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House of Representatives
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: February 21, 2020 08:40 AM
From: Representative Francis X. Ryan and Rep. Barbara Gleim, Rep. Timothy J. O'Neal, Rep. David H. Rowe
To: All House members
Subject: LEGISLATION: Fair & Equitable Manner for Payment to Creditors
 
In the near future, we plan to introduce a package of bills that will restructure the manner in which creditors receive compensation following the tax sale of property with delinquent real estate taxes.

As many of you know, the Commonwealth of Pennsylvania has long held a process to help guide county tax collection bureaus for the conduct of an Upset Tax Sale or a Judicial Tax Sale for property with delinquent real estate taxes. These guidelines, enacted through the Municipal Claim and Tax Lien Law, the Real Estate Tax Sale Law, or the Second-Class City Treasurer’s Sale and Collection Act, also stipulate the manner for the distribution of proceeds to creditors following a tax sale. Under the Real Estate Tax Sale Law, for example, regardless of when a creditor completes the legal process to record the judgment with the relevant court of common pleas, the Commonwealth always receives the first payout from the sale, followed the respective taxing districts or municipal authorities, and then the mortgagees and other lien holders. While this is certainly a benefit for Commonwealth revenues, we believe it is unjust and unfair.

To provide a more equitable process, our package of bills will restructure the distributions of proceeds to effectively establish a first-come, first-serve basis. Instead of providing a specific order in which our local tax collection bureaus must distribute proceeds, our legislative package will require distributions be made on the order in which the judgment was filed. We believe our approach represents a fair and reasonable solution for creditors to receive compensation following a tax sale of property.

We respectfully ask for your consideration to join us and cosponsor this package of legislation.
Should you have any questions about the individual proposals which make up the package please contact Thomas W Miller, Exe Dir ~ HOR Finance Committee TWMiller@pahousegop.com.



Document #1

Introduced as HB2316

Description: The act provides for a satisfaction of liens on a first come first serve basis for delinquent county, city, except of the first and second class and second class A, borough, town, township, school district, except of the first class and school districts within cities of the second class A and institution district taxes.
 

Document #2

Introduced as HB2317

Description: The act provides for a satisfaction of liens on a first come first serve basis for the collection of municipal liens and tax claims in cities of the second class.
 

Document #3

Introduced as HB2318

Description: The act provides for a satisfaction of liens on a first come first serve basis for liens for taxes and for municipal improvements for the removal of nuisances and for water rents or rates, sewer rates, and lighting rates.