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“The Consequences of Conflicting Delinquent Property Tax Collection Laws in The                       Commonwealth of Penn...
Table Of Contents:Abstract…                                                                              3Literature Revie...
Abstract:       Taxes and fees assessed by various government entities, including school districts,are crucial to the oper...
Everyone who owns real estate must pay property taxes, unless on a rareoccasion, the property is purchased with a stipulat...
had a long way to go. In a great society, a democracy for example, who does theindividual have a responsibility to? Some a...
Essentially the government is afforded by the citizenry, the right to choose how toextend its finances. For the most part,...
This means that a society operates with the cooperation of all of the citizenry.What happens when citizens choose to disse...
who do not own property. Those who own property also have an obligation to others whodo own property. The obligation inclu...
The RETSL enables a County Tax Claim Bureau to proceed to an upset sale afterone year has passed on a delinquent tax claim...
To the extent that the RETSL reduces the amount of delinquent real estate           taxes as a percentage of the market va...
Claim Bureau using the RETSL and a third party collector named Portnoff LawAssociates, Ltd., which uses the process outlin...
taxes, whether paid or unpaid, on a specific parcel of real estate                   within a matter of minutes.          ...
Estate Tax Sale Law states that an upset tax sale must be held, then a judicial sale, apublic sale, and eventually a repos...
private collectors, but there are sound reasons for a delay in the sale of someone’sproperty. Tax sales take longer becaus...
The problem is that Portnoff Law Associates only needs 4% of the tax records buthas all of the records, causing an extra s...
This court rightly found that the “main thrust” of both the MCTLA andRETSL is not who collects the delinquent taxes or how...
“Portnoff Law Associates offers the only viable long-term solution to your      delinquent real estate tax problem. With n...
ensures that those disadvantaged property owners remain safe from the treat of        losing their homes or accruing any l...
In an interview with Michelle Portnoff she was asked, “What makes PLAbetter than the Tax Claim Bureau in the function of c...
Attorney Sandy Dixon of Ticor Title Insurance Company and Chairman ofthe Pennsylvania Land Title Association’s Legislative...
provide full tax lien payoff information in writing, at no charge, within five           business days of any written requ...
claim of retaining the tax return documents. But the RETSL stipulates in Section201(a), 72 P.S. § 5860.201(a) that:       ...
return to the bureau on or before the last day of April of each year, but no           earlier than the first day of Janua...
flawed and rebutted the School Districts defense of the MCTLA collection practicesalready in place by documenting in the D...
convenience to the real estate industry outweighed the interest of the school districts.Michelle Portnoff commented that, ...
like the decisions the school board members are making, then vote them out!Operating school districts is not a one-size-fi...
repercussions not mentioned before. First, not every county in Pennsylvania has aTax Claim Bureau. If the Court rules that...
shared his opinion that a Tax Claim Bureau is not acting in the best interest of theSchool District. His argument confirms...
To be fair, in some situations a private collector may not be the best option. But it ismore important to note that not on...
how does a school district exercise control over their collection once the claims havebecome delinquent? In simple terms, ...
someone who asks for that kind of information. Two problems in this unique conflictare the division of public records, and...
burdened by the delinquent tax claim collection inconsistencies just as they mustrealize that the impact of a legislative ...
Bibliography:PLTA v. East Stroudsburg Area School District No. 226 C.D. Argued 9/13/2006City of Allentown v Kauth No. 2060...
http://www.pde.state.pa.us/schoolfinance101/lib/schoolfinance101/localtaxes.gif(accessed 4/18/07) local tax charthttp://ww...
Appendix:IN THE COMMONWEALTH COURT OF PENNSYLVANIAThe Pennsylvania Land Title :Association and Fidelity Home :Abstract, In...
Certifications from the public records of the Monroe County TaxClaim Bureau and the Monroe County Prothonotary relating to...
(emphasis added).30. Counsel to Plaintiffs [PLTA and Fidelity] hasrequested that the School Districts return any returns,b...
4) Dr. Frank Pullo (Pullo), Superintendent of the Pleasant Valley School District; 5) Donna Les(Les), business manager for...
Bureau and to provide to the Bureau detailed property descriptions for which thepayments were made; 6) that the School Dis...
notify such tax collectors in writing that returns shall not be made,but that delinquent taxes are to be collected by the ...
The importance of having access to the public records isevidenced by the testimonial accounts of problems thathave been en...
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
 “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.”
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Transcript of " “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.” "

  1. 1. “The Consequences of Conflicting Delinquent Property Tax Collection Laws in The Commonwealth of Pennsylvania.” By Gordon S. Rhoads For the Department of Political Science Arcadia University April 2007 © 2007 Gordon S. Rhoads
  2. 2. Table Of Contents:Abstract… 3Literature Review… 4Taxing Districts Face Choices… 8PLTA and Fidelity Home Abstract, Inc v. East Stroudsburg Area School District… 11City of Allentown v. Richard J. Kauth and Lourdes Kauth… 15Portnoff Law Associates… 16A response to Portnoff Law Associates… 18“The Portnoff Process” and the Tax Claim Bureau Process… 19In the Wake of the PLTA v. East Stroudsburg Area School District Decision… 20The Best Interests of The Pennsylvania School Districts… 25Conclusion… 30Bibliography… 33Appendix… 35a) PLTA v. East Stroudsburg Area School District… 33-46b) Allentown v. Kauth… 46-50c) Memo from Adrienne Verdone, Esq., CLTP, PLTA President… 51d) PA Senate Bill no. 508 2/18/03 MCTLA amendment to May 16, 1923 (P.L.207, No.153)… 52-54e) Local taxes are the majority of local school funding chart… 55f) Local taxes by source chart… 56 2
  3. 3. Abstract: Taxes and fees assessed by various government entities, including school districts,are crucial to the operation and delivery of goods and services, primarily publiceducation, to the population. This report will establish that the collection of taxes and feesby private entities is a healthy thing for the taxing entities in the Commonwealth.Pennsylvania students may face a significant decrease in resources because of delinquenttaxes and a current legal conflict. This report sheds light on the nature of choices thatgovernment entities face when competing for essential revenue, as well as point out thejudicial and legislative history involved. Research compiled over two years and opinionsof four attorneys, who are authorities on this conflict, present their opinion throughout thethesis. A resolution is necessary for the fiscal health of the Pennsylvania School Districtsand this explains why. . 3
  4. 4. Everyone who owns real estate must pay property taxes, unless on a rareoccasion, the property is purchased with a stipulated tax abatement. Taxes arerequired to provide services to all residents of a particular taxing district, includingthe property owner who pays his or her tax bill. The services that the tax bill supportsinclude funding school operating expenses, clinics, libraries, public hospitals, roadmaintenance, playgrounds, parks, pensions, and law enforcement just to name a few.As long as taxes have been levied there have been instances of late or completelydelinquent payments of the bill. What happens when money for these services isreduced because of the non-payment of taxes? Legal remedies are in place in theCommonwealth of Pennsylvania to ensure that taxing districts, such as townships,school districts, municipalities, cities, and boroughs, receive their funds in a timelymanner and maintain revenue to continue providing necessary services.Literature Review: Thomas Paine wrote in the Rights of Man that, “On the subject of supplying theTreasury by new taxes the Assembly declined taking the matter on themselves,concurring in the opinion that they had not authority.”1 Thomas Paine responded to Mr.Edmund Burke with a belief that liberty was the responsibility of all in a society.Published in 1791, The Rights of Man has been considered a political masterpiece. It wasnot the authority of the Assembly to decide how to supply the Treasury, rather, it was thepeople. In 1791 America had very little global influence. Yes, this nation had won itsbattle for sovereignty, but only two years after the Bill of Rights was adopted, the Nation1 Eckler: Thomas Paine, p. 80 4
  5. 5. had a long way to go. In a great society, a democracy for example, who does theindividual have a responsibility to? Some argue that each of us has a responsibility to ournation and liberty; others may argue that responsibility lies in self-preservation. Taxes are a fundamental tool for maintaining society and all of the activities that agovernment must undertake. Taxes, in one sense, are an investment in the future. Whenone commits funds to the preservation of society on a whole, then that person commits tothe preservation of himself or herself, as they are a member of their society. When one isa participant in society, then it is the responsibility of that person to preserve that society.On a large scale, it becomes the responsibility of everyone to perpetuate taxes, or a webof support, for the continuation of liberty, security, and services. The argument over the role of government may be widely argued, however it isassumed that the fundamental roles of government include establishing law & order,providing public services (however limited) and at least some level of protection. Agovernment cannot exist without the support of the citizenry. Whether the government isimposed or elected, it cannot survive without the labor and finances of the people. Paine elaborated on taxes writing in The Rights of Man that, “the funding systemis not money; neither is it properly speaking, credit. It in effort creates upon paper thesum which it appears to borrow, and lays on a tax to interest, and sends the annuity tomarket, to be sold for paper already in circulation. If any credit is given, it is to thedisposition of the people to pay the tax, and not to the government, which lays it on.When this disposition expires, what is supposed to be the credit of Government expireswith it.”22 Eckler: Thomas Paine, p. 119 5
