thank you may please this court this case involves a an appeal from a bankruptcy court decision which wound its way through the circuit bankruptcy appellate panel and it concerns a minnesota state court property tax refund under section two ninety eight and whether that is relieve based on need under minnesota statute section five five all point three seven assistance based on need you said relief based on need or make sure not mistaken right that that is correct your honor ok so what happened here procedurally is there was  preceding case which was on the exact same statutory analysis called grace johnson that case went up to the bappa few years ago right before that the baptists made a decision in the harty case which concerned the additional child tax federal credit under a missouri relief based statute that the batf found was similar to the minnesota statute and relying on the harty case the grace johnson case the exemption was denied and there after grace johnson was not appealed harty was appeal reversed and we are essentially here asking today that not only that this court reversed the bat but also to it explicitly overrule grace johnson in light of this court's decision could not dot clearly ascertain whether the particular statute qualified in this case i there is a minnesota non exclusive list under five five zero point three seven for what it's worth one of the types of governmental system based i need is a mental security income s s i and in order to qualify for s s i a person who does not get a property tax refund under federal law can will because anybody who gets a property tax refund and who then apply apollo applies for supplemental security income is still going to get that because they're still deemed eligible for that program and then all sudden they become a recipient of government assistance based on need under minnesota statute what the hardy court then did is it does this work this refund i know the briefs go back and forth about whether it's truly a refund but it's not no up the explain how it works ok there there's a little chart that a taxpayer gets in minnesota that says you pay so much in property taxes in this where this is where it goes there's all of these different local entities there's so where did she pay her property taxes well the county to the county and then the county distributes it there's a school district they have different binding they've got mosquito districts and they've got the metropolitan council that takes care of a a county but then this quote unquote refund comes you say out of the state's general fund right right comes directly from the there's the county get to keep one hundred percent of what she pays in for its use or is there yes kind of no arrangement with the state where there's an offset or i'm not aware of anything of the statute says clearly comes from the states general fund directly from the state and the refund exceed no i know i think that there's there's a formula in there and i know that the maximum refund is twenty five hundred dollars i don't know that anybody's property taxes would be less than that in so far as a homeowner but whether it could exceed that or not i i think as a practical matter probably not i'm not certain as far as whether there's a cap on that what do you think based on need me in the example since statute i think you need means means tested i think that the legislature sets a line in the sand and they say at a certain point you make too much and you don't qualify you don't make enough you you're below this threshold and therefore you need it and i think you think it matters where the threshold is in other words if the threshold is very high such that high income people are getting the benefit could it still be based on need or does based on need imply some kind of low income status where you're getting basic life necessities i don't think that it requires indigency or poverty and i and whether there could be a line that it exceeds good conscience where at all points this would never be based on need i don't know that that necessarily the case here because what we've got is a statute that goes up to a provides this assistance up to incomes for homeowners of one hundred five thousand dollars up to fifty seven thousand dollars for renters and in those circumstances as the the homeowners income increases the amount of the refund phases out and i in one of the things that the court did point out in in hearty two was that just because some people who might be higher income benefit from this does not make it dispositive that this is not relief based on ne who benefits predominately no that's just if if you if you just because of the way it works because of the way the formula works if you just assume that people's income were scattered between thirty thousand and one hundred thousand dollars the most of the money would be at the lower end of that range of whether the actual there's more people in the ninety thousand range or the forty thousand dollars range there wasn't any evidence and before the court to that regard now a big part of what this court did in hardy was looking at the legislative history and determine that's what the bappa had not done in that case and when looking at the legislative history when you go back through it and also before you get to legislative history you get a legislative intent which is set forth in the murphy vs henniker case which basically just says that this is for shifting property tax burdens based on ability to pay and then you turn next and so i don't know that that that's that unclear when you get to the legislative intent you turn the court then turns to the legislative history i think throughout the legislative history you can see attempts on the part of the legislature to make th available for people of lower income and i think what the baptists wanted out in this particular case was that well some of these actually don't benefit people of  don't have any caps on it because there is a separate statute to ninety eight point subdivision to age which is for people whose property taxes have increased by at least twelve percent that has no income limits on it that it's not the statute that's in the subdivision of the statute that's involved in the facts of this case and the b grace johnson case and in this case had a tough time divorcing that concept of looking at different subdivisions of the statute and lumping my client's facts in potentially with people who make a million dollars a year whose property taxes went up from eighty thousand to one hundred thousand and