CHAPTER 65 General Provisions Applicable to Counties, Cities, and Other Local Units

Miscellaneous General Provisions

65.003. Codes of ethics for city, county, charter county, urban-county government, and consolidated local government officials and employees — Codes of ethics for boards, officers, and employees of special purpose governmental entities — Interlocal agreements — Delegation of council’s subpoena power to investigate code of ethics violations.

    1. The governing body of each city, county, urban-county, consolidated local government, and charter county, shall adopt, by ordinance, a code of ethics which shall apply to all elected officials of the city, county, urban-county, consolidated local government, or charter county, and to appointed officials and employees of the city, county, urban-county, consolidated local government, or charter county government, or agencies created jointly, as specified in the code of ethics. The elected officials of a city, county, or consolidated local government to which a code of ethics shall apply include the mayor, county judge/executive, members of the governing body, county clerk, county attorney, sheriff, jailer, coroner, surveyor, and constable but do not include members of any school board. Agencies created jointly may include planning or administrative commissions or boards. Candidates for the local government elective offices specified in this subsection shall comply with the annual financial disclosure statement filing requirements contained in the code of ethics. (1) (a) The governing body of each city, county, urban-county, consolidated local government, and charter county, shall adopt, by ordinance, a code of ethics which shall apply to all elected officials of the city, county, urban-county, consolidated local government, or charter county, and to appointed officials and employees of the city, county, urban-county, consolidated local government, or charter county government, or agencies created jointly, as specified in the code of ethics. The elected officials of a city, county, or consolidated local government to which a code of ethics shall apply include the mayor, county judge/executive, members of the governing body, county clerk, county attorney, sheriff, jailer, coroner, surveyor, and constable but do not include members of any school board. Agencies created jointly may include planning or administrative commissions or boards. Candidates for the local government elective offices specified in this subsection shall comply with the annual financial disclosure statement filing requirements contained in the code of ethics.
    2. The boards, officers, and employees of special purpose governmental entities shall be subject to a code of ethics as provided in KRS 65A.070 . As used in this section, special purpose governmental entity has the same meaning as in KRS 65A.010 .
  1. Any city, county, or consolidated local government may enter into a memorandum of agreement or an interlocal agreement with one (1) or more other cities, counties, or consolidated local governments for joint adoption of a code of ethics which shall apply to all elected officials of the cities, counties, or consolidated local governments, and to appointed officials and employees as specified by each of the cities, counties, or consolidated local governments which enters into the agreement. Interlocal agreements shall be executed pursuant to the Interlocal Cooperation Act in KRS 65.210 to 65.300 . The interlocal agreement or memorandum of agreement may provide for but shall not be limited to:
    1. The provision of administrative services relating to the implementation of a code of ethics;
    2. The creation of a regional ethics board which serves independently to provide advice to member governments and their officials and provides for the enforcement of locally adopted codes of ethics; and
    3. Contracting by a memorandum of agreement with an area development district for the provision of administrative services relating to the implementation of a code of ethics. Candidates for the city, county, or consolidated local government elective offices specified in this subsection shall comply with the annual financial disclosure statement filing requirements contained in the code of ethics.
  2. Each code of ethics adopted as provided by subsection (1) or (2) of this section, or amended as provided by subsection (4) of this section, shall include but not be limited to provisions which set forth:
    1. Standards of conduct for elected and appointed officials and employees;
    2. Requirements for creation of financial disclosure statements, which shall be filed annually by all candidates for the city, county, or consolidated local government elective offices specified in subsection (1) of this section, elected officials of each city, county, or consolidated local government, and other officials or employees of the city, county, or consolidated local government, as specified in the code of ethics, and which shall be filed with the person or group responsible for enforcement of the code of ethics;
    3. A policy on the employment of members of the families of officials or employees of the city, county, or consolidated local government, as specified in the code of ethics;
    4. The designation of a person or group who shall be responsible for enforcement of the code of ethics, including maintenance of financial disclosure statements, all of which shall be available for public inspection, receipt of complaints alleging possible violations of the code of ethics, issuance of opinions in response to inquiries relating to the code of ethics, investigation of possible violations of the code of ethics, and imposition of penalties provided in the code of ethics.
  3. The code of ethics ordinance adopted by a city, county, or consolidated local government may be amended but shall not be repealed.
    1. Within twenty-one (21) days of the adoption of the code of ethics required by this section, each city, county, or consolidated local government shall deliver a copy of the ordinance by which the code was adopted and proof of publication in accordance with KRS Chapter 424 to the Department for Local Government. The Department for Local Government shall maintain the ordinances as public records and shall maintain a list of city, county, or consolidated local governments which have adopted a code of ethics and a list of those which have not adopted a code of ethics. (5) (a) Within twenty-one (21) days of the adoption of the code of ethics required by this section, each city, county, or consolidated local government shall deliver a copy of the ordinance by which the code was adopted and proof of publication in accordance with KRS Chapter 424 to the Department for Local Government. The Department for Local Government shall maintain the ordinances as public records and shall maintain a list of city, county, or consolidated local governments which have adopted a code of ethics and a list of those which have not adopted a code of ethics.
    2. Within twenty-one (21) days of the amendment of a code of ethics required by this section, each city, county, or consolidated local government shall:
      1. Deliver a copy of the ordinance by which the code was amended and proof of publication in accordance with KRS Chapter 424 to the Department for Local Government, which shall maintain the amendment with the ordinance by which the code was adopted; and
      2. Deliver a copy of the ordinance by which the code was amended to the governing body of each special purpose governmental entity that follows that establishing entity’s code of ethics pursuant to KRS 65A.070 .
    3. For ordinances adopting or amending a code of ethics under this section, cities of the first class and consolidated local governments shall comply with the publication requirements of KRS 83A.060(9), notwithstanding the exception contained in that statute.
  4. If a city, county, or consolidated local government fails to comply with the requirements of this section, the Department for Local Government shall notify all state agencies, including area development districts, which deliver services or payments of money from the Commonwealth to the city, county, or consolidated local government. Those agencies shall suspend delivery of all services or payments to the city, county, or consolidated local government which fails to comply with the requirements of this section. The Department for Local Government shall immediately notify those same agencies when the city, county, or consolidated local government is in compliance with the requirements of this section, and those agencies shall reinstate the delivery of services or payments to the city, county, or consolidated local government.
  5. Notwithstanding KRS 67C.103(14)(e), a simple majority of the legislative council of a consolidated local government may delegate its authority to issue administrative subpoenas for the attendance and testimony of witnesses and the production of documents relevant to possible violations of the code of ethics to the person or a majority of the group responsible for enforcement of a code of ethics. Subpoenas shall be served in the same manner as subpoenas for witnesses in civil cases. Compliance with the subpoenas shall be enforceable by the Circuit Court. Any failure to obey an order of the court may be punished by the court as contempt thereof.

HISTORY: Enact. Acts 1994, ch. 16, § 1, effective July 15, 1994; 1996, ch. 214, § 1, effective July 15, 1996; 1998, ch. 69, § 29, effective July 15, 1998; 2002, ch. 291, § 1, effective July 15, 2002; 2002, ch. 346, § 22, effective July 15, 2002; 2007, ch. 47, § 40, effective June 26, 2007; 2010, ch. 117, § 46, effective July 15, 2010; 2013, ch. 40, § 10, effective March 21, 2013; 2015 ch. 17, § 4, effective June 24, 2015; 2017 ch. 150, § 7, effective June 29, 2017.

Legislative Research Commission Note.

(3/21/2013). Under the authority of KRS 7.136 , the Reviser of Statutes has corrected a manifest clerical or technical error in this statute. In subsection (1)(b), the word “have” has been changed to read “has.”

NOTES TO DECISIONS

1.Applicability.

As an independent municipal corporation, the metropolitan sewer district was not an agency of the county metro government within the meaning of KRS 65.003 . Therefore, the county metro ethics commission had no jurisdiction over the sewer district or its officials. Louisville/Jefferson County Metro Ethics Comm'n v. Schardein, 259 S.W.3d 510, 2008 Ky. App. LEXIS 225 (Ky. Ct. App. 2008).

2.Officials and Employees.

Under KRS 76.030(7) and 67C.139 , the metropolitan sewer district’s executive director and chief engineer, as appointees of the mayor, albeit appointed by the urban county government, were not “appointed officials and employees” of the urban county government within the meaning of KRS 65.003 . Therefore, the county metro ethics commission had no jurisdiction over the sewer district or its officials. Louisville/Jefferson County Metro Ethics Comm'n v. Schardein, 259 S.W.3d 510, 2008 Ky. App. LEXIS 225 (Ky. Ct. App. 2008).

Cited:

Ky. Exec. Branch Ethics Comm’n v. Atkinson, 339 S.W.3d 472, 2010 Ky. App. LEXIS 105 (Ky. Ct. App. 2010).

Opinions of Attorney General.

Department of Local Government has certain specific duties in relation to local ethics codes, such as to receive and hold as public records, copies of local ethics ordinances; it also has a “general” duty to determine compliance of a local ordinance with the “basic requirements” of this section. OAG 94-69 .

This section does not require local governments to adopt a code of ethics containing standards of conduct for every appointed official and employee. OAG 95-16 .

Joint city-county entities are not units of city or county governments for purposes of this section, and the members of the governing boards of such entities are not subject to the required ethics codes implemented by the governments which appointed them to those joint city-county boards and commissions. OAG 96-17 .

65.005. Notice to county clerk of establishment of political subdivision — Application of provisions only before July 1, 2014 — Transition to reporting requirements of KRS 65A.010 to 65A.090 — Duties of clerk — Fee — Notice by existing districts.

  1. The provisions of this section shall apply prior to July 1, 2014. On and after July 1, 2014, the provisions of this section shall no longer apply; instead the provisions of KRS 65A.010 to 65A.090 shall apply. Special districts shall cooperate with the Department for Local Government and the Auditor of Public Accounts to ensure an orderly transition from the reporting requirements of this section to the reporting requirements of KRS 65A.010 to 65A.090 . Notwithstanding the dates established by this subsection, the provisions of this section and KRS 65A.010 to 65A.090 shall be administered such that the registration required by KRS 65A.090(1) occurs as required by that subsection, and there is no gap in reporting by entities subject to this section and KRS 65A.010 to 65A.090 as the transition occurs.
    1. “Special district” means any agency, authority, or political subdivision of the state which exercises less than statewide jurisdiction and which is organized for the purpose of performing governmental or other prescribed functions within limited boundaries. It includes all political subdivisions of the state except a city, a county, or a school district. (2) (a) “Special district” means any agency, authority, or political subdivision of the state which exercises less than statewide jurisdiction and which is organized for the purpose of performing governmental or other prescribed functions within limited boundaries. It includes all political subdivisions of the state except a city, a county, or a school district.
    2. “Governing body” means the body possessing legislative authority in a city, county, or special district.
  2. No special district shall be legally created without sending notification of its existence in writing to the clerk of the county within the jurisdiction of which its principal office shall be located. This requirement for notification is in addition to all other provisions of existing law providing for the creation of special districts. The notification shall contain the names and addresses of the members of the governing body of the district, the name and address of its chief executive officer, a specific reference to the statute or statutes under which it was created, and a brief description of its service area and activities. The clerk shall record the original and forward a copy of the notification to the state local finance officer and the state local debt officer, Department for Local Government. The clerk shall be paid a fee of two dollars ($2) by the district for recording and mailing the notification.
  3. The governing body of any existing special district shall submit notification as required in subsection (3) of this section within thirty (30) days after June 16, 1966, and the governing body of a newly created special district shall submit the required notification at or before its first meeting.

History. Enact. Acts 1966, ch. 128; 1974, ch. 74, Art. II, § 9(1); 1978, ch. 384, § 134, effective June 17, 1978; 1994, ch. 508, § 20, effective July 15, 1994; 1998, ch. 69, § 30, effective July 15, 1998; 1998, ch. 85, § 3, effective July 15, 1998; 2007, ch. 47, § 41, effective June 26, 2007; 2010, ch. 117, § 47, effective July 15, 2010; 2013, ch. 40, § 11, effective March 21, 2013.

Legislative Research Commission Note.

(7/15/98). This section was amended by 1998 Ky. Acts chs. 69 and 85. Where these Acts are not in conflict, they have been codified together. Where a conflict exists, Acts ch. 85, which was last enacted by the General Assembly, prevails under KRS 446.250 .

NOTES TO DECISIONS

Cited:

1.Water District.

Water district was entitled to governmental immunity in a case where flooding was caused after an employee failed to turn off water to a residence. The water district was a state agency engaged in a governmental function, pursuant to KRS 65.005(1)(a). South Woodford Water Dist. v. Byrd, 352 S.W.3d 340, 2011 Ky. App. LEXIS 153 (Ky. Ct. App. 2011), overruled, N. Ky. Water Dist. v. Carucci, 600 S.W.3d 240, 2019 Ky. LEXIS 276 ( Ky. 2019 ).

2.Development District.

Trial court erred in denying a development district's directed verdict motion as to its status under the Kentucky Whistleblower Act where although its statutory origin, Ky. Rev, Stat. Ann. § 65.005(2)(a), defined it as a political subdivision of the state, the employee had not presented sufficient evidence as to what state functions it performed. 2015 Ky. App. LEXIS 18 .

Cited:

Northern Kentucky Port Authority, Inc. v. Cornett, 700 S.W.2d 392, 1985 Ky. LEXIS 258 ( Ky. 1985 ).

Opinions of Attorney General.

An urban renewal agency comes within the definition of “special district” set forth in this section. OAG 75-490 .

The failure of a water district to notify the clerk of the county court of its existence does not deprive the water district of its status as a legal entity. OAG 76-285 .

A community action corporation organized and functioning pursuant to the terms and provisions of KRS 273.410 to 273.455 (now 273.410 to 273.453 ) is a “district” for purposes of KRS 65.060 to 65.070 and can be a “special district” as defined in this section, since the definition includes an “agency,” if such community action corporation has been designated as an agency of a city or county government under KRS 273.435 . OAG 82-196 .

Research References and Practice Aids

Cross-References.

Continuance of public ways, KRS 178.020 .

Conveyance of buildings by county building commission, KRS 67.465 .

Corporate powers of cities, KRS 82.081 .

Conveyance of real estate by cities, KRS 82.081 .

Conveyance of real estate by fiscal court, KRS 67.080 .

Dedication of public way or easement, procedure, KRS 82.400 .

Procedure for closing public ways, KRS 82.405 .

ALR

Power of municipal corporation to lease or sublet property owned or leased by it. 47 A.L.R.3d 19.

65.007. Removal of appointed member of special district governing body — Hearing — Appeal.

  1. Unless otherwise provided by state law, an appointed member of the governing body of a special district may be removed from office by the appointing authority after a hearing with notice as required by KRS Chapter 424 for inefficiency, neglect of duty, malfeasance or conflict of interest. The hearing shall be initiated and chaired by the appointing authority, who shall prepare a written statement setting forth the reasons for removal. The member to be removed shall be notified of his proposed removal and the reasons therefor by registered mail sent to his last known address at least ten (10) days prior to the hearing. The person to be removed may employ counsel to represent him. A record of the hearing shall be made by the appointing authority.
  2. Where the removal of an appointed member of a special district governing body is by the county judge/executive pursuant to subsection (1) of this section, the removal shall be subject to the approval of the fiscal court.
  3. A member removed pursuant to this section may appeal, within ten (10) days of the rendering of the decision or the approval of the fiscal court if required, to the Circuit Court of the county of the appointing authority. The scope of the appeal shall be limited to whether the appointing authority or the fiscal court abused their discretion in removing the member.

History. Enact. Acts 1980, ch. 18, § 1, effective July 15, 1980.

Opinions of Attorney General.

There is no conflict of interest where a commissioner of a water district is also president of the local bank which purchased the refinancing bonds of the district and in which the funds of the district are deposited in a checking account. OAG 80-654 .

65.008. Expiration of term of appointed member of governing body of authority.

  1. At least sixty (60) days before the expiration of the term of office of an appointed member of a district’s governing body, the district shall notify the appointing authority of the forthcoming expiration of the term of the appointed member of the district’s governing body.
  2. Unless otherwise provided by law, appointed members of district governing bodies shall serve until their successors are appointed and qualified. The failure of an appointing authority to appoint a successor or, if the appointing authority’s appointment is subject to the approval of a legislative body, to nominate a successor within sixty (60) days of the expiration of the term of office of a member of a district governing body shall constitute the reappointment of that member for another term of office.

History. Enact. Acts 1984, ch. 63, § 3, effective July 13, 1984.

NOTES TO DECISIONS

1.Standing.

Former members of a public board had constitutional standing to raise violations of the Open Meetings Act with respect to a county fiscal court’s action in removing them and the subsequent action by the board approving a lease termination agreement because they clearly alleged distinct and palpable injuries caused by the actions of the fiscal court and the board for which they would be entitled to a remedy under the Act; any action taken by the fiscal court in violation of the Act was voidable. Lincoln Trail Grain Growers Ass'n v. Meade Cty. Fiscal Court, 2021 Ky. App. LEXIS 89 (Ky. Ct. App. Aug. 6, 2021).

Cited in:

Lewis LP Gas, Inc. v. Lambert, 113 S.W.3d 171, 2003 Ky. LEXIS 166 ( Ky. 2003 ), overruled in part, Hoskins v. Maricle, 150 S.W.3d 1, 2004 Ky. LEXIS 196 ( Ky. 2004 ).

Opinions of Attorney General.

This section is not applicable where there were vacancies on the Planning and Zoning Commission for more than sixty days, because the statute refers only to “districts.” OAG 91-17 .

65.009. Ex officio member of district governing body — Designation by fiscal court.

  1. Except where the law provides that fiscal court members may serve as members of a district’s governing body, the fiscal court of the county in which the greater portion of the district’s population lies may, by resolution, designate one of its members to serve as an ex officio member of a district’s governing body. Fiscal court members shall be eligible for ex officio membership on a district’s governing body regardless of residency, political affiliation or other restrictions on board membership.
  2. The fiscal court shall notify the district of the designation of an ex officio member of the governing body and the district shall provide the ex officio member with notice of all regular and special meetings of the district’s governing body.
  3. An ex officio member of a district’s governing body designated pursuant to this section shall not be counted in determining a quorum nor shall he vote on matters before the district’s governing body.
  4. An ex officio member of a district’s governing body designated pursuant to this section shall receive no compensation or reimbursement for expenses for attending meetings of the district’s governing body.
  5. An ex officio member of a district’s governing body designated pursuant to this section shall serve in such capacity at the pleasure of the fiscal court.
  6. The provisions of this section shall not apply to a district established by a city or cities.

History. Enact. Acts 1984, ch. 63, § 4, effective July 13, 1984; 2013, ch. 40, § 84, effective March 21, 2013.

65.010. Conveyance of real estate. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1958, ch. 21) was repealed by Acts 1980, ch. 239, § 4, effective July 15, 1980. For present law see KRS 82.081 .

65.012. Requirements for referendum petitions.

  1. All referendum petitions permitted by general law in KRS Chapters 65, 67, 67A, 67C, 68, 76, 81, 81A, 83A, 96, 96A, 97, 98, 99, 107, 108, 109, 132, 147, 157, 160, 162, 165, 173, 178, 183, 212, 230, 242, 243, 244, 262, 269, 424, and 436 and any referendum petitions permitted by other KRS chapters in accordance with Sections 60 and 171 of the Constitution of Kentucky shall include the:
    1. Printed name of the petitioner;
    2. Signature of the petitioner, or if the petitioner is a business or other organization, the signature of the legal representative of the business or organization;
    3. Year of birth of the petitioner if the petitioner is an individual other than a business or other organization;
    4. Residential address of the petitioner, or if the petitioner is a business or other organization, the address of the physical location of the business or organization that authorizes it to be a petitioner and, if different, the address of its headquarters; and
    5. Date that the petitioner signed the petition.
  2. Unless otherwise explicitly provided under the applicable law governing the petition, to be eligible to sign any referendum petition described in this section, a petitioner shall:
    1. Live in the district or jurisdiction that will be affected by the referendum or, if the petitioner is a business or other organization, have a physical address within the district or jurisdiction that will be affected by the referendum; and
    2. Be a registered voter if the petitioner is an individual other than a business or other organization.

HISTORY: Enact. Acts 2012, ch. 54, § 1, effective July 12, 2012; 2018 ch. 155, § 3, effective July 14, 2018.

65.013. Tax dollars not to be used to advocate for or against public question on ballot.

Local, state, and federal tax dollars shall not be used to advocate, in partial terms, for or against any public question that appears on the ballot. For purposes of this section, “local” means and includes any city, county, urban-county government, consolidated local government, unified local government, charter county government, or special district.

HISTORY: 2021 ch. 197, § 74, effective June 29, 2021.

65.015. Legislative intention to occupy field regarding provisions of KRS 336.130.

The legislative body of any city, county, consolidated local government, urban-county government, charter county government, or unified local government shall not have the authority to adopt or enforce any ordinance, policy, or resolution that is in conflict with KRS 336.130 .

HISTORY: 2017 ch. 1, § 6, effective January 9, 2017.

65.016. Prohibition against requiring any employer to pay employee a certain wage or fringe benefit.

The legislative body of any city, county, consolidated local government, urban-county government, charter county government, or unified local government shall not have the authority to require any employer to pay to an employee a certain wage or fringe benefit other than as determined by the employer.

HISTORY: 2017 ch. 3, § 13, effective January 9, 2017.

65.020. City or county may become member of chamber of commerce. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1966, ch. 241, § 2) was repealed by Acts 1978, ch. 118, § 19, effective June 17, 1978.

65.025. Prohibitions relating to employment of entities providing architectural services and construction management services on capital construction projects — Effect of violation — Best value procurement criteria — Exception.

  1. As used in this section:
    1. “Employ” means to hire, retain, or otherwise contract with an individual or entity for goods or services;
    2. “Local government” means a city, county, charter county government, urban-county government, consolidated local government, or a special district;
    3. “Construction manager” means a person who coordinates and communicates the entire project process, clarifying cost and time consequences of design decisions as well as clarifying construction feasibility, and who manages the bidding, awarding, and construction phases of the project;
    4. “Design-build” means a system of contracting under which one (1) entity performs both architecture/engineering and construction under one (1) single contract;
    5. “Best value” means a procurement in which the decision is based on the primary objective of meeting the specific business requirements and best interests of the local government. These decisions shall be based on objective and quantifiable criteria that shall include price and that have been communicated to the offerors as set forth in the invitation for bids or request for proposals. Every invitation for bids or request for proposals shall provide that an item equal to that named or described in the specifications may be furnished. The specification may identify a sole brand in cases where, in the written opinion of the chief procurement officer, documented unique and valid conditions require compatibility, continuity, or conformity with established standards. An item shall be considered equal to the item named or described if, in the opinion of the owner and the design professional responsible for the specifications:
      1. It is at least equal in quality, durability, appearance, strength, design, and other criteria deemed appropriate;
      2. It will perform at least equally the function imposed by the general design for the public work being contracted for or the material being purchased; and
      3. It conforms substantially to the detailed requirements for the item in the specifications;
    6. “Capital project” means the construction, reconstruction, acquisition, installation, and improvement of public infrastructure that is owned by a local government and that serves a public purpose of the local government;
    7. “Private partner” means any entity that is a partner in a public-private partnership other than:
      1. The Commonwealth of Kentucky, or any agency or department thereof;
      2. The federal government;
      3. Any other local government;
      4. Any other state government; or
      5. Any agency of a state, federal, or local government; and
      1. “Public-private partnership” means a project delivery method for construction or financing of capital projects, or procurement of services, pursuant to a written public-private partnership agreement entered into pursuant to KRS 65.028 and administrative regulations promulgated thereunder, between: (h) 1. “Public-private partnership” means a project delivery method for construction or financing of capital projects, or procurement of services, pursuant to a written public-private partnership agreement entered into pursuant to KRS 65.028 and administrative regulations promulgated thereunder, between:
        1. At least one (1) private partner; and
        2. A local government.
      2. “Public-private partnership” does not include any traditional delivery method or method of procurement of goods or services entered into by a short-term contractual agreement between a local government and a private seller that terminates when the good or service is delivered, whether governed by the provisions of KRS 45A.343 to 45A.460 or 424.260 .
  2. A local government shall not employ the same entity to provide both architectural services and construction management services on the same capital construction project. No local government shall knowingly employ an officer, employee, or agent of, or an immediate family member of an officer, employee, or agent of:
    1. The architectural firm that provided the architectural services to also provide construction management services for the same capital construction project for which the architectural firm provided architectural services; or
    2. The construction management firm that provided the construction management services to also provide architectural services for the same capital construction project for which the construction management firm provided construction management services.
  3. A violation of subsection (2) of this section shall suspend the local government from receiving any financial assistance from the state, or any state agency, with respect to the project for which the architectural or construction management firm was employed until the matter is resolved.
  4. Local governments initiating a capital construction project shall incorporate, or shall require architects or construction managers in the employment of the local government to incorporate, best value procurement criteria in all invitations for bids or requests for proposals as provided for in subsection (1) of this section.
  5. Nothing in this section shall prohibit a local government from using:
    1. Design-build as a method of providing for capital construction services as long as best value contracting principles are followed as specified in subsection (1) of this section; or
    2. A public-private partnership as long as the provisions of KRS 65.028 are followed.

History. Enact. Acts 2001, ch. 154, § 1, effective June 21, 2001; 2008, ch. 47, § 4, effective July 15, 2008; 2016 ch. 67, § 4, effective April 8, 2016.

65.027. Reciprocal preference to be given to resident bidders by local governments.

  1. As used in this section, “local government” means city, county, urban-county, consolidated local government, charter county, unified local government, or special district.
  2. For all contracts awarded by a local government, the local government shall apply the reciprocal preference for resident bidders described in KRS 45A.494 .

History. Enact. Acts 2010, ch. 162, § 4, effective July 15, 2010.

Legislative Research Commission Note.

(7/15/2010). The term “unified county” in subsection (1) of this section has been changed in codification to “unified local government” in order to use the correct, statutory term for a united city-county government and maintain consistency with the current text of the Kentucky Revised Statutes. This change was made by the Reviser of Statutes under the authority of KRS 7.136(1).

65.028. Public-private partnership delivery method of awarding contracts for capital construction projects — Kentucky Local Government Public-Private Partnership Board.

  1. As used in this section:
    1. “Best value” has the same meaning as in KRS 65.025 ;
    2. “Cabinet” means the Finance and Administration Cabinet;
    3. “Local government” means a city, county, charter county, urban-county government, consolidated local government, or unified local government of the Commonwealth;
    4. “Private partner” has the same meaning as in KRS 65.025 ; and
    5. “Public-private partnership” has the same meaning as in KRS 65.025.
  2. A public-private partnership delivery method may be utilized by a local government as provided in this section and administrative regulations promulgated thereunder. Contracts using this method shall be awarded by competitive negotiation on the basis of best value, and shall in all cases take effect only if executed by the legislative body of the local government. The provisions of KRS 65.025(2) to (4) shall not apply to public-private partnerships utilized by local governments.
  3. A local government utilizing a public-private partnership shall continue to be responsible for oversight of any function that is delegated to or otherwise performed by a private partner.
  4. A public-private partnership shall not be used to circumvent any requirements or restrictions placed upon any local government pursuant to any provision of the Kentucky Revised Statutes.
  5. All public-private partnership agreements executed by a local government or any of its agencies under this section shall be approved by the legislative body of the local government at a public meeting, and shall include at a minimum the following provisions:
      1. Property owned by a local government shall not be sold, conveyed, or disposed of in any way at any time; and (a) 1. Property owned by a local government shall not be sold, conveyed, or disposed of in any way at any time; and
      2. Leases issued by a local government to any party shall not be transferred in any way by that party; without the specific and express written consent of the legislative body of the local government;
    1. Require the private partner to provide or cause to be provided performance and payment bonds on the design and construction portion of the agreement as required under KRS 45A.435 and maintenance bonds, warranties, guarantees, and letters of credit in connection with the private partner’s other activities under the agreement, in the forms and amounts satisfactory to the local government and in amounts necessary to provide adequate protection to the local government;
    2. Review and approval of plans and specifications for the project by the local government;
    3. Inspection of the project by the local government to ensure that the private partner’s actions are acceptable to the local government in accordance with the agreement;
    4. Maintenance of public liability insurance or self-insurance, in form and amount satisfactory to the local government and reasonably sufficient to insure coverage of tort liability to the public and employees and to enable the continued operation of the project;
    5. Reimbursement to be paid to the local government for services provided by the local government;
    6. Filing of appropriate financial statements by the private partner on a periodic basis;
    7. Policies and procedures governing the rights and responsibilities of the local government and the private partner in the event the public-private partnership agreement is terminated or there is a material default by the private partner. These policies and procedures shall include conditions governing assumption of the duties and responsibilities of the private partner by the local government, and the transfer or purchase of property or other interests of the private partner by the local government;
    8. Any fees or payments as may be established by agreement of the private partner and the local government;
    9. A detailed description of all duties and requirements of the private partner;
    10. The ability of a private partner or partners to quickly respond to the needs presented in the request for proposal, and the importance of economic development opportunities represented by the qualifying project. In evaluating proposals, preference shall be given to a plan that includes the involvement of small businesses as subcontractors, to the extent that small businesses can provide services in a competitive manner, unless any preference interferes with the qualification for federal or other funds; and
    11. Any other information necessary to properly address the life cycle of the agreement, including the disposition of assets if or when the public-private partnership agreement is terminated or otherwise concludes.
    1. On or before December 31, 2016, the secretary of the Finance and Administration Cabinet shall promulgate administrative regulations setting forth criteria to be used by a local government employing a public-private partnership for a particular project, and establishing a process for public- private partnership procurement undertaken by local governments consistent with this section. Prior to submission of the proposed administrative regulations pursuant to the regulatory process required by KRS Chapter 13A, the proposed administrative regulations shall be approved by the Kentucky Local Government Public-Private Partnership Board established by subsection (11) of this section. (6) (a) On or before December 31, 2016, the secretary of the Finance and Administration Cabinet shall promulgate administrative regulations setting forth criteria to be used by a local government employing a public-private partnership for a particular project, and establishing a process for public- private partnership procurement undertaken by local governments consistent with this section. Prior to submission of the proposed administrative regulations pursuant to the regulatory process required by KRS Chapter 13A, the proposed administrative regulations shall be approved by the Kentucky Local Government Public-Private Partnership Board established by subsection (11) of this section.
    2. The secretary shall consult with design-builders, construction managers, contractors, design professionals including engineers and architects, and other appropriate professionals during the development of these administrative regulations.
    3. The secretary shall have the authority to contract with a consultant, pursuant to KRS 45A.695 , to assist the cabinet and the Kentucky Local Government Public-Private Partnership Board with the review process required in subsection (12) of this section. The secretary may, through administrative regulation, impose a reasonable fee on the private partner to defray the cost of the review required in subsection (12) of this section, including any expenses or fees incurred in contracting with a consultant.
    4. If the secretary fails to timely promulgate administrative regulations pursuant to this subsection, local governments may then act pursuant to this section including compliance with the process outlined in subsection (12) of this section, in the absence of administrative regulations.
  6. A request for proposal for a local government project utilizing a public-private partnership shall include at a minimum:
    1. The parameters of the proposed public-private partnership agreement;
    2. The duties and responsibilities to be performed by the private partner or partners;
    3. The methods of oversight to be employed by the local government;
    4. The duties and responsibilities that are to be performed by the local government and any other partners to the contract;
    5. The evaluation factors and the relative weight of each to be used in the scoring of awards; and
    6. Other information required by a local government to evaluate the proposals submitted by respondents and the overall proposed public-private partnership.
  7. A private entity desiring to be a private partner shall demonstrate to the satisfaction of the local government that it is capable of performing any duty, responsibility, or function it may be authorized or directed to perform as part of the public-private partnership agreement.
  8. When a request for proposal for a project utilizing a public-private partnership is issued, the local government shall transmit a copy of the request for proposal to the cabinet and to the Department for Local Government.
  9. A request for proposal or other solicitation may be canceled, or all proposals may be rejected, if it is determined in writing that the action is taken in the best interest of the local government and approved by the legislative body.
    1. There is established within the cabinet the Kentucky Local Government Public-Private Partnership Board, composed of eleven (11) members as follows: (11) (a) There is established within the cabinet the Kentucky Local Government Public-Private Partnership Board, composed of eleven (11) members as follows:
      1. The secretary of the cabinet, or the secretary’s designee;
      2. Two (2) individuals appointed by the Kentucky League of Cities, both of whom shall have experience in municipal financial operations;
      3. Two (2) individuals appointed by the Kentucky Association of Counties, both of whom shall have experience in county financial operations, one (1) to be recommended by the Kentucky County Judge/Executive Association and one (1) to be recommended by the Kentucky County Magistrates and Commissioners Association;
      4. The commissioner of the Department for Local Government, or the commissioner’s designee;
      5. The executive director of the Office of Financial Management within the cabinet, or the executive director’s designee;
      6. The Auditor of Public Accounts, or the Auditor’s designee;
      7. One (1) citizen member appointed by the Governor, who shall have experience and knowledge in local government debt and financial operations; and
      8. Two (2) members of the Kentucky General Assembly, one (1) appointed by the President of the Senate and one (1) appointed by the Speaker of the House of Representatives, each of whom shall serve in a nonvoting ex officio capacity and shall not be considered for purposes of determining a quorum.
    2. Members of the board shall begin their terms on August 1, 2016, and shall serve for a term of four (4) years.
    3. Board members appointed under paragraph (a)2. and 3. of this subsection may send a designee with similar experience to meetings for which they are unavailable.
    4. Vacancies occurring in the term of any member shall be filled in the same manner as the original appointment.
    5. The members of the board shall receive no compensation for their services.
    6. The secretary of the cabinet, or the secretary’s designee, shall serve as chair of the board and the members shall elect a vice chair from among the membership of the board. The vice chair may preside over meetings of the board in the absence of the chair.
    7. The board shall meet at least once per year, and as needed for the timely consideration of proposed projects. A majority of the members of the board shall constitute a quorum.
    8. The secretary of the cabinet shall be responsible for providing staff support and maintaining complete records of the board’s actions and proceedings, as public records open to inspection.
    1. Upon the initial issuance of a public-private partnership agreement having a total contractual value that equals or exceeds thirty percent (30%) of the general fund revenues received by the local government in the immediately preceding fiscal year, the local government shall submit the agreement to the cabinet for the sole purpose of making an evaluation to the Kentucky Local Government Public-Private Partnership Board of the following: (12) (a) Upon the initial issuance of a public-private partnership agreement having a total contractual value that equals or exceeds thirty percent (30%) of the general fund revenues received by the local government in the immediately preceding fiscal year, the local government shall submit the agreement to the cabinet for the sole purpose of making an evaluation to the Kentucky Local Government Public-Private Partnership Board of the following:
      1. Whether the agreement meets the requirements of subsection (5) of this section;
      2. An analysis of the overall project’s economic and financial viability within the scope of available or proposed financing arrangements and expected revenues; and
      3. Whether the agreement adheres to the procurement process required by subsection (2) of this section.

        Public-private partnership agreements having a total contractual value that is less than thirty percent (30%) of the general fund revenues received by the local government in the immediately preceding fiscal year shall not be required to be submitted to the cabinet or the Kentucky Local Government Public-Private Partnership Board.

    2. The local government shall submit any information required by the cabinet, relating to the agreement and its procurement, to enable the cabinet to conduct this evaluation.
    3. The cabinet shall acknowledge receipt of the agreement within thirty (30) days, and after evaluation thereof shall, within ninety (90) days of its receipt, forward the results of its evaluation separately to each individual member of the Kentucky Local Government Public-Private Partnership Board. The full board shall meet within sixty (60) days of the issuance of the cabinet’s evaluation to consider the evaluation provided by the cabinet and approve or disapprove the proposed agreement. If the board disapproves the project, the board shall provide specific reasons for its disapproval. If the board approves the project, the cabinet shall return the agreement to the local government legislative body for final execution thereof. No public-private partnership agreement issued by a local government that is subject to evaluation by the cabinet and review and approval by the Kentucky Local Government Public-Private Partnership Board pursuant to paragraph (a) of this subsection shall take effect unless and until it is approved by the Kentucky Local Government Public-Private Partnership Board pursuant to this subsection and is found by the board to meet the requirements of this section and to be economically viable as provided in this subsection.
    4. If an agreement is not approved by the board, the local government submitting the agreement may modify the agreement and resubmit it for reconsideration in accordance with this section.
  10. The Commonwealth shall bear no liability for public-private partnership agreements approved pursuant to subsection (12) of this section.
  11. Upon approval and execution of a public-private partnership agreement, the local government shall transmit a copy of the agreement to the Department for Local Government.
  12. The Auditor of Public Accounts may periodically review public-private partnership agreements executed by a local government pursuant to this section, and any actions undertaken by private partners and local governments thereunder, to evaluate compliance with the agreement and this section.
  13. Multiple local governments, acting in accordance with KRS 65.210 to 65.300 , may jointly enter into a public-private partnership pursuant to this section. Public-private partnership agreements involving multiple local governments shall only be required to be submitted to the cabinet for evaluation and to the Kentucky Local Government Public-Private Partnership Board for review and approval, as provided by subsection (12) of this section, if the total contractual value equals or exceeds thirty percent (30%) of the combined general fund revenues received in the immediately preceding fiscal year by all local governments participating in the agreement.
    1. A person or business may submit an unsolicited proposal to a local government, which may receive the unsolicited proposal. (17) (a) A person or business may submit an unsolicited proposal to a local government, which may receive the unsolicited proposal.
    2. Within ninety (90) days of receiving an unsolicited proposal, a local government may elect to consider further action on the proposal, at which point the local government shall provide public notice of the proposal pursuant to KRS Chapter 424 or electronically on the Web site of the local government, and shall:
      1. Provide specific information regarding the proposed nature, timing, and scope of the unsolicited proposal, except that trade secrets, financial records, or other records of the person or business making the proposal shall not be posted unless otherwise agreed to by the local government and the person or business; and
      2. Provide for a notice period of at least thirty (30) days and no more than ninety (90) days for the submission of competing proposals.
    3. Upon the end of the notice period provided under paragraph (b)2. of this subsection, the local government may consider the unsolicited proposal and any competing proposals received. If the local government determines it is in the best interest of the local government to implement some or all of the concepts contained within the unsolicited proposal or competing proposals received by it, the local government may begin an open, competitive procurement process to do so pursuant to this section.
    4. An unsolicited proposal shall be deemed rejected if no written response is received from the local government within ninety (90) days after submission, during which time the governmental body has not taken any action on the proposal under paragraph (b) of this subsection.

HISTORY: 2016 ch. 67, § 5, effective April 8, 2016; 2017 ch. 132, § 6, effective March 27, 2017.

65.029. Appropriation to West End Opportunity Partnership conditioned upon partnership’s receipt of private and consolidated local government funding.

  1. As used in this section, “development area” means a region within a consolidated local government bounded by:
    1. To the south, Algonquin Parkway to the South Seventh Street intersection, but including the unincorporated communities adjacent to Park Duvalle and Algonquin:
      1. Beginning at the Ohio River, at the southwest corner of Chickasaw Park and then along the park’s southern boundary to Southwestern Parkway;
      2. Southwestern Parkway south to Algonquin Parkway;
      3. Algonquin Parkway to South Forty-first Street;
      4. South Forty-first Street south to Bells Lane;
      5. Bells Lane east to Cane Run Road;
      6. Cane Run Road north to Linwood Avenue;
      7. Linwood Avenue east to Beech Street;
      8. Beech Street south to Wingfield Lane;
      9. Wingfield Lane east to Dixie Highway;
      10. Dixie Highway north to Algonquin Parkway; and
      11. Algonquin Parkway east to South Seventh Street;
    2. To the east, South Seventh Street north to Ninth Street and Ninth Street north to the Ohio River; and
    3. The Ohio River to the north and west;
  2. Prior to any development actions taken by the West End Opportunity Partnership, a minimum investment shall be pledged within the order listed and received by the West End Opportunity Partnership:
    1. A combined total of twenty million dollars ($20,000,000) shall be pledged by and received from private sector investors and a consolidated local government, with a minimum of five million dollars ($5,000,000) pledged by a consolidated local government; and
      1. Only upon verification of receipt of the twenty million dollars ($20,000,000) pledged under paragraph (a) of this subsection, general fund moneys in the amount of ten million dollars ($10,000,000) shall be appropriated by the General Assembly to the Department for Local Government for use by the West End Opportunity Partnership for revitalization of the development area. (b) 1. Only upon verification of receipt of the twenty million dollars ($20,000,000) pledged under paragraph (a) of this subsection, general fund moneys in the amount of ten million dollars ($10,000,000) shall be appropriated by the General Assembly to the Department for Local Government for use by the West End Opportunity Partnership for revitalization of the development area.
      2. The Kentucky State Treasurer shall verify that the West End Opportunity Partnership received the full twenty million dollars ($20,000,000) in accordance with paragraph (a) of this subsection prior to the General Assembly appropriating ten million dollars ($10,000,000) from the general fund. The West End Opportunity Partnership shall provide the Kentucky State Treasurer the information needed to verify receipt of the funds. Within thirty (30) days of verifying the funds, the Kentucky State Treasurer shall notify the Interim Joint Committee on Appropriations and Revenue.
      3. If the West End Opportunity Partnership has not received the full twenty million dollars ($20,000,000) in accordance with paragraph (a) of this subsection prior to June 30, 2022, the General Assembly shall not appropriate the ten million dollars ($10,000,000) required by subparagraph 1. of this paragraph.

HISTORY: 2021 ch. 194, § 7, effective April 7, 2021.

65.030. Record-keeping by computer or other rapid-access data collection system.

Notwithstanding any provision of law to the contrary, any unit of state, county or municipal government, or any court, may maintain any records by computer or other rapid-access data collection system, provided that those records which are public records shall be kept in a manner which will allow the public unlimited and speedy access to them.

History. Enact. Acts 1970, ch. 122, § 1.

65.040. Special purpose districts may be formed by two or more counties. [Renumbered.]

Compiler’s Notes.

This section was renumbered as KRS 65.160 by the Reviser under authority of KRS 7.136 .

65.041. Disposition of firearms or ammunition owned by unit of local government — Disposition of proceeds upon sale.

KRS 45A.343 and 45A.425 to the contrary notwithstanding:

  1. When a police department, sheriff’s department, or other agency of city, county, urban-county, or charter county government or other unit of local government disposes of firearms or ammunition owned by that unit of local government, the disposition shall be by:
    1. Public auction to persons eligible under federal law to purchase the type of firearm or ammunition being offered for sale;
    2. Trade to the federally licensed firearms dealer providing new firearms or ammunition to the agency;
    3. Transfer to another government agency or government-operated museum in Kentucky for official use or display; or
    4. Sale to the employee to whom the firearm was issued, if all of the following provisions are satisfied:
      1. The firearm was issued to the employee as his or her service weapon;
      2. The employee is retiring or an employee’s service weapon is being replaced;
      3. The employee is otherwise authorized by law to own or possess the firearm; and
      4. The sale price of the firearm is the fair market value of the firearm, not to exceed the actual cost of the firearm to the unit of government; and
  2. If the firearms or ammunition are sold, the proceeds of the sale shall be utilized solely for the purchase of body armor meeting or exceeding National Institute of Justice standards, firearms, ammunition, or range facilities, or a combination thereof, by the agency of government.

HISTORY: Enact. Acts 1998, ch. 606, § 128, effective July 15, 1998; 2014, ch. 29, § 1, effective July 15, 2014; 2015 ch. 20, § 3, effective June 24, 2015.

65.045. Civil action against firearms or ammunition manufacturer, trade association, or dealer.

  1. The authority to bring suit and right to recover against any firearms or ammunition manufacturer, trade association, or dealer by or on behalf or any city, county, urban-county, charter county, special district, or other local governmental unit created by or pursuant to an act of the General Assembly or Constitution of Kentucky, or any department, agency, or authority thereof, for damages, abatement, or injunctive relief resulting from or relating to the lawful design, manufacture, marketing, or sale of firearms or ammunition to the public shall be reserved exclusively to the Commonwealth.
  2. This section shall not prohibit a city, county, urban-county, charter county, special district, or other local governmental unit created by or pursuant to an act of the General Assembly or Constitution of Kentucky from bringing an action against a firearms or ammunition manufacturer or dealer for breach of contract or warranty as to firearms or ammunition purchased by that unit of local government.

History. Enact. Acts 2000, ch. 213, § 1, effective July 14, 2000.

Compiler’s Notes.

Section 2 of Acts 2000, ch. 213, effective July 14, 2000, read: “As of the effective date of this Act [July 14, 2000], the provision of Section 1 of this Act [this section] shall apply to any lawsuit by, or on behalf of, entities prohibited from filing a lawsuit pursuant to Section 1 of this Act that has been filed and not concluded prior to the effective date of this Act. Any lawsuit in progress which violates Section 1 of this Act shall, as of the effective date of this Act, be dismissed.”

65.050. Special purpose districts may be expanded to include additional counties. [Renumbered.]

Compiler’s Notes.

This section was renumbered as KRS 65.162 by the Reviser under authority of KRS 7.136 .

65.055. Duty of county judge/executives and mayors to distribute information to local officials and board members — Electronic distribution permitted.

    1. County judge/executives and mayors, or their respective designees, shall distribute the written information provided by the Office of the Attorney General and the Department for Libraries and Archives under KRS 15.257 and 171.223 to each elected official and each member, whether elected or appointed, of every county and city legislative body, local government board, commission, authority, and committee, including boards of special districts, located within their respective jurisdictions. In the case of a board, commission, or authority created by joint action of a county or city, the county judge/executive and mayor, or their respective designees, shall distribute the written information to the members appointed by their respective jurisdictions. Distribution shall be accomplished within sixty (60) days of receiving the written information from the Office of the Attorney General and the Department for Libraries and Archives. The distribution may be by electronic means. (1) (a) County judge/executives and mayors, or their respective designees, shall distribute the written information provided by the Office of the Attorney General and the Department for Libraries and Archives under KRS 15.257 and 171.223 to each elected official and each member, whether elected or appointed, of every county and city legislative body, local government board, commission, authority, and committee, including boards of special districts, located within their respective jurisdictions. In the case of a board, commission, or authority created by joint action of a county or city, the county judge/executive and mayor, or their respective designees, shall distribute the written information to the members appointed by their respective jurisdictions. Distribution shall be accomplished within sixty (60) days of receiving the written information from the Office of the Attorney General and the Department for Libraries and Archives. The distribution may be by electronic means.
    2. The distribution of materials to members who have been elected or appointed after the most recent distribution of materials as required in paragraph (a) of this subsection has occurred shall be accomplished within sixty (60) days of the day their term of office begins. The distribution may be by electronic means.
  1. County judge/executives and mayors shall require signatory proof that each person identified in subsection (1) of this section has received the written information, shall maintain documentation of receipt on file, and shall certify to the Office of the Attorney General that the written information has been distributed as required.

History. Enact. Acts 2005, ch. 45, § 3, effective June 20, 2005; 2014, ch. 5, § 1, effective July 15, 2014.

65.060. Definition of district.

As used in KRS 65.008 , 65.009 , 65.065 and 65.070 , the term “district” shall mean and the provisions of KRS 65.008 , 65.009 , 65.065 and 65.070 shall apply to any board, commission, or special district created pursuant to the following statutes: KRS 39F.020 , 39F.160 ; KRS 65.160 , 65.162 , 65.210 to 65.300 , 65.510 to 65.650 ; KRS 74.010 to 74.415 ; KRS 75.010 to 75.260 ; KRS 76.005 to 76.210 , 76.241 to 76.273 , 76.274 to 76.279 , 76.295 to 76.420 , 76.600 to 76.640 ; KRS 77.005 to 77.305 ; KRS 80.262 to 80.610 ; KRS 91A.350 to 91A.390 ; KRS 96A.010 to 96A.230 ; KRS 104.450 to 104.680 ; KRS 107.310 to 107.500 ; KRS 108.010 to 108.070 , 108.080 to 108.180 ; KRS 109.056 , 109.059 , 109.115 to 109.190 ; KRS 147.610 to 147.705 ; KRS 147A.050 to 147A.120 ; KRS 154.50-301 to 154.50-346 ; KRS 164.605 to 164.675 ; KRS 173.450 to 173.650 , 173.710 to 173.800 ; KRS 179.700 to 179.735 ; KRS 183.132 to 183.160 ; KRS 184.010 to 184.300 ; KRS 210.460 to 210.480 ; KRS 212.720 to 212.755 ; KRS 216.310 to 216.360 ; KRS 220.010 to 220.613 ; KRS 262.100 to 262.660 , 262.700 to 262.990 ; KRS 266.010 to 266.990 ; KRS 267.010 to 267.990 ; KRS 268.010 to 268.990 ; or KRS 273.405 to 273.453 .

History. Enact. Acts 1980, ch. 30, § 1, effective July 15, 1980; 1982, ch. 253, § 12, effective July 15, 1982; 1982, ch. 453, § 22, effective July 15, 1982; 1984, ch. 63, § 1, effective July 13, 1984; 1984, ch. 308, § 16, effective July 13, 1984; 1984, ch. 4, § 1, effective July 15, 1986; 1992, ch. 383, § 3, effective July 14, 1992; 1998, ch. 226, § 112, effective July 15, 1998; 2008, ch. 6, § 1, effective July 15, 2008; 2020 ch. 21, § 13, effective March 17, 2020.

Opinions of Attorney General.

A community action corporation organized and functioning pursuant to the terms and provisions of KRS 273.410 to 273.455 (now KRS 273.410 to 273.453 ) is a “district” for purposes of KRS 65.060 to 65.070 and can be a “special district” as defined in KRS 65.005 , since the definition includes an “agency,” if such community action corporation has been designated as an agency of a city or county government under KRS 273.435 . OAG 82-196 .

A hospital district organized pursuant to KRS 216.310 to 216.360 is a “district” for purposes of KRS 65.070 requiring special districts to file annual statements. OAG 82-631 .

The definition of a district in this section does not extend to a city-county parks and recreation board created pursuant to KRS 97.035 . OAG 83-327 .

The community action agencies organized and functioning pursuant to KRS 273.405 to 273.453 are districts as that term is used in KRS 65.060 to 65.070 , and, as a district, these community action agencies may be considered local governmental units. OAG 86-7 .

65.065. Budgets — Application only to fiscal periods ending before July 1, 2014 — Transition to requirements of KRS 65A.010 to 65A.090 — Filing — Financial statements — Audits — Enforcement.

  1. The provisions of this section shall apply for fiscal periods ending prior to July 1, 2014. For fiscal periods beginning on or after July 1, 2014, the provisions of this section shall no longer apply; instead, the provisions of KRS 65A.010 to 65A.090 shall apply. Districts shall cooperate with the Department for Local Government and the Auditor of Public Accounts to ensure an orderly transition from the reporting requirements of this section to the reporting requirements of KRS 65A.010 to 65A.090 . Notwithstanding the dates established by this subsection, the provisions of this section and KRS 65A.010 to 65A.090 shall be administered such that the registration required by KRS 65A.090(1) occurs as required by that subsection, and there is no gap in reporting by entities subject to this section and KRS 65A.010 to 65A.090 as the transition occurs.
  2. The governing body of each district shall annually prepare a budget and, as appropriate, shall classify budget units in the same fashion as county budgets are classified in accordance with KRS 68.240(2) to (5). The state local finance officer shall prepare standard budget forms for district use and shall furnish them to county clerks for distribution to district officers. No moneys shall be expended from any funds or any sources, except in accordance with the budget which has been filed with the fiscal court to be available for public inspection. No budget of a district shall become effective until filed with the fiscal court of the county in which the district is located for submission to the Department for Local Government. For those districts with multicounty jurisdictions, the district shall file a copy with each of the fiscal courts within the jurisdiction of the district for their review. If the budget is not filed with the fiscal court at least thirty (30) days prior to the start of the district fiscal year, the fiscal court shall immediately notify the county attorney. The county attorney shall then notify the governing board of the special district of the noncompliance and then proceed with any steps necessary to prevent the expenditure of funds by the special district until the district is in compliance.
  3. The governing body of each district which for the year in question receives from all sources or expends for all purposes less than seven hundred fifty thousand dollars ($750,000) shall annually prepare a financial statement, except that once every four (4) years the district’s governing body shall provide for the performance of an audit as provided in subsection (5) of this section.
  4. The governing body of each district which for the year in question receives from all sources or expends for all purposes seven hundred fifty thousand dollars ($750,000) or more shall provide for the performance of an annual audit as provided in subsection (5) of this section.
  5. To provide for the performance of an audit, the governing body of a district shall employ an independent certified public accountant or contract with the Auditor of Public Accounts to perform an audit of the funds in the district budget. The audit shall conform to:
    1. Generally accepted governmental auditing standards, which means those standards for audits of governmental organizations, programs, activities, and functions issued by the Comptroller General of the United States; and
    2. Additional procedures and reporting requirements as may be required by the Auditor of Public Accounts. A unit of government furnishing funds directly to a district may require additional audits at its own expense. Upon request, the State Auditor of Public Accounts may review the final report and all related work papers and documents of the independent certified public accountant relating to the audit. If a district is required by law to audit its funds more often than is required by this section, it shall perform those audits and may submit them in lieu of the requirements of this section, if the audits meet the requirements of this subsection.
  6. The provisions of subsection (3) of this section shall not apply to any district that is required by law to annually submit a financial report to an agency of state government. The districts shall annually submit a copy of their financial report to the county judge/executive and to the state local finance officer and once every four (4) years provide for the performance of an audit as provided in subsection (5) of this section.
  7. Any resident of the district may bring an action in the Circuit Court to enforce the provisions of this section. The Circuit Court shall hear the action and, on a finding that the governing body of the district has violated the provisions of this section, shall order the district to comply with the provisions. The Circuit Court, in its discretion, may allow the prevailing party, other than the district, a reasonable attorney’s fee and court costs, to be paid from the district’s treasury.

