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Session Law

2004

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Chapter 295 AN ACT RELATIVE TO THE SALE OF MUNICIPAL TAX RECEIVABLES.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 2C of chapter 60 of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by striking out subsection (b) and inserting in place thereof the following subsection:-

(b) The appropriate financial official of a municipality may arrange for and assign or transfer to a purchaser the municipality's right to receive payments owed by a taxpayer on tax receivables after the date upon which the amounts so owed may be paid without interest or penalty. If any taxes owed to a municipality include taxes assessed by a district located wholly or in part within the limits of such municipality, then such district may assign or transfer the right to receive payment of such taxes pursuant to this section in accordance with guidelines or regulations that the commissioner may issue. The assignment or transfer of individual taxpayer receivables by a municipality may be made either individually or in bulk. Prior to the assignment or transfer of individual taxpayer receivables, the appropriate financial official shall publish, in accordance with section 1, a list of all receivables that will be offered for assignment or transfer hereunder at least 60 days prior to the offer of such parcel for assignment or transfer and a municipality may not offer for assignment or transfer any parcel upon which a taxpayer has entered into and is in compliance with the terms of a payment agreement with the appropriate financial official. If the taxpayer fails to comply with such agreement, the appropriate financial official may assign or transfer such parcel in accordance with the provisions established hereunder. The appropriate financial official may assign or transfer any receivables either individually or in groups without regard to class, except for: (1) parcels with respect to which the taxpayer has entered into a payment agreement in accordance with the provisions of this section; (2) parcels which are part of the estate of a bankrupt; (3) parcels which the appropriate financial official has determined are or may be subject to a lien under the provisions of chapter 21E; and (4) such other categories of parcels as the commissioner may by guideline define or as the municipality, with the approval of the commissioner, may authorize by vote of its selectmen, town council, or city council and mayor. Two or more collectors, or 2 or more treasurers, may jointly assign their respective municipalities' receivables in accordance with guidelines issued by the commissioner.

SECTION 2. Subsection (c) of said section 2C of said chapter 60, as so appearing, is hereby amended by striking out paragraphs (1) and (2) and inserting in place thereof the following 2 paragraphs:-

(1) The sale of tax receivables shall be by public sale to the most responsible and responsive offeror taking into consideration the following evaluation criteria: (i) the price proposed by the offeror; (ii) the offeror's qualifications and experience; (iii) the offeror's plan for communicating with the taxpayers; (iv) whether the offeror has a regular place of business in the commonwealth; (v) whether the offeror is in good standing with the department of revenue; and (vi) other criteria determined by the commissioner and the municipality. The sale shall provide for the option to purchase subsequent tax receivables subject to subsection (h) and any regulations that may be promulgated by the commissioner pursuant thereto.

(2) The sale price shall be equal to not less than (i) the amount assessed and due from the face value of the tax receivables sold hereunder and (ii) any unpaid accrued interest, statutory fees, penalties and charges owed to the municipality as of the date of sale of the tax receivables. Tax receivables may, with the approval of the town meeting, town council or city council and mayor, be sold either at a discount of not more than 50 per cent of the interest on the receivable or at a premium, under such terms as the commissioner may determine by regulations that shall be promulgated pursuant to this section. Such sale price or discounted sale price may reflect any interest accrued on any individual taxpayer receivable or related tax to the date of the sale of the right to receive payment of such tax. Any unpaid statutory fees and charges as of the date of the sale with respect to such individual taxpayer receivable or related tax shall continue to be payable to the municipality and shall be paid to it by the purchaser from the first amounts collected by the purchaser on such tax receivable unless otherwise received by such municipality.

SECTION 3. Said section 2C of said chapter 60, as so appearing, is hereby further amended by striking out, in lines 151, 154 and 157, the word "seven", each time it appears, and inserting in place thereof, in each instance, the following figure:- 12.

SECTION 4. Said section 2C of said chapter 60, as so appearing, is hereby further amended by striking out subsection (d) and inserting in place thereof the following subsection:-

(d) The sale of tax receivables shall be without recourse to the municipality selling the same except as otherwise provided in this subsection.

(1) The agreement between a municipality and a purchaser for the sale of tax receivables may provide for the repurchase of such tax receivables that do not conform to the terms and conditions of such agreement for the amount paid by the purchaser plus actual costs incurred by the purchaser from the date of sale.

