1Amending Title 53 (Municipalities Generally) of the Pennsylvania
2Consolidated Statutes, providing for tax foreclosure; and
3making related repeals.

4The General Assembly of the Commonwealth of Pennsylvania
5hereby enacts as follows:

6Section 1. Title 53 of the Pennsylvania Consolidated
7Statutes is amended by adding a chapter to read:

8CHAPTER 90

9TAX FORECLOSURE

10Sec.

119001.  Scope of chapter.

129002.  Definitions.

139003.  Tax collection bureaus.

149004.  Priority of liens.

159005. Return of delinquent taxes.

169006. Assignment of claims.

179007.  Delinquency.

189008.  Commencement of foreclosure action.

19009.  Redemption.

29010.  Foreclosure sale.

39011.  Transfers in absence of minimum bid.

49012.  Postsale duties of bureau.

59013.  Hardship protections.

69014.  Taxpayer advocate.

7§ 9001.  Scope of chapter.

8Except for any law that may be used for the sale of property
9pursuant to an assignment of a tax claim in accordance with
10section 9006 (relating to assignment of claims), this chapter
11shall be the sole law authorizing and governing the sale of real
12property for the payment of delinquent taxes. The scope of this
13chapter is limited to proceedings in rem and is not intended to
14nor shall it be construed to affect any law respecting personal
15liability for any encumbrance on real property.

16§ 9002.  Definitions.

17The following words and phrases when used in this chapter
18shall have the meanings given to them in this section unless the
19context clearly indicates otherwise:

20"Bureau."  A tax collection bureau established under section
219003 (relating to tax collection bureaus).

22"County."  A county-level municipality within this
23Commonwealth. The term includes a county which has adopted a
24home rule charter or optional plan of government under the
25provisions of Subpart E of Part III (relating to home rule and
26optional plan government).

27"Hardship payment plan."  The plan entered into under a
28program under section 9013 (relating to hardship protections).

29"Interested party."  Any of the following:

30(1) The owner or reputed owner of the subject property.

1(2) Any person who has a recorded interest in the
2property which may be affected by the sale of the property.

3(3) Any person who has an interest in the property not
4of record which is reasonably likely to be affected by the
5sale of the property and of which the bureau has knowledge,
6including, but not limited to, any person found in possession
7of the property.

8"Owner-occupant."  A natural person with a legal ownership
9interest in property which was the primary residence of the
10person for at least three consecutive months in the year
11preceding the date of delinquency and continuing thereafter as
12its primary residence.

13"Redemption amount."  The full amount of delinquent ad
14valorem real property taxes. The term includes:

15(1)  accrued interest;

16(2)  penalties; and

17(3)  costs incurred by the bureau in collecting the
18taxes.

19"Taxing district." Any county, city, borough, town,
20township, home rule municipality, optional plan municipality,
21optional charter municipality, school district or any similar
22general purpose unit of government created or authorized by
23statute which has the authority to levy ad valorem real property
24taxes.

25§ 9003.  Tax collection bureaus.

26(a)  Establishment.--The governing body of the county shall
27establish a tax collection bureau or shall enter into a joint
28agreement with another county or counties under Subchapter A of
29Chapter 23 (relating to intergovernmental cooperation) to
30establish a regional tax collection bureau. Each bureau shall

1act as agent for the taxing districts within its jurisdiction in
2the collection and enforcement of delinquent real property
3taxes. Except as otherwise provided in section 9006 (relating to
4assignment of claims), a taxing district shall not delegate the
5power or duty to collect delinquent taxes.

6(b)  Successor.--A tax collection bureau created under
7subsection (a) shall succeed to the authority of tax claim
8bureaus and all similar agencies authorized and created under
9prior law.

10(c)  Alternative collection of delinquent taxes; service
11providers.--The bureau may provide for the appointment and
12compensation of such agents, clerks, collectors, and other
13assistants and employees, either under existing county
14departments, in the private sector, or otherwise as may be
15deemed necessary, for the collection and distribution of taxes
16under this chapter. The bureau may delegate any or all of its
17powers as delinquent tax collector under this chapter to any
18agent, provided, however, that nothing in this chapter shall
19authorize the charging of fees or the collection of commissions
20by an appointed delinquent tax collector in excess of what would
21otherwise be charged or collected by the bureau.