History. Enact. Acts 1980, ch. 30, § 2, effective July 15, 1980; 1984, ch. 62, § 1, effective July 13, 1984; 1996, ch. 64, § 1, effective July 15, 1996; 1998, ch. 506, § 1, effective July 15, 1998; 2002, ch. 239, § 1, effective July 15, 2002; 2007, ch. 47, § 42, effective June 26, 2007; 2007, ch. 114, § 1, effective June 26, 2007; 2010, ch. 117, § 48, effective July 15, 2010; 2013, ch. 40, § 12, effective March 21, 2013.

Opinions of Attorney General.

The special district budget forms properly used by the district should be considered as the operational budget, not merely as an informational document. OAG 80-628 .

The state local finance officer may change any form or classification of district budgets, and may devise a budget form designed to accommodate federally approved budget forms where federal funding of the district is involved. OAG 80-628 .

65.067. Bond required of persons handling public funds — Compliance by elected officials and their employees.

  1. All officers, officials, and employees of cities, counties, urban-county governments, charter county governments, a regional wastewater commission, and special districts who handle public funds in the execution of their duties shall give a good and sufficient bond to the local governing body for the faithful and honest performance of his or her duties and as security for all money coming into that person’s hands or under that person’s control. The bond amount shall be based upon the maximum amount of public funds the officer, official, or employee handles at any given time during a fiscal year cycle. The local governing body shall pay the cost of the bond.
  2. Elected officials who post bond as required by statute, and employees of their offices covered by a blanket or umbrella bond, shall be deemed to have complied with subsection (1) of this section.

History. Enact. Acts 2000, ch. 332, § 1, effective July 14, 2000; 2011, ch. 98, § 17, effective June 8, 2011.

65.068. Fees for fingerprint impressions or photograph requested for professional, trade, or commercial purposes or personal use.

  1. Any city, county, charter county, urban-county government, consolidated local government, unified local government, or special district, or any agency or instrumentality thereof, may charge a fee of ten dollars ($10) per set of fingerprint impressions taken and five dollars ($5) per photograph taken or copied when those services are requested by a person for professional, trade, or commercial purposes or for personal use.
  2. If the Department of Kentucky State Police sets new fingerprinting and photograph fees under the provisions of KRS 16.068 , any city, county, charter county, urban-county government, consolidated local government, unified local government, or special district, or any agency or instrumentality thereof, may increase fingerprinting and photograph fees to equal those fees established by the Department of Kentucky State Police through administrative regulations.
  3. Nothing in this section shall change any other fee allocation allowed by statute.

History. Enact. Acts 2014, ch. 135, § 4, effective July 15, 2014.

Legislative Research Commission Note.

(7/15/2014). In codification, the Reviser of Statutes has inserted “unified local government,” after “consolidated local government,” in subsection (2) of this statute to match the way the types of government are listed in subsection (1) of this statute. “Unified local government” was inadvertently omitted from subsection (2) in 2014 Ky. Acts ch. 135, sec. 4, and the Reviser of Statutes has corrected this manifest clerical or typographical error under the authority of KRS 7.136 (h).

65.070. Filing with county clerk and fiscal court — Application of provisions only to fiscal periods ending before July 1, 2014 — Transition to requirements of KRS 65A.010 to 65A.090 — Publication of descriptive information on the district — Submission of audit to fiscal court — Department for Local Government to furnish standard reporting forms to county clerks — Enforcement.

  1. The provisions of this section shall apply for fiscal periods ending prior to July 1, 2014. For fiscal periods beginning on and after July 1, 2014, the provisions of this section shall no longer apply; instead, the provisions of KRS 65A.010 to 65A.090 shall apply. Districts shall cooperate with the Department for Local Government and the Auditor of Public Accounts to ensure an orderly transition from the reporting requirements of this section to the reporting requirements of KRS 65A.010 to 65A.090 . Notwithstanding the dates established by this subsection, the provisions of this section and KRS 65A.010 to 65A.090 shall be administered such that the registration required by KRS 65A.090(1) occurs as required by that subsection, and there is no gap in reporting by entities subject to this section and KRS 65A.010 to 65A.090 as the transition occurs.
  2. Within sixty (60) days following the close of the fiscal year, the district shall:
    1. File with the county clerk of each county with territory in the district a certification showing any of the following information that has changed since the last filing by the district:
      1. The name of the district;
      2. A map or general description of its service area;
      3. The statutory authority under which it was created; and
      4. The names, addresses, and the date of expiration of the terms of office of the members of its governing body and chief executive officer;
    2. Submit for review a copy of the summary financial statement with the fiscal court of each county with territory in the district; and
    3. Publish, in lieu of the provisions of KRS 424.220 , but in compliance with other applicable provisions of KRS Chapter 424, the names and addresses of the members of its governing body and chief executive officer, and either a summary financial statement, which includes the location of supporting documents, or the location of district financial records which may be examined by the public.
  3. The district shall submit for review a copy of the audit with the fiscal court of each county with territory in the district. The submission shall be made within thirty (30) days of the district’s receipt of the completed audit.
  4. The Department for Local Government shall prepare and furnish to county clerks standard reporting forms which districts may use to comply with the provisions of this section.
  5. Any resident of the district may bring an action in the Circuit Court to enforce the provisions of this section. The Circuit Court shall hear the action and, on a finding that the governing body of the district has violated the provisions of this section, shall order the district to comply with its provisions. The Circuit Court, in its discretion, may allow the prevailing party, other than the district, a reasonable attorney’s fee and court costs, to be paid from the district’s treasury.

History. Enact. Acts 1980, ch. 30, § 3, effective July 15, 1980; 1982, ch. 393, § 41, effective July 15, 1982; 1984, ch. 62, § 2, effective July 13, 1984; 1984, ch. 63, § 2, effective July 13, 1984; 1994, ch. 508, § 21, effective July 15, 1994; 1996, ch. 321, § 1, effective July 15, 1996; 1998, ch. 69, § 31, effective July 15, 1998; 1998, ch. 506, § 2, effective July 15, 1998; 2002, ch. 239, § 2, effective July 15, 2002; 2007, ch. 47, § 43, effective June 26, 2007; 2010, ch. 117, § 49, effective July 15, 2010; 2013, ch. 40, § 13, effective March 21, 2013.

Legislative Research Commission Note.

(7/15/98). This section was amended by 1998 Ky. Acts chs. 69 and 506. Where these Acts are not in conflict, they have been codified together. Where a conflict exists, Acts ch. 506, which was last enacted by the General Assembly, prevails under KRS 446.250 .

Opinions of Attorney General.

Where a local health department is co-extensive with a public health taxing district with all its income and disbursements recorded in the district’s financial records, subsection (1)(c) of this section demonstrates an intention to substitute publishing information as to the availability of financial records for publishing the previously-required detailed financial statement; therefore, as to these local health departments, there is to be an exception to the publishing requirements of KRS 424.220 , however, where the local health department is not co-extensive with a public health taxing district with the same financial records, it will have to publish in accordance with KRS 424.220 . OAG 80-325 .

A fire protection district now is required to publish an annual financial statement consistent with the requirements of subsection (1)(c) of this section in place of the annual financial statement formerly required by KRS 424.220 . OAG 80-627 .

The state local finance officer may change any form or classification of district budgets, and may devise a budget form designed to accommodate federally approved budget forms where federal funding of the district is involved. OAG 80-628 .

A hospital district organized pursuant to KRS 216.310 to 216.360 is a “district” for purposes of this section requiring special districts to file annual statements. OAG 82-631 .

A hospital district organized and functioning pursuant to the terms and provisions of KRS 216.310 to 216.360 is required to publish an annual statement consistent with the requirements of subdivision (1)(c) of this section in lieu of the annual financial statement required by KRS 424.220 . OAG 82-631 .

A riverport authority, created pursuant to KRS 65.510 to 65.650 , is required to publish an annual financial statement consistent with the requirements of subdivision (1)(c) of this section, in lieu of the provisions of KRS 424.220 . Such statement must also be in compliance with other applicable provisions (other than KRS 424.220 ) of KRS Chapter 424. OAG 83-428 , modifying OAG 83-392 .

A district health department established pursuant to KRS 212.810 to 212.930 has no taxing power, although funds arising out of public health taxing districts’ special health tax, provided for in KRS 212.720 to 212.755 , may be turned over to such district health department; accordingly, since the district health department is not a taxing district the summary financial statement of this section has no application. OAG 84-335 .

This section relating to publication of financial statements, has no application to a district health department; however, the financial statement provisions of KRS 424.220 do apply to a district health department. OAG 85-45 , modifying OAG 84-335 .

65.110. Public improvement assessment bills.

Any public improvement assessment bill issued by a city, county or urban-county government shall indicate clearly the amount of the payment which is not being used for reducing principal but rather for the payment of interest.

History. Enact. Acts 1976, ch. 44, § 1.

65.112. Compensation for sewage treatment utility property — Eminent domain — Surcharge to customers.

  1. The provisions of any other law, rule, or regulation notwithstanding, if any city, county, public body corporate or politic, or special district or subdistrict furnishes or proposes to furnish sewage treatment utility services to customers of another sewage treatment utility by means of all or any part of the installations owned or paid for by that other sewage treatment utility, then the city, county, public body, district, or subdistrict taking over or proposing to take over the customers shall pay just compensation for these installations prior to the time the customers are taken over. If an agreement for compensation is not reached, then just compensation for the installations shall be payable by the city, county, public body, district, or subdistrict after condemnation as provided for in the Eminent Domain Act of Kentucky.
  2. There is hereby granted to any city, county, public body corporate or politic, or special district or subdistrict the power of eminent domain with respect to sewage treatment plants, facilities, and installations owned by sewage treatment utilities. This power of eminent domain shall be exercisable in the manner prescribed by the Eminent Domain Act of Kentucky.
  3. Any city, county, public body corporate or politic, or special district or subdistrict shall be entitled to surcharge customers so as to recover the amount of compensation paid for installations acquired under this section by agreement or condemnation.

History. Enact. Acts 2004, ch. 53, § 1, effective July 13, 2004.

NOTES TO DECISIONS

1.Attorney’s Fees.

Metropolitan sewer district acted in bad faith during condemnation negotiations by making an inadequate last offer to the condemnee of $4,000 when it had previously offered $60,000. However, the trial court did not abuse its discretion in finding that the district’s conduct was not so prejudicial as to justify award of counsel fees to the condemnee. Golden Foods, Inc. v. Louisville & Jefferson County Metro. Sewer Dist., 240 S.W.3d 679, 2007 Ky. App. LEXIS 459 (Ky. Ct. App. 2007).

65.113. Consumer use of specified utility services and liquefied petroleum gas not to be restricted — Authority of Public Service Commission and local government.

  1. Except as provided in subsection (2) of this section, no law, ordinance, policy, resolution, code, or other form of executive, administrative, or legislative action shall be enacted, adopted, or enforced that has the purpose or effect of prohibiting, discriminating against, restricting, limiting, or impairing, based upon the energy source, a consumer’s ability to use:
    1. The utility services that are described in KRS 278.010(3)(a), (b), or (c) and that are provided by a utility that is regulated by the Public Service Commission under KRS Chapter 278 or is otherwise incorporated under KRS Chapter 279; or
    2. Liquefied petroleum gas as defined in KRS 234.100 .
  2. Nothing in this section shall be interpreted or construed to prohibit or alter the powers and authority of the Public Service Commission under KRS Chapter 278, or the ability of a local government to act in any manner under the laws of the Commonwealth in all matters other than those enumerated in subsection (1) of this section, including but not limited to the power to act:
    1. Pursuant to authority granted under KRS Chapter 100;
    2. Pursuant to authority granted under Sections 163 and 164 of the Kentucky Constitution and any law enacted pursuant to those sections; and
    3. Through the local government or its utilities to provide any lawful utility service to its customers pursuant to state law.
  3. As used in this section, “local government” means any city, county, urban-county government, consolidated local government, unified local government, or charter county government.

HISTORY: 2021 ch. 120, § 1, effective June 29, 2021.

65.115. Compensation for sewage treatment utility property — Eminent domain — Surcharge to customers. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1986, ch. 445, § 1, effective July 15, 1986) was repealed by Acts 2004, ch. 53, § 2, effective July 13, 2004. For present law, see KRS 65.112 .

65.117. Notice to state local debt officer required before any financial obligation entered into — Administrative regulations.

  1. No city, county, urban-county, consolidated local government, charter county, or special purpose governmental entity as defined in KRS 65A.010 shall enter into any financing obligation of any nature, whether evidenced by note pursuant to KRS 65.7701 to 65.7721 or otherwise, by lease pursuant to KRS 65.940 to 65.956 , under which the lease price exceeds two hundred thousand dollars ($200,000), by bond issuance pursuant to KRS Chapter 66, or any long-term debt obligation of any sort without first notifying the state local debt officer in writing. The Department for Local Government may promulgate administrative regulations to develop the forms for the notification that shall contain the relevant financial terms of the obligation, including the interest rates or method of determining rates, the date of issue, the maturity dates, term of obligation, renewal periods, and the trustee or paying agent, if any. No approval of the state local debt officer shall be required, unless otherwise required by law.
  2. Any financing obligation entered into prior to July 15, 2008, shall be considered in compliance if that notification is provided to the state local debt officer no later than one (1) year after July 15, 2008.

History. Enact. Acts 2008, ch. 35, § 1, effective July 15, 2008; 2010, ch. 117, § 50, effective July 15, 2010; 2013, ch. 40, § 14, effective March 21, 2013.

Legislative Research Commission Note.

(7/15/2008). The phrase “prior to the passage of this section” in subsection (2) of this section as it appears in 2008 Ky. Acts ch. 35, sec. 1, has been codified to read “prior to July 15, 2008,” the date on which the Act became effective and the date of a corresponding reference in that same section.

65.120. Revenues from fees, fines and forfeitures related to parking.

All revenue generated from fees, fines, and forfeitures related to parking shall continue to be retained by those governmental entities receiving such fees, fines, and forfeitures on December 31, 1976, unless the fine is collected as a result of action taken in the Court of Justice.

History. Enact. Acts 1976 (Ex. Sess.), ch. 30, § 1.

65.125. Enactment and administration of special ad valorem tax.

  1. For the purposes of this section, “local government” means a city or county government.
  2. In order that a local government may provide funding for a specified project, program, or service, any local government may enact a special ad valorem tax for the purpose subject to the following:
    1. Any such tax shall be enacted by ordinance as provided in KRS 83A.060 for cities and KRS 67.076 to 67.078 for counties. The ordinance shall identify and generally describe the program, project, or service designated by the local government and provide for the levy of an annual tax sufficient to defray the cost;
    2. Upon first reading of the ordinance which will enact a special ad valorem tax, the chief executive authority shall direct that a copy of the ordinance be delivered to the county clerk;
    3. Upon receipt of the ordinance, the county clerk shall have prepared the question, which shall be “Are you in favor of the proposal entitled  . . . . . ? Yes  . . . . .  No  . . . . . .” The question shall be placed before the voters of the local government at the next regular election if the clerk receives the ordinance not later than the second Tuesday in August preceding the day of a general election. The county clerk shall cause to be published in accordance with KRS Chapter 424, at the same time as other voter information, the full text of the proposal. The county clerk shall cause to be posted in each polling place one (1) copy of the full text of the proposal;
    4. The provisions of the general election law shall apply to questions submitted to voters under this section. The certificate of the body authorized by law to canvass election returns shall be delivered to the chief executive authority of the local government proposing the special ad valorem tax. The certificate shall be entered upon the records of the local government at the next regular meeting of the legislative body;
    5. Upon passage of the question by a simple majority of those voting, the local government may proceed with the final adoption of the ordinance levying the special ad valorem tax at a rate not to exceed that approved by the voters.
  3. Any special ad valorem tax imposed under the authority of this section shall be based upon the assessed valuation of all taxable property within the jurisdictional boundaries of the local government.
  4. Any special ad valorem tax shall be collected in the same manner as are other ad valorem taxes. The revenues generated shall be in addition to other taxes and used solely for the specified project, program, or service as designated by the ordinance enacting the tax. The proceeds of the tax shall be accounted for in a separate fund and shall not be disbursed, expended, encumbered, or transferred for any use or purpose other than provided by the ordinance enacting the special ad valorem tax.
  5. Any special ad valorem tax shall be in addition to the tax rate levied and exclusive of the recall provisions in KRS 68.245 , 91.260 , 92.280 , 132.017 , and 132.027 .

History. Enact. Acts 1988, ch. 109, § 1, effective July 15, 1988; repealed, reenact., and amend. Acts 1990, ch. 92, § 1, effective July 13, 1990; 1996, ch. 195, § 27, effective July 15, 1996.

Compiler’s Notes.

This section was formerly compiled as KRS 91A.430 .

65.130. Local governments authorized to display historic religious and nonreligious artifacts, monuments, symbols, and texts in public buildings and on public property owned by the local governments.

Any city, county, charter county, urban-county government, consolidated local government, or special district, or any agency or instrumentality thereof, may display historic artifacts, monuments, symbols, and texts, including but not limited to religious materials, in public buildings and on public property owned by that unit of government if the display is consistent with the requirements of KRS 42.705 .

History. Enact. Acts 2006, ch. 34, § 3, effective March 24, 2006.

65.133. Responsibility for enforcement of sex offender registration laws.

  1. Each local law enforcement agency and the Department of Kentucky State Police shall each have the responsibility for enforcing the provisions of sex offender registration laws.
  2. Law enforcement agencies may enter into written agreements for joint investigation and enforcement of violations of sex offender registration laws. These agreements may include other local law enforcement agencies and may include the Department of Kentucky State Police.

History. Enact. Acts 2006, ch. 182, § 15, effective July 12, 2006; 2007, ch. 85, § 139, effective June 26, 2007.

65.135. Legislative intention to occupy field regarding violations of KRS 439.3401 and KRS 17.500.

  1. It is the intent of the General Assembly to occupy the entire field of legislation relating to:
    1. Any person who has committed or is charged with the commission of a violent offense as specified in KRS 439.3401 ; and
    2. Any person who has committed or is charged with commission of a sex crime as specified in KRS 17.500 .
  2. No city, county, urban-county, charter county, consolidated local government, or other unit or instrumentality of local government shall enact an ordinance or other rule or regulation relating to the control, management, registration, monitoring, or housing of, or other matter relating to, a person specified in subsection (1) of this section.
  3. The fact that the General Assembly has not regulated a particular subject relating to a person specified in subsection (1) of this section does not grant a city, county, urban-county, charter county, consolidated local government, or other unit or instrumentality of local government the authority to enact an ordinance, rule, or regulation relating to that subject.
  4. Cities, counties, urban-counties, charter counties, consolidated local governments, and units and instrumentalities of local government shall enforce the provisions of state law with regard to persons specified in subsection (1) of this section.
  5. On July 12, 2006, any local ordinance, resolution, or rule relating to any topic specified in this section shall be null, void, and unenforceable.

History. Enact. Acts 2006, ch. 182, § 16, effective July 12, 2006.

65.140. Local governments required to pay for purchases within 30 days — Interest penalty.

  1. As used in this section, unless the context otherwise requires, “purchaser” means any city, county, or urban-county government which receives goods or services from a vendor.
  2. Unless the purchaser and vendor otherwise contract, all bills for goods or services shall be paid within thirty (30) working days of receipt of a vendor’s invoice except when payment is delayed because the purchaser has made a written disapproval of improper performances or improper invoicing by the vendor or by the vendor’s subcontractor.
  3. An interest penalty of one percent (1%) of any amount approved and unpaid shall be added to the amount approved for each month or fraction thereof after the thirty (30) working days which followed receipt of vendor’s invoice by the purchaser.

History. Enact. Acts 1990, ch. 154, § 1, effective July 13, 1990.

Opinions of Attorney General.

Although this section does not define “vendor,” the Attorney General’s Office could see no reason why the Property Valuation Administrator (PVA) should not be considered a vendor for the purpose of billing a city for the city’s tax assessments, since the PVA is providing a service for which the city is obligated to make payment; therefore the city must make payment within 30 working days of receipt of the invoice from the PVA. OAG 92-69 .

65.150. Expenditure of funds for liability or property insurance.

  1. A county or city or urban-county government and any board, commission, agency or authority of a county, city or urban-county government may expend funds necessary to insure any of its employees, officials and property against any liability or property damage arising out of an act or omission committed in the scope and course of performing legal duties.
  2. A county fee officer and his deputies and assistants may be insured pursuant to subsection (1) of this section, or the officer may expend excess fees to insure himself and his deputies and assistants against any liability arising out of an act or omission committed in the scope and course of performing legal duties.
  3. Any parties eligible to expend funds for insurance pursuant to this section may associate, pursuant to KRS 65.210 to 65.300 , for the purpose of insuring themselves against any liability or property damage.
  4. An association of governmental units formed for the purpose of providing insurance to the participating members may act on behalf of and with the approval of the participating governmental units to borrow money and issue revenue bonds to fund the costs of providing the insurance. Revenue bonds issued pursuant to the authority granted in this subsection shall be issued in accordance with KRS 65.270 .

History. Enact. Acts 1979 (Ex. Sess.), ch. 22, § 3, effective May 12, 1979; 1988, ch. 225, § 5, effective July 15, 1988; 1988, ch. 309, § 1, effective July 15, 1988.

Legislative Research Commission Note.

This section was amended by two 1988 acts which were identical and which have been compiled together.

NOTES TO DECISIONS

1.Negligence Action.

By permitting a county to purchase comprehensive liability insurance, this section effectively allows a negligence action to be filed against the county. Lee v. McCracken County Fiscal Court, 872 S.W.2d 88, 1993 Ky. App. LEXIS 103 (Ky. Ct. App. 1993).

2.Sovereign Immunity.

This section is not an express or implied waiver of the sovereign immunity of a county sued in tort. Franklin County v. Malone, 957 S.W.2d 195, 1997 Ky. LEXIS 105 ( Ky. 1997 ), overruled in part, Commonwealth Bd. of Claims v. Harris, 59 S.W.3d 896, 2001 Ky. LEXIS 198 ( Ky. 2001 ), overruled in part, Yanero v. Davis, 65 S.W.3d 510, 2001 Ky. LEXIS 203 ( Ky. 2001 ).

A county’s participation in a self-insurance fund does not waive its sovereign immunity from tort suits. Franklin County v. Malone, 957 S.W.2d 195, 1997 Ky. LEXIS 105 ( Ky. 1997 ), overruled in part, Commonwealth Bd. of Claims v. Harris, 59 S.W.3d 896, 2001 Ky. LEXIS 198 ( Ky. 2001 ), overruled in part, Yanero v. Davis, 65 S.W.3d 510, 2001 Ky. LEXIS 203 ( Ky. 2001 ).

Opinions of Attorney General.

In enacting this section, the General Assembly has authorized fiscal courts to procure comprehensive general liability insurance for the county’s employees or officials to cover the specific areas of risk spelled out in this section. OAG 80-221 .

The compensation insurance is restricted to covering employees of the county receiving injuries arising out of and in the course of employment and this section does not authorize the county to purchase liability insurance on a comprehensive general basis. OAG 80-538 .

Insurance for liabilities “arising out of an act or omission committed in the scope and course of performing legal duties” may be purchased by county governments for officials and employees; but, such expense is entirely in the discretion of the county government and there is no provision requiring county governments to provide health or life insurance for coroners. OAG 81-407 .

A county jailer is not a fee officer; however, under subsection (1) of this section, the fiscal court of any county or urban county government may expend county funds, if available, to insure a county jailer against any liability arising out of an act or omission committed in the scope and course of performing legal duties. OAG 83-94 , modifying OAG 83-35 .

It is permissive, not mandatory, for a fiscal court to pay for the jailer’s liability insurance, and where the fiscal court decides not to pay for such liability insurance, the insurance would then have to be paid for by the jailer out of his own private pocket. OAG 83-94 , modifying OAG 83-35 .

A county may acquire comprehensive liability and casualty insurance. OAG 87-20 .

Pursuant to subsection (1) of KRS 65.240 and subsection (3) of this section, counties may associate to self-insure. OAG 87-20 .

This section did not authorize action of two counties executing interlocal cooperation agreement action in which they created a trust which issued tax-exempt bonds and used the proceeds to acquire all the stock of a corporation which sought to be licensed as an insurance company in order to provide reinsurance to various self-insured groups of the Kentucky Association of Counties since subsection (4) of this section contemplates the purchase of insurance not the purchase of an insurance company and states that the insurance obtained by revenue bonds must be for participating members and not as contemplated by the agreement to entities other than the two participating members. OAG 94-1 .

65.154. “Employer”, “employee” defined — Spouse to acknowledge action in writing if not named as beneficiary by employee.

  1. KRS 344.030 notwithstanding, for the purposes of this section, “employer” shall mean the sponsor of and “employee” shall mean a member of a pension plan governed by the federal “Employee Retirement Income Security Act of 1974,” and any member of a state pension plan or a pension plan of any unit of local government.
  2. For any employee who elects not to take a joint and survivor annuity or who selects a beneficiary other than the spouse if living, the employer shall provide forms which provide for the spouse of the employee to acknowledge by signature such action.

History. Enact. Acts 1984, ch. 239, § 1, effective July 13, 1984.

Compiler’s Notes.

The Employee Retirement Income Security Act of 1974 is located throughout titles 5 and 29 of USCS.

65.155. Pick up of employee contributions.

  1. Each local government or local government agency which has a pension plan which is qualified under Section 401(a) of the Internal Revenue Code shall, solely for the purpose of compliance with Section 414(h) of the United States Internal Revenue Code, pick up the employee contributions made to the respective retirement system pursuant to KRS 79.080 , 90.400 , 90.410 , 95.290 , 95.580 , 95.627 , 95.768 , 95.769 , 95.867 , or 96.180 for all compensation earned after August 1, 1982, or after qualification pursuant to Section 401(a) of the Internal Revenue Code, whichever is later, and all contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code and KRS 141.010 . However, each local government or local government agency shall continue to withhold federal and state income taxes based upon these contributions and hold them in a separate account until the Internal Revenue Service or the federal courts rule that, pursuant to Section 414(h) of the United States Internal Revenue Code, these contributions shall not be included as gross income of the employee until such time as the contributions are distributed or made available to the employee. The picked-up employee contribution shall satisfy all obligations to the retirement fund satisfied prior to August 1, 1982, or later date, as the case may be, by the employee contribution, and the picked-up employee contribution shall be in lieu of an employee contribution. The local governments or local government agencies shall pay these picked-up employee contributions from the same source of funds which is used to pay earnings to the employee. The employee shall have no option to receive the contributed amounts directly instead of having them paid by the local government or local government agency to the fund. Employee contributions picked up after August 1, 1982, shall be treated for all purposes of KRS 79.080 , 90.400 , 90.410 , 95.290 , 95.580 , 95.627 , 95.768 , 95.769 , 95.867 , or 96.180 in the same manner and to the same extent as employee contributions made prior to August 1, 1982, or later date of pick up, as the case may be.
  2. The pick up of employee contributions by the employer shall not be construed to reduce the final salary or the average salary upon which the employee retirement benefit may be based in any of the retirement systems covered by this section.

HISTORY: Enact. Acts 1982, ch. 166, § 44, effective July 15, 1982; 1984, ch. 177, § 13, effective July 13, 1984; 1990, ch. 476, Pt. VII D § 644, effective April 11, 1990; 2018 ch. 171, § 69, effective April 14, 2018; 2018 ch. 207, § 69, effective April 27, 2018.

Legislative Research Commission Notes.

(4/27/2018). This statute was amended by 2018 Ky. Acts chs. 171 and 207, which do not appear to be in conflict and have been codified together.

Compiler’s Notes.

Section 649 of Acts 1990, ch. 476, Part VII D, provided that the provisions of Part VII D (§§ 630-648) of ch. 476 “shall apply to taxable years beginning after December 31, 1989.”

Sections 401(a) and 414(h) of the Internal Revenue Code, referred to in subsection (1) of this section, are compiled as 26 USCS § 401(a) and 26 USCS § 414(h), respectively.

65.156. Actuarial valuation requirement for local government pension systems — Exemptions — Copy to Legislative Research Commission — Contributions by cities, municipal agencies, urban-county governments, or consolidated local governments — Payment of lawful expenses — Prohibition against creation or maintenance of defined benefit retirement system susceptible of unfunded liability — Exceptions.

  1. The governing board of any local government retirement system created pursuant to KRS 67A.320 , 67A.340 , 67A.360 to 67A.690 , 79.080 , 90.400 , 90.410 , 95.290 , 95.520 to 95.620 , 95.621 to 95.629 , 95.767 to 95.784 , 95.851 to 95.884 , or KRS Chapter 96 shall submit the retirement system to an actuarial valuation, if the system provides a defined benefit, at least:
    1. Once every three (3) years if the system has six (6) or more active and retired members; or
    2. Once every five (5) years if the system has less than six (6) active and retired members. The valuation shall be prepared by an actuary who is a fellow of the Society of Actuaries, a member of the American Academy of Actuaries, or an enrolled actuary under the Employees’ Retirement Income Security Act of 1975. The board shall send a copy of the most recent valuation to the librarian of the Legislative Research Commission by September 1, 1982, and thereafter the board shall send a copy of each new valuation within ten (10) days of receipt. If all liabilities to all individuals entitled to benefits from the local government retirement system have been satisfied, no actuarial valuation shall be required.
  2. Actuaries performing valuations pursuant to this section shall use the entry age normal cost funding method. Their reports shall include a definition of each actuarial term and an explanation of each actuarial assumption used. Assumptions shall be reasonably related to the experience of the system and represent the actuary’s best estimate of anticipated experience.
  3. Any city or municipal agency with a retirement system created pursuant to KRS 79.080 , 90.400 , 90.410 , 95.520 to 95.620 , 95.621 to 95.629 , 95.767 to 95.784 , 95.851 to 95.884 , or KRS Chapter 96 which is closed to new members pursuant to KRS 78.530 , 95.520 , 95.621 , or 95.852 shall, if its local pension system provides a defined benefit, contribute annually to the pension system, for the benefit of the retirees of the system and the active participants who choose to remain in the system, and for the benefit of members who have completed at least twenty (20) years’ service and withdrawn from service pursuant to KRS 95.857 , an amount equal to that which would be required pursuant to the funding standards of KRS 95.868 , plus so much of the principal amount of any unfunded prior service liability as the actuary states is necessary to maintain cash flow adequate to pay retiree and beneficiary payments until financial obligations to all retirees and beneficiaries are fully satisfied.
  4. All lawful expenses for general administration, performance bonds, medical, actuarial, accounting, auditing, legal, and investment services of a retirement system listed in subsection (1) of this section shall be paid from the pension fund. Actuaries performing valuations pursuant to this section shall include estimates of the expenses in their recommendations for pension system funding, and local governments shall add payments for the expenses to their annual contributions to their respective retirement systems.
  5. A city or city agency, consolidated local government, or urban-county government may, pursuant to KRS 67A.340 , 79.080 , 90.410 , or KRS Chapter 96 as applicable, provide for the retirement security of its employees through the creation of a money purchase or defined contribution plan qualified under Section 401(a) of the Internal Revenue Code of 1954 as amended. City employee deferred compensation plans created pursuant to KRS 18A.270 , or money purchase or defined contribution plans, qualified under Section 401(a) of the Internal Revenue Code of 1954 as amended, which by their nature cannot have an unfunded liability, shall not be subject to the actuarial valuation requirements of this section, and shall not be subject to termination for purposes of employee entry into the County Employees Retirement System, as required by KRS 78.530 , 79.080 , 90.410 , and 96.180 .
  6. No city or county, except an urban-county, or special district, nor any agency or instrumentality of a city or county or special district shall create or maintain for its officers or employees a defined benefit retirement system, which by its nature can have an unfunded liability. The provisions of this subsection shall not preclude employer contributions for city managers or other appointed local government executives who participate, pursuant to KRS 78.540 , in a retirement system which operates in more than one (1) state, nor the continuation of a local government defined benefit retirement system which has been closed to new members but which must fulfill its obligations to current active members, retirees, and beneficiaries. Notwithstanding any provision to the contrary, the provisions of this subsection shall not apply to length of service awards programs established for the benefit of volunteer firefighters and volunteer life squad and volunteer rescue personnel.
  7. Notwithstanding any provision to the contrary, any city or county may establish awards programs that recognize the length of service to the community by volunteer firefighters, volunteer life squads, and volunteer rescue personnel.

History. Enact. Acts 1982, ch. 297, § 1, effective July 15, 1982; 1984, ch. 24, § 1, effective July 13, 1984; 1984, ch. 177, § 14, effective July 13, 1984; 1988, ch. 11, § 2, effective July 15, 1988; 1992, ch. 238, § 1, effective July 14, 1992; 1998, ch. 328, § 1, effective July 15, 1998; 2002, ch. 346, § 23, effective July 15, 2002; 2014, ch. 92, § 30, effective January 1, 2015.; 2016 ch. 31, § 1, effective July 15, 2016.

Compiler's Notes.

This section has been reprinted to correct errors appearing in the 2014 cumulative supplement.

65.157. County may appropriate funds to a city within a county or city may appropriate funds to county in which it is located — Specification of uses — Accounting on expenditures.

  1. The governing body of any county may, in accordance with the provisions of KRS Chapter 68, appropriate county funds to a city within the county to enable the city to perform proper and necessary governmental functions which the city is by statute authorized or required to undertake and which involves the public interest of the citizens of the county.
  2. The governing body of any city may, in accordance with the provisions of KRS Chapter 91A, appropriate city funds to the county in which the city is located to enable the county to perform proper and necessary governmental functions which the county is by statute authorized or required to undertake and which involves the public interest of the citizens of the city.
  3. The ordinance by which funds are appropriated to a county or a city under this section shall specify the permissible uses of such funds.
  4. A county or a city receiving funds under this section shall administer the funds and shall account at least biannually to the grantor on the expenditure of the funds.

History. Enact. Acts 1982, ch. 257, § 1, effective July 15, 1982.

65.1575. Charitable community foundations — Relationship with local governments.

  1. As used in this section:
    1. “Foundation” means a charitable community foundation established to accept gifts, bequests, devises, or other transfers for the purpose of meeting charitable objectives for the citizens of the community;
    2. “Local government” means every city, regardless of classification, every county, and every charter county and urban-county government;
    3. “Component fund” means an individual fund treated as part of a foundation and that meets the requirements established under regulations promulgated implementing 26 U.S.C. sec. 170 as amended from time to time; and
    4. “Nonprofit organization” means an organization incorporated under KRS Chapter 273 and exempt under Section 501(c)(3) of the Internal Revenue Code.
    1. A local government may donate to a foundation the proceeds from the sale of any utility or facility or any grant, bequest, or devise received by it. (2) (a) A local government may donate to a foundation the proceeds from the sale of any utility or facility or any grant, bequest, or devise received by it.
    2. A local government may contribute to a nonprofit organization exempt under Section 501(c)(3) of the Internal Revenue Code for the development and operation of a community center or recreational facilities.
  2. If the foundation receives a gift from a local government that is subject to conditions, limitations, or requirements by the donor, the gift shall be segregated in a component fund within the foundation, which shall be subject to conditions, limitations, or requirements that are substantially identical to those established by the donor.
  3. If the foundation receives a gift from a local government that is not subject to any specified conditions, limitations, or requirements by the donor, the gift amount shall be maintained in a component fund. The income from the fund shall be distributed to the local government for charitable purposes as directed by an ordinance of the governing body of the local government.
  4. If a nonprofit organization receives a gift from a local government, it shall maintain the financial records so as to be able to ascertain the use of the donated funds.
  5. The foundation or nonprofit organization exempt under Section 501(c)(3) of the Internal Revenue Code shall return any donations to the general fund of a local government if:
    1. The foundation or nonprofit organization exempt under Section 501(c)(3) of the Internal Revenue Code loses its status as a public charitable organization;
    2. The foundation or nonprofit organization exempt under Section 501(c)(3) of the Internal Revenue Code is liquidated; or
    3. The foundation or nonprofit organization exempt under Section 501(c)(3) of the Internal Revenue Code violates any condition, limitation, or requirement as established by the local government governing body.

History. Enact. Acts 1998, ch. 332, § 1, effective July 15, 1998; 2002, ch. 290, § 1, effective July 15, 2002.

Compiler’s Notes.

Section 501(c)(3) of the Internal Revenue Code, referred to in this section, is codified as 26 USCS § 501(c)(3).

65.158. Procedure for city, consolidated local government, or urban-county employee nontax payroll deductions.

Any city, consolidated local government, or urban-county government which makes deductions from the pay of its employees for any cause other than taxes shall, upon the written request of at least thirty percent (30%) of all employees within a department or division, deduct the amount from the pay of an employee as he may note on a signed payroll notification card or voucher for the purposes of employee benefits, insurance, community projects, or union dues. No deduction shall be made pursuant to this section from the pay of any employee who does not sign a payroll notification card or voucher. Upon these deductions, the city, consolidated local government, or urban-county government shall, within thirty (30) days, pay to the elected representative or designated recipient for the employees of the department or division the total amount of the deductions minus the actual cost to the city, consolidated local government, or urban-county government of processing the deductions.

History. Enact. Acts 1986, ch. 276, § 1, effective July 15, 1986; 1998, ch. 501, § 1, effective July 15, 1998; 2002, ch. 346, § 24, effective July 15, 2002.

65.159. Incentive programs for emergency services personnel achieving health and fitness goals.

  1. As used in this section:
    1. “Emergency services personnel” means any nonelected persons employed by or volunteering for a:
      1. Fire department operating under KRS Chapter 67 or 95 or under the authority of an urban-county government, consolidated local government, charter-county government, or unified local government;
      2. Police department operating under KRS Chapter 67 or 95 or under the authority of an urban-county government, consolidated local government, charter-county government, or unified local government; or
      3. Sheriff’s department; and
    2. “Local government” means a city, county, urban-county government, charter county government, consolidated local government, or unified local government.
  2. Any local government or group of local governments may elect, through the adoption of an ordinance, or identical ordinances in the case of a group of local governments, to establish an incentive program for emergency services personnel to be rewarded for their leadership in achieving health and fitness goals that can be a model for others in the community.
  3. The ordinance or ordinances shall specify what measures shall be part of the incentive program, which may include the following health and fitness indicators:
    1. Fasting blood lipid levels that include total cholesterol, low density lipoproteins, high density lipoproteins, and triglycerides;
    2. Fasting glucose levels;
    3. Systolic and diastolic blood pressure levels, the measurement of which is encouraged to be recorded when the participant is in a more-relaxed state;
    4. Fitness levels, including activities such as distances walked, push-ups, sit-ups, pull-ups, and, in lieu of pull-ups for females, timed hangs;
    5. Body fat percentages;
    6. Body mass index; and
    7. Any other measure of fitness or health as determined by the local government, such as a reduction in the use of tobacco products or sodium.

      The ordinance or ordinances may provide considerations for differences in age and gender of the emergency services personnel. Local governments are encouraged, at a minimum, to include in their program the measures indicated in paragraphs (a) to (c) of this subsection.

    1. Local governments may reward participants who make the most positive gains in the health and fitness indicators measured by the local government. (4) (a) Local governments may reward participants who make the most positive gains in the health and fitness indicators measured by the local government.
    2. The ordinance or ordinances shall clearly set out what health and fitness standards will be rewarded within the selected measures.
  4. The ordinance or ordinances may include a step-based system of awards, in the instance if a certain standard is met consistently or consecutively for an established duration of time, the reward is to be incrementally increased.
  5. The ordinance or ordinances, in addition to or in lieu of rewarding individual emergency services personnel performance, may reward performance to a particular department or any combination of departments either in the local government or among different local governments.
  6. The reward may be monetary in nature, or any other consideration or reward not otherwise prohibited by state or federal law.
  7. A local government may, by ordinance, elect to repeal the program.
  8. Any monetary reward provided under this section shall not be included in the calculation for a retirement allowance for any emergency services personnel participating in the County Employees Retirement System set out in KRS 78.510 to 78.852 .
  9. A local government shall follow any applicable state and federal laws in the gathering of any health and fitness data from participants in the program, including the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191.
  10. Local governments are encouraged to acquire health and fitness baseline data for the participants by using previously collected health and fitness data or by collecting health and fitness data on the participants at the beginning of the program or when they begin participating in the program.
  11. Each local government adopting an ordinance pursuant to this section shall send a copy of its ordinance, and any amendments thereto, to the Kentucky Department for Local Government. The ordinance or amendment may be sent electronically or by any other method deemed suitable by the local government. The ordinances and amendments shall be deemed public records pursuant to KRS 61.870 to 61.884 .
  12. A local government may accept money by grant, gift, donation, bequest, legislative appropriation, or other conveyance to be used for the sole purpose of this section and shall be placed in a separate account apart from all other funds of the local government.
  13. Nothing in this section shall be construed to prohibit any local government from enacting or establishing alternative incentives or from participating in other incentive programs for the rewarding of health or fitness levels or goals.
  14. Participation in the program shall be voluntary on the part of emergency services personnel. The failure of any emergency services personnel to meet a standard set out in this program, or to participate in the program, shall not be used as a measure of his or her job-related performance.

HISTORY: 2016 ch. 140, § 1, effective July 15, 2016.

Legislative Research Commission Notes.

(7/15/2016). 2016 Ky. Acts ch. 140, sec. 1 directed that a new section of KRS Chapter 64 be created for the text of this statute, which authorizes a local government to establish an incentive program for emergency services personnel achieving certain health and fitness goals. The subject matter of KRS Chapter 64 relates to fees and compensation of public officers and employees. Since the incentive rewards authorized under this statute are not required to be monetary in nature, in codification the Reviser of Statutes created a new section of KRS Chapter 65, which contains general provisions applicable to counties, cities, and other units of local government, as a more appropriate statutory designation under the authority of KRS 7.136(1)(a).

Special Districts

65.160. Special districts may be formed by two or more counties.

  1. Upon approval of the fiscal courts of the counties involved, two (2) or more counties may join together to form a special district to fulfill any purpose which any individual county is presently authorized to fulfill or may be authorized to fulfill in the future.
  2. The membership of the governing body of such multi-county special districts shall be apportioned among the counties in ratio to their population, with each county having at least one (1) member.
  3. Members of the governing body of multi-county special districts may be removed from office as provided by KRS 65.007 .

History. Enact. Acts 1972, ch. 31, § 1; 1980, ch. 18, § 2, effective July 15, 1980; 1980, ch. 188, § 34, effective July 15, 1980.

Compiler’s Notes.

This section was formerly compiled as KRS 65.040 and was renumbered by the Reviser under authority of KRS 7.136 .

Legislative Research Commission Note.

This section was amended by two 1980 acts which do not appear to be in conflict and have been compiled together.

Opinions of Attorney General.

This section involves the formation of special purpose districts by two or more counties and, thus, membership on the governing board is limited to member counties because cities cannot be members of such special purpose districts. OAG 78-39 .

A community action corporation is not a special district for purposes of KRS 65.160 to 65.162 . OAG 82-196 .

65.162. Special districts may be expanded to include additional counties.

  1. Any special district may be expanded to include additional counties within its jurisdiction for performing the function for which it was organized.
  2. Before a county may participate in a multi-county special district, the fiscal court shall determine that participation is feasible and necessary. The determination shall be made only after a duly advertised public hearing has been held by the fiscal court.
  3. When a county is added to a multi-county special district, it shall be given representation on the governing body of the district in the same manner as the other counties within the district.
  4. Members of the governing body of multi-county special districts may be removed from office as provided by KRS 65.007 .

History. Enact. Acts 1972, ch. 31, § 2; 1980, ch. 18, § 3, effective July 15, 1980; 1980, ch. 188, § 35, effective July 15, 1980.

Compiler’s Notes.

This section was formerly compiled as KRS 65.050 and was renumbered by the Reviser under authority of KRS 7.136 .

Legislative Research Commission Note.

This section was amended by two 1980 acts which do not appear to be in conflict and have been compiled together.

65.164. “District.”

As used in KRS 65.166 to 65.176 , the word “district” shall mean any board, commission, or special district created pursuant to the following statutes: KRS 65.660 to 65.679 ; KRS 75.010 to 75.260 ; KRS 104.450 to 104.680 ; KRS 108.010 to 108.070 ; KRS 184.010 to 184.300 ; KRS 220.010 to 220.613 ; KRS 266.010 to 266.990 ; KRS 267.010 to 267.990 ; KRS 268.010 to 268.990 ; or KRS 269.100 to 269.270 .

History. Enact. Acts 1980, ch. 369, § 1, effective July 15, 1980; 1984, ch. 4, § 2, effective July 15, 1986; 2000, ch. 429, § 12, effective July 14, 2000.

Opinions of Attorney General.

A community action corporation is not a district for purposes of KRS 65.164 to 65.176 as it is not among the boards, commissions or special districts created pursuant to the statutory provisions set forth in this section. OAG 82-196 .

65.166. Fiscal court procedure for alteration or dissolution of district.

  1. Upon receipt of a petition and following a public hearing as provided in this section, the fiscal court may alter the boundaries of a district by reducing its area, or may dissolve a district if that district has for a period of two (2) consecutive years failed to provide the services for which it was established, or if all or a portion of such services have been provided by some other entity. If the district is located in more than one (1) county, the fiscal court of each county containing a portion of the district must vote to dissolve the district before such dissolution may take effect.
  2. Upon receipt of a petition signed by at least thirty percent (30%) of that class of citizens who may by law petition for the creation of the district, the fiscal court shall schedule a public hearing on the matter of alteration or dissolution and advertise such hearing as provided in KRS 424.130 .
  3. The petition shall be in substantially the following form: “The undersigned (registered voters, qualified voters, freeholders or landowners as determined by subsection (2) of this section) living within (name of special district and containing a metes and bounds description of the district) hereby request that the fiscal court consider the alteration or dissolution of (name of district) pursuant to this section.” The petition shall conspicuously state in layman’s terms that any legal obligations of the district must be satisfied before the district can be dissolved and that the citizens of the district shall be responsible for the satisfaction of any such obligations. Signatures on the petition shall be dated, the last no later than ninety (90) days after the first.
  4. At the hearing, the burden of proving that the district is providing or taking substantial steps toward providing the services for which it was created, or that no other entity is providing the service, shall be upon the district board of directors. In determining whether to alter, dissolve or to take no action in regard to the district, the fiscal court shall consider testimony offered at the hearing and any other relevant information including but not limited to the following:
    1. Present and projected need for the service provided by the district;
    2. Population density of the district;
    3. Existence of alternate providers of services;
    4. Revenue base of the district such as assessed valuation, bonding capacity and user fees; and
    5. Consequences of alteration of the district’s boundaries on the effectiveness and efficiency of the district.
  5. Within sixty (60) days following the hearing, the fiscal court shall set forth its written findings of fact in approving or disapproving the alteration or dissolution of the district.
    1. If the fiscal court determines to dissolve a district, it shall determine a method to satisfy any legal obligations of the district which might be affected thereby. Upon satisfaction of its legal obligations, the district shall be legally dissolved; any special ad valorem tax imposed by the district shall be removed from the tax rolls by the county clerk; and any assets of the district shall be assumed by the county.
    2. If the fiscal court determines to alter the boundaries of the district, it shall draw the new boundaries of the district and determine the proportional amount of existing legal obligations of the area which is to be excluded from the district. Upon the satisfaction of such obligations, the new boundaries of the district shall be legally effective and any affected taxpayers shall be removed from the tax rolls of the district.
  6. If the final decision of the fiscal court or the Circuit Court, in the case of an appeal as provided in KRS 65.168 , is against the alteration or dissolution of the district, no attempt to alter or dissolve the district pursuant to this section shall be made within three (3) years of the decision.

History. Enact. Acts 1980, ch. 369, § 2, effective July 15, 1980.

65.168. Appeal.

Any petitioner or member of the district board of directors may, within thirty (30) days of the fiscal court’s decision, appeal an adverse finding of the fiscal court to the Circuit Court in the county containing the greater part of the district. The Circuit Court shall review the decision of the fiscal court but shall reverse the decision only if such decision is found to be arbitrary or capricious. If the Circuit Court reverses the decision of the fiscal court by ordering the alteration or dissolution of the district, it shall direct the fiscal court to determine, as provided in subsection (5) of KRS 65.166 , a method for satisfying any legal obligations of the district which might be affected thereby.

History. Enact. Acts 1980, ch. 369, § 3, effective July 15, 1980.

65.170. Dissolution by referendum.

  1. A district may be dissolved by a referendum as provided in this section.
  2. Persons seeking dissolution of a district shall submit a petition to the county clerk signed by at least fifty percent (50%) of that class of citizens who may by law petition for the creation of the district.
  3. The petition shall be in substantially the following form: “The undersigned (registered voters, qualified voters, freeholders, or landowners as determined by subsection (2) of this section) living within (name of the district and containing a metes and bounds description of the district) hereby request that the question of the dissolution of the district be put to a referendum.” The petition shall conspicuously state in layman’s terms that any legal obligations of the district must be satisfied before the district can be dissolved and that the citizens of the district shall be responsible for the satisfaction of any such obligations. Signatures on the petition shall be dated, the last no later than ninety (90) days after the first.
  4. If the county clerk determines that the petition is in proper order, he shall certify the petition to the fiscal court or consolidated local government. The fiscal court or consolidated local government shall direct that the question be placed before the voters at the next regular election if the petition is certified not later than the second Tuesday in August preceding the day of the regular election. The fiscal court or consolidated local government shall bear the costs of advertising and placing the question before the voters.
  5. The county clerk shall advertise the question as provided in KRS Chapter 424 and shall prepare the following admonition to the voter: “The (name of district) may have existing legal obligations that must be satisfied before the district can be dissolved. The citizens of the district shall be responsible for the satisfaction of any such obligations.” The question of the dissolution of the district shall be placed before the voters in substantially the following form: “The (name of the district and containing a metes and bounds description of the district) should be dissolved.” The voter shall vote “yes” or “no.”
  6. Registered voters eligible to sign a petition for dissolution as provided by subsection (2) of this section shall be eligible to vote on the question of dissolution.
  7. In referendums under this section, provision shall be made for those opposing the dissolution of the district to have equal representation with the proponents of the measure in the determination of eligibility of voters, and in the observance of canvassing and certifying of the returns.

History. Enact. Acts 1980, ch. 369, § 4, effective July 15, 1980; 1982, ch. 360, § 14, effective July 15, 1982; 1996, ch. 195, § 28, effective July 15, 1996; 2002, ch. 346, § 25, effective July 15, 2002.

Opinions of Attorney General.

In order to be eligible to vote on the question of the dissolution of a sanitation district located in a particular county, the voter must be a person: (1) who is a registered voter in that county and in a precinct located within the sanitation district, and (2) who, as required by subsection (1) of KRS 220.040 is in possession of land claiming as a freeholder (i.e., a landowner) within the limits of the sanitation district located in the county sought to be dissolved. OAG 81-354 .

65.172. Dissolution on majority vote — When dissolution opposed, restriction on further attempt.

  1. If a majority of those voting in the referendum as provided in KRS 65.170 favor the dissolution of the district, the district shall, upon satisfaction of its legal obligations, be dissolved by order of the fiscal court, any special ad valorem tax imposed by the district shall be removed from the tax rolls by the county clerk and any assets of the district shall be assumed by the county.
  2. If a majority of those voting in the referendum oppose the dissolution of the district, no attempt to dissolve the district pursuant to KRS 65.170 shall be made within five (5) years of the election.

History. Enact. Acts 1980, ch. 369, § 5, effective July 15, 1980.

65.174. Dissolution of multicounty districts.

Multicounty districts may be dissolved when each member county follows procedures defined in KRS 65.170 .

History. Enact. Acts 1980, ch. 369, § 6, effective July 15, 1980.

65.176. Withdrawal of membership.

Any member county of the district may withdraw its membership after following the procedures defined in KRS 65.170 . The district shall continue to function after such withdrawals, with its boundaries consisting of the remaining county members. No county may withdraw from any district unless it satisfies its part of all contractual obligations assumed by the district prior to the passage of its resolution to the satisfaction of the board.

History. Enact. Acts 1980, ch. 369, § 7, effective July 15, 1980.

Taxing Districts

65.180. Definition of “taxing district.”

As used in KRS 65.182 to 65.190 , unless the context otherwise requires, the word “taxing district” shall mean, and the provisions of KRS 65.182 to 65.190 shall apply to, any special district authorized by statute to levy ad valorem taxes within the meaning of Section 157 of the Constitution of Kentucky or to levy ad valorem taxes under the provisions of KRS 68.602 and governed by the following statutes: KRS 65.182, 75.010 to 75.260 , KRS Chapter 75A, 107.310 to 107.500 , 108.080 to 108.180 , 109.115 to 109.190 , 173.450 to 173.650 , 173.710 to 173.800 , 179.700 to 179.990 , 212.720 to 212.755 , 216.310 to 216.360 , 266.010 to 266.990 , and 268.010 to 268.990 .

History. Enact. Acts 1984, ch. 100, § 1, effective July 13, 1984; 2002, ch. 361, § 11, effective July 15, 2002; 2020 ch. 21, § 14, effective March 17, 2020; 2021 ch. 116, § 15, effective June 29, 2021.

NOTES TO DECISIONS

Cited:

Kentucky River Auth. v. City of Danville, 932 S.W.2d 374, 1996 Ky. App. LEXIS 112 (Ky. Ct. App. 1996), cert. denied, 520 U.S. 1186, 117 S. Ct. 1469, 137 L. Ed. 2d 682, 1997 U.S. LEXIS 2550, 65 U.S.L.W. 3711 (1997).

Research References and Practice Aids

Cross-References.

Nontaxing special districts, KRS 65.805 to 65.830 .

