For a couple of years immediately after KY enacted marine sanitation laws, they allowed boats of any size that were already equipped with PuraSans to use them...no official waiver, they just let 'em slide. But those days have been over for several years....they now require boats 66' and over to be equipped with Type IIs.
The PuraSan shouldn't cost anywhere near that much installed...it's available at discount all over the place for somewhere in the $600-$750 range (and you can get at LEAST half that much for it on eBay)...installation is very simple and shouldn't require more than a couple of hours labor.
The Raritan ManaGerm is expensive, but there are other Type IIs for around $2000...equally simple to install in a houseboat. If you're ANY kind of negotiator, you should be able to get the seller to absorb at least half the cost of replacing the PuraSan with one as a condition of sale.
The discharge of raw untreated sewage directly from the toilet and/or dumping a holding tank is illegal in ALL U.S. waters. The discharge of treated waste from a Type I or Type II MSD is legal in all waters except those specifically designated as "no discharge." In "no discharge" waters, toilet waste must be be held in a tank aboard to be emptied only by pumpout. Go here for more information about KY lakes and rivers:
http://www.boat-ed.com/ky/course/p4-13_wastedischarge.htmThe KY Dept of Fish and Wildlife is responsible for enforcing all boating safety, sanitation and pollution laws...however, sheriffs and other local law enforcement personnel may also do at least some of the actual patrol and inspection duties.