they got some of that back but those are different facts and that's not what's in front of this court and i still struggle with why the  they had to lump all that in because i thought that's what courts were supposed to do was only decide the issue that's in front of the court what do you think about the fact that the list of things in the statute are you familiar with all these different minnesota programs that are listed i'm familiar with a lot of them well you know there's a canon of construction that says when you have a list of things then additional things that aren't listed ought to be and then those refunded issue here share that whatever characteristics are common among the listed items well i think one of the things if you look at the courts have determined that an earned income credit is relieved based on need which is quite similar it's for lower income people it phases out at a at a certain level as far as the list i mean a lot of them are are means they once you get to a certain level and a certain threshold it ends and i think that's the the real definition of means testing here the legislature has drawn a line in the sand and i don't know that it's up to this court to go say hey we would have drawn the line in the sand someplace else and that's that's what i think is the overriding similarity between all of these different types of relief based on need particularly when you see the line in the sand you mean the income cutoff right the income cut off eventually at one hundred five thousand plus and harvey says you look at the operation of the statute in practice in this particular case the the refund is is phased out at at higher levels and i do want to just guess i did i touched on that this is not really a refund of overpaid property taxes and  one of the things that the baptists had mentioned also in looking at the legislative history was that well some of these figures and these caps went up over the course of time that doesn't help lower income people that helps higher income people my response to that is that's simply adjustments for inflation over the course of time and i don't know that that's particularly dispositive you know if any of these other enlisted programs go up as high as one hundred five thousand the medical minnesota care i think a lot of them might be functions of household size and the bigger the household size the higher the income could so a family with eight or ten children might be eligible for some of these programs out at one hundred hundred thousand dollars per year the property tax is not based please the court my name is matthew swanson i am counsel for the appellee in this matter randall seaver who is the chapter seven bankruptcy trustee in the underlying case the bankruptcy court in the bankruptcy appellate panel properly decided that in minnesota property tax refund is not government assistance based on need pursuant to minnesota statutes not decision is consistent with this court's holding in hardy v fink the minnesota property tax refund act is distinctly different and distinguishable from the a c t c which was dealt with and hearty by this court for several reasons in it is evidenced by the legislatures in minnesota legislators intent and in acting the statute the amendments made to the statute over the course of forty years and finally the operation of the statute and practice of the two issues i'd like to focus on today are one of the distinguishing features between amendments in the minnesota property tax refund act that we're dealing with this in this case and those reviewed by this court in the heart of the fink case and then also some unique provisions of the minnesota property tax refund act and the minnesota exemption statute issued today which provide further support for the bankruptcy appellate panels decision in finding that this is not government assistance based on need the hardy case is important as the debtors or as the mr tyson said the crux of their case is essentially that the decision in harvey fink by this court or over rules or overturns the decision by man to be johnson i'm concerned a property tax refund on the minnesota statute however when the this court overturned the bankruptcy appellate panels decision and hearty the court focused on the amendments made to the statute which those amendments were not analyzed or viewed or discussed by the bankruptcy appell statute and practice based on amendments that had been made to the c t c over a decade and noted that in practice the phase out amount for the refundable portion of the a c t c was actually much lower and was actually lower than forty thousand dollars  just based on a component of your only entitled to a refund for the ace for the city see if you don't have taxable income if it exceeds the amount of taxable income that you have in our case we have the exact over the course of the statute the minister property tax refund act we've seen the minnesota legislature increase the the phase out amount for the higher income earners in one thousand nine hundred nine the maximum increase or the maximum amount that in visual could earn in a year and be entitled to a refund was thirty five thousand dollars and it was increased to sixty thousand dollars in one thousand nine hundred nine in two thousand and one it was increased again to seventy seven thousand five hundred twenty dollars and then in two thousand thirteen was increased to one hundred five thousand five hundred dollars these amendments are relevant because they show on like the hardy decision and unlike the ac t c we don't see that the legislature in minnesota is narrowly tailoring these refunds for lower income individuals and the hard decision they cited to a hatch in re hatch out of iowa which stated that the effect of the amendments for the a c made the refund almost exclusively available to lower income individuals we do not have that in this case in this case we have the income being increased not only at the phase out amount but then there's a component that's discussed in the breac component of the statute which requires it's your percentage of liability essentially for your they multiply this factor by your income to get to help determine the refund amount and they've cut that in half  for the highest income earning category for minnesota taxpayers and homeowners thereby increasing the available refund for the highest earning wage earners under the statute and i just want to dress the question regarding need how do we terminate if what is need based well what the appellant is asking is that even