81A.429 Payments following annexation of territory that contains active
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/ky/81a-429A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
residential, commercial, or industrial uses -- Cost-sharing agreements --
Reporting to the Department for Local Government -- Administrative
regulations.
(1)When a city annexes territory in a county that contains active residential,
commercial, or industrial uses on a substantial part of the territory, and the crediting
provisions set forth in KRS 68.197 apply to the county, the city shall remit
payments to the county on January 1 of each year for a period of ten
(10)years
following the enactment of the ordinance finally annexing territory into the city,
pursuant to the following formula unless the city and county otherwise agree in
writing:
(a)The county shall calculate the amounts of ad valorem property, occupational
licensure, and insurance premium taxes the county collected within the
territory in the year prior to the proposed annexation;
(b)The county shall then add to the total amount of ad valorem property tax one
hundred fifty percent (150%) of the occupational licensure tax and one
hundred fifty percent (150%) of the insurance premium tax collected in the
year prior to annexation; and
(c)The county shall then subtract from the figure calculated in paragraph
(b)of
this subsection the property tax, occupational licensure tax, and insurance
premium tax revenue it has collected or anticipates it will be able to collect for
each year following the annexation, which figure will represent the remittance
payment required to be paid by the city to the county.
The county shall update its calculation of the figure in paragraph
(c)of this
subsection on a yearly basis, and shall provide the figure to the city at least thirty
(30)days prior to the date on which payment is required to be made by the city. A
city shall not be required to remit payments unless the county has provided the city
with documentation confirming the figure calculated in paragraph
(c)of this
subsection.
(a)When a city proposes to annex territory that does not contain active
residential, commercial, or industrial uses on a substantial part of the territory,
the crediting provisions set forth in KRS 68.197 apply to the county in which
the territory is located, and:
1. The territory is not immediately contiguous to the existing city boundary
and is connected only by a corridor, unless:
a. Existing water and sewer services were provided by the city to the
territory on or before January 1, 2024; and
b. The county has not made a previous investment in infrastructure in
the territory, not including routine road maintenance; or
2. The territory is contiguous to the existing city boundary, but the city is
not able to provide tangible benefits or services as a result of the
annexation, including but not limited to:
a. Specialized infrastructure or utilities that the county itself cannot
feasibly provide at the time of the annexation;
b. The provision of public safety or emergency response services that
the county itself cannot feasibly provide at the time of annexation;
or
c. The ability to sell alcoholic beverages in the territory to be
annexed;
the county may, within fifteen
(15)days after receiving written notice of the
annexation from the city as required by KRS 81A.412(2) or 81A.420(1), enact
a resolution stating that the county desires to negotiate with the city regarding
the creation of an interlocal agreement for revenue and cost sharing related to
development of the territory to be annexed. A copy of the resolution shall be
immediately transmitted to the city.
(b)If a city receives the resolution, it shall negotiate with the county to form an
interlocal agreement that addresses participation between the county and city
in:
1. Cost sharing for public investment in the development of the area;
2. Cost sharing for provision of municipal services within the area; and
3. Revenue sharing of occupational tax revenue collected from the
territory.
(c)The negotiations shall be completed within sixty
(60)days of the enactment of
the resolution by the county, and the city shall not enact an ordinance finally
annexing the territory into the city during that period.
(d)If the parties fail to reach an agreement within the sixty
(60)day period
described in paragraph
(c)of this subsection:
1. The city may enact an ordinance finally annexing the territory into the
city; and
2. The county may elect to:
a. Not participate in the development of the territory; or
b. Participate with the city in the development of the territory.
(e)If the county elects to participate with the city in development of the territory
pursuant to subsection (2)(d)2.b. of this section, a cost and revenue sharing
default option shall apply, under which the county shall provide funding for:
1. Fifty percent (50%) of the costs associated with the public investment
made in developing the territory; and
2. Fifty percent (50%) of the costs associated with the provision of
additional municipal services in the territory.
The city shall be required to remit to the county, on a yearly basis, fifty
percent (50%) of the occupational tax revenue generated in the territory, or an
amount of occupational tax revenue that would equal the amount that the
county would collect from the territory pursuant to its countywide
occupational tax rate in the absence of crediting, whichever is less. In no
instance shall a county receive payments under this section that would exceed
the amount it would collect from the territory pursuant to its countywide
occupational tax rate in the absence of crediting. If a county would receive an
amount of revenue that is less than fifty percent (50%) of the occupational tax
revenue generated in the territory pursuant to this paragraph, then its
responsibility for funding pursuant to subparagraphs 1. and 2. of this
paragraph shall be changed to a percentage equal to the percentage of revenue
that the county would receive under this paragraph. A county may, during the
sixty
(60)day period discussed in paragraph
(c)of this subsection, elect to
impose a countywide occupational tax or raise its countywide occupational
tax rate in conformance with statute.
(f)Any agreement made pursuant to this subsection, including a default
agreement under subsection (2)(e) of this section, shall be considered an
interlocal agreement and be subject to the provisions of the Interlocal
Cooperation Act, including the reporting requirements set forth in KRS
65.260.
(3)When a city proposes to annex territory in a county in which the crediting
provisions set forth in KRS 68.197 apply, the provisions of subsections
(1)and
of this section shall not apply if the city and county are parties to an interlocal
agreement concerning the sharing of occupational tax revenue between the city and
county, and that agreement would apply to the proposed annexation.
(a)When a city completes an annexation of territory in a county in which the
crediting provisions set forth in KRS 68.197 apply, the city shall submit to the
Department for Local Government the information required by this
subsection. The information shall be submitted within sixty
(60)days
following the enactment of the ordinance finally annexing the territory into
the city, and shall include the following:
1. The information required in KRS 81A.470(1)(a) and (b);
2. A statement indicating whether the annexation was subject to subsection
(1), (2), or
(3)of this section, or if the annexation was one in which the
city provided tangible benefits or services as a result of the annexation
pursuant to subsection (2)(a)2. of this section; and
3. A copy of any interlocal agreement created as a result of compliance
with this section or that applies as described in subsection
(3)of this
section.
(b)The Department for Local Government may make reporting forms consistent
with this subsection, and may promulgate administrative regulations pursuant
to KRS Chapter 13A to implement the provisions of this subsection.