KRS § 134.504 — KY Code / Title XI / Chapter 134 / Section 134.504
134.504 Department to collect or contract with county attorney for collection of certificates of delinquency
Status: in_force

134.504 Department to collect or contract with county attorney for collection of

certificates of delinquency.

(1) The department shall be responsible for the collection of certificates of delinquency

and personal property certificates of delinquency. The provisions of this section

relating to certificates of delinquency shall also apply to personal property

certificates of delinquency unless otherwise specifically noted. The department shall

offer the collection duties related to certificates of delinquency and personal

property certificates of delinquency to the county attorney in each county, unless the

department determines that a county attorney has previously failed to perform

collection duties in a reasonable and acceptable manner.

(2) Any county attorney desiring to perform the collection duties shall enter into a

contract with the department on an annual basis.

(3) The terms of the contract shall specify the duties to be undertaken by the county

attorney, which shall include, at a minimum, the duties set forth in subsection (4) of

this section. The terms of the contract shall also provide that, if the county attorney

fails to perform the duties required by the contract during the contract period, the

department may assume all collection responsibilities.

(4) The following duties shall be performed by the department or the county attorney,

as the case may be, with regard to each certificate of delinquency:

(a) Within thirty (30) days after the establishment of a certificate of delinquency,

the county attorney or the department shall mail a notice by regular mail to the

owner of record on the assessment date at the address on the records of the

property valuation administrator, or to the in-care-of address if an in-care-of

address is provided as required by subsection (5) of this section. The notice

shall:

1. Include the name, address, and telephone number of a contact person in

the county attorney's office or the department, as the case may be;

2. Advise that:

a. The certificate of delinquency is a lien of record against the

property on which the taxes are due;

b. The amounts due are a personal obligation of the taxpayer on the

assessment date; and

c. The certificate bears interest at the rate of twelve percent (12%)

and, if not paid, will be subject to collection by the county attorney

or the department as provided by law;

3. Include the total amount due as of the date of the notice;

4. Include in bold print in at least twelve (12) point font, a statement

advising the taxpayer that anytime after ninety (90) days from the

creation of the certificate of delinquency, the certificate of delinquency

may be paid by a third-party purchaser and, that if so paid, the certificate

of delinquency will be subject to collection by the third-party purchaser

as provided by law. The notice shall also advise that a third-party

purchaser may impose substantial additional administrative costs and

fees associated with collection in addition to the amount due on the

certificate of delinquency, and that collection actions may include

foreclosure. This provision shall not be included in notices sent for

personal property certificates of delinquency; and

5. Advise that the taxpayer may qualify for a payment plan with the county

attorney or the department, if the taxpayer meets the requirements

established by the county attorney or the department, and if terms are

agreed to prior to the date of the sale;

(b) The county attorney or the department shall file in the office of the county

clerk a list of the names and addresses to which the thirty (30) day notice was

mailed along with a certificate attesting that the notices were mailed in

accordance with the requirements of this section;

(c) 1. All thirty (30) day notices returned as undeliverable shall be submitted

by the county attorney or department to the property valuation

administrator, and a list of the returned notices shall be filed with the

county clerk, who shall record the list in the order book of the county.

2. The property valuation administrator shall attempt to correct inadequate

or erroneous addresses and, if property has been transferred, shall

determine the new owner, current mailing address, and in-care-of

address, if any, as provided in KRS 382.135.

3. The property valuation administrator shall return the notices with the

corrected information to the county attorney or the department within

twenty (20) days of receipt.

4. Upon receipt of the new information from the property valuation

administrator, the county attorney or the department shall resend the

notice required by paragraph (a) of this subsection using the updated

information;

(d) 1. At least twenty (20) days after the mailing of the thirty (30) day notice

required by paragraph (a) of this subsection, but within sixty (60) days

of the establishment of a certificate of delinquency, the county attorney

or department shall send a second notice, by regular mail, to owners of

record whose tax bills remain delinquent, or to the in-care-of addresses

or corrected address, if information regarding a new property owner has

been received by the county attorney or the department under the

provisions of paragraph (c) of this subsection. The notice shall include,

at a minimum, the following information:

a. The name, address, and telephone number of a contact person in

the county attorney's office or the department, as the case may be;

b. A statement that a sale of tax claims will be held by the county

clerk on the date established by the department for the sale. The

text of the statement shall include the actual sale date, as well as a

statement noting that the certificate of delinquency may be paid by

a third-party purchaser at the sale, and if the certificate of

delinquency is paid by a third-party purchaser, it will be subject to

collection by the third-party purchaser as provided by law, that

significant additional collection fees will be imposed by the third-

party purchaser, and that collection actions may include

foreclosure. This statement shall not be included in notices sent to

owners of property subject to a personal property certificate of

delinquency; and

c. A statement that the taxpayer may qualify for a payment plan with

the county attorney or the department, if the taxpayer meets the

requirements established by the county attorney or the department

and if terms are agreed to prior to the date of the sale.

2. The county attorney or the department shall file in the office of the

county clerk a list of the names and addresses to which the sixty (60) day

notice was mailed, along with a certificate attesting that the notices were

mailed in accordance with the requirements of this section.