  6. 6. Essentially the government is afforded by the citizenry, the right to choose how toextend its finances. For the most part, the government chooses to finance services thatadvance the will of the people. In some circumstances, the government may choose tofund any number of programs or activities that are not the will of the people. When thisoccurs, it is the theory of Locke that the government looses the credibility that thecitizens extend to it. That is, if the government is not extending finances advancing thewill of the people, or finance with the intent to advance the future prosperity of thepeople, then the government will then loose their own credibility. This means that thegovernment always has an expired approval when the interest of the people is notmaintained, and that the people have the right to choose another government. Taxes are at the heart of this approval. The people’s support comes from thecorrect and approved levying of taxes. The goods and services provided are for thebenefit of all, or so it is assumed. The citizens will always expect that services renderedto their ‘neighbor’ will also be an option for themselves. Taxes are to be a shared burden,as well as a shared benefit. When participation in this foundation of support is diminishedby a voluntary withholding of tax commitment, then society itself is threatened. John Simmon’s assessment of Lockean theory quotes Locke’s writing, “Nosociety can, of course, be a scheme of cooperation which men enter voluntarily in a literalsense…. Yet a society satisfying [hypothetical contractarian demands] comes as close asa society can to being a voluntary scheme, for it meets the principals that free and equalpersons would assent to under circumstances that are fair. In this sense its members areautonomous and the obligations they recognize self-imposed.”33 Morris, p. 133 6
  7. 7. This means that a society operates with the cooperation of all of the citizenry.What happens when citizens choose to dissent and choose to separate themselves fromthe obligations of society? Without the dynamics of interaction and cooperation, societywould cease to exist. The implications of being a member of society include aresponsibility to the other members of society. When one participates in the interplay ofsociety and daily life, then one is obligated to his fellow man. What does this mean? InLockean theory, the undertone is a responsibility to each other. Living in society is acommitment and obligation in itself. Jack Fruchtman compared Lock and Paine by pointing out the theories of propertyownership and their implications on poverty. Fruchtman wrote, “Paine approached the problem of poor people by formulating a legal fiction: those who owned property owned a debt to the poor. He thought of the owners of property as not really owners, but lessees. They occupied the land perhaps through inheritance, perhaps through sale, perhaps through thievery. In any case, there was no original deed, because the first person who took ownership had no “rights” to the property. He simply claimed it and seized it. Paine genuinely believed that poverty was the outcome of civilization. There was no such thing as poverty in a state of nature. In that pre-political condition, before civil society came into being, a person’s life might have been threatened by wild animals, or even by other men. But he was not poor. He had plenty from the earth, and all he needed to do was use it. This, too, differed from Locke, who had presumed that even in a state of nature, a person might take control of a certain amount of property once he mixed his labor with it, that is, cultivated it and made things grow on it.”4 A society is a place for the interaction of everyone. In human society, each personhas a role. What is the role of a property owner? According to Paine, property belongedto everyone. And to Locke, a property could be something claimed, especially if thatproperty was developed for any particular use. These theories affirm that ownership andsociety are shared phenomenon. Those that “own” property have an obligation to those4 Fruchtman, p. 360 7
  8. 8. who do not own property. Those who own property also have an obligation to others whodo own property. The obligation includes an affirmation that society includes theproperty owner and relies on the property owner for a certain level of support. Propertyownership is an accomplishment of societal participation that announces wealth and orsuccess. Paine’s theory of property ownership and owning a debt to the poor is acorrelation to property ownership and taxation. There is a debt owed to society as awhole. That debt will ensure the survival of society as well as the survival ofproperty owners to come. The theory of taxation is simple. As Paine elaborated on“ownership” there really is no single “owner” as everyone has a share of the space onthis planet. The personal use of that space is something precious, as well as a debtowed to all those who do not have the privilege to that land.Taxing Districts Face Choices: In Pennsylvania, the taxing districts have choices when it comes to selectingthe process by which they will collect delinquent taxes. Two specific references willbe brought up throughout this thesis that are important to understand. The first is thePennsylvania Municipal Claims and Tax Liens Act of 1923 or “MCTLA.” Thesecond is the Pennsylvania Real Estate Tax Sale Law Act of 1947 or “RETSL.” TheMCTLA provides provisions that allow for a taxing district to collect delinquenttaxes, defined as all fees plus cost of collection through the use of a third party, andultimately if no payment is made within a year, the taxing district has the right toproceed to liquidate the property at a sheriff sale. 8
  9. 9. The RETSL enables a County Tax Claim Bureau to proceed to an upset sale afterone year has passed on a delinquent tax claim. However, this process may take up tothree years, as it provides delaying remedies for delinquent property owners. Typically, taxes are assessed based on the value of a given property. Thecounty assessor has the role of declaring a value of a given property, at which pointan annual tax bill is assessed by multiplying the taxing authority’s millage rate,which is generally one tenth of one percent by the assessed value. We will furtherdiscover the problems that taxing by assessed property values pose to services suchas education later. Once the tax bill has become delinquent, which is at the end of the calendaryear of the dated original tax bill, under the RETSL, the tax record must be turnedover to the County Tax Claim Bureau. At the point of receiving the claims at the TaxClaim Bureau, a penalty fee is added to the amount of the tax and a tax lien is filedagainst the property. Edward Rupert, CPE, Butler County wrote about the RETSLreporting, “The Real Estate Tax Sale law starting in Title 72 §5860.101 is specific about the due process of selling a person’s home or property for the nonpayment of tax due. The main thrust of the Tax Sale Law is to make sure the owner or reputed owner has actual notice of the pending sale… The result of the PA Real Estate Tax Sale Law (RETSL) was to consolidate all delinquent real estate tax claims into one agency as a convenience to local officials, property owners, prospective purchasers, and title searchers. This consolidation greatly helps to eliminate the accumulation of delinquent taxes and the revival of liens permitted by prior lien laws. This law replaces the county treasurers’ and city treasurers’ sale by a single procedure under the Tax Claim Bureau. The RETSL provides a means of conveying [a] better title to a purchaser at tax sale. The RETSL was designed to benefit local governments in the accelerated collection of delinquent real estate taxes without causing undue hardship on the delinquent property owner. 9
  10. 10. To the extent that the RETSL reduces the amount of delinquent real estate taxes as a percentage of the market value of taxable property, it increases the total tax yield and also serves to reduce the share of total taxes born by those who promptly pay their taxes.5 If a taxing district chooses to use the MCTLA to collect, they may hire a thirdparty private collection agency or firm to hasten the process. In either case, using theRETSL or MCTLA, the tax is delinquent and owed to the taxing authority. Recently,a debate has arisen contesting the methods by which taxing authorities may collecttaxes. The RETSL requires that all delinquent claims go to the Tax Claim Bureau,and the MCTLA allows for a third party to collect delinquent taxes moreexpediently. Several problems arise in the Commonwealth of Pennsylvania becauseof the concurrence of the RETSL and MCTLA. First, in order for a third party to collect the delinquent taxes under theMCTLA, the third party must have access to the documents that record the reportedowner of the property, amount of delinquent tax, and property information toproceed. This is the first conflict of the concurrence of the MCTLA and RETSL. TheRETSL requires that all documents pertaining to the delinquency statistics areforwarded to the Tax Claim Bureau, but the MCTLA makes no mention of whoholds claim to the delinquent tax records. Second, the Tax Claim Bureau isresponsible for providing certifications that the properties are either free-and-clear ofliens, or if they are in a status of delinquency. With the presence of a third partycollector, such information is not made available to the Tax Claim Bureaus andinformation pertaining to property status is in the hands of the third party collector.To understand the legal conflict one may compare the collection processes of the Tax5 Edward Rupert, AAP Journal Assessors Association of Pennsylvania, Issue 5 Volume 2 spring 2004 10
  11. 11. Claim Bureau using the RETSL and a third party collector named Portnoff LawAssociates, Ltd., which uses the process outlined in the MCTLA.PLTA and Fidelity Home Abstract, Inc v. East Stroudsburg Area School District: This case was argued on September 13, 2006 in the Commonwealth Court ofPennsylvania Court of Common Pleas of Monroe County. It is necessary to cite thefacts of the case based upon the testimony elicited at the December 7, 2005 hearing: The Facts of this case are as follows: Briefly since 2003 the Tax Collectors, following the instructions of the School Districts, have not made returns of delinquent school taxes for tax years 2002, 2003 and 2004 to the Monroe County Tax Claim Bureau . . . Instead, the School Districts have contracted with Portnoff Law Associates, Ltd (hereinafter referred to as “Portnoff”), to act as their solicitor for purposes of collecting delinquent taxes using the provisions of the Municipal Claims and Tax Lien Act. As a result, the Bureau has no records of paid or delinquent school taxes for properties located within the two School Districts for the tax years 2002, 2003 and 2004. The School Districts are able to provide information regarding delinquent school tax records to the general public upon request; however, the information is not readily available for viewing by the general public, nor is the information updated after the delinquent taxes are forwarded to Portnoff for collection. Consequently, title searchers, title insurance companies, mortgage companies, banks, attorneys and the general public cannot obtain this information from the Bureau or the School Districts; instead, they must contact Portnoff. Anyone requesting information from Portnoff can receive a verbal report on the status of such taxes free of charge; however, if a written report is requested, the cost is $25.00 to $50.00 depending on whether it is an expedited request. When requesting a written report from Portnoff, it takes a minimum of five business days to receive the information for a regular request, and it takes two business days to receive the information on an expedited request. All responses to requests are sent by fax. Although identified as certifications, the reports prepared by Portnoff are not signed certifications. This same information, if it were available at the Bureau, could be viewed by the requester either in printed form by looking at the hard copy file or by using the computer terminals that are available for public use free of charge. If a tax lien certificate is requested from the Bureau, the requester would receive an “official” certification of the status of the 11
