Request By:
Mr. Donald W. Blevins
Fayette County Clerk
Fayette County Courthouse
Lexington, Kentucky 40507
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Susan G. Leavenworth, Assistant Attorney General
Your letter requested an opinion regarding filing of liens on motor vehicles under the Automated Vehicle Information System (AVIS). You stated in your letter that the AVIS is programmed to take up to six liens; however, a programming plug is in place to restrict the input to two liens.
KRS 186A.060 requires that the form, utilized in connection with the registration or titling of vehicles in the state, contain certain specified information. KRS 186A.060(14)(a) requires that the form contain a lien information section with the elements necessary to ascertain that the vehicle is "subject to lien or liens, not exceeding two (2), in the name of the applicant, owner or transferee". KRS 186.045(10) states, in part, as follows:
The county clerk is prohibited from filing any financing statement on any vehicle subject to the provisions of this section if a certificate of registration and ownership or transfer receipt therefor is presented to him which has all the spaces provided thereon for noting security interests fully exhausted.
KRS 186A.190(3) provides that "no more than two (2) active financing statements as provided by KRS Chapter 355 may be recorded upon a certificate of title".
Effective July 15, 1982, pursuant to KRS 134.148(2) the county clerk may file a lien on vehicles on behalf of the state, county, city, special district and school district and record such lien on the face of the certificate of title and registration in the manner in which lis pendens are recorded. Prior to July 15, 1982, the filing of liens was mandatory as KRS 134.148(2) stated that the "clerk shall file a lien" . (Emphasis added).
Your first question is as follows:
Where a clerk chooses to file liens on motor vehicles for unpaid personal property taxes under KRS 134.148(2), can AVIS legally store more than two liens?
KRS 186A.190(3), KRS 186A.060(14)(a), and KRS 186.045 prohibit the county clerk from listing more than two liens on the certificate of title in connection with the registration or titling of the vehicles. KRS 186A.190(3) and KRS 186.045(1) refer to active financing statements, while KRS 186A.060(14)(a) refers to liens in general, however the information in that section required to be filed in conjunction with the liens indicates the legislature intended its restriction of two liens apply only to commercial liens. In particular, KRS 186A.190(3) refers to financing statements provided for by KRS Chapter 355. KRS 355.9-102(2) provides that KRS Chapter 355 does not apply to statutory liens except as provided in KRS 355.9-310 (that section applies to liens for repairs on motor vehicles and is not relevant to the present situation). Unpaid property taxes would be statutory liens. Although the statutes provide a limit to the number of commercial liens that can be listed on a certificate of title, there is no such limit to the number of statutory liens. There is no restriction from placing any type of indicator on the certificate of title that other liens exist.
Your second question is as follows:
Where a certificate of registration has a security agreement lien filed as lien #1 and a clerk's lien for unpaid taxes filed but not appearing on the certificate of registration and a second lien is requested by a filed security agreement, does the clerk reject the second security agreement lien or does the clerk ignore the tax lien and file the second security agreement lien and record same on the certificate of registration?
The form utilized in connection with registration or titling of vehicles, set out in KRS 186A.060, provides spaces for listing lien information. The form does not specify commercial or tax liens. Under KRS 134.148(2), the decision to file and record the lien on the face of the certificate of title and registration is discretionary and not mandatory.
The change in KRS 134.148(2) and the new section, KRS 134.810, were enacted under House Bill 807. As of January 1, 1984, there was a conflict between the two provisions to the extent that one is discretionary and the other is mandatory. In Gish v. Shaver, 140 Ky. 647, 131 S.W. 515 (1910), the Court held that where there is an irreconcilable conflict between different parts of the same act, the last in order of position must control. KRS 134.810 is the last in order of position. More importantly, KRS 134.810 mentions specifically the state ad valorem taxes on motor vehicles, while KRS 134.148(2) only makes a general reference to taxes. The rule is generally that a statute with specific provisions controls over one with general references to the same subject. Therefore, the filing of a lien was mandatory as of January 1, 1984. Since commercial liens were referred to in KRS 186A.190(3), 186A.060(14), and 186.045, the clerk should place these on the certificate of title, if they exist, and then after any commercial liens are listed, the clerk should place the tax liens on the certificate where space permits or into the computer.
Your third question is as follows:
Where two liens are already filed against a motor vehicle and the clerk attempts to file a lien for taxes unpaid and the AVIS system will not accept the lien, what is the clerk's responsibility thereafter?
KRS 186A.010 requires that the Transportation Cabinet develop an automated system having the capabilities and functions described in KRS Chapter 186A. One of the functions is to provide an information data base to improve efficiency in collection of personal property tax. If the AVIS system does not have the technical capabilities to store more than two liens and there is no other place to store the information, then obviously the clerk cannot store the additional lien and will be responsible to file them in some other form as well as filing it in the same manner as lis pendens are filed.
Your fourth and final question is as follows:
Is each tax year a separate lien for unpaid taxes?
KRS 134.148(2) states that the sheriff may provide the county clerk with a list of delinquent taxpayers after he had made his settlement with the fiscal court. That settlement is made annually pursuant to KRS 134.310. KRS 134.148(2) states that the clerk may file a lien and that the delinquent tax bills shall be subject to interest from the date the lien is filed until paid. The two sections read together indicate that each tax year is a separate lien for unpaid taxes.