November 8, 2012
IN RE: EXCEPTIONS AND CHALLENGES OF RAUSCH CREEK LAND, L.P., CLAIM FOR DELINQUENT TAXES- TAX APPEAL OF: RAUSCH CREEK LAND, L.P.
The opinion of the court was delivered by: P. Kevin Brobson, Judge
Argued: June 4, 2012
BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge
HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge
OPINION BY JUDGE BROBSON
This is an appeal from an order of the Court of Common Pleas of Schuylkill County (trial court). The trial court affirmed an order of the Schuylkill County Tax Claim Bureau (Bureau), dated November 21, 2011, which denied Rausch Creek Land, L.P.'s (Rausch Creek) exceptions and challenges filed against the Bureau's claims for delinquent taxes. For the reasons set forth below, we affirm.
On or about December 30, 2010, Rausch Creek filed challenges and exceptions to the Bureau's tax claims relating to mineral (in this case coal) rights owned by Rausch Creek, as described in surface mining permits issued by the Department of Environmental Protection (DEP) and identified as tax parcel nos. 13-0-54803019, 13-0-054841304, 13-0-54951301, 22-0-54851319, and 22-0-54930102 (the Tax Parcels).*fn1 (Reproduced Record (R.R.) at 98a-102a.) Rausch Creek failed to pay the taxes assessed on the mineral rights for the 2009 tax year. It appears undisputed that Rausch Creek received tax bills for the taxes owed. In addition, Rausch Creek also received absolute letters from the Bureau, indicating that the Tax Parcels (i.e., the mineral rights) would be exposed to public sale if the taxes were not paid or exceptions were not filed by December 2010. (R.R. at 98a-102a.)
Rausch Creek filed with the Bureau separate challenges and exceptions under the Real Estate Tax Sale Law (RETSL)*fn2 to each of the five (5) absolute letters sent by the Bureau. (Certified Record (C.R.), Item No. 1.) Rausch Creek, in its exceptions to the validity of the tax claims against the Tax Parcels, argued that all of the specified Tax Parcels pertain to surface mining permits as opposed to real property. (Id.) Rausch Creek also challenged the validity of the tax claims on the basis that the Tax Parcels are not identified sufficiently in the records of Schuylkill County Tax Mapping, the Bureau, or the Schuylkill County Recorder of Deeds, because the maps or descriptions of the Tax Parcels are not maintained within Schuylkill County. As a result, Rausch Creek argued that the absolute letters were inadequate, because they failed to identify properly and consistently the Tax Parcels at issue in violation of Section 309(c) of the RETSL, 72 P.S. § 5860.309(c), which requires that "property against which the claim is filed" be sufficiently described. Further, Rausch Creek argued that the absolute letters were not sent to the owner(s) of the Tax Parcels, and, therefore, they were sent in violation of Section 308 of the RETSL, 72 P.S. § 5860.308.
Following a hearing, the Bureau issued an opinion and order dated February 11, 2011, wherein the Bureau denied and dismissed Rausch Creek's challenges and exceptions to the validity of the tax claims. (C.R., Item No. 1.) Specifically, the Bureau concluded that the genuine issues raised by Rausch Creek related to the validity of the underlying assessments. The Bureau concluded, therefore, that Rausch Creek should have filed appeals with the Schuylkill County Board of Assessment Appeals pursuant to Section 8844(c) of the Consolidated County Assessment Law, 53 Pa. C.S. § 8844(c).*fn3 Furthermore, the Bureau noted that the RETSL allows a tax claim to be set aside, reduced, or found invalid "for any other reason not involving a question which could have been raised by an appeal provided for by law." See Section 314 of the RETSL, 72 P.S. § 5860.314.
Rausch Creek appealed the Bureau's decision to the trial court. Rausch Creek raised the same arguments on appeal to the trial court, specifically that the absolute letters were deficient as they failed to identify properly the Tax Parcels and notify the owner(s) of the affected property. Rausch Creek stated that "although . . . the assessments at issue are themselves invalid," the notices and any sale of the Tax Parcels are invalid as the "absence of maps corresponding to the subject [t]ax n[umbers] literally makes it impossible for the [Bureau] to identify the propert[ies] that [are the] subject of said claims and possible sale." (C.R., Item No. 1.)
The trial court held a hearing on Rausch Creek's appeal on September 23, 2011. Prior to the hearing, however, the Bureau filed an application for summary relief. In its application, the Bureau argued that the proper procedure for challenging an assessment is to file an appeal with the Schuylkill County Board of Assessment Appeals. As a result, the Bureau argued that it did not have jurisdiction to rule on an assessment issue and, further, that based on precedent, a party cannot collaterally attack an assessment by filing an action with the Bureau.