22(d)  Availability of data.--Each bureau shall create and
23maintain an Internet website for the purpose of posting
24information concerning the tax status of each parcel within its
25jurisdiction and shall make the same information available for
26inspection during regular office hours. The following shall
27apply:

28(1)  The bureau shall be responsible for maintaining
29current information on the Internet website; however, data
30provided on the website or in any notice or database

1connected to the Internet website shall not be construed to
2constitute a guarantee or legal document, and the bureau
3shall not be liable for direct or indirect damages resulting
4from use of the data. For the purpose of this subsection,
5"current" means within two weeks of receiving accurate and
6credited payment.

7(2)  The Internet website shall include the following
8information for each tax delinquent property:

9(i)  the address;

10(ii)  the parcel identification number;

11(iii)  the name of the owner;

12(iv)  the property type or a brief description of the
13property;

14(v)  the acreage;

15(vi)  the deed book and page in which the property
16appears;

17(vii)  the date of last sale if this information is
18made available to the bureau;

19(viii)  the amount for which the property was last
20sold if this information is made available to the bureau;

21(ix)  the taxing district;

22(x)  the tax year of the delinquency;

23(xi)  the redemption amount;

24(xii)  a notice of proceedings against the property,
25including the docket number and the date and time
26scheduled for any hearing or sale under this chapter;

27(xiii) any other notices required under this
28chapter;

29(xiv) the name, telephone number and address of any
30collector of delinquent taxes appointed as provided in

1subsection (c); and

2(xv) information relating to the assignment of a
3claim, including the name, telephone number and address
4of any assignee, the date of the assignment, the amount
5of the claim assigned and any additional information
6forwarded to the bureau as provided in paragraph (3).

7(3)  A term and condition of any assignment of claims
8under section 9006 shall be that an assignee provide the
9bureau with written notification of all of the following:

10(i) The payment, compromise or other satisfaction of
11the claim assigned within five days of the payment,
12compromise or satisfaction.

13(ii) The name, telephone number and address of any
14subsequent assignee and the date of the assignment,
15within five days of the assignment.

16(iii) Notice of proceedings instituted by the
17assignee against the property or against an owner for
18recovery of an assigned claim, including the docket
19number, date and time of any hearing or sale under this
20chapter or any other law, rule or regulation providing
21for the action.

22(4) The Internet website may permit users to register to
23receive notices related to specific properties and may also
24provide forms, general notices and any other relevant
25information or services.

26(e)  Binding effect of certification.--Upon the written
27request of any person, the bureau shall issue a certification
28showing the amount of any taxes due on the property as of the
29date of the issuance. If any certification incorrectly indicates
30that a tax has been paid or that less than the true and correct

1amount is owed and any person acts in reliance upon such
2representations by acquiring, for valuable consideration, an
3interest in the property, no lien may be imposed on the property
4for the amount of the error. If a tax certification is requested
5in connection with a particular transaction, the parties to the
6transaction shall be presumed to have acted in reliance upon the
7representations in the certification.

8(f)  Fees.--Except where otherwise prohibited by law, a
9bureau may require the payment of reasonable fees for services
10under this chapter, including, but not limited to, issuing tax
11certifications and notices and making copies of records. The
12charges made for each service shall bear a reasonable
13relationship to the service rendered. Such fees for services
14shall be in addition to the 5% commission authorized in section
159012(c) (relating to postsale duties of bureau). Any interest
16earned on money held by the bureau prior to distribution shall
17also be retained by the bureau for administrative costs.

18§ 9004.  Priority of liens.

19Notwithstanding any other provision of law, all taxes on real
20property are declared a first lien on the real property, second
21only to a lien of the Commonwealth.

22§ 9005. Return of delinquent taxes.

