THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY ROSS, TAYLOR, THOMAS, CALTAGIRONE, DALEY, DeLUCA, GOODMAN, GROVE, HACKETT, HARKINS, HELM, HESS, KOTIK, MASSER, MILNE, MUNDY, MURT, QUINN, SONNEY, SWANGER, VULAKOVICH AND YOUNGBLOOD, DECEMBER 21, 2011

REFERRED TO COMMITTEE ON URBAN AFFAIRS, DECEMBER 21, 2011  

AN ACT

Amending Title 53 (Municipalities Generally) of the Pennsylvania

Consolidated Statutes, providing for tax foreclosure; and

making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Title 53 of the Pennsylvania Consolidated

Statutes is amended by adding a chapter to read:

CHAPTER 90

TAX FORECLOSURE

Sec.

9001.  Definitions.

9002.  Scope of chapter.

9003.  Tax collection bureaus.

9004.  Liens; priority.

9005.  Delinquency.

9006.  Commencement of foreclosure action.

9007.  Redemption.

9008.  Foreclosure sale.

9009.  Transfers in absence of minimum bid.

9010.  Post-sale duties of bureau.

9011.  Hardship protections.

9012.  Taxpayer advocate.

§ 9001.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Bureau."  A tax collection bureau established under section

9003 (relating to tax collection bureaus).

"Hardship payment plan."  The plan entered into under a

program under section 9011 (relating to hardship protections).

"Interested party."  The owner or reputed owner of the

subject property, any person who has a recorded interest in the

property which may be affected by the sale and any person who

has an interest in the property not of record which is

reasonably likely to be affected by the sale and of which the

bureau has knowledge, including, but not limited to, any person

found in possession of the property.

"Owner-occupant."  A natural person with a legal ownership

interest in property which was the primary residence of the

person for at least three consecutive months in the year

preceding the date of delinquency.

"Redemption amount."  The full amount of delinquent ad

valorem real property taxes. The term includes:

(1)  accrued interest;

(2)  penalties; and

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

"Taxing district."  Any county, city, borough, town,

township, home rule municipality, optional plan municipality,

optional charter municipality, school district or any similar

general purpose unit of government created or authorized by

statute which has the authority to levy ad valorem real property

taxes.

§ 9002.  Scope of chapter.

This chapter shall be the sole law authorizing and governing

the sale of real property for the payment of delinquent taxes.

The scope of this chapter is limited to proceedings in rem and

is not intended to nor shall it be construed to affect any law

respecting personal liability for any encumbrance on real

property.

§ 9003.  Tax collection bureaus.

(a)  Establishment.--Each county shall establish a tax

collection bureau or shall enter into a joint agreement under

Subchapter A of Chapter 23 (relating to intergovernmental

cooperation), to establish a regional tax collection bureau.

Each bureau shall act as agent for the taxing districts within

its jurisdiction in the collection and enforcement of delinquent

real property taxes.

(b)  Successor.--A tax collection bureau created under

subsection (a) shall succeed to the authority of tax claim

bureaus and all similar agencies authorized and created under

prior law.

(c)  Powers and duties nontransferable.--The powers and

duties of the tax collection bureaus shall not be transferable

or assignable. A bureau shall have the authority to enter into

contracts or other agreements for legal or other services as

provided by the laws respecting local governance; provided that,

notwithstanding any provision of law or ordinance to the

contrary, a bureau may not sell or assign any lien or claim for

taxes or the right to collect delinquent taxes.

(d)  Availability of data.--Each bureau shall create and

maintain an Internet website for the purpose of posting

information concerning the tax status of each parcel within its

jurisdiction and shall make the same information available for

inspection during regular office hours.

(1)  The bureau shall be responsible for keeping the

information posted on the Internet website current; however,

data provided on the website or in any notice or database

connected therewith shall not be construed to constitute a

guarantee or legal document and the bureau shall not be

liable for direct or indirect damages resulting from use of

the data.

(2)  The Internet website shall include the following

information for each tax delinquent property:

(i)  the address;

(ii)  the parcel identification number;

(iii)  the name of the owner;

(iv)  the property type;

(v)  the acreage;

(vi)  the deed book and page in which the property

appears;

(vii)  the date of last sale;

(viii)  the amount for which the property was last

sold; 

(ix)  the taxing district;

(x)  the tax year of the delinquency;

(xi)  the redemption amount;

(xii)  a notice of proceedings against the property,

including the docket number and the date and time

scheduled for any hearing or sale under this chapter; and

(xiii)  the other notices required under this

chapter.