65.181. Compliance with KRS 65A.010 to 65A.090.

The board of any taxing district established pursuant to KRS 65.180 to 65.192 shall comply with the provisions of KRS 65A.010 to 65A.090 .

History. Enact. Acts 2013, ch. 40, § 20, effective March 21, 2013.

65.182. Procedures for creating taxing district.

Except as otherwise provided by state law, the sole methods of creating a taxing district shall be in accordance with the following:

    1. Persons desiring to form a taxing district shall present a petition to the fiscal court clerk and to each member of the fiscal court, meeting the criteria of KRS 65.184 , and signed by a number of registered voters equal to or greater than twenty-five percent (25%) of an average of the voters living in the proposed taxing district and voting in the last four (4) general elections. At time of its submission to fiscal court, each petition shall be accompanied by a plan of service, showing such of the following as may be germane to the purposes for which the taxing district is being formed: (1) (a) Persons desiring to form a taxing district shall present a petition to the fiscal court clerk and to each member of the fiscal court, meeting the criteria of KRS 65.184 , and signed by a number of registered voters equal to or greater than twenty-five percent (25%) of an average of the voters living in the proposed taxing district and voting in the last four (4) general elections. At time of its submission to fiscal court, each petition shall be accompanied by a plan of service, showing such of the following as may be germane to the purposes for which the taxing district is being formed:
      1. The statutory authority under which the district is created and under which the taxing district will operate;
      2. Demographic characteristics of the area including but not limited to population, density, projected growth, and assessed valuation;
      3. A description of the service area including but not limited to the population to be served, a metes and bounds description of the area of the proposed taxing district, the anticipated date of beginning service, the nature and extent of the proposed service, the projected effect of providing service on the social and economic growth of the area, and projected growth in service demand or need;
      4. A three (3) year projection of cost versus revenue;
      5. Justification for formation of the taxing district including but not limited to the location of nearby governmental and nongovernmental providers of like services; and
      6. Any additional information, such as land use plans, existing land uses, drainage patterns, health problems, and other similar analyses which bear on the necessity and means of providing the proposed service.
    2. A majority of the members of a fiscal court may vote to form a taxing district set forth in a plan of service that shall contain those items set forth in paragraph (a)1. to 6. of this subsection as may be germane to the purposes for which the taxing district is being formed.
  1. The fiscal court clerk shall notify all planning commissions, cities, and area development districts within whose jurisdiction the proposed service area is located and any state agencies required by law to be notified of the proposal for the creation of the taxing district.
  2. The fiscal court clerk shall schedule a hearing on the proposal for no earlier than thirty (30) nor later than ninety (90) days following receipt of the petition, charter, and plan of service, and shall, in accordance with the provisions of KRS Chapter 424, publish notice of the time and place of the public hearing and an accurate map of the area or a description in layman’s terms reasonably identifying the area.
  3. At the public hearing, the fiscal court shall take testimony of interested parties and solicit the recommendations of any planning commission, city, area development district, or state agency meeting the criteria of subsection (2) of this section.
  4. The fiscal court may extend the hearing, from time-to-time, for ninety (90) days from the date of the initial hearing and shall render a decision within thirty (30) days of the final adjournment of the hearing.
  5. Following the hearing, the fiscal court shall set forth its written findings of fact and shall approve or disapprove the formation of the taxing district to provide service as described in the plan of service and to exercise the powers granted by the specific statutes that apply to the taxing district being formed.
  6. The creation of a taxing district shall be of legal effect only upon the adoption of an ordinance, in accordance with the provisions of KRS 67.075 and 67.077 , creating the taxing district, and compliance with the requirements of KRS 65.005 .
  7. A certified copy of the ordinance creating the taxing district shall be filed with the county clerk who shall add the levy to the tax bills of the county. For taxing purposes, the effective date of the tax levy shall be January 1 of the year following the certification of the creation of the taxing district.
  8. Nothing in this section shall be construed to enlarge upon or to restrict the powers granted a taxing district under the taxing district’s specific authorizing statutes.
  9. In a county which does not contain a city of the first class, the fiscal court may adopt the procedures of KRS 65.192 to create a fire protection district or a volunteer fire department district, but only those qualified voters who live within the boundaries of the proposed district shall vote on the question of whether it shall be established.

History. Enact. Acts 1984, ch. 100, § 2, effective July 13, 1984; 1994, ch. 155, § 1, effective July 15, 1994; 2002, ch. 361, § 12, effective July 15, 2002.

NOTES TO DECISIONS

Cited:

Kennard v. Bracken County Library Bd. of Trustees, 887 S.W.2d 363, 1994 Ky. App. LEXIS 137 (Ky. Ct. App. 1994); Caneyville Volunteer Fire Dep’t v. Green’s Motorcycle Salvage, Inc., 286 S.W.3d 790, 2009 Ky. LEXIS 158 ( Ky. 2009 ).

Opinions of Attorney General.

The establishment of an ambulance service district embracing the city is entirely in the hands of the city council for determination. There is no statutory authority for submitting the question to the voters. OAG 85-11 .

The tax rate requested in the petition cannot be decreased after the petition is submitted to the fiscal court. OAG 85-121 .

A “poll” or “straw vote” could not be placed on the ballot asking for voter opinion regarding the fiscal court’s action on a proposed taxing district, since any attempt to place such a question on the ballot would not only be unauthorized and therefore not binding but would also constitute an unauthorized expenditure of county funds. OAG 85-121 .

The procedure authorized by KRS 65.192 differs from the general procedure for creating special taxing districts, set forth in this section, by removing decision-making power from the local governmental units and placing it directly in the hands of the voters. OAG 91-188 .

65.184. Petition — Contents — Signatures.

  1. A valid petition for the creation of a taxing district shall be in substantially the following form:

    “The following registered voters of (insert name of county) hereby petition the fiscal court to form a (insert type of taxing district) which shall have the authority to impose a special ad valorem tax of (insert exact amount) on each one hundred dollars ($100) worth of property assessed for local taxation in the district for the following reasons: (A valid petition shall contain a brief list in layman’s terms of the reasons for the creation of the taxing district.)”

  2. The petition shall contain the name and address of each petitioner. Each signature shall be dated as of the day of its execution, the last signature no later than one hundred eighty (180) days from the first signature.

History. Enact. Acts 1984, ch. 100, § 3, effective July 13, 1984.

NOTES TO DECISIONS

Cited:

Kennard v. Bracken County Library Bd. of Trustees, 887 S.W.2d 363, 1994 Ky. App. LEXIS 137 (Ky. Ct. App. 1994).

Opinions of Attorney General.

The verification of signatures on a petition to create a taxing district must be accomplished within the time frame set out in KRS 65.182(3). The petition must be verified in time for the hearing to be scheduled pursuant to appropriate notice required under KRS Chapter 424 within the referred to time frame. OAG 85-121 .

The signatures on a petition to create a taxing district must be verified as to voter registration. The court should direct the county clerk to check the signatures on the petition against the registration books to determine whether or not they are duly registered and also whether the number of signatures meets the statutory percentage requirement. OAG 85-121 .

Petitioners cannot continue to collect signatures once the petition and supporting documentation have been submitted to the fiscal court. Once the petition is filed and subject to review and verification, it cannot be amended thereafter so as to add additional signatures. OAG 85-121 .

65.186. Appeal from decision of fiscal court to form a taxing district.

  1. Any city containing all or any portion of the service area or any state agency with jurisdiction over the taxing district or any citizen living in the proposed area of the taxing district may, within thirty (30) days of the decision of the fiscal court, appeal the decision of the fiscal court on the formation of a district to the Circuit Court.
  2. The Circuit Court may affirm the action of the fiscal court, remand the matter to the fiscal court for additional findings or may reverse the action of the fiscal court and order approval or disapproval of the district. The Circuit Court may reverse the action of the fiscal court only if such decision is found to be arbitrary or capricious.
  3. No new or additional evidence may be introduced in the Circuit Court except as to fraud or misconduct affecting the decision of the fiscal court.
  4. Where appeals are brought from two (2) or more fiscal courts, the actions shall be merged and venue shall lie in the Circuit Court of the county where the greatest number of the taxing district’s residents are located.

History. Enact. Acts 1984, ch. 100, § 4, effective July 13, 1984.

65.188. Two or more counties included in one district.

The fiscal courts of two (2) or more counties may create a taxing district that includes the area of two (2) or more counties by following the procedures of KRS 65.182 to 65.190 .

History. Enact. Acts 1984, ch. 100, § 5, effective July 13, 1984.

65.190. Effect of amendment or repeal of section of KRS by 1984 Acts Chapter 100.

The amendment or repeal by 1984 Acts Chapter 100 of a section authorizing the creation of a taxing district shall not be construed as limiting or changing the power or organization of taxing districts created prior to July 13, 1984.

History. Enact. Acts 1984, ch. 100, § 6, effective July 13, 1984.

Opinions of Attorney General.

Since the 1984 act amending KRS 75.010 became effective on July 13, 1984, the new legislation is not retroactive as applied to a fire district created prior to July 13, 1984; however, such amendment of KRS 75.010 is retroactive as applied to an effort to establish a fire district under KRS 75.010 but which effort, prior to July 13, 1984, had not resulted in the complete creation of a fire district. OAG 84-313 .

65.192. Alternate method of creating a taxing district in counties containing a consolidated local government or a city of the first class.

In counties containing a consolidated local government or city of the first class, the following method of creating a taxing district shall be an alternative to KRS 65.182 to 65.190 :

  1. Persons desiring to form a taxing district shall present a petition to the fiscal court clerk or clerk of the legislative council of a consolidated local government and to each member of the fiscal court or consolidated local government council, requesting that the question of establishing the special district be placed upon the ballot for the next general election. The petition shall be signed by at least one hundred (100) registered voters from each senatorial district, contained wholly or partially within the proposed taxing district. If one hundred (100) registered voters do not reside within a senatorial district and within the boundaries of the proposed taxing district, then the petition shall be signed by twenty-five percent (25%) of the registered voters within said senatorial district. At the time of its submission to the fiscal court or consolidated local government council each petition shall be accompanied by a plan of service, showing such of the following as may be germane to the purposes for which the taxing district is being formed:
    1. The statutory authority under which the district is created and under which the taxing district will operate;
    2. The method of creating and appointing the governing body of such district if it is to be different from the general statutory authority under which it will operate;
    3. Demographic characteristics of the area, including but not limited to population, density, projected growth, and assessed valuation;
    4. A description of the service area, including but not limited to the population to be served, a metes and bounds description of the area of the proposed taxing district, the anticipated date of beginning service, the nature and extent of the proposed service, the projected effect of providing service on the social and economic growth of the area, and projected growth in service demand or need;
    5. A three (3) year projection of cost versus revenue and the method chosen for raising such revenues as authorized in this section;
    6. Justification for formation of the taxing district, including but not limited to the location of nearby governmental and nongovernmental providers of like services; and
    7. Any additional information such as land use plans, existing land uses, drainage patterns, health problems, and other similar analyses which bear on the necessity and means of providing the proposed service.
  2. The fiscal court clerk or the clerk of the legislative council of a consolidated local government shall notify all planning commissions, cities, and area development districts within whose jurisdiction the proposed service area is located and any state agencies required by law to be notified of the proposal for the creation of the taxing district.
  3. The fiscal court clerk or the clerk of the legislative council of a consolidated local government shall review the petition, and if the fiscal court or consolidated local government council determines that the signatures are valid, the fiscal court or consolidated local government council shall schedule a hearing on the proposal for no earlier than thirty (30) nor later than sixty (60) days following receipt of the petition, charter, and plan of service, and shall, in accordance with the provisions of KRS Chapter 424, publish notice which includes the time and place of the public hearing, alerts the public that the issue discussed at the hearing will be placed upon the ballot, and includes an accurate map of the area or a description in layman’s terms reasonably identifying the area.
  4. At the public hearing, the fiscal court or the legislative council of a consolidated local government shall take testimony of interested parties and solicit the recommendations of any planning commission, city, area development district, or state agency meeting the criteria of subsection (2) of this section.
  5. Following the public hearing, the fiscal court or the legislative council of a consolidated local government shall adopt a resolution submitting to the qualified voters of the county or the consolidated local government the question as to whether a taxing district should be established for the area and a special ad valorem tax or an occupational license fee imposed for the maintenance and operation of the district. A certified copy of the order of the fiscal court or the legislative council of a consolidated local government shall be filed with the county clerk not later than the second Tuesday in August prior to the next regular election and thereupon the clerk shall cause the question to be placed upon the ballot.
  6. The question shall be stated so that the service to be provided by the district, the type of governing body, and the method of financing as allowed by this section are clearly outlined.
  7. If a majority of those voting on the question favor the establishment of a special district with authorization to impose an ad valorem tax, then it shall be so established and shall constitute and be a taxing district within the meaning of Section 157 of the Constitution of Kentucky. If a majority of those voting on the question favor the establishment of a special district with an increase in the occupational license fee as authorized by this section, it shall be so established and shall operate as set forth in the question on the ballot.
  8. If an ad valorem tax is approved, the county clerk shall add the levy to the tax bills of the county or the consolidated local government. For taxing purposes, the effective date of the tax levy shall be January 1 of the year following the election. If an occupational license fee increase is approved, the appropriate legislative bodies shall add the levy to the occupational license fee as of January 1 of the year following the election. The tax or fee shall be collected in the same manner as are other county or consolidated local government ad valorem taxes or occupational license fees and shall be turned over to the governing body of the district. The special ad valorem tax or fee shall be in addition to all other ad valorem taxes or occupational license fees.
  9. Nothing in this section shall be construed to enlarge upon or to restrict the powers granted a taxing district under the taxing district’s specific authorizing statutes.
  10. A special district created pursuant to this section may be financed either by a special ad valorem tax imposed by the governing body of the district, as authorized by the voters in an election on the question, of an amount not to exceed ten cents ($0.10) per one hundred dollars ($100) of assessed value of the property subject to local taxation of the district; or by a levy of occupational license fees by the public body or bodies with jurisdiction over the area served by the special district, if the levy has been approved by the voters in an election on the question. The special district shall not levy both an ad valorem tax and an occupational license fee. The occupational license fee shall not exceed one percent (1%) of:
    1. Salaries, wages, commissions, and other compensation earned by persons for work done and services performed or rendered; and
    2. The net profits of businesses, trades, professions, or occupations from activities conducted in the district, except public service companies, banks, trust companies, combined banks and trust companies, combined trust, banking and title companies, any savings and loan association whether state or federally chartered, and in all other cases where a public body is prohibited by law from imposing a license fee.
  11. The budget of any taxing district created pursuant to this section shall be approved by the fiscal court or legislative council of a consolidated local government if financed by an ad valorem tax, or by the fiscal court or the legislative council of a consolidated local government and the legislative body levying the fee, if funded by an occupational license fee increase. The board of the district shall submit its estimate of revenue and proposed budget to the appropriate approving body or bodies by May 1 of each year, and such body or bodies shall approve or amend the budget by June 1.

History. Enact. Acts 1986, ch. 484, § 1, effective July 15, 1986; 1996, ch. 195, § 29, effective July 15, 1996; 2002, ch. 346, § 26, effective July 15, 2002.

Opinions of Attorney General.

Once a special taxing district is created pursuant to this section, and the district is financed by an occupational license tax, the tax rate established for the district cannot be changed under any circumstances. OAG 91-188 .

The procedure authorized by this section differs from the general procedure for creating special taxing districts, set forth in KRS 65.182 , by removing decision-making power from the local governmental units and placing it directly in the hands of the voters. OAG 91-188 .

The statute must be construed to insure a uniform rate of taxation throughout the district’s service area, and since there exists no procedure to assure a uniform change in the cities’ tax rate, the rate may not be changed at all. OAG 91-188 .

Claims Against Local Governments

65.200. Definitions for KRS 65.2001 to 65.2006.

As used in KRS 65.2001 to 65.2006 , unless the context otherwise requires:

  1. “Action in tort” means any claim for money damages based upon negligence, medical malpractice, intentional tort, nuisance, products liability and strict liability, and also includes any wrongful death or survival-type action.
  2. “Employee” means any elected or appointed officer of a local government, or any paid or unpaid employee or agent of a local government, provided that no independent contractor nor employee nor agent of an independent contractor shall be deemed to be an employee of a local government.
  3. “Local government” means any city incorporated under the law of this Commonwealth, the offices and agencies thereof, any county government or fiscal court, any special district or special taxing district created or controlled by a local government.

History. Enact. Acts 1988, ch. 224, § 15, effective July 15, 1988.

NOTES TO DECISIONS

1.Sovereign Immunity.

Operating a golf course is not an “integral” function of state government; thus, a statutorily created agency so functioning as a non-profit, no capital stock corporation, formed to provide recreational facilities for the county, operated without the shield of sovereign immunity. Kenton County Pub. Parks Corp. v. Modlin, 901 S.W.2d 876, 1995 Ky. App. LEXIS 70 (Ky. Ct. App. 1995).

2.Local Government.

A water district was a “local government” within the meaning of this section as it was a special district created by the county fiscal court under KRS Chapter 74 in accordance with the procedures set forth in KRS 65.805 et seq. Siding Sales v. Warren County Water Dist., 984 S.W.2d 490, 1998 Ky. App. LEXIS 136 (Ky. Ct. App. 1998).

Trial court erred in allowing a punitive damages claim to go forward in a claim against a city housing authority; the housing authority was a non-profit entity created by the city to provide low cost housing, and nothing prohibited it from acting on the city’s behalf. Louisville Metro Hous. Auth. v. Burns, 198 S.W.3d 147, 2005 Ky. App. LEXIS 233 (Ky. Ct. App. 2005).

Cited:

Richardson v. Louisville/Jefferson County Metro Gov’t, 260 S.W.3d 777, 2008 Ky. LEXIS 152 ( Ky. 2008 ).

Research References and Practice Aids

Northern Kentucky Law Review.

Comment, A Survey of Kentucky Tort Reform, 17 N. Ky. L. Rev. 473 (1990).

65.2001. Application and construction of KRS 65.2002 to 65.2006.

  1. Every action in tort against any local government in this Commonwealth for death, personal injury or property damages proximately caused by:
    1. Any defect or hazardous condition in public lands, buildings or other public property, including personalty;
    2. Any act or omission of any employee, while acting within the scope of his employment or duties; or
    3. Any act or omission of a person other than an employee for which the local government is or may be liable shall be subject to the provisions of KRS 65.2002 to 65.2006 .
  2. Except as otherwise specifically provided in KRS 65.2002 to 65.2006 , all enacted and case-made law, substantive or procedural, concerning actions in tort against local governments shall continue in force. No provision of KRS 65.2002 to 65.2006 shall in any way be construed to expand the existing common law concerning municipal tort liability as of July 15, 1988, nor eliminate or abrogate the defense of governmental immunity for county governments.

History. Enact. Acts 1988, ch. 224, § 16, effective July 15, 1988.

NOTES TO DECISIONS

Analysis

1.Local government.

The Louisville Water Company is an agency of the City of Louisville and, therefore, an action in tort against it is an action against a local government subject to the provisions of KRS 65.200 to 65.200 6. Louisville Water Co. v. Phelps, 2001 Ky. App. LEXIS 61 (Ky. Ct. App. May 18, 2001).

3.Damages

There was no merit to a former city employee’s argument that the Kentucky Claims Against Local Government Act, KRS 65.2001 et seq., unconstitutionally prohibited a plaintiff from recovering punitive damages from a municipality; it was the black-letter law in Kentucky that punitive damages under the Act were available only against entities that could not meet the criteria necessary to be categorized as an agency of a municipality, and such damages could not be awarded against the municipality or its agencies. Cherry v. City of Bowling Green, 2012 Ky. App. LEXIS 119 (Ky. Ct. App. July 20, 2012), review denied, ordered not published, 2013 Ky. LEXIS 64 (Ky. Mar. 13, 2013).

4.Scope of Employment.

Trial court erred in concluding that a police officer was acting within the scope of his employment at the time of ab accident because the officer stepped aside from his employment to accomplish some private purpose; immediately prior to the accident the officer was off-duty, he had run two personal errands, had his children in the vehicle with him, and was on his way home. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

In this provision, the General Assembly clearly acknowledges and expressly provides that there is a point at which an employee is not acting in furtherance of his or her municipal employer's interests. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

5.Respondeat Superior.

City's decision to provide a police officer a defense and simultaneously protect its interests under the Claims Against Local Governments Act was altogether proper and consistent with both the letter and the spirit of that statute because the allegations against the officer sufficiently invoked his duties as a public servant to cause the city to offer a defense until it was determined that he was not acting within the scope of his employment; that decision did not constitute an admission of fact or an assumption of liability. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

There is case law which compels the application of respondeat superior principles in cases involving a question of municipal liability; these principles lend themselves more naturally to the facts and circumstances arising from Claims Against Local Governments Act cases at the heart of which lies the question of whether an employee acted within the scope of his or her employment, thereby obligating his or her employer to answer, and indemnify him or her, for his or her actions. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

Trial court's reliance on a police officer's compliance with standard operating procedures (SOPs) was misplaced because that he was operating in compliance with the SOPs at the time of an accident could not, and did not, definitively compel the city to defend and indemnify him for his actions under the Claims Against Local Governments Act (CALGA); under no circumstances can a municipal police department's SOPs supersede CALGA or create a duty to indemnify where state statute says there is none. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

Cited:

Frankfort v. Byrns, 817 S.W.2d 462, 1991 Ky. App. LEXIS 124 (Ky. Ct. App. 1991); Richardson v. Louisville/Jefferson County Metro Gov’t, 260 S.W.3d 777, 2008 Ky. LEXIS 152 ( Ky. 2008 ).

Notes to Unpublished Decisions

1.Legislative intent.

Unpublished decision: It was not the intent of the drafters of the Kentucky Claims Against Local Governments Act, KRS 65.2001(2), to abrogate or expand the immunity afforded to local governments by either the Kentucky Constitution or the common law. Griffith v. Flinn, 2003 Ky. App. LEXIS 161 (Ky. Ct. App. June 27, 2003).

Research References and Practice Aids

Northern Kentucky Law Review.

Article: Government Tort Liability: A Survey Examination of Liability for Public Employers and Employees in Kentucky,36 N. Ky. L. Rev. 377 (2009).

65.2002. Amount of damages recoverable against local governments.

The amount of damages recoverable against a local government for death, personal injury or property damages arising out of a single accident or occurrence, or sequence of accidents or occurrences, shall not exceed the total damages suffered by plaintiff, reduced by the percentage of fault including contributory fault, attributed by the trier of fact to other parties, if any.

History. Enact. Acts 1988, ch. 224, § 17, effective July 15, 1988.

NOTES TO DECISIONS

1.Punitive Damages.

This section does not authorize an award of punitive damages against a local government. Louisville Water Co. v. Phelps, 2001 Ky. App. LEXIS 61 (Ky. Ct. App. May 18, 2001).

Trial court erred in allowing a punitive damages claim to go forward in a claim against a city housing authority; the housing authority was a non-profit entity created by the city to provide low cost housing, and nothing prohibited it from acting on the city’s behalf. Louisville Metro Hous. Auth. v. Burns, 198 S.W.3d 147, 2005 Ky. App. LEXIS 233 (Ky. Ct. App. 2005).

Research References and Practice Aids

Northern Kentucky Law Review.

Comment, A Survey of Kentucky Tort Reform, 17 N. Ky. L. Rev. 473 (1990).

Treatises

Caldwell’s Kentucky Form Book, 5th Ed., Answer of City to Complaint of Battery Against Police Officer, Form 102.07.

65.2003. Claims disallowed.

Notwithstanding KRS 65.2001 , a local government shall not be liable for injuries or losses resulting from:

  1. Any claim by an employee of the local government which is covered by the Kentucky workers’ compensation law;
  2. Any claim in connection with the assessment or collection of taxes;
  3. Any claim arising from the exercise of judicial, quasi-judicial, legislative or quasi-legislative authority or others, exercise of judgment or discretion vested in the local government, which shall include by example, but not be limited to:
    1. The adoption or failure to adopt any ordinance, resolution, order, regulation, or rule;
    2. The failure to enforce any law;
    3. The issuance, denial, suspension, revocation of, or failure or refusal to issue, deny, suspend or revoke any permit, license, certificate, approval, order or similar authorization;
    4. The exercise of discretion when in the face of competing demands, the local government determines whether and how to utilize or apply existing resources; or
    5. Failure to make an inspection.

Nothing contained in this subsection shall be construed to exempt a local government from liability for negligence arising out of acts or omissions of its employees in carrying out their ministerial duties.

History. Enact. Acts 1988, ch. 224, § 18, effective July 15, 1988.

NOTES TO DECISIONS

Analysis

1.Ministerial Actions.

City was liable for negligence where the court found the actions of the city were ministerial in nature and, therefore, not clothed with immunity for the negligent design and construction of a drainage system which resulted in damage to the property of homeowners. Frankfort v. Byrns, 817 S.W.2d 462, 1991 Ky. App. LEXIS 124 (Ky. Ct. App. 1991).

Decision of when or if to extend sewer lines or to allow additional tap-ins is a legislative decision, and a city’s decision to service an area with a storm water drainage system is a discretionary legislative act; the design, building, and maintenance of such a system is ministerial, but until a hookup is approved, a city is exercising a legislative or discretionary function and has no liability for failure to provide service. Greenway Enters. v. City of Frankfort, 148 S.W.3d 298, 2004 Ky. App. LEXIS 292 (Ky. Ct. App. 2004).

City could be liable in a wrongful death action to the extent that the accident was caused by its police officer’s breach of his duty to operate a police cruiser in a safe manner. The operation of a police cruiser was considered conduct that was ministerial in nature. Pile v. City of Brandenburg, 215 S.W.3d 36, 2006 Ky. LEXIS 322 ( Ky. 2006 ).

2.Factual Question of Immunity.

The trial court erred by concluding that a city, and the individual employees, who were its agents and officers, were as a matter of law immune from liability in a tort action based on husband’s murder of wife where city’s police officers failed to arrest husband pursuant to an alleged mandatory arrest warrant despite several opportunities to do so. Ashby v. Louisville, 841 S.W.2d 184, 1992 Ky. App. LEXIS 233 (Ky. Ct. App. 1992), abrogated in part, Gaither v. Justice & Pub. Safety Cabinet, 447 S.W.3d 628, 2014 Ky. LEXIS 337 ( Ky. 2014 ).

Because subdivision ordinances were not unconstitutional, they were enforceable and the issue of whether officials were entitled to immunity pursuant to KRS 65.2003 did not have to be addressed. Campbell County Fiscal Court v. Nash, 2008 Ky. App. LEXIS 373 (Ky. Ct. App. Dec. 12, 2008), review granted, transferred, 2010 Ky. LEXIS 40 (Ky. Jan. 13, 2010), aff'd in part and rev'd in part, 345 S.W.3d 811, 2011 Ky. LEXIS 57 ( Ky. 2011 ).

Defendant was entitled to state-law immunity under this section in plaintiff's suit arising out of the failure to pave a street since it exercised legislative authority when it decided which roads to pave. Bullock v. City of Covington, 698 Fed. Appx. 305, 2017 FED App. 0566N, 2017 U.S. App. LEXIS 19647 (6th Cir. Ky. 2017 ).

3.Failure to Enforce Any Law.

Where the plaintiffs essentially alleged that the defendant city failed to enforce local regulatory law establishing fire safety standards, the city was immune under subsection (3)(b) of this section. Siding Sales v. Warren County Water Dist., 984 S.W.2d 490, 1998 Ky. App. LEXIS 136 (Ky. Ct. App. 1998).

4.Permits, Licenses, Etc.

The defendant city’s refusal to issue an occupancy permit for a new building constructed to replace one destroyed by a fire, pending expansion of the water lines serving the property, constituted not only regulatory action on the city’s part, but also discretionary action, given its imposition of conditional occupancy dependent upon a sufficient water supply and, therefore, the city was exempt from liability for its alleged negligence under subsection (3)(c) of this section. Siding Sales v. Warren County Water Dist., 984 S.W.2d 490, 1998 Ky. App. LEXIS 136 (Ky. Ct. App. 1998).

Liability of a local government for its failure to enforce laws or regulations enacted for the public safety has been consistently denied by the courts and by the Kentucky Claims Against Local Governments Act, KRS 65.2003 , for three distinct reasons: (1) under the doctrine of immunity, the decision as to whether a structure meets the code standards is a discretionary function requiring the expertise and the decision-making authority of the government, its officers and employees; (2) there is recognition that, as a matter of public policy, governments should not be fearful of liability for the failure to govern, and through the enactment of safety laws, governments are not then insurers of compliance by private individuals; and (3) absent a special relationship between a government and a private individual, there is simply no duty to any specific citizen by virtue of building codes. The duty to protect is owed to the public and not to a particular individual or class of individuals. Griffith v. Flinn, 2003 Ky. App. LEXIS 161 (Ky. Ct. App. June 27, 2003).

5.Evidence of Bad Faith.

In response to a city’s motion for summary judgment relating to owners’ various tort claims against the city arising from a zoning dispute, the owners brought forth no evidence, beyond their mere allegations, that the city or its officials acted in bad faith; in the absence of any evidence which would overcome the city’s immunity, the trial court properly dismissed the owners’ claims. Godman v. City of Fort Wright, 234 S.W.3d 362, 2007 Ky. App. LEXIS 317 (Ky. Ct. App. 2007).

6.Jurisdiction.

In a negligence case against a water district, an appellate court had no jurisdiction to hear an argument under the Kentucky Claims Against Local Governments Act, KRS 65.200 - 65.200 6; as a statutory defense to liability only, its denial could have only been vindicated following a final judgment as with any other liability defense. To the extent the trial court denied the water district’s motion to dismiss on this ground, the order remained interlocutory, and it was not made reviewable by the collateral order doctrine or other jurisprudence. South Woodford Water Dist. v. Byrd, 352 S.W.3d 340, 2011 Ky. App. LEXIS 153 (Ky. Ct. App. 2011), overruled, N. Ky. Water Dist. v. Carucci, 600 S.W.3d 240, 2019 Ky. LEXIS 276 ( Ky. 2019 ).

Cited in

Hicks v. Young, 2019 Ky. App. LEXIS 7 (Ky. Ct. App. Jan. 25, 2019).

Notes to Unpublished Decisions

Analysis

1.Failure to Enforce Any Law.

Unpublished decision: Failure to enforce government regulations or laws having quasi-judicial and quasi-legislative elements has consistently been held non-tortious. Griffith v. Flinn, 2003 Ky. App. LEXIS 161 (Ky. Ct. App. June 27, 2003).

2.Permits, Licenses, Etc.

Unpublished decision: KRS 65.2003(3)(c) is a codification of the common law regarding the failure of a local government to enforce safety and building codes. Griffith v. Flinn, 2003 Ky. App. LEXIS 161 (Ky. Ct. App. June 27, 2003).

Research References and Practice Aids

Kentucky Law Journal.

Note: A “Preposterous Anomaly”: Sovereign Immunity in Kentucky Following the Crash of Comair Flight 5191, 98 Ky. L.J. 889 (2009/2010).

Northern Kentucky Law Review.

Comment, A Survey of Kentucky Tort Reform, 17 N. Ky. L. Rev. 473 (1990).

65.2004. Periodic payment of damages.

  1. Upon motion of a local government against which final judgment has been rendered for a claim within the scope of KRS 65.200 to 65.200 6, the court, in accordance with subsection (2) of this section, may include in such judgment a requirement that the judgment be paid in whole or in part by periodic payments. Periodic payments may be ordered paid over a period of time not exceeding ten (10) years. Any periodic payment, upon becoming due under the terms of the judgment, shall constitute a separate judgment. Any judgment ordering any such payments shall specify the total amount awarded, the amount of each payment, the interval between payments and the number of payments to be paid under the judgment. Judgments paid pursuant to this section shall bear interest accruing from the date final judgment is entered, at the interest rate as specified in KRS 360.040. For good cause shown, the court may modify such judgment with respect to the amount of such payments and the number of payments, but the total amount of damages awarded by such judgment shall not be subject to modification in any event and periodic payments shall not be ordered paid over a period in excess of ten (10) years.
  2. A court may order periodic payment only upon finding that:
    1. Payment of the judgment is not totally covered by insurance; and
    2. Funds for the current budget year and other funds of the local government which lawfully may be utilized to pay judgments are insufficient to finance both the adopted budget of expenditures for the year and the payment of that portion of the judgment not covered by insurance.

History. Enact. Acts 1988, ch. 224, § 19, effective July 15, 1988.

Research References and Practice Aids

Northern Kentucky Law Review.

Comment, A Survey of Kentucky Tort Reform, 17 N. Ky. L. Rev. 473 (1990).

65.2005. Defense of employee by local government — Liability of employee.

  1. A local government shall provide for the defense of any employee by an attorney chosen by the local government in any action in tort arising out of an act or omission occurring within the scope of his employment of which it has been given notice pursuant to subsection (2) of this section. The local government shall pay any judgment based thereon or any compromise or settlement of the action except as provided in subsection (3) of this section and except that a local government’s responsibility under this section to indemnify an employee shall be subject to the limitations contained in KRS 65.2002 .
  2. Upon receiving service of a summons and complaint in any action in tort brought against him, an employee shall, within ten (10) days of receipt of service, give written notice of such action in tort to the executive authority of the local government.
  3. A local government may refuse to pay a judgment or settlement in any action against an employee, or if a local government pays any claim or judgment against any employee pursuant to subsection (1) of this section, it may recover from such employee the amount of such payment and the costs to defend if:
    1. The employee acted or failed to act because of fraud, malice, or corruption;
    2. The action was outside the actual or apparent scope of his employment;
    3. The employee willfully failed or refused to assist the defense of the cause of action, including the failure to give notice to the executive authority of the local government pursuant to subsection (2) of this section;
    4. The employee compromised or settled the claim without the approval of the governing body of the local government; or
    5. The employee obtained private counsel without the consent of the local government, in which case, the local government may also refuse to pay any legal fees incurred by the employee.

History. Enact. Acts 1988, ch. 224, § 20, effective July 15, 1988; 1994, ch. 233, § 1, effective July 15, 1994.

NOTES TO DECISIONS

1.Former Employees

Local government was obligated to provide a former police officer for the locality with a defense in civil actions against the officer because the officer’s status as a former employee did not preclude the local government’s duty to defend since the civil claims arose from the officer’s job as a police officer. Richardson v. Louisville/Jefferson County Metro Gov't, 260 S.W.3d 777, 2008 Ky. LEXIS 152 ( Ky. 2008 ).

2.Scope of Employment.

Trial court erred in concluding that a police officer was acting within the scope of his employment at the time of ab accident because the officer stepped aside from his employment to accomplish some private purpose; immediately prior to the accident the officer was off-duty, he had run two personal errands, had his children in the vehicle with him, and was on his way home. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

3.Respondeat Superior.

City's decision to provide a police officer a defense and simultaneously protect its interests under the Claims Against Local Governments Act was altogether proper and consistent with both the letter and the spirit of that statute because the allegations against the officer sufficiently invoked his duties as a public servant to cause the city to offer a defense until it was determined that he was not acting within the scope of his employment; that decision did not constitute an admission of fact or an assumption of liability. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

There is case law which compels the application of respondeat superior principles in cases involving a question of municipal liability; these principles lend themselves more naturally to the facts and circumstances arising from Claims Against Local Governments Act cases at the heart of which lies the question of whether an employee acted within the scope of his or her employment, thereby obligating his or her employer to answer, and indemnify him or her, for his or her actions. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

In this provision, the General Assembly clearly acknowledges and expressly provides that there is a point at which an employee is not acting in furtherance of his or her municipal employer's interests. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

4.Duty to Indemnify.

Trial court's reliance on a police officer's compliance with standard operating procedures (SOPs) was misplaced because that he was operating in compliance with the SOPs at the time of an accident could not, and did not, definitively compel the city to defend and indemnify him for his actions under the Claims Against Local Governments Act (CALGA); under no circumstances can a municipal police department's SOPs supersede CALGA or create a duty to indemnify where state statute says there is none. Louisville/Jefferson Cnty. Metro Gov't v. Braden, 519 S.W.3d 386, 2017 Ky. App. LEXIS 19 (Ky. Ct. App. 2017).

Opinions of Attorney General.

A city was legally required to indemnify two (2) people for their legal defense costs in a litigation relating to the management of the city’s policemen’s retirement fund as they were both employees of the city for purposes of the statute. OAG 01-1 .

65.2006. Judgments affected.

KRS 65.200 to 65.200 6 shall apply to all actions in tort in which money damages have not been adjudged as of July 15, 1988.

History. Enact. Acts 1988, ch. 224, § 21, effective July 15, 1988.

Energy Project Assessment District (EPAD) Act of 2015

65.205. Definitions for KRS 65.205 to 65.209.

As used in KRS 65.205 to 65.209 :

  1. “Energy improvement” means any permanent improvement fixed to real property and intended to increase the efficiency of energy use or decrease water or energy consumption or demand, generate electricity, provide thermal energy, or regulate temperature, including but not limited to a product, device, technology, or interacting group of products, devices, or technologies on the customer’s side of an electric, gas, water, or other energy meter;
  2. “Energy project” means the installation or modification of an energy improvement, including any associated project or financing costs;
  3. “Energy project assessment district” or “EPAD” means a geographic area designated by a local government pursuant to KRS 65.206 , within which energy projects may be undertaken and financed through the imposition of an assessment pursuant to KRS 65.205 to 65.209 ;
  4. “Local government” means any city, county, consolidated local government, urban-county government, charter county government, or unified local government of the Commonwealth;
  5. “Program” means an EPAD program established by a local government pursuant to KRS 65.206 ; and
  6. “Real property” excludes residential property consisting of fewer than five (5) units.

HISTORY: 2015 ch. 54, § 1, effective June 24, 2015.

65.206. Establishment of program to advance conservation and efficient use of energy and water resources.

  1. Pursuant to KRS 65.205 to 65.209 , the governing body of a local government may establish a program to advance the conservation and efficient use of energy and water resources within its jurisdiction, which program is hereby declared to be a valid exercise of the powers of local government and is in the best interest of the people of the Commonwealth, by allowing for energy projects to be financed by assessments imposed upon the real property being improved through the energy project. Nothing in KRS 65.205 to 65.209 shall be interpreted to:
    1. Expand the powers of eminent domain for a local government, state agency, or private entity or to allow a local government, state agency, or private entity to use the powers of eminent domain under this program; or
    2. Disregard or allow contravention of any net metering ordinance or policy, any generator interconnection ordinance or policy, or any rate ordinance duly adopted by the governing body.
    1. To establish a program, the governing body of a local government shall adopt a resolution or ordinance providing the terms and conditions of the program, including but not limited to: (2) (a) To establish a program, the governing body of a local government shall adopt a resolution or ordinance providing the terms and conditions of the program, including but not limited to:
      1. A statement that the local government intends to utilize assessments on relevant real property to support private sector energy projects;
      2. The designation of an EPAD, and a description of the boundaries thereof; and
      3. A procedure for the owners of record of real property located within an EPAD to petition the local government for participation in the program.
    2. Once a program is established, the governing body of a local government may amend the terms and conditions of the program by resolution or ordinance; except that no amendment shall be adopted to retroactively change the conditions under which an existing assessment was imposed, unless the owner of record of the affected real property consents to the amendment in writing.
    3. A local government may:
      1. Hire program staff, or contract with a third-party entity to administer a program;
      2. Impose fees on participating property owners to offset the costs of administering the program, including assessment and collection functions of various county offices; except that these fees shall not exceed the cost of services performed; and
      3. Engage financing for the purpose of administering the program from financial institutions with a physical presence in Kentucky whose deposits are insured by the Federal Deposit Insurance Corporation.
    4. Any combination of local governments may agree to jointly implement or administer a program.
    1. The geographic area designated by the governing body of a local government as the EPAD: (3) (a) The geographic area designated by the governing body of a local government as the EPAD:
      1. May include the entire local government or any portion thereof; and
      2. Shall be wholly within the boundaries of the local government.
    2. A local government may designate more than one (1) separate EPAD within its boundaries.
  2. An authorized official of a local government that has established a program may approve a request from the owner of record of real property located within an EPAD to impose an assessment upon the property, which shall be used to repay the owner’s financing of an energy project on that property and the costs of any upgrades to the electrical or gas distribution system connected to that property necessary to accommodate the energy improvement. The upgrade costs shall be paid to the owner of the electrical distribution system. The financing may be provided by a third party or, if authorized by the local government, by any local government.
  3. Each energy project approved for participation in the program shall include a review of the property’s baseline energy or water usage conditions and the energy or water savings projected to be achieved as a result of the energy project.
  4. A program may authorize a participating property owner to:
    1. Directly purchase; or
    2. Acquire by contract, through a lease, power purchase agreement, or other service contract;

      the equipment and materials necessary for the installation or modification of an energy improvement.

  5. In addition to the authority provided in the Kentucky Revised Statutes for local governments to levy special assessments with the same lien status as a property tax, the governing body of a local government that establishes a program pursuant to this section may exercise powers granted under KRS 65.205 to 65.209 .

HISTORY: 2015 ch. 54, § 2, effective June 24, 2015.

65.207. Assessments on EPAD real property to repay energy project financing and associated costs — Conditions — Notice — Collection.

  1. An assessment may be imposed by a local government upon real property located in an EPAD and undergoing an approved energy project, pursuant to KRS 65.205 to 65.209 , to repay the financing and associated costs of the energy project.
    1. A local government may impose an assessment only after: (2) (a) A local government may impose an assessment only after:
      1. A petition to participate in the program and to be assessed is filed by the owner of record of the real property to be assessed; and
      2. A written contract is signed between the local government and the owner of record of the real property to be assessed accepting the energy project into the program and establishing the terms and conditions of the energy project and the assessment to be imposed.
    2. The petition filed by the owner of record shall include the written consent of the holder of each existing mortgage lien on the relevant property stating that the lien holder does not object to the imposition of the assessment.
  2. A local government that authorizes financing through assessments as part of a program established pursuant to KRS 65.205 to 65.209 shall file written notice of each assessment in the real property records of the county in which the property is located. This notice shall include:
    1. The amount of the assessment;
    2. The legal description of the real property;
    3. The name of each owner of record of the real property; and
    4. A reference to the statutory assessment lien provided under this section.
  3. Upon the imposition of an assessment, the assessment:
    1. Shall be added to the property tax bill for the relevant property;
    2. Shall be collected and distributed by the sheriff, or other designated local official or department, to the imposing local government in the same manner as the other taxes on the bill, and unpaid assessments shall bear the same penalty as general state and local ad valorem taxes; and
    3. Shall, together with any interest and penalties, constitute a first and prior lien against the real property on which the assessment is imposed from the date on which the notice of assessment is recorded pursuant to this section until paid. This lien shall have the same priority status as a lien for any other state or local ad valorem tax upon the property.

HISTORY: 2015 ch. 54, § 3, effective June 24, 2015.

65.208. Assessment imposed only at request of owner of EPAD real property to repay project financing.

The imposition of an assessment pursuant to KRS 65.205 to 65.209 is to be made solely at the request of the owner of record of real property within an EPAD. A local government shall not compel a person who owns real property in an EPAD to enter into a contract to repay the financing of an energy project through assessments under KRS 65.205 to 65.209 .

HISTORY: 2015 ch. 54, § 5, effective June 24, 2015.

65.209. Issuance of bonds or notes to finance energy projects — Security — Lien.

  1. A local government may issue bonds or notes to finance energy projects through assessments imposed pursuant to KRS 65.205 to 65.209 .
  2. Bonds or notes issued under this section shall not be general obligations of the local government. The bonds or notes shall be secured solely by one (1) or more of the following, as provided by the governing body of the local government in the resolution or ordinance approving the issuance of the bonds or notes:
    1. Payments of assessments on relevant real properties in one (1) or more specified energy project assessment districts;
    2. Reserves established by the local government from grants, bonds, or other available funds;
    3. Municipal bond insurance, lines of credit, public or private guaranties, standby bond purchase agreements, collateral assignments, mortgages, or other available means of providing credit support or liquidity; and
    4. Any other funds available for the purposes of KRS 65.205 to 65.209 .
  3. A local government pledge of assessments, funds, or contractual rights in connection with the issuance of bonds or notes by the local government under this section constitutes a first lien on the assessments, funds, or contractual rights pledged in favor of the person to whom the pledge is given, without further action by the local government. The lien is valid and binding against any other person, with or without notice.

HISTORY: 2015 ch. 54, § 4, effective June 24, 2015.

Interlocal Cooperation Act

65.210. Short title of KRS 65.210 to 65.300.

KRS 65.210 to 65.300 may be cited as the Interlocal Cooperation Act.

History. Enact. Acts 1962, ch. 216, § 1.

NOTES TO DECISIONS

1.Housing Federal Prisoners.

Entering into an agreement to house federal prisoners pursuant to this act and KRS 441.025 , is a power, not a duty, imposed upon county government. Lexington-Fayette Urban County Detention Center v. Crockett, 786 S.W.2d 869, 1990 Ky. LEXIS 16 ( Ky. 1990 ).

2.Application.

A county’s participation in a self-insurance fund does not waive its sovereign immunity from tort suits. Franklin County v. Malone, 957 S.W.2d 195, 1997 Ky. LEXIS 105 ( Ky. 1997 ), overruled in part, Commonwealth Bd. of Claims v. Harris, 59 S.W.3d 896, 2001 Ky. LEXIS 198 ( Ky. 2001 ), overruled in part, Yanero v. Davis, 65 S.W.3d 510, 2001 Ky. LEXIS 203 ( Ky. 2001 ).

Opinions of Attorney General.

Any agreement made pursuant to this section through KRS 65.300 must be submitted to the Attorney General for examination and approval and failure to disapprove an agreement within two (2) days of its submission shall constitute approval thereof. OAG 72-465 .

This section through KRS 65.300 would allow a complete merger of a department of one governmental unit with a department of another so long as the merger is not used to avoid any existing and continuing legal functions and obligations. OAG 72-465 .

The city and county could enter into a contractual agreement to administer the building and housing codes under the Interlocal Cooperation Act, which agreement must contain the information referred to in KRS 65.250 and be approved by the office of the attorney general. OAG 73-570 .

When a county or counties make provision for a public defender, a county is a political subdivision but two (2) counties acting jointly do not make a single political subdivision and when the fiscal court acts legally for the county it means that the county, which is a political subdivision, is so acting and the fiscal court in such situation is an instrumentality of a political subdivision or county of a state. OAG 73-638 .

A fiscal court cannot contract, under authority of KRS 64.530 , with a fourth-class city located within their jurisdiction to detail a deputy sheriff to perform a majority of his duties within the city in return for the payment of his salary and expenses by the city; but, the city and county may enter into a contractual arrangement for police protection pursuant to the Interlocal Cooperation Act, KRS 65.210 to 65.300 . OAG 74-578 .

Under the Interlocal Cooperation Act cities within a county could enter into a contract to contribute funds, equipment and employees to the county for a county program to operate a landfill and collect and dispose of garbage throughout the county. OAG 74-706 .

Under this act a county and a city therein may enter into a joint city-county contract to establish a joint heritage commission. OAG 74-719 .

Where a city and county created, under the Kentucky Interlocal Cooperation Act, a new joint library with its board of trustees to conduct the affairs of the existing public library, they created, by virtue of KRS 65.250 , a “body corporate” and any additional creation by the board of trustees of a separate library corporation would be superfluous. OAG 75-288 .

If several cities execute an interlocal cooperation agreement to purchase materials and supplies, the agent for the cities, in advertising for bids, should identify the cities which are parties to the agreement as being the real contracting parties and buyers of materials and supplies. OAG 77-498 .

Where the Kentucky-Tennessee state line is a common boundary between two (2) cities, the cities could enter into a valid mutual aid contract relating to use of fire-fighting staff and equipment. OAG 77-632 .

An interlocal agreement is utilized where cooperative action in the utilization of peace officers and police department members is needed by which means governmental units can take advantage of the extraterritorial police power authorized in KRS 65.255 , and while in the performance of their duties, under an interlocal agreement, police officers outside their own city or county shall have the full power of arrest and all other powers they possess in their own city or county. OAG 78-364 .

Police officers are officers of the governmental entity in which they serve but under an interlocal agreement, for example, police officers involved in a cooperative undertaking between a city and a county or two (2) cities can avoid the prohibitions in KRS 61.080 and § 165 of the Kentucky Constitution against a person being, at the same time, a county officer and a city officer or an officer in two (2) different cities. OAG 78-364 .

The Interlocal Cooperation Act is a device whereby governmental units (including political subdivisions of the state and agencies of the state government) may jointly exercise their power on a basis of mutual advantage and thus provide services and facilities in a more efficient, economical and beneficial manner than they could individually, but only those powers which can be exercised individually can be exercised collectively. OAG 78-364 .

Where the several units of local government within the Bluegrass Area Development District sought to upgrade police services in the area of narcotics enforcement by forwarding to BGADD their proportionate share of matching funds for a Law Enforcement Assistance Administration grant, and then have BGADD contract on their behalf with the Kentucky State Police to provide those services, there was no cooperative and joint exercise of police powers requiring utilization of procedures of the Interlocal Cooperation Act. OAG 78-364 .

Since a city and a county, individually, may directly operate an ambulance service, they could utilize the provisions of KRS 79.110 to 79.180 or KRS 65.210 to 65.300 to agree to directly operate, jointly, an ambulance service even though KRS 65.730 has been repealed. OAG 79-104 .

The intent underlying the Interlocal Cooperation Act is that whatever a unit of government may do alone, it may do jointly with another governmental unit. OAG 79-208 .

Each of the local superintendents who comprise the Board of Directors of Eastern Kentucky Educational Development Corporation (EKEDC) may be held liable for the commission of an act or omission to take action regarding EKEDC matters which is a legal cause of injury to another. OAG 79-502 .

A county, or two (2) or more counties, acting under an agreement executed pursuant to the provisions of the Interlocal Cooperation Act may issue mortgage revenue bonds to finance the redevelopment of existing housing and to purchase existing housing units so long as the purchase is only a phase or part of the overall redevelopment plan under subsection (3)(j) of KRS 67.083 which will result in the ultimate transfer of title from county government to a private purchaser or to a governmental entity specifically authorized to administer a housing program. OAG 81-346 .

A sixth-class city may contract to furnish police protection to other sixth-class cities who are participating in agreements executed under the Interlocal Cooperation Act, KRS 65.210 to 65.300 , as long as the city is able to handle police services within its own boundaries and also has the capabilities to furnish police protection services to other cities. OAG 83-363 .

An agreement under the Interlocal Cooperation Act is a joint or cooperative undertaking between or among those governmental entities who have become parties to a formal agreement by satisfying the statutory requirements of KRS 65.210 to 65.300 ; the agreement is limited to public agencies and cannot be extended to include nonpublic agencies. OAG 84-200 .

While “public agencies” may enter into agreements executed under the Interlocal Cooperation Act, KRS 65.210 to 65.300 , assuming they can exercise unilaterally those functions they seek to exercise collectively, the agreements, including the benefits to be obtained therefrom, are limited to those units of government who have satisfied the statutory requirements of KRS 65.210 to 65.300 and are actually parties to the agreements. OAG 84-200 .

Cities and counties through the utilization of the Interlocal Cooperation Act, KRS 65.210 to 65.300 , may own and operate a hot mix bituminous asphalt plant for constructing and maintaining the roads and streets for which the member public agencies are responsible. OAG 84-200 .

An agreement pursuant to the Interlocal Cooperation Act, KRS 65.210 to 65.300 , is open to public inspection as it constitutes final action by the city; copies of such agreements must be filed with the county clerk of the county which is party to the agreement before the agreement becomes operative. OAG 84-217 .

With regard to fire protection services in rural areas, and a proposal concerning the merger of three fire departments, the cities and the county seeking such merger could possibly utilize the provisions of this act to more effectively and efficiently deliver fire protection services in the areas involved. OAG 90-134 .

Other than the requirements of KRS 304.1-120 (6) a self-insurance liability pool organized under the Interlocal Cooperation Act which provides coverage to local governments is not subject to the insurance code. OAG 92-124 .

The KACo Reinsurance Trust Program (KRT) is an interagency body of two (2) or more public agencies within the meaning of sudivision (1)(k) of KRS 61.870 and is therefore subject to the Open Records Act. OAG 93-65 .

Since the four subsections of KRS 224.40-315 are internally inconsistent, Senate Bill No. 2, Acts 1991 (Ex. Sess.) ch. 12, did not give a local solid waste management area’s governing body the authority to determine whether management facilities (which are not disposal facilities) are consistent with the local solid waste management plan. OAG 93-67 .

The Northern Kentucky Solid Waste Management Area is a cooperative arrangement between three units of government created under KRS 65.210 65.300 ; it can incorporate and enter into contracts as a separate entity, if permitted by the interlocal agreement itself. OAG 93-67 .

Three counties joining together pursuant to an interlocal agreement for the purpose of handling solid waste problems does not create a “special district” or a “waste management district” under KRS Chapter 109. OAG 93-67 .

Action of two (2) counties in executing an Interlocal Cooperation Act in which they created a trust which issued tax-exempt bonds and used the proceeds to acquire all the stock of a corporation was prohibited by Const., § 170 since the trust’s authority is no greater than that of either county, and since the counties cannot own stock in a corporation, neither can the trust. OAG 94-1 .

KRS 65.150 did not authorize action of two (2) counties executing interlocal cooperation agreement action in which they created a trust which issued tax-exempt bonds and used the proceeds to acquire all the stock of a corporation which sought to be licensed as an insurance company in order to provide reinsurance to various self-insured groups of the Kentucky Association of Counties since subsection (4) of KRS 65.150 contemplates the purchase of insurance not the purchase of an insurance company and states that the insurance obtained by revenue bonds must be for participating members and not as contemplated by the agreement to entities other than the two (2) participating members. OAG 94-1 .