23(a)  General rule.--Each receiver or collector of ad valorem 
24real property taxes for every taxing district shall make a 
25return to the tax collection bureau on or before a date 
26established by the bureau, which shall be not later than the 
27last day of April of each year and not earlier than the first 
28day of January of that year. The return shall be typewritten on 
29a form provided by or acceptable to the bureau and shall include 
30a list of all properties against which taxes were levied, the
 

1whole or any part of which were due and payable in the calendar 
2year immediately preceding and which remain unpaid, giving the 
3description of each such property as it appears in the tax 
4duplicate and the name and address of the owner as it appears in 
5the tax duplicate, together with the amount of such unpaid taxes 
6and penalties up to the first day of the first month of 
7delinquency, at which time the taxes shall be subject to 
8penalties in accordance with section 9007 (relating to 
9delinquency). The return shall be accompanied by a signed 
10affidavit that the return is correct and complete.

11(b)  Exception.--No taxes shall be returned by any tax
12collector where the owner is paying delinquent taxes under the
13provisions of any State law or local ordinance abating
14penalties, interest and costs, unless there has been a default
15in payment by the owner, in which case, or at any time when a
16yearly return is being made after any such default, a return
17shall be made of the balance due as fixed by the law abating
18penalties, interest and costs or either. The lien of all such
19taxes shall be continued for the purpose of making a return
20thereof and collecting the same under the provisions of this
21chapter.

22§ 9006. Assignment of claims.

23The bureau may assign some or all of its portion of the
24claims, either absolutely or as collateral security, for an
25amount to be determined by the bureau and under such terms and
26conditions upon which the bureau and the assignee shall agree in
27writing. Upon such an assignment, the following shall apply:

28(1)  Assignment shall not be deemed a discharge or
29satisfaction of the claim or the taxes giving rise to the
30claim and the lien of the assigned claim and taxes giving

1rise to the claim shall continue in favor of the assignee.

2(2)  The bureau shall not commence a foreclosure action
3or exercise any other powers under this chapter with respect
4to the assigned tax claim.

5(3)  The assignee shall have and enjoy the same rights,
6privileges and remedies as were held by the taxing district
7with respect to the assigned claim and the tax giving rise to
8the claim under the provisions of this chapter or any other
9laws applicable to the collection and enforcement of tax
10claims or municipal claims other than taxes, including the
11right of the taxing district to receive the distribution of
12moneys or the proceeds of a sale as provided in this chapter.

13(4)  The bureau may exercise its authority under section
149003(a) (relating to tax collection bureaus) to provide for
15the assignee to exercise all of the duties of the bureau in
16connection with the collection and enforcement of the tax
17claims assigned or may provide by contract with the assignee
18for the division or sharing of such duties between the bureau
19or other person and the assignee with respect to the tax
20claims assigned.

21(5)  Assignment shall not affect the 5% commission on tax
22claim collections payable to the bureau under section 9012(c)
23(relating to postsale duties of bureau) and reimbursement of
24any applicable county charges.

25§ 9007.  Delinquency.

26(a)  General rule.--For all taxing districts, real property
27taxes that remain due and unpaid shall be deemed delinquent on
28December 31 of each calendar year in which the taxes were due
29and remain unpaid.

30(b)  Penalties.--On January 30 following the year the real

1property taxes were deemed delinquent, all unpaid taxes shall be
2subject to a penalty equal to an amount not less than 0.5% nor
3more than 2% of the principle owed. The taxing body shall
4establish the penalty for this initial delinquency by ordinance
5or resolution. In addition to the penalty for initial
6delinquency, for the first six months, at the end of every
7subsequent month of delinquency, the unpaid taxes shall be
8subject to a penalty equal to 2.5% of the principle owed.
9Following those initial six months of delinquency, at the end of
10every subsequent month of delinquency, the unpaid taxes shall be
11subject to a penalty equal to 3.5% of the principle owed. The
12penalty shall be computed and added to the total amount due
13until the date upon which foreclosure proceedings are commenced,
14until the delinquent taxes are paid in full or redeemed or until
15the owner enrolls in a hardship payment plan.

16(c)  Fees.--The bureau may charge reasonable fees to a
17delinquent taxpayer for actual costs incurred in the collection
18and enforcement of the real estate property tax.

19§ 9008.  Commencement of foreclosure action.