(3)  The Internet website may permit users to register to

receive notices related to specific properties and may also

provide forms, general notices and any other relevant

information or services.

(e)  Binding effect of certification.--Upon the

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written request of any person, the bureau shall issue a

certification showing the amount of any taxes due on the

property as of the date of the issuance. If any certification

incorrectly indicates that a tax has been paid or that less than

the true and correct amount is owed and any person acts in

reliance upon such representations by acquiring, for valuable

consideration, an interest in the property, no lien may be

imposed on the property for the amount of the error. If a tax

certification is requested in connection with a particular

transaction, the parties to the transaction shall be presumed to

have acted in reliance upon the representations in the

certification.

(f)  Fees.--Except where otherwise prohibited by law, a

bureau may require the payment of reasonable fees for services

under this chapter, including, but not limited to, issuing tax

certifications and notices, making copies of records, filing tax

returns and recording deeds.

§ 9004.  Liens; priority.

Notwithstanding any other provision of law, all taxes on real

property are declared a first lien on the real property, second

only to a lien of the Commonwealth.

§ 9005.  Delinquency.

(a)  General rule.--Taxes assessed against real property

shall be deemed delinquent on the first day the taxes are due

and remain unpaid.

(b)  Penalties.--All unpaid taxes shall be subject to a

penalty equal to 5% on the 30th calendar day of delinquency. At

the end of every subsequent week of delinquency, the unpaid

taxes shall be subject to a penalty equal to 2% of the full

amount owed. The penalty will be computed and added to the total

amount due until the date upon which foreclosure proceedings may

be commenced or until the owner enrolls in a hardship payment

plan.

(c)  Fees.--The bureau may impose reasonable fees for costs

actually incurred in the collection and enforcement of the

property tax.

§ 9006.  Commencement of foreclosure action.

(a)  General rule.--Twelve months after the date of initial

delinquency, the bureau shall commence foreclosure proceedings

against the tax delinquent property, provided that the owner is

not enrolled in good standing in a hardship payment plan under

section 9011 (relating to hardship protections).

(b)  Form and procedure.--Except as otherwise provided, the

rules of civil procedure pertaining to venue, commencement of

action, notice, service of process, judgment and execution in

actions for mortgage foreclosure shall apply to actions for

foreclosure and sale under this chapter. References to "sheriff"

shall be considered to be references to "tax collector" or "tax

collection bureau."

(c)  Disallowance of claims.--The complaint for foreclosure

shall not include any claim related to personal property or

personal liability and shall relate only to the tax delinquent

property. No counterclaims shall be permitted.

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

(1)  the name and address of each interested party, along

with a description of the interest;

(2)  the grounds for subject matter jurisdiction, in rem

jurisdiction over the defendant property, and venue;

(3)  a general description of the property, including the

address and tax parcel number;

(4)  an itemized statement of the redemption amount and

the time and place where payment may be made; and

(5)  a request for relief.

(e)  Amendment of complaint.--The complaint may be amended at

any time prior to entry of judgment to include the amount of any

additional fees or subsequent tax delinquency.

§ 9007.  Redemption.

(a)  Authorization.--An interested party may redeem the

property from sale by paying the full redemption amount at any

time prior to entry of an order for the sale of the property.

Except as otherwise provided by Federal law, entry of an order

for sale shall extinguish all rights of redemption.

(b)  Result.--Upon receipt of the redemption amount, the

petitioner shall notify the court of the same and shall file for

dismissal of the action without prejudice. Dismissal does not

affect the rights and interests of interested parties.

(c)  Payment by party other than fee simple owner.--If

payment of the redemption amount is by a party other than a fee

simple owner, the bureau shall issue to the payor a certificate

which, when filed with the appropriate office in the county for

the recording of civil judgments, shall evidence possession of a

lien on the property for full amount of the payment. The lien,

when properly recorded, shall have the same priority as the lien

for delinquent tax. The lienholder shall not otherwise succeed

to the powers of the tax collection bureau under this chapter.