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

65.220. Purpose of KRS 65.210 to 65.300.

It is the purpose of KRS 65.210 to 65.300 to permit public agencies to make the most efficient use of their powers by enabling them to cooperate with each other on a basis of mutual advantage and thereby to provide services and facilities in a manner and pursuant to forms of governmental organization that will accord best with geographic, economic, population, and other factors influencing the needs and development of local communities.

History. Enact. Acts 1962, ch. 216, § 2; 2000, ch. 464, § 2, effective July 14, 2000; 2020 ch. 98, § 1, effective July 15, 2020.

NOTES TO DECISIONS

Cited in:

N. Ky. Area Dev. Dist. v. Wilson, 612 S.W.3d 916, 2020 Ky. LEXIS 460 ( Ky. 2020 ).

Opinions of Attorney General.

A city and county may enter into an agreement to combine the city and county purchasing departments under the terms of the Interlocal Cooperation Act and by so doing relieve the county of its obligation and requirement under KRS 68.160 to appoint a purchasing agent. OAG 64-400 .

Jails of a second-class city and the county can be combined. OAG 67-64 .

Park and recreational facilities of a second-class city and the county may be merged. OAG 67-64 .

The fire departments of a second-class city and the county could be merged pursuant to the Interlocal Cooperation Act. OAG 67-64 .

The police departments of a city of the second class and the county could be merged under the Interlocal Cooperation Act. OAG 67-64 .

One or more cities of the fourth, fifth or sixth class would be authorized to join with the county under the Interlocal Cooperation Act to jointly establish a dog pound, appoint a dog warden and administer such a program if a written agreement was entered into by the parties and approved by the office of the attorney general. OAG 68-108 .

The police departments of a city and the county could be merged under the Interlocal Cooperation Act. OAG 68-443 .

Where a project was to be undertaken to relocate a highway, a railroad, and divert a river within the cut, the urban renewal and community development agency of the city could serve as the contracting agency, or project authority, to administer the project on behalf of the city, the railroad and the Department (now Bureau) of Highways. OAG 69-96 .

Agreements between volunteer fire departments to send men and equipment to assist each other can legally be entered into by virtue of the Interlocal Cooperation Act. OAG 69-213 .

Counties could combine in an agreement to construct, operate, or procure the operation of a juvenile detention facility, but such interlocal agreement would have to observe the provisions of KRS 208.130 (now repealed) and would be restricted to those counties of the same category as measured against KRS 208.130 . OAG 70-118 .

Where a combined project between counties for the construction of a juvenile detention home is entered into under KRS 65.210 to 65.300 , the cost may be allocated to each participating county on some agreed upon and equitable basis. OAG 70-118 .

A consolidation of the city and county health departments could be accomplished under the Interlocal Cooperation Act. OAG 70-212 .

Where a county wishes to allow city policemen to carry out police work anywhere in the county without having a member of the sheriff’s department with them, an agreement between the city and county can be entered into under the Interlocal Cooperation Act. OAG 71-62 .

Although a fifth-class city and a sixth-class city could not hire the same policemen, under the Interlocal Cooperation Act they could form a joint system of police protection. OAG 71-85 .

Although the fiscal court can establish a direct county disposal system or garbage collection in the unincorporated area of the county, a city could enter into a joint venture with the county in those areas. OAG 71-449 .

The police systems of the three (3) fifth-class cities in a county and a proposed county police system could be legally merged or consolidated. OAG 71-478 .

Both the city and county can enact measures to control flooding problems which, in turn, means that they can jointly participate in such a program under the Interlocal Cooperation Act. OAG 80-93 .

A sixth-class city may contract to furnish police protection to other sixth-class cities who are participating in agreements executed under the Interlocal Cooperation Act, KRS 65.210 to 65.300 , as long as the city is able to handle police services within its own boundaries and also has the capabilities to furnish police protection services to other cities. OAG 83-363 .

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

65.230. Definitions for KRS 65.210 to 65.300.

As used in KRS 65.210 to 65.300 , unless the context otherwise requires:

  1. “Interlocal agency” means a separate legal or administrative entity with a governing board that is created in an agreement entered into by public agencies pursuant to the provisions of KRS 65.210 to 65.300 ;
  2. “Local government” means any:
    1. City;
    2. County;
    3. Consolidated local government;
    4. Urban-county government;
    5. Charter county government; or
    6. Unified local government;
  3. “Public agency” means:
    1. Any local government;
    2. Any political subdivision of this state or of another state;
    3. Any agency, board instrumentality, or commission created by a local government;
    4. Any taxing district as defined by KRS 65.180 ;
    5. Any special purpose government entity as defined in KRS 65A.010(9)(a) to (c), including those entities that are exempt from the definition of special purpose governmental entity under the provisions of KRS 65A.010(9)(d)7. to 9.;
    6. Any interlocal agency;
    7. The Commonwealth or any agency or instrumentality of the state government or of the United States, including but not limited to a state-supported institution of higher education;
    8. Any county school district or independent school district; and
    9. Any private institution of higher education entering into an agreement authorized by KRS 65.240(4) with another public agency.

History. Enact. Acts 1962, ch. 216, § 3; 1964, ch. 114, § 1; 1982, ch. 87, § 1, effective July 15, 1982; 1988, ch. 393, § 1, effective July 15, 1988; 1994, ch. 356, § 1, effective July 15, 1994; 2000, ch. 464, § 3, effective July 14, 2000; 2003, ch. 80, § 1, effective June 24, 2003; 2020 ch. 98, § 2, effective July 15, 2020.

NOTES TO DECISIONS

Cited in:

N. Ky. Area Dev. Dist. v. Wilson, 612 S.W.3d 916, 2020 Ky. LEXIS 460 ( Ky. 2020 ).

Opinions of Attorney General.

Under the Interlocal Cooperation Act Ashland and other cities in Kentucky have the authority to enter into an agreement with Huntington and other cities in West Virginia to establish and operate a metropolitan planning agency. OAG 67-193 .

Kentucky area development districts created under KRS 147A.050 to 147A.120 are political subdivisions of the state and at the same time are units of local government qualifying under the intergovernmental personnel act of 1970 for the receipt of funds under certain federal programs. This opinion also affirms OAG 73-318 . OAG 73-529 .

A Kentucky city, which is a “public agency” as defined by this section, may, pursuant to the authority set forth in KRS 82.082 , enter into a contract for sewerage services with another unit of government, including a unit located in another state, under the provisions of the Interlocal Cooperation Act, KRS 65.210 et seq., and the Kentucky city can utilize, pursuant to KRS 65.250 , the existing administrative machinery of the other “public agency” which is supplying the sewerage service for a designated fee, to serve as the administrative unit for the cooperative undertaking. OAG 81-220 .

An agreement under the Interlocal Cooperation Act is a joint or cooperative undertaking between or among those governmental entities who have become parties to a formal agreement by satisfying the statutory requirements of KRS 65.210 to 65.300 ; the agreement is limited to public agencies and cannot be extended to include nonpublic agencies. OAG 84-200 .

While “public agencies” may enter into agreements executed under the Interlocal Cooperation Act, KRS 65.210 to 65.300 , assuming they can exercise unilaterally those functions they seek to exercise collectively, the agreements, including the benefits to be obtained therefrom, are limited to those units of government who have satisfied the statutory requirements of KRS 65.210 to 65.300 and are actually parties to the agreements. OAG 84-200 .

Cities and counties through the utilization of the Interlocal Cooperation Act, KRS 65.210 to 65.300 , may own and operate a hot mix bituminous asphalt plant for constructing and maintaining the roads and streets for which the member public agencies are responsible. OAG 84-200 .

The Kentucky Association of Counties may not, on behalf of the counties, issue revenue bonds under the Interlocal Cooperation Act to partially finance the self-insurance fund since it is not a public agency. OAG 87-20 .

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

65.240. Joint exercise of power by state agencies with other public agencies — Permissible agreements among private institutions of higher education, county school districts, and independent school districts.

  1. Any powers, privileges, or authorities exercised or capable of exercise by a public agency of this state may be exercised and enjoyed jointly with any other public agency of this state, and jointly with any public agency of any other state or of the United States to the extent that the laws of the United States permit such joint exercise or enjoyment. Any agency of the state government when acting jointly with any public agency may exercise and enjoy all of the powers, privileges and authority conferred by KRS 65.210 to 65.300 upon a public agency.
  2. Any two (2) or more public agencies may enter into agreements with one another for joint or cooperative action pursuant to the provisions of KRS 65.210 to 65.300 , including but not limited to for the sharing of revenues and physical assets. Appropriate action by ordinance, resolution or otherwise pursuant to law, of the governing bodies of the participating public agencies shall be necessary before any such agreement may enter into force.
  3. Any public agency may enter into agreements with another public agency or agencies pursuant to KRS 65.210 to 65.300 to acquire by purchase or lease, any real or personal property, or any interest, right, easement, or privilege therein, outside of its municipal or jurisdictional boundaries, in connection with the acquisition, construction, operation, repair, or maintenance of any water, sewage, wastewater, or storm water facilities, notwithstanding any other provision of the Kentucky Revised Statutes restricting, qualifying, or limiting their authority to do so, except as set forth in KRS Chapter 278.
  4. A private institution of higher education and one (1) or more county school districts or independent school districts may enter into agreements under KRS 65.210 to 65.300 for the purposes of establishing and operating a program or facility, including a center for child learning and study, designed to help one (1) or more schools meet the goals set out in KRS 158.6451 , or for the investment of funds if the Attorney General determines that the proposal is compatible with the United States Constitution as part of the review of the agreement provided in KRS 65.260(2), notwithstanding any other provision of the statutes restricting, qualifying or limiting their authority to do so.

History. Enact. Acts 1962, ch. 216, § 4(1), (2); 1964, ch. 114, § 2; 1982, ch. 97, § 2, effective July 15, 1982; 1988, ch. 393, § 2, effective July 15, 1988; 2018 ch. 196, § 4, effective July 14, 2018; 2020 ch. 98, § 4, effective July 15, 2020.

Opinions of Attorney General.

For the purpose of the indebtedness limitations of the constitution under Sections 157 and 158 of the Kentucky Constitution, the revenue sharing money actually made available to the city and county for the year in which the proposed new indebtedness for the buildings will be incurred, is a valid part of the two governmental units’ revenue for that particular year. OAG 73-263 .

In view of the explicit language of this section and KRS 65.270 , the Campbell County solid waste management authority can condemn land in its own name for its governmental and contractual purposes as the pre-existing rights of eminent domain vested in the participating governments may be collectively focused and utilized. OAG 73-787 .

A joint solid waste disposal authority may contract with a local garbage collector to provide garbage collection services to a city in the interlocal cooperation agreement since the agreement anticipates that the solid waste disposal program will be effectuated on a joint basis rather than a separate, city by city and unilateral basis. OAG 74-42 .

A city marshal of one city can be employed as a part-time deputy marshal, police officer, or patrolman of another city through an agreement between the two cities under an Interlocal Cooperation Act containing the information required in KRS 65.150 and approved by the Attorney General. OAG 74-537 .

As long as cities and counties comply with KRS 65.210 to 65.300 and meet the financial requirements of the Workmen’s Compensation Board and rules and regulations thereof, there is no impediment to cities joining with other cities and/or counties to provide workmen’s compensation self-insurance. OAG 78-115 .

This section would permit a city and county to grant jointly one cable television franchise, upon advertised bid solicitation, which would service the county and city. OAG 79-208 .

By reasonable implication the Interlocal Cooperation Act permits two major types of agreements: (1) the joint conduct by two or more governmental units of a particular function or joint operation of a particular governmental facility, and (2) the provision of governmental services on a contractual basis by one unit of government to one or more additional units. OAG 79-309 .

The Interlocal Cooperation Act envisions that governmental units may exercise certain powers jointly, provided each unit participating in the joint activity has the statutory authority to exercise such powers separately or unilaterally, and an interlocal agreement involving even one party which does not have the requisite statutory authority would render such contract null and void. OAG 79-309 .

Local school districts are public agencies which may take advantage of the benefits to be derived from entering into an interlocal agreement with each other. OAG 79-500 .

What a public agency can do by itself can usually be done jointly with other public agencies under an interlocal cooperation agreement, assuming no statutory bar exists to the contrary. OAG 79-500 .

An entity formed through the legal device of an interlocal cooperation agreement by public agencies which are sovereignly immune as a separate administrative entity, would be subject to the doctrine of sovereign immunity. OAG 79-502 .

Pursuant to this section, and Ky. Const., §§ 163 and 164, a city and county may engage in a joint cable television franchise, but where the city already has a franchise and is bound until May 31, 1984, unless the holder of the franchise and the city and county all agree to start over and the city and county advertise for a new and joint franchise, this is not possible before that date. OAG 79-566 .

A fourth-class city in Kentucky has the authority to operate various utility services and could, under the terms and provisions of the Interlocal Cooperation Act 65.210 et seq., execute a contract with another city to jointly operate such utility services. OAG 79-574 .

A interlocal agreement involving one party which does not have the requisite statutory authority would render the contract null and void. OAG 79-574 .

Concerning school and educational matters generally, a Kentucky city could not execute an interlocal agreement because cities do not have statutory authority to participate in school matters. OAG 79-574 .

A public housing agency operating under interlocal cooperation agreement may carry out a services project, in connection with a HUD section eight existing housing program, within the boundaries of all governmental units participating in the agreement; the Interlocal Cooperation Act provides authority for the public housing agency’s performing such function extraterritorially. OAG 79-617 .

Since a public housing agency operating under an interlocal cooperation agreement neither owns nor operates the actual buildings rented to persons assisted by the HUD section eight existing housing rent subsidy program, the extraterritoriality involved does not conflict with the concept of housing projects “acquired and operated” by a public housing authority envisioned by KRS Chapter 80. OAG 79-617 .

Although a sheriff normally has no authority to enforce city ordinances, pursuant to an interlocal cooperation agreement between a fourth-class city and a county the sheriff could be given complete jurisdiction to enforce city ordinances, as well as state law, within the municipal boundaries. OAG 80-42 .

A city housing agency may not operate a section 8 existing housing program (42 USCS § 1437f) within the boundaries of another city. OAG 80-55 .

Exclusive of the Interlocal Cooperation Act (KRS Chapter 147A), there is no statutory authority for the Kenton fiscal court to expend money on a railroad bridge located in Boone County a short distance from the Kenton County line which is part of a road which provides the only access to an industrial park, the commercial area of Boone County and I-75 for residents in the southern end of Kenton County; under this section, however, Boone County and Kenton County may execute an interlocal agreement wherein both counties may expend their general or road fund moneys in the reconstruction or repair of the bridge, subject, of course, to the availability of such funds in the county budgets and funds which were not previously committed to specific road and bridge projects. OAG 80-642 .

Since cities and counties have the authority under KRS 79.080(2) to establish and operate, individually, plans for the payment of hospitalization benefits, they may, under the authority of the Interlocal Cooperation Act, KRS 65.210 to 65.300 operate such plans jointly with other cities and counties. The agreement must ultimately be approved by the attorney general. OAG 82-294 .

Although local governments are responsible for the enforcement of the state building code within the boundaries of their jurisdictions, the department of local government may participate in the local enforcement program to the extent of providing funds for the research and planning of a program whereby various local governments will jointly conduct and operate an enforcement program. (Decision prior to 1982 enactment of KRS 147A.021 .) OAG 82-312 .

KRS 441.006 (now KRS 441.025 ) provides for jail agreements under the Interlocal Act, KRS 65.210 to 65.300 . OAG 82-334 .

Since a county cannot furnish county equipment and road employes to maintain or construct a city street unless such street is made a part of the county road system, the mere fact that an interlocal agreement is being entered into that does not encompass the city street’s being made a part of the county road system would not convert it into a lawful project. OAG 82-418 .

Not only may cities enact dog control ordinances but they may join together with other cities in joint or cooperative undertakings to handle such matters of common concern. OAG 82-447 .

The county has definite and prescribed obligations under KRS Chapter 258, but they do not include the duty to accept dogs at the county pound which were picked up by municipal dog control authorities, particularly where violations of municipal ordinances are involved. While the cities and the county have the authority to enter into a joint or cooperative agreement concerning dog control and the use of the county dog pound, which could include a boarding fee for dogs delivered to the pound by city dog control officers, the cities, in the absence of an agreement with the county, cannot require the county to accept dogs picked up for violations of municipal ordinances; absent an agreement between the cities and the county relative to dog control, the cities will enforce their ordinances only and the county and all peace officers will enforce the provisions of KRS Chapter 258. OAG 82-447 .

Where a city and county had not entered into an interlocal agreement relative to a joint cable television franchise, the unilateral solicitation of bids by the county, and the county’s acceptance of a bid which included the area of the city, resulted in an illegal award of franchise. OAG 83-321 .

While Ky. Const., §§ 163 and 164 dealing with franchises are self-operative in nature, the Interlocal Cooperation Act (KRS Chapter 147A), this section, would permit the city and county to grant jointly one cable television franchise (upon advertised bid solicitation) which would service the county and city and there is nothing in the joint action which would militate against the self-executing nature of Ky. Const., §§ 163 and 164 or against the exclusivity of separate governmental control over the streets and roads of the county and city respectively. OAG 83-321 .

Where bridge was entirely located in one county but was used by a few residents of adjacent county, the two (2) counties could enter into an interlocal agreement wherein both counties would contribute money to the repair or reconstruction of the bridge; however, for such an agreement to be valid, it must clearly appear that both counties had a definite public interest in such project and, in addition, the county in which the bridge was located would in no manner surrender its jurisdiction over the bridge. OAG 83-340 .

In addition to the express authorization of a contract between an airport authority and a city by which the authority undertakes emergency service involving UPS Aircraft either on UPS runways or on the UPS ramps by KRS 75.050 , this section expressly permits any two (2) or more public agencies of Kentucky to contract to do jointly what each can do alone. However, in view of the formalities of this and the following sections, KRS 75.050 , standing alone, is sufficient authority for the contract. OAG 85-97 .

Pursuant to subsection (1) of this section and subsection (3) of KRS 65.150 , counties may associate to self-insure. OAG 87-20 .

All peace officers in the Commonwealth of Kentucky are authorized, if not required, to cooperate with federal officials, i.e. the DEA, in enforcing appropriate federal laws against illegal drugs and drug trafficking. Also Kentucky peace officers may, to the extent permitted by federal law, enforce federal drug laws regarding crimes that have occurred in Kentucky in whole or in part, or that otherwise affect a business or person residing in Kentucky. OAG 92-104 .

A city may not unilaterally expend funds to maintain a waterway that is not within its boundaries. OAG 12-009 , 2012 Ky AG LEXIS 110.

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

Research References and Practice Aids

Kentucky Law Journal.

Owsley, The Kentucky Interlocal Cooperation Act, 51 Ky. L.J. 22 (1962).

ALR

Joint project or enterprise, power of political subdivision to engage in. 123 A.L.R. 997.

Power of eminent domain as between state and subdivision or agency thereof, or as between different subdivisions or agencies themselves. 35 A.L.R.3d 1293.

65.241. Public agency must notify establishing local governments of its intent to enter into interlocal agreement — Response or nonresponse of local governments.

  1. A public agency as defined in KRS 65.230(3)(c) to (f) shall provide written notification to the governing body of each of its establishing local governments of its intent to enter into an interlocal agreement pursuant to the provisions of KRS 65.210 to 65.300 that includes a:
    1. Written description and purpose of the proposed agreement;
    2. Copy of the proposed agreement; and
    3. Statement that the governing body of the establishing local government may either approve or disapprove the public agency’s entry into the proposed agreement by sending a written response of its approval or disapproval within thirty (30) days of the receipt of the notification from the public agency. The statement shall also note that if an establishing local government does not respond within that thirty (30) day period, the establishing local government shall be deemed to have approved the proposed entry into the agreement.
  2. In order for a public agency as defined in KRS 65.230(3)(c) to (f) to enter into an agreement pursuant to the provisions of KRS 65.210 to 65.300 , each governing body of the local government establishing that public agency, if more than one (1), shall:
    1. Notify the public agency of its approval in writing within thirty (30) days of receipt of the notification as set out in subsection (1) of this section; or
    2. Make no response. If the governing body of the local government makes no response within thirty (30) days of the notification as set out in subsection (1) of this section, the nonresponse shall be deemed to be approval of the proposal.

HISTORY: 2020 ch. 98, § 3, effective July 15, 2020.

65.242. Change in parties to interlocal agreement.

  1. Provided that the terms of the agreement are not being substantively changed, whenever an existing agreement that complies with the requirements of KRS 65.210 to 65.300 is amended solely to join new parties or to remove existing parties, approval of the Attorney General or the Department for Local Government under KRS 65.260 and approval of the agency or officer with jurisdiction under KRS 65.300 shall not be required for the amendment to be effective.
  2. In lieu of the requirements of KRS 65.290 , when an agreement is amended pursuant to subsection (1) of this section, each public agency subject to the agreement or the interlocal agency created by the agreement shall file a copy of the amended agreement with the Secretary of State.
  3. Public agencies may, by the terms of an agreement made pursuant to KRS 65.210 to 65.300 , specify the manner in which parties may be added to or removed from the agreement pursuant to this section. The language may authorize the addition of new parties or the removal of existing parties with or without the requirement of action by each public agency that is a party to the existing agreement or with a requirement of action by a minimum percentage of the legislative bodies of the public agencies that are parties to the agreement.

HISTORY: 2016 ch. 92, § 1, effective July 15, 2016; 2020 ch. 98, § 5, effective July 15, 2020.

65.243. Status and authorities of interlocal agency created by interlocal agreement — Interlocal agreement controls if more restrictive than KRS 65.210 to 65.300 — Status and authorities are cumulative — No statutory power to tax granted to interlocal agency — Interlocal agency deemed a public agency.

  1. An interlocal agency created by the interlocal agreement shall constitute an agency and instrumentality of the public agencies party to the interlocal agreement for the purpose of performing the essential governmental functions and the public purposes authorized by the interlocal agreement.
  2. Unless restricted, limited, or otherwise conditioned under the terms of the interlocal agreement, an interlocal agency is authorized to exercise any powers not in conflict with local, state, or federal law or in conflict with the interlocal agreement that are necessary and convenient to accomplish the purposes for which the interlocal agency was created.
  3. To the extent that any of the provisions of the interlocal agreement are more restrictive, or limit the powers, privileges, or authority of the interlocal agency that are otherwise allowed by KRS 65.210 to 65.300 , the provisions of the interlocal agreement shall control.
  4. The status and authorities of an interlocal agency granted in this section, unless limited by the interlocal agreement, is cumulative and in addition to the powers and authority of an interlocal agency that may otherwise exist and that are granted or implied under any other laws of the Commonwealth to a specific type of public body that may also function as an interlocal agency under KRS 65.210 to 65.300 .
  5. Nothing in this section shall be construed to grant an interlocal agency the ability to levy a tax.
  6. An interlocal agency created by an interlocal agreement shall be deemed to be a public agency as defined in KRS 61.805 and 61.870 , and as such shall be subject to KRS 61.800 to 61.850 and 61.870 to 61.884 .

HISTORY: 2020 ch. 98, § 7, effective July 15, 2020.

65.245. Cooperative interlocal agreements for the sharing of revenues. [Repealed]

History. Enact. Acts 1992, ch. 87, § 1, effective July 14, 1992; 2000, ch. 464, § 4, effective July 14, 2000; 2002, ch. 346, § 27, effective July 15, 2002; repealed by 2020 ch. 98, § 18, effective July 15, 2020.

65.250. Contents of agreements authorized by KRS 65.240.

  1. Any agreement entered into under KRS 65.210 to 65.300 shall specify the following:
    1. The purpose and duration of the agreement;
    2. If the agreement creates an interlocal agency:
      1. The organization, composition, authority, and nature of the interlocal agency, including the terms and qualifications of the members of the governing authority and their manner of appointment or selection;
      2. A statement of the powers delegated to the interlocal agency or any restrictions, limitations, or conditions the contracting parties wish to place on those powers; and
      3. A general statement of any responsibilities of the interlocal agency to the parties that established it;
    3. The manner of financing the joint or cooperative undertaking and of establishing and maintaining a budget therefor; said agreement for financing the joint or cooperative undertaking shall include agreements relative to the respective responsibilities of the public agencies involved for the payment of the employer’s share involved in any pertinent pension plan or plans, if any, provided for by KRS 65.280 ;
    4. The permissible method or methods to be employed in accomplishing the partial or complete termination of the agreement, including the method for disposing of property upon such partial or complete termination; and
    5. Any other necessary and proper matters.
  2. In the event that the agreement does not establish an interlocal agency to conduct the joint or cooperative undertaking, the agreement shall, in addition to paragraphs (a), (c), (d), and (e) enumerated in subsection (1) of this section, contain the following:
    1. Provision for an administrator responsible for the joint or cooperative undertaking; and
    2. The manner of acquiring, holding, and disposing of real and personal property used in the joint or cooperative undertaking.

History. Enact. Acts 1962, ch. 216, § 4(3), (4); 1964, ch. 114, § 4; 1966, ch. 255, § 78; 2020 ch. 98, § 6, effective July 15, 2020.

Opinions of Attorney General.

Where a city and a county acting under the Interlocal Cooperation Act and with intent to take advantage of the extraterritorial police power permitted by the act enter into an agreement authorizing all members of the city police force to exercise the power of arrest and other powers that they possess, in any territory of the county outside the city limits, this does not represent a cooperative and joint exercise of police power as required by KRS 64.240 (now repealed) nor does the failure to mention the matter of financing the joint or cooperative undertaking conform with subsec. (1)(d) of this section and the failure to create a separate legal or administrative entity does not conform to subsec. (2) of said section. The agreement therefore does not comply with either the intent or the terms of the Interlocal Cooperation Act and cannot be approved by the attorney general as required by this section. OAG 69-113 .

An interstate cooperative agreement could legally provide that the Tennessee watershed district would acquire such easements or flowage rights on Tennessee lands from Tennessee landowners whose lands might be flooded as a result of the construction and operation of two Kentucky dams, subject to the Tennessee district’s being reimbursed, by the Kentucky district, for its expenses in acquiring, recording and transferring such rights to the Kentucky district if such agreement complied with the requirements of this section, KRS 65.260 and 65.290 . OAG 69-204 .

Where a city and county created, under the Kentucky Interlocal Cooperation Act, a new joint library with its board of trustees to conduct the affairs of the existing public library, they created a “body corporate” and any additional creation by the board of trustees of a separate library corporation would be superfluous. OAG 75-288 .

An interlocal agreement and the steps taken to effectuate Ky. Const., §§ 163 and 164 may properly include joint advertising, joint consideration of bids, joint awarding of a cable television franchise covering city and county areas, a provision that the consideration payable to the city and county shall be a certain percentage of the gross receipts from city subscribers going to the city and a percentage of gross receipts of county subscribers going to the county respectively, and the joint control over the franchise. OAG 79-208 .

Where either a joint or cooperative agreement is involved, the agreement may provide for either a separate legal or administrative entity to conduct the undertaking or it may utilize the existing administrative machinery of one or more of the governmental units which are parties to the contract. OAG 79-309 .

Although the articles of incorporation of an entity purported to show that the apparent purpose of the corporation was to perform governmental activity, specifically to assist those political subdivisions of the state of Kentucky located in Campbell County in performing their municipal functions, the articles did not fully comply with this section and there was no indication that it had complied with KRS 65.260 , therefore, since the entity had no formal statutory authority that would make it an instrumentality of a political subdivision as defined in KRS 61.420(5) for social security purposes, social security should be paid by the entity directly to the social security administration as any other nonprofit corporation would do. OAG 80-348 .

A Kentucky city, which is a “public agency” as defined by KRS 65.230 , may, pursuant to the authority set forth in KRS 82.082 , enter into a contract for sewerage services with another unit of government, including a unit located in another state, under the provisions of the Interlocal Cooperation Act, KRS 65.210 et seq., and the Kentucky city can utilize, pursuant to this section, the existing administrative machinery of the other “public agency” which is supplying the sewerage service for a designated fee, to serve as the administrative unit for the cooperative undertaking. OAG 81-220 .

A city of the fifth class which entered into an interlocal agreement concerning fire protection could not pass the yearly charge on to its citizens in the absence of a statutory authorization for such special assessment. OAG 84-61 .

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

65.255. Powers of peace officers operating under cooperative interlocal agreement.

If an agreement entered into under the authority of KRS 65.210 to 65.300 provides for cooperative action in the utilization of peace officers, those peace officers, while in the performance of their duties under the agreement outside their own city, county, or other jurisdiction, shall have the full power of arrest and all other powers they possess in their own city, county, or other jurisdiction, and shall have the same immunities and privileges as if the duties were performed in their own city, county, or other jurisdiction.

History. Enact. Acts 1968, ch. 68; 2020 ch. 98, § 8, effective July 15, 2020.

Opinions of Attorney General.

Although a literal construction of KRS 95.510 (now repealed) would appear to empower police of cities of the third class to exercise their jurisdiction within an adjoining county providing it is within one (1) mile of the city limits, this construction is negated by this section and Const., § 101. OAG 75-68 .

Where a city and a county operate a joint metro police force under the Interlocal Cooperation Act and, under the authority of KRS 95.445 , the city establishes an auxiliary police force to perform special duties within the city, the members of the metro force have, under this section, county-wide jurisdiction but this extraterritorial jurisdiction would not extend to the members of the auxiliary force, whose power of arrest is limited to the city. OAG 75-381 .

Although a sheriff normally has no authority to enforce city ordinances, pursuant to an interlocal cooperation agreement between a fourth-class city and a county the sheriff could be given complete jurisdiction to enforce city ordinances, as well as state law, within the municipal boundaries. OAG 80-42 .

While police officers of a sixth class city have a statutory obligation to rigidly enforce the provisions of KRS 189.520 , dealing with driving under the influence, they can only enforce this statute or any other statute within their jurisdictional area of authority. Generally, the jurisdiction of such police officers to arrest for offenses against the state is limited to the city limits of their particular city. However, where sixth class cities are operating under an interlocal agreement, the jurisdiction is extended to include the city limits of all of the cities which are parties to the agreement. Also under the appropriate circumstances the jurisdiction of a sixth class city police officer could be expanded by the utilization of the concept of hot pursuit under KRS 431.045 . OAG 82-599 .

A city is generally liable for the negligent acts of its police officers who are operating in another city as authorized by an interlocal agreement, and liability will generally be incurred regardless of what the agreement says to the contrary. OAG 83-363 .

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

65.260. Limitations upon agreements — Approval by Attorney General or Department for Local Government — Exemptions.

  1. No agreement made pursuant to KRS 65.210 to 65.300 shall relieve any public agency of any obligation or responsibility imposed upon it by law, except that to the extent of actual and timely performance thereof by an interlocal agency, that performance may be offered in satisfaction of the obligation or responsibility.
  2. Except as provided in subsections (3) and (4) of this section, every agreement made pursuant to KRS 65.210 to 65.300 shall, prior to and as a condition precedent to its entry into force, be submitted to the Attorney General who shall determine whether the agreement is in proper form and compatible with the laws of this state. The Attorney General shall approve any agreement submitted to his or her office under this subsection unless he or she finds that it does not meet the requirements set forth in KRS 65.210 to 65.300 . If the agreement does not meet these requirements, the Attorney General shall detail in writing, addressed to the public agencies concerned, the specific respects in which the proposed agreement fails to meet the requirements of law. The failure of the Attorney General to disapprove an agreement submitted under this subsection within thirty (30) days of its submission shall constitute approval thereof.
    1. In lieu of the requirements of subsection (2) of this section, agreements involving only local governments, an agency, board, instrumentality, or commission created exclusively by one (1) or more local governments, or any combination thereof, shall prior to and as a condition precedent to its entry into force, be submitted to the Department for Local Government. The department shall determine whether the agreement is in proper form and shall approve any agreement submitted to it under this subsection unless it finds that the agreement does not meet the requirements set out in KRS 65.210 to 65.300 . If the agreement does not meet these requirements, the department shall detail, in writing, addressed to the public agencies concerned, the specific respects in which the proposed agreement fails to meet the requirements of KRS 65.210 to 65.300 . The failure of the department to disapprove an agreement submitted under this subsection within thirty (30) days of its submission shall constitute approval thereof. (3) (a) In lieu of the requirements of subsection (2) of this section, agreements involving only local governments, an agency, board, instrumentality, or commission created exclusively by one (1) or more local governments, or any combination thereof, shall prior to and as a condition precedent to its entry into force, be submitted to the Department for Local Government. The department shall determine whether the agreement is in proper form and shall approve any agreement submitted to it under this subsection unless it finds that the agreement does not meet the requirements set out in KRS 65.210 to 65.300. If the agreement does not meet these requirements, the department shall detail, in writing, addressed to the public agencies concerned, the specific respects in which the proposed agreement fails to meet the requirements of KRS 65.210 to 65.300. The failure of the department to disapprove an agreement submitted under this subsection within thirty (30) days of its submission shall constitute approval thereof.
    2. The approval of an agreement by the Department for Local Government under paragraph (a) of this subsection shall be deemed final and conclusive that the agreement meets the requirements of KRS 65.210 to 65.300, and the agreement shall not thereafter be subject to challenge as to the validity of its formation.
  3. The submission of an interlocal cooperative agreement to the Attorney General or the Department for Local Government as provided in subsections (2) and (3) of this section shall not be required for any cooperative agreement which involves:
    1. Only the construction, reconstruction, or maintenance of a municipal road or bridge, provided a written agreement is approved by each of the affected governing bodies of the public agencies, or the administrative head of a public agency if there is no governing body; or
    2. Interlocal cooperative agreements between school boards and local governments.

History. Enact. Acts 1962, ch. 216, § 4(5), (6); 1964, ch. 114, § 3; 1992, ch. 46, § 1, effective July 14, 1992; 2000, ch. 464, § 1, effective July 14, 2000; 2007, ch. 47, § 44, effective June 26, 2007; 2010, ch. 117, § 51, effective July 15, 2010; 2020 ch. 98, § 9, effective July 15, 2020.

Opinions of Attorney General.

Although two (2) cities have entered into an interlocal agreement, such agreement could be mutually dissolved by the cities at any time and no binding effect would result from a contract with a police authority and any contract between the Kentucky crime commission through the Kentucky law enforcement foundation fund would need to be entered into with the actual subdivisions involved. OAG 73-603 .

Although the articles of incorporation of an entity purported to show that the apparent purpose of the corporation was to perform governmental activity, specifically to assist those political subdivisions of the state of Kentucky located in Campbell County in performing their municipal functions, the articles did not fully comply with KRS 65.250 and there was no indication that it had complied with this section, therefore, since the entity had no formal statutory authority that would make it an instrumentality of a political subdivision as defined in KRS 61.420(5) for social security purposes, social security should be paid by the entity directly to the social security administration as any other nonprofit corporation would do. OAG 80-348 .

Research References and Practice Aids

Kentucky Law Journal.

Owsley, The Kentucky Interlocal Cooperation Act, 51 Ky. L.J. 22 (1962).

65.270. Revenue bonds.

  1. Whenever any two (2) or more public agencies, as defined in KRS 65.230 , enter into an agreement for joint or cooperative action pursuant to the provisions of KRS 65.210 to 65.300 , any public agency acting separately or jointly with one (1) or more of any other public agencies, may acquire, construct, maintain, add to, and improve the necessary property, real and personal, which is required in order to perform the functions under the agreement, and for the purpose of defraying the costs incident to the performance of the agreement, may borrow money and issue negotiable revenue bonds.
  2. Any public agency or agencies may borrow money and issue bonds under this section pursuant to an order, resolution, or ordinance of its or their legislative or administrative body or bodies, which order, resolution, or ordinance shall set forth the terms of the agreement in full, the amount of the revenue bonds to be issued, and the maximum rate of interest. In every instance the order, resolution, or ordinance shall provide that the joint or cooperative action is being undertaken pursuant to the provisions of KRS 65.210 to 65.300 .
  3. The bonds may be issued to bear interest at a rate or rates or method of determining rates as the public agency or agencies determines, payable at the times and at a place or places as the public agency or agencies determines.
  4. The bonds may provide that they or any of them may be called for redemption prior to maturity.
  5. Any public agency is empowered to accept donations or gifts to the joint or cooperative action from any source and to accept appropriations and grants to the joint or cooperative action from the federal government or its agencies and appropriations from the state or any county, city, or other political subdivision and, at the option of the public agency or agencies, to pledge any donations, gifts, or appropriations to the payment of revenue bonds issued to finance the cost of a joint or cooperative action.
  6. Bonds issued pursuant to this section shall be negotiable and shall not be subject to taxation. If any officer whose signature or countersignature appears on the bonds or coupons ceases to be an officer before delivery of the bonds, his signature or countersignature shall be valid and sufficient for all purposes the same as if he had remained in office until delivery. The bonds shall be sold in a manner and upon terms as the public agency or agencies deem best. The bonds shall be payable solely from the revenue derived from the joint or cooperative action and shall not constitute an indebtedness of the state, county, city, or political subdivision. It shall be plainly stated on the face of each bond that it has been issued under the provisions of KRS 65.210 to 65.300 .
  7. All money received from the bonds shall be applied solely for the acquisition, construction, maintenance, improvement, or operation of the joint or cooperative action, and the necessary expense of preparing, printing, and selling the bonds, or to advance the payment of interest on the bonds during the first three (3) years following the date of the issuance of the bonds.
  8. The rents, royalties, fees, rates, and charges for the service or sale of the joint or cooperative action shall be fixed and revised from time to time so as to be sufficient to provide for the payment of interest upon all bonds and to create a sinking fund to pay the principal of the bonds when due, and to provide for the operation and maintenance of the joint or cooperative action and an adequate depreciation account.

History. Enact. Acts 1962, ch. 216, § 5; 1996, ch. 274, § 4, effective July 15, 1996; 2020 ch. 98, § 10, effective July 15, 2020.

Opinions of Attorney General.

Given the explicit language of this section and KRS 65.240 , the Campbell County solid waste management authority can condemn land in its own name for its governmental and contractual purposes as the pre-existing rights of eminent domain vested in the participating governments may be collectively focused and utilized. OAG 73-787 .

The interlocal cooperative board may act as the fiscal agent for projects funded through the department of education. OAG 74-351 .

A county or group of counties operating under an interlocal agreement and issuing revenue bonds which are “public obligations” under subsection (1)(b) of KRS 58.410 would be subject to the interest rate provisions of KRS 58.430 which repealed the provisions of subsection (3) of this section upon its enactment. OAG 81-346 .

The Kentucky Association of Counties may not, on behalf of the counties, issue revenue bonds under the Interlocal Cooperation Act to partially finance the self-insurance fund since it is not a public agency. OAG 87-20 .

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

Research References and Practice Aids

Cross-References.

Acquisition and development of public projects by governmental units and agencies through revenue bonds, KRS ch. 58.

Facsimile signatures and seals on public securities and options as to negotiability, KRS 61.390 .

ALR

Recitals in bond as putting purchaser on notice of circumstances affecting validity of the bond. 86 A.L.R. 1099; 158 A.L.R. 938.

Revenue-producing enterprise owned by municipality, diversion of revenue from operation of, from payment of bonds issued for such enterprise. 103 A.L.R. 579; 165 A.L.R. 854.

Smaller political units, constitutionality of statutory plan for financing, or refinancing bonds of, by larger political unit. 106 A.L.R. 608.

Revenue bonds or other bonds not creating indebtedness as within constitutional or statutory requirement of prior approval by electors of issuance of bonds or incurring of indebtedness. 146 A.L.R. 604.

Validity of municipal bond issue as against owners of property, annexation of which to municipality became effective after date of election at which issue was approved by voters. 10 A.L.R.2d 559.

65.280. Effect of civil service laws and regulations upon transferred employees.

  1. In the event that a public agency or agencies determine to transfer any of its employees to the joint or cooperative action, which employees are subject to any civil service laws or regulations, such employees shall not lose any rights or benefits which have accrued prior to such transfer. Such employees, when transferred, to the joint or cooperative action from a public agency or agencies that are subject to any civil service laws or regulations, and who have completed probationary appointments with the public agency or agencies prior to the date of transfer, shall be considered as having satisfied all of the qualifications of the joint or cooperative action and shall be given full and regular appointments as defined in such laws or regulations as of the date they are transferred to the joint or cooperative action.
  2. In the event that the joint or cooperative action is such that its employees would be afforded civil service rights or benefits if they were employees of a county or city, such employees shall be afforded the protection of civil service laws or regulations; provided, however, that such protection is available under the laws of this state.
  3. In the event the joint or cooperative action employs a person employed immediately prior thereto by a component city or county, or by a special district, such employee shall be deemed to remain an employee of such city, county or special district for the purposes of any pension plan of such city, county, or special district, and shall continue to be entitled to all rights and benefits thereunder as if he had remained as an employee of the city, county, or special district, until the joint or cooperative action has provided a pension plan to which such employee is eligible and such employee has elected, in writing, to participate therein. Until such election, the joint or cooperative action shall deduct from the remuneration of such employee the amount which such employee is or may be required to pay in accordance with the provisions of the plan of such city, county, or special district and the joint or cooperative action shall pay to the city, county, or special district any amounts required to be paid under the provisions of such plan by employer and employee, unless an agreement, not adversely affecting the employee’s interest, or expectancy, has been made pursuant to KRS 65.250(1)(c) for the payment of the employer’s pension obligation.

History. Enact. Acts 1962, ch. 216, §§ 6, 7; 1964, ch. 114, § 5; 1966, ch. 255, § 79; 1972, ch. 383, § 1; 2020 ch. 98, § 16, effective July 15, 2020.

Opinions of Attorney General.

Employees of the interlocal cooperative board who are employed for special project purposes are entitled to all of the civil service and fringe benefits enjoyed by employees of the member agency. OAG 74-351 .

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

Research References and Practice Aids

ALR

Acquiescence or delay as affecting rights of public employee illegally discharged, suspended, or transferred. 145 A.L.R. 767.

65.290. Copies of agreement must be filed — Status of public agencies in case or controversy involving agreement between or among agencies of other state or United States.

  1. Before any agreement made pursuant to KRS 65.210 to 65.300 shall become operative or have force and effect, a certified copy thereof shall be filed with the Secretary of State. After the original filing of an agreement as provided in this section, no additional filing is required for agreements amended solely for the addition or removal of parties as provided under KRS 65.242 .
  2. If an agreement entered into pursuant to KRS 65.210 to 65.300 is between or among one (1) or more public agencies of this state and one (1) or more public agencies of another state or of the United States, that agreement may have the status of an interstate compact, but in any case or controversy involving performance or interpretation thereof or liability thereunder, the public agencies party thereto shall be real parties in interest and the state may maintain an action to recoup or otherwise make itself whole for any damages or liability which it may incur by reason of being joined as a party therein. An action shall be maintainable against any public agency or agencies whose default, failure of performance, or other conduct caused or contributed to the incurring of damage or liability by the state.

History. Enact. Acts 1962, ch. 216, § 8; 1964, ch. 114, § 6; 2020 ch. 98, § 11, effective July 15, 2020.

Notes to Opinions

Attorney General Opinions

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

65.300. Approval of agreement by officer or agency required.

If an agreement made pursuant to KRS 65.210 to 65.300 deals in whole or in part with the provisions of services or facilities over which an officer or agency of the state government has constitutional or statutory powers of control, the agreement shall, as a condition precedent to its entry into force, be submitted to the state officer or agency having that power of control and shall be approved or disapproved by the officer or agency as to all matters within the jurisdiction of the officer or agency in the same manner and subject to the requirements governing the action of the Attorney General pursuant to subsection (2) of KRS 65.260 . The requirement of this section shall be in addition to and not in substitution for the requirement of submission to and approval by the Attorney General under subsection (2) of KRS 65.260 .

History. Enact. Acts 1962, ch. 216, § 9; 2020 ch. 98, § 12, effective July 15, 2020.

Notes to Opinions

Attorney General Opinions

A city may withdraw its participation from an existing tourism commission in accordance with its “home rule” powers under KRS § 82.082 . The legislature allows for a separate tax by allowing local governments to act separately in forming tourism commissions in KRS § 91A.350(1) and (2). OAG 2015-07

65.310. Definitions for KRS 65.310 to 65.314.

As used in KRS 65.310 to 65.314 :

  1. “Public entity” means any organization that represents a statewide association of local governments where the majority of its governing body is composed of mayors, county judges/executive, or other local elected officials, and whose membership includes any or a combination of the following:
    1. Cities;
    2. Counties;
    3. Charter counties;
    4. Urban-counties;
    5. Consolidated local governments; and
    6. Unified local governments; and
  2. “Affiliated organization” means any incorporated or unincorporated organization staffed, managed, or administered by a public entity.

History. Enact. Acts 2010, ch. 76, § 2, effective July 15, 2010.

65.312. Applicability of Open Records Act and Open Meeting Act to governing bodies of public entity and affiliated organizations — Exceptions — Financial data to be posted on Web — Annual audit.

The governing body of a public entity and the governing body of an affiliated organization shall:

  1. Be subject to the provisions of KRS 61.870 to 61.884 , and all records of the public entity and its affiliated organizations shall be deemed open records and subject to public inspection, unless the record:
    1. Is excluded from inspection under KRS 61.878 ;
    2. Includes information that would provide an unfair competitive advantage to private sector competitors providing insurance coverage or financing services in the Commonwealth;
    3. Is generated by the public entity or an affiliated organization, is generally recognized as confidential or proprietary, and which, if openly disclosed, would permit an unfair commercial advantage to competitors of the public entity or an affiliated organization; or
    4. Relates to a fraudulent insurance claim investigation conducted by the public entity or an affiliated organization and does not become evidence in a criminal or civil action. This paragraph shall not be construed to affect the rights of parties in a civil or criminal action to obtain copies of the records pursuant to the rules of discovery applicable to that action;
  2. Be subject to the provisions of KRS 61.800 to 61.850 , with the following exceptions:
    1. Meetings may be closed in accordance with KRS 61.810 ; and
    2. Proceedings to discuss insurance rates, proposed rates, or anything that relates to rates if that discussion would jeopardize the competitiveness of the public entity or an affiliated organization may be closed, as well as proceedings which would provide an unfair competitive advantage to private sector competitors of the public entity or an affiliated organization providing insurance coverage or financing services in the Commonwealth;
  3. By January 15 of each year, establish a schedule of regular meetings consistent with KRS 61.820 , and conduct the regular meetings in accordance with the Open Meetings Act, KRS 61.805 to 61.850 . A public entity and its affiliated organizations may conduct special or emergency meetings, as set out in KRS 61.823 , over telephonic conference call, provided that the public entity or the affiliated organization otherwise adheres to the requirements of KRS 61.805 to 61.850 and provides a designated location or locations where members of the public may attend and hear the audio of each individual participating in the telephonic meeting;
  4. By January 1, 2011, provide a Web site that will allow citizens Internet access to substantial and substantive financial data about expenditures of the public entity and its affiliated organizations. Information on the Web site shall be updated at least on a monthly basis and shall provide the following information not considered confidential by state or federal law:
    1. The name of the recipient of the funds of the public entity and its affiliated organizations;
    2. The expenditure type by vendor;
    3. The amount of the expenditure;
    4. A description of the purpose of the expenditure, if available;
    5. The payment date of the expenditure;
    6. An electronic link to a database displaying the information contained in paragraphs (a) to (e) of this subsection, which information shall remain in the database for at least three (3) years after the payment date of the expenditure;
    7. The budget adopted by the governing body and its affiliated organizations; and
    8. The complete annual audit results on a continuing basis;
  5. Beginning August 1, 2010, undergo an annual audit performed by a certified public accountant or the Auditor of Public Accounts. The contract with the certified public accountant shall specify:
    1. That the certified public accountant shall forward a copy of the audit report and management letters to the Auditor of Public Accounts; and
    2. That the Auditor of Public Accounts shall have the right to review the certified public accountant’s work papers before and after the release of the audit; and
  6. Allow the Office of the Auditor of Public Accounts to conduct, at its discretion, an examination of the public entity and its affiliated organizations.

History. Enact. Acts 2010, ch. 76, § 3, effective July 15, 2010.

65.314. Adoption of procurement, personnel, and compensation policies and code of ethics.

By August 1, 2010, the governing body of a public entity and the governing body of any affiliated organization of the public entity shall each:

  1. Adopt a procurement policy consistent with KRS 45A.345 to 45A.460 that includes, notwithstanding KRS 45A.380(3) and (10), a transparent, competitive, selection process for licensed professional services, bond underwriting and bond counsel services, and financial and insurance products and services;
  2. Approve a detailed, equitable personnel and compensation policy;
  3. Approve contracts only in accordance with its bylaws and procurement policy;
  4. Establish an independent process to receive, analyze, investigate and resolve concerns relating to the public entity and its affiliated organizations, including alleged violations of the code of ethics required by subsection (6) of this section;
  5. Conduct training for its members relating to their legal and fiduciary responsibilities; and
  6. Adopt a code of ethics that shall include:
    1. Standards of conduct for its members and its officers and employees;
    2. Requirements for creation and annual filing of financial disclosure statements for its members and its officers and management personnel; and
    3. A policy on the employment of:
      1. Individuals related to its members; and
      2. Individuals related to its officers and employees.

History. Enact. Acts 2010, ch. 76, § 4, effective July 15, 2010.

Local Government Training

65.320. Local Government Training Advisory Council.

There shall be created a Local Government Training Advisory Council in Kentucky, to be composed of the presidents or their designees of the Kentucky Association of Counties, the County Judge/Executives Association, and the Kentucky League of Cities and the commissioner of the Department for Local Government.

History. Enact. Acts 1992, ch. 208, § 1, effective July 14, 1992; 1998, ch. 69, § 32, effective July 15, 1998; 2007, ch. 47, § 45, effective June 26, 2007; 2010, ch. 117, § 52, effective July 15, 2010.

65.323. Duties of council.

  1. The Local Government Training Advisory Council shall:
    1. Develop and update on a biennial basis a local government training plan that:
      1. Quantifies the training needs of local governments;
      2. Evaluates the abilities of existing training programs to meet the needs;
      3. Identifies areas of unmet need that justify expanding existing programs or the creation of new programs; and
      4. Formulates a strategy, giving consideration to the use of state-of-the-art communication techniques to enhance training efforts, that meets the needs of local governments;
    2. Submit a copy of the local government training plan to the Legislative Research Commission by November 1 of odd-numbered years;
    3. Ensure the proper coordination of training programs for city and county governments; and
    4. Elect a chairperson annually from its membership.
  2. The council shall adopt the plan provided for in subsection (1)(a) of this section by majority vote, at which time it shall become the policy document used by the Department for Local Government to determine priorities for the expenditure of training funds.

History. Enact. Acts 1992, ch. 208, § 2, effective July 14, 1992; 1998, ch. 69, § 33, effective July 15, 1998; 2007, ch. 47, § 46, effective June 26, 2007; 2010, ch. 117, § 53, effective July 15, 2010.

65.327. Use of existing training providers.

  1. The Local Government Training Advisory Council shall use the expertise of existing training providers in developing new or expanded programs. This includes but is not limited to:
    1. All institutions of higher education and affiliate organizations that provide training and technical assistance to local governments;
    2. State agencies that provide training related to statutory or regulatory oversight responsibilities;
    3. Area development districts;
    4. Public official professional associations;
    5. Private providers associated with established certification programs; and
    6. Any other provider suitable for developing effective training programs.
  2. The council shall be attached to the Department for Local Government for administrative purposes.

History. Enact. Acts 1992, ch. 208, § 3, effective July 14, 1992; 1998, ch. 69, § 34, effective July 15, 1998; 2007, ch. 47, § 47, effective June 26, 2007; 2010, ch. 117, § 54, effective July 15, 2010.

65.330. Members not to be compensated.

The members of the council shall not be compensated for their duties on the council.

History. Enact. Acts 1992, ch. 208, § 4, effective July 14, 1992.

65.333. Meetings.

  1. The council shall meet at least four (4) times each year at the times it determines by resolution. Special meetings may be called by the chairperson. Upon the request of three (3) members of the council, the chairperson shall call a special meeting.
  2. Notice of each meeting shall be given by the chairperson at least ten (10) days prior to the time of the meeting, unless all members of the council waive notice.

History. Enact. Acts 1992, ch. 208, § 5, effective July 14, 1992.

65.337. Quorum — Vote requirement.

A majority of the voting members of the council constitutes a quorum for the transaction of business, but no business shall be transacted and no proposition carried unless a majority of the members votes for it.

History. Enact. Acts 1992, ch. 208, § 6, effective July 14, 1992.

Land Bank Authorities

65.350. Definitions for KRS 65.350 to 65.375.

As used in KRS 65.350 to 65.375 :

  1. “Authority” means the land bank authority established pursuant to KRS 65.210 to 65.300 and KRS 65.350 to 65.375 ;
  2. “Agreement” means the interlocal cooperation agreement entered into by the parties pursuant to KRS 65.210 to 65.300 and KRS 65.350 to 65.375 ;
  3. “Local government” means every city, regardless of classification, every county, and every consolidated local government and urban-county government;
  4. “Party” or “parties” means one (1) or more parties to an agreement, which shall include any local government, the local school district, which may include county and independent school districts, within the county and the Commonwealth of Kentucky;
  5. “Property” means real property, including any improvements thereon;
  6. “Tax-delinquent property” means any property on which the taxes levied and assessed by any party remain in whole or in part unpaid on the date due and payable; and
  7. “Local government lien” means any lien established by or in favor of a local government under KRS Chapter 65, 82, 91, 91A, or 134.

HISTORY: Enact. Acts 1988, ch. 92, § 1, effective July 15, 1988; repealed, reenact., and amend. Acts 1990, ch. 341, § 1, effective July 13, 1990; 2003, ch. 171, § 1, effective June 24, 2003; 2017 ch. 86, § 4, effective June 29, 2017.

