KRS § 134.128 — KY Code / Title XI / Chapter 134 / Section 134.128
134.128 Process for sale of certificate of delinquency by clerks to persons not listed in KRS 134.127(1)(a)
Status: in_force

134.128 Process for sale of certificate of delinquency by clerks to persons not listed

in KRS 134.127(1)(a).

(1) The sale of certificates of delinquency by county clerks to persons other than those

listed in KRS 134.127(1)(a) shall be conducted in accordance with the provisions of

this section.

(2) The department shall promulgate administrative regulations to establish a process

for the purchase and sale of certificates of delinquency to third parties. The process

developed by the department shall:

(a) 1. Establish an annual statewide schedule for the sale of certificates of

delinquency in each county. The schedule shall be published on the

department's website at least ten (10) days prior to the first sale. The sale

in each county shall be administered by the county clerk.

2. The sale in each county shall be scheduled at least ninety (90) days but

not more than one hundred thirty-five (135) days after the unpaid tax

claims are filed by the sheriff with the county clerk, unless the

provisions of subparagraph 3. of this paragraph apply. The department

may stagger the schedule so that sales are conducted on different dates

and times in different counties.

3. A county clerk who:

a. Due to the assessment schedule established by the department,

anticipates receiving certificates of delinquency relating to

unmined coal, oil, or gas reserves, or any other mineral or energy

resources assessed separately from the surface real property

pursuant to KRS 132.820 too late to be included in the annual sale

scheduled during the timeframes established by subparagraph 2. of

this paragraph; and

b. Wants to include those certificates in the annual sale for the year in

which the certificates of delinquency are created;

may submit a request to the department to hold the annual sale for that

county up to one hundred ninety-five (195) days after the bulk of the

unpaid tax claims are filed by the sheriff with the county clerk in

accordance with KRS 134.122;

(b) Except as provided in KRS 134.127(1)(a), prohibit the payment of any newly

filed certificates of delinquency by a third party prior to the scheduled annual

sale of certificates of delinquency for that year for that county;

(c) Prohibit the payment of any certificates of delinquency:

1. Involved in bankruptcy litigation in which the county attorney or

department has filed a claim;

2. Involved in other litigation initiated by the county attorney or the

department, or in which the county attorney or department responds or

files a claim;

3. Under a payment plan that has been agreed to by the taxpayer and the

county attorney or the department, and on which the payment agreement

is in good standing; or

4. Related to property included in a tax delinquency diversion program

established under KRS 99.727 and on the protected list required under

KRS 134.504(10);

(d) Establish a process to be used by county clerks in determining the order in

which interested third-party purchasers may select and pay available

certificates of delinquency at the annual sale. The process shall, at a

minimum:

1. Be uniform in all counties to the extent practicable;

2. Establish a process, if there is more than one (1) purchaser registered to

purchase certificates of delinquency at the sale, that allows all interested

purchasers an opportunity to purchase certificates of delinquency on an

equitable basis. The sale shall not be structured in such a manner to

allow one (1) third party to purchase all of the certificates of

delinquency if there are other properly registered third parties that are

also interested in purchasing certificates of delinquency;

3. Establish fairness for all participants by prohibiting the participation of

multiple related entities, or multiple individuals representing related

interests as separate entities in the selection process at an annual sale.

The department shall define "related entities" and "related interests" as

part of the regulatory process; and

4. Establish a process to be used by county clerks in identifying, verifying,

and selling priority certificates of delinquency. The process shall:

a. Require third-party purchasers to submit a list of priority

certificates of delinquency to the county clerk up to ten (10) days

before the annual sale so that the clerk may identify and allocate

priority certificates of delinquency to third-party purchasers prior

to the annual sale;

b. Require that all priority certificates of delinquency allocated to a

third-party purchaser prior to the annual sale be removed from the

annual sale;

c. Allow any third-party purchaser holding a certificate of

delinquency on a parcel of property from a prior year to submit a

priority list and purchase any priority certificates of delinquency to

which the third-party purchaser is entitled, notwithstanding that

the third-party purchaser may be related to another third-party

purchaser participating in the sale; and

d. Give priority to the third-party purchaser holding a certificate of

delinquency from the most recent tax year if more than one (1)

third party holds an outstanding certificate of delinquency on a

parcel of property;