20(a)  General rule.--Twelve months after the date of initial
21delinquency, as determined under section 9007(a) (relating to
22delinquency), the bureau shall commence foreclosure action
23against the tax delinquent property, provided that the owner is
24not enrolled in good standing in a hardship payment plan under
25section 9013 (relating to hardship protections).

26(b)  Notice.--Within seven days of commencing foreclosure 
27action under this section, the bureau shall post visible signage 
28on the property and send notice by both certified mail and first 
29class mail, address correction requested, to the person to whom 
30a tax bill for property returned for delinquent taxes was last
 

1sent, to the person identified as the owner of property returned 
2for delinquent taxes, to a person entitled to notice of the 
3return of delinquent taxes and to a person to whom a tax 
4certificate for property returned for delinquent taxes was 
5issued, as shown on the current records of the county. The 
6signage and mailed notice required under this subsection shall 
7include all of the following:

8(1) The date the property will be forfeited to the
9county treasurer, or similar office in counties operating
10under a home rule charter.

11(2) A statement that a person who holds a legal interest
12in the property may lose that interest as a result of the
13forfeiture and subsequent foreclosure proceeding.

14(3) A legal description or parcel number of the property
15and the street address of the property, if available.

16(4) The person or persons to whom the notice is
17addressed.

18(5) The unpaid delinquent taxes, interest, penalties and
19fees due on the property.

20(6) A statement that unless those unpaid delinquent
21taxes, interest, penalties and fees are paid within 30 days
22of date of mailing by the bureau, absolute title to the
23property shall vest in the foreclosing taxing district.

24(c)  Disallowance of claims.--The complaint for foreclosure
25shall not include any claim related to personal property or
26personal liability and shall relate only to the tax delinquent
27property. No counterclaims shall be permitted.

28(d)  Complaint.--The complaint shall set forth:

29(1)  the name and address of each interested party, along
30with a description of the interest;

1(2)  the grounds for subject matter jurisdiction, in rem
2jurisdiction over the defendant property, and venue;

3(3)  a general description of the property, including the
4address and tax parcel number;

5(4)  an itemized statement of the redemption amount and
6the time and place where payment may be made; and

7(5)  a request for relief.

8(e)  Amendment of complaint.--The complaint may be amended at
9any time prior to entry of judgment to include the amount of any
10additional costs, fees or subsequent tax delinquency.

11§ 9009.  Redemption.

12(a)  Authorization.--An interested party may redeem the
13property from sale by paying the full redemption amount at any
14time prior to entry of an order for the sale of the property.
15Except as otherwise provided by Federal law, entry of an order
16for sale shall extinguish all rights of redemption.

17(b)  Result.--Upon receipt of the redemption amount, the
18petitioner shall notify the court of the same and shall file for
19dismissal of the action without prejudice. Dismissal does not
20affect the rights and interests of interested parties.

21(c)  Payment by party other than fee simple owner.--If
22payment of the redemption amount is by a party other than a fee
23simple owner, the bureau shall issue to the payor a certificate
24which, when filed with the appropriate office in the county for
25the recording of civil judgments, shall evidence possession of a
26lien on the property for full amount of the payment. The lien,
27when properly recorded, shall have the same priority as the lien
28for delinquent tax. The lienholder shall not otherwise succeed
29to the powers of the tax collection bureau under this chapter.

30§ 9010.  Foreclosure sale.

1(a)  Sale.--Upon entry of judgment and order for foreclosure,
2the property shall be exposed for sale at a public sale. The
3sale shall not occur earlier than 45 days following the date of
4issuance of the court's order or later than 90 days following
5the date of the issuance of the court's order.

6(b)  Bidding.--The following shall apply:

7(1)  Any person or entity that wishes to bid at the sale
8must first sign a sworn affidavit that the person or entity
9is not, either personally or as a principal of any business
10entity:

11(i)  delinquent on any real property taxes or
12municipal fees for service in any municipality in this
13Commonwealth;

14(ii)  in current violation of property maintenance
15codes or public health codes in any municipality in this
16Commonwealth; or

17(iii)  bidding on behalf of another who is not
18eligible to bid.

19(2)  Notwithstanding any other provision of law, the
20petitioner may bid at the sale.

21(3)  The minimum bid price for the sale of the property
22shall be the redemption amount.

