AN ACT relating to the Kentucky Tax Tribunal.

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AN ACT relating to the Kentucky Tax Tribunal. 1
WHEREAS, the General Assembly recognizes a need for an independent tax court 2
or tribunal with its members having expertise in state and local tax matters; and 3
WHEREAS, specialized tax tribunals and courts have been implemented in over 35 4
states, with most housed in the Executive Branch, though some have been placed in the 5
Judicial Branch; and 6
WHEREAS, as currently writt en, our Constitution would require an amendment to 7
house such a tax tribunal in the Judicial Branch, and therefore, the General Assembly is 8
placing the tax tribunal in the Executive Branch; and 9
WHEREAS, in order to streamline the resolution of all state an d local tax -related 10
disputes, the General Assembly intends to and does hereby divest the Circuit Courts and 11
District Courts of original jurisdiction over all such matters vested in the tax tribunal by 12
this Act; and 13
WHEREAS, the General Assembly hereby esta blishes an independent state -level 14
tax tribunal described and known as the Kentucky Tax Tribunal, which shall have sole 15
and exclusive statewide jurisdiction over all actions that arise under the tax laws in the 16
Commonwealth to hear and resolve all controve rsies arising out of or related to the 17
assessment, collection, and refund of all state and local taxes in the Commonwealth; 18
NOW, THEREFORE, 19
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 20
SECTION 1. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 21
READ AS FOLLOWS: 22
As used in this Sections 1 to 17 of this Act: 23
(1) "Electronic transmission" includes transmission by facsimile or email; 24
(2) "Taxing agency" includes any state or local ca binet, department, agency, 25
authority, board, commission, school district, special district, municipality, city, 26
county, charter county government, urban-county government, consolidated local 27
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government, unified local government, or other entity having taxa tion powers, to 1
the extent each governmental body or entity listed in this subsection levies, 2
assesses, or collects taxes or fees, or has the power to levy, assess, or collect taxes 3
or fees; 4
(3) "Taxpayer" means any person required or permitted by law or a dministrative 5
regulation to perform any act subject to the administrative jurisdiction of a taxing 6
agency, including the following: 7
(a) File a report, return, statement, certification, claim, estimate, declaration, 8
form, or other document; 9
(b) Furnish any information; 10
(c) Withhold, collect, or pay any tax, installment, estimate, or other funds; and 11
(d) Secure any license, permit, or other authorization to conduct a business or 12
exercise any privilege, right, or responsibility; and 13
(4) "Tribunal" means the Kentucky Tax Tribunal. 14
SECTION 2. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 15
READ AS FOLLOWS: 16
(1) The Kentucky Board of Tax Appeals is abolished on December 31, 2027. 17
(2) (a) The Kentucky Tax Tribunal shall be created in the executive branch 18
effective January 1, 2028. 19
(b) The tribunal shall have exclusive jurisdiction for all tax -related disputes in 20
the Commonwealth. 21
(c) Effective December 31, 2027, the District Courts and Circuit Courts are 22
hereby divested of their original jurisdiction over all civil tax-related matters 23
except any action that may be pending under subsection (6) of this section. 24
(d) The tribunal shall be independent from the authority of all taxing agencies 25
in the Commonwealth and shall rule on all tax-related disputes. 26
(3) In creating the tribunal, the General Assembly intends to foster the settlement or 27
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other resolution of tax disputes to the greatest extent possible and, in cases in 1
which litigation is necessary, provide the people of the Commonweal th with a fair 2
and independent procedure to resolve tax disputes with taxing agencies. Sections 3
1 to 17 of this Act, including the jurisdiction of the tribunal, shall be interpreted 4
and construed in furtherance of this express legislative intent to secure an 5
efficient, just, speedy, and inexpensive determination or resolution of every tax 6
action. 7
(4) (a) All property of the Kentucky Board of Tax Appeals shall be transferred to 8
the Kentucky Tax Tribunal effective January 1, 2028. 9
(b) All employees of the Ken tucky Board of Tax Appeals shall be transferred to 10
the tribunal effective January 1, 2028, without any change in employment 11
status or compensation. 12