(e) Require all potential participants in the sale to register at least one (1) week in

advance with the county clerk;

(f) Require a review of the list of registered participants, either by the county

clerk or the department, prior to the sale to ensure that:

1. All registered participants seeking to pay multiple certificates of

delinquency are properly registered with the department as required by

KRS 134.129; and

2. No registered participants or related entities or related interests

prohibited from separate participation in the annual sale pursuant to the

provisions of paragraph (d)3. of this subsection and the administrative

regulations promulgated thereunder have separately registered to

participate in the annual sale;

(g) Establish advance deposit requirements for registered participants based upon

the maximum amount the registered participant may pay for desired

certificates of delinquency;

(h) Establish a registration fee to be paid to the clerk. The registration fee paid to

each county shall not exceed two hundred fifty dollars ($250) annually and

may be tiered;

(i) Establish payment requirements, which may include nullification of the

payment and forfeiture of the advance deposit if a third-party purchaser fails

to produce full payment within the specified time; and

(j) Establish payment methods.

(3) Any person who, in any calendar year:

(a) Pays or plans to pay more than five (5) certificates of delinquency statewide;

(b) Pays or plans to pay more than three (3) certificates of delinquency in any

county; or

(c) Invests or plans to invest more than ten thousand dollars ($10,000) in the

payment of certificates of delinquency on a statewide basis in any calendar

year;

shall register with the department annually as provided in KRS 134.129.

(4) The department shall be responsible for monitoring the sale of certificates of

delinquency.

(5) (a) At least thirty (30) but not more than forty-five (45) days before the scheduled

sale date, the county clerk shall cause a notice to be published in accordance

with the provisions of KRS Chapter 424. The notice shall list by property

owner, property address, and if available, parcel number or lot number, all

certificates of delinquency available for sale. The notice shall provide the

date, time, and location of the sale. In addition, the notice shall list, in a

separate section, all personal property certificates of delinquency held by the

county clerk.

(b) As compensation for advertising the sale, the county clerk shall receive five

dollars ($5) for each certificate of delinquency and personal property

certificate of delinquency advertised. The fee shall be added to the amount of

the certificate of delinquency or personal property certificate of delinquency

and shall be paid by the person paying the certificate of delinquency or

personal property certificate of delinquency.

(c) The cost of placing the advertisement shall be paid by the county. The cost

shall be added to the amount of the certificate of delinquency or personal

property certificate of delinquency and shall be paid by the person paying the

certificate of delinquency or personal property certificate of delinquency. The

department shall establish a formula that may be used by counties in

allocating the advertising costs among the delinquent tax claims. The formula

shall take into account that a percentage of delinquent tax claims remains

unpaid.

(6) Any certificate of delinquency not paid at the annual sale, not subject to a payment

plan with the department or county attorney, and not known to be in litigation may

be paid to the county clerk at any time by any person after the sale, provided that:

(a) Any person required by KRS 134.129 to register with the department shall

hold a current certificate of registration at the time of purchase;

(b) Any person not previously registered with the county clerk during the

calendar year shall register with the county clerk and shall pay the registration

fee established by administrative regulation pursuant to subsection (2)(h) of

this section; and

(c) Any person previously registered with the county clerk during the calendar

year who has not paid the maximum registration fee for that year shall pay the

appropriate amount for each certificate of delinquency paid, as established by

administrative regulation pursuant to subsection (2)(h) of this section, until

the maximum registration has been paid.

(7) Any certificate of delinquency received by the county clerk too late to be included

in the annual sale in any year shall be retained by the clerk until the next scheduled

annual sale. During that time period, the clerk may accept payment on the

certificate of delinquency only from those individuals and entities listed in KRS

134.127(1)(a).