23(4)  The property shall be sold to the highest qualified
24bidder. For the purposes of this paragraph, "qualified
25bidder" means a person or entity which is in compliance with
26paragraph (1).

27(c)  Effect.--At the conclusion of the sale, the winning
28bidder shall pay the full amount of the bid. Failure to pay the
29full amount of the bid shall result in the immediate reexposure
30of the property to sale.

1§ 9011.  Transfers in absence of minimum bid.

2(a) Tax collection bureau as trustee.--If, after offering 
3the property for sale in accordance with section 9010 (relating 
4to foreclosure sale), the minimum bid is not met, all rights in 
5the property shall transfer to the bureau as trustee by 
6operation of law. The bureau shall maintain a list of such 
7properties on its Internet website and in its office. From time 
8to time, the bureau may publish a list of these properties in a 
9locally circulating newspaper. Neither the county nor the bureau 
10shall have any personal liability for the property while it is
11acting as trustee.

12(b)  Subsequent disposition.--The bureau may, in its
13discretion:

14(1)  hold another public sale;

15(2)  with the written consent of all the taxing districts
16where the property is located, accept an offer of any price
17for the property; or

18(3)  transfer the property to political subdivisions or
19third parties on such terms and conditions and for such
20consideration as are mutually acceptable to the bureau and
21the transferee.

22§ 9012.  Postsale duties of bureau.

23(a)  Deed.--The bureau shall, as trustee grantor, make and
24deliver to the purchaser or transferee a deed in fee simple,
25without warranties, for the property. It shall be the duty of
26the bureau to ensure that the deed is properly recorded.

27(b)  Forms and returns.--The bureau shall file all required
28tax returns and all other forms or declarations required by law
29as a result of the transfer.

30(c)  Distribution of proceeds.--The following shall apply:

1(1) Proceeds collected under this chapter shall be
2subject, first, to offset any costs or fees for services
3associated with the sale of the property and a commission of
45% of all money collected to be retained by the bureau to
5offset costs of the administration of this chapter.

6(2) After retention of the amount under paragraph (1),
7the bureau shall distribute sale proceeds in accordance with
8the amount and priority of each party's interest. If the sale
9price exceeds the minimum bid, the bureau shall deposit into
10an escrow account the amount of the surplus and shall publish
11a proposed schedule of distribution. The proposed schedule
12shall be posted in the office and on the Internet website of
13the bureau not less than ten days before distribution.
14Exceptions to the proposed schedule must be submitted in
15writing to the bureau within ten days of the date of posting.

16(3) The court with original jurisdiction over the action
17in foreclosure shall hear any disputes arising from
18exceptions to the proposed schedule of distribution.

19§ 9013.  Hardship protections.

20(a)  Requirement.--Each bureau shall create a program to
21alleviate undue hardship which may be caused by a claim for
22delinquent real property taxes. In developing program policies
23and internal guidelines, the bureau shall take into
24consideration the important public interests of preventing
25homelessness and avoiding property abandonment and blight.

26(b)  Eligibility.--In order to participate in a hardship
27payment plan, an applicant must be an owner-occupant and must
28not have defaulted on a prior hardship payment plan for
29delinquent taxes. The bureau shall approve an application for
30enrollment in a hardship payment plan if it determines, based on

1information in the application, that the tax claim constitutes
2an actual hardship for the applicant and the tax has remained
3delinquent through no significant fault of the applicant.

4(c)  Application.--The application must be submitted to the
5bureau not later than 14 days following the date of issuance of
6the court's order in a foreclosure action and shall include the
7following:

8(1)  proof that the applicant is an owner-occupant;

9(2)  proof of household income and expenses;

10(3)  a list of all debts of the applicant along with the
11amount of the debt and interest rate; and

12(4)  an explanation of any extenuating circumstances
13which occurred or persisted during the preceding year and
14which significantly affected the ability of the applicant to
15pay the taxes as they became due.

16(d)  Notice and enrollment.--The bureau shall notify the
17applicant of its decision or shall request additional
18documentation of the information contained in the application
19within 14 days of receipt. If the application is approved, the
20bureau shall include with the notification a payment schedule.

