58.1-3018 - Payment of local taxes on behalf of taxpayer by third party; tax payment agreements.
§ 58.1-3018. Payment of local taxes on behalf of taxpayer by third party; taxpayment agreements.
A. For the purposes of this section, "third-party tax payment agreement"means any agreement whereby a third party contracts with a taxpayer to pay toa county, city or town on behalf of that taxpayer the local taxes, charges,fees or other obligations due and owing to the county, city or town. Suchagreement may have as its subject current taxes, charges, fees andobligations, delinquent taxes, penalties and interest, or any combination ofthe foregoing.
B. The treasurer of any county, city or town may enter into agreementsauthorizing third parties to offer to taxpayers within such localitythird-party tax payment agreements, provided that such agreements meet thefollowing requirements:
1. Every third-party tax payment agreement shall be in writing, in a formapproved by the treasurer of the locality, and shall provide for the paymentof the taxes which are the subject of such agreement by the third partydirectly to the treasurer of the county, city or town within ten days of theacceptance of a duly executed agreement by the third party.
2. Third-party tax payment agreements shall provide for the reimbursement ofthe third party by the taxpayer on whose behalf taxes were paid ininstallments over a period not to exceed twenty-four months, and may providefor interest, exclusive of any origination fee, at an annual rate approved bythe treasurer which shall not exceed sixteen percent. Such agreements mayprovide for the payment by the taxpayer of an origination fee at a rateapproved by the treasurer which shall not exceed ten percent of the amountpaid by the third party. No interest, excluding any origination fee paid bythe taxpayer, shall accrue during the six-month period commencing on the dateof the payment. This subdivision shall not be construed to permit thetreasurer to authorize a third party to make a "mortgage loan" as that termis defined in § 6.1-409.
3. No fee may be charged to or collected from the treasurer or the localitywith respect to any third-party tax payment agreement.
4. The third party shall provide to the treasurer monthly status reportsregarding third-party tax payment agreements entered into by taxpayers of thelocality. Such reports shall include, at a minimum, a listing of all activeaccounts, and with respect to each account, total charges, total taxpayerpayments, total amounts paid to the treasurer, and total amounts subject torecourse. A summary of the monthly report, deleting any information thatwould identify any taxpayer and any other confidential taxpayer information,shall be retained as a public record in the treasurer's office.
C. In the event that a taxpayer who is a party to a third-party tax paymentagreement fails in his obligations arising under such agreement to reimbursethe third party:
1. The third party shall be entitled to receive from the treasurer areimbursement payment equal to all taxes paid on behalf of such taxpayerpursuant to the tax payment agreement, less all payments received by thethird party from the taxpayer, exclusive of interest and fees charged by thethird party to the taxpayer pursuant to the agreement. No payment may berequested pursuant to this subsection unless the third party has demonstratedto the satisfaction of the treasurer that good-faith efforts to collect theobligations arising under the tax payment agreement have been made and that,notwithstanding these efforts, the taxpayer is more than thirty daysdelinquent in his obligations arising under the agreement.
2. Any treasurer who reimburses a third party pursuant to this subsectionshall reinstate the amount of such reimbursement upon the appropriate taxrolls of the locality as delinquent taxes or current taxes, as the case maybe, and shall send the taxpayer written notice of such action by first-classmail to the taxpayer's last known address within five business days of suchreinstatement.
3. If the taxpayer fails to pay in full any sum reinstated pursuant to thissection by the ordinary due date of the tax, the treasurer may applypenalties and interest in accordance with general law from the due date ofthe tax.
4. Any right of the third party to payment arising under a third-party taxpayment agreement shall terminate upon the receipt by the third party of areimbursement payment from the treasurer in accordance with the terms of thissubsection.
D. With respect to each third-party tax payment agreement which has as itssubject, in whole or in part, real property taxes, the third party shallcause to be recorded among the land records of the circuit court in eachlocality within which the real property is situated a copy of the applicabletax payment agreement. Such agreement shall be indexed by the clerk under thename of the taxpayer or taxpayers as grantor and the name of the third partyas grantee. Upon the satisfaction of all obligations arising under a taxpayment agreement so recorded, the third party, within ninety days ofsatisfaction, shall cause to be recorded a certificate of release, settingforth the names of the taxpayer and the third party, the date of thethird-party tax payment agreement, and the book and page at which theagreement is recorded. Any such certificate of release shall be indexed bythe clerk under the name of the third party as grantor and the taxpayer asgrantee. The clerk may charge a fee not to exceed thirteen dollars for therecordation of any tax payment agreement or certificate of release.
E. Upon the payment of any tax by a third party pursuant to a tax paymentagreement, the applicable period of limitation for the enforcement of eachtax which is the subject of the agreement shall be tolled during any periodin which outstanding obligations remain unsatisfied pursuant to the agreement.
(1996, c. 896; 1997, cc. 180, 846.)