Opinion ID: 3010160
Heading Depth: 2
Heading Rank: 1

Heading: Prepetition Interest

Text: We first address whether the bankruptcy court correctly determined that Allegheny County is entitled to prepetition interest on its tax claims at a rate of twelve percent under Pennsylvania law. Although most of the defendants have conceded this point, defendant Johnson argues that the county is entitled to a maximum interest rate of only ten percent. We disagree. Pursuant to 72 Pa. Cons. Stat. Ann. 5648, second class Pennsylvania counties are entitled to interest on all county tax delinquencies and may adopt a maximum interest rate of twelve percent per annum on these debts. It is undisputed that Allegheny County is the only second class county for purposes of 5648 and that its County Commissioners have chosen to charge tax debtors the maximum amount allowed under that statute. Nevertheless, Johnson argues that 5648 conflicts with and is governed by 53 Pa. Cons. Stat. Ann. 7143, which provides that interest claims made by municipalities for unpaid taxes cannot exceed ten percent per annum. We agree that 7143 conflicts with 5648, but we do not find 7143 to be controlling. Notwithstanding Johnson's assertions to the contrary, 5648 is the more specific of the two statutes because it deals with tax delinquencies in second class counties. Further, the ten percent interest rate of 7143, established by an amendment dated October 29, 1981, predatesthe twelve percent interest rate of 5648, which was established on May 5, 1982. See Pa. Laws 319, No. 113, 1; Pa. Laws 372, No. 106, 1. Section 1933 of the Pennsylvania Statutory Construction Act of 1972 provides: Whenever a general provision in a statute shall be in conflict with a special provision in the same or another statute, the two shall be construed, if possible, so that effect may be given to both. If the conflict between the two provisions is irreconcilable, the special provisions shall prevail and shall be construed as an exception to the general provision, unless the general provision shall be enacted later and it shall be the manifest intention of the General Assembly that such general provisions shall prevail. 1 Pa. Cons. Stat. Ann. 1933 (emphasis added). Based on 1993, the special provision allowing twelve percent interest to second class counties embodied in 5648 prevails over the general provision of 7143 and must be construed as an exception to it. To summarize, 5648 is inconsistent with 7143 because it specifically empowers the Allegheny County commissioners to establish an interest rate of up to twelve percent on delinquent taxes. Section 7143, on the other hand, provides for a maximum rate of only ten percent. Thus, the two statutes are in conflict because they authorize different rates. The commissioners, taking advantage of the full authorization of 5648, established the applicable rate at twelve percent. We believe that 5648--the later, more specific statute--controls here. Accordingly, we hold that Allegheny County is entitled to prepetition interest at a rate of twelve percent per annum under 5648 and thus AFFIRM the ruling of the lower courts on that issue.