THE COURTS
Title 204—JUDICIAL SYSTEM GENERAL PROVISIONS
PART II. GENERAL ADMINISTRATION
[ 204 PA. CODE CH. 29 ]
Proposed Amendments to Financial Regulations Promulgated Pursuant to 42 Pa.C.S. §§ 3502, 3733 and 3733.1
[41 Pa.B. 4084]
[Saturday, July 30, 2011]The Administrative Office of Pennsylvania Courts (''AOPC'') is planning to recommend that the Supreme Court promulgate limited amendments to the financial regulations governing the collection of the ''Judicial Computer System/Access to Justice/Criminal Justice Enhancement Account'' Fee authorized by 42 Pa.C.S. §§ 3733 and 3733.1.
The text of the proposed amendments to the financial regulations is set forth as follows. Additions are shown in bold; deletions are in bold and brackets. An explanatory report is also provided that summarizes the various considerations that factored into these proposed amendments.
Interested persons should submit suggestions, comments, or objections concerning this proposal to:
Administrative Office of Pennsylvania Courts
ATTN: Financial Regulations Comments
1515 Market Street, Suite 1414
Philadelphia, PA 19102
financialregscomments@pacourts.us
no later than August 30, 2011.
ZYGMONT A. PINES,
Court Administrator of Pennsylvania
Annex A
TITLE 204. JUDICIAL SYSTEM GENERAL PROVISIONS
PART II. GENERAL ADMINISTRATION
CHAPTER 29. MISCELLANEOUS PROVISIONS
Subchapter I. BUDGET AND FINANCE § 29.351. Definitions.
* * * * * (d) Court of Common Pleas. Clerk of Court.
* * * * * 2. Except for the provisions of subsection (g) below, for purposes of 42 Pa.C.S. §§ 3733(a.1) and 3733.1, a statutory fee of twelve dollars and twenty-five cents ($12.25) shall be imposed for each filing of a deed, mortgage or property transfer for which a fee, charge or cost is now authorized. The documents identified as meeting the above conditions are listed below. The list is not exclusive and any other filing for which a fee is imposed, which can be considered a property transfer, is included and should have the fee imposed. Subject to later amendment, the following documents have been identified as meeting the statutory provisions:
* * * * * viii. Easements; [and]
ix. Rights of Way;
x. Leases involving mineral rights including, but not limited to, those for oil, gas and coal;
xi. Assignments of leases involving mineral rights including, but not limited to, those for oil, gas and coal; and
xii. ''Memoranda'' or other documents including, but not limited to, bundled filings or blanket assignments which refer to or incorporate by reference or list any property transfer(s). A separate fee shall be imposed for each such referenced, incorporated or listed property transfer at the time of filing.
* * * * * (f) Recorders of Deeds. Except for the provisions of subsection (g) below, for purposes of 42 Pa.C.S. §§ 3733(a.1) and 3733.1, a statutory fee of twelve dollars and twenty-five cents ($12.25) shall be imposed for each filing of a deed, mortgage or property transfer for which a fee, charge or cost is now authorized. The documents identified as meeting the above conditions are listed below. The list is not exclusive and any other filing for which a fee is imposed, which can be considered a property transfer, is included. Subject to later amendment, the following documents have been identified as meeting the statutory provisions:
* * * * * viii. Easements; [and]
ix. Rights of Way;
x. Leases involving mineral rights including, but not limited to, those for oil, gas and coal;
xi. Assignments of leases involving mineral rights including, but not limited to, those for oil, gas and coal; and
xii. ''Memoranda'' or other documents including, but not limited to, bundled filings or blanket assignments which refer to or incorporate by reference or list any property transfer(s). A separate fee shall be imposed for each such referenced, incorporated or listed property transfer at the time of filing.
* * * * *
EXPLANATORY REPORT The Administrative Office of Pennsylvania Courts (''AOPC'') is proposing limited amendments to the financial regulations promulgated by the Supreme Court governing the collection of the ''Judicial Computer System / Access to Justice / Criminal Justice Enhancement Account'' (''JCS/ATJ/CJEA'') fee by Recorder of Deeds (''Recorder'') offices. The AOPC has been informed that there is inconsistent application of the fee by the Recorders' offices with regard to the filing of oil and gas leases, assignments thereof, particularly concerning the manner in which these documents are being filed (i.e. ''bundled'' or memorandum filings involving multiple property transfers). The proposed amendments to the financial regulations are intended to clarify that the JCS/ATJ/CJEA fee should be assessed upon the filing of these documents.
The Recorder collects a $23.50 JCS/ATJ/CJEA fee for each filing of a deed, mortgage, or property transfer for which a fee, charge or cost is now authorized. 42 Pa.C.S. § 3733(A.1)(1)(v); 42 Pa.C.S. § 3733.1(A)(1); 204 Pa. Code § 29.351(d)(2), (f). Section 3733(A.1)(1)(v) authorizes the Supreme Court to designate by financial regulations the specific filings in the Recorder's office to which this fee applies. The financial regulations are codified in 204 Pa. Code § 29.351. In order to trigger the imposition of the JCS/ATJ/CJEA fee, the filings at issue must be a property transfer for which a fee, charge or cost is now authorized. 42 Pa.C.S. § 3733(A.1)(1)(v); 204 Pa. Code §§ 29.351(d)(2), (f).
