Request By:
Mr. Lawrence J. Phillips
Assistant County Attorney
Jefferson County
Delinquent Tax Division
1129 Kentucky Home Life Building
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; By Alex W. Rose, Assistant Attorney General
In your letter to the Attorney General you ask for an opinion concerning KRS 91.514. Specifically, you wish to know if the City of Louisville may refuse to have property sold subject to unpaid state and county tax liens.
KRS 91.514 is part of a procedure whereby a city of the first class may collect delinquent city taxes. The procedure is outlined in KRS 91.481 through 91.527. The city may file a petition to force the sale of property on which the city has a tax lien. The city must join all parties having an interest in the property. See KRS 91.491. This includes the state and county. KRS 91.514 applies after a hearing is held on the petition. Subsection (1) provides that after the sale, the purchaser shall have an absolute estate in fee simple. Since the state was a party in the suit, it has lost no rights. This subsection merely gives the purchaser a fee simple title free from liens. Subsection (2) applies to tax bills that are not yet delinquent when the petition is filed. In other words, those tax bills and the affected property that are in between the delinquency date and the date of the petition cannot have their liens extinguished and, if sold, these liens will follow the title. Subsection (3) provides that if the city purchases the property it shall be free of all liens.
Neither subsection (1) nor (3) adversely affects the state or county liens. This procedure merely gives the city a method of selling property for delinquent taxes. Since other taxing districts must be made parties to the suit, they may protect their interests. The court must determine the disposition of the proceeds, following the provisions of KRS 91.517.
The lien provided in KRS 134.420(1) is not in conflict with these statutes. That lien is of equal rank for the state, county and city. The above statutes provide a method for the city to enforce its lien, but as stated above, all other taxing districts must be made parties.
KRS 134.470 and 91.514(1) must be read in para materia. The intent of KRS 91.514 is to allow the city to force the sale of the property. A certificate of delinquency may be enforced against any property of the delinquent taxpayer. However, against the property involved in the suit, KRS 91.514(1) would extinguish the state lien against that property, although the state would have the right to defend its lien and possibly receive some proceeds from the sale.