  12. 12. taxes, whether paid or unpaid, on a specific parcel of real estate within a matter of minutes. The cost of this official tax lien certificate is $10.00. Real estate attorneys and title agents who handle real estate matters regarding properties located in the School Districts have suffered monetary losses due to the lack of or inaccuracy of information regarding the status of the school taxes. They have also experienced delays in receiving information from tax records which previously had been instantly available at the Bureau. Confusion has been created for delinquent taxpayers over who they should make delinquent tax payments to – the Bureau or Portnoff. Taxpayers have also experienced problems obtaining credit because the tax liens filed by Portnoff in the Monroe County Prothonotary’s Office have not been satisfied even though they have been paid.6 From the facts of this case one can see that this is not a debate over theexistence of third party tax collection. This is a complex conflict about who hasclaim to delinquent tax records. The Pennsylvania Land Title Association asserts thatbecause Portnoff Law Associates is collecting delinquent taxes for East StroudsburgArea School District, there is an increased rate of confusion and delay in thereporting of public information, as well as an increased cost of operation for the realestate industry. In an interview with Sandy Dixon, Esq., the Chairman of the PennsylvaniaLand Title Association’s Legislative and Judicial Committee, he stated that, “PLTAv. East Stroudsburg is essentially a business issue. My role in the case was to protectthose who certify sales against receiving false or inaccurate information caused bythe transfer of delinquent taxes from the East Stroudsburg School District to PortnoffLaw Associates instead of to the Monroe County Tax Claim Bureau. Every taxingdistrict can turn over claims to a tax bureau or can turn over [the delinquent claims]to a private attorney or agency for collection. There is a legal process. The Real6 PLTA v. East Stroudsburg Area School District No. 226 C.D. 2006 12
  13. 13. Estate Tax Sale Law states that an upset tax sale must be held, then a judicial sale, apublic sale, and eventually a repository sale. Portnoff will proceed directly to asheriff sale. The RETSL gives the delinquent owner more time to makearrangements or ultimately pay. The law also states that the information must beturned over to the Tax Claim Bureau.”7 PLTA v. East Stroudsburg Area School District was brought by thePennsylvania Land Title Association to argue that they believed that the RETSLgave the Tax Claim Bureau the right to all claims. Ensuring that the Tax ClaimBureau has all of the tax record is to the advantage of title searchers. For titlesearchers, winning the case disregards the best interests of students and taxingdistricts dependent on the tax revenue, rather furthers their interest in making theirbusinesses operate faster and at a lower cost. The case does not answer the question,which law applies to the taxing districts? If the issue truly is about availability ofpublic information, then the RETSL and MCTLA cannot both have application in theCommonwealth. The Case mentions the City of Allentown v. Kauth (2005) notingthe Court in that case held that, “the two statutes are very similar and operateconcurrently with one another…” essentially agreeing with the decision yet choosingto pick and choose sections of both the MCTLA an RETSL for general application.Again, the concurrent application of these statutes does not work. Attorney Jane Roach is an elected member of the Board of Directors of thePennsylvania Bar Institute and served as the attorney for Pennsylvania Land TitleAssociation in the case PLTA v. East Stroudsburg Area School District. Ms. Roachelaborated in interview that, “The Tax Claim Bureaus are slower to collect than7 Sandy Dixon Esq., 3/28/07 13
  14. 14. private collectors, but there are sound reasons for a delay in the sale of someone’sproperty. Tax sales take longer because it is sound law.” Ms. Roach talked about how she felt about the role of a private collector fordelinquent taxes and she stated, “The Pennsylvania Land Title Association says thatthere is nothing wrong with private collection.” Roach believes that privatecollection is not necessarily as effective as the Tax Claim Bureau and continued,saying that, “It’s absolutely of no interest to Fidelity Abstract or PLTA whether [ataxing district] hires a private collector. But, we question the availability of publicinformation when Portnoff Law Associates is contracted. To collect 4% of the taxes[Portnoff] holds 100% of the record. They charge $25 for a title search of theserecords, and property owners have paid Portnoff Law Associates then receivednotices of a tax sale.” Ms. Roach believes that the confusion has been especiallydifficult for senior citizens. She said, “Some seniors didn’t realize that for someyears they had to pay the Tax Claim Bureau and other years they were required topay Portnoff Law Associates. Because of this confusion, and believing that theirtaxes were paid, some of their homes went to tax sale.” Ms. Roach explained the crux of the situation saying, “Title companies aremaking more mistakes because Portnoff Law Associates and the Tax Claim Bureausare holding records for inconsistent years. For example, when Portnoff LawAssociates started to collect, they told school districts to pass on their records toPortnoff. That is against the law. According to the law, all records must go to the TaxClaim Bureau. The Tax Claim Bureau did not object. For several years [the records]were stored at the school district and Portnoff Law Associates took files as needed. 14
  15. 15. The problem is that Portnoff Law Associates only needs 4% of the tax records buthas all of the records, causing an extra search for records by contacting Portnoff LawAssociates.”8City of Allentown v. Richard J. Kauth and Lourdes Kauth: On May 12th 2005, the Court of Common Pleas of Lehigh County decidedCity of Allentown v. Kauth taking care to note that, “The County argues that this language expresses an intent by the legislature that taxing districts coordinate their tax collection efforts through county tax claim bureaus. Those taxing districts stand to lose the protection afforded by Section 312 [of the RETSL] if municipalities such as the City may proceed with free and clear judicial sale under the MCTLA. Although the County acknowledges that the RETSL did not expressly repeal any specific provisions of the MCTLA, it contends that the operative provisions of the two statutes are irreconcilable and that the RETSL, which was enacted later in time, impliedly repealed the MCTLA…”9 The reality of the situation is that the RETSL was simply an alternative to theMCTLA. Simply because the RETSL was enacted after the MCTLA, that does notmean it repeals the MCTLA. It would seem that before PLTA v. East Stroudsburg,this case was the scheme of the Lehigh County Tax Claim Bureau to return taxclaims to the Bureau. “As the trial court aptly noted, the MCTLA and RETSL are not inconsistent with one another; rather, they permit, through strikingly similar and parallel mechanisms, a taxing authority to expose a delinquent property for an upset sale… Whether the judicial sale is affected under the MCTLA or the RETSL the intent of the legislature is the same: to return real property to productive use under new ownership.”108 Jane Roach, Esq. 3/30/079 City of Allentown V Kauth No. 2060 C.D. 2004 No. 2061 C.D. 200510 ibid 15
  16. 16. This court rightly found that the “main thrust” of both the MCTLA andRETSL is not who collects the delinquent taxes or how, rather that the delinquent taxis legally collected, restoring the property to a source of revenue once again. “We hold that the two statutes are very similar and operate concurrently with one another, due to the fact that the RETSL establishes an alternative for the collection of delinquent tax claims, but not a mandatory alternative. The County’s argument would require us to find, in derogation of the express language used by the legislature, that RETSL is mandatory. We find no merit to the County’s claim that any or all of the provisions of the MCTLA have been impliedly repealed by the RETSL.”11Portnoff Law Associates: Michelle Portnoff, President of Portnoff Law Associates stated in aninterview on April 9th, 2007 that, “I think that the biggest obstacle that Portnoff LawAssociates faces is the Commonwealth Court decision in November [deciding thatthe] RETSL and MCTLA can take place concurrently. It doesn’t make any sense.You can’t have two collectors collecting the same debt. I think that in a conflict incourt, a legislative clarification is needed. Under Pennsylvania law, the legislaturehas the right to basically remedy legislation when it’s interpreted differently from itsoriginal intent.”12 What does Pennsylvania Land Title Association v. East Stroudsburg AreaSchool District mean for Portnoff Law Associates? Portnoff Law Associates is a firmthat prides itself in the fact that it can collect more efficiently than the Tax ClaimBureaus as well as with more concern for the individual taxpayer. In their initialcommunication to a taxing district they solicit that:11 City of Allentown V Kauth No. 2060 C.D. 2004 No. 2061 C.D. 200512 Michelle Portnoff Esq., 4/9/07 16
  17. 17. “Portnoff Law Associates offers the only viable long-term solution to your delinquent real estate tax problem. With nearly twenty years experience collecting delinquent real estate taxes and municipal user fees, we can collect your delinquent real estate taxes much more efficiently and fairly than any other service in the Commonwealth of Pennsylvania. Our firm affords the highest rate of return in the Commonwealth, and our clients consistently experience reduced delinquency rates in the years subsequent to the implementation of our collection process. Portnoff Law Associates is not a collection agency, and it does not operate like one. Unlike the Tax Claim Bureau, Xspand or any other collection agency, Portnoff Law Associates operates under legislation that allows the fair and reasonable costs of collection to be passed through to delinquent taxpayers. Our clients enjoy the unique advantage of maintaining total control over the entire collection process. The process utilized by our firm offers your taxing district the following benefits. We urge you to refer to this table when comparing various delinquent tax collection services: The Portnoff Process ™ Amounts Remitted 100% of principal, penalties, and interest to date of collection Length of collection process Less than 1 year 95% + of principal, penalties and interest Percentage of claims collected to date of collectionCommission charged to taxing district 0% Remittance Weekly remittance of 100% of principal, penalties, and interest to date of collection Reduced delinquency rates in Yes subsequent years Hardship Program Yes The efforts of our firm are directed toward habitually delinquent taxpayers who have the means to pay their taxes timely, but choose not to do so. We believe that it is unfair for a taxing district to require its good citizens who timely pay their taxes to subsidize those property owners who refuse to pay their taxes year after year. We urge you to review the track records of the organizations you wish to consider for the task of delinquent tax collection. Some of the companies that purchase delinquencies are known to lack compassion when dealing with delinquent property owners. Because we are a professional law firm that operates on behalf of its clients, we offer a unique process that protects the infirm, the elderly, the sick, the disabled, and those delinquent taxpayers on limited incomes. We are proud to administer a Hardship Program, the parameters of which are set by the taxing district, which 17