(c) Terms of the members of the Board of Tax Appeals shall end upon 13
dissolution of the board on December 31, 2027. 14
(d) All records of the Kentucky Board of Tax Appeals shall be transferred to the 15
tribunal effective January 1, 2028. 16
(5) Sections 1 to 17 of this Act shall apply to: 17
(a) All proceedings commenced before the tribunal on or after January 1, 18
2028; 19
(b) Any pending administrative proceeding involving a question of law or fact 20
arising under any state or local tax law in this Commonwealth, including 21
any action before the Kentucky Board of Tax Appeals, in which a final or 22
nonappealable administrative determi nation has not been entered before 23
January 1, 2028; and 24
(c) Any action under paragraph (b) of this subsection shall be transferred to 25
the tribunal, which shall render the decision in that proceeding. 26
(6) Sections 1 to 17 of this Act shall not affect any proceeding, prosecution, action, 27
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suit, or appeal commenced in the judicial branch before January 1, 2028. 1
SECTION 3. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 2
READ AS FOLLOWS: 3
(1) (a) The tribunal shall consist of not more than three (3) judges appointed by the 4
Governor from a list of three (3) persons submitted to him or her by the 5
board of governors of the Kentucky Bar Association. 6
(b) Each appointment made under this subsection shall be: 7
1. For a term of four (4) years; and 8
2. Subject to confirmation by the Senate in accordance with KRS 11.160. 9
(c) From inception of the tribunal forward, if more than one (1) judge is 10
appointed to the tribunal, the judges appointed shall be given terms of 11
differing lengths, not exceeding four (4) years, as may be required to ensure 12
that the terms of office do not expire in the same year. 13
(d) Any vacancy on the tribunal occurring other than by expiration of a term 14
shall be filled in the same manner as an original appointment. 15
(2) (a) Each judge of the tribunal shall be: 16
1. A citizen of the United States; 17
2. A resident of the Commonwealth; 18
3. At least thirty-five (35) years of age; and 19
4. Licensed to practice law in the courts of this Commonwealth for no 20
less than ten (10) continuous years prior to appointment. 21
(b) A person shall not be appointed as a judge of the tribunal unless, at the time 22
of appointment, the individual has demonstrated: 23
1. Extensive knowledge of state and local tax law; and 24
2. Not less than ten (10) years of experience in tax -related dispute 25
resolution and litigation. 26
(3) A judge of the tribunal shall: 27
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(a) Hold no other public office or position in federal, state, or local government 1
and shall not actively engage in any other gainful employment or business, 2
except nothing in this paragraph shall prohibit a judge of the tribunal from 3
owning a passive interest in business entities or earning income from 4
incidental teaching or scholarly activities; 5
(b) Receive no less t han the annual salary and benefits provided to a Circuit 6
Court judge; and 7
(c) Be provided the use of a state-owned motor vehicle. 8
(4) Before assuming the duties of the office, each judge of the tribunal shall take the 9
oath prescribed by Section 228 of the Constitution of Kentucky. 10
(5) (a) If more than one (1) judge is appointed to the tribunal, the Governor shall 11
designate one (1) of the members as the chief judge. 12
(b) The chief judge shall: 13
1. Be the executive of the tribunal; 14
2. Have sole authority over the administration of the tribunal; 15
3. Apportion among the judges all causes, matters, and proceedings 16
coming before the tribunal; and 17
4. Be responsible for the training of all judges appointed to the tribunal 18
by: 19
a. Conducting an orientation session for each judge as 20
expeditiously as possible following his or her appointment; and 21
b. Conducting no less than two (2) seminars each year for all 22
judges and staff of the tax tribunal to discuss any legislative 23
changes, relev ant court decisions, and applicable policies and 24
procedures. 25
(6) (a) If the tribunal's docket becomes congested, resulting in the untimely 26
adjudication of claims, or if a judge for any reason cannot preside in an 27
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action pending before the tribunal and no o ther judge can preside, the 1
Governor may appoint a special judge. 2
(b) A special judge appointed under this subsection shall: 3
1. Have the same qualifications required in subsection (2) of this section; 4
2. Have all the powers and responsibilities of a regula r judge of the 5
tribunal; 6