The statutory authorization for collection of this fee on any ''property transfer for which a fee, charge or cost is now authorized'' has presented challenges in the past. For example, when the AOPC learned of confusion as to whether a ''right of way'' was a property transfer on which the JCS/ATJ/CJEA fee should be assessed, the financial regulations were amended in 2009 to answer the question in the affirmative. This clarification was adopted, even though the current financial regulations provide that the list of nine specific documents involving property transfers for which a fee, charge or cost is authorized ''is not exclusive and another other filing for which a fee is imposed, which can be considered a property transfer, is included and should have the fee imposed.'' 204 Pa. Code §§ 29.351(d)(2),(f).
As concerns mineral rights leases or assignments thereof, the AOPC concluded that the JCS/ATJ/CJEA fee should be imposed. First, mineral right leases or assignments thereof are property transfers. See Lesnick v. Chartiers Natural Gas Company, 889 A.2d 1282 (Pa. Super. 2005) (''Pennsylvania considers oil and natural gas 'leases' to be, in reality, transfer of realty''); Jacobs v. CNG Transmission Corp, 332 F. Supp. 2d 759, 772-773 (W.D. Pa. 2004) (''Of equal importance is the well understood recognition that the execution [of] an oil and gas lease reflects a conveyance of property rights within a highly technical and well-developed industry . . . [the interest obtained by the gas company is a 'fee simple determinable']); Duquesne Natural Gas Company v. Fefolt, 198 A.2d 608, 610 (Pa. Super. 1964) (''All of the Pennsylvania cases are in accord that the original grant and conveyance by the [lessor] to the [lessee] created an estate in real property and severed the gas and oil from the rest of the real estate.''). Given that in a gas and oil lease the lessee obtains a fee simple determinable from the lessor, a property transfer has occurred. Similarly, a property transfer occurs in the assignment of a gas and oil lease, because the assignee receives from the assignor a fee simple determinable as well.
In addition, a fee, charge or cost is authorized to be collected when a lease or assignment is filed with the Recorder, pursuant to 16 P. S. § 7629 (First Class Counties), 16 P. S. § 11411 (Second Class Counties) and 42 P. S. § 21051 (All Other Counties).
The AOPC has learned that some filers of property transfers (i.e. mineral rights leases or assignments) are ''bundling'' dozens of individual transfers into one filing and only one JCS/ATJ/CJEA fee of $23.50, if any, is assessed by the Recorder's office. It is important to note that each individual property transfer in these ''bundled'' filings are property transfers to which the JCS/ATJ/CJEA fee is applicable. Thus, if these property transfers were singularly filed with the Recorder's office, a JCP/ATJ/CJEA fee would be assessed on each. Therefore, the issue is not whether the fee is applicable to these ''bundled'' filings, but whether a single fee or a separate fee for each property transfer referenced, incorporated, or listed in these ''bundled'' filings should be imposed. The AOPC is of the opinion that ''bundling'' multiple property transfers together in a single filing and only paying a single fee contravenes the aforementioned Judicial Code and financial regulation provisions.
Section 3733(A.1)(1)(v) of the Judicial Code and these financial regulations provide that the JCS/ATJ/CJEA fee is charged ''for each filing of a . . . property transfer.'' The use of the singular term ''property transfer'' indicates that the fee should be charged per property transfer.
Further, it is placing form over substance to interpret the aforementioned authorities as providing that a filer of ''bundled'' property transfers is assessed a single fee while an individual of who files multiple property transfers in non-bundled/non-memorandum documents pays multiple fees. Such a result may encourage the use of ''creative filing techniques'' and create confusion with regard to determining the proper fee(s) to assess.
Moreover, there is support in the current regulations for the recommended approach. Specifically, a divorce complaint may include many counts such as for support, custody, and other related matters. The financial regulations require a separate JCS/ATJ/CJEA fee to be assessed for each counts rather than allowing a litigant to pay one fee for ''bundling'' all into one petition. 204 Pa. Code § 29.351(b)(2)(ii). The proposed amendments concerning bundled and memorandum filings relating to property transfers are consistent with this provision in the financial regulations relating to divorce matters.
Thus, to further clarify the regulations and to ensure consistent application of the JCS/ATJ/CJEA fee across the Commonwealth, the AOPC proposes amending the financial regulations contained in 204 Pa. Code § 29.351(d)(2) and (f) to add the following to the existing list of documents to which the fee applies: filings of ''leases involving mineral rights, including, but not limited to, those for oil, gas and coal''; ''assignments of leases involving mineral rights including, but not limited to, those for oil, gas and coal''; and filings of ''Memoranda or other documents including, but not limited to, bundled filings or blanket assignments which refer to or incorporate by reference or list any property transfer(s). A separate fee shall be imposed for each such referenced, incorporated or listed property transfer at the time of filing.''
[Pa.B. Doc. No. 11-1263. Filed for public inspection July 29, 2011, 9:00 a.m.]
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