Compiler’s Notes.

This section was formerly compiled as KRS 91.800 .

65.352. Compliance with KRS 65A.010 to 65A.090.

Any board formed and operating under KRS 65.350 to 65.375 shall comply with the provisions of KRS 65A.010 to 65A.090 .

History. Enact. Acts 2013, ch. 40, § 21, effective March 21, 2013.

65.355. Creation of authority.

  1. Any local government, the county or independent school district within the county, and the Commonwealth of Kentucky may enter into an interlocal cooperation agreement pursuant to KRS 65.210 to 65.300 for the purpose of establishing a land bank authority pursuant to KRS 65.350 to 65.375 .
  2. The authority shall be a public body corporate and politic with the power to sue and be sued, issue deeds in its name, and any other powers necessary and convenient to carry out these powers or that may be granted to the authority by the parties.
  3. The authority shall be established to acquire the tax delinquent properties of the parties, properties that have become blighted or deteriorated as defined by KRS 99.705 and properties that have local government liens filed against them, to facilitate the public purpose of returning property that is in a non-revenue generating, non-tax producing status to effective utilization, including but not limited to providing housing, new industry, and jobs for the citizens of the county. The authority shall have the powers provided in KRS 65.370 and 65.375 and in the interlocal cooperation agreement.

HISTORY: Enact. Acts 1988, ch. 92, § 2, effective July 15, 1988; repealed, reenact., and amend. Acts 1990, ch. 341, § 2, effective July 13, 1990; 2003, ch. 171, § 2, effective June 24, 2003; 2017 ch. 86, § 5, effective June 29, 2017.

Compiler’s Notes.

This section was formerly compiled as KRS 91.805 .

65.360. Board of authority.

  1. The authority shall be governed by a board composed of one (1) member appointed by each unit of local government that is a party to the agreement, one (1) member appointed by the superintendent of schools of the county school district or of the independent school district, and one (1) member appointed by the Governor. Each member shall serve at the pleasure of the respective appointing authority for a term of four (4) years and shall serve without compensation. The members shall be residents of the county and may be employees of the parties and shall serve without additional compensation. Any vacancy shall be filled in the same manner as the original appointment.
  2. The board of the authority shall meet as required, and three (3) members shall constitute a quorum. Approval by a majority of the membership shall be necessary for any action to be taken by the authority. All meetings shall be open to the public, except as otherwise permitted by KRS 61.810 , and a written record shall be maintained of all meetings. A chairman shall be elected from among the members, and he shall execute all deeds, leases, and contracts of the authority when authorized by the board.
  3. The authority may employ its own staff or may utilize employees of the parties, as determined by the agreement.

History. Enact. Acts 1988, ch. 92, § 3, effective July 15, 1988; repealed, reenact., and amend. Acts 1990, ch. 341, § 3, effective July 13, 1990; 2003, ch. 171, § 3, effective June 24, 2003.

Compiler’s Notes.

This section was formerly compiled as KRS 91.810 .

65.365. List of electronic mail addresses of interested housing authorities.

Upon the creation of a land bank authority, the authority shall maintain a list of electronic mail addresses for all city, county, or regional housing authorities, and the Kentucky Housing Corporation, that have requested to be notified prior to any action by the authority to dispose of property in its inventory. It shall be the responsibility of an interested housing authority to provide the authority with the following information:

  1. The name of the organization;
  2. The electronic mailing address for the organization; and
  3. The name and title of a contact person for the organization.

HISTORY: Enact. Acts 1990, ch. 341, § 4, effective July 13, 1990; 2017 ch. 86, § 6, effective June 29, 2017.

65.370. Acquisition and disposal of property — Publication of information — Taxes extinguished — Proceeds of sale or disposal — Remittance of property taxes.

  1. The authority shall hold in its own name, for the benefit of the parties, all properties conveyed to it by the parties, all tax delinquent properties or properties having local government liens acquired by it pursuant to KRS 65.375 , and all properties otherwise acquired by other means.
  2. The authority shall administer the properties held by it, as follows:
    1. All property held by the authority shall be inventoried, and the inventory shall be maintained as a public record;
    2. The authority shall organize and classify the property on the basis of suitability for use;
    3. The authority shall maintain all property held by it in accordance with applicable laws and codes; and
    4. The authority shall have the power to manage, maintain, protect, rent, lease, repair, insure, alter, sell , trade, exchange, or otherwise dispose of any property on terms and conditions as determined by KRS 65.350 to 65.375 and by the authority. The authority may assemble tracts or parcels of property, and may exchange parcels, and may otherwise effectuate the purposes of the agreement and of KRS 65.350 to 65.375 .
  3. Before the authority may rent, lease, sell, trade, exchange, or otherwise dispose of any property it shall:
    1. Establish a price for rent or lease purposes;
    2. Establish a purchase price for sale purposes; or
    3. Establish the conditions for sale, rent, trade, exchange, or other disposal of the property.
  4. The authority shall publish pursuant to KRS Chapter 424, the information required pursuant to subsection (3) of this section, at least seven (7) days before any property may be disposed of from the inventory. Immediately following publication the authority shall notify by electronic mail all housing authorities on the mailing list required pursuant to KRS 65.365 of the authority’s intent to dispose of a specified property and the established price to rent, lease, or purchase the property, and conditions for disposal of the property.
  5. No property shall be acquired pursuant to KRS 65.350 to 65.375 by any entity for investment purposes only and with no intent to use the property other than to transfer the property at a future date for monetary gain.
  6. When a property is acquired by the authority, all state, county, city, and school district taxes shall be extinguished.
  7. When the authority sells or otherwise disposes of property, except property acquired and disposed of pursuant to KRS 65.375 , all proceeds shall be retained by the authority.
  8. For the first five (5) years following conveyance of the property by the authority to an owner that is subject to ad valorem property taxes, fifty percent (50%) of the ad valorem property taxes collected from the property by all parties to the agreement, except school districts, shall be remitted to the authority.

HISTORY: Enact. Acts 1988, ch. 92, § 4, effective July 15, 1988; repealed, reenact., and amend. Acts 1990, ch. 341, § 5, effective July 13, 1990; 2017 ch. 86, § 7, effective June 29, 2017.

Compiler’s Notes.

This section was formerly compiled as KRS 91.815 .

65.375. Conditions under which authority to take title to tax-delinquent properties.

  1. If any party obtains a judgment against a tax-delinquent property within the county for the taxes and, to satisfy the judgment, the property is ordered sold at a tax sale pursuant to KRS 91.504 or other provision of the Kentucky Revised Statutes, if no person bids an amount equal to the full amount of all tax bills, interest, and costs owing on the property at the sale, the authority shall be deemed to have bid the full amount of all tax bills, interest, and costs due to all parties of the authority regardless of whether or not they are all parties to the lawsuit. The authority shall not be required to make actual payment to the court for the amount deemed to have been bid. The court, notwithstanding any other provision of law, shall treat the amount deemed to have been bid as cash received. Upon proper motion by the authority, the court shall make a deed of the property to the “Land Bank Authority.” The title to the property shall be an absolute estate in fee simple, free and clear of all tax bills, interests, and costs owing to the parties of the authority but shall be subject to rights of way of public utilities on which tax has otherwise been paid and subject to any right of redemption of the United States of America, if any.
  2. At the time that the authority sells or otherwise disposes of property obtained pursuant to this section as part of its land bank program, the proceeds from the sale shall be distributed as follows:
    1. The party or parties bringing the action that resulted in the acquisition of the property by the land bank authority shall be reimbursed, to the extent proceeds are available, for all costs incurred; and
    2. Any remaining proceeds shall be distributed to the parties in proportion to their respective tax bills. Conveyance of a property to a party shall not constitute disposal.

History. Enact. Acts 1988, ch. 92, § 5, effective July 15, 1988; repealed, reenact., and amend. Acts 1990, ch. 341, § 6, effective July 13, 1990; 1992, ch. 314, § 7, effective July 14, 1992; 2009, ch. 10, § 57, effective January 1, 2010; 2017 ch. 86, § 8, effective June 29, 2017.

Compiler’s Notes.

This section was formerly compiled as KRS 91.820 .

Local Scenic Easement Law

65.410. Definitions.

  1. “Local legislative body” means the chief governing body of a city, county, consolidated local government, or urban-county which has legislative powers whether it is the board of aldermen, the general council, the common council, the legislative council, the city council, the board of commissioners, the fiscal court, or otherwise.
  2. “Open space land” means any land in an area which is provided or preserved for park or recreational purposes; conservation of land or other natural resources; historic or scenic purposes; or community development purposes.
  3. “Public body” means any state agency or local legislative body.
  4. A “scenic easement” is an interest in land transferred by the owner thereof to the public, either in perpetuity or for a term of years. A scenic easement may be created by sale, gift, lease, bequest, or otherwise. An instrument which creates a scenic easement shall contain a covenant whereby the owner of the land promises neither to undertake nor to permit the construction of any improvements upon the land, except as the instrument provides and except for public service facilities installed for the benefit of the land subject to such covenant or public service facilities installed pursuant to an authorization by the governing body of the city, county, urban-county, or the Public Service Commission. Any such reservation shall be consistent with the purposes of this chapter or with the findings of the county, city, or urban-county pursuant to KRS 65.466 and shall not permit any action which will materially impair the open-space character of the land.

History. Enact. Acts 1972, ch. 312, § 1; 1976, ch. 123, § 1; 2002, ch. 346, § 28, effective July 15, 2002.

Research References and Practice Aids

Journal of Mineral Law & Policy.

Comments, Preservation of Kentucky's Diminishing Farmland: A Statutory Analysis, 5 J.M.L. & P. 305 (1989-90).

Kentucky Law Journal.

Note, Historic Preservation — An Individual’s Perspective, 67 Ky. L.J. 1018 (1978-1979).

Comment, Conservation Easements: The Greening of America, 73 Ky. L.J. 255 (1984-85).

65.420. Acquisition of easements, purposes.

Local legislative bodies may obtain scenic and recreation easements in the Commonwealth for the purposes of providing necessary land for park development, restoration or preservation of scenic beauty, restoration or preservation of areas of historical interest, community development purposes and similar public purposes.

History. Enact. Acts 1972, ch. 312, § 2.

Research References and Practice Aids

Kentucky Law Journal.

Comment, Conservation Easements: The Greening of America, 73 Ky. L.J. 255 (1984-85).

65.430. Local legislative bodies may acquire interest in real property.

To carry out the purposes of KRS 65.410 to 65.460 , local legislative bodies may acquire by purchase, gift, lease, bequest or otherwise title to or any interests or rights in real property that will provide a means for the preservation or provision of permanent open space land.

History. Enact. Acts 1972, ch. 312, § 3.

65.440. Local legislative bodies, additional powers.

  1. Local legislative bodies shall have all the powers necessary to carry out the purposes and provisions of KRS 65.410 to 65.460 , including the following powers in addition to others granted by KRS 65.410 to 65.460 :
    1. To borrow funds and make expenditures necessary to carry out the purposes of KRS 65.410 to 65.460;
    2. To advance or accept advances of public funds;
    3. To apply for, accept and utilize grants and any other assistance from the federal government and any other public or private sources; to give such security as may be required and to enter and carry out contracts or agreements in connection with the assistance; and to include in any contract for assistance from the federal government such conditions imposed pursuant to federal laws as the local legislative body may deem reasonable and appropriate and which are not inconsistent with the purposes of KRS 65.410 to 65.460;
    4. To make and execute contracts and other instruments necessary to the exercise of its powers under KRS 65.410 to 65.460;
    5. In connection with the real property acquired for the purposes of KRS 65.410 to 65.460, to provide or to arrange or contract for the provision, construction, maintenance, operation or repair by any person or agency, public or private, of services, privileges, works, streets, roads, public utilities, or other facilities or structures that may be necessary to the provision, preservation, maintenance, and management of the property as open space land;
    6. To insure or provide for the insurance of any real or personal property or operations of the public body against any risks or hazards, including the power to pay premiums on the insurance;
    7. To demolish or dispose of any structures or facilities which may be detrimental to or inconsistent with the use of real property as open space land; and
    8. To exercise any or all of its functions and powers under KRS 65.410 to 65.460 jointly or cooperatively with one or more public bodies of this state, and to enter into agreements for joint or cooperative action.
  2. For the purposes of KRS 65.410 to 65.460 the local legislative bodies may:
    1. Appropriate funds;
    2. Issue and sell their revenue bonds and general obligation bonds in the manner and within the limitations prescribed by the applicable laws of the Commonwealth; and
    3. Exercise their powers under KRS 65.410 to 65.460 through a board or commission, or through such office or officers as the local legislative bodies by resolution determine.

History. Enact. Acts 1972, ch. 312, § 4.

65.450. Valuation and taxation of legislative body’s interest in real property.

Where an interest in real property less than the fee is held by the local legislative body for the purposes of KRS 65.410 to 65.460 , assessments made on the property for taxation shall reflect any change in the market value of the property which may result from the interest held by the local legislative body. The value of the interest held by the local legislative body shall be exempt from property taxation to the same extent as other property owned by the local legislative body.

History. Enact. Acts 1972, ch. 312, § 5.

Research References and Practice Aids

Kentucky Law Journal.

Note, Historic Preservation — An Individual’s Perspective, 67 Ky. L.J. 1018 (1978-1979).

Comment, Conservation Easements: The Greening of America, 73 Ky. L.J. 255 (1984-85).

65.460. Local legislative bodies denied power of eminent domain.

Local legislative bodies shall not exercise the power of eminent domain to acquire scenic easements. Nothing contained in this chapter shall prevent the use of eminent domain to acquire all other interests or rights in real property. A scenic easement will terminate when eminent domain is used to acquire property covered by the scenic easement agreement.

History. Enact. Acts 1972, ch. 312, § 6; 1976, ch. 123, § 11.

Research References and Practice Aids

Kentucky Law Journal.

Note, Historic Preservation — An Individual’s Perspective, 67 Ky. L.J. 1018 (1978-1979).

65.462. Acceptance of instrument constitutes dedication — Term of easement and covenant.

The execution and acceptance of an instrument described in KRS 65.410(4), shall constitute a dedication to the public of the scenic character of the lands for the term specified. Any such easement and covenant shall run for a term of not less than 30 years.

History. Enact. Acts 1976, ch. 123, § 2.

65.464. Covenant against cutting of trees.

An instrument described in KRS 65.410(4) shall contain a covenant against the cutting of timber, trees and other natural growth, except as may be required for fire prevention, thinning, elimination of diseased growth and similar protective measures, or for the harvest of trees in a manner compatible with scenic purposes.

History. Enact. Acts 1976, ch. 123, § 3.

65.466. Requirements for acceptance.

A scenic easement shall not be accepted by a city, county, urban-county, or consolidated local government, unless the governing body, by resolution finds:

  1. That the preservation of the character of the land is consistent with the plan of the city, county, consolidated local government, or urban-county, where such plan exists; and
  2. That the preservation of the character of the land is in the best interest of the state, county, city, consolidated local government, or urban-county, is important to the public for the enjoyment of scenic beauty, and will serve the public interest in a manner recited in the resolution and consistent with the purposes of KRS 65.462 to 65.480 .
  3. The local legislative body may consider these factors:
    1. It is likely that at some time the public may acquire the land for a park or other public use;
    2. The land is unimproved and has scenic value to the public as viewed from a public highway or from public or private buildings;
    3. The retention of the land as open space will add to the amenities of living in adjoining or neighboring urbanized areas;
    4. The land lies in an area which in the public interest should remain rural in character and the retention of the land as open space will help preserve the rural character of the area;
    5. It is in the public interest that the land remain in its natural state, including the trees and other natural growth, as a means of preventing floods or soil erosion or because of its value as watershed;
    6. The land lies within an established scenic highway corridor;
    7. The land is valuable to the public as a wildlife preserve or sanctuary and the instrument contains appropriate covenants to that end; or
    8. The land has historic significance or contains a building of either historic or architectural importance.

History. Enact. Acts 1976, ch. 123, § 4; 2002, ch. 346, § 29, effective July 15, 2002.

Research References and Practice Aids

Kentucky Law Journal.

Comment, Conservation Easements: The Greening of America, 73 Ky. L.J. 255 (1984-85).

65.468. Planning commission to issue advisory report on acquisition.

The local legislative body shall not acquire a scenic easement until the matter has been referred to its planning department or planning commission, where such planning body exists, and report thereon has been received from the planning commission. Within 30 days after receiving the proposal to acquire a scenic easement, the planning commission shall submit its report to the governing body. The governing body may extend the time for submitting such a report for an additional period not exceeding 30 days. The report shall contain a statement that the proposal is, or is not, consistent with the comprehensive plan of the jurisdiction where such plan exists. The report shall be considered advisory to the local legislative body and shall not be binding upon it or restrict its actions in the matter.

History. Enact. Acts 1976, ch. 123, § 5.

Research References and Practice Aids

Kentucky Law Journal.

Comment, Conservation Easements: The Greening of America, 73 Ky. L.J. 255 (1984-85).

65.470. Construction in violation of easement prohibited — Injunctive relief.

  1. From and after the time when a scenic easement has been acquired by the local legislative body and its acceptance endorsed thereon, no building permit shall be issued for any structure which would violate the easement and the local legislative body shall seek by appropriate proceedings an injunction against any threatened construction or other development or activity on the land which would violate the easement and shall seek a mandatory injunction requiring the removal of any structure erected in violation of the easement and the restoration of the land to its original character insofar as possible.
  2. In the event the local legislative body fails to seek an injunction against any threatened construction or other development or activity on the land which would violate the easement or to seek a mandatory injunction requiring the removal of any structure erected in violation of the easement or the restoration of the land to its original character insofar as possible, or if the local legislative body should construct any structure or development or conduct or permit any activity in violation of the easement, any resident of the jurisdiction which has acquired the easement may, by appropriate proceedings, seek such an injunction.

History. Enact. Acts 1976, ch. 123, § 6.

65.472. Recording of easement.

Upon acceptance of any instrument creating a scenic easement the clerk of the local legislative body shall record the same in the office of the county clerk and file copies with the property valuation administrator and the local planning commission if such commission exists. From and after the time of such recordation such contract shall import such notice thereof to all persons as is afforded by the recording laws of this state.

History. Enact. Acts 1976, ch. 123, § 7; 1978, ch. 384, § 135, effective June 17, 1978.

65.474. Extension of term of easement.

From time to time, the local legislative body may accept an instrument whereby the term of any scenic easement is extended in the same manner as is provided for the acceptance of an instrument originally creating a scenic easement. Upon the acceptance thereof the same shall be recorded in the office of the county clerk and copies filed with the property valuation administrator and the local planning commission.

History. Enact. Acts 1976, ch. 123, § 8; 1978, ch. 384, § 136, effective June 17, 1978.

65.476. Termination of easement.

If any land or a portion thereof as to which any local legislative body has accepted a scenic easement is thereafter sought to be condemned for public use and the local legislative body received the easement as a gift without the payment of any compensation therefor, the easement shall terminate as of the time of the filing of the complaint in condemnation as to the land or portion thereof sought to be taken for public use, and the owner shall be entitled to such compensation for the taking as he would have been entitled to had the land not been burdened by the easement.

History. Enact. Acts 1976, ch. 123, § 9.

65.478. Consent of owner of subsurface rights to easement.

A scenic easement shall not be transferred by the owners of property in which there are outstanding subsurface rights without the written consent of the owner of such subsurface rights.

History. Enact. Acts 1976, ch. 123, § 10.

65.480. Construction of certain improvements not prohibited.

Nothing contained in KRS 65.462 to 65.478 shall prohibit construction of improvements for agricultural purposes, flood control, control of soil erosion, or drainage of land.

History. Enact. Acts 1976, ch. 123, § 12.

Tax Increment Financing in Counties Containing a Consolidated Local Government or a City of the First Class

65.490. Definitions for KRS 65.490 to 65.499.

As used in KRS 65.490 to 65.499 , unless the context otherwise requires:

  1. “Agency” means an urban renewal and community development agency of a taxing district located within a county containing a consolidated local government or a city of the first class, established under KRS Chapter 99; a development authority located within a county containing a consolidated local government or a city of the first class established under KRS Chapter 99; a nonprofit corporation located within a county containing a consolidated local government or a city of the first class; or a designated department, division, or office of a county containing a consolidated local government or of a city of the first class;
  2. “Development area” means an area no less than one (1) square mile, nor more than six (6) square miles, designated in need of public improvements by a local or state government in a county containing a consolidated local government or a city of the first class, a project area as defined in KRS 99.615 , or a public project as defined in KRS 58.010 in a county containing a consolidated local government or a city of the first class. “Development area” includes an existing economic development asset;
  3. “Increment” means that amount of money received by any taxing district or the state that is determined by subtracting the amount of old revenues from the amount of new revenues in any year for which a taxing district or the state and an agency have agreed upon under the terms of a contract of release or a grant contract;
  4. “Local government” means a county containing a consolidated local government or a city of the first class;
  5. “New revenues” means the revenues received by any taxing district or the state from a development area in any year after the establishment of the development area;
  6. “Old revenues” means the amount of revenues received by any taxing district or the state from a development area in the last year prior to the establishment of the development area;
  7. “Project” means any urban renewal, redevelopment, or public project undertaken in accordance with the provisions of KRS 65.490 to 65.497 , any project undertaken in accordance with KRS 99.610 to 99.680 , any project undertaken in accordance with the provisions of KRS Chapter 58, or any “public project” as that term is defined in KRS 58.010 undertaken by a nonprofit corporation located within a county containing a consolidated local government or a city of the first class;
  8. “Release” or “contract of release” or “grant contract” means that agreement by which a taxing district or the state permits the payment to an agency of a portion of increments or an amount equal to a portion of increments received by it in return for the benefits accrued to the taxing district or the state by reason of a project undertaken by an agency in a development area;
  9. “Taxing district” means a consolidated local government, a county containing a city of the first class, a city of the first class that encompasses all or part of a development area, or the state, but does not mean a school district; and
  10. “Pilot program” means a tax increment financing program or a grant program created by an agency within a consolidated local government or a county containing a city of the first class which shall exist for a period of twenty (20) years, and may be extended for a period not to exceed an additional twenty-five (25) years as provided in KRS 65.4931 .

History. Enact. Acts 2000, ch. 326, § 1, effective July 14, 2000; 2002, ch. 346, § 30, effective July 15, 2002; 2006, ch. 252, Pt. XXX, § 1, effective April 25, 2006; 2017 ch. 189, § 1, effective April 11, 2017.

65.491. Legislative findings regarding tax increment financing.

  1. It is found and declared that public improvements, and publicly promoted private improvements, in any development area that result in the increase in the value of property located in the development area or result in increased employment within the development area serve a public purpose for each taxing district possessing the authority, directly or indirectly, to impose ad valorem taxes, sales taxes, income taxes, or occupational license fees in the development area, and for the state with regards to its revenues from ad valorem taxes, sales taxes, and income taxes. The increment in revenues derived by each taxing district and the state from the development area is found and declared to be one of the benefits derived by each taxing district and the state from any local development project or public project undertaken by the agency; and
  2. It is found that the use of tax increment financing or a grant program based upon the use of increment financing as tax revenues has proved to be successful and of great benefit to areas in need of revitalization and development in other parts of the country; therefore, the development of a pilot program within the Commonwealth to test the usefulness of increment financing to assist local governments in restoring and revitalizing their communities is declared to be a most worthy public purpose.

History. Enact. Acts 2000, ch. 326, § 2, effective July 14, 2000.

65.493. Development areas for tax increment financing — Qualifications.

  1. A county containing a city of the first class or a city of the first class may establish a development area for the purpose of creating a pilot program to utilize tax increment financing or a grant program based upon the increment in state tax revenues for the redevelopment and revitalization of these development areas within their communities.
  2. A development area in a county containing a city of the first class shall be located within ten (10) miles of the central business district of the largest city within the county and shall be within one (1) mile of one (1) or more economic development assets having employers, with at least one thousand (1,000) employees, who will leverage and promote investment in the zone.
  3. A development area in a county containing a city of the first class shall have adequate roads, sewers, water, rail service, and an interstate highway interchange directly available.
  4. At least fifty percent (50%) of a development area in a county containing a city of the first class, excluding roads, utility easements, and other infrastructure-related improvements, shall be composed of land that is a brownfield site or other land compatible for industrial or commercial uses to permit and facilitate redevelopment and reuse of land in the development area compatible with the adjacent economic development assets.

History. Enact. Acts 2000, ch. 326, § 3, effective July 14, 2000.

65.4931. Extension of pilot program period for not more than 25 years — Conditions — Reports.

  1. As used in this section:
    1. “Borrower” means the entity receiving the proceeds from a new bond issued because of an extended tax increment financing agreement allowed under KRS 65.490(10);
    2. “Excess revenues” means all moneys which exceed the costs associated with the borrower’s operating expenses, capital expenditures, and the regularly scheduled debt service on the bond; and
    3. “Term of the bond” shall begin on the date any current bonds are refinanced, reissued, or restructured and shall end upon the earlier of the stated maturity date of the bond or the payment in full of the bond.
  2. A pilot program may be extended for a period not to exceed an additional twenty-five (25) years in connection with the issuance of a new bond by the Kentucky Economic Development Finance Authority if the pilot program agreement contains provisions requiring that:
    1. The borrower use all excess revenues to redeem the bond prior to the stated maturity date;
      1. Once the bond is callable, the borrower apply all excess revenues to the redemption of the bond prior to the stated maturity date at least every thirty-six (36) months; and (b) 1. Once the bond is callable, the borrower apply all excess revenues to the redemption of the bond prior to the stated maturity date at least every thirty-six (36) months; and
      2. If it is the position of the borrower that the application of all excess revenues to the redemption of the bond prior to the stated maturity date jeopardizes the project, the borrower shall present an alternative payment plan for that thirty-six (36) month period to the Capital Projects and Bond Oversight Committee for approval; and
    2. No further revenues under the pilot program be remitted to the borrower following the end of the term of the bond.
  3. The borrower shall submit a report to the Governor and the Capital Projects and Bond Oversight Committee on or before November 1, 2018, and annually thereafter regarding the operations and financial condition of the borrower.

History. 2017 ch. 189, § 2, effective April 11, 2017.

Legislative Research Commission Notes.

(4/11/2017). During codification, the Reviser of Statutes has changed the internal numbering of paragraphs in subsection (2) of this statute from the way it appeared in 2017 Ky. Acts ch. 189, sec. 2 under the authority of KRS 7.136(1)(a).

65.494. KRS 65.490 to 65.499 limited to development areas established by county containing city of the first class or a city of the first class before March 23, 2007.

Effective on March 23, 2007, the provisions of KRS 65.490 to 65.499 shall apply only to development areas which were established by a county containing a city of the first class or a city of the first class prior to March 23, 2007, and that are subject to the provisions of a grant contract, Interlocal Cooperation Agreement or Master Agreement executed prior to March 23, 2007.

History. Enact. Acts 2007, ch. 95, § 23, effective March 23, 2007.

65.495. State and local development contracts for release of tax increments or grant awards — Limitations.

  1. In connection with the establishment of any development area, an agency may enter into contracts with one (1) or more taxing districts for the release to the agency of increments expected to be derived by a taxing district within a development area with an existing development asset as leveraged in part by the undertaking of a project.
  2. No contract shall require the release of less than fifty percent (50%) of the increments, or more than ninety-five percent (95%) of the increments where the revenue is derived solely from ad valorem taxation or solely from occupational license fees, or more than eighty percent (80%) of the increments where the revenue is derived from ad valorem taxes and occupational license fees.
  3. An agency may enter into a contract with the state, acting by and through the Governor, for an annual grant to the agency in an amount equal to not less than fifty percent (50%) nor more than eighty percent (80%) of the increment in ad valorem taxes, sales taxes, income taxes, and limited liability entity taxes derived by the state within the development area with an existing economic development asset as leveraged in part by the undertaking of a project.
  4. Any amount derived by the agency under the terms of a release shall be used solely for the purposes of the project and in the development area.

History. Enact. Acts 2000, ch. 326, § 4, effective July 14, 2000; 2006 (1st Extra. Sess.) ch. 2, § 69, effective June 28, 2006.

Legislative Research Commission Note.

(6/28/2006). 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 73, provides that “unless a provision of this Act specifically applies to an earlier tax year, the provisions of this Act shall apply to taxable years beginning on or after January 1, 2007.”

65.497. State and local development contracts for benefits derived by taxing authority — Annual renewal.

  1. Each taxing district is authorized to execute a contract of release with any agency in acknowledgment of benefits to be derived by it within the development area with an existing economic development asset as leveraged in part by the undertaking of a project, and in order to promote the public purposes of the taxing district.
  2. Any contract signed for the release of increments shall be made on the basis of automatic year-to-year renewals, with the option to discontinue upon sixty (60) days’ notice before the end of any annual termination date of the contract.
  3. The state, acting by and through the Governor, is authorized to execute a grant contract with any agency in acknowledgment of benefits to be derived by it with the development area with an existing economic development asset as leveraged in part by the undertaking of a project, and in order to promote the public purpose of the state.
  4. Any grant contract signed for an amount equal to the increment derived from the development area shall be made on the basis of automatic year-to-year renewals, with the option to discontinue upon sixty (60) days’ notice before the end of any annual termination date of the contract.

History. Enact. Acts 2000, ch. 326, § 5, effective July 14, 2000.

65.499. Notice of contract of release to tax collector — Distribution of tax revenues.

Any agency, other than a county, consolidated local government, city, urban-county, or charter county government, that enters into a contract with any taxing district for the release of any increments that may arise during the period of a contract of release shall forthwith notify the official charged with the collecting of taxes for the property in the development area of the execution of a contract of release, and the official charged with the collection of taxes shall in each year a contract of release is in effect determine the amount of the increment that is the subject of the contract of release for division between the taxing district and the agency; and, upon the basis of the agreement made between the taxing district and the agency, the official shall divide and distribute the funds derived from the area between the taxing district and the agency. Any local government that has designated an agency as having oversight of a designated development area shall annually issue a release to the agency of those increments created from the taxes collected on properties within the development area. All increments released to an agency of a local government shall be used solely for the purposes of projects in the development area.

History. Enact. Acts 2000, ch. 326, § 6, effective July 14, 2000; 2002, ch. 346, § 31, effective July 15, 2002.

65.500. Legislative findings — Purposes of KRS 65.500 to 65.506 and 141.398.

  1. The General Assembly finds and declares the following:
    1. The development area, the west end of Louisville, which includes the communities of Parkland, Shawnee, Park Duvalle, Russell, Portland, California, Chickasaw, including an adjacent unincorporated community, Park Hill, and Algonquin, including an adjacent unincorporated community, has been the home of many prominent African-Americans, including being the boyhood home of Muhammad Ali;
    2. The development area possesses a rich history of African-American life, including thriving restaurants, theatres, and other minority-owned businesses. That history also includes the presence of the Western Branch of the Louisville Free Public Library, at 10th St. and Chestnut, America’s first public library open to African-Americans, which opened in 1908;
    3. The development area continues to be the home of thousands of African-Americans who live and work in the Commonwealth and desire to build a better future for themselves, their families, and the generations that follow;
    4. The current challenging economic times combined with the intergenerational effects of years of racial prejudice and segregation have hindered the economic progress of African-Americans;
    5. The development area currently has a low percentage of owner-occupied homes, problems with vacant and abandoned housing, and a dearth of strategic economic planning and investment;
    6. Fifty percent (50%) of households within the development area have an annual gross income of less than twenty-five thousand one hundred thirty dollars ($25,130), and individuals under the age of eighteen (18) or over the age of sixty-five (65) make up approximately thirty-eight and one-tenth percent (38.1%) of the population;
    7. In the development area, thirty-nine and six-tenths percent (39.6%) of the population lives below the federal poverty level and children make up thirty-seven and four-tenths percent (37.4%) of all individuals below the poverty line; and
    8. In addition to many nonprofits working in the development area to improve the quality of life of residents, African-American leaders and other Louisville community leaders and philanthropists have recently united to envision a public-private partnership to make investments promoting economic growth and the long-term well-being of the community, while simultaneously supporting policies to guard against displacement of residents as growth proceeds.
  2. The General Assembly enacts KRS 65.500 to 65.506 and 141.398 to:
    1. Support the revitalization of and investment in the development area; and
    2. Provide resources for additional opportunities for residents of the development area, both natural persons and businesses, to work together to improve their educational attainment, working opportunities, and quality of life, thus returning the West End to the safe, prosperous, and enjoyable community needed, deserved, and expected by the residents, and for the area to become an equal partner in the future of all of Jefferson County.
  3. It is the intent of the General Assembly that if any part of KRS 65.500 to 65.506 or 141.398 is held unconstitutional, the remaining parts shall remain in force.

HISTORY: 2021 ch. 203, § 1, effective June 29, 2021.

65.501. Definitions for KRS 65.500 to 65.506.

As used in KRS 65.500 to 65.506 :

  1. “Affiliated” means the following:
    1. Members of a family, including brothers and sisters of the whole or half blood, spouse, parents, grandparents, ancestors, children, spouses of children, grandchildren, spouses of grandchildren, and other lineal descendants of an individual;
    2. An individual and a corporation, if more than ten percent (10%) in value of the outstanding stock of which is owned, directly or indirectly, by or for that individual;
    3. An individual and a limited liability company or a partnership, if more than ten percent (10%) of the capital interest or profits are owned or controlled, directly or indirectly, by or for that individual; or
    4. An individual and a trust, if the individual is a grantor, fiduciary, or beneficiary of the trust;
  2. “Board” means the board of the West End Opportunity Partnership;
  3. “CPI” means the nonseasonally adjusted United States city average of the Consumer Price Index for all urban consumers for all items, as released by the federal Bureau of Labor Statistics;
  4. “Development area” means a region within a consolidated local government bounded by:
    1. To the south, Algonquin Parkway to the South Seventh Street intersection, but including the unincorporated communities adjacent to Park Duvalle and Algonquin:
      1. Beginning at the Ohio River, at the southwest corner of Chickasaw Park and then along the park’s southern boundary to Southwestern Parkway;
      2. Southwestern Parkway south to Algonquin Parkway;
      3. Algonquin Parkway to South Forty-First Street;
      4. South Forty-First Street south to Bells Lane;
      5. Bells Lane east to Cane Run Road;
      6. Cane Run Road north to Linwood Avenue;
      7. Linwood Avenue east to Beech Street;
      8. Beech Street south to Wingfield Lane;
      9. Wingfield Lane east to Dixie Highway;
      10. Dixie Highway north to Algonquin Parkway; and
      11. Algonquin Parkway east to South Seventh Street;
    2. To the east, South Seventh Street north to Ninth Street and Ninth Street north to the Ohio River; and
    3. The Ohio River to the north and west;
  5. “Governing body” means the body possessing legislative authority in a consolidated local government;
  6. “Incremental revenues” means the amount of revenues received by:
    1. A consolidated local government, determined by subtracting old revenues from new revenues in a calendar year with respect to the development area; and
    2. The Commonwealth, determined by subtracting old revenues from new revenues in a calendar year with respect to the development area;
    1. “Local tax revenues” means revenues derived by a consolidated local government from one (1) or more of the following sources: (7) (a) “Local tax revenues” means revenues derived by a consolidated local government from one (1) or more of the following sources:
      1. Real property ad valorem taxes, excluding any taxes not assessed while a property is participating in an assessment or reassessment moratorium program under KRS 99.600 ; and
      2. Occupational license taxes; and
    2. “Local tax revenues” does not mean revenues that have been pledged to support a tax increment financing project established under KRS 65.490 to 65.499 , 65.680 to 65.699 , or 65.7041 to 65.7083 or an economic development project within the development area;
  7. “New revenues” means the amount of:
    1. Local tax revenues received by a consolidated local government with respect to the development area in any calendar year beginning with the calendar year described under KRS 65.504(1); and
    2. State tax revenues received by the Commonwealth with respect to the development area in any calendar year beginning with the calendar year described under KRS 65.504(1);
  8. “Old revenues” means the amount of:
    1. Local tax revenues received by a consolidated local government with respect to the development area in any calendar year beginning with the calendar year immediately preceding the calendar years described under KRS 65.504(1).
    2. State tax revenues received by the Commonwealth with respect to the development area in any calendar year beginning with the calendar year immediately preceding the calendar years described under KRS 65.504(1); and

      “Old revenues” shall be adjusted annually to incorporate the percentage change in the CPI. In the first calendar year of the calendar years described under KRS 65.504(1), the calculated amount for the state tax revenues and the local tax revenues shall be adjusted by multiplying each amount by the percentage change in the CPI. For every calendar year thereafter until the expiration of the calendar years described under KRS 65.504(1), the calculated amount for the state tax revenues and the local tax revenues shall be the previous year’s calculated amount multiplied by the percentage change in the CPI;

  9. “Percentage change in the CPI” means the percentage of change in CPI from one (1) year to the next based on averaging the twelve (12) consecutive months of CPI data for each of the two (2) immediately preceding calendar years and then using those two (2) averages to calculate a year-over-year percentage change; and
    1. “State tax revenues” means revenues received by the Commonwealth from one (1) or more of the following sources: (11) (a) “State tax revenues” means revenues received by the Commonwealth from one (1) or more of the following sources:
      1. State real property ad valorem taxes, excluding any taxes not assessed while a property is participating in an assessment or reassessment moratorium program under KRS 99.600 ;
      2. Individual income taxes required to be withheld by an employer as required under KRS 141.310 ; and
      3. Sales taxes levied under KRS 139.200 , excluding sales taxes already pledged for:
        1. Approved tourism attraction projects, as defined in KRS 148.851 , within the development area; and
        2. Projects which are approved for sales tax refunds under Subchapter 20 of KRS Chapter 154 within the development area and
    2. “State tax revenues” does not mean revenues that have been pledged to support a tax increment financing project established under KRS 65.490 to 65.499 , 65.680 to 65.699 , or 65.7041 to 65.7083 or an economic development project within the development area.

HISTORY: 2021 ch. 203, § 2, effective June 29, 2021.

Legislative Research Commission Notes.

(6/29/2021). Under the authority of KRS 7.136(1), the Reviser of Statutes has altered the format of the text in subsection (9) of this statute during codification. The words in the text were not changed.

65.502. West End Opportunity Partnership — Powers and duties — Purposes.

  1. The West End Opportunity Partnership is hereby created and shall be a public corporation and a public body corporate and politic, with the powers and duties in its corporate name to:
    1. Have a corporate seal;
    2. Sue and be sued;
    3. Make or execute contracts and other instruments necessary or convenient to the exercise of its powers;
    4. Make, and from time to time amend and repeal, bylaws and procedures, including a policy and procedure for replacing any institution that has a permanent seat on the board, should an institution cease to exist or change corporate form, to effect the purposes of KRS 65.500 to 65.506 ;
    5. Hire and maintain personnel as may be required;
    6. Borrow from and accept loans and grants from the federal, state, local jurisdictions, or any agency thereof, or from any sources, public or private, and to pledge such security as may be required;
    7. Invest any funds held in reserves or any funds not required for immediate disbursements, in property or securities in which savings banks may legally invest funds subject to their control;
    8. Purchase its bonds at a price not more than the principal amount thereof and accrued interest, and all bonds so purchased to be canceled;
    9. Plan initiatives within the development area;
    10. Invest in projects and neighborhood-based or neighborhood-directed initiatives led by other organizations seeking to invest within the development area;
    11. Make loans to businesses, individuals, or other organizations seeking to invest within the development area;
    12. Receive proceeds from loans and grants;
    13. Purchase, acquire, own, hold, and dispose of all real and personal property necessary for carrying out its corporate purposes;
    14. Invest in projects that create affordable housing within the development area;
    15. Communicate with the advisory council established in KRS 65.506 to seek specific knowledge about the community;
    16. Adopt and comply with KRS Chapter 45A or develop a procurement code designed to provide for the purchase of supplies, equipment, services, and construction items that provide the greatest long-term benefit to the development area, the greatest integrity for the West End Opportunity Partnership, and the best service and products for the public;
    17. Develop a program that will:
      1. Raise awareness of the income tax credit established under KRS 141.398 ;
      2. Enable individuals in the development area to timely pay property taxes by lending funds on a short-term basis until the refundable income tax credit is returned to the individual; and
      3. Assist individuals residing in the development area and qualifying for the income tax credit by filling out returns or other paperwork required to claim the tax credit;
    18. Create an account for the incremental tax increases collected from property owners of residential property located within the development area;
    19. Create an account to make home improvements for existing property owners of residential property located within the development area; and
    20. Exercise any power, duties, and requirements for carrying out its corporate purposes under KRS 65.500 to 65.506.
  2. The purpose of the West End Opportunity Partnership shall be to:
    1. Manage and support the revitalization of and investment in the development area, with a focus on projects supported by residents and businesses within the development area;
    2. Encourage private investment in businesses and residential projects that will have a significant impact within the development area;
    3. Ensure that all projects include the employment of area residents, both in short-term construction jobs and long-term employment in businesses locating within the development area; and
    4. Ensure that all housing projects include the creation of housing that is deemed affordable in accordance with federal guidelines for low-income families.
  3. The West End Opportunity Partnership shall comply with KRS 61.800 to 61.850 and 61.870 to 61.884 .
  4. The board shall comply with KRS Chapter 65A and the West End Opportunity Partnership shall be subject to audit under KRS 43.070 .
    1. The West End Opportunity Partnership is solely responsible for its operations. No debt of the West End Opportunity Partnership is a debt of the Commonwealth or consolidated local government. An action of the West End Opportunity Partnership is not an action of the Commonwealth or a consolidated local government and shall not obligate the Commonwealth or consolidated local government in any manner. (5) (a) The West End Opportunity Partnership is solely responsible for its operations. No debt of the West End Opportunity Partnership is a debt of the Commonwealth or consolidated local government. An action of the West End Opportunity Partnership is not an action of the Commonwealth or a consolidated local government and shall not obligate the Commonwealth or consolidated local government in any manner.
    2. Bonds issued by the board under the provisions of this section do not constitute a debt of the Commonwealth or of any political subdivision thereof, or a pledge of the faith and credit of the Commonwealth or of any such political subdivision, but such bonds shall be payable solely from the funds, and security, provided therefor under the provisions of KRS 65.500 to 65.506 , and all such bonds shall contain on the face thereof a statement to that effect.

HISTORY: 2021 ch. 203, § 3, effective June 29, 2021.

Legislative Research Commission Notes.

(6/29/2021). In codification, a correction has been made to subsection (3) of this statute. Section 3 of 2021 Ky. Acts ch. 203, which created this statute, contains a reference to “ KRS 81.884,” a number that does not correspond to any existing section of the Kentucky Revised Statutes. It is clear from the context that the reference was intended to read “ KRS 61.884 .” Under the authority of KRS 7.136 , the Reviser of Statutes has corrected this manifest clerical or technical error.

65.503. Governing board of West End Opportunity Partnership — Membership — Meetings — Training.

  1. The West End Opportunity Partnership shall be governed by a board. The board shall initially consist of the following members:
    1. One (1) member appointed by the Governor for a term of two (2) years;
    2. One (1) member appointed by the mayor of a consolidated local government for a term of two (2) years;
    3. One (1) member of the legislative council of the consolidated local government appointed by its members for a term of three (3) years;
    4. A representative of the University of Louisville appointed by its board of trustees for a term of three (3) years;
    5. A representative of Simmons College of Kentucky appointed by its board of trustees for a term of three (3) years; and
      1. The following shall be appointed by the Governor: (f) 1. The following shall be appointed by the Governor:
        1. One (1) member from the NAACP of Louisville;
        2. One (1) member from OneWest in Louisville;
        3. One (1) member from Louisville Urban League;
        4. One (1) member from the Federal Reserve Bank in Louisville;
        5. One (1) member from the Volunteers of America Mid States in Louisville;
        6. One (1) member from a locally based foundation with assets over one hundred million dollars ($100,000,000); and
        7. One (1) member from a bank with local assets greater than one billion dollars ($1,000,000,000).
      2. The initial appointments of the members described in subparagraph 1. of this paragraph shall be for terms as follows:
        1. Two (2) members for a term of one (1) year;
        2. Two (2) members for a term of two (2) years;
        3. Two (2) members for a term of three (3) years; and
        4. One (1) member for a term of four (4) years.
  2. The board shall include in its bylaws a process for appointing one (1) member from each of the nine (9) neighborhoods in the development area as additional members. The process shall:
    1. Ensure the nine (9) members are each from a different neighborhood;
    2. Require that, at all times, at least one (1) of the nine (9) members representing the neighborhoods shall be between the ages of eighteen (18) and thirty (30) at the time of appointment or reappointment; and
    3. Provide that the initial appointment of the members be for terms as follows:
      1. Four (4) members for a term of two (2) years; and
      2. Five (5) members for a term of three (3) years.
  3. After expiration of the term limits provided in subsections (1) and (2) of this section, the board shall self-perpetuate. The overall makeup of the board shall remain the same unless an institution ceases to exist or changes corporate form. All successors of the representatives described in subsection (1) of this section shall serve four (4) year terms and all successors of the representatives described in subsection (2) of this section shall serve three (3) year terms. No individual shall serve more than two (2) consecutive terms.
  4. The head of economic development for the consolidated local government, or his or her designee, and the secretary of the Cabinet for Economic Development, or his or her designee, shall be nonvoting, ex officio members of the West End Opportunity Partnership;
  5. The membership of the board shall not exceed twenty-one (21) voting members.
  6. The majority of the board’s membership shall reflect the racial majority of the residents living in the development area.
  7. A chair of the board shall be selected annually from its members and shall have responsibility for board meeting agendas and presiding at board meetings.
  8. Members of the board shall be entitled only to reimbursement from the West End Opportunity Partnership for actual expenses incurred in the performance of their duties as board members.
  9. A majority of the entire voting members of the board shall constitute a quorum, and all actions of the board shall be by vote of a majority of its entire voting membership.
  10. A member of the board shall abstain from action on an official decision in which he or she has or may have a personal or private interest, or if the member is affiliated with any party conducting business with the West End Opportunity Partnership, shall disclose the existence of that personal or private interest or affiliation in writing to the other members of the board on the same day on which the member becomes aware that the interest or affiliation exists or that an official decision may be under consideration by the board. The member which has or may have a personal or private interest or affiliation shall be absent from all meetings and votes in relation to the matter.
  11. As a prerequisite to service, each appointee to the board and each member of the West End Louisville Advisory Council established in KRS 65.506 shall participate in a board-sanctioned training program on the topics of community and economic development, finance, equity and community engagement, gentrification, and the implications of these concepts.

HISTORY: 2021 ch. 203, § 4, effective June 29, 2021.

65.504. Local participation agreement to pledge percentage of incremental revenues to West End Opportunity Partnership.

  1. Notwithstanding KRS 6.945 , beginning in the calendar year following the full receipt of the initial funds statutorily required to be invested by private sector investors, a consolidated local government, and the Commonwealth to the West End Opportunity Partnership and continuing for twenty (20) years, eighty percent (80%) of the incremental revenues shall be pledged to the West End Opportunity Partnership by a consolidated local government and the Commonwealth.
  2. A local participation agreement shall be executed between the West End Opportunity Partnership and the governing body involved in providing financing or pledging incremental revenues to support the implementation of a development plan in a development area.
  3. The local participation agreement shall be adopted by the governing body by ordinance and shall include but not be limited to the following provisions:
    1. Identification of the parties to the local participation agreement and the duties and responsibilities of each entity under the agreement;
    2. Specific identification of the incremental revenues released or pledged by type of tax by each taxing district;
    3. The anticipated benefit to be received by each taxing district for the release or pledge, including a detailed summary of old revenues collected;
    4. A requirement that pledged incremental revenues shall be accounted for within a separate account under KRS 65.505 ;
    5. Terms of default and remedies, provided that no remedy shall permit the withholding by any party to the local participation agreement of any incremental revenues pledged to the special fund if increment bonds are outstanding that are secured by a pledge of those incremental revenues;
    6. The commencement date, activation date, and termination date; and
    7. Any other provisions not inconsistent with KRS 65.500 to 65.506 .
  4. Any pledge of incremental revenues in a local participation agreement shall be superior to any other pledge of revenues for any other purpose and shall, from the activation date to the termination date set forth in the local participation agreement, supersede any statute, ordinance, or resolution regarding the application or use of incremental revenues. An ordinance in conflict with a local participation agreement shall not be adopted while any increment bonds secured by that pledge remain outstanding. Ordinances or resolutions pledging incremental revenues on a subordinate basis to any existing pledges may be adopted.
  5. The local participation agreement established under this section and the development area established under KRS 65.501 shall not be included in the percentage calculation established by KRS 65.7049(2).
  6. Notwithstanding KRS 65.7049(2), the local participation agreement shall permit residential property located within the development area to be eligible for participation in a program granting property assessment or reassessment moratoriums pursuant to KRS 99.600 when the incremental revenues related to that residential property have not been pledged to support a tax increment financing project established under KRS 65.490 to 65.499 , 65.680 to 65.699 , or 65.7041 to 65.7083 or an economic development project within the development area.

HISTORY: 2021 ch. 203, § 5, effective June 29, 2021.

65.505. Documentation, records, and release of incremental revenues — Bonds — Biennial report.

  1. All documentation, records, and release of incremental revenues relating to local tax revenues shall be maintained and determined by the governing body.
  2. All documentation, records, and release of incremental revenues relating to state tax revenues shall be maintained and determined by the Department of Revenue.
  3. Upon notice from the West End Opportunity Partnership, the governing body obligated under a local participation agreement and the Department of Revenue shall release to the West End Opportunity Partnership the incremental revenues due.
    1. The governing body and the Department of Revenue shall have no obligation to refund or otherwise return any of the incremental revenues to the taxpayer from whom the incremental revenues arose or are attributable. (4) (a) The governing body and the Department of Revenue shall have no obligation to refund or otherwise return any of the incremental revenues to the taxpayer from whom the incremental revenues arose or are attributable.
    2. No additional incremental revenues resulting from audit, amended returns, or other activity for any period shall be transferred after the initial release to the West End Opportunity Partnership for that period.
  4. If the West End Opportunity Partnership issues bonds for development within the development area and incremental revenues have been pledged for that development, the West End Opportunity Partnership shall maintain a separate account to account for the:
    1. Bond proceeds received;
    2. Incremental revenues received; and
    3. Payment of debt charges of the bond.
  5. The West End Opportunity Partnership shall provide a biennial report to the Interim Joint Committee on Appropriations and Revenue on or before August 1, 2023, and on or before August 1 of each odd-numbered year thereafter. The report shall contain the following information:
    1. The amounts of moneys received by private sector investors, the consolidated local government, and the Commonwealth, including the party that made the payment;
    2. The annual financial statements of the West End Opportunity Partnership, including the current balances of all funds and accounts of the West End Opportunity Partnership;
    3. The total amount of state tax revenues and local tax revenues received by the West End Opportunity Partnership for the preceding biennial period categorized by each type of tax;
    4. The operating expenditures incurred by the West End Opportunity Partnership, including management fees, investment fees, legal fees, or administrative fees incurred;
    5. A list of the projects supported by investments from the West End Opportunity Partnership in the preceding year and a description of the investment amount contributed by the West End Opportunity Partnership for each project;
    6. The amount of bonds issued or other borrowed moneys received by the West End Opportunity Partnership;
    7. Any personal or private interests or affiliated board members as described in KRS 65.503(10); and
    8. Upon request from the General Assembly, copies of the West End Opportunity Partnership’s bylaws and any contracts or agreements in which the West End Opportunity Partnership is a party.

HISTORY: 2021 ch. 203, § 6, effective June 29, 2021.

65.506. West End Louisville Advisory Council — Membership — Duties.

  1. A West End Louisville Advisory Council is hereby established and shall be a subcommittee of the West End Opportunity Partnership established in KRS 65.502 . The council shall consist of one (1) resident from each of the nine (9) different neighborhoods located within the development area.
  2. The members of the council shall serve four (4) year terms, except initial appointments shall be for terms as follows:
    1. Two (2) members for a term of one (1) year;
    2. Three (3) members for a term of two (2) years;
    3. Three (3) members for a term of three (3) years; and
    4. One (1) member for a term of four (4) years.
  3. The Governor shall initially appoint the members of the council, but then the council shall self-perpetuate.
  4. The council shall:
    1. Elect its own chairperson and establish other officers as needed to execute the duties of the council;
    2. Adopt bylaws and operate under its bylaws;
    3. Establish and evaluate goals and outcomes for economic development and housing issues in the development area; and
    4. Assist the board with information about the development area community and its economic development and housing project needs.

HISTORY: 2021 ch. 203, § 7, effective June 29, 2021.

Riverport Authority

65.510. Definitions for KRS 65.510 to 65.650.

As used in KRS 65.510 to 65.650 , unless the context otherwise requires:

  1. “Riverport authority” or “authority” means an authority established as provided in KRS 65.510 to 65.650 ;
  2. “Riverport facilities” includes land, wharves, landings, buildings, equipment, and other improvements and appurtenances necessary or proper for the establishment, maintenance, operation, and expansion of riverports;
  3. “Governmental unit” means a city or a county;
  4. “Person” means any individual, firm, partnership, corporation, company, association, joint stock association, or body politic, and includes any trustee, receiver, assignee, or other similar representative thereof;
  5. “Industrial park” includes land which is held, owned, or optioned for present or future industrial or commercial development; and
  6. “Economic environs” means the political boundaries of the governmental units establishing a riverport authority.

History. Enact. Acts 1964, ch. 48, § 1; 1966, ch. 64, § 13; 1968, ch. 118, § 1; 1994, ch. 154, § 1, effective July 15, 1994.

NOTES TO DECISIONS

1.Purpose.