3. a. Be paid a salary for each day served, not to exceed 1/260 of the 7
annual salary and benefits for a Circuit Judge, and necessary 8
expenses incidental to the performance of the duties of the 9
assignment; or 10
b. In lieu of benefits , a per diem amount equal to the value of 11
benefits calculated in the same manner may be paid at the option 12
of the tribunal; and 13
4. Be entitled to serve for a term no longer than twelve (12) months 14
unless confirmed by the Senate under KRS 11.160. 15
(7) (a) A judge of the tribunal may be removed by the Governor for neglect of duty, 16
misfeasance, malfeasance, or other good cause after being given a copy of 17
the charges and an opportunity for an administrative hearing conducted in 18
accordance with KRS Chapter 13B. 19
(b) Any judge of the tribunal removed by the Governor may appeal any final 20
order of removal to the Franklin Circuit Court in accordance with KRS 21
Chapter 13B. 22
(c) This section shall not preclude the right of any judge removed under this 23
section from pursuing any other remedy provided by law. 24
SECTION 4. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 25
READ AS FOLLOWS: 26
(1) The principal office of the tribunal shall be located in Frankfort, Kentucky, in a 27
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building that is separate and apart from any building in which a taxing agency is 1
located. 2
(2) (a) The tribunal shall conduct hearings: 3
1. At its principal office; or 4
2. At regional locations throughout the Commonwealth to provide 5
taxpayers a reasonable opportunity to appear be fore the tribunal with 6
minimal inconvenience and expense. The tribunal, however, shall not 7
conduct hearings at locations that are owned or utilized by taxing 8
agencies for any purpose. 9
(b) 1. Proceedings may also be conducted via video or audio conference; and 10
2. The tribunal, in its discretion, may allow remote attendance at any 11
proceeding. 12
(4) The office of the tribunal shall be open during regular working hours for the 13
conduct of its business, with the exception of closure due to inclement weather or 14
periods of emergency. 15
(5) The tribunal may enter into a memorandum of understanding with the 16
Administrative Office of the Courts to provide hearing rooms, chambers, offices, 17
or other appropriate facilities when hearings are held outside of Frankfort, with 18
the tribunal to bear all incurred costs. 19
SECTION 5. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 20
READ AS FOLLOWS: 21
(1) The tribunal shall have authority to: 22
(a) Hire personnel it determines necessary to carry out its duties and functions; 23
(b) Enter into personal service contracts in compliance with KRS Chapter 45A 24
as needed; 25
(c) Establish a library and obtain any equipment necessary to carry out its 26
duties and functions; and 27
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(d) Promulgate administrative regulations in accordance with KRS Chapter 1
13A. 2
(2) The records of the tribunal shall be: 3
(a) Maintained in a manner that complies with the confidentiality requirements 4
of Section 30 of this Act, as applicable, an d the provisions of KRS 61.870 to 5
61.884; and 6
(b) Retained in the same manner and for the same period of time as records of 7
the Circuit Courts, as published by the Administrative Office of the Courts. 8
SECTION 6. A NEW S ECTION OF KRS CHAPTER 142 IS CREATED TO 9
READ AS FOLLOWS: 10
(1) (a) The tribunal shall have exclusive jurisdiction to hold hearings, make 11
findings of fact, conclusions of law, and issue opinions and orders on all 12
matters arising under any state or local tax law in this Commonwealth. 13
(b) In exercising its exclusive jurisdiction, the tribunal may establish a small 14
claims division and shall have authority to set the jurisdictional limits and 15
procedures of any small claims division. 16
(2) (a) A person shall not contest any matter within the exclusive jurisdiction of the 17
tribunal in any action, suit, or proceeding in the Circuit Court or District 18
Court or any other forum of the Commonwealth except on appeal as 19
provided in subsection (1) of Section 13 of this Act. 20
(b) Any action, suit, or proceeding brought in violation of this subsection shall 21
be dismissed without prejudice by the involved court or forum. 22
(c) The improper commencement of any action, suit, or proceeding shall not 23
toll the time period established for com mencing a proceeding before the 24
tribunal. 25
(3) Except in cases involving the denial of a claim for refund credit, offset, or 26
recoupment, the taxpayer shall have the right to have the taxpayer's case heard 27