§ 9008.  Foreclosure sale.

(a)  Sale.--Upon entry of judgment and order for foreclosure,

the property shall be exposed for sale at a public sale. The

sale shall not occur earlier than 45 days following the date of

issuance of the court's order or later than 90 days following

the date of the issuance of the court's order.

(b)  Bidding.–-

(1)  Any person or entity who wishes to bid at the sale

must first sign a sworn affidavit that the person or entity

is not, either personally or as a principal of any business

entity:

(i)  delinquent on any real property taxes in any

jurisdiction;

(ii)  in knowing violation of property maintenance or

public health codes in any municipality of the

Commonwealth; or

(iii)  bidding on behalf of another who is not

eligible to bid.

(2)  Notwithstanding any other provision of law, the

petitioner may bid at the sale.

(3)  The minimum bid price for the sale of the property

shall be the redemption amount.

(4)  The property shall be sold to the highest bidder.

(c)  Effect.--At the conclusion of the sale, the winning

bidder shall pay the full amount of the bid. Failure to pay the

full amount of the bid shall result in the immediate re-exposure

of the property to sale.

§ 9009.  Transfers in absence of minimum bid.

(a)  Tax collection bureau as trustee.--If, after offering

the property for sale in accordance with section 9008 (relating

to foreclosure sale), the minimum bid is not met, all rights in

the property shall transfer to the bureau as trustee by

operation of law. The bureau shall maintain a list of such

properties on its Internet website and in its office. From time

to time, the bureau may publish a list of these properties in a

locally circulating newspaper.

(b)  Subsequent disposition.--The bureau may, in its

discretion:

(1)  hold another public sale;

(2)  with the written consent of all the taxing districts

where the property is located, accept an offer of any price

for the property; or 

(3)  transfer the property to political subdivisions or

third parties on such terms and conditions and for such

consideration as are mutually acceptable to the bureau and

the transferee.

§ 9010.  Post-sale duties of bureau.

(a)  Deed.--The bureau shall, as trustee grantor, make and

deliver to the purchaser or transferee a deed in fee simple,

without warranties, for the property. It shall be the duty of

the bureau to ensure that the deed is properly recorded.

(b)  Forms and returns.--The bureau shall file all required

tax returns and all other forms or declarations required by law

as a result of the transfer.

(c)  Distribution of proceeds.--The bureau shall distribute

sale proceeds in accordance with the amount and priority of each

party's interest. If the sale price exceeds the minimum bid, the

bureau shall deposit into an escrow account the amount of the

surplus and shall publish a proposed schedule of distribution.

The proposed schedule shall be posted in the office and on the

Internet website of the bureau not less than ten days before

distribution. Exceptions to the proposed schedule must be

submitted in writing to the bureau within ten days of the date

of posting. The court with original jurisdiction over the action

in foreclosure shall hear any disputes arising from exceptions

to the proposed schedule of distribution.

§ 9011.  Hardship protections.

(a)  Requirement.--Each bureau shall create a program to

alleviate undue hardship which may be caused by a claim for

delinquent real property taxes. In developing program policies

and internal guidelines, the bureau shall take into

consideration the important public interests of preventing

homelessness and avoiding property abandonment and blight.

(b)  Eligibility.-–In order to participate in a hardship

payment plan, an applicant must be an "owner-occupant," as

defined in section 9001 (relating to definitions), and must not

have defaulted on a prior hardship payment plan for delinquent

taxes. The bureau shall approve an application for enrollment in

a hardship payment plan if it determines, based on information

in the application, that the tax claim constitutes an actual

hardship for the applicant and the tax has remained delinquent

through no significant fault of the applicant.

(c)  Application.--The application must be submitted to the

bureau no later than ten days following service of original

process in a foreclosure action and shall include the following:

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

(2)  proof of household income and expenses;

(3)  a list of all debts of the applicant along with the

amount of the debt and interest rate; and

(4)  an explanation of any extenuating circumstances

which occurred or persisted during the preceding two years

and which significantly affected the ability of the applicant

to pay the taxes as they became due.

(d)  Notice and enrollment.-–The bureau shall notify the

applicant of its decision or shall request additional

documentation of the information contained in the application

within 14 days of receipt. If the application is approved, the

bureau shall include with the notification a payment schedule.