3. If the notice required by paragraph (c) of this subsection is returned as

undeliverable, and the property valuation administrator is not able to

provide a corrected or updated address, the county attorney or the

department shall address the sixty (60) day notice to "Occupant" and

shall mail the notice to the address of the property to which the

certificate of delinquency applies;

(e) The county attorney or the department shall deliver to the property valuation

administrator, at the same time the notice required by paragraph (d) of this

subsection is sent, a list of the owners whose tax bills remain delinquent. The

property valuation administrator shall review this list in accordance with KRS

132.220 to establish that the properties on the list can be identified and

physically located; and

(f) Anytime after the expiration of the one (1) year tolling period established by

KRS 134.546, the county attorney or department may institute an action to

collect the amount due on a certificate of delinquency owned by the taxing

jurisdictions and in the possession of the county clerk. At least forty-five (45)

days before instituting a legal action, the county attorney or department shall

send, by regular mail, a notice of intent to initiate legal action to enforce the

lien. The notice shall be sent to the owner of record of the property or to the

in-care-of address or corrected address if either has been provided pursuant to

this section.

(5) If property subject to a certificate of delinquency has been transferred in any year

after the assessment date, the property valuation administrator shall determine the

in-care-of address supplied in the deed pursuant to KRS 382.135 and shall provide

that information to the county attorney or the department.

(6) (a) Failure of the county attorney or the department to mail the notices required in

subsection (4) of this section shall not affect the validity of the claim of the

state, county, school district, and taxing district. However, the county attorney

or the department shall not receive any compensation, commission, or

payment related to any certificate of delinquency for which the notices

required by the provisions of subsection (4) of this section are not sent.

(b) For each notice mailed, one dollar ($1) shall be added to the amount of the

certificate of delinquency, to offset the cost of mailing, and, upon collection,

the county attorney or the department shall be paid such amounts as

reimbursement for mailing costs.

(7) (a) As compensation for the collection duties performed pursuant to a contract

with the department, a county attorney shall be paid twenty percent (20%) of

the amount due each taxing unit during the contract period, whether the

amount is paid voluntarily, through sale, or under court order, and whether the

amount is paid to the county clerk or the county attorney. The fee for the

county attorney shall be added to the amount of the certificate of delinquency

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

(b) If payment in full is voluntarily made by the taxpayer to the county attorney or

county clerk within five (5) days of the filing of the tax claim with the county

clerk, the county attorney fee shall be waived.

(c) If a county attorney files a court action or files a cross-claim, the county

attorney shall be paid an additional fee of thirteen percent (13%) of the

amount of the certificate of delinquency and shall be reimbursed for costs

incident to the court action. The additional fee and costs incident to the

litigation shall be added to the certificate of delinquency and shall be paid by

the person paying the certificate of delinquency.

(d) If more than one (1) county attorney renders necessary services to collect on a

certificate of delinquency, the county attorney serving the last notice or

rendering the last substantial service preceding collection shall be entitled to

the fee.

(8) (a) The county attorney shall establish a system to accept installment payments

from delinquent taxpayers. The county attorney may, during the contract

period, enter into an agreement with a delinquent taxpayer to accept

installment payments on the certificates of delinquency. The agreement shall

not waive the county attorney's right to initiate court action or other authorized

collection activities if the taxpayer does not make payments in accordance

with the agreement.

(b) The county attorney may, upon written request of the taxpayer for good cause

and with agreement of the affected taxing jurisdiction or fee recipient, waive

or reduce fees and penalties that are part of a certificate of delinquency during

settlement or negotiation with a taxpayer in accordance with guidance

provided by the department.

(9) Any action by the county attorney authorized by this chapter shall be filed on

relation of the commissioner. A copy of any judgment obtained by the county

attorney shall be sent to the department.

(10) (a) The county attorney shall notify the county clerk and the department of the

filing of a suit at the time the suit is filed and of payment agreements at the

time such agreements are entered into. The county clerk shall note on the

certificate of delinquency the filing of the lawsuit or the existence of the

payment agreement, and these certificates of delinquency shall not be

available for purchase or payment by a third-party purchaser.

(b) The county attorney shall provide to the county clerk at least ten (10) days but

not more than twenty (20) days prior to the annual sale date for the county

established pursuant to KRS 134.128, a protected list of current year

certificates of delinquency that are:

1. Under a payment plan with the county attorney on which payments are

current;

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

county attorney responds or files an answer;

3. Involved in bankruptcy litigation in which the county attorney has filed a

claim; or

4. Included on a list of protected properties submitted to the county

attorney by a vacant property review commission or an alternative

government entity as provided in KRS 99.727.

The list shall include sufficient detail for the county clerk to accurately

identify the property.

(c) The county attorney shall notify the county clerk of the failure of any payment

agreement and, upon notification to the clerk, the certificate of delinquency

shall be available for purchase.

(11) The department may make its delinquent tax collection databases and other

technical resources, including but not limited to tax refund offsetting, available to

the county attorney upon request from the county attorney. The county attorney

seeking assistance shall enter into any agreements required by the department to

protect taxpayer confidentiality, to ensure database integrity, or to address the

concerns of the department.

(12) (a) If a county attorney chooses not to contract for collection duties, or if a county

attorney fails to perform the duties required by the contract, the department

shall assume responsibility for all uncollected certificates of delinquency and

personal property certificates of delinquency, including, at the option of the

department, those with pending court action or for which the county attorney

has entered into an installment payment agreement.

(b) If the department assumes or retains responsibility for the collection of

certificates of delinquency and personal property certificates of delinquency,

the twenty percent (20%) fee that would have been paid to the county attorney

under subsection (7) of this section, and any other fees or costs established by

this section for the county attorney shall be paid to the department for deposit

in the delinquent tax fund provided for under KRS 134.552.