{"data":{"id":"us-ky/krs-67c.147","jurisdiction":"us-ky","citation":"KRS 67C.147","heading":"Taxes and services in area of former city of the first class -- Imposition of","body":"different tax rates -- Separate rates for land and improvements -- Urban\nservice tax district -- Reporting requirements -- Modification of boundaries --\nReimbursement to fire districts operating into the area of the urban service tax\ndistrict -- Use of revenue from differential tax rate.\n(1) In order to maintain the tax structure, tax rates, or level of services in the area of the\nconsolidated local gover nment formerly comprising the city of the first class, the\nlegislative council of a consolidated local government may provide in the manner\ndescribed in this chapter for taxes and services within the area comprising the\nformer city of the first class which  are different from the taxes and services which\nare applicable in the remainder of the county. These differences may include\ndifferences in tax rates upon the class of property which includes the surface of the\nland, differences in ad valorem tax rates up on personal property, and differences in\ntax rates upon insurance premiums.\n(2) (a) Any difference in the ad valorem tax rate on the class of property which\nincludes the surface of the land in the portion of the county formerly\ncomprising the city of the f irst class and in the portion of the county other\nthan that formerly comprising the city of the first class may be imposed\ndirectly by the consolidated local government council.\n(b) For purposes of this section, the consolidated local government council m ay\nby ordinance adopt the following two (2) distinct subclassifications of real\nproperty for purposes of taxation within the portion of the county formerly\ncomprising the city of the first class:\n1. \"Land,\" which means the surface of the earth and its natu ral resources,\nexclusive of any human -made structures, cultivated agricultural\nproducts, or artificial improvement or alteration to the land; and\n2. \"Improvements,\" which means any human -made addition to or\nmodification of land that enhances its value, including but not limited to:\na. Any building, structure, fence, or pavement constructed upon the\nland;\nb. Any cultivated agricultural products grown upon the land; and\nc. Any artificial land backfill, grading , or site preparation aimed at\nmodifying the natural topography.\n(c) The council may levy a separate ad valorem tax rate on land and a separate ad\nvalorem tax rate on improvements within the portion of the county formerly\ncomprising the city of the first class. The rate levied on improvements may be\nlower than the rate levied on land. The rate levied on improvements shall be\nsufficient to constitute a bona fide tax levy.\n(d) Notwithstanding KRS 132.010, for any tax year in which separate rates are\nlevied under this subsection, the compensating tax rate shall be calculated as\nthe specific combination of rates on land and improvements so that when\napplied to the current year's assessment, it produces an aggregate revenue\nequal to the revenue produced in the preceding year.\n(e) Notwithstanding KRS 132.010 and 132.017, the portion of a tax rate that is\nsubject to recall in relation to producing revenue exceeding four percent (4%)\nover that produced by the compensating tax rate shall be determined based on\nthe aggregate revenue produced by the combination of the rate levied on land\nand the rate levied on improvements.\n(f) Notwithstanding KRS 132.810, the homestead exemption shall be applied\nfirst against the assessed value of improvements, and any remaining balance\nof the exemption shall then be applied against the assessed value of land.\n(3) Any change in these ad valorem tax rates shall comply with KRS 68.245, 132.010,\n132.017, and 132.027 and shall be used for services as provided by KRS 82.085.\n(4) If the consol idated local government council determines to provide for tax rates\napplicable to health insurance premiums and personal property which are different\nin the area formerly comprising the city of the first class than the rates applicable in\nthe remainder of the county, it shall do so in the following manner. The\nconsolidated local government council shall by ordinance create a tax district to be\nknown as the \"urban service tax district\" bounded by the former boundaries of the\nformer city of the first class. T he ordinance shall designate the number of members\nof the board of this tax district and the manner in which they shall be appointed.\nThe ordinance shall provide that the board of the tax district shall receive the\nincome derived from the differential tax rate applicable in the area formerly\ncomprising the city of the first class with respect to personal property, health\ninsurance premiums, or both, and shall contract with the consolidated local\ngovernment to pay all sums collected to the consolidated local  government, in\nreturn for the provision of services performed by the consolidated local government\nwithin the area formerly comprising the city of the first class which services are in\naddition to services performed by the consolidated local government in  the\nremainder of the county. The consolidated local government shall provide at least\nan annual reporting to the urban service tax district board and the legislative body\nof the consolidated local government containing but not limited to detailed\noperating and capital expenditures of each service performed by the consolidated\nlocal government.