though the argument that it overwhelmingly benefits the lower income individuals is not dispositive what we're looking at today an argument is if even one dollar is paid to a higher income individual a person making a hundred five thousand five hundred dollars for instance deciding th government assistance based on need we would have to state that that money is based on need not just because the money would go to the lower income individuals it's need but any payment under the minnesota property tax refund act which would be subject to exemption under minnesota statute section five fifty point three seven would have to be deemed to government assistance based on need and the bankruptcy appellate panel was unwilling to take that step and say that higher wage earners earning up to hundred five thousand dollars or individuals based on need and i don't think this court should either there are cases well what's the point of the cutoff you know at some guess in some sense the legislature decided people at one hundred thousand colorful point about how if the debtor it paid the correct amount the cash remaining in the debtors pocket would not be exempt but i'm concerned about whether this really is a refund in the sense that the back seemed to think it was in that case it sounds like it's more of a transfer payment because the money that is paid into the county is not refunded back to house that would be there would be my understanding as well hence for it isn't really the cash wouldn't have remained in her pocket if she hadn't paid the same cash and coming back to her that's correct however i think the appropriate analysis and this goes to men so started section two ninety eight point one zero which requires that you have actually paid your property tax refunds in order to be eligible for a property tax refund or projects pre paid your property taxes for the prior year in order to be eligible for a refund therefore it's not just simply a credit that's given to all homeowners based on based on income you actually have had to pay your property taxes in order to receive the refund and one of the factors in calculating your refund is how much property taxes you paid in the prior year and payable and in the year to come as well furthermore when we're looking at whether or not it's an actual  refund another provision of the minnesota statute section two ninety eight point one five which i think is instructive is that the the fact that the state is able to see is an individual's property tax refund if their delinquent in any other taxes so if this is really a credit based on need it doesn't seem it doesn't seem like the state would give you a refund with one hand and then take it in another based on your a different tax truly based on need you think the state wouldn't be able to reach that tax refund so going back to the operation of the statute and practice and once again this is goes to why is it based on need how do we determine if it's based on need in practice in income individuals in minnesota earning in excess of two hundred five thousand dollars because there are dependent exemptions from income as well are eligible for this tax refund when you look at the other cases that decide what constitutes government assistance based on need including the additional child tax credit the family working credit and the tomsic case and the k to twelve education credit in the demitra case all of those cases deal with individuals that are lower wage earning individuals and there's a phase out in a much smaller amount less than half of what the phase out amount here is in the minnesota property tax minnesota property minnesota property tax refund act and finally i want to harder decision with the additional child tax credit the phase out amount i believe was thirty seven thousand seven hundred statutes initially correct but then there's also the tomsic case which i cited in our brief but deals with the family working credit and out amount but finally i want to point out one more unique distinct feature of the minnesota statute u the statute section five fifty point three seven subdivision fourteen an individual who is entitle to the government assistance whatever is government assistance based on need is also entitled to exempt his earnings for up to six months after return that individual to employment and the ceasing of his eligibility for whatever it is determined are deemed to be government assistance based on need so in this case if a minister property tax refund is deemed a government assistance based on need we have a scenario where an individual under subdivision to h of the statute could have an unchecked amount of earnings but still be eligible to exempt his his earnings from garnishment for a period of six months after return to work which is somewhat vague term but six months after return to work and after the ending of or after the eligibility ceases and it's difficult to say because of the statute if you you're eligible for a property tax refund if you pay your property taxes and you live in your home on january second of that year you do not have to file your property tax refund application until august fifteenth of the following year so if i'm eligible as of january second of two thousand and eighteen i don't have to actually file my property tax refund application and sell it august fifteenth or two thousand and nineteen at that point i'm already eligible for another property tax refund for the following year and so if you treat a situation if i'm in a sort of property tax refund is government assistance based on need when does your eligibility cease and one would an individual returning from work with a high income possibly have one hundred point three seven because of the issues that are so big when would it be if it would never be and that's my point and that's what the baptist issue with and that i think that is that is a clear issue with the statute interpret ng the min property reform tax property tax refund to be government assistance based on need because it would create in a reasonable an absurd interpretation of the statute and result and therefore i believe this court should lower income individuals are not tailored to favor lower income individuals but make the act or make the refund available to hire and individual income individuals as well and therefore as of the court  unless your honour's have any other questions i don't have anything that i don't see any questions thank you thank you cor thank you both for your present the arguments you provided to the court will take your case