  18. 18. ensures that those disadvantaged property owners remain safe from the treat of losing their homes or accruing any legal fees.”13A Response to Portnoff Law Associates: Steve Levin of the Pittsburgh Post-Gazette wrote an article describing theburden a bill from Portnoff Law Associates placed on a couple who bought their firsthome in McKeesport Pennsylvania. “The property had belonged to Welchs father, and there was an outstanding tax debt of $1,549.82 owed to the McKeesport Area School District. The couple sent a check for $1,600.05 to the company that acted as their closing agent to forward payment to Portnoff Law Associates, a Wynnewood, Pa., collection firm. But the settlement agency delayed sending the check, and by the time it was received, Portnoff had added a $150 fee to the bill. Now, instead of being free and clear homeowners, Gregory and Welch still owed $99.77. Had they paid it then, or forced the settlement agency to pay it, their problems would be over. But they didnt do the former and a two-year statute of limitations prevents them from doing the latter. Four years later, the couple owes Portnoff more than $1,700. The original $99.77 bill rose as high as $1,089.04 this January before the couple managed a $500 payment.”14 Some have debated the very existence of a third party collector. Is it the roleof anyone else, other than the government, to impose a function of the government?One can equate the existence of Portnoff Law associates to any privatized entity thatserves the public as the government otherwise would if it had the resources. Privateprisons, and security companies fill a void and provide a service more cheaply thanthe government, and they operate within the auspices of the government, just asPortnoff has been hired to collect delinquent taxes for various taxing districts.“The Portnoff Process” and the Tax Claim Bureau Process:13 Sample letter signed by Alan B. Portnoff Esq., acquired from firm employee orientation, notdated14 Steve Levin: A Dream Foreclosed: Small Mistakes, Giant Consequences, Pittsburgh Post-Gazette, 6/7/2004 18
  19. 19. In an interview with Michelle Portnoff she was asked, “What makes PLAbetter than the Tax Claim Bureau in the function of collecting delinquent taxes?” Sheresponded, “The RETSL mandates 2 ½ years to collect. For example, if the countyTax Claim Bureau collected 2006, then a tax sale wouldn’t take place until 2009”“Under the MCTLA you may give 30 days notice before proceeding… Generally 90percent of taxes and fees are usually paid on time or are current. For the masspopulation, there is no change when Portnoff Law Associates is the collector ofdelinquent taxes and fees. The county Tax Claim Bureau may use the MCTLA tocollect [delinquent taxes] but they can’t get their act together to collect as efficientlyas the MCTLA allows… The public sector is not state of the art [enough] for the useof a MCTLA process.” One benefit of contracting Portnoff over forwarding claims to the Tax ClaimBureau is Portnoff’s ability to swiftly collect delinquent taxes for school districts andtaxing districts as well as return the full amount without withholding a percentage ofthe claim, as the Tax Claim Bureau withholds 5% of the collected amount. Whenasked to elaborate on why the Pennsylvania Land Title Association has an interest inwhether or not Portnoff Law Associates collects the delinquent taxes, Portnoff said,“Most clerks aren’t driving to the county Tax Claim Bureau or to a 3rd party, most[title certification requests are] done by email or fax.” 15 Title insurance companies are increasingly impatient to allow for areasonable return time for their requests. Portnoff provides all requests for tax payoffamounts via email or fax within 5 days. They have an entire department dedicated tothe return of information requested via written communication, email, or fax.15 Michelle Portnoff Esq., 4/9/07 19
  20. 20. Attorney Sandy Dixon of Ticor Title Insurance Company and Chairman ofthe Pennsylvania Land Title Association’s Legislative and Judicial Committee said,“We have no objection to private collection but our whole issue is the right to getrecords easily, inexpensively, and locally. The role of title insurance companies is toensure that the property is free of taxes, and this case is to ensure that role.”16 Michelle Portnoff responded to the question asking her to define her solutionto Pennsylvania Land Title Association’s claim that the records should be returned tothe Tax Claim Bureau. Her response was, “I think that the way to make informationmost accessible is to make it available electronically… The best result allows accessby the public for up to the minute records and a 3rd party can provide that servicebest.”17In the Wake of the PLTA v. East Stroudsburg Area School District Decision: The opinion of the court on February 2, 2006 was not in the favor of PortnoffLaw Associates. On February 2, 2006, the trial court granted the motion for peremptory judgment and issued a writ of mandamus: 1) that the School Districts and tax collectors are to make future annual returns to the Bureau; 2) that the School Districts are to provide to the Bureau all of the School Districts’ books and records for the tax years 2002, 2003, and 2004; 3) that the School Districts also are to provide a detailed disclosure to the Bureau of the status of all real estate taxes for the applicable tax years; 4) that the School Districts and tax collectors are to make payments for the delinquent taxes shown on the returns only to the Bureau; 5) that the School Districts are to relinquish all future payments for delinquent taxes to the Bureau and to provide to the Bureau detailed property descriptions for which the payments were made; 6) that the School Districts are to file a satisfaction of liens for payments received on municipal liens; and 7) that the School Districts are to16 Sandy Dixon Esq., 3/28/200717 Michelle Portnoff Esq., 4/9/07 20
  21. 21. provide full tax lien payoff information in writing, at no charge, within five business days of any written request.18 The Trial Court decision ordered that essentially all delinquent claims are tobe forwarded to the Tax Claim Bureau. Also ordered was a return of all claims to thetax claim bureau for the years 2002-2004, years that Portnoff Law Associates isactively collecting. Also, the Court ordered that the School Districts are responsiblefor providing lien information in writing at no charge to anyone who makes a requestfor that information in writing. This order is supposed to make lien payoff information more accessible totitle insurance companies, however the implication of this decision will create chaosfor the taxpayers, the school district officials, Portnoff Law Associates, andeventually for the Tax Claim Bureau. This case is on appeal, and both PLTA andPortnoff Law Associates are pursuing a legislative remedy to the problem. Problemsarising from this order would overwhelm school districts and the Tax Claim Bureauin labor and costs. Also consider the taxpayer who may have been on an establishedpayment plan with Portnoff Law Associates, who now could be forced to adapt to thechange. East Stroudsburg Area School District would also have to face and acceptanother decrease in the flow of revenue, as Portnoff has proven to be faster atcollecting the debts, legally using the MCTLA, than the Tax Claim Bureau using theRETSL. Using the MCTLA instead of the RETSL was the argument that EastStroudsburg Area School District and Portnoff Law Associates used to justify their18 PLTA V. East Stroudsburg Area School District No. 226 C.D. Argued 9/13/2006 21
  22. 22. claim of retaining the tax return documents. But the RETSL stipulates in Section201(a), 72 P.S. § 5860.201(a) that: In lieu of or in addition to creating a bureau, counties are authorized to provide by ordinance for the appointment and compensation of such agents, clerks, collectors and other assistants and employees, either under existing departments, in private sector entities or otherwise as may be deemed necessary, for the collection and distribution of taxes under this act. Any alternative collection method shall be subject to all of the notices, time frames, enumerated fees and protections for the property owners in this act.19 Essentially this stipulates that any party that collects delinquent taxes otherthan the Tax Claim Bureau is required to collect taxes enumerated by the RETSL.The challenge that Portnoff Law Associates and the school districts that contractPortnoff face is the stipulation in the RETSL requires Portnoff and the schooldistricts to turn claims over to the Tax Claim Bureau. The Court decided that theRETSL doesn’t necessarily override the MCTLA, rather they are to workconcurrently. The Court indicates that, again, the issue is not whether or not Portnoff or anythird party can collect delinquent tax claims, it’s whether or not the third party mayuse the records for their own use, and how they should proceed to collect. TheMCTLA allows for the filing of liens with the Prothonotary, speeding up the processof collection if the delinquent fails to make payment, as well as creating a very realand near-future consequence for avoiding payment of delinquent taxes. But how canPortnoff Law Associates Collect more effectively than the Tax Claim Bureau if theyare forced to operate like the Tax Claim Bureau under the auspices of the RETSL? It shall be the duty of each receiver or collector of any county, city, borough, town, township, school district or institution district taxes to make a19 RETSL, Section 201(a), 72 P.S. § 5860.201(a) 22
