PRINTER'S NO. 461
No. 441 Session of 1995
INTRODUCED BY DeLUCA, LEVDANSKY, READSHAW, PISTELLA, DALEY,
MELIO, MARKOSEK, VAN HORNE, CURRY, LAUGHLIN, DERMODY, FAJT
AND ROBERTS, JANUARY 31, 1995
REFERRED TO COMMITTEE ON FINANCE, JANUARY 31, 1995
AN ACT
1 Providing for real estate tax deferrals for senior citizens in
2 second class counties and for procedures for taxing
3 authorities with respect to these deferrals.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Second Class
8 County Senior Citizen Tax Deferral Law.
9 Section 2. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Department." The Department of Aging of the Commonwealth.
14 "Homestead." The owner-occupied, primary residence of a
15 qualified homeowner and includes owner-occupied units in a
16 condominium, townhouse or similar structure and an owner-
17 occupied mobile home.
18 "Income." The term shall have the meaning described in
1 section 302 of the act of August 14, 1991 (P.L.342, No.36),
2 known as the Lottery Fund Preservation Act, and as described in
3 the applicable regulations of the Department of Aging.
4 "Mobile home." Any wheeled vehicle, exceeding either eight
5 feet in width or 32 feet in length, excluding towing gear and
6 bumpers, without motive power, which is designed and commonly
7 used for occupancy by persons for residential purposes, in
8 either temporary or permanent locations, and which may be drawn
9 over the public highways by a motor vehicle.
10 "Qualified homeowner." A taxpayer who becomes 65 years of
11 age on or before December 31 of the year for which application
12 is made for real property tax deferral and who is otherwise
13 qualified as a low-income homeowner as provided for in this act.
14 "Qualified property." The property upon which real estate
15 taxes may be deferred under this act.
16 "Real property taxes." All ad valorem taxes levied on a
17 homestead or a mobile home, including special assessments.
18 "Taxpayer." A person who has filed or whose guardian,
19 conservator or attorney-in-fact has filed a claim for deferral
20 under this act, or persons who have jointly filed a claim for
21 deferral under this act.
22 Section 3. Property entitled to deferral.
23 In order to qualify for real property tax deferral under this
24 act, the property shall meet all of the following requirements
25 at the time the claim is filed and so long thereafter as payment
26 is deferred:
27 (1) The property must be the homestead of the taxpayer
28 claiming the deferral and must be located in any county of
29 the second class.
30 (2) The taxpayer claiming the deferral must, alone or
19950H0441B0461 - 2 -
1 jointly with another person residing in the homestead, own
2 the fee simple estate or be purchasing the fee simple estate
3 under a recorded instrument of sale, except that nonresidence
4 of a joint owner shall not prevent the taxpayer from meeting
5 the requirement of this paragraph.
6 (3) The total household income of the residents of the
7 property must not exceed the sum of $25,000.
8 (4) The property for which the deferral is claimed must
9 not be income producing.
10 (5) All real property taxes for years prior to the year
11 for which the election is made must be paid.
12 (6) The cumulative value of the deferral provided under
13 this act plus the interest accrued on the deferral shall not
14 exceed the market value of the property less the value of all
15 mortgages which constitute liens upon the property and any
16 other liens upon the property filed prior to the date of
17 recordation of the certificate for deferral.
18 Section 4. Application for deferral and recovery agreement.
19 (a) Application.--Subject to the provisions of this act, a
20 taxpayer may, on or before April 1 of each year in which he
21 claims a deferral, apply to the taxing authority where his
22 qualified property is located or to the official designated by a
23 taxing authority to collect special assessments on the qualified
24 property, as the case may be, for a deferral of all or a part of
25 any increase of real estate taxes payable during that year for
26 the preceding year in the case of real estate taxes other than
27 special assessments, or for a deferral of any installments
28 payable during that year in the case of special assessments, on
29 all or part of his qualified property.
30 (b) Form.--The application shall be on a form prescribed by
19950H0441B0461 - 3 -
1 the department and furnished by the taxing authority, showing
2 the following:
3 (1) The applicant will be 65 years of age or older by
4 December 31 of the year for which a tax deferral is claimed.
5 (2) A description of the property and a verification
6 that the property is qualified property.
7 (3) A certification that the taxpayer has owned and
8 occupied as his residence the qualified property for at least
9 the last three years except for any periods during which the
10 taxpayer may have temporarily resided in a nursing or
11 sheltered care home.
12 (4) A statement specifying whether the deferral is for
13 all or a part of the tax increase or special assessment and,
14 if for a part, the amount of deferral applied for.
15 (c) Grant of deferral.--The taxing authority shall grant the
16 tax deferral provided that the owner or owners of the property
17 have entered into a tax deferral and recovery agreement with the
18 taxing authority.
19 Section 5. Recovery agreement.
20 The recovery agreement shall specify the following:
21 (1) That the total amount of taxes deferred under this
22 act, plus interest, for the year for which a tax deferral is
23 claimed as well as for those previous years for which taxes
24 are not delinquent and for which the deferral has been
25 claimed may not exceed 80% of the taxpayer's equity interest
26 in the property for which taxes are to be deferred and that,
27 if the total deferred taxes plus interest equals 80% of the
28 taxpayer's equity interest in the property, the taxpayer
29 shall thereafter pay the annual interest due on such deferred
30 taxes plus interest so that total deferred taxes plus
19950H0441B0461 - 4 -
1 interest will not exceed such 80% of the taxpayer's equity
2 interest in the property.