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by the tribunal prior to the payment of any conteste d amount and prior to the 1
posting of any bond required by law. 2
(4) The tribunal shall have jurisdiction over matters where "as -applied" challenges 3
are brought concerning statutes, ordinances, resolutions, administrative 4
regulations, and published policies or rules. 5
(5) A taxpayer desiring to facially challenge the constitutionality of a statute, 6
ordinance, resolution, policy, rule, or administrative regulation as written may, at 7
the taxpayer's election, do so by pursuing one (1) of the following methods, as 8
applicable: 9
(a) 1. Commence a declaratory action with respect to the constitutional 10
challenge in the either the Franklin Circuit Court or the Circuit Court 11
of the county in which the taxpayer resides or maintains a place of 12
business, or, if applicable, the District Courts of the United States; and 13
2. File a petition with the tribunal with respect to the remainder of the 14
matter, which proceeding shall be stayed pending final resolution of 15
the constitutional challenge; 16
(b) File a petition with the tribunal for resolution of all issues other than the 17
constitutional challenge, preserving the constitutional challenge until the 18
entire matter, including the constitutional challenge, is presented to a 19
reviewing appellate court; or 20
(c) Bifurcate the matter by comme ncing a declaratory action as described in 21
paragraph (a) of this subsection regarding the facial constitutional 22
challenge and filing a petition with the tribunal for a determination of the 23
remaining issues. 24
(6) This section shall not eliminate the board of assessment appeal process embodied 25
in KRS Chapter 133 for property valuation assessment appeals, with all appeals 26
from the board of assessment taken to the tribunal. 27
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SECTION 7. A NEW SECTION OF KRS CHAPTER 142 IS CREAT ED TO 1
READ AS FOLLOWS: 2
(1) A taxpayer shall commence a proceeding in the tribunal by filing a petition 3
seeking judicial review of a final ruling, order, or other determination of a taxing 4
agency that: 5
(a) Imposes liability for tax, penalty, fee, or interest; 6
(b) Denies a refund, credit application, or claim; 7
(c) Cancels, revokes, suspends, or de nies an application for license, permit, or 8
registration related to taxes; 9
(d) Reviews a decision rendered pursuant to Section 36 of this Act; or 10
(e) Constitutes any other action that gives a person the right to a hearing under 11
the tax laws applicable to any taxing agency of the Commonwealth. 12
(2) (a) The petition shall be filed in the tribunal no later than thirty (30) days after 13
the applicable taxing agency's written notice of the final ruling, order, or 14
determination is made and communicated to the taxpayer. 15
(b) The fees required under Section 8 of this Act shall be paid at the time the 16
petition is filed. 17
(3) (a) The taxing agency shall file an answer in the tribunal no later than thirty 18
(30) days after receipt of the tribunal's notification that the taxpa yer has 19
properly filed a petition. 20
(b) Upon good cause shown, the tribunal may grant additional time for the 21
taxing agency to file its answer upon motion, not to exceed ninety (90) days. 22
(c) If an amended petition is filed as provided in subsection (6) of this section, 23
the taxing agency shall answer within forty-five (45) days of the filing of the 24
amended petition. 25
(d) The taxing agency shall serve a copy of its answer on the taxpayer and the 26
taxpayer's counsel and file proof of the service with the answer. 27
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(e) If the taxing agency fails to timely file its answer, all material facts alleged 1
in the petition or amended petition shall be deemed admitted. 2
(4) (a) The taxpayer may file a reply to the agency's answer within fifteen (15) days 3
after receipt of the answer. 4
(b) If an amended answer is made as provided in subsection (6) of this section, 5
the taxpayer shall have thirty (30) days to file a reply. 6
(c) The taxpayer shall serve a copy of the reply on the authorized representative 7
of the taxing agency and shall file proof of service with the reply. 8
(d) If the taxpayer fails to reply within the prescribed time, all material facts 9
alleged in the answer or amended answer shall be deemed admitted. 10
(5) When a reply has been filed, or if no reply has been filed, th e matter shall be 11
promptly assigned to a judge and may be scheduled for hearing. 12
(6) (a) Either party may amend a pleading once without leave at any time before 13
the period for responding to the pleading expires. 14