  23. 23. return to the bureau on or before the last day of April of each year, but no earlier than the first day of January of that year. The return shall be type written on a form provided by or acceptable to the county and shall include a list of all properties against which taxes were levied, the whole or any part of which were due and payable in the calendar year immediately preceding and which remain unpaid, giving the description of each such property as it appears in the tax duplicate, and the name and address of the owner as it appears in the tax duplicate, together with the amount of such unpaid taxes, penalties and interest due to but not including the first day of the month following the return.20 The Court also decided that the argument that Portnoff and the SchoolDistricts made in their defense was not valid. The School Districts asserted that: The Trial Court cannot circumvent the School Districts’ choice to proceed under the MCTLA by requiring the Tax Collectors to make a return to the Tax Claim Bureau under the RETSL on behalf of the School Districts. Section 5971t of the Local Tax Collection Law specifically prohibits a tax collector from making a return to the tax claim bureau if a taxing district advises that delinquent taxes will be collected by filing liens with the Prothonotary under the MCTLA. 72 P.S. § 5971t (“no tax collector shall make any return of taxes providing this act, if the taxing authorities shall notify such tax collectors in writing that returns shall not be made, but that delinquent taxes are to be collected by the filing of liens in the office of the prothonotary.”). The School Districts have given written notice to the tax collectors that their delinquent taxes will be collected by their Collection Solicitor under the MCLA. (R. 302a-303a). Therefore, the tax collectors are statutorily barred from making returns to the Tax Claim Bureau, further demonstrating that filing returns with the RETSL is not a mandatory requirement.”21 This demonstrates the School Districts belief that the RETSL and MCTLAcannot be administered concurrently. As Michelle Portnoff stated, “You can’t havetwo collectors collecting the same debt.” (Michelle Portnoff Esq., 4/9/07) The Court decided that the School District’s argument contained errors thatmay or may not have been intentional. The Court found that the reasoning was20 RETSL, Section 201(a), 72 P.S. § 5860.201(a)21 PLTA V. East Stroudsburg Area School District No. 226 C.D. Argued 9/13/2006 23
  24. 24. flawed and rebutted the School Districts defense of the MCTLA collection practicesalready in place by documenting in the Decision, “We have reviewed the provisions of the MCTLA and find no provision that repeals § 5860.306 requiring receivers, i.e. taxing districts, or tax collectors to make returns to the tax claim bureau. Thus, there is no conflict between the two statutes regarding the requirement for making returns of delinquent taxes to the tax claim bureau…22 The Court failed to recognize the fundamental differences of Portnoff LawAssociates and the Tax Claim Bureau. The Court believes that the Tax Claim Bureauuses the RETSL which is more expedient and beneficial to not only the schooldistricts, but to the county as well as the title insurance companies. But what isn’tdiscussed in the case is the burden of delinquent taxes to the school districtsthemselves. The only thing highlighted is the burden to the Real Estate industry, andthe additional cost incurred by obtaining a record search through Portnoff LawAssociates. The Court continued in its rebuttal to the School District argument that theyare not required to turn over records to the Tax Claim Bureau, “Furthermore, Section 5860.201(a) of the RETSL gives tax claim bureaus the authority to use other methods of collection, including the MCTLA, while at the same time requiring compliance with the provisions of the RETSL. Similarly, the 2004 amendment to the MCTLA also gave tax claim bureaus authority to use the procedures of that act to collect delinquent real estate taxes in addition to the procedures set forth in the RETSL.”23 The importance of having access to the public records is evidence as thetestimonial accounts of problems that have been encountered by real estate attorneys,title searchers, and the general public. In this case, the court decided that the22 PLTA V. East Stroudsburg Area School District No. 226 C.D. Argued 9/13/200623 ibid 24
  25. 25. convenience to the real estate industry outweighed the interest of the school districts.Michelle Portnoff commented that, “I think that the title insurance industry will beopen to working something out to solve this problem. You have competing needsand the vast majority of taxpayers pay on time, but the entire real estate industry isnot in disarray over people who don’t pay their taxes.”24The Best Interests of The Pennsylvania School Districts: It is a fact that the majority of revenue collected by the Commonwealth ofPennsylvania school districts to sustain their daily operating expenses is collectedfrom the local tax base. According to the Pennsylvania Department of Education,local taxes represent 93.9 percent of the revenue for school districts! Dawn SchmidtEsq., former Director of Portnoff Law Associates and the current DeputyPhiladelphia Tax Solicitor responded to that statistic saying, “That is a reallyimportant statistic, because that really differs from state to state. There are manyimpacts of relying on local taxes for school operating expenses. First and foremost,everyone benefits from quality education in society. Nobody says that children aregetting too much. I am idealist and ask, what more can we do for the students?”When asked if schools should diversify their sources of revenue, Schmidt replied,“Again, I am an idealist. I believe that school districts should have a lot of powerbased on their obligations. Unless we give them the power to even make the choiceto diversify, then how will they know whether or not a change in the currentpractices will improve cash flow? It’s not as if I am saying that the school districtsshould have sovereign power, because voters ultimately have the power. If we don’t24 Michelle Portnoff, 4/9/2007 25
  26. 26. like the decisions the school board members are making, then vote them out!Operating school districts is not a one-size-fits-all scenario.25 When a school district faces a funding crisis, or suddenly faces an increase incosts, then it is the responsibility of the school boards to formulate solutions. Ideally,school districts would face challenges without a debt burden. Unfortunately, in somesituations, school districts may face an overwhelming debt load from previous years.What happens when a school district faces a fiscal challenge without the funds toremedy the situation? Either the school district will have to cut costs and divertspending, increase taxes, or go into debt. Dawn Schmidt said, “It’s really importantto know that when a school district faces a crisis, they are empowered to makechoices. Sometimes the choices are not ideal, like selling delinquent tax claims for aloss, but sometimes a choice that isn’t ideal may be the only realistic option to solvean immediate challenge. For example, if a school district is owed one million dollarsin delinquent claims, selling those claims for eight hundred thousand dollars may bebetter than waiting years to recover the full amount, especially if a school is facingsevere budget shortcomings.”26 It’s been established by the Pennsylvania Legislature that school districts inthe commonwealth need to be afforded flexibility and choices. The RETSL is simplyan addition to the choices that the school districts have. The RETSL in no wayrepeals the MCTLA, because if it does then there would be several severe25 Dawn Schmidt Esq., Phone Interview 4/16/200726 ibid 26
  27. 27. repercussions not mentioned before. First, not every county in Pennsylvania has aTax Claim Bureau. If the Court rules that the RETSL requires all claims to bereturned to the County Tax Claim Bureau, then what do the school districts do inAllegheny County, which includes Pittsburgh School District? According to Dawn Schmidt, “By the courts reasoning in PLTA v. EastStroudsburg, Allegheny County couldn’t abide by the court’s decision. I just can’tfollow their logic. I don’t see how this ruling helps anyone. Competition helps theschool districts. If you look at the RETSL, some Tax Claim Bureaus have too muchflexibility, but the RETSL doesn’t mandate efficiency. It is not fair that the SchoolDistrict is mandated to return claims to the Tax Claim Bureau where they haveabsolutely no influence. “27 A 2005 article in the Pittsburgh Tribune-Review titled, Push is on for countytax claim bureau stated, Allegheny County Controller Mark Patrick Flaherty is pushing a plan to consolidate collection of overdue property tax debts into one countywide tax claim bureau. Melding debt collection now carried out by 174 taxing bodies into one agency would speed collection of debts, increase efficiency and get properties back on tax rolls more rapidly, Flaherty said. "The whole process would just be a lot quicker in terms of getting liens erased from properties," he said. Flahertys plan would have no effect on local tax collectors responsibility to collect current taxes.”28 County Controller Mark Patrick Flaherty is not entirely correct in hisassessment of a County Tax Claim Bureau. Ideally the Tax Claim Bureau wouldspeed up collection, however it is not the reality across the state. The writer of thearticle was able to solicit an opinion from a local School Board President, who27 Dawn Schmidt Esq., Phone Interview 4/16/200728 Glenn May: Push is On for County Tax Claim Bureau, Pittsburgh Tribune-Review, 11/14/2005 27
  28. 28. shared his opinion that a Tax Claim Bureau is not acting in the best interest of theSchool District. His argument confirms the opinion that only a local school districtknows their situation best. “Ed Wielgus, president of the North Hills School Board, said centralized debt collection might be a solution in search of a problem. "Ive always been amazed that the county and the state know whats best for the school districts. Local tax officials can be more responsive to cash-strapped residents, "They can go to their local person or go to their school board and get help.” “North Hills, for example, puts properties up for sale only when the owner refuses all help and cuts off communication with the district,” he said. Jake Haulk, president of the Allegheny Institute for Public Policy, said there appears to be a rush in Allegheny County to consolidate everything in government without considering the merits of doing so. If local governing officials and voters are happy with local control of debt collection, "theres no need to hand that off to somebody down on Grant Street," he said. County Chief Executive Dan Onorato, a Democrat, said he supports Flahertys idea. So does state Sen. Jim Ferlo, D-Highland Park. "Its definitely something I could wholeheartedly embrace," said Ferlo, minority chairman of the Senate Local Government Committee, which would likely review such a plan. Establishing the bureau would require a change in state law. State law now allows all counties except Allegheny to have centralized tax claims bureaus, and Ferlo said it would be relatively simple to add Allegheny County to the list. Westmoreland County is among the counties that uses a unified claims bureau. It has collected all debts for the county’s 65 taxing jurisdictions since the late 1970s and the system has worked well, said Westmoreland County Tax Office director Yvonne Hayes.”29 Pennsylvania Law specifically spells out the choices a School District has tosolve their delinquent tax problem. They can contract a private collector or use a TaxClaim Bureau, because in reality, the Tax Claim Bureau isn’t always the best option.29 Glenn May: Push is On for County Tax Claim Bureau, Pittsburgh Tribune-Review, 11/14/2005 28