(2) The agreement between a municipality and a purchaser for the sale of tax receivables may provide for the repurchase at the election of the municipality of tax receivables inadvertently included in the sale that were excludable under the definition of the class to be assigned that was approved by the commissioner under subsection (b). Such repurchases at the option of the municipality shall take place not later than 6 months immediately following the assignment.

(3) If any individual taxpayer receivable (i) shall be abated or (ii) is less than the amount for which the tax receivable in respect thereof was purchased by the purchaser at the time of sale, then, in each case, the purchaser shall be reimbursed by the amount of such abatement or other reduction in the amount of the tax receivable. If such tax receivable was purchased for a discount as provided in paragraph (2) of subsection (c), the repurchase price or reimbursement shall be reduced by the same percentage by which the purchase price of the tax receivable was discounted. In lieu of any such repurchase or reimbursement, the municipality may provide a replacement tax receivable of the same fiscal year as the tax receivable to be replaced that, together with any cash provided by the municipality or the purchaser, shall equal such purchase price or reimbursement amount; provided, however, that a replacement tax receivable shall be of similar market value as the tax receivable that is being replaced. The replacement tax receivable shall be provided only after compliance with subsection (b).

(4) The reimbursement amount, pursuant to paragraph (3), shall include, in the case of abatement, interest accrued on such amount from the date of purchase by the purchaser to the date of repurchase or reimbursement by the municipality, calculated in accordance with the rate provided in section 69 of chapter 59.

(5) The obligation of the municipality to repurchase any tax receivable pursuant to paragraphs (1) and (2), or to reimburse the purchaser pursuant to paragraph (3), including any replacement tax receivable in lieu of such repurchase or reimbursement, shall be set forth in an agreement between the municipality and the purchaser thereof, and (i) such obligation shall not exceed 10 per cent of the aggregate purchase price received by the municipality from the purchaser, inclusive of any interest and statutory fees paid by such purchaser to the municipality; but in the case of any reimbursement pursuant to said paragraph (3), such reimbursement amount shall not be charged to such percentage limitation; and (ii) the maximum period of time during which a municipality shall remain obligated to repurchase any tax receivable shall not exceed the lesser of: (a) 3 years from the date a tax receivable was purchased from the municipality, and (b) the period ending on the date 6 months prior to the date on which the lien securing the individual tax liability would terminate pursuant to section 37.

(6) The limitations set forth in this subsection shall not apply in any case involving fraud or misrepresentation.

SECTION 5. Said section 2C of said chapter 60, as so appearing, is hereby further amended by striking out subsection (h) and inserting in place thereof the following subsection:-

(h) The purchaser of an individual tax receivable on any parcel of real estate shall have the right to purchase any subsequent delinquent individual tax receivable on the same parcel in accordance with the terms of sale of the original agreement, except that there shall be no discount or premium; the price of such subsequent receivable shall be the amount assessed together with any accrued interest, charges and fees. There shall be no requirement of notice or publication with respect to the transfer of such subsequent receivables, notwithstanding the provisions of subsection (b).

SECTION 6. Said chapter 60 is hereby further amended by striking out section 52, as so appearing, and inserting in place thereof the following section:-

Section 52. Cities and towns may make regulations for the possession, management and sale of land purchased or taken for taxes, not inconsistent with law, regulations promulgated by the department of revenue or the right of redemption. The treasurer of any city or town holding 1 or more tax titles may assign and transfer such tax title or titles, individually or bundled, to the highest bidder after a public auction, after having given 14 days' notice of the time and place of such public auction by publication, which shall conform to the requirements of section 40, and having posted such notice in 2 or more convenient and public places in said city or town, provided that the sum so paid for such assignment is not less than the amount necessary for redemption, and may execute and deliver on behalf of the city or town any instrument necessary therefor. The treasurer shall send notice of the intended assignment to the owner of record of each parcel at his last known address not less than 10 days prior to the assignment, but failure to receive such notice shall not affect the validity of the assignment. The instrument of assignment shall be in a form approved by the commissioner and shall be recorded within 60 days from its date and if so recorded shall be prima facie evidence of all facts essential to its validity. The instrument of assignment shall, for each parcel assigned thereunder, state the amount for which the tax title on the parcel could have been redeemed on the date of the assignment, separately stating for each parcel the principal amount and the total interest accrued until the date of assignment. The principal amount shall be the sum of the amounts for which the parcel was taken and amounts subsequently certified under section 61. Except as hereinafter otherwise provided, all provisions of law applicable in cases where the original purchaser at a tax sale is another than the city or town shall thereafter apply in the case of such an assignment, as if the assignee had been a purchaser for the original sum at the original sale or at a sale made at the time of the taking and had paid to the city or town the subsequent taxes and charges included in the sum paid for the assignment. Any extension of the time within which foreclosure proceedings may not be instituted granted by a city or town treasurer prior to assignment shall be binding upon the assignee.

