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West Virginia Legislators Receive Updates Regarding Delinquent Property Tax Sale Process

By Matt Young, West Virginia Press News Sharing

CHARLESTON, W.Va. – The Joint Standing Committee on Government Operations met, on Monday, during the second day of the June Interim Legislative Session.

Christal Perry, deputy director of land with the W.Va. State Auditor’s office, delivered a presentation on the delinquent property sales process. Perry began by expressing her excitement at the recent passing of SB 552, “relating to the sales tax process; reducing the rate of interest on delinquent property taxes; (and) modifying the method by which notice is provided regarding the payment of property taxes.”

“What we wanted to talk to you about today is why we needed to see change with the tax-sale system,” Perry said, before explaining how the previous system had been “exceptionally convoluted.”

“We had a lot of out-of-state speculators coming in, and they knew how this tax-sale process worked,” Perry continued. “They would purchase these properties for pennies on the dollar. And once these properties go (tax) delinquent, any liens on the property are no longer valid. So if the cities had a lien for demolition or refuse fees, there was no way to collect those. These speculators had no interest in investing in the cities – they were just there to collect the interest.”

Under SB 552, the interest rate for delinquent taxes on properties certified to the State Auditor have been reduced, and certain delinquent taxpayers can qualify to satisfy their outstanding tax-debt through incremental payments. It also “addresses the right to set aside a tax deed improperly obtained, or a tax deed obtained without sufficient notice.”

The committee then spent several moments discussing the need for timely and appropriate notification of property owners regarding delinquent tax-status and impending tax-sales, with Del. Barbara Evans Fleischauer, D-Monongalia, requesting clarification as to the process.

“We wouldn’t want people’s property confiscated without following some procedures that are relatively litigious,” Fleischauer said, before inquiring as to what happens when a notification-letter is returned undelivered.

“The sheriff will not send a process server out,” Russell Rollison, also from the State Auditor’s office, replied. “It’s the purchaser of the property at our tax sale that does, if a letter is returned. We have no choice in that matter. There has to be further diligent efforts. Process serving is one method – publication as a last resort – if the attorney will make a stipulation that they’ve exerted all possible references to locate the property owners.”

Sen. Mark Maynard, R-Wayne, committee co-chair, introduced “a presentation of regulatory board review of the West Virginia Board of Dentistry.”

Maynard then called Harry Koval, research analyst with the Performance Evaluation and Research Division (PERD) of the Office of the Legislative Auditor, before the committee.

“The objective of this review was to determine the need for the board to assess the board’s compliance with the general provisions of West Virginia Code,” Koval began. “The Legislative Auditor finds that, without regulation, the public could face life threatening consequences, and recommends that the legislature continue the Board of Dentistry as currently regulated.”

Koval further explained that, in fiscal year 2021, the Board of Dentistry accumulated a cash balance “that is nearly three-times its annual expenditures.”

“This is partly due to expenditures decreasing in 2020 and 2021, as well as licensee-fees increasing in fiscal years 2006, 2012 and 2014,” Koval added.

According to Koval, state code mandates that if the cash balance of any board exceeds twice its annual operating budget, the excess amount is to be transferred to the state’s General Revenue Fund. Koval then stated that the board is attempting to reduce the excess cash balance by reducing “virtually” all of its fees. However, despite the reduction, Koval advised the committee that it remains “unclear” if the board will have excess funds in the future.

“The Legislative Auditor still recommends the Legislature consider amending code to state that transfers from licensing boards to the state’s General Revenue Fund be based upon the sum of a board’s actual revenue for the previous two fiscal years, instead of the board’s budget,” Koval added.

With no further business before the committee, the meeting was adjourned. The Select Committee on Government Operations is scheduled to reconvene next month during the July Interim Legislative Session.