The obvious intent of the Legislature in adopting the Riverport Authority Act, KRS 65.510 et seq., was to promote and develop port facilities by a governmental agency for the use and benefit of the general public. E.M. Bailey Distributing Co. v. Conagra, Inc., 676 S.W.2d 770, 1984 Ky. LEXIS 235 ( Ky. 1984 ).

2.Model Procurement Code.

The Kentucky Model Procurement Code, KRS 45A.010 et seq., was not applicable to a county riverport authority where neither the county, nor the authority, had adopted the provisions of the Code required by KRS 45A.343 . E.M. Bailey Distributing Co. v. Conagra, Inc., 676 S.W.2d 770, 1984 Ky. LEXIS 235 ( Ky. 1984 ).

3.Unlawful Franchise.

Operating agreement between riverport authority and private company, which entitled company to various benefits including the exclusive use of the land adjacent to the riverport facility and the use of grain-loading apparatus to the exclusion of all others upon a 24-hour prior notice on which use there was no limitation, and which agreement was for two years with an automatic renewal for three consecutive one-year periods, unlawfully granted to company a franchise or a privilege without complying with the requirements of advertisement and competitive bidding in Ky. Const., § 164 and thus was null and void. E.M. Bailey Distributing Co. v. Conagra, Inc., 676 S.W.2d 770, 1984 Ky. LEXIS 235 ( Ky. 1984 ).

Opinions of Attorney General.

The provisions of KRS 65.510 to 65.650 indicate without any doubt that the riverport authority is a public or governmental agency or corporation with specifically assigned duties and powers relating to clearly defined public purposes and is not a private corporation but exists solely for public purposes; therefore, it is not necessary that it be formally incorporated or have or file articles of incorporation. OAG 77-16 .

Considering the purposes for which a riverport authority is created and remembering that it is a public, rather than a private, corporation existing for public purposes, the riverport authority cannot arbitrarily deny grain shippers access to its scales. OAG 78-676 .

Restrictions on purchasing grain would not be in keeping with the riverport’s purposes as a public corporation performing its statutorily created public functions or in the best interests of the authority or the public. OAG 78-676 .

Acting within the frame of its statutory powers the riverport authority as a public corporation is autonomous in nature. OAG 79-133 .

As of January 1, 1980, riverport authorities must look to the applicable provisions of the Kentucky Model Procurement Code in connection with their procurement programs. OAG 80-71 .

A riverport authority, created pursuant to KRS 65.510 through 65.650 , is required to publish an annual financial statement consistent with the requirements of KRS 65.070(1)(c), in lieu of the provisions of KRS 424.220 . Such statement must also be in compliance with other applicable provisions (other than KRS 424.220 ) of KRS Chapter 424. OAG 83-428 , modifying OAG 83-392 .

The bidding statute, KRS 424.260 , applies to a riverport authority created pursuant to KRS 65.510 et seq., unless the authority has specifically adopted the Model Procurement Code, KRS 45A.345 to 45A.460 , in which latter case the Model Procurement Code, with its bidding requirements, applies to the riverport authority. OAG 84-196 .

Even though a riverport authority is created jointly by a city and county, the created authority is still a body politic and corporate, it is still a special district and, thus, the district, i.e., the riverport authority, is subject to the bidding principle under KRS 424.260 , or the Model Procurement Code if adopted by the authority. OAG 84-196 .

65.520. Establishment — General powers — Cabinet’s oversight responsibilities.

  1. Any governmental unit by act of its legislative body, or any two (2) or more governmental units acting jointly by acts of their legislative bodies, and with the approval of the Transportation Cabinet, Office of the Secretary, may establish a developmental riverport authority to be composed of six (6) members.
  2. The authority shall be a body politic and corporate with the usual corporate attributes, and in its corporate name may sue and be sued, contract and be contracted with and do all things reasonable or necessary to effectively carry out the powers and duties prescribed by KRS 65.510 to 65.650 . The authority may exercise all powers granted to governmental agencies by KRS 58.010 to 58.140 . The authority may exercise all powers, consistent with its powers and duties stated in this chapter, granted by KRS 273.171 to corporations governed by KRS 273.161 to 273.390 .
  3. The responsibility for riverports shall be established within the Transportation Cabinet to provide oversight on development activities involving riverport authorities. The cabinet shall be responsible for managing a study that will develop a long-range capital improvements plan for Kentucky’s riverports that shall include, but not be limited to:
    1. Guidelines for ground transportation access to riverports;
    2. A model for determining the economic impact of riverports; and
    3. A blueprint for creating long-term funding mechanisms for riverports.

History. Enact. Acts 1964, ch. 48, § 2 (1), (2); 1966, ch. 64, § 14; 1968, ch. 118, § 2; 1994, ch. 499, § 10, effective July 15, 1994; 1998, ch. 583, § 1, effective July 15, 1998.

Legislative Research Commission Note.

This section originally referred to sections of KRS Ch. 273 that were repealed in the 1968 Session. Equivalent references have been substituted.

Opinions of Attorney General.

A riverport authority is not subject to the five-year limitation on holding of real estate set out in Ky. Const., § 192 since such bodies are not private corporations but are public agencies exercising powers conferred upon them by the legislature. OAG 68-78 .

Where a city, through its legislative body and with the approval of the Kentucky port and river development commission, establishes a developmental riverport authority, there is no constitutional or statutory provision authorizing a referendum by either the election or petition method and any attempt to refer it to the voters by either method would be a nullity and illegal. OAG 73-865 .

The provisions of KRS 65.510 to 65.650 indicate without any doubt that the Riverport Authority is a public or governmental agency or corporation with specifically assigned duties and powers relating to clearly defined public purposes and is not a private corporation but exists solely for public purposes; therefore, it is not necessary that it be formally incorporated or have or file articles of incorporation. OAG 77-16 .

A port authority is clearly a “public agency” as defined in KRS 61.805 . OAG 79-512 .

Acting within the frame of its statutory powers, the port authority as a public corporation is autonomous in nature, but the very nature and functions of a port authority mean that the members of a riverport authority are consequentially and necessarily “public officers” for the purpose of applying rules relating to tort liability. OAG 79-590 .

The port authority members would not be, generally, liable for the negligence of port authority employes, if the authority has employed persons of suitable skill. OAG 79-590 .

A city riverport authority has the right to locate its main port facility on land located outside the city limits since the riverport authority is a separate body politic from that of the city or county with no defined geographic boundaries. OAG 80-160 .

Once a riverport authority is established and thereby becomes a political entity, it has complete control over its own operation under the terms of KRS 65.510 to 65.650 . OAG 80-160 .

Considering the public function and public purpose of a riverport authority, a port authority has no authority to exclude on its own initiative the coal handling business as a standing policy; to attempt to exclude would mean a clear and direct violation of the mandate that the port’s contracts cannot “prevent, restrict or hamper the general use of the riverport by the public.” OAG 80-601 .

65.530. Purpose, duties, and powers of riverport authority.

  1. The purposes of the authority shall be to establish, maintain, operate, and expand necessary and proper riverport and river navigation facilities, and to acquire and develop property, or rights therein within the economic environs, the home county, or any county adjacent thereto, of the riverport or proposed riverport to attract directly or indirectly river-oriented industry. It shall have the duty and such powers as may be necessary or desirable to promote and develop navigation, river transportation, riverports, and riverport facilities, and to attract industrial or commercial operations to the property held as industrial parks.
  2. The authority may establish and fix reasonable rates, charges, and fees for the use of the riverport facilities which shall be published in a manner available to the general public in the county in which the riverport is located. In fixing rates, charges, or fees the authority may take into consideration, among other factors, the total capital investment of the authority, the revenue needed properly to maintain such facilities, the revenue needed properly to expand the riverport and its facilities, the portion of the facilities utilized by the licensee or contracting party and its customers, and the volume and type of business conducted. Any party aggrieved by the rates, charges, or fees may appeal from the action of the authority to the Circuit Court of the county within which the authority operates, within ninety (90) days from the date that the authority finally publishes the rates, charges, or fees and gives notice of same to the contracting party or licensee. The Circuit Court may hear evidence and determine whether or not the rates, charges, or fees are, or are not, reasonable in amount. Appeal from the judgment of the Circuit Court may be prosecuted as any other civil appeal.
  3. The authority shall also have power, from time to time, to fix rates, charges, or fees by contract, or by publishing general rates, charges, or fees for commercial vendors, concessionaires, or other persons for the use or occupancy of riverport facilities under the terms and conditions it deems to be in the best interest of maintaining, operating, or expanding necessary riverport facilities, and the public use thereof.
  4. The authority may acquire by contract, lease, purchase, option, gift, condemnation, or otherwise any real or personal property, or rights therein, necessary or suitable for establishing, developing, operating, or expanding riverports, riverport facilities, water navigation facilities, including spoilage areas for the disposal of materials dredged from river bottoms in an effort to improve the navigability of rivers, reserve storage areas and reserves of bulk materials utilized by the authority or any person acting as the authority’s agent or licensee, and industrial parks or sites within the economic environs of the riverport or proposed riverport. The authority may erect, equip, operate, and maintain on the property buildings and equipment necessary and proper for riverport and water navigation facilities. The authority may dispose of any real or personal property, or rights therein, which in the opinion of the authority is not needed for use as riverport or water navigation facilities, or use as industrial parks or sites. The authority may lease, sell, convey, or assign its interest in land owned, optioned, or otherwise held by it to any person for the purpose of constructing and/or operating any industrial or commercial facility or for the purpose of acting as the authority’s agent or licensee in effectively carrying out any of its powers and duties.
  5. With the consent of the legislative body of the governmental unit in which the property to be condemned is located, the authority may by resolution, reciting that the property cannot be acquired by purchase or agreement and is needed for riverport, water navigation, or industrial purposes in accordance with the powers set forth in subsection (4) of this section, direct the condemnation of any property. The procedure for condemnation shall conform to the procedure set out in the Eminent Domain Act of Kentucky.
  6. The authority may apply for, receive authorization for, establish, and operate a foreign trade zone, as permitted by 19 U.S.C. sec. 81 , provided approval is obtained from the Cabinet for Economic Development.
  7. The authority shall comply with the provisions of KRS 65A.010 to 65A.090 .

History. Enact. Acts 1964, ch. 48, § 3; 1966, ch. 64, § 15; 1968, ch. 118, § 3; 1968, ch. 152, § 35; 1976, ch. 140, § 22; 1980, ch. 129, § 2, effective July 15, 1980; 1994, ch. 499, § 11, effective July 15, 1994; 1996, ch. 337, § 4, effective July 15, 1996; 2013, ch. 40, § 22, effective March 21, 2013; 2021 ch. 151, § 1, effective June 29, 2021.

Compiler’s Notes.

The Eminent Domain Act of Kentucky, referred to in subsection (5), is compiled as KRS 416.540 to 416.680 .

The federal law concerning foreign trade zones, referred to in subsection (6) of this section is now compiled as 19 USCS §§ 81(a) — 81(u).

NOTES TO DECISIONS

1.Condemnation.

A riverport authority created pursuant to KRS Chapter 65 can condemn land which is needed for the construction of a riverport for public use prior to securing permission from the United States Corps of Engineers for the construction of the project, since it is not conceivable that all phases of the development of a riverport be completed simultaneously or completed within a reasonable time from each other before condemnation proceedings may be instituted. Northern Kentucky Port Authority, Inc. v. Cornett, 625 S.W.2d 104, 1981 Ky. LEXIS 298 ( Ky. 1981 ).

Cited in:

Paducah Marine Ways, Inc. v. Revenue Cabinet Commonwealth, 730 S.W.2d 956, 1987 Ky. App. LEXIS 495 (Ky. Ct. App. 1987).

Opinions of Attorney General.

The riverport authority would not be required to make an offer to a landowner prior to condemning his land for purposes pointed out in KRS 65.530 . OAG 67-505 .

The riverport authority act gives the established authority the right to reasonably regulate the operation of privately owned boats along the adjoining property so as to prevent such boats from blocking or impeding the movement of coast guard boats. OAG 70-174 .

If it became necessary to develop and expand the riverport facility or to permit normal access to the coast guard facility, the authority could acquire the adjacent property either by purchase or condemnation. OAG 70-174 .

If the use of the riverport harbor facilities would, by virtue of granting fleet permits, inhibit the ingress and egress of the coast guard vessels or other boats utilizing the harbor facilities, or interfere in any way with the normal flow of traffic in and around the harbor, or create a docking space problem, the authority would have the legal right to deny the permits. OAG 78-440 .

Where the Greater Cincinnati Area Foreign Trade Zones Board (GCAFTZB) wished to enter into a contract with the Northern Kentucky Port Authority (NKPA) for the operation by GCAFTZB of a free trade zone on 400 acres owned by NKPA, and NKPA was also willing to enter such a contract, this section provides the NKPA with the authority to do so. OAG 78-548 .

There is nothing in subsection (2) of this section suggesting that the rates of the riverport authority are governed or influenced by the rates set by private firms for the same or similar services. OAG 78-676 .

Where Maysville and Mason County have created a riverport authority, which authority planned to acquire riverport facilities, a portion of which would be leased to a corporation engaged in coal transloading, the authority had the power to condemn the airspace, at a reasonable height above the tracks of the Chesapeake and Ohio Railroad Company, for erection of a conveyor belt system to take coal from rail hoppers or trucks to the port’s river area for loading onto barges. OAG 79-457 .

The members of the port authority are public officers and as public officers when acting in good faith within the scope of their authority are not personally liable for damages sustained by a member of the public as a result of their action, unless they have acted negligently, but they are liable for damages resulting from their negligence or deliberate wrongdoing, regardless of whether they were acting within the scope of their authority and are responsible for their misfeasance and negligence but are not responsible for the negligence of their employes if they have employed persons of suitable skill. OAG 79-590 .

A city riverport authority has the right to locate its main port facility on land located outside the city limits since the riverport authority is a separate body politic from that of the city or county with no defined geographic boundaries. OAG 80-160 .

Subsection (5) of this section clearly authorizes a city authority to condemn property located outside of the city and in the county. The authority must however first obtain the consent of the county fiscal court since the property to be condemned is located in the county and outside the city. OAG 80-160 .

Considering the public function and public purpose of a riverport authority, a port authority has no authority to exclude on its own initiative the coal handling business as a standing policy; to attempt to exclude would mean a clear and direct violation of the mandate that the port’s contracts cannot “prevent, restrict or hamper the general use of the riverport by the public.” OAG 80-601 .

Assuming that the riverport authority is an instrumentality or agency of the county, subsection (1) of KRS 416.560 and subsections (4) and (5) of this section are irreconcilable with respect to condemnation of property which the authority has been unable to purchase, since the first statute provides that the fiscal court would condemn the property and the second statute provides the riverport authority may, itself, condemn the property; however, since the legislature republished this section after the enactment of KRS 416.560 , it intended, as relates to the specific subject of riverport authorities, to impliedly repeal subsection (1) of KRS 416.560 to that extent, since, whenever there are apparent irreconcilable conflicts in statutes, the later statute controls; thus, the riverport authority may proceed, with the consent of the fiscal court, to condemn the land under its own name. OAG 81-244 .

A county riverport authority is not required to advertise to the general public its intent to sell parcels of an industrial park to industrial clients and request bids for the purchase of said property, where the riverport authority intends to convey the fee simple title to the industrial purchasers. OAG 84-277 .

65.540. Members of authority — Appointment, terms — Removal — Effect of compact.

  1. The members of the authority shall be appointed as follows:
    1. If the authority is established by a city, such members shall be appointed by the mayor of the city;
    2. If the authority is established by a county, such members shall be appointed by the county judge/executive with the approval of the fiscal court;
    3. If the authority is established as a joint city-county riverport authority, three (3) members shall be appointed by the mayor and three (3) members by the county judge/executive to the terms as provided in subsection (2) of this section, and in addition, the mayor may appoint himself or a member of the city legislative body as one (1) additional member of the authority and the county judge/executive may appoint himself or a member of the fiscal court as one (1) additional member of the authority for a term of two (2) years, provided that such persons may not serve on the authority after the expiration of their terms as an elected official;
    4. If a combination of cities and/or counties establishes a joint riverport authority, the mayors and/or county judges/executive involved shall jointly choose six (6) members to the terms as provided in subsection (2) of this section, and shall jointly choose successors and may upon agreement appoint a mayor or a member of a city legislative body and a county judge/executive or a member of a fiscal court as two (2) additional members of the authority for terms of two (2) years, provided that such persons may not serve on the authority after the expiration of their terms as an elected official.
  2. Except as provided in subsection (1)(c) and (d) of this section, members of the authority shall serve for a term of four (4) years each, and until their successors are appointed and qualified, provided, however, that initial appointments shall be made so that two (2) members are appointed for two (2) years, two (2) members for three (3) years, and two (2) members for four (4) years. Upon expiration of these staggered terms, successors shall be appointed for a term of four (4) years.
  3. A riverport authority member may be replaced by the appointing authority for inefficiency, neglect of duty, malfeasance, or conflict of interest. The appointing authority shall submit a written statement to the riverport authority setting forth the reasons for removal, and the statement shall be read at the next authority meeting, which shall be open to the general public. The member so removed shall have the right of appeal in the Circuit Court. Except as provided in subsection (1)(c) and (d) of this section no riverport authority member shall hold any official office with the appointing authority.
  4. Notwithstanding subsection (2) of this section, when a city of the first class and a county containing such city have in effect a compact under KRS 79.310 to 79.330 , the terms of the members of the authority shall be for three (3) years and until their successors are appointed and qualified. Upon the effective date of the compact, the county judge/executive with the approval of the fiscal court shall adjust the terms of the sitting members so that one-third (1/3) of the terms expire in one (1) year, one-third (1/3) expire in two (2) years, and one-third (1/3) expire in three (3) years. Upon expiration of these staggered terms, successors shall be appointed for a term of three (3) years. Upon the establishment of a consolidated local government in a county where a city of the first class and a county containing that city have had in effect a cooperative compact pursuant to KRS 79.310 to 79.330 , all members of the authority shall be appointed by the mayor of the consolidated local government for a term of three (3) years pursuant to the provisions of KRS 67C.139 . Incumbent members upon the establishment of the consolidated local government shall continue to serve as members of the authority for the time remaining on their current terms of appointment.

History. Enact. Acts 1964, ch. 48, § 2(3), (4), (10); 1968, ch. 118, § 4; 1976 (Ex. Sess.), ch. 20, § 6, effective January 2, 1978; 1978, ch. 118, § 17, effective June 17, 1978; 1986, ch. 77, § 8, effective July 15, 1986; 2002, ch. 346, § 32, effective July 15, 2002.

Opinions of Attorney General.

The mayor could not serve as a member of the riverport authority. OAG 66-18 .

City and county officials, other than members of the city legislative body or members of the fiscal court, may be appointed to the joint riverport authority provided there exists no constitutional or statutory incompatiblity. OAG 70-432 .

There would be no incompatibility between serving as city councilman and as a member of the county riverport authority. OAG 71-462 .

If two (2) members of a riverport authority who are stockholders in a local grain company will not attend the meeting in which the question of leases to grain companies will be voted on, and the two (2) members will not attempt to influence the vote of the remaining four members on this issue, the two (2) members will not be subject to removal for conflict of interest. OAG 78-747 .

Proxies may not be used by members of either the Kentucky Port and River Development Commission or a local riverport authority. OAG 79-589 .

Where a city establishes a riverport authority and gives the mayor the appointment power, the mayor appoints the members thereof and has the power to replace any member under the terms of subsection (3) of this section; however, the power to remove a member of the authority can only be accomplished following a hearing from which the member so removed may appeal to the circuit court as provided in subsection (3) of this section; thus, the mayor cannot remove members of the authority except for cause and in the manner prescribed in subsection (3) of this section. OAG 80-160 .

Members of a joint city-county port authority need not be residents of the city or county which created the authority, except for the mayors and county judge/executive serving as additional members since they are officers designated under Ky. Const., § 234 as being required to live in their respective cities or counties, and this section is silent on the residency requirements. OAG 81-66 .

The county judge/executive cannot, under this section, be appointed to serve on the joint city-county port authority board on which he already serves in his capacity as county judge/executive, since he cannot be viewed as two (2) persons, the county judge/executive and a private person. OAG 81-66 .

Since a riverport authority is a governmental entity, a presiding officer who was also the president of a local bank would have a disqualifying conflict of interest, provided it could be shown that, in the authority’s dealing with the member’s bank, the member derived a pecuniary interest or profit in the relationship, though the personal financial benefit was small; however, such financial interest would not be disqualifying where it could not be reasonably calculated to affect the judgment of the member in conducting the affairs of the riverport authority. OAG 84-136 .

65.550. Withdrawal of city or county — Successors — Agreed dissolution.

  1. In the event that a joint riverport authority is created by cities and/or counties, and thereafter a city or cities or county or counties desire to withdraw from participation, then the remaining participants may jointly choose a successor member or members of the authority. No such withdrawing city or cities or county or counties shall be entitled to the return of any money or property advanced such authority.
  2. Notwithstanding the provisions of subsection (1), any cities and/or counties which have established a joint riverport authority as provided for herein, may provide by a mutual written agreement between such cities and/or counties, and the joint riverport authority, that such joint riverport authority may be dissolved and may further provide that upon such complete termination, all funds, property and other assets held by the joint riverport authority shall be returned to such cities and/or counties in the same proportion as contributions of funds, property and other assets were made by such cities and/or counties. This section shall not apply and no dissolution shall be made until such time as all legal obligations of the joint riverport authority shall be satisfied and all existing commitments fulfilled.

History. Enact. Acts 1964, ch. 48, § 2(8); 1966, ch. 136.

65.560. Meetings of authority — Quorum — Effect of tie vote.

A quorum for the transacting of the business of the authority shall consist of four (4) members for a six (6) member authority and five (5) members for an eight (8) member authority. Meetings of the authority may be called by the chairman or by four (4) members for a six (6) member authority and five (5) members for an eight (8) member authority. In case of tie voting by the authority, the issue shall be deemed to have failed passage.

History. Enact. Acts 1964, ch. 48, § 2(9); 1978, ch. 118, § 18, effective June 17, 1978.

Opinions of Attorney General.

Where membership of a joint city-county port authority was expanded to eight members, but there were only five active members on the board and three vacancies, the quorum for the board is five under this section, regardless of the number of vacancies. OAG 81-66 .

65.570. Compensation of members — Employees — Duties of secretary-treasurer — Effect of compact.

  1. Members of the authority shall serve without compensation but shall be reimbursed for any actual and necessary expenses incurred by them in the conduct of the affairs of the authority. The authority shall, upon the appointment of its members, organize and elect officers. The authority shall choose a chairman and vice chairman who shall serve for terms of one (1) year. The authority may fix a salary for the secretary-treasurer, and the secretary-treasurer shall execute an official bond to be set and approved by the authority, and the cost thereof shall be paid by the authority.
  2. The authority may employ or retain necessary counsel, agents, employees, or other persons to carry out its purposes, work, and functions and may prescribe such rules and regulations as it deems necessary.
  3. The secretary-treasurer shall keep the minutes of all meetings of the authority and shall also keep a set of books showing the receipts and expenditures of the authority. He shall preserve on file duplicate vouchers for all expenditures and shall present to the authority, upon request, complete reports of all financial transactions and the financial condition of the authority. Such books and vouchers shall at all times be subject to examination by the legislative body or bodies by whom the authority was created. He shall transmit at least once annually a detailed report of all acts and doings of the authority to the legislative body or bodies by whom the authority was created.
  4. Notwithstanding subsection (1) of this section, when a city of the first class and a county containing such city have in effect a compact under KRS 79.310 to 79.330 , the secretary-treasurer or executive director, as the case may be, shall be appointed by and serve at the pleasure of the county judge/executive with the approval of the fiscal court as provided in KRS 67.040 ; fiscal court shall fix the salary. Upon the establishment of a consolidated local government in a county where a city of the first class and a county containing that city have had in effect a cooperative compact pursuant to KRS 79.310 to 79.330 , the secretary-treasurer or executive director, as the case may be, shall be appointed by and shall serve at the pleasure of the mayor.

History. Enact. Acts 1964, ch. 48, § 2(5) to (7); 1968, ch. 118, § 5; 1986, ch. 77, § 9, effective July 15, 1986; 2002, ch. 346, § 33, effective July 15, 2002.

Opinions of Attorney General.

A person can serve as trial commissioner and at the same time can be employed by a county riverport authority to act as legal counsel for the authority. OAG 77-101 .

Where a riverport authority advertised for a director, received 53 applications and selected and hired one man as director, and that man resigned after working for six (6) weeks, it was not necessary for the authority to review former applicants and advertise again to hire a replacement, if no regulations to that effect have been enacted pursuant to this section. OAG 81-187 .

65.580. City or county may appropriate funds or levy tax for use of riverport authority.

In order to provide money for the costs of administration, operation, maintenance, and development and for the purchase, lease, option, or holding of property, or rights therein, necessary or proper for the purposes contemplated in KRS 65.510 to 65.650 , the legislative body of any governmental unit creating the riverport authority under KRS 65.510 to 65.650 may annually appropriate funds to the authority; or such governmental unit may make an annual levy to collect a tax on taxable property situated in the governmental unit for such riverport development. Any appropriation shall be made by the legislative body in such amounts, in such proportion and upon such terms as the legislative body may determine. All funds derived from such appropriation or tax shall be turned over to the riverport authority for the purpose of carrying out the duties and powers of the authority.

History. Enact. Acts 1964, ch. 48, § 4; 1968, ch. 118, § 6.

65.590. Riverport authority may borrow money, how secured.

The authority may borrow money from any source on its own credit in anticipation of revenue to be derived from taxes, appropriations or other income, and for such purposes the authority may pledge the taxes, appropriations or income anticipated. The authority may pledge its assets, including, but not by way of limitation, real or personal property held for the purposes contemplated in KRS 65.510 to 65.650 , as security for moneys borrowed.

History. Enact. Acts 1964, ch. 48, § 5; 1968, ch. 118, § 7.

Opinions of Attorney General.

Since a riverport authority is a governmental entity, a presiding officer who was also the president of a local bank would have a disqualifying conflict of interest, provided it could be shown that, in the authority’s dealing with the member’s bank, the member derived a pecuniary interest or profit in the relationship, though the personal financial benefit was small; however, such financial interest would not be disqualifying where it could not be reasonably calculated to affect the judgment of the member in conducting the affairs of the riverport authority. OAG 84-136 .

65.600. Revenue bonds issued, when.

The authority is authorized to defray the cost of acquiring any real or personal property for the purposes contemplated in KRS 65.510 to 65.650 through the issuance of revenue bonds, and for that purpose the authority shall have all the powers and duties that are granted to or imposed upon governmental units by law.

History. Enact. Acts 1964, ch. 48, § 6; 1968, ch. 118, § 8.

65.610. Contracts for use of facilities — Maintenance costs, how paid.

  1. The authority may contract with any person or governmental agency for the use of the riverport and riverport facilities. Such contract shall not prevent, restrict or hamper the general use of the riverport by the public.
  2. All unpledged or surplus revenue derived from the use of the riverport and the riverport facilities shall be first applied to the maintenance of the riverport and the riverport facilities. A governmental unit may expend funds for this purpose out of its general funds or any other available funds.

History. Enact. Acts 1964, ch. 48, § 7.

NOTES TO DECISIONS

1.Unlawful Franchise.

Operating agreement between riverport authority and private company, which entitled company to various benefits including the exclusive use of the land adjacent to the riverport facility and the use of grain-loading apparatus to the exclusion of all others upon a 24-hour prior notice on which use there was no limitation, and which agreement was for two years with an automatic renewal for three consecutive one-year periods, unlawfully granted to company a franchise or a privilege without complying with the requirements of advertisement and competitive bidding in Ky. Const., § 164 and thus was null and void. E.M. Bailey Distributing Co. v. Conagra, Inc., 676 S.W.2d 770, 1984 Ky. LEXIS 235 ( Ky. 1984 ).

Opinions of Attorney General.

Considering the public function and public purpose of a riverport authority, a port authority has no authority to exclude on its own initiative the coal handling business as a standing policy; to attempt to exclude would mean a clear and direct violation of the mandate that the port’s contracts cannot “prevent, restrict or hamper the general use of the riverport by the public.” OAG 80-601 .

65.620. Title to property — Tax exemptions.

The title to all property acquired by the authority shall vest in the authority and all such property shall be exempt from taxation to the same extent as other property used for public purposes. All revenue of the authority shall also be exempt from taxation.

History. Enact. Acts 1964, ch. 48, § 8; 1968, ch. 118, § 9.

NOTES TO DECISIONS

Cited:

E.M. Bailey Distributing Co. v. Conagra, Inc., 676 S.W.2d 770, 1984 Ky. LEXIS 235 ( Ky. 1984 ).

65.630. Exercise of powers declared public function — Property held for public purpose.

The exercise of any power granted to a riverport authority in KRS 65.510 to 65.650 is hereby declared to be a public function, exercised for a public purpose, and as a matter of public necessity, and any real or personal property, or rights therein, acquired by a riverport authority and used in the manner and for the purposes enumerated in KRS 65.510 to 65.650 is hereby declared to be acquired and used for public purposes and as a matter of public necessity.

History. Enact. Acts 1964, ch. 48, § 9; 1968, ch. 118, § 10.

65.640. Authority may indemnify the United States for damages resulting from improvements.

Any riverport authority created pursuant to KRS 65.510 to 65.650 may indemnify the United States against any claims for damages, and any damage, that may result by overflow of the river from its being improved by the United States.

History. Enact. Acts 1964, ch. 48, § 10.

65.650. Commitments of authority to the United States to improve navigability.

  1. Any riverport authority created pursuant to KRS 65.510 to 65.650 may make commitments to the United States to provide certain specific minimum facilities and to provide spoilage areas when such commitments are necessary to obtain the assistance of the United States in improving the navigability of any river.
  2. Any such commitments made pursuant to this section shall be with the approval of the appointing authority.

History. Enact. Acts 1964, ch. 48, § 11.

Emergency Services Boards

65.660. Creation of single-county emergency services board — Replacement of existing fire, ambulance, and rescue squad boards — Boundaries — Taxing powers — Dissolution or alteration of boundaries.

  1. A fiscal court in a county with a county-wide fire protection district formed under KRS Chapter 75 that has entered into an interlocal agreement to provide fire service to the largest city in the county may, through the adoption of an ordinance in accordance with KRS 67.075 and 67.077 , merge the boards of the following special districts that are wholly contained within the county:
    1. Ambulance districts created under KRS 108.080 to 108.180 ;
    2. Fire protection districts created under KRS 75.010 to 75.260 ; and
    3. Local rescue squad districts created under KRS Chapter 39F.
  2. Once the fiscal court has merged any of the boards listed in paragraphs (a) to (c) of subsection (1) of this section, no additional special districts listed in paragraphs (a) to (c) of subsection (1) of this section shall be permitted to be created whose board of directors and taxing authority are not transferred to the emergency services board, and no boundary of a district shall exceed the boundary of the county that the emergency services district represents.
  3. An emergency services board’s jurisdiction shall encompass the boundaries of the special districts whose boards and taxing authority it is replacing.
  4. An emergency services board shall have the powers that constitute a taxing district within the meaning of Section 157 of the Constitution of Kentucky.
  5. If an emergency services board chooses to levy the tax allowed in KRS 65.670 , a certified copy of the ordinance levying the tax shall be filed with the county clerk who shall add the levy to the tax bills of the county. For taxing purposes, the effective date of the tax levy shall be January 1 of the year following the certification of the creation of the emergency services board.
  6. An emergency services board may be dissolved or the boundaries of the districts it represents may be altered if the procedures under KRS 65.164 to 65.176 are followed. If the emergency services board is dissolved, then the boards of the special districts of which it assumed the board duties shall be reappointed according to statute within thirty (30) days of the emergency services board’s dissolution, and the original taxing protocol applicable to the specific special district shall apply. Each special district shall assume that portion of the debt attributable to its service. Any unattributable debt shall be assumed by the fiscal court.

History. Enact. Acts 2000, ch. 429, § 2, effective July 14, 2000.

65.661. Compliance with KRS 65A.010 to 65A.090.

Any emergency services board established pursuant to KRS 65.660 to 65.679 shall comply with the provisions of KRS 65A.010 to 65A.090 .

History. Enact. Acts 2013, ch. 40, § 23, effective March 21, 2013.

65.662. Creation of multicounty emergency services board — Replacement of existing fire, ambulance, and rescue squad boards — Boundaries — Taxing powers — Dissolution or alteration of boundaries.

  1. Two (2) or more fiscal courts of which one (1) county shall have a county-wide fire protection district formed under KRS Chapter 75 that has entered into an interlocal agreement to provide fire service to the largest city in the county may, through the adoption of concurrent ordinances in accordance with KRS 67.075 and 67.077 , merge the boards of the following special districts that are wholly contained within their counties:
    1. Ambulance districts created under KRS 108.080 to 108.180 ;
    2. Fire protection districts created under KRS 75.010 to 75.260 ; and
    3. Local rescue squad districts created under KRS Chapter 39F.
  2. Once the fiscal courts have merged any of the boards listed in paragraphs (a) to (c) of subsection (1) of this section, no additional special districts listed in paragraphs (a) to (c) of subsection (1) of this section shall be permitted to be created in any of the member counties whose administration and taxing authority are not transferred to the emergency services board, and no boundary of a district shall exceed the boundaries of the counties that the multicounty emergency services district represents.
  3. A multicounty emergency services board’s jurisdiction shall encompass the boundaries of the special districts within the member counties whose boards and taxing authority it is replacing.
  4. A multicounty emergency services board shall have the powers that constitute a taxing district within the meaning of Section 157 of the Constitution of Kentucky.
  5. If a multicounty emergency services board chooses to levy the tax allowed in KRS 65.670 , a certified copy of the ordinance levying the tax shall be filed with the county clerk of each member county who shall add the levy to the tax bills of the county. For taxing purposes, the effective date of the tax levy shall be January 1 of the year following the certification of the creation of the emergency services board.
  6. A multicounty emergency services board may be dissolved or the boundaries altered if the procedures under KRS 65.164 to 65.176 are followed. If the emergency services board is dissolved, then the boards of the special districts of which it assumed the board duties shall be reappointed according to statute within thirty (30) days of the emergency services board’s dissolution, and the original taxing protocol applicable to the specific special district shall apply. Each special district shall assume that portion of the debt attributable to its service. Any unattributable debt shall be assumed equally by each fiscal court formerly participating in the multicounty emergency services board.

History. Enact. Acts 2000, ch. 429, § 3, effective July 14, 2000.

65.664. Powers of emergency services boards.

The emergency services board shall be a corporate public body and a political subdivision of the Commonwealth. It may prosecute and defend suits, hire necessary employees, and perform all acts necessary to carry on the work of providing fire fighting, emergency ambulance, and rescue squad services to the community.

History. Enact. Acts 2000, ch. 429, § 4, effective July 14, 2000.

65.666. Management of single-county emergency services board — Board appointments — Terms of board members — Residency requirement — Removal.

  1. The affairs of the emergency services board composed of one (1) county shall be controlled and managed by a board of directors appointed by the county judge/executive with the approval of the fiscal court.
  2. The county judge/executive shall appoint:
    1. One (1) member from each magisterial district of the county; and
    2. One (1) additional member from the county at large.
    1. If the board is composed of a number evenly divisible by four (4): (3) (a) If the board is composed of a number evenly divisible by four (4):
      1. One-fourth (1/4) of the board members’ initial terms shall be one (1) year;
      2. One-fourth (1/4) of the board members’ initial terms shall be two (2) years;
      3. One-fourth (1/4) of the board members’ initial terms shall be three (3) years; and
      4. One-fourth (1/4) of the board members’ initial terms shall be four (4) years.
    2. If the board is composed of a number unevenly divisible by four (4), then the county judge/executive shall appoint the remainder for a term of four (4) years.
  3. After the initial appointment, terms of the board members shall be for four (4) years.
  4. Board members may be reappointed, and they may succeed themselves.
  5. Each board member shall reside in the county.
  6. A majority of the membership of the board shall constitute a quorum.
  7. A member of the board of directors may be removed from office as provided in KRS 65.007 .
  8. The county judge/executive shall serve as an ex officio member of the board.
  9. No elected official shall serve as a member of the board.
  10. The board shall be appointed within thirty (30) days after the creation of the emergency services board.

History. Enact. Acts 2000, ch. 429, § 5, effective July 14, 2000.

65.668. Management of multicounty emergency services board — Board appointments — Terms of board members — Residency requirement — Removal — Vacancies.

  1. The affairs of the emergency services board composed of more than one (1) county shall be controlled and managed by a board of directors consisting of no more than eleven (11) members, with the number of members to be determined jointly by the county judges/executive of the member counties.
  2. The county judge/executive of each member county shall be entitled to appoint a proportionate share of the board relative to the population of the county according to the most recent federal census estimates of the year in which appointments are to be made with the approval of their respective fiscal courts. With the exception of the expiration of the initial appointment at the creation of the emergency services board, each year an appointment term expires the county judges/executive shall determine which county judge/executive, according to the adjusted population count, shall be allowed to make an additional appointment with the approval of his or her fiscal court. Each member county shall be allowed at least one (1) appointee. In no instance shall the emergency services board encompass more than eleven (11) counties.
    1. One-fourth (1/4) of the board members’ initial terms shall be one (1) year; (3) (a) One-fourth (1/4) of the board members’ initial terms shall be one (1) year;
    2. One-fourth (1/4) of the board members’ initial terms shall be two (2) years;
    3. One-fourth (1/4) of the board members’ initial terms shall be three (3) years; and
    4. One-fourth (1/4) of the board members’ initial terms shall be four (4) years.
  3. After the initial appointment, terms of the board members shall be for four (4) years.
  4. Board members may be reappointed, and they may succeed themselves.
  5. Each board member shall reside in the county he or she represents.
  6. A majority of the membership of the board shall constitute a quorum.
  7. A member of the board of directors may be removed from office as provided in KRS 65.007 .
  8. The county judge/executive of each county shall serve as an ex officio member of the board.
  9. No elected official shall serve as a member of the board.
  10. The board shall be appointed within thirty (30) days after the creation of the emergency services board.
  11. Vacancies in unexpired terms shall be filled by the appointing authority for the remainder of the unexpired term. No reapportionment, in accordance with the provisions of subsection (2) of this section, shall be executed in the instance of a vacancy in an unexpired term.

History. Enact. Acts 2000, ch. 429, § 6, effective July 14, 2000.

65.670. Levy of ad valorem tax — License fee — Purpose.

    1. In order to ensure the delivery of adequate services to the community or communities, the emergency services board may levy an ad valorem tax not to exceed ten cents ($0.10) per one hundred dollars ($100) of the assessed valuation of all property in the district. The emergency services board may levy this ad valorem tax on the property of each taxpayer served by each district whose board is merged into the emergency services board. The emergency services board ad valorem tax shall be collected by the sheriff of each member county in the same manner as county ad valorem taxes. The sheriff shall be entitled to a fee of four percent (4%) of the amount of the tax collected; and (1) (a) In order to ensure the delivery of adequate services to the community or communities, the emergency services board may levy an ad valorem tax not to exceed ten cents ($0.10) per one hundred dollars ($100) of the assessed valuation of all property in the district. The emergency services board may levy this ad valorem tax on the property of each taxpayer served by each district whose board is merged into the emergency services board. The emergency services board ad valorem tax shall be collected by the sheriff of each member county in the same manner as county ad valorem taxes. The sheriff shall be entitled to a fee of four percent (4%) of the amount of the tax collected; and
    2. The emergency services board may, in addition to the ad valorem tax in paragraph (a) of this subsection, charge fees necessary to further defray the costs of its operation.
  1. Tax and license fee revenues derived from this section shall be used only for the services described in KRS 65.660 or 65.662 .
  2. The assets and liabilities of the special districts under the jurisdiction of the emergency services board shall be maintained separately, but shall be managed by the emergency services board.

History. Enact. Acts 2000, ch. 429, § 7, effective July 14, 2000; 2004, ch. 152, § 1, effective July 13, 2004.

65.672. Contracts for fire, ambulance, and emergency squad services.

The emergency services board may contract with private and public entities to provide fire, ambulance, and emergency squad services.

History. Enact. Acts 2000, ch. 429, § 8, effective July 14, 2000.

65.674. Provision of emergency services through agency of county government — Dedicated county ad valorem tax — Exception to tax levy recall provisions.

  1. Once an emergency services board assumes control over fire, ambulance, or emergency squad districts, a fiscal court, or fiscal courts through an interlocal agreement, may opt to provide fire, ambulance, and emergency squad services directly or through an agency of county government. If that is the case, a dedicated ad valorem tax for the provision of fire, ambulance, and emergency squad services exclusive of all other taxes may be levied by the county or counties. The provisions of the ad valorem tax of KRS 65.670 shall apply.
  2. The initial levy of the ad valorem tax for the provision of funding to the emergency services board under this section shall not be subject to the recall provisions of KRS 68.245 or 132.023 , whichever is applicable. Subsequent changes to the amount shall be subject to the provisions of KRS 68.245 or 132.023 , whichever is applicable.

History. Enact. Acts 2000, ch. 429, § 9, effective July 14, 2000.

65.676. Emergency services tax supplemental to existing tax of fire, ambulance, and emergency squad districts — Aggregate tax limits.

In counties where ambulance districts created under the provisions of KRS 108.080 to 108.180 ; fire protection districts created under the provisions of KRS 75.010 to 75.260 ; or local rescue squad districts created under the provisions of KRS Chapter 39F exist and have enacted an ad valorem tax, the emergency services board may leave those ad valorem tax levies in place. The emergency services board may levy its permitted funding mechanisms in addition to these existing taxes, but the aggregate of the existing tax levied by the original district or districts, and the tax levied by the emergency services board shall not exceed the limits prescribed in KRS 65.670 .

History. Enact. Acts 2000, ch. 429, § 10, effective July 14, 2000.

65.679. KRS 65.660 to 65.679 supersede structure and taxing privileges of fire, ambulance, and emergency squad districts — Other provisions not affected.

If a fiscal court chooses to create an emergency services board, the provisions of KRS 65.660 to 65.679 shall supersede the structure of the boards of directors and the taxing privileges under KRS 108.080 to 108.180 , KRS 75.010 to 75.260 , and KRS Chapter 39F. The remaining provisions of KRS 108.080 to 108.180 , KRS 75.010 to 75.260 , and KRS Chapter 39F, applicable to the operation of the fire department, ambulance service, or emergency squad, shall remain in effect.

History. Enact. Acts 2000, ch. 429, § 11, effective July 14, 2000.

Incremental Financing for Economic Development

65.680. Definitions for KRS 65.680 to 65.699.

As used in KRS 65.680 to 65.699 :

  1. “Activation date” means the date established in the grant contract at any time in a two (2) year period after the date of approval of the grant contract by the economic development authority or the tourism development authority, as appropriate. The economic development authority or tourism development authority, as appropriate, may extend this two (2) year period to no more than four (4) years upon written application of the agency requesting the extension. To implement the activation date, the agency who is a party to the grant contract shall notify the economic development authority or the tourism development authority, as appropriate, the Department of Revenue, and other taxing districts that are parties to the grant contract when the implementation of the increment authorized in the grant contract shall occur;
  2. “Agency” means an urban renewal and community development agency established under KRS Chapter 99; a development authority established under KRS Chapter 99; a nonprofit corporation established under KRS Chapter 58; an air board established under KRS 183.132 to 183.160 ; a local industrial development authority established under KRS 154.50-301 to 154.50-346 ; a riverport authority established under KRS 65.510 to 65.650 ; or a designated department, division, or office of a city or county;
  3. “Assessment” means the job development assessment fee authorized by KRS 65.6851 , which the governing body may elect to impose throughout the development area;
  4. “Brownfield site” means real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant;
  5. “City” means any city, consolidated local government, or urban-county;
  6. “Commencement date” means the date a development area is established, as provided in the ordinance creating the development area;
  7. “Commonwealth” means the Commonwealth of Kentucky;
  8. “County” means any county, consolidated local government, or charter county;
  9. “CPI” means the nonseasonally adjusted Consumer Price Index for all urban consumers, all items (base year computed for 1982 to 1984 equals one hundred (100)), published by the United States Department of Labor, Bureau of Labor Statistics;
  10. “Debt charges” means the principal, including any mandatory sinking fund deposits, interest, and any redemption premium, payable on increment bonds as the payments come due and are payable and any charges related to the payment of the foregoing;
  11. “Development area” means a contiguous geographic area, which may be within one (1) or more cities or counties, defined and created for economic development purposes by an ordinance of a city or county in which one (1) or more projects are proposed to be located, except that for any development area for which increments are to include revenues from the Commonwealth, the contiguous geographic area shall satisfy the requirements of KRS 65.6971 or 65.6972 ;
  12. “Economic development authority” means the Kentucky Economic Development Finance Authority as created in KRS 154.20-010 ;
  13. “Enterprise Zone” means an area that had been designated by the Enterprise Zone Authority of Kentucky to be eligible for the benefits of Subchapter 45 of KRS Chapter 154 before January 1, 2005;
  14. “Governing body” means the body possessing legislative authority in a city or county;
  15. “Grant contract” means:
    1. That agreement with respect to a development area established under KRS 65.686 , by and among an agency and one (1) or more taxing districts other than the Commonwealth, by which a taxing district permits the payment to an agency of an amount equal to a portion of increments other than revenues from the Commonwealth received by it in return for the benefits accruing to the taxing district by reason of one (1) or more projects in a development area; or
    2. That agreement, including with respect to a development area satisfying the requirements of KRS 65.6971 or 65.6972 , a master agreement and addenda to the master agreement, by and among an agency, one (1) or more taxing districts, and the economic development authority or the tourism development authority, as appropriate, by which a taxing district permits the payment to an agency of an amount equal to a portion of increments received by it in return for the benefits accruing to the taxing district by reason of one (1) or more projects in a development area;
  16. “Increment bonds” means bonds and notes issued for the purpose of paying the costs of one (1) or more projects in a development area, the payment of which is secured solely by a pledge of increments or by a pledge of increments and other sources of payment that are otherwise permitted by law to be pledged or used as a source of payment of the bonds or notes;
  17. “Increments” means the amount of revenues received by any taxing district, determined by subtracting the amount of old revenues from the amount of new revenues in the calendar year with respect to a development area and for which the taxing district or districts and the agency have agreed upon under the terms of a grant contract;
  18. “Infrastructure development” means the acquisition of real estate within a development area meeting the requirements of KRS 65.6971 and the construction or improvement, within a development area meeting the requirements of KRS 65.6971 , of roads and facilities necessary or desirable for improvements of the real estate, including surveys; site tests and inspections; environmental remediation; subsurface site work; excavation; removal of structures, roadways, cemeteries, and other underground and surface obstructions; filling, grading, and provision of drainage, storm water retention, installation of utilities such as water, sewer, sewage treatment, gas, and electricity, communications, and similar facilities; and utility extensions to the boundaries of the development area meeting the requirements of KRS 65.6971;
  19. “Issuer” means a city, county, or an agency issuing increment bonds;
  20. “New revenues” means the amount of revenues received with respect to a development area in any calendar year after the activation date for a development area:
    1. Established under KRS 65.686 , the ad valorem taxes other than the school and fire district portions of the ad valorem taxes received from real property generated from the development area and properties sold within the development area, and occupational license fees not otherwise used as a credit against an assessment, and all or a portion of assessments as determined by the governing body; or
    2. Satisfying the requirements of KRS 65.6971 , the ad valorem taxes other than the school and fire district portions of the ad valorem taxes received from real property generated from the development area and properties sold within the development area; or
    3. Satisfying the requirements of KRS 65.6972 , the ad valorem taxes, other than the school and fire district portions of the ad valorem taxes, received from real property, Kentucky individual income tax, Kentucky sales and use taxes, local insurance premium taxes, occupational license fees, or other such state taxes as may be determined by the Department of Revenue to be applicable to the project and specified in the grant contract, generated from the primary project entity within the development area minus relocation revenue;
  21. “Old revenues” means the amount of revenues received with respect to a development area:
    1. Established under KRS 65.686 , in the last calendar year prior to the commencement date for the development area, revenues which constitute ad valorem taxes other than the school and fire district portions of ad valorem taxes received from real property in the development area and occupational license fees generated from the development area; or
    2. Satisfying the requirements of KRS 65.6971 , in the last calendar year prior to the commencement date for the development area, revenues which constitute ad valorem taxes other than the school and fire district portions of ad valorem taxes received from real property in the development area; or
    3. Satisfying the requirements of KRS 65.6972 , in the period of no longer than three (3) calendar years prior to the commencement date, the average as determined by the Department of Revenue to be a fair representation of revenues derived from ad valorem taxes, other than the school and fire district portions of ad valorem taxes, from real property in the development area, and Kentucky individual income tax, Kentucky sales and use taxes, local insurance premium taxes, occupational license fees, and other such state taxes as may be determined by the Department of Revenue as specified in the grant contract generated from the development area. With respect to this paragraph, if the development area was within an active enterprise zone for the period used by the Department of Revenue for measuring old revenues, then the calculation of old revenues shall include the amounts of ad valorem taxes, other than the school and fire district portions of ad valorem taxes, that would have been generated from real property, Kentucky individual income tax, Kentucky sales and use taxes, local insurance premium taxes, occupational license fees, and other such state taxes as may be determined by the Department of Revenue as specified in the grant contract, were the development area not within an active enterprise zone. With respect to this paragraph, if the primary project entity generated old revenue prior to the commencement date in the development area or revenues were derived from the development area prior to the commencement date of the development area, then revenues shall increase each calendar year by the percentage increase of the consumer price index, if any;
  22. “Outstanding” means increment bonds that have been issued, delivered, and paid for, except any of the following:
    1. Increment bonds canceled upon surrender, exchange, or transfer, or upon payment or redemption;
    2. Increment bonds in replacement of which or in exchange for which other bonds have been issued; or
    3. Increment bonds for the payment, or redemption or purchase for cancellation prior to maturity, of which sufficient moneys or investments, in accordance with the ordinance or other proceedings or any applicable law, by mandatory sinking fund redemption requirements, or otherwise, have been deposited, and credited in a sinking fund or with a trustee or paying or escrow agent, whether at or prior to their maturity or redemption, and, in the case of increment bonds to be redeemed prior to their stated maturity, notice of redemption has been given or satisfactory arrangements have been made for giving notice of that redemption, or waiver of that notice by or on behalf of the affected bond holders has been filed with the issuer or its agent;
  23. “Primary project entity” means the entity responsible for control, ownership, and operation of the project within a development area satisfying the requirements of KRS 65.6972 which generates the greatest amount of new revenues or, in the case of a proposed development area satisfying the requirements of KRS 65.6972 , is expected to generate the greatest amount of new revenues;
  24. “Project” means, for purposes of a development area:
    1. Established under KRS 65.686 , any property, asset, or improvement certified by the governing body, which certification is conclusive as:
      1. Being for a public purpose;
      2. Being for the development of facilities for residential, commercial, industrial, public, recreational, or other uses, or for open space, or any combination thereof, which is determined by the governing body establishing the development areas as contributing to economic development;
      3. Being in or related to a development area; and
      4. Having an estimated life or period of usefulness of one (1) year or more, including but not limited to real estate, buildings, personal property, equipment, furnishings, and site improvements and reconstruction, rehabilitation, renovation, installation, improvement, enlargement, and extension of property, assets, or improvements so certified as having an estimated life or period of usefulness of one (1) year or more;
    2. Satisfying the requirements of KRS 65.6971 ; an economic development project defined under KRS 154.22-010 , 154.24-010 , or 154.28-010 ; or a tourism attraction project defined under KRS 148.851 ; or
    3. Satisfying the requirements of KRS 65.6972 , the development of facilities for:
      1. The transportation of goods or persons by air, ground, water, or rail;
      2. The transmission or utilization of information through fiber-optic cable or other advanced means;
      3. Commercial, industrial, recreational, tourism attraction, or educational uses; or
      4. Any combination thereof;
  25. “Relocation revenue” means the ad valorem taxes, other than the school and fire district portions of ad valorem taxes, from real property, Kentucky individual income tax, Kentucky sales and use taxes, local insurance premium taxes, occupational license fees, and other such state taxes as specified in the grant contract, received by a taxing district attributable to that portion of the existing operations of the primary project entity located in the Commonwealth and relocating to the development area satisfying the requirements of KRS 65.6972 ;
  26. “Special fund” means a special fund created in accordance with KRS 65.688 into which increments are to be deposited;
  27. “Taxing district” means a city, county, or other taxing district that encompasses all or part of a development area, or the Commonwealth, but does not mean a school district or fire district;
  28. “Termination date” means the date on which a development area shall cease to exist, which for purposes of a development area:
    1. Established under KRS 65.686 , shall be:
      1. For a period of no longer than twenty (20) years from the commencement date and set forth in the grant contract; or
      2. For a period as determined under KRS 65.687 . Increment bonds shall not mature on a date beyond the termination date established by this paragraph; or
    2. Satisfying the requirements of KRS 65.6971 , shall be for a period of no longer than twenty (20) years from the commencement date and set forth in the grant contract constituting a master agreement, except that for an addendum added to the master agreement for each project in the development area, the termination date may be extended to no longer than twenty (20) years from the date of each addendum; or
    3. Satisfying the requirements of KRS 65.6972 , shall be for a period of no longer than twenty (20) years from the activation date of the grant contract. Increment bonds shall not mature on a date beyond the termination date established by this subsection;
  29. “Tourism development authority” means the Tourism Development Finance Authority as created in KRS 148.850 ; and
  30. “Project costs” mean the total private and public capital costs of a project.

History. Enact. Acts 2000, ch. 358, § 1, effective July 14, 2000; 2001, ch. 133, § 5, effective June 21, 2001; 2002, ch. 338, § 3, effective July 15, 2002; 2002, ch. 346, § 34, effective July 15, 2002; 2005, ch. 85, § 89, effective June 20, 2005; 2005, ch. 168, § 45, effective March 18, 2005; 2009 (1st. Ex. Sess.), ch. 1, § 60, effective June 26, 2009.

