Senate committee advances bill allowing registered local entities to buy delinquent tax certificates on vacant Louisville homes

Senate Bill 129, intended to spur redevelopment of vacant and abandoned residential properties in Louisville Metro, passed out of the Senate standing committee on Economic Development, Tourism and Labor with a favorable recommendation.

The bill creates a program under which certain qualified third-party purchasers — including political subdivisions operating in Louisville Metro, state or local agencies, boards or commissions operating in Louisville Metro, quasi‑governmental entities created by or operating in Louisville Metro, and nonprofit organizations registered with the Kentucky Secretary of State for at least five years — may purchase certificates of delinquent taxes on vacant and abandoned residential properties 90 days after the certificate is created. The bill requires the Kentucky Department of Revenue to register qualifying purchasers, maintain a list of registrants, and promulgate rules setting procedures for sale and purchase of those certificates.

“This is another small way that we can get properties back functioning in our, in our largest state in the Commonwealth and get affordable housing to those folks,” Senator Mills said while presenting the bill on behalf of absent sponsor Senator Rocky Adams.

Supporters told the committee the change builds on earlier General Assembly work to remove blighted properties from tax-delinquent status and return them to productive use. Senator Yates, a member of the housing task force that recommended the change, urged the committee to adopt the proposal as “another tool in the toolbox.”

Committee members raised concerns about homeowner impacts. Senator Boswell noted scenarios in which small tax debts for elderly property owners can balloon into far larger obligations through fees and foreclosure costs, saying the committee must “be careful” to protect vulnerable owners.

Under the bill, entities that purchase delinquent tax certificates remain subject to existing collections and foreclosure rules that apply to other third‑party purchasers. The bill specifies the program will apply only to vacant and abandoned residential properties and requires registration with the Department of Revenue.

The committee adopted a committee substitute for the bill and then voted to advance it with a favorable recommendation.

Votes at a glance: Senate Bill 129 — committee substitute adopted; advanced with favorable recommendation.

Provenance: The committee discussion introducing SB 129 begins in the transcript where Chair Wheeler calls for Senator Mills to present (transcript segment starting at 35.65 seconds) and ends after the roll call and final comments recorded when Senator Thomas later registers his vote in favor (segment near 895.28 seconds).