Lindsay Brinson

Lindsay Brinson, a nurse from Eagle, Nebraska, tells state lawmakers that she will have to pay nearly $100,000 to keep her home after a private company paid off a small tax debt. She testified at a hearing on Legislative Bill 463 on Friday.

LINCOLN — Fighting back tears, Lindsay Brinson told a group of state lawmakers on Friday that she may lose her $108,000 home because she couldn’t afford to pay her $2,500 property tax bill in 2013.

A private company, which paid the tax bill and her unpaid taxes in subsequent years, acquired the title to her home in Eagle, Nebraska, under a legal process designed to get people to pay their delinquent taxes.

At a legislative hearing Friday, Brinson said the process was a nightmare for her and doesn’t give homeowners like her proper notice that a company could soon take away their home.

To keep a home that was already paid for, she is now paying $507 a month for 15 years to an Omaha management company that paid her tax debts. She said that, including an $8,000 down payment, she will eventually have to pay more than $99,000 to keep her home because of $16,600 in delinquent taxes.

“These investment companies are taking advantage of people who are already in severe financial crisis and making their situation dramatically worse,” she told a panel of state lawmakers. “Now I’m paying twice for my home.”

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The testimony came as the Legislature’s Revenue Committee considered a measure, Legislative Bill 463, to increase notification to delinquent taxpayers so they clearly understand that they owe back taxes and could lose their home or farm if they don’t pay companies that pick up such debts.

The problem came into focus last year in a series of stories in The World-Herald about such tax liens. In one case, an infirm 94-year-old widow living in a nursing home in North Platte lost a farm worth $1.1 million after neglecting to pay tax bills that grew to $50,000. The Legislature had passed a bill in 2012 to improve notification in such cases, but lawmakers put the changes on hold temporarily in 2014 and again in 2017.

State Sen. Matt Williams of Gothenburg said he crafted LB 463 to “significantly address” the notification shortfalls after discussions with county officials involved in the tax lien process and two companies that obtain properties through the system.

He said the bill would have prevented the case in North Platte by ensuring that an attempt would have been made to personally notify the owner of the farm, as well as the farmer who rented the land, that taxes were delinquent and a private company could soon take the title to the land.

Under current law, no in-person notification is required; instead, a notice can be sent via certified mail — a notice Brinson said she never saw because she picked up her mail at the Eagle post office every week or so.

Williams said his bill would also improve notification by requiring — if other means of notification fail — that a legal ad be placed in the newspaper designated by the county board as the legal paper for the county. Right now, such an ad can be placed in any newspaper in the county, which increases the likelihood that it could be overlooked.

A representative of Legal Aid of Nebraska and an elderly client of the organization testified that LB 463 didn’t go far enough.

Caitlin Cedfeldt, a Legal Aid attorney, said delinquent taxpayers whose debts are being bought up by private investors should get a clear warning immediately after a company buys a “tax certificate” on their home or farmland, not three years later when companies can move to acquire the property by obtaining a tax deed. After three years, the tax debt grows considerably, she said, making it even more difficult to pay.

“Notice should be provided earlier, in plain English,” Cedfeldt said.

Legal Aid is challenging the constitutionality of the state’s tax lien process .

Cedfeldt said the current system is “unjust and inequitable” and particularly unfair for elderly, handicapped or low-income homeowners who may not understand the gravity of the situation or have the money to hire an attorney.

Williams, who is a banker, said earlier notification, as suggested by Legal Aid, was not supported by the group of bankers, county officials and companies that helped craft LB 463. He emphasized that people don’t get into this trouble unless they don’t pay their property taxes and continue to not pay for three to five years.

No one spoke in opposition to the bill.

Reporter - Regional/state issues

Paul covers state government and affiliated issues. He specializes in tax and transportation issues, following the governor and the state prison system. Follow him on Twitter @PaulHammelOWH. Phone: 402-473-9584.

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