21(e)  Right of appeal.--An applicant may appeal the decision
22of the bureau to the governing body of the county. All appeals
23must be made within 14 days after notice of the decision. The
24decision on appeal shall be final and binding.

25(f)  Terms of repayment.--The bureau shall determine the
26terms of a hardship payment plan in accordance with the program
27policies adopted under subsection (a), subject to the following
28limitations:

29(1)  no payment schedule may incorporate any tax
30forgiveness or abatement not otherwise authorized by law;

1(2)  no payment schedule may exceed the duration of 24
2months;

3(3)  the payment schedule shall permit the taxpayer to
4make payment of the amount due in at least four separate
5payments, spaced at least 30 days apart; and

6(4)  the initial payment shall not exceed 25% of the
7amount of delinquent taxes.

8(g)  Default.--The bureau shall cause foreclosure proceedings
9to be stayed for the duration of enrollment in a hardship
10payment plan. However, proceedings shall be recommenced within
11two weeks of any default. Two or more consecutive missed
12payments or failure to timely pay any taxes levied on the
13property after the date of enrollment in the hardship payment
14plan shall constitute default under this section.

15(h)  Modification.--A request for a modification of a
16hardship payment plan must be submitted to the bureau prior to
17the second missed payment. Criteria for granting modification
18include:

19(1) loss of employment;

20(2) involuntary reduction of work hours;

21(3) illness requiring physician treatment; or

22(4) death of a contributing member of the household.

23§ 9014.  Taxpayer advocate.

24(a)  Appointment.--Each bureau shall appoint at least one
25individual, who has sufficient knowledge of consumer finances,
26as a taxpayer advocate. The taxpayer advocate may be a public
27officer or employee or a volunteer, provided the individual
28appointed may not have the authority to approve or disapprove an
29application for enrollment in a hardship protection program or
30exercise any powers of enforcement under this chapter.

1(b)  Powers.--A taxpayer advocate shall have no authority to
2act on behalf of the taxpayer except as expressly granted in
3writing by the taxpayer.

4Section 2.  Repeals are as follows:

5(1)  The General Assembly declares that the repeals under
6paragraph (2) are necessary to effectuate the addition of 53
7Pa.C.S. Ch. 90.

8(2)  The following acts and parts of acts are repealed:

9(i)  The act of May 16, 1923 (P.L.207, No.153),
10referred to as the Municipal Claim and Tax Lien Law, is
11repealed insofar as it is inconsistent with the addition
12of 53 Pa.C.S. Ch. 90.

13(ii)  Article VI of the act of July 7, 1947
14(P.L.1368, No.542), known as the Real Estate Tax Sale
15Law, is repealed absolutely.

16(iii)  The act of June 28, 1967 (P.L.122, No.32),
17entitled "An act authorizing and empowering city
18treasurers of cities of the second class A to sell at
19public sale, lands or real estate upon which the taxes,
20assessed and levied by the city, are delinquent and
21unpaid; fixing the interests of all taxing authorities
22where such lands are purchased by the city; providing for
23the distribution of moneys received as income from or
24resale of such lands; and providing for a method of
25reselling such lands purchased, by the city, or by the
26city at any sale for the nonpayment of taxes, free and
27clear of all mortgages, ground rents, interest in or
28claims against said lands; authorizing an agreement
29between cities of the second class A purchasing property
30at treasurer's sales and all other taxing authorities

1having an interest in such lands with respect to the
2distribution of rents, income and the proceeds of the
3resale of such lands," is repealed insofar as it is
4inconsistent with the addition of 53 Pa.C.S. Ch. 90.

5(iv)  The act of October 11, 1984 (P.L.876, No.171),
6known as the Second Class City Treasurer's Sale and
7Collection Act, is repealed insofar as it is inconsistent
8with the addition of 53 Pa.C.S. Ch. 90.

9(3)  All acts and parts of acts are repealed insofar as
10they are inconsistent with the addition of 53 Pa.C.S. Ch. 90.

11Section 3.  The addition of 53 Pa.C.S. Ch. 90 shall apply to
12ad valorem real property taxes which are delinquent as of July
131, 2014.

14Section 4.  This act shall take effect in 60 days.