  29. 29. To be fair, in some situations a private collector may not be the best option. But it ismore important to note that not only does the Tax Claim Bureau take a 5% fee fromthe school district on the delinquent liens, but the County collects without any schooldistrict oversight. According to Michelle Portnoff, in Pennsylvania that 5% fee wasan estimated $32 million last year. “Thirty-two million dollars could have gone toteachers and textbooks.”30 A benefit of contracting Portnoff Law Associates, or any third party collectoris the school district’s ability to regulate the process and have controls. Local schooldistricts know their citizens and know the reality of their situation. Like AttorneyDawn Schmidt said, there is never one school district in the same position as another.School Districts in the Commonwealth of Pennsylvania range from very rural toextremely urban. Philadelphia schools face different challenges than EastStroudsburg. Revenue in Potter County schools is spent differently than MontgomeryCounty Schools. Two school districts in Montgomery County may have different taxbases and different obligations. Of course there is not a simple solution to thedifferences between PLTA and East Stroudsburg Area School District. It isimportant to note that if a solution is not found, students will suffer. The court deciding PLTA v. East Stroudsburg Area School District chose toaccept the argument that the availability of information to the real estate industry andthe general public outweigh the best interest of the school district, and the actualintent of the MCTAL altogether. The Court’s recent ruling does nothing to alleviatethe burden of delinquent taxes on the School District, rather it would simply mandateone collector per county for all delinquent claims within that county. In this scenario,30 Michelle Portnoff, Phone Interview 4/9/07 29
  30. 30. how does a school district exercise control over their collection once the claims havebecome delinquent? In simple terms, they have absolutely no control. Schmidtelaborated the value of the MCTLA saying, “The MCTLA allows school districts tosell their debt, pass the collection on to a third party, or use the County Tax ClaimBureau. How can a school district make a choice when they are mandated by a courtto use the Tax Claim Bureau? The school districts have an incredible responsibilityto educate our children, and a result of mandating the use of a Tax Claim Bureau tocollect delinquent claims would limit the school district’s ability to choose what isbest for our children.”31Conclusion: When the Court decided PLTA v. East Stroudsburg Area School District itfailed to recognize the implications, consequences, and scope of their decision. TheCourt affirmed that the concurrence of the RETSL and MCTLA exist, however thelogic of the decision does not allow for that affirmation to realistically apply. Bothlaws fundamentally allow for school districts in the Commonwealth of Pennsylvaniato choose the delinquent tax claim collector for themselves and their tax-payingcitizens. The court’s decision contradicts itself and actual law. In part, the debate is over money. Who has the right to the taxpayer’s money?Some County Tax Claim Bureaus feel that it is their role to collect all of thedelinquent tax claims in their jurisdiction. Other Tax Claim Bureaus do not object tothe burden of tax collection to be shared. Some Tax Claim Bureaus areuncooperative to the extent that they won’t even recognize a third party collector to31 Dawn Schmidt Esq., Phone Interview 4/16/2007 30
  31. 31. someone who asks for that kind of information. Two problems in this unique conflictare the division of public records, and the division of labor rights. State law gives the right to taxing districts in the Commonwealth to contractthird party delinquent tax collection, again, the court and most of the parties involveddo not disagree with this fact. All the parties in this conflict agree that the issue ismuch deeper than the practice of hiring a private tax collector. Is there acompromise? Some Tax Claim Bureaus want to collect all of the delinquent claims.A benefit would be a significant increase in county revenue. Some would like to seeall of the claims in the hands of private collectors, rapidly collecting the districtdelinquent taxes. But there is a middle ground. There can be a sharing of thedelinquent claims that allows for easy title searches, as well as expedient collectionoptions at the ready for school districts and taxing districts. Michelle Portnoffbelieves that the answer is computerized record keeping. PLTA believes that thatanswer is computerized record searches. Can a statewide, online, record repository be the answer? If that is theanswer, then who will foot the bill? Both the Pennsylvania Land Title Associationand Portnoff Law Associates are now seeking a legislative remedy to the problem.The PLTA realizes that it is unrealistic to go into every taxing district and ask thecourts to issue mandamus, ordering the records returned to the Tax Claim Bureaus.Portnoff realizes that in the future, a conflict in legislation will jeopardize private taxcollection. Can the legislature find a way to combine the MCTLA and RETSL intobalanced legislation? The legislature must realize that the real estate industry is 31
  32. 32. burdened by the delinquent tax claim collection inconsistencies just as they mustrealize that the impact of a legislative remedy can benefit every Pennsylvania publicschool student. The legislature must find a way to protect private businesses, everycounty’s vitality, and the secured prosperity of all Pennsylvania school districts. Atthe center of this conflict is a demand for careful consideration to everyone involvedand connected to this issue. A compromise may not satisfy everyone, but a compromise will guarantee thatprecious Pennsylvanian jobs aren’t lost, students are competitively educated, andPennsylvania counties aren’t dependent on delinquent tax collection fees and interest.Without compromise, Pennsylvania schools will face an uncertain future. One solutionto this conflict is a state funded information-sharing network allowing for the securedstorage of public information. In this day and age, the ability to share essentialinformation is easy to implement. As easy as implementation may be, the cost is indeeda factor. It is a state function to secure welfare of the students, and an investment incompromise is an investment in the future. This change requires smart programming, anenvironment of cooperation, and the intent to honestly serve all Pennsylvanians. Gordon Rhoads 32
  33. 33. Bibliography:PLTA v. East Stroudsburg Area School District No. 226 C.D. Argued 9/13/2006City of Allentown v Kauth No. 2060 C.D. 2004 No. 2061 C.D. 2005Jane Roach Esq., Attorney for Pennsylvania Land Title Association & Member ofthe Board of Directors of the Pennsylvania Bar Institute, Phone Interview on3/30/2007Michelle Portnoff Esq., President of Portnoff Law Associates, Phone Interview,4/9/07Sandy Dixon Esq., Chairman of the PLTA Legislative and Judicial Committee,Phone Interview 3/28/2007Dawn Schmidt Esq., Former Director of Portnoff Law Associates & Deputy City Solicitorfor the Philadelphia Major Tax Enforcement Division, Phone Interview 4/16/2007Rupert, Edward: AAP Journal Assessors Association of Pennsylvania, Issue 5Volume 2 Spring 2004Steve Levin: A Dream Foreclosed: Small Mistakes Giant Consequences, Pittsburgh Post-Gazette, 6/7/04: http://www.post-gazette.com/pg/04159/328289.stm accessed on 3/31/2007Glenn May: Push is On for County Tax Claim Bureau, Pittsburgh Tribune-Review,11/14/05: http://www.pittsburghlive.com/x/pittsburghtrib/s_394262.html accessed on 4/2/07RETSL, Section 201(a), 72 P.S. § 5860.201(a)Findlaw.com, 10/1/2000, Accessed on 3/29/2007:http://library.findlaw.com/2000/Oct/1/128768.html, Saul Ewing LLPThe Pennsylvania Real Estate Tax Sale Law Act 542 of 1947, P.L. 1368; 72 P.S. §5860.101The Pennsylvania Municipal Claims & Tax Liens Act (Municipal Claim and TaxLien Law) Act 153 of 1923, P.L. 207; 53 P.S. § 7101Sample letter signed by Alan B. Portnoff Esq., acquired from firm employee orientation, notdatedhttp://www.mapwatch.com/multi-maps/full/pennsylvania-county-map.gif (accessed4/18/07) sources of revenuehttp://www.pde.state.pa.us/schoolfinance101/lib/schoolfinance101/souceoffnding.gif(accessed 4/18/07) statewide sources of school funding 33
  34. 34. http://www.pde.state.pa.us/schoolfinance101/lib/schoolfinance101/localtaxes.gif(accessed 4/18/07) local tax charthttp://www.pde.state.pa.us/schoolfinance101/lib/schoolfinance101/localbysource.gif(accessed 4/18/07) local sources of school revenue chartMorris, Christopher W. The Social Contract Theorists: Oxford England, 1999Fruchtman, Jack Jr. Thomas Pain Apostle of Freedom: New York NY, 1994Eckler, Peter. The Complete Political Works of Thomas Paine: New York NY, 1917 34
  35. 35. Appendix:IN THE COMMONWEALTH COURT OF PENNSYLVANIAThe Pennsylvania Land Title :Association and Fidelity Home :Abstract, Inc., Individually and as :Representatives of All Other Individuals :and Entities Similarly Situated ::v. ::East Stroudsburg Area School District, :Dr. Rachel R. Heath, Superintendent of :East Stroudsburg Area School District, :Pleasant Valley School District, :Dr. Frank A. Pullo, Superintendent :Pleasant Valley School District, :June ONeill, Chestnuthill Township :Tax Collector, Helen Mackes, :Eldred Township Tax Collector, Carolyn :Meinhart, Polk Township Tax Collector, :Jean Altemose, Ross Township Tax :Collector, Alberta Tallada, East :Stroudsburg Borough Tax Collector, :Dawn Arnst, Middle Smithfield Tax :Collector, Sharon Gerberich, :Smithfield Township Tax Collector, :Kathy Mosher Kroll, Price Township :Tax Collector ::Appeal of: East Stroudsburg Area :School District, Pleasant Valley School :District, Dr. Rachel R. Heath and : No. 226 C.D. 2006Dr. Frank A. Pullo : Argued: September 13, 2006BEFORE: HONORABLE JAMES GARDNER COLINS, President JudgeHONORABLE BERNARD L. McGINLEY, JudgeHONORABLE DORIS A. SMITH-RIBNER, JudgeHONORABLE ROCHELLE S. FRIEDMAN, JudgeHONORABLE BONNIE BRIGANCE LEADBETTER, JudgeHONORABLE RENÉE COHN JUBELIRER, JudgeHONORABLE ROBERT SIMPSON, Judge2OPINION BY JUDGE McGINLEY FILED: November 22, 2006The East Stroudsburg School District (East Stroudsburg) and PleasantValley School District (Pleasant Valley) (collectively, the School Districts)1 appealfrom an order of the Court of Common Pleas of Monroe County (trial court) thatgranted the Pennsylvania Land Title Association’s (PLTA) and Fidelity HomeAbstract, Inc.’s (Fidelity) motion for peremptory judgment and issued a writ ofmandamus against the School Districts.On November 21, 2005, PLTA and Fidelity alleged in its class action2Complaint:1. . . .[PLTA] . . . is a duly organized Pennsylvania nonstock,non-profit corporation in good standing, whosestated mission is ‘the advancement of the science ofevidencing and insuring title to real property and theeducation of its members through various seminars andother educational functions’ . . . .2. . . . Fidelity . . . is a duly organized Pennsylvaniacorporation in good standing engaged in the business oftitle examination, real estate settlement services and thesale of title insurance . . . .1 This is a civil class action in mandamus against the School Districts, the SchoolDistricts’ Superintendents and eight tax collectors for a number of townships and a boroughlocated within the School Districts’ geographic boundaries in Monroe County.2 PLTA and Fidelity also commenced this action on behalf of a class defined as:[A]ll individuals and entities, including but not limited to soleproprietorships, partnerships, corporations, limited liabilitycompanies and associations whose business purposes and activitiesrequire that they have access to accurate public records and to tax 35
