Current through Register Vol. 50, No. 6, December 1, 2023
RELATES TO:
KRS
134.128,
134.129
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
134.129(2) requires a person
to hold a certificate of registration from the Department of Revenue prior to
the payment of any certificate of delinquency that results in the person owning
more than five (5) certificates of delinquency statewide, more than three (3)
certificates of delinquency in any county, or investing more than $10,000 in
the payment of certificates of delinquency statewide in a calendar year.
KRS
134.129(3) requires the
Department of Revenue to promulgate administrative regulations to establish
registration requirements, an application process, and an administrative fee to
offset the cost of processing and reviewing the application for a certificate
of registration.
KRS
134.128(2)(d) 3 requires the
department to define "related entities" and "related interests" for the purpose
of regulating the sale of certificates of delinquency. This administrative
regulation establishes the registration requirements and application process
for persons to hold a certificate of registration prior to the payment of a
certificate of delinquency.
Section 1.
Definitions.
(1) "Affiliate" means any person
who directly or indirectly through one (1) or more intermediaries controls, is
controlled by, or is under the common control with, another person.
(2) "Agent" means a person authorized by
agreement with a registrant to act on behalf of a registrant.
(3) "Applicant" means a person filing a
complete application.
(4)
"Application" means an Application for Certificate of Registration to Purchase
Certificates of Delinquency, Form number 62A370A.
(5) "Commissioner" means the Commissioner of
the Department, or his or her designee.
(6) "Control" means:
(a) Ownership of, or the power to vote,
directly or indirectly, twenty-five (25) percent or more of a class of voting
securities or voting interests of a registrant or applicant, or person in
control of a registrant or applicant;
(b) The power to elect a majority of
executive officers, managers, directors, trustees, or other person exercising
managerial authority of a registrant or applicant;
(c) The power to exercise influence, directly
or indirectly, over the management or policies of a registrant or
applicant;
(d) Holding the position
of an officer, director, general partner, or managing member of the registrant
or the applicant or in a position of similar status or performing similar
duties and functions of the registrant or the applicant; or
(e) Being entitled to receive twenty-five
(25) percent or more of the profits from the registrant or applicant.
(7) "Department" means the
Kentucky Department of Revenue.
(8)
"Person" means any individual, corporation, business trust, estate, trust
partnership, limited liability company, association, organization, joint
venture, government or any subdivision, agency or instrumentality thereof, or
any other legal or commercial entity.
(9) "Registrant" means a person registered to
purchase a certificate of delinquency.
(10) "Related entities" or "related
interests" means a relationship between two persons in which a person:
(a) Can exercise control or significant
influence over another person;
(b)
Is related by blood, adoption, or marriage to another person;
(c) Controls or is controlled by another
person; or
(d) Is an agent or
affiliate of another person.
Section 2. Registration Requirement.
(1) A person required by
KRS
134.129(1) to register
annually shall file a notarized application with the department at least sixty
(60) days prior to the purchase of any certificate of delinquency that requires
registration under
KRS
134.129 and this administrative
regulation.
(2) Pursuant to
KRS
134.129(4), the department
shall consider the following criteria and information in its review and
evaluation of an application:
(a) The
applicant and its directors, officers, members, and managers shall:
1. Be current and in good standing on all
taxes owed to the Commonwealth;
2.
Be in good standing with regard to operations under a previously issued
certificate of registration;
3. Not
have previously operated without obtaining a certificate of registration under
KRS 134.139 under circumstances that required registration; and
4. Have a satisfactory record with the Office
of Consumer Protection within the Office of the Attorney General. A record
shall be considered satisfactory if the Office of the Attorney General has not
filed a civil or criminal complaint against or entered into an Assurance of
Voluntary Compliance with the applicant or registrant that resulted in an
injunction, judgment, or order which contained a finding of fact or conclusion
of law that the applicant or registrant violated any provision of KRS Chapter
360, 365, 367, or 380;
(b) If the person is a related entity or has
related interests with another person that is registered or intends to register
with the department;
(c) If persons
with related interests or related entities to the applicant meet the criteria
established by
KRS
134.129(4) and this
administrative regulation;
(d) If
the applicant is not an individual, whether the applicant is in good standing
in the state of incorporation or formation; and
(e) If required by law to register to conduct
business in the Commonwealth, if the applicant is in good standing with the
Kentucky Secretary of State.
(3) The commissioner may permit an applicant
to submit substituted information in lieu of the information required by this
section or application if the required information is not available.
(4) Every nonindividual applicant, at the
time of the filing of the application and after a certificate of registration
is issued, shall be in good standing in the state of its incorporation or
formation.
(5) Every applicant, at
the time of the filing of the application and after a certificate of
registration is issued, shall be registered and qualified to do business in
this Commonwealth, and be in good standing with the Kentucky Secretary of
State.
Section 3. Review
of Application.
(1) The department shall
review and investigate any matter related to an application to determine if the
applicant meets the requirements of
KRS
134.129 and this administrative
regulation.
(2) The department
shall approve an application and issue a certificate of registration to an
applicant if the applicant meets the requirements of
KRS
134.129 and this administrative
regulation.
