Request By:
Rep. Tommy Thompson
House Majority Whip
Opinion
Opinion By: JACK CONWAY, ATTORNEY GENERAL; Matt James, Assistant Attorney General
Statutes construed: KRS 132.285
OAGs cited: OAG 89-87, OAG 90-79, OAG 92-70
Opinion of the Attorney General
House Majority Whip Tommy Thompson has requested an opinion of this office on whether a city may purchase the county assessment made by the property valuation administrator ("PVA") from a third party and use it without compensating the PVA. We advise that a city may not purchase the county assessment made by the property valuation administrator from a third party and use it as the basis for taxation without compensating the property valuation administrator pursuant to KRS 132.285.
KRS 132.220(1) requires all taxable property in a county to be assessed annually by Jan. 1, and KRS 132.420 commits this assessment to the PVA in each county. KRS 132.285(1) provides in relevant part:
[A]ny city may by ordinance elect to use the annual county assessment for property situated within such city as a basis of ad valorem tax levies ordered or approved by the legislative body of the city . . . Each city which elects to use the county assessment shall annually appropriate and pay each fiscal year to the office of the property valuation administrator for deputy and other authorized personnel allowance, supplies, maps and equipment, and other authorized expenses of the office one-half of one cent ($ 0.005) for each one hundred dollars ($ 100) of assessment;
KRS 132.285(1) thus allows cities to use the annual assessment by the PVA as a basis for city taxation, provided that the city compensates the PVA $ 0.005 for each $ 100 of assessment. At issue is whether a party may purchase the PVA's assessment from a third party which has already obtained the PVA's assessment without compensating the PVA.
KRS 133.047(4) provides that the real property documents submitted by a taxpayer are confidential, but that "other real property records in the office of the property valuation administrator shall be subject to the provisions of KRS 61.870 to KRS 61.884," which are the Open Records laws. The property tax rolls of the PVA are thus public records, and requests for them are treated as such. OAG 90-79. KRS 61.874(4)(a) provides that "if copies of nonexempt public records are requested for commercial purposes, the public agency may establish a reasonable fee." KRS 61.874(4)(b) further provides that "[t]he public agency from which copies of nonexempt public records are requested for a commercial purpose may require a certified statement from the requestor stating the commercial purpose for which they shall be used, and may require the requestor to enter into a contract with the agency." KRS 61.874(5)(c) makes it unlawful to obtain public records for a "commercial purpose, if the person uses or knowingly allows the use of the public record for a different commercial purpose. " Thus while the PVA assessments are subject to Open Records requests, if they are requested by a commercial entity, the PVA may request a statement of the commercial purpose from the entity, and enter into a contract with that entity. Should the commercial entity allow the records for a commercial purpose different than the one stated by the entity, the entity would be in violation of KRS 61.874(5)(b).
As applied to this particular situation, a private entity may request the property tax rolls from the PVA for a commercial purpose. The PVA may require a statement of that commercial purpose and a contract, and the private entity is subject to penalties if it deviates from that purpose. Thus a private entity which buys the property tax rolls for its own purposes may not subsequently resell the tax rolls to cities. However, a private entity may brazenly state as its commercial purpose that it intends to resell the tax rolls to cities. In the absence of a statute expressly providing so, resale restrictions on public records have been found not to be protected from antitrust actions by state action immunity.
First American Title Co. v. Devaugh, 480 F.3d 438, 459-60 (6th Cir. 2007). See also
Wiles v. Ascom Transport System, Inc., 478 Fed.Appx. 283, 292-93 (6th Cir. 2012) (allowing resale of personal information authorized for disclosure by Kentucky's Driver Privacy Protection Act). Further, this office "has consistently recognized that under the Open Records Law, all persons have the same standing to inspect public records and that the purpose for which an individual requests those records is irrelevant." 08-ORD-261; OAG 89-87. Thus a public agency may not prohibit resale of public records in general.
While a public agency may not prohibit resale of public records, if a city purchases the PVA's assessment from a third party and uses it, the city would owe the PVA the compensation due in KRS 132.285(1). In OAG 92-70, we addressed the issue of cities who were purchasing the assessment for one year and then using the same assessment as the basis for successive years, without compensating the PVA. We advised that "a city 'elects' to use a PVA's assessment if, in fact, the city uses the PVA's assessment as the basis for its own assessments." Id. Accordingly, we advise that if a city in fact uses the PVA's assessment, whether purchased from the PVA or a third party, the city owes the PVA compensation under KRS 132.285(1). A city purchasing the PVA's assessment from a third party would thus be paying twice for the same assessment.
In sum, if a city in fact uses a property valuation administrator's assessment as the basis for its own taxation, whether purchased from a property valuation administrator or a third party, the city owes the property valuation administrator the compensation due under KRS 132.285.