\n(5) After the initial formation of an urban service tax district in a consolidated local\ngovernment, the boundaries of the district may be modified in the following\nmanner. The proposal to alter the boundaries of the urban service tax district within\na consolidated local government may be initiated by:\n(a) A resolution enacted by the consolidated local government describing the\nboundaries of the area to be added to or  deleted from the tax district and duly\npassed and signed by the mayor not less than one hundred twenty (120) days\nbefore the next regularly scheduled election day within the county; or\n(b) A petition signed by a number of qualified voters living within pr ecincts\nwithin the area to be added to or deleted from the tax district equal to ten\npercent (10%) of the votes cast within each precinct in the last general\nelection for President of the United States and delivered to the clerk of the\nlegislative council more than one hundred twenty (120) days next preceding\nthe next regularly scheduled election day within the county.\nThe boundaries so described in either case shall not cross precinct lines. The\nquestion of whether the area bounded as described should be added to or deleted\nfrom, as the case may be, the urban service tax district shall then be placed upon the\nballot in the precincts in the area to be added or deleted at the next regular election\nand the question stated on the ballot shall be so phrased tha t a \"Yes\" vote shall be\ncast in favor of making the proposed change and a \"No\" vote shall be cast to oppose\nthe proposed change. If a majority of those voting in those precincts support the\nchange, then the change in the boundaries of the urban service tax  district shall be\nimplemented.\n(6) (a) Beginning with emergency medical responses made on or after July 1, 2025,\nthe consolidated local government shall reimburse a fire district operating\nunder KRS Chapter 75 for expenses related to each emergency medica l\nresponse made by the fire district operating under KRS Chapter 75 into the\narea of the urban service tax district. A fire district so responding shall receive\nfrom the consolidated local government three hundred dollars ($300) for\ntransporting a person a nd one hundred fifty dollars ($150) for arriving at\nperson's location when no person is transported.\n(b) The payment established in paragraph (a) of this subsection shall be in\naddition to any insurance moneys the fire district may be eligible to receive\nresulting from the response.\n(c) The payment established in paragraph (a) of this subsection shall be adjusted\non July 1 of each year by the percentage increase in the nonseasonally\nadjusted annual average Consumer Price Index for All Urban Consumers\n(CPI-U), U.S. City Average, All Items, between the two (2) most recent\ncalendar years available, as published by the United States Bureau of Labor\nStatistics.\n(d) The consolidated local government shall not charge a fire district operating\nunder KRS Chapter 75 for any expenses or services that the consolidated local\ngovernment was not charging the fire district prior to January 1, 2024.\n(e) A fire district operating under KRS Chapter 75 that receives payment or\nreimbursement in any form from the consolidated loca l government for an\nemergency medical response made by the fire district into the area of the\nurban service tax district prior to July 1, 2025, shall not be eligible for\npayments or reimbursement under this subsection beginning on July 1 of the\nfollowing fiscal year and continuing until the end of that fiscal year.\n(7) Except for services provided within the central business district as defined by the\nconsolidated local government via ordinance as of April 1, 2024:\n(a) From July 1, 2025, to June 30, 2028, t he differential tax received by the urban\nservice tax district shall fund no less than eighty -five percent (85%) of all\ncosts related to the services provided, including capital expenditures related to\nthe services, within the urban service tax district by  the consolidated local\ngovernment as set out in this section that are in addition to the services\nperformed by the consolidated local government in the remainder of the\ncounty;\n(b) From July 1, 2028, to June 30, 2031, the differential tax received by the urban\nservice tax district shall fund no less than ninety percent (90%) of all costs\nrelated to the services provided, including capital expenditures related to the\nservices, within the urban service tax district by the consolidated local\ngovernment as set  out in this section that are in addition to the services\nperformed by the consolidated local government in the remainder of the\ncounty;\n(c) From July 1, 2031, to June 30, 2034, the differential tax received by the urban\nservice tax district shall fund no less than ninety -five percent (95%) of all\ncosts related to the services provided, including capital expenditures related to\nthe services, within the urban service tax district by the consolidated local\ngovernment as set out in this section that are in add ition to the services\nperformed by the consolidated local government in the remainder of the\ncounty; and\n(d) After June 30, 2034, the differential tax received by the urban service tax\ndistrict shall fund no less than one hundred percent (100%) of all cost s related\nto the services provided, including capital expenditures related to the services,\nwithin the urban service tax district by the consolidated local government as\nset out in this section that are in addition to the services performed by the\nconsolidated local government in the remainder of the county.","path":["KRS Chapter 67C"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57996","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:29Z","sha256":"0fad8dfc057f0c38c66e55fb8ae0cd209a21fc0cf4d62cc6bbb26461b1b9edec","source_id":"us-ky","stale":false,"prev":"us-ky/krs-67c.145","next":"us-ky/krs-67c.301"},"notice":"GroundRules: Original legal text. Not legal advice."}