At the hearing before the trial court, Virginia Murray, the Chief Assessor of Schuylkill County, testified that maps dealing with mineral resources have been outsourced to Resource Technology Corporation (RTC) in State College, Pennsylvania, since 1996. (R.R. at 17a.) Ms. Murray testified that RTC maintains maps containing the property location of surface mining permits. (Id. at 20a, 22a.) RTC assigns a value to the coal contained on the properties one time per year and sends the Schuylkill County Assessment Office those figures once per year in order for the Schuylkill County Assessment Office to assess the minerals where surface mining permits are held. (Id. at 20a.) According to Ms. Murray's testimony, the county did not frequently use the information contained on the mineral resources maps. (Id.) Further, the Schuylkill County Assessment Office referred any individual interested in mineral resource information to RTC. (Id. at 44a.) Finally, Ms. Murray testified that she has no involvement with the Bureau's entry of claims or absolute letters. (Id. at 49a.)
As Rausch Creek attempted to question Ms. Murray on the history of the tax maps and the maintenance of mineral resource maps held outside Schuylkill County, the Bureau objected to the relevance of the questioning. (Id. at 24a.) Specifically, the Bureau stated that the line of questions and relevant statutes dealing with the location of tax maps has no relation to the Bureau. (Id.) Rausch Creek pointed the trial court to Section 405 of the County Code,*fn4 requiring certain county offices to keep frequently used records in the county seat, which, in this case, is Pottsville, Pennsylvania. (Id.) The Bureau objected to Rausch Creek's evidence and argument, stating that Rausch Creek's contentions related to an assessment issue. (Id. at 26a-27a.) The trial court sustained the Bureau's objection that Section 405 of the County Code was irrelevant to Rausch Creek's exceptions and challenges to tax claims.
Rausch Creek's land manager, Arthur Diaz, also testified before the trial court. (Id. at 68a.) Mr. Diaz testified that he is responsible for monitoring assessments for Rausch Creek. (Id. at 69a.) Mr. Diaz stated that there were several issues with tax bills pertaining to coal and mining projects, specifically noting that some tax bills were improperly sent to Rausch Creek. (Id.) Mr. Diaz testified that he addressed these concerns with RTC. (Id. at 74a.) Subsequent to that conversation, Mr. Diaz testified that Rausch Creek no longer received improperly sent tax bills. (Id.)
Finally, David Williams, a mining engineer and surveyor, testified that Schuylkill County's present mapping system identifies when a surface mining permit is issued by DEP. (Id. at 79a.) When the permit is issued, the permitted parcel (i.e., the tax parcel) is assigned a tax parcel number, which references the permit number. (Id.) The area of the tax parcel, therefore, should correspond to the area of the mineral associated with the surface, as depicted in the permit. (Id. at 80a.) Mr. Williams testified that the permit number, however, does not always sufficiently describe the real property associated with the mining permit. (Id. at 79a.) Specifically, he opined that the boundary lines for the surface mining permits are, many times, left to the discretion of the surveyor and, therefore, different descriptions are possible. (Id.) Accordingly, Mr. Williams noted that the present mapping system does not always adequately describe some properties. (Id. at 80a.)
After the hearing, the trial court affirmed the Bureau's decision denying Rausch Creek's challenges and exceptions. The trial court explained that an aggrieved party may challenge a tax claim for any reason "not involving a question which could have been raised by an appeal provided by law." Section 314 of the RETSL. In this case, Rausch Creek's challenges were questions of law that should have been challenged through an assessment appeal to the Schuylkill County Board of Assessment Appeals. Accordingly, the trial court concluded that Rausch Creek's exceptions and challenges were after-the-fact challenges to tax assessments, which Rausch Creek improperly raised with the Bureau. (Trial court's opinion and order, attached to Appellant's Brief.) Further, the trial court stated that "[a] collateral attack on the assessment by way of a proceeding before the [Bureau] after the tax payer failed to avail itself of the appeal procedure under the assessment statutes is precluded under [Section 314(a) of the RETSL]." (Id.) See In re: Upset Sale, Tax Claims Bureau of Montgomery Cnty., 205 A.2d 104, 107 (Pa. Super. 1964). Finally, the trial court noted that Rausch Creek, while believing the assessment to be improper, never challenged the assessment with the Schuylkill County Board of Assessment Appeals.
On appeal,*fn5 Rausch Creek argues that the trial court erred when it concluded that the Bureau lacked subject matter jurisdiction over the underlying challenges and exceptions. Second, Rausch Creek argues that the trial court erred in denying the exceptions and challenges to the tax claims, because the notices failed to meet the requirements of Section 309(c) of the RETSL. Third, Rausch Creek similarly argues that the trial court erred in denying the exceptions and challenges, because the notices failed to notify the "owner" of the affected property as required by Section 308(a) of the RETSL. Finally, Rausch Creek argues that the trial court erred in sustaining the Bureau's objection that Section 405 of the County Code, requiring certain county offices to keep regularly used documents at the county seat, was irrelevant to the proceedings and Rausch Creek's argument.
