KentuckyHB 6002026 Regular SessionHouseWALLET

AN ACT relating to the collection of delinquent tax bills.

Sponsored By: Mary Beth Imes (Republican)

Signed by Governor

Attorney, CountyCountiesState AgenciesTaxationTaxation, PropertyLocal Mandate

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Bill Overview

Analyzed Economic Effects

12 provisions identified: 3 benefits, 5 costs, 4 mixed.

Higher collection fees and court costs

If the county attorney collects, a 20% fee is added to what you owe for each taxing unit. That 20% is waived only if you pay in full within five days of filing. If the attorney sues, you also owe the greater of documented reasonable attorney fees and costs or an extra 13% of the certificate amount; fees up to $2,000 are presumed reasonable. To get a pre‑judgment release of the property, you must pay the taxes, interest, attorney fees, and court costs. If more than one county attorney worked the case, the one who last served notice or did the last major work gets the fee.

Cities can sue and force a sale

If city land taxes stay unpaid for six months, the city can sue in Circuit Court and use in‑rem actions against the property. The petition must list each parcel and all recorded interests, and other tax cases about the same land are merged into this case. The city must publish notice twice within 30 days of filing and send certified mail to recorded tax holders; you have 50 days after first publication to file an answer. The tax bill and filed affidavits are prima facie proof unless you file a verified challenge. Trials are by a judge and not stayed by appeal; the court sets a master‑commissioner sale once amounts and lien priorities are decided, and taxing units can cross‑claim for immediate ad valorem taxes.

Redemption, appeals, and sale proceeds

You can pay the full amount before the sale to discharge the lien or satisfy the judgment. If the sale price is less than the most recent certified assessed value, you can redeem within 60 days by paying the purchaser the original price plus 18% yearly interest, pro‑rated by days. The court applies sale money first to costs, then to all tax bills; unclaimed money after two years goes to the state. The latest certified assessment must be filed and used to gauge redemption equity. Appeals of a sale confirmation must be filed within 30 days and use the same bond rules as appeals from the sale judgment. The particular estate must be offered first, future estates are protected from undervalued sales, and if a city buys the property it decides how to use or dispose of it.

Stronger final title after tax sales

After a court confirms a tax sale and the redemption period ends, the buyer gets full ownership and immediate possession. The new title is still subject to some tax liens that attached before the case or before redemption ended, and to any U.S. redemption right; special tax-bill liens go to the sale proceeds. If a city or land bank buys, liens are cleared only up to the taxing authority’s interest. The collector, any interested person, or someone acting for a person found of unsound mind can appeal a confirmation or disapproval. But an appeal cannot raise issues that could have been raised from the original judgment of sale.

Payment plans and stop third‑party buys

County attorneys must accept installment payments and may enter payment plans. You can ask in writing to waive or reduce fees and penalties for good cause if the taxing unit agrees, and default can still lead to court action. When a lawsuit is filed or a payment plan exists, the clerk marks the certificate and it cannot be sold to third‑party buyers. 10 to 20 days before the annual sale, the county attorney sends a protected list so certificates on active plans, in litigation, with a county bankruptcy claim, or on a vacant‑property list are not sold. If required notices are not mailed, the tax claim still stands, but the collector gets no commission or compensation on that certificate.

Cities can use commissioner sales

Urban‑county governments and home‑rule cities can use the commissioner’s sale process to collect any taxes they are owed. These actions must follow the statute of limitations in KRS 134.546. This expands the use of court‑ordered sales to collect delinquent taxes.

Early notices, 12% interest, $1 fee

Within 30 days of a delinquent tax certificate, the county attorney or the state mails you a notice that says the debt is a lien and earns 12% yearly interest. A second notice goes out within 60 days and warns of the sale date and possible extra fees if a third party pays your bill. If a notice comes back, the property valuation office has 20 days to fix the address, and the notice must be resent. You pay an extra $1 for each notice mailed. After a one‑year tolling period, you get a 45‑day warning before a lawsuit can be filed.

State takes over delinquent tax collections

Contracts with county attorneys must list collection duties, and the Department of Revenue can take over if duties are not performed or no contract is made. The takeover includes pending lawsuits and active payment plans. The 20% collection fee is paid to the Department’s delinquent tax fund when it assumes collections. The Department can share delinquent‑tax databases and refund‑offset tools with county attorneys who sign confidentiality and data‑protection agreements.

Extra safeguards for minors and disabled

The law bars taking a minor’s or an adjudicated disabled person’s personal belongings to pay real‑property taxes. A court must appoint a guardian ad litem before selling that person’s real estate during the disability. If the property was inherited, gifted, from a decedent’s settlement, or owned before adjudication, it cannot be sold only for taxes and costs for less than its certified assessed value.

Clearer public lists of tax delinquents

Each July, cities prepare a list of unpaid property tax bills with parcel details and interest and penalty rates. The list also shows when a lawsuit was filed, the case number, and the date. The tax bill itself must be marked when a case is filed. Courts index each parcel separately so people can find case records by property.

County and state share collections duties

Counties can use state rules to collect any county tax bill, within the statute of limitations. The state offers collection work to county attorneys unless past performance was poor. County attorneys must sign a new contract each year to do this work.

$0.50 clerk fee per parcel

In a tax enforcement case, the circuit clerk charges $0.50 for each separately indexed parcel. This amount is taxed and paid as court costs. Your total equals $0.50 times the number of indexed parcels.

Sponsors & Cosponsors

Sponsor

Mary Beth Imes
Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 119 • No: 12

Senate vote • 3/25/2026

3rd reading, passed

Yes: 37 • No: 1

House vote • 3/5/2026