June 2, 1975
Mr. D. G. Syvertson
State's Attorney
Clark County Courthouse
Clark, South Dakota 57225
OFFICIAL OPINION NO. 75-98
Non-cancellation of past due special assessments on sale of tax deed land
Dear Mr. Syvertson:
You have requested my official opinion as to the authority of the county treasurer to cancel past due installments of certified special assessments of a municipality; upon the sale of real estate by the county, which had been acquired by the county by tax deed and sold at prices less than the total amount of general taxes, tax assessments, interest, costs, etc.
These tax deeds were taken pursuant to regular tax deed proceedings as well as the Scavenger Tax Law. There are delinquent special assessments owing to the municipality.
In the event of a tax deed sale, SDCL 9-43-41 provides for the application of proceeds of such sale of tax deed land by the county as follows:
Whenever any parcel of land has been acquired by the county by tax deed and sold and conveyed at a price less than the total principal, interest, and costs of all general taxes and past due installments of special assessments which are unpaid thereon, then the proceeds of such sale shall be applied first to the payment of expenses incurred by the county in the proceedings to take tax deed and in such sale proceedings; secondly, towards the payment of the total principal, interest and costs of all such general taxes, such distribution to be made pursuant to direction for disposition of proceeds as set forth in § 7-31-31; and thirdly, the balance shall be applied toward and considered as payment of the principal, interest and costs of all such past due installments of special assessments. (Underscoring supplied.)
Concerning this section it should be noted that there have been several amendments to this particular section. So far as applicable here, SDCL 1967 9-43-41 provided for cancellation of the lien in the event of a deficiency as follows:
. . . the balance shall be applied toward and considered as payment of the principal, interest and costs of all such past due installments of special assessments; if no balance remains for said third purpose, such past due installments of special assessments shall, nevertheless, be cancelled on the books of the county treasurer and he shall notify the city auditor of the fact and such cancellation of past due installments.
A 1973 amendment to this section, by Chapter 56, struck the portion providing for applying the balance toward and considering the same as payment of the principal and substituted:
Remain on the books of the county treasurer as a lien against each parcel of land purchased by tax deed.
By Chapter 78, Laws of 1974, this portion of the section was deleted and the language reinstated virtually as it had existed before, that is, "The balance shall be applied toward and considered as payment of the principal, interest and costs of all such past due installments of special assessments."
However, the 1974 Legislature, in its adoption of Chapter 78, also amended § 10-25-12 which provides that estates in fee simple shall vest in the grantee by the tax deed subject however to lien for state taxes, and also to liens for past due installments of special assessments for the financing of municipal improvements levied pursuant to § 9-43, except for those delinquent for more than 15 years where no collection procedure has been instituted pursuant to § 9-43-60.
An extensive opinion of a former attorney general, dated January 4, 1968, and found in 1967-68 AGR 419, discusses this particular problem and relates to the statute as it then existed. In part material here, 9-43-4l is virtually the same insofar as the language, "the balance shall be applied toward and considered as payment of the principal, interest and costs of all such past due installments of special assessments." § 10-25-12 at that time, however, did not provide for a continuing lien for special assessments.
It is my opinion, therefore, that the provisions of § 9-43-41 concerning the third category of payments, that is, the balance left to pay principal, interest and costs of past due installments of special assessments, will only result in the removal of the lien for such special assessments to the extent the same are fully satisfied and any remaining unpaid special assessments will continue to be a lien against the tax deed property.
I call your attention, however, to § 9-43-54, which permits governing boards of municipalities to compromise special assessments against lots or parcels of real estate situated in cities or towns. Unless the special assessment is compromised by the municipality, the lien is discharged only to the extent that the proceeds from the tax deed sale are sufficient to pay the principal, interest and costs for sales taking place subsequent to and tax deed issued after the effective date of Chapter 78.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
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