(b) If an answer has been filed, a pleading may be amended only with the 15
written consent of the adverse party or with the permission of the tribunal 16
by order. 17
(7) (a) The parties to a tribunal proceeding may, by written agreement, waive their 18
right to a hearing and submit an action to the tribunal on written 19
stipulations and briefs. 20
(b) After submission, the tribunal may, in its discretion, require appearance for 21
the taking of further evidence or oral argument. 22
(8) Service of process required under this Chapter shall be made in conformity with 23
Section 16 of this Act. 24
SECTION 8. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 25
READ AS FOLLOWS: 26
(1) Upon filing a petition, the taxpayer shall pay to the clerk of the tribunal a filing 27
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fee, in an amount to be determined by the tribunal, of no less than one hundred 1
dollars ($100) and no more than five hundred dollars ($500) based upon the 2
amount in dispute. All filing fees shall be retained by the tribunal and used as a 3
part of its operating budget. 4
(2) A taxpayer whose petition seeks a hearing in the small claims division established 5
under Section 12 of this Act shall be required to pay a filing fee in the amount of 6
twenty-five dollars ($25). 7
(3) The same fee required for filing a petition under subsection (1) or (2) of this 8
section shall be paid by any other party making an appearance in a proceeding, 9
including an intervenor or amicus curiae, except that no fee shall be charged to a 10
taxing agency, governmental body, or government official appearing in a 11
representative capacity. 12
(4) The tribunal may fix a fee, not in excess of the fees charged and collected by the 13
clerks of the Circuit Courts, for: 14
(a) Compiling documents; 15
(b) Preparing transcripts or any video recording of the record; or 16
(c) Copying any record, entry, or other document, and the compilation and 17
certification of any record, entry, or other document. 18
SECTION 9. A NEW SECTION OF KRS CHAPTER 142 IS CR EATED TO 19
READ AS FOLLOWS: 20
(1) Subject to limitations established by the tribunal in administrative regulations 21
promulgated in accordance with KRS Chapter 13A, a party may obtain discovery 22
by: 23
(a) Written interrogatories; 24
(b) Requests for the production of documents; 25
(c) Depositions; and 26
(d) Requests for admissions. 27
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(2) The tribunal may provide for other forms of discovery permissible under the 1
Kentucky Rules of Civil Procedure upon motion of a party for good cause shown. 2
(3) A judge or the clerk of the tribunal, on the request of any party to the proceeding, 3
shall issue subpoenas requiring the attendance of witnesses and giving of 4
testimony, and subpoenas duces tecum requiring the production of evidence, 5
consistent with the Kentucky Rules of Civil Procedure. 6
(4) Any witness subpoenaed or whose deposition is taken shall receive from the party 7
requesting their attendance the same fees and mileage as a witness in a Circuit 8
Court proceeding. 9
(5) The tribunal may: 10
(a) Enforce its orders relating to discovery and o ther procedural issues by 11
deciding issues wholly or partly against the offending party, and: 12
(b) Impose sanctions, including contempt orders, against a party or counsel of 13
record if the violation is found to be willful. 14
(6) The tribunal shall have the auth ority to award attorney's fees and costs in a 15
manner consistent with the authority of a Circuit Court. 16
SECTION 10. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 17
READ AS FOLLOWS: 18
(1) Proceedings before the tribunal shall be tried de novo, without a jury, and no 19
deference shall be afforded to the taxing agency's action being reviewed. 20
(2) The tribunal shall take evi dence, conduct hearings, and issue final and 21
interlocutory decisions. 22
(3) The tribunal shall have the power to review and rule upon motions brought 23
before it and shall have regularly scheduled sessions to hear and rule upon 24
motions by parties, including emergency motions. 25
(4) Testimony shall be given only under oath or affirmation. 26
(5) (a) Absent good cause shown, hearings shall be open to the public and shall be 27
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conducted in accordance with the rules of practice and procedure as 1
established by the tribunal through administrative regulations promulgated 2
in accordance with KRS Chapter 13A. 3
(b) On motion of either party, the tribunal may issue a protective order or an 4
order closing part or all of the hearing, or seal the record, from the public 5
