"Until the last few years, no one would come to the sales and no one would send a letter," she said. "There was zero interest or participation."
But over the last three or four years, five to six people have bid on the bills, Bottom said.
Recent buyers have included Danville businessmen; Community Bancshares, which is the holding comany of PBK of Stanford; and Dr. William P. Grise, a Richmond physician, Bottom said, adding that Grise has been a regular bidder.
To give an idea of the size of delinquent tax bills for which bids have been offered, Bottom showed a letter sent from the Richmond doctor prior to the 2005 sale in which he said he wanted to buy a half dozen bills ranging from $2,060.10 to $5,830.47.
This year, the sheriff's department, which collects taxes for the city of Danville, county government, the county school board, the state and most other local taxing districts, has a total of 12,888 tax bills representing a total of about $10 million in taxes, Bottom said. Of those amounts, some 717 are delinquent tax bills representing about $150,000, she said.
Limited number of tax bills for sale
But under a complicated, if not quirky, formula laid down by the state, only a fraction of the delinquent tax bills can be sold each year, said Sheriff LeeRoy Hardin.
"The state only allows up to 10 percent of the total amount of taxes owed to be sold by us, so that means we're talking about some $15,000 out of the $150,000 in delinquent tax money for us this year that would be available for sale," he said. "If the prospective buyers want to purchase bills totaling more than 10 percent of the total amount owed, then we have to cancel the sale."
In the event of a cancellation, the state buys the tax bills that the prospective buyers wanted to purchase and sends a check for the amount to the sheriff's department, Hardin said.
"If the buyers wanted to buy, say, $20,000 in delinquent tax bills but couldn't because that would be $5,000 over the limit, the state will buy all those bills and pay us the $20,000," he said.
As for the balance of the delinquent tax bills - the ones that are not bought by private indiviuals or companies at a sale or purchased by the state when there is a cancellation of the sale - the county attorney or attorneys representing the state Revenue Cabinet go to the county clerk's office and place liens on those properties, Hardin said. A lien prevents a property owner from selling the property.
In most cases, the county attorney is the one who decides when legal action beyond the placing of a lien is necessary, Hardin said.
If a sale is held and potential buyers make their purchases, the buyers have the county clerk place liens on the property whose tax bills they have purchased, he said. State law also allows the buyers to charge interest of up to 12 percent on the property owners when and if they pay the bills, he said.
"We are guided and governed by state law and the state Revenue Department throughout this whole process," Hardin said. "We are just selling delinquent tax bills. We're not setting the property owners out of their houses. And once a bill is bought, what happens from then on out is between the person or company who bought the bill and the property owner."
The sheriff's department isn't the only local governmental unit that has sold delinquent tax bills. The Danville school district, which collects its own taxes, also has done it.
"We have held three public auctions, and last year was the first time we ever sold any of our delinquent tax bills," said Patsy Clevenger, financial officer for the district. "We sold $22,000 worth of delinquent tax bills on 12 to 18 pieces of property to Community Bancshares in Stanford."
Clevenger said interest in buying delinquent tax bills appears to be growing. "We already have had three calls about our sale in late March," she said. "That may not seem like a lot, but it's three more than were interested in our first sale three years ago."