Legislative Research Commission Notes.

(3/18/2005). 2005 Ky. Acts. ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1, 2005.

65.682. Legislative finding.

The General Assembly finds and declares that economic development created by the development of projects to support economic revitalization and improvement in a development area which results in the increase in the value of property located in a development area or results in increased employment opportunities within or around a development area serves a public purpose; and that the authority prescribed by KRS 65.680 to 65.699 and the purposes to be accomplished thereunder, are proper governmental and public purposes for which public moneys may be expended; and that the creation or expansion of development areas is of paramount importance mandating that the provisions of KRS 65.680 to 65.699 be liberally construed and applied in order to advance public purposes.

History. Enact. Acts 2000, ch. 358, § 2, effective July 14, 2000; 2002, ch. 338, § 4, effective July 15, 2002.

65.683. KRS 65.680 to 65.699 limited to development areas established under KRS 65.686 by a city or county before March 23, 2007.

Effective on March 23, 2007, the provisions of KRS 65.680 to 65.699 shall apply only to development areas which are:

  1. Established under KRS 65.686 by a city or county prior to March 23, 2007; and
  2. Subject to the provisions of a grant contract executed prior to March 23, 2007.

History. Enact. Acts 2007, ch. 95, § 24, effective March 23, 2007.

65.684. Powers of city or county for economic development.

For any development area for which increments do not include revenues from the Commonwealth, in addition to any other powers conferred by law, any city or county may exercise any powers necessary or convenient to carry out the purposes of KRS 65.680 to 65.699 , including the power to:

  1. Create development areas and to define their boundaries;
  2. Undertake projects;
  3. Issue increment bonds and pledge increments to the payment of debt charges on those increment bonds;
  4. Create a special fund established for the deposit of increments and other funds that may be used or pledged for the payment of increment bonds and to pay the costs of projects;
  5. Utilize increments to pay the costs of economic development projects and for the payment of amounts due on increment bonds; and
  6. Impose assessments.

History. Enact. Acts 2000, ch. 358, § 3, effective July 14, 2000; 2001, ch. 133, § 6, effective June 21, 2001; 2002, ch. 338, § 5, effective July 15, 2002.

65.6851. Option to impose assessment fee on certain newly created jobs — Limitation on amount — Tax credit for assessed employees — Restriction on multiple assessments — Termination — Requirements to exercise option — Transition provisions.

For any development area for which increments do not include revenues from the Commonwealth:

  1. Any governing body establishing a development area may impose an assessment on each person employed in the development area, as a condition of employment, whose job was newly created as a result of a project, and as determined by the policies and procedures established by the governing body, subject to the conditions in subsection (6) of this section, and who is subject to the state tax imposed by KRS 141.020 . A job shall not be deemed to be newly created under this section if it occurs due to the relocation of jobs from another location within the Commonwealth.
  2. Subject to KRS 65.6853 , the total assessment levied by any governing body within the development area shall not exceed an amount equal to two percent (2%) of the gross wages of the employee.
  3. Each person so assessed shall be entitled to credits against any local occupational license fee or payroll tax of the governing body that established the development area and the job development assessment fee, if an occupational license fee is then levied by that governing body and is not otherwise totally used as a credit against assessments imposed under Subchapter 23, 24, or 26 of KRS Chapter 154, and provided that the amount does not exceed the amount of the occupational licensing fee or payroll tax paid to that local government by the employee. If the governing body that created the job development assessment fee has no occupational license fee, the employee shall not be entitled to receive a credit against any other governmental agency’s occupational license fee.
  4. Subsequent to the establishment of a development area by one (1) governing body, no other governing body may levy an assessment in any portion of the development area that would cause the total assessment in any portion of the development area to exceed two percent (2%) of the gross wages of the employee, subject to KRS 65.6853 . If more than one (1) governing body jointly establishes a development area, the governing bodies that establish the development area shall agree upon the amount of the assessment and the manner by which the assessment is to be prorated among the governing bodies establishing the development area.
  5. Any assessment of employees in connection with their employment at a project levied under this section shall permanently lapse on the date:
    1. Any bonds issued in connection with acquiring or developing the infrastructure of a development area, in accordance with KRS 65.680 to 65.699 , are retired; or
    2. Any loans or other financing incurred in connection with the establishment of a development area mature or are prepaid in full.
  6. For the purposes of this section:
    1. The development area shall be a previously undeveloped tract of land;
    2. No more than five hundred (500) acres may be approved in any twelve (12) month period in any county; and
    3. Acceptable developments shall be limited to projects as defined in KRS 65.680 .
  7. Any agency that has established a development area under KRS 65.680 to 65.699 prior to July 15, 2002, unless otherwise approved by the agency, shall continue to operate under the provisions of KRS 65.680 to 65.699 as determined by the policies and procedures established by the agency prior to July 15, 2002.

History. Enact. Acts 2001, ch. 133, § 2, effective June 21, 2001; 2002, ch. 338, § 6, effective July 15, 2002; 2005, ch. 153, § 2, effective June 20, 2005.

65.6853. Relationship to other job development assessment fees — Maximum on total tax credits.

For any development area for which increments do not include revenues from the Commonwealth:

  1. If a company, against whose employees an assessment is levied under KRS 65.6851 , enters into an agreement with the economic development authority under Subchapter 23, 24, or 26 of KRS Chapter 154 allowing the company to impose a job development assessment fee as part of that agreement, the total assessment levied against the employee for state inducements and the development area shall not exceed six percent (6%), subject to subsection (2) of this section.
  2. If an eligible company under Subchapter 23, 24, or 26 of KRS Chapter 154 locates or expands within a development area, the assessment imposed under KRS 65.6851(1) shall not exceed the lesser of two percent (2%) or the difference between two percent (2%) and the local occupational license fee used as a credit against the assessments granted under Subchapter 23, 24, or 26 of KRS Chapter 154.

History. Enact. Acts 2001, ch. 133, § 3, effective June 21, 2001; 2002, ch. 338, § 7, effective July 15, 2002.

65.6855. Application of assessments — Employer’s duties.

For any development area for which increments do not include revenues from the Commonwealth:

  1. The employees of any company choosing to locate in a development area shall be subject to any assessments levied against them, and the company shall not have the authority to reject an assessment.
  2. Each employer in the development area shall:
    1. Collect the assessment from its employees by deducting the assessment from each paycheck of its employees;
    2. Promptly remit the assessment to the official charged with collecting revenues in the development area;
    3. Make its payroll books and records available to the official charged with collecting revenues in the development area at a reasonable time as specified by the governing body; and
    4. File with the official charged with collecting revenues in the development area any documentation with regard to the assessment as required by the governing body.

History. Enact. Acts 2001, ch. 133, § 4, effective June 21, 2001; 2002, ch. 338, § 8, effective July 15, 2002.

65.686. Establishment or modification of development area — Procedure — Termination.

  1. Any city or county may establish or modify a development area by:
    1. Holding a public hearing by its governing body or its designee at which interested parties are afforded a reasonable opportunity to express their views on the proposed creation or modification of a development area and its boundaries. Notice of the hearing shall:
      1. Include a declaration that the purpose of the hearing is to afford interested parties an opportunity to express their views regarding the proposed development area;
      2. Include a general description of the boundaries of the proposed development area;
      3. State the time and place of the hearing; and
      4. Be published in a local newspaper of general circulation at least seven (7) days but no more than twenty-one (21) days prior to the scheduled hearing date; and
    2. Adopting an ordinance which shall:
      1. Describe the boundaries of the proposed development area with sufficiency to allow ordinary and reasonable certainty of the territory included. However, no proposed development area shall include property located in any other development area;
      2. Create the development area on a date certain, which shall be referred to as the commencement date;
      3. Assign a name to the proposed development area for identification purposes;
      4. Contain findings that the designation of the proposed development area will result in the increase in the value of property located in the development area or result in increased employment within or around the development area, or both;
      5. Approve the grant contract, if any, relating to a development area;
      6. Establish, if applicable, a special fund for that development area;
      7. Contain any other findings, limitations, rules, or procedures regarding the proposed development area and its establishment or maintenance as deemed necessary by the governing body; and
      8. Permit, if applicable, the levying of an assessment; and
    3. Providing the official charged with collecting revenues in the development area, if the official is not an employee of the city or county designating the development area, with a description of the development area and any other information available which is needed to determine increments or new revenues.
    1. For any development area for which increments do not include revenues from the Commonwealth, increments generated in a development area shall be submitted by the official charged with collecting revenues in the development area, to the city or county establishing the special fund for that development area, deposited to that special fund and used to pay the costs of projects or to pay debt charges on increment bonds, except that increments payable to any city or county other than the city or county establishing the development area shall be submitted to that city or county as if no development area existed unless that city or county is a party to a grant contract that provides that some or all of the increments are to be submitted to a special fund. (2) (a) For any development area for which increments do not include revenues from the Commonwealth, increments generated in a development area shall be submitted by the official charged with collecting revenues in the development area, to the city or county establishing the special fund for that development area, deposited to that special fund and used to pay the costs of projects or to pay debt charges on increment bonds, except that increments payable to any city or county other than the city or county establishing the development area shall be submitted to that city or county as if no development area existed unless that city or county is a party to a grant contract that provides that some or all of the increments are to be submitted to a special fund.
    2. For any development area for which increments include revenues from the Commonwealth, increments paid by the city, county, or Commonwealth to the agency for which the development area is created shall be used to pay the costs of projects or to pay debt charges on increment bonds.
  2. The existence of a development area shall terminate on the termination date.

History. Enact. Acts 2000, ch. 358, § 4, effective July 14, 2000; 2001, ch. 133, § 7, effective June 21, 2001; 2002, ch. 338, § 9, effective July 15, 2002.

65.687. Extension of termination date for development area — Conditions.

  1. The termination date for a development area may be extended beyond twenty (20) years as provided in this section. To qualify for an extension of the termination date, the development area shall meet the following conditions:
    1. The initial development area shall have been established by the county under KRS 65.686 prior to July 1, 2003, and all subsequent development areas contiguous to the initial development area shall have been established prior to August 1, 2006;
    2. The development area, consisting of one (1) or more contiguous development areas, includes at least four hundred (400) acres in the aggregate; and
    3. The agency that issued the increment bonds for the development areas described in paragraphs (a) and (b) of this subsection shall, within two (2) years of June 26, 2009, refund the outstanding increment bonds with the issuance of new increment bonds for a term not to exceed twenty (20) years.
  2. The termination date for development areas meeting the requirements of subsection (1) of this section shall be the term of the new increment bonds issued in accordance with subsection (1)(c) of this section, not to exceed twenty (20) years from the date the new increment bonds described in subsection (1)(c) of this section are issued.

History. Enact. Acts 2009 (1st Ex. Sess.), ch. 1, § 61, effective June 26, 2009.

65.688. Special fund for outstanding increment bonds.

For any development area for which increments do not include revenues from the Commonwealth, while increment bonds are outstanding, the issuer shall maintain a special fund which shall be pledged for the retirement of those increment bonds. Officials charged with collecting revenues in the development area shall, for each year a grant contract is in effect or any increment bonds are outstanding with respect to a development area, determine the amount of increments from the development area which they are charged with collecting and submit those increments for deposit in the special fund established by the governing body for that development area. Funds deposited in a special fund for the payment of increment bonds shall be disbursed at the times and in the amounts required to pay debt charges on those increment bonds. Accrued interest from the sale of increment bonds shall be deposited in the special fund pledged to the payment of those bonds. Amounts in a special fund which exceed the amount required to pay debt charges on related increment bonds in any fiscal year may accumulate in the special fund for the payment of future debt charges or to pay the costs of additional projects in the development area, or may be transferred by the governing body from the special fund under the terms of a grant contract or used for any lawful purpose.

History. Enact. Acts 2000, ch. 358, § 5, effective July 14, 2000; 2002, ch. 338, § 10, effective July 15, 2002.

65.690. Ordinances governing increment bonds — Required provisions.

Increment bonds shall be issued, administered, and regulated only by ordinance adopted by the governing body which, in addition to any other provisions deemed appropriate by the governing body, shall:

  1. Declare the necessity of the increment bond issue;
  2. State the principal amount or maximum principal amount of the increment bonds to be issued;
  3. State the purpose of the increment bond issue;
  4. State or provide for the date of, and the dates and amounts or maximum amount of, maturities or principal payments on the increment bonds;
  5. State any provisions for a mandatory sinking fund, mandatory sinking fund redemption, or for redemption prior to maturity;
  6. Provide for the rate or rates of interest, or maximum rate or rates of interest, or the method for establishing or determining the rate or rates of interest to be paid on the increment bonds; and
  7. State any provision for a designated officer of the issuer to determine any of the specific terms required to be stated or provided for in this section, subject to any limitations stated in the proceedings.

History. Enact. Acts 2000, ch. 358, § 6, effective July 14, 2000.

65.692. Permitted purposes for bond issuance.

  1. Increment bonds may be issued to pay the costs of projects in the development area. The provisions of KRS 66.021 , 66.031 , 66.041 , 66.045 , 66.071 , 66.091 , 66.121 , 66.131 , 66.141 , 66.151 , 66.171 , 66.181 , and 66.191 shall apply to the issuance of increment bonds insofar as they do not conflict with KRS 65.680 to 65.699 ; if they do conflict, KRS 65.680 to 65.699 shall apply.
  2. Debt payments on increment bonds may be paid from increments, from any other funds of the issuer, or from funds identified in a grant contract, or any combination thereof. If increment bonds are payable solely from increments, the issuer shall, prior to the issuance of the increment bonds, make a determination that the increments are adequate to make the debt payments so long as the increment bonds are outstanding.
  3. Increment bonds may also be issued to fund or refund all or any portion of outstanding increment bonds. Any increment bonds issued under this subsection shall mature as determined by the governing body consistent with the definition of termination date as contained in KRS 65.680 and 66.091 .

History. Enact. Acts 2000, ch. 358, § 7, effective July 14, 2000; 2002, ch. 338, § 11, effective July 15, 2002.

65.694. Pledge of increments for bond payment — Precedence of pledges.

Any city or county may pledge increments to the payment of increment bonds by an ordinance adopted by the governing body or by a grant contract adopted by ordinance. Any pledge of increments adopted under this section shall, as to the increments, but not as to any other revenues, be superior to any other pledge of revenues for any other purpose and shall, from the effective date of the ordinance to the termination date, supersede any statute or ordinance regarding the application or use of increments. No ordinance in conflict with an ordinance pledging increments shall be adopted while any increment bonds secured by that pledge remain outstanding. Ordinances pledging increments on a subordinate basis to any existing pledges may be adopted.

History. Enact. Acts 2000, ch. 358, § 8, effective July 14, 2000; 2002, ch. 338, § 12, effective July 15, 2002.

65.696. Development area grant contract — Required provisions.

For any development area for which increments do not include revenues from the Commonwealth:

  1. Upon establishment of a development area, any city or county may release, by a grant contract with any other city or county, increments expected to be collected by that city or county in the related development area for a period that does not extend beyond the termination date.
  2. The grant contract shall include the following provisions:
    1. The identity of each city and county participating in the financing agreement;
    2. A detailed description of each project that is the subject of the grant contract, including an estimate of its costs of construction or acquisition and development;
    3. A detailed description of the development area;
    4. A detailed summary estimating old revenues collected and projected new revenues in the development area for each city and county that is a party to the grant contract, on an annual basis, for the term of the proposed grant contract;
    5. The maximum amount of increments to be released by the parties to the grant contract, if any, and the maximum number of years the release will be effective, including an agreement to deposit the increments in a special fund created for that purpose, which, if any increment bonds are to be issued, shall be held by the issuer of the increment bonds;
    6. The times and procedures for depositing increments and other funds, if any, in the special fund to be established for the development area and any provisions relating to the collection of the increments;
    7. Any covenants regarding additional funds or to pay the costs of the projects;
    8. Any covenants regarding completion of the project;
    9. Terms of default and remedies, except that no remedy shall permit the withholding by any party to the grant contract of any increments to be deposited in the special fund identified in the grant contract so long as any increment bonds are outstanding that are secured by a pledge of those increments;
    10. The commencement date;
    11. The termination date; and
    12. Any other provisions not inconsistent with KRS 65.680 to 65.699 that are deemed necessary or appropriate by the parties to the grant contract.

History. Enact. Acts 2000, ch. 358, § 9, effective July 14, 2000; 2002, ch. 338, § 13, effective July 15, 2002.

65.6971. Development area for infrastructure development — Application — Approval — Ordinance creating area — Increment amounts — Grant contracts — Portion of increment due from each taxing district — Financing account — Reports — Operating procedures — Obligation of Department of Revenue and agency.

  1. A city, county, or agency shall submit an application to the Cabinet for Economic Development for approval of a development area for infrastructure development which includes revenues from the Commonwealth, the standards for which the Cabinet for Economic Development and the Tourism, Arts and Heritage Cabinet shall establish through their operating procedures or by the promulgation of administrative regulations in accordance with KRS Chapter 13A. The Cabinet for Economic Development shall determine whether the development area described in the application constitutes a project of the type described in this section. The Cabinet for Economic Development, upon its determination, shall assign the application to the economic development authority or the tourism development authority, as appropriate, for further consideration and approval.
  2. A development area for purposes of infrastructure development shall:
      1. Consist of at least fifty (50) acres of undeveloped land, unless approved otherwise by the economic development authority or the tourism development authority in consideration of the geography of the area; or (a) 1. Consist of at least fifty (50) acres of undeveloped land, unless approved otherwise by the economic development authority or the tourism development authority in consideration of the geography of the area; or
      2. Consist of at least one (1) acre constituting a brownfield site; and
      1. In the case of an economic development project, be under the control of, owned by, and operated by an agency at the commencement date; or (b) 1. In the case of an economic development project, be under the control of, owned by, and operated by an agency at the commencement date; or
      2. In the case of a tourism attraction project, be under the control of, leased by, owned by, or operated by an agency at the commencement date.
  3. With respect to each city, county, or agency that applies to the economic development authority or the tourism development authority for approval of a development area for infrastructure development, the economic development authority or the tourism development authority shall request materials and make all inquiries concerning the application the economic development authority or the tourism development authority deems necessary. Upon review of the application and requested materials, and completion of inquiries, the economic development authority or the tourism development authority may grant approval for:
    1. The development area for infrastructure development;
    2. Each project for which an application has been submitted to be located in the development area for infrastructure development, provided that each project approved for location in the development area for infrastructure development meets the criteria necessary in order to qualify for inducements under subchapters 22, 24, or 28 of KRS Chapter 154, or satisfies the requirements of a tourism development attraction defined under KRS 148.851 ;
    3. The percentage of the Commonwealth’s portion of the increment that the Commonwealth agrees to distribute to the agency each year during the term of the grant contract;
    4. The maximum amount of costs for infrastructure development for which the increment may be distributed to the agency; and
    5. The master agreement constituting a grant contract and any addendum for each project approved for location in the development area for infrastructure development.
  4. Prior to any approval by the economic development authority or the tourism development authority, the economic development authority or the tourism development authority shall have received an ordinance adopted by the city or county creating the development area and establishing the percentage of increment that the city and county are distributing each year to the agency for use in the infrastructure development of the development area for which economic development authority or the tourism development authority approval is sought. The economic development authority or the tourism development authority shall not approve a percentage of the Commonwealth’s portion of the increment to be distributed to the agency each calendar year with respect to a development area for infrastructure development greater than the percentage approved by the city or county creating the development area.
  5. The maximum amount of increment available for development areas for infrastructure development is one hundred percent (100%).
  6. The terms and conditions of each grant contract, including the master agreement constituting a grant contract and any addenda, are subject to negotiations between the economic development authority or the tourism development authority and the other parties to the grant contract. The grant contract shall include but not be limited to the following provisions: the activation date, the taxes to be included in the calculation of the increment, the percentage increment to be contributed by each taxing district, the maximum amount of infrastructure development costs, a description of the development area, the termination date, subject to extension through each addendum, and the requirement of the agency to annually certify to the economic development authority or the tourism development authority as to the use of the increment for payment of infrastructure development costs.
    1. Any agency that enters into a grant contract for the release of any increments that may arise during the period of a grant contract shall, after each calendar year a grant contract is in effect, notify each taxing district obligated under the grant contract that an increment is due, and, in consultation with each taxing district, determine the respective portion of the total increment due from each taxing district. The agency shall then present the total increment due from the Commonwealth under the grant contract to the Department of Revenue for certification. (7) (a) Any agency that enters into a grant contract for the release of any increments that may arise during the period of a grant contract shall, after each calendar year a grant contract is in effect, notify each taxing district obligated under the grant contract that an increment is due, and, in consultation with each taxing district, determine the respective portion of the total increment due from each taxing district. The agency shall then present the total increment due from the Commonwealth under the grant contract to the Department of Revenue for certification.
      1. Upon notice from the agency, each taxing district obligated under the grant contract, other than the Commonwealth, shall release to the agency the respective portion of the total increment due under the grant contract. The agency shall certify to the Department of Revenue on a calendar year basis the amount of the increment collected.
      2. Upon certification of the total increment due from the Commonwealth by the Department of Revenue, the department is authorized and directed to transfer the increment to a tax increment financing account established and administered by the Finance and Administration Cabinet for payment of the Commonwealth’s portion of the increment. Prior to disbursement by the Finance and Administration Cabinet of the funds from the tax increment financing account, the economic development authority or the tourism development authority shall notify the Finance and Administration Cabinet that the agency is in compliance with the terms of the grant contract. Upon notification, the Finance and Administration Cabinet is authorized and directed to release to the agency the Commonwealth’s portion of the total increment due under the grant contract.
    2. The Department of Revenue shall report to the economic development authority or the tourism development authority on a calendar year basis the amount of the total increment released to an agency.
  7. The Department of Revenue shall have the authority to establish operating procedures for the administration and determination of the Commonwealth’s increment.
  8. The Department of Revenue or agency shall have no obligation to refund or otherwise return any of the increment to the taxpayer from whom the increment arose or is attributable. Further, no additional increment resulting from audit, amended returns or other activity for any period shall be transferred to the tax increment financing account after the initial release to the agency of the Commonwealth’s increment for that period.

History. Enact. Acts 2002, ch. 338, § 14, effective July 15, 2002; 2005, ch. 85, § 90, effective June 20, 2005; 2005, ch. 95, § 12, effective June 20, 2005; 2009, ch. 16, § 9, effective June 25, 2009.

65.6972. Development area and related project — Application — Approval — Requirements for project — Independent consultant — Approval by authority — Ordinance — Grant contracts — Portion of increment due from each taxing district — Financing account — Reports — Operating procedures — Obligation of Department of Revenue and agency.

  1. A city, county, or agency shall submit an application to the Cabinet for Economic Development for approval of a development area, which includes revenues from the Commonwealth, and the related project, the standards for which the Cabinet for Economic Development and the Tourism, Arts and Heritage Cabinet shall establish through their operating procedures or by the promulgation of administrative regulations in accordance with KRS Chapter 13A. The Cabinet for Economic Development shall determine whether the development area and related project described in the application constitutes a project of the type described in KRS Chapter 154 for which the economic development authority shall have the right to approve the development area and related project or KRS Chapter 148 for which the tourism development authority shall have the right to approve the development area and related project. The Cabinet for Economic Development, upon its determination, shall assign the application to the economic development authority or the tourism development authority, as appropriate, for further consideration and approval.
  2. A project otherwise satisfying the requirements of the project as defined in KRS 65.680 , in order to qualify the project and related development area, in addition shall satisfy all of the following requirements for a project:
    1. Represent new economic activity in the Commonwealth;
    2. Result in a minimum capital investment of ten million dollars ($10,000,000);
    3. Result in the creation of a minimum of twenty-five (25) new full-time jobs for Kentucky residents to be held by persons subject to the personal income tax of the Commonwealth within two (2) years of the date of the final resolution authorizing the development area and the project;
    4. Result in a net positive economic impact to the economy of the Commonwealth, taking into consideration any substantial adverse impact on existing Commonwealth businesses;
    5. Generate a minimum of twenty-five percent (25%) of the total revenues derived from the project attributable to sources outside of the Commonwealth during each year a grant contract is in effect;
    6. Result in a unique contribution to or preservation of the economic vitality and quality of life of a region of the Commonwealth; and
    7. Not be primarily devoted to the retail sale of goods.
  3. After assignment of the application for the project and related development area by the Cabinet for Economic Development:
    1. The economic development authority or the tourism development authority, as appropriate, shall engage the services of a qualified independent consultant to analyze data related to the project and the development area, who shall prepare a report for the economic development authority or the tourism development authority, as appropriate, with the following findings:
      1. The percentage of revenues derived from the development area which are generated from business not located in the Commonwealth;
      2. The estimated amount of increment the development area is expected to generate over a twenty (20) year period from the projected activation date;
      3. The estimated amount of ad valorem taxes, other than the school or fire district portion of ad valorem taxes, from real property, Kentucky individual income tax, Kentucky sales and use taxes, local insurance premium taxes, occupational license fees, or other such state taxes which would be displaced within the Commonwealth, to reflect economic activity which is being shifted over the twenty (20) year period;
      4. The estimated increment the development area is expected to generate over the twenty (20) year period, equal to the estimated amount set forth in paragraph (a)2. of this subsection minus the estimated amount set forth in paragraph (a)3. of this subsection; and
      5. The project or development area will not occur if not for the designation of the development area and granting of increments by the Commonwealth to the development area.
    2. The independent consultant shall consult with the economic development authority or the tourism development authority, as appropriate, the Office of State Budget Director and the Finance and Administration Cabinet in the development of the report. The Office of State Budget Director and the Finance and Administration Cabinet shall agree as to methodology to be used and assumptions to be made by the independent consultant in preparing its report. On the basis of the independent consultant’s report and prior to any approval of a project by the economic development authority or the tourism development authority, as appropriate, the Office of State Budget Director and the Finance and Administration Cabinet shall certify whether there is a projected net positive economic impact to the Commonwealth and the expected amount of incremental state revenues from the project to the economic development authority or tourism development authority, as appropriate. Approval shall not be granted if it is determined that there is no projected net positive economic impact to the Commonwealth.
    3. The primary project entity shall pay all costs associated with the independent consultant’s report.
  4. With respect to each city, county, or agency that applies for approval of a project and development area, the economic development authority or the tourism development authority, as appropriate, shall request materials and make all inquiries concerning the application the economic development authority or the tourism development authority, as appropriate, deems necessary. Upon review of the application and requested materials, and completion of inquiries, the economic development authority or the tourism development authority, as appropriate, may by resolution grant approval for:
    1. The development area and project for which an application has been submitted;
    2. The percentage of the Commonwealth’s portion of the increment that the Commonwealth agrees to have distributed to the agency each year during the term of the grant contract;
    3. The maximum amount of costs for the project for which the increment may be distributed to the agency; and
    4. The grant contract.
  5. Prior to any approval by the economic development authority or the tourism development authority, as appropriate, the economic development authority or the tourism development authority shall have received an ordinance adopted by the city or county creating the development area and approving the project and establishing the percentage of increment that the city and county are distributing each year to the agency to pay for the development area for which economic development authority or tourism development authority approval is sought. The economic development authority or the tourism development authority, as appropriate, shall not approve a percentage of the Commonwealth’s portion of the increment to be distributed to the agency each year with respect to a development area and project greater than the percentage approved by the city or county creating the development area.
  6. The amount of increment available for a development area shall be no more than eighty percent (80%) per year, but shall in no case exceed twenty-five percent (25%) of the project costs during the term of the grant agreement.
  7. The terms and conditions of each grant contract are subject to negotiations between the economic development authority or the tourism development authority, as appropriate, and the other parties to the grant contract. The grant contract shall include but not be limited to the following provisions: the activation date, the agreed taxes to be included in the calculation of the increment, the percentage increment to be contributed by the Commonwealth and other taxing districts, the maximum amount of project costs, a description of the development area and the project, the termination date, and the requirement that the agency annually certify to the economic development authority or tourism development authority, as appropriate, as to the use of the increment for payment of project costs in the development area.
  8. The agency responsible for the development area that enters into the grant contract shall, after each year the grant contract is in effect, certify to the economic development authority or the tourism development authority, as appropriate:
    1. The amount of the increment used during the previous calendar year for the project costs; and
    2. That more than twenty-five percent (25%) of the total revenues derived from the project during the previous calendar year were attributable to sources outside the Commonwealth.
    1. Any agency that enters into a grant contract for the release of any increments that may arise during the period of a grant contract shall, after each calendar year a grant contract is in effect, notify each taxing district obligated under the grant contract that an increment is due. In consultation with each taxing district, the agency shall determine the respective portion of the total increment due from each taxing district, and the determination of the agency shall be reviewed by an independent certified public accountant. The agency shall submit to the Department of Revenue for certification its determination with respect to the total increment due together with the review of the certified public accountant and detailed information concerning ad valorem taxes, Kentucky individual income tax, Kentucky sales and use taxes, local insurance premium taxes, occupational license fees, and other such state taxes as may be determined by the Department of Revenue, including withholding taxes of employees of each taxpayer located in the development area. (9) (a) Any agency that enters into a grant contract for the release of any increments that may arise during the period of a grant contract shall, after each calendar year a grant contract is in effect, notify each taxing district obligated under the grant contract that an increment is due. In consultation with each taxing district, the agency shall determine the respective portion of the total increment due from each taxing district, and the determination of the agency shall be reviewed by an independent certified public accountant. The agency shall submit to the Department of Revenue for certification its determination with respect to the total increment due together with the review of the certified public accountant and detailed information concerning ad valorem taxes, Kentucky individual income tax, Kentucky sales and use taxes, local insurance premium taxes, occupational license fees, and other such state taxes as may be determined by the Department of Revenue, including withholding taxes of employees of each taxpayer located in the development area.
      1. Upon notification to the agency of the total increment by the Department of Revenue and notice from the agency, each taxing district obligated under the grant contract, other than the Commonwealth, shall release to the agency the respective portion of the total increment due under the grant contract. The agency shall certify to the Department of Revenue on a calendar year basis the amount of the increments collected.
      2. Upon certification of the total increment due from the Commonwealth by the Department of Revenue, the department is authorized and directed to transfer the increment to a tax increment financing account established and administered by the Finance and Administration Cabinet for payment of the Commonwealth’s portion of the increment. Prior to disbursement by the Finance and Administration Cabinet of the funds from the tax increment financing account, the economic development authority or the tourism development authority, as appropriate, shall notify the Finance and Administration Cabinet that the agency is in compliance with the terms of the grant contract. Upon notification, the Finance and Administration Cabinet is authorized and directed to release to the agency the Commonwealth’s portion of the total increment due under the grant contract.
    2. The Department of Revenue shall report to the economic development authority or the tourism development authority, as appropriate, on a calendar year basis the amount of the total increment released to an agency.
  9. The Department of Revenue shall have the authority to establish operating procedures for the administration and determination of the Commonwealth’s increment.
  10. The Department of Revenue or agency shall have no obligation to refund or otherwise return any of the increment to the taxpayer from whom the increment arose or is attributable. Further, no additional increment resulting from audit, amended returns or other activity for any period shall be transferred to the trust account established under subsection (9)(a)2. of this section and administered by the Finance and Administration Cabinet after the initial release to the agency of the Commonwealth’s increment for that period.

History. Enact. Acts 2002, ch. 338, § 15, effective July 15, 2002; 2005, ch. 85, § 91, effective June 20, 2005; 2005, ch. 95, § 13, effective June 20, 2005; 2009, ch. 16, § 10, effective June 25, 2009.

65.698. Authority of KRS 65.680 to 65.699 supplemental to other legal authority.

The authority granted by KRS 65.680 to 65.699 is in addition to and not a limitation on any other authorizations granted by or pursuant to law for the same or similar purposes.

History. Enact. Acts 2000, ch. 358, § 10, effective July 14, 2000.

65.699. Short title for KRS 65.680 to 65.699.

KRS 65.680 to 65.699 may be cited as the Kentucky Increment Financing Act.

History. Enact. Acts 2000, ch. 358, § 11, effective July 14, 2000.

65.700. Definitions for KRS 65.700 and 65.703. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 2001, ch. 148, § 1, effective June 21, 2001) was repealed by Acts 2002, ch. 338, § 49, effective July 15, 2002. For present law, see KRS 65.680 .

65.703. Authorization for grant contracts with certain agencies for release of portion of tax increment — Procedures — Evaluation. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 2001, ch. 148, § 2, effective June 21, 2001) was repealed by Acts 2002, ch. 338, § 49, effective July 15, 2002.

Tax Increment Financing

65.7041. Findings of General Assembly relative to KRS 65.7041 to 65.7083.

  1. The General Assembly finds and declares that the establishment of development areas, local development areas, and projects which result in increased property values, increased employment opportunities, and increased economic activity in communities within the Commonwealth serves a public purpose.
  2. The General Assembly further finds and declares that the authority prescribed in KRS 65.7041 to 65.7083 , and the purposes to be accomplished thereunder, are proper.
  3. A city or county creating or expanding a development area or local development area, shall, to the greatest extent it determines to be reasonably feasible in carrying out the provisions of KRS 65.7041 to 65.7083 , afford maximum opportunity for the rehabilitation, development, renovation, or improvement of a development area or local development area by private enterprise.

History. Enact. Acts 2007, ch. 95, § 1, effective March 23, 2007.

65.7043. Purposes of KRS 65.7041 to 65.7083.

The purposes of KRS 65.7041 to 65.7083 are as follows:

  1. KRS 65.7047 provides authority for cities and counties to establish local development areas for the development of previously undeveloped land within their jurisdictional boundaries and to devote local resources to support the development of projects in those local development areas. Local development areas established under KRS 65.7047 and projects within local development areas shall not be eligible for participation by the Commonwealth; and
    1. KRS 65.7049 , 65.7051 , and 65.7053 provide a framework for cities and counties: (2) (a) KRS 65.7049 , 65.7051 , and 65.7053 provide a framework for cities and counties:
      1. To establish development areas for:
        1. The redevelopment of previously developed land within their jurisdictional boundaries; and
        2. The development of previously undeveloped land, if:
          1. The project proposed for the development area includes an arena as part of the proposed development;
          2. The project is a mixed-use development located in a university research park;
          3. The project is a mixed-use development located within three (3) miles of a military base that houses, deploys, or employs any combination of at least twenty-five thousand (25,000) military personnel, their families, military retirees, or civilian employees;
          4. The project is a mixed-use development which includes either or both significant public storm water and sanitary sewer facilities designed to comply with a community-wide court decree mandating corrective action by the local government or an agency thereof; or
          5. The project is a mixed-use development that includes a tract of previously undeveloped land that was owned by a liberal arts educational institution within four (4) years prior to the April 10, 2017, and the previously undeveloped land is bounded on one (1) side by a four (4) lane United States highway on April 10, 2017. No more than fifty percent (50%) of the previously undeveloped land shall be used for qualified mixed uses; and
      2. To devote local resources to providing redevelopment assistance and supporting projects in those development areas.
    2. Projects within development areas established pursuant to KRS 65.7049, 65.7051, and 65.7053 shall be eligible for participation by the Commonwealth if such projects meet the requirements for Commonwealth participation established by Subchapter 30 of KRS Chapter 154.

History. Enact. Acts 2007, ch. 95, § 2, effective March 23, 2007; 2008, ch. 178, § 1, effective July 15, 2008; 2009 (1st Ex. Sess.), ch. 1, § 56, effective June 26, 2009; 2011, ch. 62, § 1, effective June 8, 2011; 2013, ch. 99, § 1, effective June 25, 2013; 2017 ch. 174, § 1, effective April 10, 2017.

Legislative Research Commission Notes.

(4/10/2017). 2017 Ky. Acts ch. 174, sec. 5 provided that amendments made to subsection (2) of this statute in 2017 Ky. Acts ch. 174, sec. 1 shall apply to applications for which a Tax Incentive Agreement has not been approved prior to April 10, 2017 (the effective date of that section of that Act).

65.7044. Oversight and responsibility for Commonwealth’s participation in tax increment financing.

  1. Oversight and responsibility for the Commonwealth’s participation in tax increment financing shall be transferred from the Tax Increment Financing Commission to the Kentucky Economic Development Finance Authority, established by KRS 154.20-010 , on July 15, 2008.
  2. On and after July 15, 2008, the Tax Increment Financing Commission and the Division of Tax Increment Financing within the Office of the Commissioner in the Department of Revenue shall cease to exist.
  3. All documentation and records relating to state participation in all tax increment financing programs and all agreements authorized by all prior and existing statutes shall be transferred by the Tax Increment Financing Commission and the Division of Tax Increment Financing to the Kentucky Economic Development Finance Authority.
  4. The Division of Tax Increment Financing shall obtain authorization from all affected entities prior to the transfer of any confidential tax information to the Kentucky Economic Development Finance Authority.
  5. Members of the Tax Increment Financing Commission and staff of the Division of Tax Increment Financing shall cooperate fully with the Kentucky Economic Development Finance Authority in the transfer of all necessary records and information.
  6. Tax increment financing projects established under prior tax increment financing laws and agreements entered into under prior tax increment financing laws shall be administered and interpreted in accordance with the law in effect at the time the project was approved and the agreement entered into.

History. Enact. Acts 2008, ch. 178, § 12, effective July 15, 2008.

Legislative Research Commission Note.

(7/15/2008). The Reviser of Statutes has corrected a manifest clerical or typographical error in subsection (1) of this statute from the way it appeared in 2008 Ky. Acts ch. 178, sec. 12. In that Act, a reference to “KRS 154.20-10” should have read “KRS 154.20-010 ,” which established the Kentucky Economic Development Finance Authority. This change has been made under the authority of KRS 7.136(1)(h).

65.7045. Definitions for KRS 65.7041 to 65.7083.

As used in KRS 65.7041 to 65.7083 :

  1. “Activation date” means the date established any time within a two (2) year period after the commencement date. The activation date is the date on which the time period for the pledge of incremental revenues shall commence. The governing body may extend the two (2) year period to no more than four (4) years upon written application by the agency requesting the extension. To implement the activation date, the agency that is a party to the local participation agreement or the local development area agreement shall notify the governing body that created the development area or local development area;
  2. “Agency” means:
    1. An urban renewal and community development agency established under KRS Chapter 99;
    2. A development authority established under KRS Chapter 99;
    3. A nonprofit corporation;
    4. A housing authority established under KRS Chapter 80;
    5. An air board established under KRS 183.132 to 183.160 ;
    6. A local industrial development authority established under KRS 154.50-301 to 154.50-346 ;
    7. A riverport authority established under KRS 65.510 to 65.650 ; or
    8. A designated department, division, or office of a city or county;
  3. “Arena” means a facility which serves primarily as a venue for athletic events, live entertainment, and other performances, and which has a permanent seating capacity of at least five thousand (5,000);
  4. “Authority” means the Kentucky Economic Development Finance Authority established by KRS 154.20-010 ;
  5. “Brownfield site” means real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant;
  6. “Capital investment” means:
    1. Obligations incurred for labor and to contractors, subcontractors, builders, and materialmen in connection with the acquisition, construction, installation, equipping, and rehabilitation of a project;
    2. The cost of acquiring land or rights in land within the development area on the footprint of the project, and any cost incident thereto, including recording fees;
    3. The cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of acquisition, construction, installation, equipping, and rehabilitation of a project which is not paid by the contractor or contractors or otherwise provided;
    4. All costs of architectural and engineering services, including test borings, surveys, estimates, plans, specifications, preliminary investigations, supervision of construction, and the performance of all the duties required by or consequent upon the acquisition, construction, installation, equipping, and rehabilitation of a project;
    5. All costs that are required to be paid under the terms of any contract for the acquisition, construction, installation, equipping, and rehabilitation of a project; and
    6. All other costs of a nature comparable to those described in this subsection;
  7. “City” means any city, consolidated local government, or urban-county government;
  8. “Commencement date” means:
    1. The date on which a local development area agreement is executed; or
    2. The date on which a local participation agreement is executed;
  9. “Commonwealth” means the Commonwealth of Kentucky;
  10. “County” means any county, consolidated local government, charter county, unified local government, or urban-county government;
  11. “Debt charges” means the principal, including any mandatory sinking fund deposits, interest, and any redemption premium, payable on increment bonds as the payments come due and are payable and any charges related to the payment of the foregoing;
  12. “Development area” means an area established under KRS 65.7049 , 65.7051 , and 65.7053 ;
  13. “Economic development projects” means projects which are approved for tax credits under Subchapter 20, 22, 23, 24, 25, 26, 27, 28, 34, or 48 of KRS Chapter 154;
  14. “Establishment date” means the date on which a development area or a local development area is created. If the development area, local development area, development area plan, or local development area plan is modified or amended subsequent to the original establishment date, the modifications or amendments shall not extend the existence of the development area or local development area beyond what would be permitted under KRS 65.7041 to 65.7083 from the original establishment date;
  15. “Governing body” means the body possessing legislative authority in a city or county;
  16. “Increment bonds” means bonds and notes issued for the purpose of paying the costs of one (1) or more projects, or grant or loan programs as described in subsection (30)(c) of this section, in a development area or a local development area;
  17. “Incremental revenues” means the amount of revenues received by a taxing district, as determined by subtracting old revenues from new revenues in a calendar year with respect to a development area, a project within a development area, or a local development area;
  18. “Issuer” means a city, county, or agency issuing increment bonds;
  19. “Local development area” means a development area established under KRS 65.7047 ;
  20. “Local development area agreement” means an agreement entered into under KRS 65.7047 ;
  21. “Local participation agreement” means the agreement entered into under KRS 65.7063 ;
  22. “Local tax revenues” means:
    1. Revenues derived by a city or county from one (1) or more of the following sources:
      1. Real property ad valorem taxes;
      2. Occupational license taxes, excluding occupational license taxes that have already been pledged to support an economic development project within the development area; and
      3. The occupational license fee permitted by KRS 65.7056 ; and
    2. Revenues derived by any taxing district other than school districts or fire districts from real property ad valorem taxes;
  23. “Low-income household” means a household in which gross income is no more than two hundred percent (200%) of the poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services under the authority of 42 U.S.C. sec. 9902(2) ;
  24. “Mixed-use” has the same meaning as in KRS 154.30-060 ;
  25. “New revenues” means the amount of local tax revenues received by a taxing district with respect to a development area or a local development area in any calendar year beginning with the year in which the activation date occurred;
  26. “Old revenues” means the amount of local tax revenues received by a taxing district with respect to a development area or a local development area during the last calendar year prior to the commencement date. If the governing body determines that the amount of local tax revenues received during the last calendar year prior to the commencement date does not represent a true and accurate depiction of revenues, the governing body may consider revenues for a period of no longer than three (3) calendar years prior to the commencement date, so as to determine a fair representation of local tax revenues;
  27. “Outstanding” means increment bonds that have been issued, delivered, and paid for by the purchaser, except any of the following:
    1. Increment bonds canceled upon surrender, exchange, or transfer, or upon payment or redemption;
    2. Increment bonds in replacement of which or in exchange for which other increment bonds have been issued; or
    3. Increment bonds for the payment, redemption, or purchase for cancellation prior to maturity, of which sufficient moneys or investments, in accordance with the ordinance or other proceedings or any applicable law, by mandatory sinking fund redemption requirements, or otherwise, have been deposited, and credited in a sinking fund or with a trustee or paying or escrow agent, whether at or prior to their maturity or redemption, and, in the case of increment bonds to be redeemed prior to their stated maturity, notice of redemption has been given or satisfactory arrangements have been made for giving notice of that redemption, or waiver of that notice by or on behalf of the affected bond holders has been filed with the issuer or its agent;
  28. “Planning unit” means a planning commission established pursuant to KRS Chapter 100;
  29. “Project” means any property, asset, or improvement located in a development area or a local development area and certified by the governing body as:
    1. Being for a public purpose; and
    2. Being for the development of facilities for residential, commercial, industrial, public, recreational, or other uses, or for open space, including the development, rehabilitation, renovation, installation, improvement, enlargement, or extension of real estate and buildings; and
    3. Contributing to economic development or tourism;
  30. “Redevelopment assistance,” as utilized within a development area, includes the following:
    1. Technical assistance programs to provide information and guidance to existing, new, and potential businesses and residences;
    2. Programs to market and promote the development area and attract new businesses and residents;
    3. Grant and loan programs to encourage the construction or rehabilitation of residential, commercial, and industrial buildings; improve the appearance of building facades and signage; and stimulate business start-ups and expansions;
    4. Programs to obtain a reduced interest rate, down payment, or other improved terms for loans made by private, for-profit, or nonprofit lenders to encourage the construction or rehabilitation of residential, commercial, and industrial buildings; improve the appearance of building facades and signage; and stimulate business start-ups and expansions;
    5. Local capital improvements, including but not limited to the installation, construction, or reconstruction of streets, lighting, pedestrian amenities, public utilities, public transportation facilities, public parking, parks, playgrounds, recreational facilities, and public buildings and facilities;
    6. Improved or increased provision of public services, including but not limited to police or security patrols, solid waste management, and street cleaning;
    7. Provision of technical, financial, or other assistance in connection with:
      1. Applications to the Energy and Environment Cabinet for a brownfields assessment or a No Further Remediation Letter issued pursuant to KRS 224.1-450 ; or
      2. Site remediation by means of the Voluntary Environmental Remediation Program to remove environmental contamination in the development area, or lots or parcels within it, pursuant to KRS 224.1-510 to 224.1-532 ; and
    8. Direct development by a city, county, or agency of real property acquired by the city, county, or agency. Direct development may include one (1) or more of the following:
      1. Assembly and replatting of lots or parcels;
      2. Rehabilitation of existing structures and improvements;
      3. Demolition of structures and improvements and construction of new structures and improvements;
      4. Programs of temporary or permanent relocation assistance for businesses and residents;
      5. The sale, lease, donation, or other permanent or temporary transfer of real property to public agencies, persons, and entities both for profit and nonprofit; and
      6. The acquisition and construction of projects;
  31. “Service payment agreement” means an agreement between a city, county, or issuer of increment bonds or other obligations and any person, whereby the person agrees to guarantee the receipt of incremental revenues, or the payment of debt charges, or any portion thereof, on increment bonds or other obligations issued by the city, county, or issuer;
  32. “Special fund” means a special fund created under KRS 65.7061 in which all incremental revenues shall be deposited;
  33. “Taxing district” means any city, county, or special taxing district other than school districts and fire districts;
  34. “Tax incentive agreement” means an agreement entered into under KRS 154.30-070 ;
  35. “Termination date” means:
    1. For a development area, a date established by the ordinance creating the development area that is no more than twenty (20) years from the establishment date. If a tax incentive agreement for a project within a development area or a local participation agreement relating to the development area has a termination date that is later than the termination date established in the ordinance, the termination date for the development area shall be extended to the termination date of the tax incentive agreement, or local participation agreement. However, the termination date for the development area shall in no event be more than forty (40) years from the establishment date;
    2. For a local development area, a date established by the ordinance creating the local development area that is no more than twenty (20) years from the establishment date, provided that if a local development area agreement relating to the local development area has a termination date that is later than the termination date established in the ordinance, the termination date for the local development area shall be extended to the termination date of the local development area agreement;
    3. For a local participation agreement, a date that is no more than twenty (20) years from the activation date. However, the termination date for a local participation agreement shall in no event be more than forty (40) years from the establishment date of the development area to which the local participation agreement relates; and
    4. For a local development area agreement, a date that is no more than twenty (20) years from the activation date. However, the termination date for a local development area agreement shall in no event be more than forty (40) years from the establishment date of the local development area to which the development area agreement relates; and
  36. “University research park” means land owned by a public university that has been designated by the public university as being primarily for the development of projects and facilities to support high-tech, pharmaceutical, laboratory, and other research-based businesses, including projects and facilities to support and complement the development of high-tech, pharmaceutical, laboratory, and other research-based businesses.

History. Enact. Acts 2007, ch. 95, § 3, effective March 23, 2007; 2008, ch. 178, § 2, effective July 15, 2008; 2009 (1st. Ex. Sess.), ch. 1, § 57, effective June 26, 2009; 2010, ch. 24, § 58, effective March 25, 2010; 2011, ch. 62, § 2, effective June 8, 2011.

65.7047. Establishment of local development areas — Conditions for establishment — Steps for establishment or modification — Funding — Execution of agreement — Pledge of revenues.

  1. Any city or county may establish a local development area pursuant to this section, subject to the following conditions:
    1. A local development area shall be on previously undeveloped land;
    2. No more than one thousand (1,000) acres shall be approved for a local development area in any twelve (12) month period in any county;
    3. The establishment or expansion of the local development area shall not cause the assessed value of taxable real property within all local development areas and development areas of the city or county establishing the local development area to exceed twenty percent (20%) of the assessed value of all taxable real property within its jurisdiction. For the purpose of determining whether the twenty percent (20%) threshold has been met, the assessed value of taxable real property within all of the local development areas and development areas shall be valued as of the establishment date; and
    4. Unless the ordinance establishing a local development area requires an earlier termination date, a local development area shall cease to exist on the termination date.
  2. A city or county shall take the following steps to establish or modify a local development area:
    1. The city or county shall engage the services of a qualified independent outside consultant or financial adviser to analyze the data related to the project and the development area and prepare a report. The report shall include the following:
      1. The estimated approved public infrastructure costs for the project and, if relevant, project costs, financing costs, and costs associated with land preparation, demolition, and clearance;
      2. The feasibility of the project, taking into account the scope and location of the project;
      3. The estimated amount of local tax revenues, as applicable, that would be generated by the project over the period, which may be up to forty (40) years, as applicable, from the development area’s established date;
      4. The estimated amount of local tax revenues, as applicable, that would be displaced within the city or county, for the purpose of quantifying economic activity which is being shifted over the same period as that set forth in subparagraph 3. of this paragraph. The projections for displaced activity shall include economic activity that is lost to the local jurisdiction as a result of the project, as well as economic activity that is diverted to the project that formerly took place at existing establishments within the local jurisdiction prior to the commencement date of the project;
      5. The estimated amount of old revenues that would have been generated in the development area of the project in the absence of the project, computed over the same time period as set forth in subparagraph 3. of this paragraph;
      6. In the process of estimating the revenues and impacts prescribed in subparagraphs 3. and 4. of this paragraph, the independent outside consultant shall not consider any of the following:
        1. Revenues or economic impacts associated with any projects within the development area where the new project will be located; or
        2. Revenues or economic impacts associated with economic development projects and approved Kentucky Tourism Development Act projects under KRS Chapter 148;
      7. The relationship of the estimated incremental revenues to the financing needs, including any increment bonds, of the project;
      8. When estimating the fiscal impact of the project, the consultant shall evaluate the amount of revenue estimated in subparagraph 3. of this paragraph and shall deduct the amounts estimated in subparagraphs 4. and 5. of this paragraph. The resulting difference shall be compared to the estimated incremental revenues to determine the presence or absence of a positive fiscal impact; and
      9. A determination that the project will not occur if not for the designation of the development area, the granting of incremental revenues by the taxing district or districts, and the granting of the local tax incremental revenues.
    2. The city or county shall hold a public hearing to solicit input from the public regarding the local development area. The city or county shall advertise the hearing by causing to be published, in accordance with KRS 424.130 , notice of the time, place, and purpose of the hearing and a general description of the boundaries of the proposed local development area. The notice shall include a summary of the projects proposed for the local development area;
    3. After the public hearing, the city or county shall adopt an ordinance which shall include the following provisions:
      1. A description of the boundaries of the local development area;
      2. The establishment date and the termination date;
      3. A name for the local development area for identification purposes;
      4. Approval of any agreements relating to the local development area;
      5. A provision establishing a special fund for the local development area or any project within the local development area;
      6. A requirement that any entity other than the governing body that receives financial assistance under the local development area ordinance, whether in the form of a grant, loan, or loan guarantee, shall make periodic accounting to the governing body;
      7. A provision for periodic analysis and review by the governing body of the development activity in the local development area;
      8. Designation of the agency or agencies responsible for oversight, administration, and implementation of the local development ordinance;
      9. The estimated net positive fiscal impact as calculated in paragraph (a)8. of this subsection in the required independent consultant report; and
      10. Any other provisions, findings, limitations, rules, or procedures regarding the proposed local development area or a project within the local development area and its establishment or maintenance deemed necessary by the city or county; and
    4. If incremental revenues or other resources are to be pledged from taxing districts other than the city or county establishing the local development area, a local development area agreement shall be executed in accordance with the provisions of subsection (4) of this section.
  3. Funding for projects in a local development area shall be provided in accordance with KRS 65.7057 .
  4. A local development area agreement shall be executed among the agencies and taxing districts involved in administering, providing financing, or pledging incremental revenues within the local development area. The local development area agreement shall be adopted by a city or county by ordinance and by any other taxing district or agency by resolution, and shall include but not be limited to the following provisions:
    1. Identification of the parties to the local development area agreement and the duties and responsibilities of each entity under the agreement;
    2. Specific identification of the tax increments released or pledged by type of tax by each taxing district;
    3. The anticipated benefit to be received by each taxing district for the release or pledge, including:
      1. A detailed summary of old revenues collected and projected new revenues for each taxing district on an annual basis for the term of the local development area agreement; and
      2. The maximum amount of incremental revenue to be paid by each taxing district and the maximum number of years the payment will be effective;
    4. A detailed description of the local development area;
    5. A description of each proposed project, including an estimate of the costs of construction, acquisition, and development;
    6. A requirement that pledged incremental revenues will be deposited in a special fund pursuant to KRS 65.7061 , including the timing and procedure for depositing incremental revenues and other pledged amounts into the special fund;
    7. Terms of default and remedies, provided that no remedy shall permit the withholding by any party to the local development area agreement of any incremental revenues pledged to the special fund if increment bonds are outstanding that are secured by a pledge of those incremental revenues;
    8. The commencement date, activation date, and termination date; and
    9. Any other provisions not inconsistent with KRS 65.7041 to 65.7083 deemed necessary or appropriate by the parties to the agreement.
  5. Any pledge of incremental revenues in a local development area agreement shall be superior to any other pledge of revenues for any other purpose and shall, from the activation date to the termination date set forth in the local area development agreement, supersede any statute, ordinance, or resolution regarding the application or use of incremental revenues. No ordinance in conflict with a local development area agreement shall be adopted while any increment bonds secured by that pledge remain outstanding. Ordinances or resolutions pledging incremental revenues on a subordinate basis to any existing pledges may be adopted.