3 (2) That any real estate taxes deferred under this act
4 and any interest accrued thereon at the rate of 4%,
5 compounded annually, are a lien on the real estate and
6 improvements thereon until paid. No sale or transfer of the
7 real property may be legally closed and recorded until the
8 taxes which would otherwise have been due on the property,
9 plus accrued interest, have been paid, unless the taxing
10 authority certifies in writing that an arrangement for prompt
11 payment of the amount due has been made. This provision shall
12 apply if the property is to be made the subject of a contract
13 of sale.
14 (3) That upon the death of the taxpayer claiming the
15 deferral, the heirs-at-law, assignees or legatees shall have
16 first priority to the real property upon which taxes have
17 been deferred by paying in full the total taxes which would
18 otherwise have been due, plus interest. However, if such
19 heir-at-law, assignee or legatee is a surviving spouse, the
20 tax deferred status of the property shall be continued during
21 the life of that surviving spouse if the spouse is 55 years
22 of age or older within six months of the date of death of the
23 taxpayer and enters into a tax deferral and recovery
24 agreement before the time when deferred taxes become due
25 under this section. Any additional taxes deferred, plus
26 interest, on the real property under a tax deferral and
27 recovery agreement signed by a surviving spouse shall be
28 added to the taxes and interest which would otherwise have
29 been due, and the payment of which has been postponed during
30 the life of such surviving spouse, in determining the 80%
19950H0441B0461 - 5 -
1 equity requirement provided by this section.
2 (4) That if the taxes due, plus interest, are not paid
3 by the heir-at-law, assignee or legatee or if payment is not
4 postponed during the life of the surviving spouse, the
5 deferred taxes and interest shall be recovered from the
6 estate of the taxpayer within one year of the date of death.
7 In addition, deferred real estate taxes and any interest
8 accrued thereon are due within 90 days after any tax-deferred
9 property ceases to be qualified property. If payment is not
10 made when required by this section, tax sale proceedings may
11 be instituted by the taxing authority.
12 (5) That any joint owner has given written prior
13 approval for the agreement, which written approval shall be
14 made a part of the agreement.
15 (6) That a guardian for a person under legal disability
16 appointed for a taxpayer who otherwise qualifies under this
17 act may act for the taxpayer in complying with this act.
18 (7) That a taxpayer or his agent has provided to the
19 satisfaction of the taxing authority sufficient evidence that
20 the qualified property on which the taxes are to be deferred
21 is insured against fire or casualty loss for at least the
22 total amount of taxes which have been deferred.
23 Section 6. Statement for lien.
24 (a) Recording.--In the case of each tax deferral and
25 recovery agreement entered into between a taxing authority and
26 owner or owners of qualified property, the taxing authority
27 shall forthwith cause to be recorded with the recorder of deeds
28 of the county in which the qualifying property is located a
29 statement of their action which shall constitute a lien upon the
30 real estate and improvements thereon covered by the agreement
19950H0441B0461 - 6 -
1 for those taxes as have been deferred under this act plus
2 accrued interest as provided for by section 4. The statement
3 shall name the owner or owners and shall include a description
4 of the property adequate for identification. The filing fee for
5 this statement shall be paid by the taxing authority and shall
6 be added to and become a part of the deferred taxes due.
7 (b) Listing of property.--The taxing authority shall, in
8 subsequent years, continue to list the property as tax-deferred.
9 The lien for deferred taxes and interest shall attach on the
10 date of recordation of the certificate for deferral, shall be
11 junior to any mortgage or deed of trust recorded prior to the
12 date of recording of such certificate, and shall have priority
13 over all liens attaching subsequent to the date of recording of
14 such certificate.
15 Section 7. Payment of deferred taxes; release of liens.
16 If payment of the deferred taxes is tendered to the taxing
17 authority, it shall accept payment, give a receipt therefor and
18 promptly issue a release of the deferred tax lien, which release
19 shall be given or sent to the person making payment.
20 Section 8. Notice to taxpayer regarding duty to claim deferral
21 annually.
22 At the time the taxing authority sends the annual real
23 property tax notice to any taxpayer who has claimed a deferral
24 of property taxes in the previous calendar year, it shall
25 enclose a deferral notice, advising the taxpayer that he must
26 renew a claim for deferral annually and that if he fails to do
27 so, the real property taxes shall become due and payable in
28 accordance with the schedule set out in the enclosed tax notice,
29 and that failure to receive notice provided for in this act is
30 not a defense in any proceeding for the collection of taxes or
19950H0441B0461 - 7 -
1 for the foreclosure of a tax lien. Any officer or employee of
2 the taxing authority is not personally liable for failure to
3 give this notice.
4 Section 9. Repeal.
5 All acts and parts of acts are repealed insofar as they are
6 inconsistent with this act.
7 Section 10. Effective date.
8 This act shall take effect in 60 days.
L30L72JLW/19950H0441B0461 - 8 -