SECTION 7. Section 62 of said chapter 60, as so appearing, is hereby amended by striking out the second paragraph and inserting in place thereof the following paragraph:-

Any such person may so redeem by paying or tendering to a purchaser, other than the town, his legal representatives or assigns, or to the person to whom an assignment of a tax title has been made by the town, at any time prior to the filing of such petition for foreclosure, in the case of a purchaser the original sum and intervening taxes and costs paid by him and interest on the whole at said rate, or in the case of an assignee of a tax title from a town the amount stated in the instrument of assignment with additional interest on the principal amount at said rate from the date of said assignment. In each case he shall also pay or tender, for examination of title and a deed of release, not more than $3 in the aggregate, and in addition thereto the actual cost of recording the tax deed or evidence of taking and the instrument of assignment, if any. He may also redeem the land by paying or tendering to the treasurer the sum which he would be required to pay to the purchaser or to the assignee of a tax title, with $10 additional. When land is redeemed from a tax title held by a city or town, the city treasurer, or acting city treasurer, notwithstanding the provisions of the charter of his city, or the town treasurer, as the case may be, shall, in the name and on behalf of the city or town, execute, acknowledge and deliver an instrument, which need not be under seal, containing a reference to the record of the tax deed or instrument of taking sufficient to identify it and reciting that the city or town acknowledges satisfaction of the tax title account secured thereby. The instrument provided for herein shall specify the year for which, and the name of the person to whom, the tax for which the land was sold or taken was assessed, and shall also specify the land on which such tax was assessed. If a person other than the owner of the fee rightfully redeems, requesting that he be named in the instrument, the instrument shall include his name and, when duly recorded in the registry of deeds of the county or district where the land is situated, shall be notice to all persons of such payment. If the amount so paid for redemption is paid by a holder of a mortgage on the premises, the amount so paid may be added to the mortgage debt. Any person redeeming land from a tax title held by a city or town may, as a condition of redemption, be required by the city or town treasurer to pay to him the expense of recording the instrument of redemption; and, when such expense has been so paid, such treasurer shall be deemed to be authorized to record such instrument and shall forthwith cause the same to be filed for record in the proper registry of deeds. No person shall knowingly collect or attempt to collect for the redemption of any such land a sum of money greater than that authorized by this section.

SECTION 8. Said chapter 60 is hereby further amended by striking out section 63, as so appearing, and inserting in place thereof the following 2 sections:-

Section 62A. Municipalities may by bylaw or ordinance authorize payment agreements between the treasurer and persons entitled to redeem parcels in tax title. Such agreements shall be for a maximum term of no more than 5 years or such lesser period as the ordinance or bylaw may specify and may waive not more than 50 per cent of the interest that has accrued on the amount of the tax title account, subject to such lower limit as the ordinance or bylaw may specify. An ordinance or bylaw under this section shall provide for such agreements and waivers uniformly for classes of tax titles defined in the ordinance or bylaw.

Any such agreement must require a minimum payment at the inception of the agreement of 25 per cent of the amount needed to redeem the parcel. During the term of the agreement the treasurer may not bring an action to foreclose the tax title unless payments are not made in accordance with the schedule set out in the agreement or timely payments are not made on other amounts due to the municipality that are a lien on the same parcel.

Section 63. The treasurer shall receive money paid to him instead of the purchaser or assignee of a tax title, if the amount tendered equals the amount stated in the instrument of assignment or collector's deed plus additional interest at the rate stated in section 62 from the date of sale or assignment to the date the treasurer receives such payment, and give to the person paying it a certificate specifying the amount paid, the name of the person to whom and the real estate on which the tax was originally assessed, and the registry of deeds and the book and page of the records therein where the collector's deed or evidence of taking and the instrument of assignment, if any, is recorded; and the recording of the certificate in said registry shall extinguish all right and title acquired under the collector's deed or evidence of taking. The treasurer shall forthwith pay over all money so paid, to the person entitled thereto as determined by him, except that he shall retain $10 for the use of the town and shall account to it therefor.

Approved August 13, 2004.

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