KRS 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 delinquenc y. 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 del inquency 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 coun ty 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 re quired 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 nin ety (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 prov ided 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 m ay 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 thirt y (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 bi lls 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 certifi cate 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 t he 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 i s 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 addres s 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 expira tion 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 cl erk. 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 pro perty 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 adminis trator 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 ma iling, 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 shal l 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 ne gotiation 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 (1 0) 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 pa yments 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 pro tected 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 datab ases 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 departmen t 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.