First, we will address whether the Bureau lacked subject matter jurisdiction over the challenges and exceptions. We begin by noting that the underlying premise throughout all of Rausch Creek's argument is that the Schuylkill County Tax Assessment Office lacked authority to assess the Tax Parcels for a variety of reasons. Rausch Creek appears to contend that because the assessment is improper based on the nature of the property involved*fn6 and because the Tax Parcels were not sufficiently described for purposes of assessment,*fn7 a valid tax claim does not exist. Rausch Creek also appears to argue that the tax claims are not valid because the "owners" of the "affected property" were not notified of the assessment.*fn8 These assessment issues are ones that Rausch Creek should have addressed by way of assessment appeals. As noted earlier, Section 8844 of the Consolidated County Assessment Law provides that any person aggrieved by an assessment may appeal to the assessment board on or before September 1. This statutory remedy is exclusive and mandatory. Hanoverian v. Lehigh Cnty. Bd. of Assessment, 701 A.2d 288, 289 (Pa. Cmwlth. 1997) (citing Deigendesch v. Bucks Cnty., 505 Pa. 555, 482 A.2d 228 (1984)).
In addition, our Superior Court, in Montgomery County, analyzed the section of the RETSL allowing for tax claim challenges. Specifically, when looking to Section 314 of the RETSL, the Superior Court stated:
Not all questions relating to the claims are withdrawn from the provisions of § 314, but only those which could have been raised by an appeal provided for by law. . . . An example of an 'appeal provided for by law' is found in the assessment procedure. A collateral attack on the assessment by means of a proceeding before the Tax Claim Bureau, when the taxpayer has failed to avail himself of the appeal procedure laid down by the statutes with respect to assessments, is, therefore, precluded by § 314.
Montgomery Cnty., 205 A.2d at 107.
Here, Rausch Creek is attempting to do exactly what the Superior Court prohibited in Montgomery County. Essentially, Rausch Creek is attempting to circumvent the assessment appeal process by filing a claim with the Bureau, addressing issues that could have been raised in an assessment appeal. Rausch Creek cannot pursue its disguised assessment appeals with the Bureau, because it failed to file its grievances with the Schuylkill County Board of Assessment Appeals. An appeal of the assessments to the Schuylkill County Board of Assessment Appeals was Rausch Creek's exclusive and mandatory remedy to challenge the validity of the assessments. Further, Rausch Creek cannot now collaterally attack the assessments through a proceeding before the Bureau.
The trial court, therefore, properly dismissed Rausch Creek's exceptions and challenges to the extent that Rausch Creek could have raised an issue by following the proper procedure for assessment appeals with the Schuylkill County Board of Assessment Appeals. As a result, we agree with the trial court that the Bureau did not have jurisdiction to address Rausch Creek's exceptions and challenges to the extent that they are assessment issues. This does not end our analysis, however, because Rausch Creek also raises the following issues not related to the underlying assessment.
Rausch Creek argues that the tax claims notices violate Section 309(c) of the RETSL, because they fail to sufficiently describe the Tax Parcels for tax sale purposes. Specifically, Section 309(c) of the RETSL provides that claims for taxes must include:
A description of the property against which the claim is filed sufficient to identify the same. A description of the property shall be deemed sufficient if it contains (1) a reference to a record of a deed or other instrument of conveyance which describes the property, or (2) a reference to the number or number and block of the property in a plan, recorded in the office of the recorder of deeds of the county, and the record of such plan, or (3) a reference to the number on any lot and block plan officially adopted by a taxing district, or (4) a statement of the street and number of the property as officially designated by public authorities of a taxing district as of the time the property was assessed, or (5) where the property is not identified by reference to the record of a deed, or other instrument of conveyance, and may not be identified by street and number, or by recorded plan, or by a lot and block plan, a statement of the approximate acreage of the property and the name of at least one
(1) owner of adjoining property, if such statement is accompanied by information showing the character of an use to which the property is devoted, as for instance . . . "coal, oil or other mineral severed from the surface," . . . . The aforesaid description shall not be deemed exclusive.