(e)  Right of appeal.--An applicant may appeal the decision

of the bureau to the body charged with hearing appeals from

assessments of property value in that jurisdiction. All appeals

must be made within 14 days after notice of the decision. The

decision on appeal shall be final and binding.

(f)  Terms of repayment.-–The bureau shall determine the

terms of a hardship payment plan in accordance with the program

policies adopted under subsection (a), subject to the following

limitations:

(1)  no payment schedule may incorporate any tax

forgiveness or abatement not otherwise authorized by law;

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

months;

(3)  the payment schedule shall permit the taxpayer to

make payment of the amount due in at least four separate

payments, spaced at least 30 days apart; and

(4)  the initial payment shall not exceed 25% of the

amount of delinquent taxes.

(g)  Default.--The bureau shall cause foreclosure proceedings

to be stayed for the duration of enrollment in a hardship

payment plan. Proceedings shall be recommenced within two weeks

of any default. Two or more consecutive missed payments or

failure to timely pay any taxes levied on the property after the

date of enrollment in the hardship payment plan shall constitute

default under this section.

(h)  Modification.--A request for a modification of a

hardship payment plan must be submitted to the bureau prior to

the second missed payment.

§ 9012.  Taxpayer advocate.

(a)  Appointment.--Each bureau shall appoint at least one

individual, who has sufficient knowledge of consumer finances,

as a taxpayer advocate. The taxpayer advocate may be a public

officer or employee or a volunteer, provided the individual

appointed may not have the authority to approve or disapprove an

application for enrollment in a hardship protection program or

exercise any powers of enforcement under this chapter.

(b)  Duties.--The taxpayer advocate shall, whenever possible,

contact and offer assistance to any delinquent taxpayer that the

taxpayer advocate has reason to believe may be infirmed or

incapacitated by reason of age, disease or physical or mental

condition. With the consent and assistance of the taxpayer, the

taxpayer advocate shall identify and educate friends or family

members who might provide continuing support. Where appropriate,

the taxpayer advocate shall assist the taxpayer in preparing an

application for enrollment in a hardship payment plan.

(c)  Powers.--A taxpayer advocate shall have no authority to

act on behalf of the taxpayer except as expressly granted. Any

information obtained in the course of the duties of the taxpayer

advocate shall be confidential.

Section 2.  Repeals are as follows:

(1)  The General Assembly declares that the repeals under

paragraph (2) are necessary to effectuate the addition of 53

Pa.C.S. Ch. 90.

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

(i)  The act of May 16, 1923 (P.L.207, No.153),

referred to as the Municipal Claim and Tax Lien Law, is

repealed insofar as it is inconsistent with the addition

of 53 Pa.C.S. Ch. 90.

(ii)  Article VI of the act of July 7, 1947

(P.L.1368, No.542), known as the Real Estate Tax Sale

Law, is repealed absolutely.

(iii)  The act of June 28, 1967 (P.L.122, No.32),

entitled "An act authorizing and empowering city

treasurers of cities of the second class A to sell at

public sale, lands or real estate upon which the taxes,

assessed and levied by the city, are delinquent and

unpaid; fixing the interests of all taxing authorities

where such lands are purchased by the city; providing for

the distribution of moneys received as income from or

resale of such lands; and providing for a method of

reselling such lands purchased, by the city, or by the

city at any sale for the nonpayment of taxes, free and

clear of all mortgages, ground rents, interest in or

claims against said lands; authorizing an agreement

between cities of the second class A purchasing property

at treasurer's sales and all other taxing authorities

having an interest in such lands with respect to the

distribution of rents, income and the proceeds of the

resale of such lands," is repealed insofar as it is

inconsistent with the addition of 53 Pa.C.S. Ch. 90.

(iv)  The act of October 11, 1984 (P.L.876, No.171),

known as the Second Class City Treasurer's Sale and

Collection Act, is repealed insofar as it is inconsistent

with the addition of 53 Pa.C.S. Ch. 90.

(3)  All acts and parts of acts are repealed insofar as

they are inconsistent with the addition of 53 Pa.C.S. Ch. 90.

Section 3.  The addition of 53 Pa.C.S. Ch. 90 shall apply to

ad valorem real property taxes which are delinquent as of July

1, 2012.

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