HISTORY: Enact. Acts 2007, ch. 95, § 4, effective March 23, 2007; 2008, ch. 178, § 3, effective July 15, 2008; 2021 ch. 185, § 100, effective June 29, 2021.

65.7049. Establishment of development area for investment, reinvestment, development, use, and reuse pursuant to this section and KRS 65.7051 and 65.7053 — Conditions for establishment — Findings required.

Any city or county may establish a development area pursuant to this section, KRS 65.7051 , and 65.7053 to encourage investment and reinvestment in and development, use, and reuse of areas of the city or county under the following conditions:

  1. The area shall be contiguous and shall be no more than three (3) square miles;
  2. The establishment or expansion of the development area shall not cause the assessed value of taxable real property within all development areas and local development areas of the city or county establishing the development area to exceed twenty percent (20%) of the assessed value of all taxable real property within its jurisdiction. For the purpose of determining whether the twenty percent (20%) threshold has been met, the assessed value of taxable real property within all of the development areas and local development areas shall be valued as of the establishment date;
  3. The governing body of the city or county shall determine that the development area either:
    1. Has two (2) or more of the following conditions:
      1. Substantial loss of residential, commercial, or industrial activity or use;
      2. Forty percent (40%) or more of the households are low-income households;
      3. More than fifty percent (50%) of residential, commercial, or industrial structures are deteriorating or deteriorated;
      4. Substantial abandonment of residential, commercial, or industrial structures;
      5. Substantial presence of environmentally contaminated land;
      6. Inadequate public improvements or substantial deterioration in public infrastructure; or
      7. Any combination of factors that substantially impairs or arrests the growth and economic development of the city or county; impedes the provision of adequate housing; impedes the development of commercial or industrial property; or adversely affects public health, safety, or general welfare due to the development area’s present condition and use; or
    2. The project meets the requirements of KRS 65.7043(2)(a)1.b.; and
  4. The governing body of the city or county shall find that all of the following are true for projects meeting the requirements of paragraph (a) of subsection (3) of this section:
    1. That the development area is not reasonably expected to be developed without public assistance. This finding shall be supported by specific reasons and supporting facts, including a clear demonstration of the financial need for public assistance; and
    2. That the public benefits of the development area justify the public costs proposed. This finding shall be supported by specific data and figures demonstrating that the projected benefits outweigh the anticipated costs and shall take into account the positive and negative effects of investment in the development on existing businesses and residents within the community as a whole; and
      1. That the area immediately surrounding the development area has not been subject to growth and development through investment by private enterprise; or (c) 1. That the area immediately surrounding the development area has not been subject to growth and development through investment by private enterprise; or
      2. If the area immediately surrounding the development area has been subject to growth and development through investment by private enterprise, the identification of special circumstances within the development area that would prevent its development without public assistance.

History. Enact. Acts 2007, ch. 95, § 5, effective March 23, 2007; 2009 (1st Ex. Sess.), ch. 1, § 58, effective June 26, 2009; 2011, ch. 62, § 3, effective June 8, 2011; 2013, ch. 99, § 2, effective June 25, 2013; 2017 ch. 174, § 3, effective April 10, 2017; 2018 ch. 199, § 3, effective July 14, 2018.

Legislative Research Commission Notes.

(4/10/2017). 2017 Ky. Acts ch. 174, sec. 5 provided that amendments made to subsection (3)(b) of this statute in 2017 Ky. Acts ch. 174, sec. 3 shall apply to applications for which a Tax Incentive Agreement has not been approved prior to April 10, 2017 (the effective date of that section of that Act).

65.7051. Establishment of development plan for a development area — Public hearing.

  1. Any city or county seeking to establish a development area shall adopt a development plan. The development plan may be developed by a city, a county, or a city and county jointly, or may be proposed by an agency or by a private entity. The plan shall include the following:
    1. Assurances that the proposed development area meets the requirements of KRS 65.7049(1) and (2), identification of the conditions in the proposed development area that meet the criteria set forth in KRS 65.7049(3), and, if applicable, confirmation that the requirements of KRS 65.7049(4) have been met;
    2. A detailed description of the existing uses and conditions of real property in the development area;
    3. A map showing the boundaries of the proposed development area, a legal description of the development area, and geographic reference points;
    4. A map showing proposed improvements and uses therein, including the identification of any proposed projects, along with a narrative description of the proposed improvements, projects, and uses within the development area;
    5. A description of the redevelopment assistance proposed to be employed in the development area, including the manner and location of such assistance;
    6. A detailed financial plan containing projections of the cost of the proposed redevelopment assistance to be provided, proposed projects to be funded, proposed sources of funding for these costs, projected incremental revenues, and the projected time frame during which financial obligations will be incurred;
    7. Proposed changes of any zoning ordinance, comprehensive plan, master plan, map, building code, or ordinance anticipated to be required to implement the development plan; and
    8. If the city or county is a member of a planning unit, certification of review by the planning commission for compliance with the comprehensive plan of the planning unit pursuant to KRS Chapter 100 after any necessary changes identified in paragraph (g) of this subsection are made.
  2. Prior to adoption of a development plan, the city or county shall hold a public hearing to solicit input from the public regarding the plan. The city or county shall advertise the hearing by causing to be published, in accordance with KRS 424.130 , notice of the time, place, and purpose of the hearing and a general description of the boundaries of the proposed development area. The notice shall include a summary of the redevelopment assistance proposed to be employed, identification of projects proposed for the development area, and a statement that a copy of the development plan is available for inspection at the business office of the city or county.
  3. Prior to publication of a hearing notice pursuant to subsection (2) of this section, a copy of the development plan shall be filed with the city clerk of each city having jurisdiction within the proposed development area, and with the county fiscal court.
  4. A city or county having jurisdiction within the proposed development area not initially participating in a proposed development plan shall have the opportunity to determine whether it will participate in the plan. The city or county shall determine and notify the entity proposing the development plan in writing within thirty (30) days after the public hearing whether it will participate in the plan.
  5. At the end of the time period established in subsection (4) of this section, the city or county may adopt an ordinance establishing a development area in accordance with KRS 65.7053 .

History. Enact. Acts 2007, ch. 95, § 6, effective March 23, 2007; 2008, ch. 178, § 4, effective July 15, 2008; 2011, ch. 62, § 5, effective June 8, 2011.

65.7053. Contents of ordinance establishing a development area — Agency to oversee and administer implementation of ordinance — Termination date.

  1. An ordinance establishing a development area shall include the following provisions:
    1. A legal description of the boundaries of the development area, and geographic reference points;
    2. The establishment date;
    3. The termination date, including a provision that allows the termination date to be extended as provided in KRS 65.7045(35);
    4. A name for the development area for identification purposes;
    5. A finding that the conditions in the development area meet the criteria described in KRS 65.7049 ;
    6. A finding supporting the need to employ redevelopment assistance in the development area;
    7. A provision adopting the development plan required by KRS 65.7051(1);
    8. Approval of any agreements relating to the development area, including any local participation agreements;
    9. A provision establishing a special fund for the development area or any project within the development area;
    10. A requirement that any entity other than the governing body that receives financial assistance under the development area ordinance, whether in the form of a grant, loan, or loan guarantee, shall make periodic accounting to the governing body;
    11. A provision for periodic analysis and review by the governing body of the development activity in the development area, a review of the progress in meeting the stated goals of the development area, and a requirement that the review and analysis be forwarded to the authority if the development activity includes projects subject to a tax incentive agreement;
    12. Designation of the agency or agencies responsible for oversight, administration, and implementation of the development ordinance; and
    13. Any other provisions, findings, limitations, rules, or procedures regarding the proposed development area or a project within the development area and its establishment or maintenance deemed necessary by the city or county.
  2. An ordinance establishing a development area may designate an existing agency to oversee and administer implementation of a development area ordinance or a portion thereof.
  3. Unless the ordinance establishing a development area requires an earlier date, a development area shall cease to exist on the termination date.

History. Enact. Acts 2007, ch. 95, § 7, effective March 23, 2007; 2008, ch. 178, § 5, effective July 15, 2008; 2009 (1st. Ex. Sess.), ch. 1, § 59, effective June 26, 2009; 2011, ch. 62, § 6, effective June 8, 2011.

65.7055. Amendment, change, or revision to development plan or development area — Adoption — Hearing and notice — Ordinance.

Any amendment, change, or revision to a development plan adopted as part of a development area established pursuant to KRS 65.7049 , 65.7051 , and 65.7053 , including the addition of a project, use of new or different redevelopment assistance within the development area, or amendment of the development area boundaries shall be made as follows, provided that any amendment adopted shall not extend the existence of development area beyond the termination date:

  1. An amendment to the development plan shall be adopted by the city or county. The proposed development plan amendment shall include the following:
    1. Identification of the development area to which the amendment applies;
    2. A copy of the development plan as revised by the amendment;
    3. A narrative description of the proposed changes to the original development area plan and how those changes will impact the original development plan;
    4. If the amendment changes the boundaries, or in any way amends maps filed with the original development plan, a revised map, a revised legal description of the development area, and revised geographic reference points, and identification of new improvements, or projects proposed in the amendment;
    5. A description of the redevelopment assistance proposed to be employed, including the manner and location of such assistance relating to the proposed amendment;
    6. A financial plan relating to the proposed amendment, including the proposed cost of providing any redevelopment assistance and proposed projects to be funded, the sources of funding to meet those costs, projected incremental revenues, and the projected time period during which financial obligations will be incurred;
    7. Proposed changes of any zoning ordinance, comprehensive plan, master plan, map, building code, or ordinance required to implement the proposed amendment; and
    8. If the city or county is a member of a planning unit, certification of review by the planning commission for compliance with the comprehensive plan of the planning unit pursuant to KRS Chapter 100 after any necessary changes identified in paragraph (g) of this subsection are made.
  2. Prior to the adoption of an amendment to a development plan, the city or county shall comply with the hearing and notice provisions set forth in KRS 65.7051(2) and (3). The notice provided in relation to an amendment to the development plan shall include a summary of how the amendment changes the development plan and shall identify new redevelopment assistance and projects proposed by the amendment.
  3. The city or county shall adopt any amendment to the development plan and any amendment to the development area by ordinance. The ordinance shall include the following provisions:
    1. A provision adopting the amendment to the development plan required by subsection (1) of this section;
    2. Approval of any local participation agreements or other agreements relating to the amendment;
    3. The identification of any new or different state or local tax revenues pledged by any taxing district to support the provision of redevelopment assistance or projects identified in the amendment;
    4. A finding that the amendment does not increase the aggregate value of taxable real property included in all the redevelopment areas and the local development areas within the jurisdiction of the city or county to more than twenty percent (20%) of the total value of taxable real property within its jurisdiction. For the purpose of determining whether the twenty percent (20%) threshold has been met, the assessed value of taxable real property within all of the local development areas and development areas shall be valued as of the establishment date; and
    5. Any other provisions, findings, limitations, rules, or procedures regarding the amendment deemed necessary by the city or county.

History. Enact. Acts 2007, ch. 95, § 8, effective March 23, 2007; 2008, ch. 178, § 6, effective July 15, 2008.

65.7056. Occupational license fee — Assessment — Credit against other license fee — Collection and remittance — Job development assessment fee — Fee maximums.

  1. Any city, county, or combination of cities and counties establishing a development area or local development area may, as a condition of employment, impose an occupational license fee against each person employed in the development area or local development area through the adoption of an ordinance imposing such fee. The imposition of the fee shall be subject to the following:
    1. The occupational license fee shall be imposed only against persons whose jobs are newly created as a result of a project within the development area or local development area. A job is not newly created if it occurs due to the relocation of a job from another location within the Commonwealth;
    2. The person against whom the assessment is imposed shall be subject to the state tax imposed by KRS 141.020 ;
    3. The assessment or any combination of assessments imposed by a city, a county, or a combination of cities and counties within the development area or local development area shall not exceed two percent (2%) of gross wages of the person; and
    4. The imposition of a fee shall be reported to the Kentucky Economic Development Finance Authority established by KRS 154.20-010 .
    1. Each person against whom an assessment is imposed shall be entitled to a credit against any jurisdictionwide local occupational license fee levied by the city, county, or combination of cities and counties that established the development area or local development area if the jurisdictionwide levy has not previously been made available as a credit against assessments imposed under Subchapter 23, 24, 25, 26, or 27 of KRS Chapter 154. (2) (a) Each person against whom an assessment is imposed shall be entitled to a credit against any jurisdictionwide local occupational license fee levied by the city, county, or combination of cities and counties that established the development area or local development area if the jurisdictionwide levy has not previously been made available as a credit against assessments imposed under Subchapter 23, 24, 25, 26, or 27 of KRS Chapter 154.
    2. The amount of the credit shall not exceed the amount of the jurisdictionwide occupational license fee paid to that city, county, or combination of cities and counties by the person subject to the assessment.
    3. If the city, county, or combination of cities and counties imposing the occupational license fee within the development area or local development area does not levy a jurisdictionwide occupational license fee, the employee shall not be entitled to a credit against any other city’s or county’s occupational license fee or any income tax levied by the Commonwealth.
  2. Each employer in the development area or local development area shall, for each employee subject to an occupational license fee levied pursuant to this section:
    1. Collect the occupational license fee by deducting the occupational license fee from each paycheck of its employees;
    2. Promptly remit the occupational license fee to the official charged with collecting revenues in the development area or local development area;
    3. Make its payroll books and records available to the official charged with collecting revenues in the development area or local development area at a reasonable time as specified by the city, county, or cities and counties establishing the development area or local development area; and
    4. File with the official charged with collecting revenues in the development area or local development area any documentation with regard to the occupational license fee as required by the city, county, or cities and counties establishing the development area or local development area.
  3. Any assessment of a person under this section shall permanently lapse on the earlier of:
    1. The termination date;
    2. The date on which any bonds issued in connection with the project are retired; or
    3. The date on which any loans or other financing incurred in connection with the establishment of the development area or local development area mature or are paid in full.
  4. If a company, against whose employees an assessment is levied under this section, enters into an agreement with the economic development authority under Subchapter 23, 24, 25, 26, or 27 of KRS Chapter 154 allowing the company to impose a job development assessment fee as part of that agreement, the total assessment levied against the employee for state inducements and the development area or local development area shall not exceed six percent (6%), subject to subsection (6) of this section.
  5. If an eligible company under Subchapter 23, 24, 25, 26, or 27 of KRS Chapter 154 locates or expands within a development area or local development area, the assessment imposed under this section shall not exceed the lesser of two percent (2%) or the difference between two percent (2%) and the local occupational license fee used as a credit against the assessments granted under Subchapter 23, 24, 25, 26, or 27 of KRS Chapter 154.

History. Enact. Acts 2008, ch. 178, § 8, effective July 15, 2008.

65.7057. Permitted sources for local funding for redevelopment assistance or projects — Special assessments — Local participation agreement required.

  1. To provide funding for redevelopment assistance or projects in a development area or projects in a local development area:
    1. Any taxing authority may, in addition to any other pledge permitted by law to secure its obligations, pledge up to one hundred percent (100%) of the incremental local tax revenues generated in the development area or local development area or from a project within the development area or local development area for up to thirty (30) years from the activation date;
    2. The amount of incremental revenues shall be determined for each type of tax separately; and
    3. Local tax revenues from a development area that have not been pledged to support redevelopment assistance or projects within the development area, or from a local development area that have not been pledged to support projects within the local development area, may be used to support other economic development projects, provided that local tax revenues shall not be pledged more than once. Thus, local tax revenues pledged to support increment bonds issued for the development area or local development area shall not also be pledged to support a specific project within the development area or local development area, and those revenues shall not be pledged to support any other program, development, or undertaking.
  2. Any city may pledge revenues collected under a special assessment imposed under KRS 91A.200 to 91A.290 to support projects or the provision of redevelopment assistance within a development area, or to support projects within a local development area, and may pledge revenues collected from the assessment to support increment bonds.
  3. Any county may levy a special assessment under the terms and conditions established for cities under KRS 91A.200 to 91A.290 to support projects or the provision of redevelopment assistance within a development area, or to support projects within a local development area, and may pledge revenues collected from the assessment to support increment bonds.
  4. Any city, county, or combination of cities and counties establishing a development area or a local development area may pledge revenues collected pursuant to the occupational license fee permitted by KRS 65.7056 .
  5. Any pledge of incremental revenues or other revenues related to a development area by a taxing district shall be accomplished through the execution of a local participation agreement in accordance with KRS 65.7063 .
  6. Any pledge of incremental revenues or other revenues related to a local development area by a taxing district shall be accomplished through the execution of a local development area agreement in accordance with KRS 65.7047 .

History. Enact. Acts 2007, ch. 95, § 9, effective March 23, 2007; 2008, ch. 178, § 7, effective July 15, 2008.

65.7059. Issuance of increment bonds by local governments.

Any city, county, or agency with bonding authority may issue increment bonds and may pledge incremental revenues to the payment of the increment bonds.

  1. Increment bonds shall be issued, administered, and regulated by ordinance adopted by the governing body which shall:
    1. Declare the necessity of the incremental bond issue;
    2. State the principal amount or maximum principal amount of the increment bonds to be issued;
    3. State the purpose of the increment bond issue;
    4. State or provide for the date of, and the dates and amounts or maximum amount of, maturities or principal payments on the increment bonds;
    5. State any provisions for a special fund, mandatory sinking fund, mandatory sinking fund redemption, or for redemption prior to maturity;
    6. Provide for the rate or rates of interest, or maximum rate or rates of interest, or the method for establishing the rate or rates of interest to be paid on the increment bonds;
    7. State any provision for a designated officer of the issuer to determine any of the specific terms required to be stated or provided for in this subsection, subject to any limitations stated in the proceedings;
    8. If the increment bonds are payable solely from incremental revenues, include a determination that the incremental revenues are adequate to make the debt charges so long as the increment bonds are outstanding; and
    9. Include any other provisions deemed appropriate by the governing body.
  2. Increment bonds issued pursuant to this section shall not mature on a date beyond the termination date of the development area or local development area.
  3. Increment bonds may also be issued to fund or refund all or any portion of outstanding increment bonds. Any increment bonds issued under this section shall mature as determined by the governing body consistent with the termination date.
  4. The provisions of KRS 66.021 , 66.031 , 66.041 , 66.045 , 66.071 , 66.091 , 66.121 , 66.131 , 66.141 , 66.151 , 66.171 , 66.181 , and 66.191 shall apply to the issuance of increment bonds insofar as they do not conflict with the provisions of KRS 65.7041 to 65.7083 . If they do conflict, the provisions of KRS 65.7041 to 65.7083 shall apply.

History. Enact. Acts 2007, ch. 95, § 10, effective March 23, 2007.

65.7061. Special fund to be pledged for retirement of increment bonds — Requirements governing disbursal of funds.

During any time when incremental revenues have been pledged pursuant to a local participation agreement or local development area agreement, or that increment bonds are outstanding, the city, county, or issuer, as the case may be, shall maintain a special fund, which shall be pledged for the retirement of increment bonds, if such bonds are outstanding, and the payment of costs related to a project in a development area or local development area, or providing redevelopment assistance in a development area.

  1. Officials charged with collecting revenues for any taxing district that has pledged incremental revenues under a local participation agreement or a local development area agreement shall, for each year a local participation agreement or local development area agreement is in effect or any increment bonds are outstanding with respect to a development area or local development area, submit those incremental revenues for deposit in the special fund. The amount of incremental revenues shall be determined under KRS 65.7083 .
  2. Funds deposited in a special fund shall be disbursed at the times and in the amounts required to pay the costs of any debt charges on incremental bonds, approved costs, and redevelopment assistance. However, there shall be no disbursements for other redevelopment assistance or approved costs in a development area or local development area, if the funds are required to pay debt charges on increment bonds.
  3. Amounts in a special fund which exceed the amount required to pay debt charges and, in a development area, and costs of redevelopment assistance in any fiscal year shall be used to provide for the retirement or defeasance of all or a portion of the remaining debt charges secured by the incremental revenues. Amounts beyond this may be used to pay the costs of additional projects or redevelopment assistance.

History. Enact. Acts 2007, ch. 95, § 11, effective March 23, 2007; 2008, ch. 178, § 9, effective July 15, 2008.

65.7063. Requirements for local participation agreements — Pledge of incremental revenues superior to other pledges of revenues.

  1. A local participation agreement shall be executed among the agencies and taxing districts involved in administering or providing financing or pledging incremental revenues to support the implementation of a development plan in a development area. The local participation agreement shall be adopted by a city or county by ordinance and by any other taxing authority or agency by resolution, and shall include but not be limited to the following provisions:
    1. Identification of the parties to the local participation agreement and the duties and responsibilities of each entity under the agreement;
    2. Specific identification of the incremental revenues released or pledged, or wage assessments pledged by type of tax by each taxing district;
    3. The anticipated benefit to be received by each taxing district for the release or pledge, including:
      1. A detailed summary of old revenues collected and projected new revenues for each taxing district on an annual basis for the term of the local participation agreement; and
      2. The maximum amount of incremental revenue to be paid by each taxing district and the maximum number of years the payment will be effective;
    4. A detailed description of the development area, including a legal description of the parcels included in the development area;
    5. A description of each proposed project that is the subject of a local participation agreement, including an estimate of the costs of construction, acquisition, and development;
    6. A requirement that pledged incremental revenues will be deposited in a special fund established pursuant to KRS 65.7061 , including the timing and procedure for depositing incremental revenues and other pledged amounts into the special fund;
    7. Terms of default and remedies, provided that no remedy shall permit the withholding by any party to the local participation agreement of any incremental revenues pledged to the special fund if increment bonds are outstanding that are secured by a pledge of those incremental revenues;
    8. The commencement date, activation date, and termination date; and
    9. Any other provisions not inconsistent with KRS 65.7041 to 65.7083 deemed necessary or appropriate by the parties to the agreement.
  2. Any pledge of incremental revenues in a local participation agreement shall be superior to any other pledge of revenues for any other purpose and shall, from the activation date to the termination date set forth in the local participation agreement, supersede any statute, ordinance, or resolution regarding the application or use of incremental revenues. An ordinance in conflict with a local participation agreement shall not be adopted while any increment bonds secured by that pledge remain outstanding. Ordinances or resolutions pledging incremental revenues on a subordinate basis to any existing pledges may be adopted.

History. Enact. Acts 2007, ch. 95, § 12, effective March 23, 2007; 2008, ch. 178, § 10, effective July 15, 2008.

65.7065. Service payment agreement — Power of city, county, or issuer to enter into agreement — Liens, priority, validity, enforceability, and termination.

  1. A city, county, or issuer may enter into a service payment agreement.
  2. The service payment agreement may provide that the city, county, or issuer shall have a lien on property described in the service payment agreement equal to the amount of periodic payments due under the service payment agreement. The service payment agreement may further provide that any lien created pursuant to this section shall be governed by the provisions set forth in KRS 91A.280 , provided that a lien created pursuant to this section shall not have the priority established in KRS 91A.280 in relation to an existing lien on the property covered by the agreement unless, prior to recording the service payment agreement, the lien holder under the service payment agreement provides notice of the lien created by the service payment agreement to the holder of the existing lien, and the holder of the existing lien consents to the priority in writing. If written consent is not obtained, the priority of the lien created under this subsection in relation to the prior lien shall be determined in the same manner as a mortgage lien under KRS 382.280 .
  3. A lien authorized by this section shall not be valid and enforceable until evidence of the lien has been recorded in the office of the county clerk. The lien shall commence upon the issuance of increment bonds or other obligations and shall continue until other funding sources pledged to and derived from the project that is the subject of the service payment agreement are sufficient to make, when due, all payments on the increment bonds or other obligations identified in the service payment agreement. Upon termination of a lien authorized by this section, a release shall be filed by the city, county, or issuer with the county clerk.

History. Enact. Acts 2007, ch. 95, § 13, effective March 23, 2007.

65.7067. Real property in development areas not eligible for assessment moratoriums under KRS 99.600.

Real property located within a development area shall not be eligible for participation in a program granting property assessment or reassessment moratoriums pursuant to KRS 99.600 .

History. Enact. Acts 2007, ch. 95, § 14, effective March 23, 2007.

65.7069. State Tax Increment Financing Commission — Members — Powers and duties — Annual report.

  1. The State Tax Increment Financing Commission is hereby created as an independent agency of the state within the meaning of KRS Chapter 12. The commission shall be composed of the following members:
    1. The secretary of the Finance and Administration Cabinet, who shall be the chair thereof;
    2. The state budget director;
    3. The secretary of the Cabinet for Economic Development;
    4. The secretary of the Tourism, Arts and Heritage Cabinet;
    5. The chair of the Kentucky Economic Development Finance Authority;
    6. The dean of the University of Kentucky Gatton College of Business and Economics; and
    7. The dean of the University of Louisville College of Business and Public Administration.
  2. The commission shall review all applications for state participation in tax increment financing projects and shall approve those proposals it determines meet the requirements established by KRS 65.7071 , 65.7073 , 65.7075 , 65.7077 , 65.7079 , and 65.7081 .
  3. Members of the commission shall serve without compensation, but may receive reimbursement for their actual and necessary expenses incurred in the performance of their duties.
  4. Any four (4) members of the commission shall constitute a quorum and shall by majority vote be authorized to transact any and all business of the commission.
  5. The commission shall meet at least two (2) times each year, but may meet more frequently upon the call of the chair or a request made by any four (4) members of the commission.
  6. The commission shall be attached to the Finance and Administration Cabinet for administrative purposes and staff services. All cabinets, departments, divisions, agencies, and officers of the Commonwealth shall furnish the commission with necessary assistance, resources, information, records, or advice as it may require to fulfill its duties.
  7. The commission shall prepare bylaws and shall establish procedures applicable to the operations of the commission.
  8. The commission shall have the authority to promulgate any regulations necessary for the administration of KRS 65.7069 , 65.7071 , 65.7073 , 65.7075 , 65.7077 , 65.7079 , and 65.7081 in accordance with KRS Chapter 13A.
  9. On or before February 15, 2008, and each year thereafter, the commission shall provide the Governor and the Legislative Research Commission with an annual report, which shall include but shall not be limited to the following for the prior calendar year:
    1. A list of applications considered by the commission during the prior calendar year, including the name of the applicant, a description of the project, the local tax revenues or other revenues pledged, the level of participation requested from the Commonwealth, and whether the application was approved; and
    2. For each approved application, the report shall include:
      1. The total commitment made by the Commonwealth, detailed by type of tax and estimated incremental revenues pledged for each tax;
      2. The length of the commitment; and
      3. The portion of the development area included in the project.

History. Enact. Acts 2007, ch. 95, § 15, effective March 23, 2007; 2009, ch. 16, § 11, effective June 25, 2009.

65.7071. State tax increment financing participation programs — Application requirements for a local government to request state participation — Commission review requirements — Pledge limitations — Projects grant agreements required — Independent consultant’s report. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 2007, ch. 95, § 16, effective March 23, 2007) was repealed, reenacted and amended as KRS 154.30-030 , effective July 15, 2008.

65.7073. Commonwealth Participation Program for State Real Property Ad Valorem Tax Revenues — Criteria for state participation — Qualifying expenditures — Pledge limitations — Commission review — Required determinations by the commission — Project grant agreement required. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 2007, ch. 95, § 16, effective March 23, 2007) was repealed, reenacted and amended as KRS 154.30-040 , effective July 15, 2008.

65.7075. Signature Project Program — Purpose — Two programs — Criteria for state participation — Qualifying expenditures — Commission review — Required determinations by the commission — Pledge limitations — Project grant agreement required. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 2007, ch. 95, § 18, effective March 23, 2007) was repealed, reenacted and amended as KRS 154.30-050 , effective July 15, 2008.

65.7077. Commonwealth Participation Program for Mixed-Use Redevelopment in Blighted Urban Areas — Definitions — Criteria for state participation — Qualifying expenditures — Commission review — Required determinations by the commission — Pledge limitations — Project grant agreement required. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 2007, ch. 95, § 19, effective March 23, 2007) was repealed, reenacted and amended as KRS 154.30-060 , effective July 15, 2008.

65.7079. Term and conditions of project grant agreements to be negotiated between commission and agency — Provisions of agreement — Pledge of incremental revenues superior to other pledges of revenues — Renewal and discontinuance of agreement. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 2007, ch. 95, § 20, effective March 23, 2007) was repealed, reenacted and amended as KRS 154.30-070 , effective July 15, 2008.

65.7081. Requirement that minimal capital investment be made prior to the release of incremental revenues — Escrow account — Duties of office to monitor agreements, track revenues, and prepare reports for commission. [Repealed, reenacted and amended.]

Compiler’s Notes.

This section (Enact. Acts 2007, ch. 95, § 21, effective March 23, 2007) was repealed, reenacted and amended as KRS 154.30-080 , effective July 15, 2008.

65.7083. Payment and release of incremental revenues — Duties of local taxing districts and Department of Revenue.

  1. Any agency that enters into a local participation agreement or local development area agreement for the release of incremental revenues during the period of a local participation agreement or local development area agreement shall, after each calendar year, in which a local participation agreement or local development area agreement is in effect, notify each taxing district obligated under the local participation agreement or local development area agreement that incremental revenues are due and, in consultation with each taxing district, the agency shall determine the amount of incremental revenues due from each taxing district.
  2. Upon notice from the agency, each taxing district obligated under a local participation agreement or local development area agreement shall release to the agency the incremental revenues due under the local participation agreement or local development area agreement. The agency shall certify to the authority on a calendar year basis the amount of incremental revenues and occupational license fees collected where applicable.
  3. The local taxing district shall have no obligation to refund or otherwise return any of the incremental revenues to the taxpayer from whom the incremental revenues arose or are attributable. Further, no additional incremental revenues resulting from audit, amended returns, or other activity for any period shall be transferred after the initial release to the agency of the taxing district’s increment for that period.

History. Enact. Acts 2007, ch. 95, § 22, effective March 23, 2007; 2008, ch. 178, § 11, effective July 15, 2008.

Ambulance Service Contracts

65.710. Contract requirements.

In order to enable cities and counties to fulfill their obligations regarding the public health, safety, and welfare, the General Assembly does hereby allow cities and counties to contract with private persons, partnerships, or corporations for providing ambulance service to the residents of such cities and counties subject to the following conditions:

  1. These contracts must be in writing and must be approved by the legislative body of the city if a city is party thereto, or by the fiscal court in case a county is party thereto.
  2. No contract shall be made with an ambulance service or other organization or person unless the contract shall stipulate that at least one (1) person on each ambulance run shall possess currently valid emergency medical technician certification.
  3. All contracts made with any ambulance service or other organization or person shall stipulate that all vehicles used for operation of the service comply with vehicle and equipment administrative regulations issued by the Cabinet for Health and Family Services.
  4. All contracts shall include the stipulation that at least two (2) trained persons, one (1) driver and one (1) attendant, shall be carried on each ambulance for each ambulance call which is covered by the contract.
  5. No contract shall be made for a period of time greater than four (4) years.
  6. The vehicle, equipment, training, and personnel requirements of subsections (2), (3), and (4) of this section shall also apply to the operation of an ambulance service by a city or a county or by a city and a county jointly.
  7. No provisions of this section shall be construed as to limit the power of any city or county to contract for or operate ambulance services under requirements which are stricter than those of this section, or to require insurance, or bonding of contractors, provided these provisions are not in conflict with the requirements of this section.

History. Enact. Acts 1970, ch. 192, § 1; 1980, ch. 119, § 7, effective July 15, 1980; 1998, ch. 426, § 91, effective July 15, 1998; 2005, ch. 99, § 109, effective June 20, 2005; 2019 ch. 44, § 4, effective June 27, 2019; 2020 ch. 91, § 49, effective April 15, 2020.

Opinions of Attorney General.

The county could not contribute county funds to the operation of funeral home ambulance services not covered by contracts pursuant to this section and KRS 65.730 (now repealed). OAG 72-202 .

The provision allowing cities and counties to contract for ambulance service is permissive only, and furnishing of service is not mandatory. OAG 72-202 .

Since KRS 65.730 (now repealed) requires that the standards set out in this section must be met by the county in the operation of county ambulance service, a county could not operate an ambulance service even with the best equipment available if it did not meet the standards; moreover, there is a possibility that the members of the fiscal court might be individually liable if they are negligent in failing to meet a public duty to use equipment of sufficient standards. OAG 73-160 .

A county can either contract for or operate an ambulance service for its citizens and, since section 103(a)(1)(D) of Title I of the revenue sharing act (31 USCS § 1222(a)(1)(D)) authorizes expenditures for health purposes, revenue sharing funds may be used for this purpose. OAG 73-162 .

If the fiscal court believes that the health and welfare of the counties and citizens demand, it can engage in an ambulance service contract without submitting it to the vote of the people subject to its levying the franchise on bid pursuant to section 164 of the Kentucky Constitution. OAG 73-246 .

In a county ambulance program a small fee or service charge could be made for each call under the broad legislative authority and police powers given under KRS 67.083 . OAG 73-246 .

In view of the fact that a county can only levy ad valorem taxes and license taxes the proposed special tax by the county to fund the county ambulance program could not be levied. OAG 73-246 .

County establishment of an ambulance service with some private organization or person could not be legally placed on the ballot since there is no constitutional or statutory authority for such placing and it would conflict with this section. OAG 73-246 .

Since the growing ambulance problem and the premise that the counties’ exercise of their police power to provide ambulance service shouldn’t be impaired by the Bureau of Highways toll collections, it is believed that the county and bureau interests can be balanced to provide both toll revenue and public health. OAG 73-349 .

A city of the fourth class may make a grant to a corporation which provides ambulance service provided it is done on a contractual basis to insure that the inhabitants of the city are furnished ambulance service. OAG 74-301 .

Where an ambulance does not conform to the statutory standards set forth in this section, county cannot subsidize such ambulance service operating on nonconforming licenses, in the county. OAG 75-158 .

Providing of ambulance services, under any of the options, is permissive only. OAG 75-190 .

Where a city merely contracts for services from a private ambulance firm, it would not be liable for negligence by such firm. OAG 75-284 .

A county as a political subdivision and arm of state government is protected by its sovereign immunity from liability for negligence by an ambulance service which it subsidizes. OAG 75-284 .

There is no statutory requirement that firms operating an ambulance service for hire by a city or county government carry malpractice insurance against civil liability for negligence. OAG 75-284 .

Under the express wording of this section and KRS 65.730 (now repealed) the county, through the fiscal court, may contract directly with a private person, partnership or corporation to provide ambulance service for the county’s inhabitants, however, this is subject to the fiscal court’s letting the franchise contract on bids pursuant to Ky. Const., § 164; moreover, the fiscal court may authorize the county judge (now county judge/executive), in connection with an ambulance franchise ordinance, to sign the awarded contract on behalf of the county. OAG 76-571 .

Where private persons conducting an ambulance service receive a county subsidy, the fiscal court could stipulate in the contract with the providers of the service that the charges to be collected from users are to be considered debts owing unto the county. OAG 76-673 .

Where constitutional requirements regarding debt restrictions and voter approval are observed, a county or city could grant an ambulance service franchise for longer than one year. OAG 77-483 .

Revenue sharing funds of counties may be used to subsidize both private and nonprofit agencies providing emergency ambulance services to counties under contract agreements pursuant to this section and KRS 65.730 (now repealed). OAG 77-501 .

Coal severance tax funds of counties may not be used to subsidize either private or nonprofit agencies providing emergency ambulance services to counties under contract agreements pursuant to this section and KRS 65.730 (now repealed). OAG 77-501 .

A franchise contract relating to ambulance service can be and should be limited to emergency ambulance service. OAG 78-360 .

KRS 65.730 (repealed) required that the standards mentioned in this section must be met by a county, whether it operated the ambulance service itself directly or whether it contracted for such service. OAG 78-506 .

There is nothing in this section that suggests that the fiscal courts enacting an ordinance relating to ambulance service is mandatory. OAG 78-557 .

Where a county emergency ambulance service franchise would be up for bids September 1, 1979, but would be only for a term of three months, but where it had been determined that no one would bid for a franchise for only 90 days, the county could negotiate a contract with the current franchisee, since there would be no contract for a term of years, and this section provides for contracting for less than a term of years. OAG 79-428 .

A county cannot grant a franchise to a private ambulance service for a term of a year or years with the original bid winner being given an option to negotiate exclusively to provide the next year’s service without the necessity to rebid in each succeeding year because if a fiscal court grants a franchise, the literal terms of Section 164 of the Kentucky Constitution must be followed and the bidding requirement is mandatory for each new term. OAG 80-258 .

A county cannot incorporate under KRS Chapter 273 and grant that corporation a long-term franchise to negotiate with private firms on a yearly basis to provide ambulance service to the county, because the fiscal court, by a KRS Chapter 273 creation, cannot circumvent the express language of Ky. Const., § 164. OAG 80-258 .

While there is no statutory authority for the fiscal court to enter into a contract to operate a county ambulance service with the office of the sheriff, there is nothing to prevent such a contract with the sheriff as an individual person, apart from his sheriff’s office and staff, provided he can carry on both functions in the manner required by law and the contract; however, while there is no express statutory requirement that a sheriff devote all of his time to the sheriff’s office, it could be implicit that in the broad range of statutory duties of the sheriff is the requirement that he devote full time to his duties but only the courts can resolve such question; moreover, the money received by the sheriff for this county ambulance service would have had to be added to his regular county sheriff’s office fee income to apply the rubber dollar maximum and employes working for the sheriff in connection with the ambulance service must be private individuals. OAG 80-574 .

A fiscal court may reasonably restrict its ambulance services to emergency situations only. OAG 82-239 .

In general, any county may, in the discretion of the fiscal court, establish a county emergency ambulance service by contracting for it and granting a franchise under Ky. Const., § 164, or may establish an emergency ambulance service district pursuant to KRS 108.100 et seq., or may establish a county emergency ambulance service directly operated by the county, but the fiscal court is not mandatorily required to provide emergency ambulance service under present statutes. OAG 82-239 .

While a city cannot legally donate or contribute public funds to a private corporation over which it has no control, with certain exceptions where the state legislature has specifically authorized such donations, the city could contract with a nonprofit organization to render paramedic services to its citizens the same as it is specifically authorized to do with respect to contracting for emergency ambulance service pursuant to KRS 65.710 to 65.730 (KRS 65.730 is now repealed). The city could also provide for paramedic service in conjunction with the operation of its own emergency ambulance service on behalf of the citizens of the city. OAG 82-366 .

An ambulance service may be carried on in the county under one of three methods: (1) ambulance service under a county franchise to private persons or a corporation under this section, provided such franchise is let under competitive bidding pursuant to Ky. Const., § 164; (2) ambulance service as a direct county operation under its police power as found in KRS 67.083(3)(t); and (3) ambulance service provided by an ambulance district as established under KRS 108.080 et seq. OAG 82-601 .

Since the county’s granting a franchise for ambulance service and the city’s granting a franchise are two different exercises of power, the city’s letting of an ambulance service within that city (ambulances traveling over city streets) will in no way conflict with the fiscal court’s authority to grant an ambulance franchise relating to ambulance service within the unincorporated boundaries of the county, and involving ambulances traveling over roads in that area. OAG 82-601 .

The one-year maximum contract period of subdivision (5) of this section governing ambulance service contracts is inoperative in light of Ky. Const., § 164 which establishes a 20-year maximum period for franchises. OAG 82-601 ; OAG 83-349 .

This section provides for only cities and counties contracting for ambulance services; this section, because of its express and literal language, cannot apply to an ambulance service district created under KRS Chapter 108. Clearly the statutes dealing with the ambulance service district envision the district’s furnishing ambulance services directly, or, as an option under KRS 108.140(9), the district’s contracting with private persons, partnerships or corporations for providing ambulance service to residents of the district. OAG 83-172 .

The fiscal court had the authority under Ky. Const., §§ 163 and 164 to issue a franchise for the furnishing of ambulance service to a private person or corporation after the bidding procedure required by Ky. Const., § 164. OAG 83-222 .

Where the person operating an ambulance service in a county had received no franchise, and the fiscal court did not make use of Ky. Const., §§ 163 and 164, so that no bidding procedure was used by fiscal court, the ambulance service was not operating constitutionally; consequently, the person operating the ambulance service was subject to a mandamus suit in the local Circuit Court, in which the fiscal court could seek to compel him to cease his operation of an ambulance service on county roads. OAG 83-222 .

Where a county is funding its ambulance contract from the county’s ad valorem taxes, it would have to include all of the county, including corporate areas within the county, as a service area, since the ambulance purpose is common to the entire county. OAG 84-323 .

An ambulance service contract can be let under this section, provided such franchise is let out under competitive bidding, pursuant to Ky. Const., § 164; such a franchise may be granted for up to 20 years. If the subject contract was not let under competitive bidding, it would be void. OAG 84-323 .

Where a county entered into a contract for the furnishing of ambulance service, pursuant to this section, the ambulance service involved a purpose common to the entire county; thus, unless such contract embraced all citizens within the county, including those who lived in cities within the county, Ky. Const., §§ 2 and 171 would be violated. OAG 84-323 .

65.720. Construction of contract provisions.

No provisions of KRS 65.710 shall be construed as to limit the power of any city or county to contract for services under requirements which are stricter than those listed in KRS 65.710 and 65.720 , or to require insurance or bonding of contractors, provided such provisions are not in conflict with the requirements of KRS 65.710 and 65.720 .

History. Enact. Acts 1970, ch. 192, § 2; 1980, ch. 188, § 36, effective July 15, 1980.

NOTES TO DECISIONS

1.Kentucky Mandatory Requirement.

Kentucky Constitution, § 103, KRS 62.050 and 67.720 are mandatory in nature and substantial compliance with these provisions is not sufficient. Commonwealth ex rel. Stidham v. Henson, 887 S.W.2d 353, 1994 Ky. LEXIS 111 ( Ky. 1994 ).

65.730. Additional county powers. [Repealed.]

Compiler’s Notes.

This section (Enact. Acts 1970, ch. 192, § 3) was repealed by Acts 1978, ch. 118, § 19, effective June 17, 1978.

Emergency Telephone Service

65.750. Definitions for KRS 65.750 to 65.760.

As used in KRS 65.750 to 65.760 :

  1. “911 emergency service” means a system that provides the end user of a service connection with emergency services by using the digits 9-1-1, directs emergency calls to the appropriate public safety answering points based on the geographic location from which the call originated, and provides the capability for automatic number identification and automatic location identification features in accordance with the FCC order. As used in KRS 65.760 , the term “911 emergency service” includes the terms “next generation 911” as defined in KRS 65.7621 , “wireless enhanced 911 system,” “wireless enhanced 911 service,” and “wireless E911 service” as used in KRS 65.7621 to 65.7643 ;
  2. “Automatic call distribution” or “ACD” means a system that automatically distributes incoming calls to PSAP attendants in the order the calls are received;
  3. “Automatic number identification” or “ANI” means a feature that allows for the automatic display of the 911 caller’s ten (10) digit number, or equivalent, in accordance with applicable FCC rules and regulations;
  4. “Automatic location identification” or “ALI” means a feature by which the location or estimated location of the calling party is made available to a PSAP in accordance with applicable FCC rules and regulations;
  5. “Automatic location identification data management system” or “ALI/DBS” means a system of manual procedures and computer programs used to create, store, and update the data required for ALI in support of enhanced 911;
  6. “Automatic vehicle location” or “AVL” means a system used to track emergency responder vehicles;
  7. “Dispersed private telephone system” or “DPTS” means a multiline, shared tenant system or PBX used for the purpose of reselling telephone service to residential customers and whose connection to a telephone network is capable of carrying emergency calls from more than one (1) specific location within a structure or structures but does not mean a multiline, shared tenant system or PBX owned and operated by a state agency or used in providing service within a hotel or motel;
  8. “FCC order” means the Order of the Federal Communications Commission, FCC Docket No. 94-102, adopted effective October 1, 1996, including any subsequent amendments or modifications thereof;
  9. “Fully enhanced 911 emergency telephone service” means a telephone network feature that selectively routes calls placed to the national 911 emergency number to the proper public service answering points (PSAPs) and provides the PSAP with a voice connection and ANI and ALI information;
  10. “Geographic information systems” or “GIS” means a system for capturing, storing, displaying, analyzing, and managing data, and associated attributes which are spatially referenced;
  11. “Law Enforcement Information Network of Kentucky and the National Crime Information Center” or “LINK/NCIC” means two (2) systems used by law enforcement and emergency communications personnel for short messaging between agencies and to request vehicle, driver, and criminal history checks;
  12. “Local government” means any city, county, urban-county government, consolidated local government, unified local government, or charter county government;
  13. “Master street address guide” or “MSAG” means a database of street names and house number ranges within their associated communities defining emergency services zones and their associated emergency service numbers used by PSAPs to enable proper routing of 911 calls;
  14. “Private branch exchange” or “PBX” means a privately owned switch system that connects calls to a telephone company;
  15. “Public safety answering point” or “PSAP” means a communications facility that is assigned the responsibility to receive 911 calls originating in a given area and, as appropriate, to dispatch public safety services or to extend, transfer, or relay 911 calls to appropriate public safety agencies;
  16. “Service connection” means the transmission, conveyance, or routing of voice, data, video, text, or any other information signal of the purchaser’s choosing by any medium or method now in existence or later devised with the ability to directly connect the user to 911 emergency services;
  17. “Service supplier” means a person or entity that administers, maintains, and operates the ALI/DBS and may include telephone companies that provide local exchange telephone service to a telephone subscriber;
  18. “Station identification number” or “SIN” means a number that a DPTS uses to identify a specific station on the switch; and
  19. “Interconnected Voice over Internet Protocol” or “VoIP” means a service that:
    1. Enables real-time, two-way voice communications;
    2. Requires a broadband connection from the user’s location;
    3. Requires Internet protocol-compatible customer premises equipment; and
    4. Permits users generally to receive calls that originate on the public switched telephone network and terminate calls to the public switched telephone network.

History. Enact. Acts 1984, ch. 154, § 1, effective July 13, 1984; 1998, ch. 521, § 1, effective July 15, 1998; 1998, ch. 535, § 13, effective July 15, 1998; 2016 ch. 111, § 2, effective July 15, 2016; 2019 ch. 108, § 1, effective June 27, 2019.

Opinions of Attorney General.

The funds received as a result of the implementation of KRS 65.750 through 65.760 may only be utilized in connection with the establishment and maintenance of a 911 emergency telephone system. OAG 91-182 .

The term “911 emergency services,” as used in subsection (3) of KRS 65.760 , means, in the context of its use, “911 emergency telephone services,” as such service is the subject of KRS 65.750 to 65.760 and such “911 emergency telephone service” includes the personnel necessary to receive a call to 911, and to refer (or dispatch) the call to a responding agency, and the dispatch personnel necessary to provide 911 telephone service on a twenty-four (24) hour basis may properly be funded from funds collected to provide such service in accordance with KRS 65.760. OAG 96-33 .

65.751. Legislative findings and declarations regarding all emergency services.

The General Assembly hereby finds and declares that:

  1. The general welfare and safety of the citizens of the Commonwealth of Kentucky in emergency situations depend in large measure upon a fully functional 911 emergency services system;
  2. It is in the best interests of the Commonwealth to provide adequate resources to local governments for the effective delivery of life-saving 911 emergency services;
  3. The authority granted and the purposes to be accomplished by KRS 65.750 to 65.760 and 65.7621 to 65.7643 are proper governmental and public purposes necessary for the provision of 911 emergency services to the citizens of the Commonwealth; and
  4. The CMRS service charges, as defined in KRS 65.7621(10), are vital to the provision of 911 emergency services to the citizens of the Commonwealth and are intended to apply to each CMRS connection regardless of whether that connection is prepaid, postpaid, or uses free minutes.

HISTORY: 2016 ch. 111, § 1, effective July 15, 2016.

65.752. Requirements for enhanced 911 emergency service — Privacy of information.

  1. Any DPTS located in an area that has adopted enhanced 911 emergency service shall within three (3) years of the date of its adoption, or if already adopted within three (3) years after July 15, 1998, be able to:
    1. Operate effectively within an enhanced 911 system;
    2. Transmit a SIN for the station that directly dials the emergency number 911 to the service supplier; and
    3. Provide the service supplier with the following system information that shall be updated within five (5) business days if changes occur within the system:
      1. Number of incoming trunk connections to the enhanced 911 system; and
      2. SIN, sublocation, such as floor or apartment number, if applicable, and street address of each station that may originate an emergency call.
  2. In areas where fully enhanced 911 service has been implemented, the service supplier shall, at a minimum, make the verified ANI and ALI provided by the DPTS available to a PSAP for a fully enhanced 911 call.
  3. In areas where fully enhanced 911 service has been implemented, the service supplier shall maintain the confidentiality and privacy of all information contained in the ALI/DBS, including any information that identifies telephone calls made from extensions on DPTS, except when the release of the information is ordered by a court of competent jurisdiction.
  4. In areas where enhanced 911 service has been implemented, an employee of a PSAP shall not retrieve or disclose ALI information except in response to a 911 call or for the purpose of maintaining the ALI database, unless ordered by a court of competent jurisdiction.

History. Enact. Acts 1998, ch. 521, § 2, effective July 15, 1998.

Opinions of Attorney General.

The Division of Public Safety, operating as a Public Safety Answering Point for the purpose of receiving 911 calls and dispatching public safety services as appropriate, is not foreclosed from releasing recordings of 911 calls under the narrow prohibition on disclosure of Automatic Location Identification information codified at KRS 65.752(4). Further, KRS 61.878(1)(a) may only be properly invoked where the facts of a specific case warrant invocation, and not as a matter of policy; the facts in this case do not support the denial of the request. OAG 04-ORD-161.

65.754. Penalties for violations of KRS 65.752.

  1. Any owner, employee, or agent of a DPTS that knowingly or wantonly violates the provisions of KRS 65.752(2) shall be fined not less than twenty-five dollars ($25) nor more than two hundred dollars ($200) or imprisoned in the county jail for not more than ninety (90) days, or both. Each day the violation continues shall be considered a separate offense.
  2. Any owner, employee, or agent of a DPTS or a service supplier that violates the provisions of KRS 65.752(3) shall be subject to the following penalties:
    1. For a first offense, a Class A misdemeanor; and
    2. For a second and subsequent offense, a Class D felony.

History. Enact. Acts 1998, ch. 521, § 3, effective July 15, 1998.

65.755. Digits reserved for emergency telephone number.

Every telephone company within the Commonwealth shall reserve the initial digits 9-1-1 for use as an emergency telephone number. The company shall assign this number within an exchange only to a public body or other applicant for the establishment of 911 emergency service.

History. Enact. Acts 1984, ch. 154, § 2, effective July 13, 1984; 2016 ch. 111, § 25, effective July 15, 2016.

65.760. Establishment of 911 emergency telephone service by local government — Sources and disposition of revenues — Funding.

  1. Any local government may establish 911 emergency service upon approval of the governing body of the city, county, or urban-county government and may adopt regulations concerning the provision of this service by ordinance.
  2. Any local government, or any combination thereof, may with the approval of their governing bodies enter into an interlocal cooperation agreement creating a joint 911 emergency service.
    1. The funds required by a local government to establish and operate 911 emergency service, or to participate in joint service with other local governments, may be obtained through the levy of any special tax, license, or fee not in conflict with the Constitution and statutes of this state. The special tax, license, or fee may include a subscriber charge for 911 emergency service that shall be levied on an individual exchange-line basis, limited to a maximum of twenty-five (25) exchange lines per account per government entity. (3) (a) The funds required by a local government to establish and operate 911 emergency service, or to participate in joint service with other local governments, may be obtained through the levy of any special tax, license, or fee not in conflict with the Constitution and statutes of this state. The special tax, license, or fee may include a subscriber charge for 911 emergency service that shall be levied on an individual exchange-line basis, limited to a maximum of twenty-five (25) exchange lines per account per government entity.
    2. Any private commercial telephone service or owner of a dispersed private telephone system (DPTS) that provides local and 911 emergency service to subscribers for compensation shall collect and remit the subscriber charge to the local government on the same basis as the primary local exchange carrier, except that this requirement shall not apply to a state agency that currently maintains an independent 911 system with its own public safety answering point.
    3. Any provider of interconnected VoIP local and 911 emergency services to subscribers for compensation shall collect and remit any special tax, license, or fee levied under paragraph (a) of this subsection to the local government, except that the special tax, license, or fee levied under paragraph (a) of this subsection shall not apply to a commercial mobile radio service subject to a fee imposed under KRS 65.7629 or 65.7634 .
  3. All revenues raised from any special tax, license, or fee levied under subsection (3) of this section shall be expended only as provided in this subsection and only to the extent that the expenditure is directly attributable to the establishment, operation, or maintenance of a PSAP, the delivery of 911 emergency services, or the provision of wireless enhanced 911 services, as follows:
    1. The hiring of personnel;
    2. The following costs for employees:
      1. Salaries;
      2. Fringe benefits;
      3. MSAG coordination;
      4. Uniforms; and
      5. Addressing and database development and management;
    3. Facility costs for the following expenses:
      1. Capital improvements for construction, remodeling, or expansion;
      2. Lease or rental payments;
      3. Utilities;
      4. Heating and air conditioning;
      5. Fire suppression systems;