its first lien.
No committee action was taken on the bill during the hearing. Members asked the sponsor and county/city associations to provide data on how often occupied residential properties are foreclosed for tax nonpayment, with county and city representatives offering to collect and supply additional numbers.
