TAXATION

Real Property Tax Rebate • Senior Citizens • “Claimant” • Estates

Muscarella v. Commw. , PICS Case No.14-0446 (Pa. Commw. March 14, 2014) McCullough, J. (28 pages).

The executor of an estate on behalf of the estate and the class he represented sought an order declaring 61 Pa.Code §§401.1(iv) and 401.43(a) of the revenue department’s regulations invalid insofar as they limit a personal representative of an estate from claiming a property tax rebate for a decedent who did not live during some part of the year next succeeding the calendar year for which the rebate is claimed. Granted.

Before her death, the decedent owned premises in Norristown, paid property taxes and filed and obtained property tax rebates under the Act. Prior to her death in November 2009, she paid her 2009 property taxes. In June 2010, her executor filed a property tax rebate claim which was denied because the decedent did not survive for the entire 2009 tax year. Following unsuccessful appeals to the board, the executor filed a petition for review with this court and also filed a motion for class certification.

The purpose of the act was to provide assistance in the form of property tax and rent rebates to senior citizens. Both the current act and its predecessor defined a “claimant” as a person who filed a claim for property tax rebate and who meets the definition of a “claimant” in 53 P.S. §6926.1303. In 1976, the department adopted regulations that recognized estates as “claimants” so long as the decedent lived some part of the year next succeeding the calendar year in which the rebate was sought. During discovery, the executor sought any documentation supporting this limitation, but the commonwealth responded that no such documentation exists. The executor argued that the regulations violated the equal protection and due process clauses.

The executor established the lack of any legitimate state interest in treating claimants who die during the claim year any differently from those who survive the entire claim year. The record showed that in interrogatories, the commonwealth could not identify any evidence or information that would justify requiring a claimant to survive the entire claim year. Under either situation, the decedent did not receive the rebate; rather, it went to the estate. The claim form expressly prohibited estates like those of the decedent from even filing a claim for a rebate. Filing a claim or filing an appeal of a claim was futile and denied the executor and all members of the class their right to due process to protect the legitimate property interest in obtaining a rebate. Thus, the current regulations and the form, insofar as they limited a personal representative of an estate from claiming a property tax rebate for a decedent who did not live during some part of the year next succeeding the calendar year for which the rebate is claimed violated the Equal Protection and Due Process clauses of the United States and the Pennsylvania constitutions.

The commonwealth also argued that the court should disregard the regulations permitting rebates to estates and asserted that all estates should be prohibited from receiving rebates, alleging that the definition of “claimant” under §1303 of the act does not include estates. Section 1303 defines a “claimant” as a “person who files” but does not include a definition of “person.” Section 1991 of the Statutory Construction Act of 1972 defines “person” to include an estate. Thus, in §1303, the definition of “claimant” includes estates.

Given the General Assembly’s refusal to deny estates the right to file property tax rebate claims in the five decades that the statute has existed, the legislature intended to include estates within the ambit of rebate relief. In addition, the Commonwealth Documents Law sets forth specific, mandatory procedures with regard to the legality, amendment or repeal of administrative regulations. The commonwealth’s attempt to void the current regulations circumvented the public notice and comment requirements of the CDL. The court was not the proper venue for the commonwealth to amend or void the current regulations.

A dissenting opinion argued that the term “claimant” in §1303 did not include estates. The legislative intent was to benefit senior citizens and a rebate paid to a decedent’s estate might benefit the creditors of the estate and the beneficiaries, but it provided no benefit to the deceased senior citizen. Additionally, the context of §1303 definition of “claimant” precluded the use of the broader definition of “person” in §1991 of the SCA as a basis for allowing anything other than a natural person to be a claimant under the Act.