(3) The department
shall deny the application and refuse to issue a certificate of registration if
the applicant does not meet one or more of the requirements as set forth in
KRS
134.129 and this administrative
regulation.
(4) All certificates of
registration shall expire on December 31 in the calendar year in which they are
issued regardless of the date of issuance.
(5) A certificate of registration shall be
not be transferred or assigned.
(6)
The department shall deem an application abandoned if the applicant fails to:
(a) File a complete application;
(b) Timely provide any information required
by this administrative regulation or requested by the department, or
(c) Pay the processing fee required by this
administrative regulation.
Section 4. Denial, Suspension, or Revocation
of Registration.
(1) The department shall
revoke, suspend, refuse to issue a registration, or accept surrender of a
registration in lieu of revocation or suspension, if the department finds that
the person, applicant, or registrant:
(a)
Failed to comply with the requirements of
KRS
134.129 and this administrative
regulation;
(b) Does not conduct
business in accordance with the law;
(c) Is guilty of fraud in connection with any
transaction governed by
KRS
134.129 and this administrative
regulation;
(d) Has made any
misrepresentations or false statements to or concealed any essential or
material fact or has suppressed or withheld from the department any information
which, if it had been properly and timely submitted or disclosed to the
department, would have rendered the person ineligible to be registered under
this administrative regulation;
(e)
Has refused to permit an examination or investigation by the department of his
or her books and affairs or has refused within a reasonable time to furnish any
information or make any disclosure that may be required by the department under
the provisions of this administrative regulation;
(f) Has abandoned an application by failing
to provide the department any information required or requested by the
department under this administrative regulation to complete an
application;
(g) Has employed or
contracted with a person who has had an application denied or certificate of
registration revoked or suspended under this administrative
regulation;
(h) Has failed to pay
any required fee under this administrative regulation;
(i) Has failed to pay any state tax or to
comply with any administrative or court order directing the payment of state
tax; or
(j) Has violated any
provision under this administrative regulation or order issued by the
commissioner.
(2) Any
person whose registration has been denied, suspended, revoked, or surrendered
in lieu of revocation or suspension shall not participate in any business
activity of a registrant under this administrative regulation and shall not
engage in any business activity on the premises where a registrant under this
administrative regulation is conducting its business.
(3) Any person who has had his or her
application denied by the department shall not file another application until
January 1 of the year following the denial.
(4) Any person who has had his or her
certificate of registration revoked twice shall be permanently barred from
applying for a certificate of registration.
(5) The commissioner may enter into a consent
order with another person at any time for the purpose of resolving a matter
arising under this administrative regulation. A consent order shall be signed
by the person to whom it is issued or by the person's authorized representative
and shall indicate agreement with the terms contained in the order.
(6) Any consent order that the commissioner
enters into to resolve a matter arising under this administrative regulation
shall be deemed an administrative action and a public record.
(7) The commissioner shall stay, suspend, or
postpone the effective date of an order issued under this administrative
regulation, pending the administrative proceeding and the issuance of a final
order resulting from the proceeding, upon written request by the affected
person or licensee.
(8) The
surrender or expiration of a registration shall not affect the registrant's
civil or criminal liability for acts committed prior to the surrender or
expiration. The surrender or expiration of a registration shall not affect a
proceeding to revoke or suspend a registration.
Section 5. Notice and Right of Appeal.
(1)
(a) The
department shall provide written notice to:
1.
An applicant if an application is denied; or
2. A registrant if a certificate of
registration is suspended or revoked.
(b) The notice shall be sent by certified
mail or personal delivery to the last known address of the applicant or
registrant, as provided by the applicant or registrant, according to the
records of the department.
(c) An
applicant or registrant shall be deemed to have received a copy of the written
notice three (3) business days following the mailing thereof.
(2) Any applicant or registrant
who has had his or her application denied or registration suspended or revoked
may file a written request for a hearing.
(3) A written request for a hearing shall:
(a) Be filed with the department within (10)
ten days of the date of the denial, suspension, or revocation;
(b) Shall be made in good faith;
and
(c) Briefly state the reason or
reasons the person is aggrieved, together with the grounds to be relied upon as
a basis for the relief to be sought at the hearing.
(4) A hearing shall be held within ten (10)
days of the receipt of the written request for a hearing unless the parties
agree otherwise.
(5) The
commissioner shall appoint a hearing officer to preside over the matter. The
hearing officer shall issue a recommended order within twenty-one (21) days of
the hearing.
(6) The commissioner
shall issue a final order within five (5) days of the issuance of the
recommended order by the hearing officer.
(7) Any person aggrieved by the decision of
the commissioner may file an appeal to the Franklin Circuit Court within thirty
(30) days of the issuance of the final order.
Section 6. Fees. Each application shall be
accompanied by a nonrefundable processing fee in the amount of $250.
Section 7. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) "Application for Certificate of
Registration to Purchase Certificates of Delinquency", November 2009;
and
(b) "Certificate of
Registration", November 2009.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Department of Revenue,
501 High Street, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 5
p.m.
36 Ky.R. 1394;
2040-A; eff. 4-2-2010; Crt eff. 6-7-2019.
STATUTORY AUTHORITY:
KRS
134.128(2) 3,
134.19(3)