  36. 36. Certifications from the public records of the Monroe County TaxClaim Bureau and the Monroe County Prothonotary relating toproperty taxes for properties located in the School Districts.Class Action Complaint In Mandamus (Complaint), November 21, 2005, Paragraph 36 at 10;Reproduced Record (R.R.) at 16a.33. . . . East Stroudsburg . . . is a school district of theSecond Class and a taxing district, located in Monroe andPike Counties . . . with its administrative offices in EastStroudsburg . . . .....5. . . . Pleasant Valley . . . is a school district of the ThirdClass and a taxing district located in Monroe County . . .with its administrative offices in Brodheadsville, MonroeCounty . . . .....16. . . . East Stroudsburg . . . and Pleasant Valley . . . areMonroe County taxing districts within the meaning of theSchool Code, the Local Tax Collection Act, the GeneralAssessment Act and the Real Estate Tax Sales Act.Count I17. The Monroe County Tax Claim Bureau, hereinafter“the Bureau” is a county office, established by the RealEstate Tax Sales Act, supervised by the Monroe CountyCommissioners and charged with various real estate taxcollection obligations under the Real Estate Tax SalesAct.....19. The Tax Collectors and or their predecessors in officehave not made any returns on any school taxes for theEast Stroudsburg School District to the Bureau for the taxyears 2002, 2003 and 2004. (emphasis added).20. The Tax Collectors and or their predecessors in officehave not made any returns on any school taxes for thePleasant Valley School District to the Bureau for the taxyears 2002, 2003 and 2004. (emphasis added).21. The Tax Collectors and or their predecessors in officehave instead, apparently at the direction of the SchoolDistricts, made returns to or relinquished their books, taxduplicates, data and or records solely to the SchoolDistricts. (emphasis added).22. The School Districts have pursued the collection ofand have collected delinquent taxes directly, in part4through the filing of municipal liens in the Office of theProthonotary of Monroe County. (emphasis added).23. Plaintiffs [PLTA and Fidelity] believes [sic] andtherefore avers [sic] that the Tax Collectors and theSchool Districts intend to continue the practice ofdepriving the Bureau of any returns, tax duplicates,records, data or books of school taxes, instead placingany returns and the books, tax duplicates and or recordsof the Tax Collectors with the School Districts.24. The Bureau is unable to provide Plaintiff [PLTA andFidelity], the Class and or public with Certifications orwith any access to the returns, data, tax duplicates, booksand records of school taxes for the real estate locatedwithin the geographic boundaries of the School Districts,for the tax years described above, as the Bureau has nocontrol of or access to any returns of any school taxesfrom the Tax Collectors, or to the books, tax duplicates,data and records of the collection of such school taxes bythe Tax Collectors. (footnote omitted).25. Returns and public records for all other taxingdistricts in Monroe County are duly returned to andavailable to the public at the Bureau.....29. Counsel to Plaintiffs [PLTA and Fidelity] hasrequested that the Tax Collectors make returns to theBureau and they have failed and refused to do so. 36
  37. 37. (emphasis added).30. Counsel to Plaintiffs [PLTA and Fidelity] hasrequested that the School Districts return any returns,books, tax duplicates, data and records to the Bureau andthey have failed and refused to do so. (emphasis added).31. Counsel to Plaintiffs [PLTA and Fidelity] hasrequested that the School Districts relinquish all directpayments of delinquent taxes to the Bureau and they havefailed to do so. (emphasis added).32. The failure and refusal of the Tax Collectors and theSchool Districts to make returns and to relinquish the5returns, books, duplicates, data and records of the TaxCollectors and receipts of direct payments of delinquenttaxes to the Bureau warrants Mandamus relief . . . .(emphasis added).33. Plaintiffs [PLTA and Fidelity] have an immediate andcomplete legal right to the relief requested herein andhave a beneficial interest in this matter distinct from thegeneral public interest . . . .34. The ability of Plaintiffs [PLTA and Fidelity] and theClass reliably to search, to examine and to insure titles toreal estate in the School Districts has been substantiallyimpaired by the events, facts and circumstances set outabove. (emphasis added).35. Plaintiffs [PLTA and Fidelity] have no adequateremedy at law in that a suit for damages would notremedy the deprivation of access to public records of taxclaims and payments. (emphasis added).Complaint, Paragraphs 1-3, 5, 16-17, 19-25, and 29-35 at 2-8; R.R. at 8a-14a.Also, on November 21, 2005, PLTA and Fidelity sought a peremptoryjudgment on its mandamus claims and alleged:4. Plaintiffs [PLTA and Fidelity] are prepared to provethrough stipulations and through the testimony ofappropriate witnesses that there are no genuine issues ofmaterial fact in dispute. (emphasis added).5. Where there are no issues of material fact in dispute, aparty requesting mandamus relief is entitled toperemptory judgment prior to the filing of a responsivepleading by the Defendants [the School Districts].6. Plaintiffs [PLTA and Fidelity] request an evidentiaryhearing on their Motion for Peremptory Judgment.(emphasis added).67. The resolution of peremptory judgment prior tocertification of the proposed class is warranted in that:....c. The issuance of Peremptory Judgment prior to classcertification would result in a judgment that binds theindividual Plaintiffs [PLTA and Fidelity] and theDefendants [the School Districts] and not the Class;given the nature of the mandamus relief requested in thisaction, neither the Class nor the Defendants [the SchoolDistricts] would suffer harm if the mandamus reliefissued in the form of a peremptory judgment does notbind the class.Motion For Peremptory Judgment On Mandamus Claims, November 21, 2005,Paragraphs 4-7(c) at 1; R.R. at 38a.The trial court recounted the facts based upon the testimony3 elicitedat the December 7, 2005, hearing:The facts of this case are as follows: Briefly since 2003the Tax Collectors, following the instructions of theSchool Districts, have not made returns of delinquentschool taxes for tax years 2002, 2003 and 2004 to theMonroe County Tax Claim Bureau . . . . Instead, theSchool Districts have contracted with Portnoff LawAssociates, Ltd (hereinafter referred to as “Portnoff”), to3 The following parties testified: 1) Greg Christine (Christine), director of the MonroeCounty Tax Claim Bureau; 2) Dr. Rachael Heath (Heath), Superintendent of the EastStroudsburg School District; 3) Kathy Kroll Mosher (Mosher), tax collector for Price Township; 37
  38. 38. 4) Dr. Frank Pullo (Pullo), Superintendent of the Pleasant Valley School District; 5) Donna Les(Les), business manager for Pleasant Valley School District; 6) Marie Guidry (Guidry), businessmanager for East Stroudsburg; 7) Robin Rodenhauser (Rodenhauser), Chief DeputyProthonotary for Monroe County; 8) Helen Decidue (Decidue), Recorder of Deeds for MonroeCounty; 9) Marshall E. Anders (Anders), attorney for Integrity Abstract; 10) Lori Cerato(Cerato), attorney and licensed insurance agent for Lawyers Title; 11) Charles Molinari(Molinari), title agent for Universal Abstract; 12) Craig Roberts (Roberts), underwriter forLawyers Title; and 13) Michelle Portnoff (Portnoff), principal partner for Portnoff LawAssociates, Ltd.7act as their solicitor for purposes of collecting delinquenttaxes using the provisions of the Municipal Claims andTax Lien Act. As a result, the Bureau has no records ofpaid or delinquent school taxes for properties locatedwithin the two School Districts for the tax years 2002,2003 and 2004. The School Districts are able to provideinformation regarding delinquent school tax records tothe general public upon request; however, theinformation is not readily available for viewing by thegeneral public, nor is the information updated after thedelinquent taxes are forwarded to Portnoff for collection.Consequently, title searchers, title insurance companies,mortgage companies, banks, attorneys and the generalpublic cannot obtain this information from the Bureau orthe School Districts; instead, they must contact Portnoff.Anyone requesting information from Portnoff can receivea verbal report on the status of such taxes free of charge;however, if a written report is requested, the cost is$25.00 to $50.00 depending on whether it is an expeditedrequest. When requesting a written report from Portnoff,it takes a minimum of five business days to receive theinformation for a regular request, and it takes twobusiness days to receive the information on an expeditedrequest. All responses to requests are sent by fax.Although identified as certifications, the reports preparedby Portnoff are not signed certifications. This sameinformation, if it were available at the Bureau, could beviewed by the requester either in printed form by lookingat the hard copy file or by using the computer terminalsthat are available for public use free of charge. If a taxlien certificate is requested from the Bureau, therequester would receive an “official” certification of thestatus of the taxes, whether paid or unpaid, on a specificparcel of real estate within a matter of minutes. The costof this official tax lien certificate is $10.00.Real estate attorneys and title agents who handle realestate matters regarding properties located in the SchoolDistricts have suffered monetary losses due to the lack ofor inaccuracy of information regarding the status of theschool taxes. They have also experienced delays inreceiving information from tax records which previouslyhad been instantly available at the Bureau. Confusion8has been created for delinquent taxpayers over who theyshould make delinquent tax payments to – the Bureau orPortnoff. Taxpayers have also experienced problemsobtaining credit because the tax liens filed by Portnoff inthe Monroe County Prothonotary’s Office have not beensatisfied even though they have been paid. (footnoteomitted).Opinion of the Trial Court, February 2, 2006, at 2-4.On February 2, 2006, the trial court granted the motion forperemptory judgment and issued a writ of mandamus: 1) that the School Districtsand tax collectors are to make future annual returns to the Bureau; 2) that theSchool Districts are to provide to the Bureau all of the School Districts’ books andrecords for tax years 2002, 2003, and 2004; 3) that the School Districts also are toprovide a detailed disclosure to the Bureau of the status of all real estate taxes forthe applicable tax years; 4) that the School Districts and tax collectors are to makepayments for the delinquent taxes shown on the returns only to the Bureau; 5) thatthe School Districts are to relinquish all future payments for delinquent taxes to the 38