A review of the absolute letters at issue in this matter reveals that they set forth a variety of information regarding the Tax Parcels. For instance, the absolute letter for Tax Parcel 13-0-54803019 includes the acreage of the TaX Parcel, a brief verbal description, and an associated DEP permit number, as follows:
Goodspring #1 West
PERMIT# 54803019 (R.R. at 98a.) The same type of information is included in each absolute letter. (R.R. at 99a-102a.) This information, however, does not appear to meet the requirements of any of the specific subsections of Section 309(c) of the RETSL. The absolute letters do not reference a deed or instrument of conveyance as set forth in Section 309(c)(1). They neither refer to a number and/or block of a plan recorded in the office of the recorder of deeds as set forth in Section 309(c)(2), nor do they reference any lot and block plan officially adopted by the county as set forth in Section 309(c)(3). Although the record is devoid of any explanation regarding the verbal description of the Tax Parcels (for instance, the reference to "Goodspring #1" noted above), the descriptions contained in the absolute letters do not appear to be references to a street and number as set forth in Section 309(c)(4). While the absolute letters contain a statement of the approximate acreage, they do not identify an owner of adjoining property as required by Section 309(c)(5). Thus, the descriptions are not deemed to be sufficient under Section 309(c) of RETSL, but this does not end our analysis because Section 309(c) also provides that "[t]he aforesaid description[s] shall not be deemed exclusive."
Here, the absolute letters specifically reference the Tax Parcel numbers, approximate acreage, and the DEP permit number pertaining to the mineral rights at issue. The descriptions, therefore, were sufficient to allow Rausch Creek to identify the mineral rights at issue, particularly given that Rausch Creek is the holder of the permits. Moreover, the descriptions provide sufficient information to allow an individual (or the county) to request copies of the maps of the mineral rights maintained by RTC. Thus, Rausch Creek's argument that the descriptions of the mineral rights at issue were not sufficient for purposes of Section 309(c) of RETSL is without merit.*fn9
Next, we will consider Rausch Creek's argument that the Bureau failed to notify the owners of the affected property under Section 308(a) of the RETSL.*fn10 There is no dispute that Rausch Creek is the holder of the surface mining permits relating to the Tax Parcels, and it appears that Rausch Creek is the owner*fn11 of the mineral rights, as well. Furthermore, Rausch Creek does not dispute that it owns the mineral rights. Moreover, Rausch Creek received notice of the delinquent taxes by absolute letter.
Rausch Creek appears to conflate the ownership interests in this matter, thereby resulting in a misapprehension of the law. Here, Schuylkill County has assessed the mineral rights, not the real property under which the minerals are located.*fn12 Rausch Creek appears to take the position that the real property is, in its words, the "affected property." The mineral rights were, however, the property that was assessed. Thus, for purposes of notice, the "owner" is the owner of the severed mineral rights, not the owner of the real property above the mineral rights. Rausch Creek's argument, therefore, is without merit.
Finally, we address the relevance of Section 405 of the County Code to Rausch Creek's argument. Section 405(a) of the County Code provides, in part:
The commissioners, auditors, controller, treasurer, sheriff, recorder of deeds, prothonotary, clerk of courts of quarter sessions and oyer and terminer, clerk of orphans' court, register of wills, recorder of deeds and district attorney shall keep their respective offices, and all public records and papers belonging thereto, at the county seat, and in such buildings as may be erected or appropriated for such purpose. The county commissioners shall have the power to keep and maintain records and to contract with persons, for storage, retrieval, and transmission of county records within or outside the county except that no records shall be stored outside the county seat without the approval of the president judge and the officer in charge of the office to which the records belong. Public records stored outside of the county seat shall be made accessible to the general public at the county seat by means of an electronic telecopying system or facility which will permit the retrieval of the records or exact copies thereof within three business days.
County records used on a regular or frequent basis shall remain in the county seat.
Nothing in the County Code requires the Bureau or the Schuylkill County Assessment Office to maintain records at the county seat. Additionally, the statute requires that "county records used on a regular or frequent basis shall remain at the county seat." Section 405 of the County Code. Based on Ms. Murray's testimony, it is evident that the mineral resource information is not used on a regular basis. In fact, Ms. Murray's testimony indicates that the information contained on the maps held in State College, Pennsylvania, are used approximately once per year. (R.R. at 20a.) In addition, the general public has access to these records, and the clerks in the Schuylkill County Assessment Office assist members of the public in obtaining the information necessary to locate the mineral mapping resources. Accordingly, the trial court did not err in concluding that Section 405 of the County Code is irrelevant to Rausch Creek's argument.
Accordingly, we affirm the order of the trial court.
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
In Re: Exceptions and Challenges : of Rausch Creek Land, L.P., Claim : for Delinquent Taxes- Tax
Nos. : 13-0-54803019, 13-0-054841304, : No. 2299 C.D. 2011 13-0-54951301, 22-0-54851319 : and 22-0-54930102 :
: Appeal of: Rausch Creek Land, L.P. :
AND NOW, this 8th day of November, 2012, the order of the Court of Common Pleas of Schuylkill County, is hereby AFFIRMED.
P. KEVIN BROBSON, Judge