Request By:
Mr. Gary W. Brittain
County Attorney
Knox County
P.O. Box 136
Barbourville, Kentucky 40906
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Alex W. Rose, Assistant Attorney General
In your letter to the Attorney General, you set out the following situation:
Knox County issued Industrial Revenue Bonds for the construction of an industrial project. This project was then leased to Plastics Universal Corporation. The lease agreement provided that the corporation would make payments to Knox County and to the school board in lieu of taxes. The lease was assigned to Bituminous-Laurel Mining, Inc. The payments in lieu of taxes for the years 1978-1981, inclusive, were never made. You participated in the procedures necessary to collect these payments.
You wish to know whether you are entitled to a 20% fee for your efforts in the collection of these payments.
Industrial revenue bonds are issued pursuant to KRS Chapter 103. Property owned and financed by a tax-exempt governmental unit (here, Knox County) is exempt from ad valorem property taxation. (The leasehold interest in such property is, however, subject to tax under KRS 132.020.)
In the lease arrangements, the corporation agreed to make payments to the county and the school board. These payments were not required by statute and resulted from lease negotiations between the parties. The payments are not taxes.
KRS 134.500 allows the county attorney a fee of 20% of delinquent tax claims that he collects. However, these tax claims arise under specific statutory provisions relating to certificates of delinquency (see KRS Chapter 134).
Since the payments made pursuant to the lease do not arise under KRS Chapter 134, the county attorney is not allowed the 20% fee for the collecting of these payments.