  39. 39. Bureau and to provide to the Bureau detailed property descriptions for which thepayments were made; 6) that the School Districts are to file a satisfaction of liensfor payments received on municipal liens; and 7) that the School Districts are toprovide full tax lien payoff information in writing, at no charge, within fivebusiness days of any written request. See Order of the Trial Court, February 2,2006, at 1-2.I. Whether The Trial Court Erred As A Matter Of Law When It DeterminedThat Section 306(a) Of The “Real Estate Tax Sale Law” (RETSL)4 WasMandatory?4 Act of July 7, 1947, P.L., as amended, 72 P.S. §§ 5860.306(a).9Initially, the School Districts assert5 that statutorily they chose tocollect delinquent taxes pursuant to the Municipal Claims and Tax Liens Act(MCTLA)6, 53 P.S. §§ 7101-7505 and, as a result, were not required to complywith Section 306(a) of the RETSL, 72 P.S. §5860.306(a). The School Districtsassert that under Pennsylvania law a taxing district may collect delinquent schooltaxes under either of the following; the MCTLA, the RETSL, or the Local TaxCollection Law (LTCL) .7Section 201(a) of the RETSL, 72 P.S. § 5860.201(a), provides:In lieu of or in addition to creating a bureau, counties areauthorized to provide by ordinance for the appointmentand compensation of such agents, clerks, collectors andother assistants and employes, either under existingdepartments, in private sector entities or otherwise asmay be deemed necessary, for the collection anddistribution of taxes under this act. Any alternativecollection method shall be subject to all of the notices,time frames, enumerated fees and protections for theproperty owners contained in this act . . . . (emphasisadded).Section 306(a) of the RETSL, 72 P.S. § 5860.306(a), provides:5 This Court’s review is limited to a determination of whether the trial court committedan abuse of discretion, an error of law, or rendered a decision which lacked supporting evidence.Bell v. Berks County Tax Claim Bureau, 832 A.2d 587, 590 (Pa. Cmwlth. 2003). Also,“[p]eremptory judgment in a mandamus action may be entered only where no genuine issue ofmaterial fact exists, and the case is free and clear from doubt.” Council of the City ofPhiladelphia v. Street, 856 A.2d 893, 896 (Pa. Cmwlth. 2004), citing Forward Township SanitarySewage Authority v. Township of Forward, 654 A.2d 170 (Pa. Cmwlth. 1998).6 Act of May 16, 1923, P.L. 207, as amended, 53 P.S. §§ 7101-7105.7 Act of May 25, 1945, P.L., as amended, 72 P.S. §§5511.1-5511.42.10It shall be the duty of each receiver or collector of anycounty, city, borough, town, township, school district orinstitution district taxes to make a return to the bureau onor before the last day of April of each year, but no earlierthan the first day of January of that year. The return shallbe type written on a form provided by or acceptable tothe county and shall include a list of all properties againstwhich taxes were levied, the whole or any part of whichwere due and payable in the calendar year immediatelypreceding and which remain unpaid, giving thedescription of each such property as it appears in the taxduplicate, and the name and address of the owner as itappears in the tax duplicate, together with the amount ofsuch unpaid taxes, penalties and interest due to but notincluding the first day of the month following the return .. . . (emphasis added).After review of the applicable statutory authority, this Court rejectsthe School Districts’ argument8, and concurs in the trial court’s analysis that8 This Court notes that the School Districts committed the following errors, whether intentionalor unintentional during argument. Specifically, the School Districts argue:The Trial Court cannot circumvent the School Districts’ choice toproceed under the MCTLA by requiring the Tax Collectors tomake a return to the Tax Claim Bureau under the RETSL on behalfof the School Districts. Section 5971t of the Local Tax CollectionLaw specifically prohibits a tax collector from making a return tothe tax claim bureau if a taxing district advises that delinquenttaxes will be collected by filing liens with the Prothonotary underthe MCTLA. 72 P.S. § 5971t (“No tax collector shall make anyreturn of taxes provided in this act, if the taxing authorities shall 39
  40. 40. notify such tax collectors in writing that returns shall not be made,but that delinquent taxes are to be collected by the filing of liens inthe office of the prothonotary.”). The School Districts have givenwritten notice to the tax collectors that their delinquent taxes willbe collected by their Collection Solicitor under the MCTLA. (R.302a-303a). Therefore, the tax collectors are statutorily barredfrom making returns to the Tax Claim Bureau, furtherdemonstrating that filing returns with the RETSL is not amandatory requirement.(Footnote continued on next page…)11Section 306(a) of the RETSL, 72 P.S. § 5860.306(a) requires the School Districts“to make returns to the tax bureau” of all delinquent taxes:We have reviewed the provisions of the MCTLA andfind no provision that repeals § 5860.306 requiringreceivers, i.e. taxing districts, or tax collectors to makereturns to the tax claim bureau. Thus, there is no conflictbetween the two statutes regarding the requirement formaking returns of delinquent taxes to the tax claimbureau. Moreover, § 5511.21(b) of the LTCL, whichauthorizes a taxing district to recover unpaid taxes after areturn is made to a bureau, clearly recognizes therequirement of § 5860.306. The Court in Wallingford[Swarthmore School District v. Kuyumjian, 625 A.2d1305 (Pa. Cmwlth. 1993)] further stated that the authorityof a taxing district to recover unpaid taxes after a returnhas been made to a bureau has been the long standing lawof this Commonwealth. Wallingford, supra at 1307,citing Tremont Township School District v. WesternAnthracite Coal Co., 73 A.2d 670 (1950).Furthermore, Section 5860.201(a) of the RETSL givestax claim bureaus the authority to use other methods ofcollection, including the MCTLA, while at the same timerequiring compliance with the provisions of RETSL.Similarly, the 2004 amendment to the MCTLA also gavetax claim bureaus authority to use the procedures of thatact to collect delinquent real estate taxes in addition tothe procedures set forth in the RETSL. 53 P.S. Sec7193.5. Thus, if a tax claim bureau, as a taxing authority,is authorized to use the provisions of the MCTLA to(continued…)Brief for Appellants at 17.First, Section 21t of the Act of May 29, 1931, P.L. 280 (Act), 72 P.S. §5971t, wasrepealed and has no application to the RETSL: (“This section was repealed insofar as taxingdistricts coming within provisions of and operating under sections 5860.101-5860.803 of thistitle, by act 1947, July 7, P.L. 1368, § 801, section 5860.801 of this title”). Second, Section 21tof the Act was not part of the LTCL which is codified at 72 P.S. §§ 5511.1-5511.42.12collect delinquent taxes yet, is still required to complywith the provisions of the RETSL (72 P.S. Sec5860.201(a)), then it stands to reason that other taxingauthorities, like the School Districts, who have opted touse the MCTLA provisions, would likewise be requiredto comply with the RETSL provisions. Although notspecifically stated in the statutes, we believe thiscompliance requirement applies to the specific provisionfor making returns to the tax claim bureau. It should alsobe noted that the Commonwealth Court in [City ofAllentown v.] Kauth [, 874 A.2d 164 (Pa. Cmwlth.2005)] held that “the two statutes are very similar andoperate concurrently with one another . . .”. Kauth,supra, at 169. Likewise, we find that the MCTLA andRETSL statutes are not mutually exclusive, but insteadare very similar and their provisions are designed tooperate in conjunction with one another. Accordingly,we believe that it is possible to give effect to theprovisions of both the MCTLA and the RETSL;therefore, the provisions of these two statutory collectionschemes are not irreconcilable..... 40
  41. 41. The importance of having access to the public records isevidenced by the testimonial accounts of problems thathave been encountered by real estate attorneys, titleinsurance agents and the general public . . . .....The dominant purpose of the RETSL is to providespeedier and more efficient procedures for enforcing taxliens and to improve the quality of titles obtained at a taxsale. Povlow [v. Brown, 315 A. 2d 375 (Pa. Cmwlth.1974)], supra. It is clear that the ability to obtainaccurate and complete information has been and willcontinue to negatively impact the quality of titles to realestate as long as the public records for the delinquentschool taxes continue to be diverted away from theBureau. Since the statutes are very similar and workconcurrently, the choice to use the procedures of theMCTLA to collect delinquent school taxes does notrelieve the School Districts or Tax Collectors of theirduty to make returns to the Monroe County Tax claimBureau as required § 5860.306 of the RETSL.(emphasis added and in original).13Opinion of the Trial Court at 24-26 and 31.II. Whether The Trial Court Erred When It Determined That The Right ToKnow Act9 Was Applicable?The School Districts next contend that the Right to Know Act is notapplicable because the Bureau is not solely authorized as the repository for publicrecords of delinquent taxes or issuer of official tax certifications. Specifically, theSchool Districts assert they complied with all laws addressing the availability ofpublic records.Section 1 of the Right to Know Act, 65 P.S. § 66.1, defines the term“agency” as “any political subdivision of the Commonwealth . . . or municipalauthority or similar organization created by or pursuant to a statute which declaresin substance that such organization performs or has for its purpose the performanceof an essential governmental function.”Also, Section 1 of the Right to Know Act defines the term “publicrecord” as “[a]ny account, voucher or contract dealing with the receipt ordisbursement of funds by an agency . . . .”Last, Section 2 of the Right to Know Act, 65 P.S. § 66.2, provides:(a) General rule. Unless otherwise provided by law, apublic record shall be accessible for inspection andduplication by a requester in accordance with this act. Apublic record shall be provided to a requester in themedium requested if the public record exists in that9 Act of June 21, 1957, P.L. 390, as amended, 65 P.S. §§ 66.1-66.9.14medium; otherwise, it shall be provided in the medium inwhich it exists. Public records shall be available foraccess during the regular business hours of an agency.Nothing in this act shall provide for access to a recordwhich is not a public record.Here, it is undisputed that the School Districts, the tax collectors andthe Bureau are “public” agencies and that the records of real estate tax paymentsby property owners are “public records” as defined by Section 1 of the Right toKnow Act, 65 P.S. § 66.1. The query before this Court is whether the SchoolDistricts complied with Section 2 of the Right to Know Act, 65 P.S. § 66.2 underthe challenged procedure for the collection of delinquent taxes so that the taxrecords are readily available to the public upon request.This Court again agrees with the observations of the trial court that:Representatives of . . . East Stroudsburg . . . testified thatinformation regarding school taxes is available, uponrequest, at the [East Stroudsburg’s] office. Thetestimony reveals that the information is looked up on thecomputer system by a school employee and the requesteris given an oral report; or if requested, a printed form willbe provided which shows all records paid or unpaid since1993; however, the report will not be signed. Thetestimony further revealed that members of the generalpublic cannot sit down at a computer themselves andaccess the tax records on the school’s database. The 41

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