ACT 164 OF 2014:  New Requirements for Elected or Appointed Municipal Tax Collectors

On October 22, 2014, Governor Corbett signed House Bill 1590, which made significant amendments to Pennsylvania law applicable to tax collectors elected or appointed to the position of municipal tax collector. These provisions apply to such tax collectors who collect school district taxes. The bill is now known as Act 164 of 2014. Some of the changes took effect immediately. Others take effect October 22, 2015.

The Act’s most significant changes are as follows:

1.      Criminal History Background Checks. Effective October 22, 2015, the new law imposes requirements for criminal history background checks for municipal tax collectors. An individual is disqualified from submitting a nomination petition if the individual has been convicted of certain crimes, primarily crimes relating to theft or computer hacking.

2.     DCED Certification of Qualified Tax Collectors. Effective October 22, 2015, the new law requires that a municipal tax collector be certified as qualified by DCED after training and a qualification examination. An individual who passes the qualification examination and who successfully completes a basic training program is considered a “qualified tax collector,” and DCED is mandated to issue to such individual a “qualified municipal collector designation.” As to this requirement, there is a grandfather provision under which all municipal tax collectors in office on October 22, 2014 are deemed to be qualified tax collectors, and DCED will provide a tax collector designation certificate to such grandfathered tax collectors.

3.      Tax Collector Mandatory Continuing Education. Effective October 22, 2015, the new law requires that a municipal tax collector have 6 hours of continuing education each year. After completion, DCED issues a renewed designation certificate. Failure to meet this requirement renders the tax collector ineligible for reelection.

4.      Deputy Tax Collector in Case of Incapacitation. This is an odd one. Basically, the new law requires that each tax collector appoint a “deputy in reserve” in case the tax collector becomes mentally incapacitated.

Specifically, Act 164 amends § 22 of the Local Tax Collection Law to state:

“(b) At a minimum, a tax collector shall, with the approval of a taxing district and the tax collector’s surety, appoint a deputy tax collector who shall collect and settle taxes during any incapacitation of the tax collector. The deputy tax collector shall collect and settle taxes for the duration of the tax collector’s incapacitation, unless the taxing district determines action under Section 4.2 or 4.4 is necessary. As used in this subsection, the term ‘incapacitation’ shall mean temporarily or permanently impaired by reason of physical illness, physical disability, mental illness, mental deficiency or other cause to the extent that the person lacks sufficient understanding or capacity to make or communicate responsible decisions concerning the collection and settlement of taxes.”

Typical of Pennsylvania legislation, this is a provision that arguably reflects a laudable concept; however, the legislative mandate was adopted without thought as to practicality or details of implementation. This new mandate was effective immediately, and as a result many school districts are receiving requests for school district approval of a tax collector signed deputization form apparently prepared by the County Commissioners Association of Pennsylvania.

There are many open questions concerning the deputization requirement, and KKAL suggests caution before moving down the path of approving deputy tax collectors. The following are among many open questions:

a.     The new law requires the school district and the bonding company to approve the deputy tax collector. What information must be provided by the tax collector or proposed deputy in connection with the request for approval? What are the criteria on which the approval of the deputy should be based?

b.     Effective 10/22/15, the new law requires criminal history background checks for elected tax collectors. Do the new criminal history background check requirements apply to a deputy?

c.     Effective 10/22/15, the new law requires that an elected tax collector be certified as qualified by DCED after training and a qualification examination. Do the new DCED certification requirements apply to a deputy?

d.      The Local Tax Collection Law mandates the tax collector be a resident of the taxing authority, and maintain specified office hours within the district. Do these requirements apply to a deputy?

e.       Any deputization form should include:

(1)    Agreement of deputy to serve.

(2)    Signature by deputy.

(3)    Statement of what the deputy is agreeing to do – specific duties.

(4)    Statement of deputy qualifications.

(5)    Statement of how deputy the will be compensated. After incapacitation occurs, to whom does the school district pay compensation? For taxes collected and not yet remitted? For taxes collected after incapacitation? Considering that per § 22(a), the original elected tax collector, or the tax collector’s personal representative or estate, remains responsible to account for all taxes collected by the deputy, and also considering that work relating to collection of some taxes might be performed by both parties, is compensation for collection of any part of the taxes shared?

(6)      Statement of how tax collections will be handled after the deputy takes over. Assuming the tax bill has designated that tax payments be sent to the address of the tax collector, what is the process for redirecting payments to the deputy, and for obtaining payments held by the incapacitated tax collector?

(7)       Statement of how incapacitation will be determined.

f.   It is imperative that the tax collector bond be reviewed before school district approval of any deputy. The review is for two purposes. First, to verify the bond will in fact cover activities of the deputy. Second, to verify the bond is in proper form and provides adequate protection to the district. In reviewing various bond forms, we have from time to time discovered that some proposed bond forms included substantial loopholes under which districts could suffer significant loss.

KKAL has requested clarification from DCED as to DCED’s views on the above open questions.

In conclusion, until further clarification is received, we recommend caution in approving new deputy tax collectors. After October 22, 2015, school districts that use municipal tax collectors should verify that the collectors are properly certified as qualified tax collectors.

We hope you find this issue of KKAL’s Education Law Watch helpful and informative. Please understand that the Law Watch is designed to provide information about current developments and required actions. It does not constitute legal advice, and school districts should consult a lawyer knowledgeable in this area of the law prior to taking specific actions on the issues addressed.

If you have any questions regarding any education law matter, including the issues discussed in this newsletter, please do not hesitate to contact us at 717/392-1100, or email us at the following addresses:

Education Law Group
(717) 392-1100

Clarence C. Kegel, Jr.  
Howard L. Kelin                                                         
Jeffrey D. Litts                                                            
Rhonda F. Lord                                                            
Jason T. Confair                                                      
Stephen S. Russell                                                   
Kay Mercein Mann                                                    
Christine Nentwig                                                  

Kegel Kelin Almy & Lord LLP is a regional law firm with offices in Lancaster, Pennsylvania. KKAL is solicitor and general counsel to 20 school districts and joint school systems – and bond counsel, finance counsel, or special joint counsel to many others in Central and Eastern Pennsylvania. In addition, KKAL frequently serves Pennsylvania school districts for unusual and challenging problems, projects, or litigation.