when the party opposing disclosure of certain information shows good 6
cause to protect the information from disclosure. Any information that the 7
tribunal rules shall not be disclosed shall be exempt from the Open Records 8
Act, KRS 61.870 to 61.884. 9
(c) When deciding whethe r the moving party has shown good cause to protect 10
information from being disclosed to the public, the judge shall weigh the 11
public's right of access with: 12
1. The privacy rights of participants or third parties; 13
2. Disclosure of trade secrets as defined by KRS 365.880(4); and 14
3. National security. 15
(6) The tribunal shall apply the Kentucky Rules of Evidence in all proceedings, 16
except the tribunal may admit all re levant evidence, including hearsay, if the 17
tribunal determines the evidence is probative of a material fact in controversy. 18
(7) All rules of privilege recognized by the laws of the Commonwealth and common 19
law shall control in the tribunal. 20
(8) In the case of an issue of fact, the taxpayer shall have the burden of proof by a 21
preponderance of the evidence. 22
(9) The taxing agency shall have the burden of proof when attempting to impose 23
findings of penalties, fees, and fraud. 24
(10) Proceedings before the tribunal , except those before the small claims division 25
under Section 12 of this Act, shall be officially reported in a manner consistent 26
with the decisions of the appellate courts of the Commonwealth, with similar 27
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publication or distribution provisions established by the tribunal. 1
(11) Proceedings before the tribunal shall be conducted in accordance with the 2
provisions of KRS Chapter 13B. To the extent any provision of Sections 1 to 17 of 3
this Act conflicts with the provisions of KRS Chapter 13B, the provisions o f 4
Sections 1 to 17 of this Act shall control. 5
(12) (a) The Kentucky Rules of Civil Procedure shall apply to actions before the 6
tribunal. 7
(b) In the case of an appeal from the tribunal under Section 13 of this Act, the 8
Kentucky Rules of Appellate Procedure governing appeals to the Kentucky 9
Court of Appeals shall apply. 10
(c) To the extent any provision of Sections 1 to 17 of this Act conflicts with the 11
Kentucky Rules of Civil Procedure, the provision of Sections 1 to 17 of this 12
Act shall control. 13
(13) Upon m otion properly advanced, the petition and other pleadings in the 14
proceeding shall be deemed to conform to the evidence presented at the hearing, 15
unless: 16
(a) A party establishes to the satisfaction of the tribunal that presentation of the 17
evidence would unf airly prejudice the party in maintaining its position on 18
the merits; or 19
(b) Denying the taxpayer's request to conform to the evidence would confer 20
jurisdiction on the tribunal over a matter that would not otherwise come 21
within its jurisdiction. 22
SECTION 11. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 23
READ AS FOLLOWS: 24
(1) (a) The tribunal shall have the power to establish remedies as appropriate for 25
the matter before it. 26
(b) The tribunal shall not have the authority to declare a statute, ordinance, 27
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resolution, administrative regulation, policy, or rule unconstitutional. 1
(2) The tribunal's decision shall have the same effect and shall be enforced in the 2
same manner as a final judgment of a Circuit Court, unless timely appealed. 3
(3) The tribunal shall render its decisions in writing and shall include a concise 4
statement of the facts found and the conclusions of law reached. 5
(4) The tribunal shall render its decision: 6
(a) No later than six (6) months after submission of the last brief filed following 7
completion of the hearing; or 8
(b) If briefs are not submitted, no later than six (6) months following 9
completion of the hearing and submission of the matter for decision. 10
(5) The chief judge may extend the six (6) month period, for good cause, up to six (6) 11
additional months. 12
(6) If the tribunal fails to render a decision within six (6) months, or twelve (12) 13
months if the chief judge has granted an extension, either party may institute an 14
original action in the Circuit Court to compel issuance of a decision. 15
(7) The tribunal shall apply the doctrine of stare decisis to its decisions, remaining 16
consistent in its application of law from case to case, unless the tribunal provides 17
detailed reasons for distinguishing or reversing its prior precedent. 18
(8) Orders and opi nions issued by the Kentucky Board of Tax Appeals, the former 19
Claims Commission, and the former Kentucky Tax Commission may be utilized 20
by the tribunal in its deliberations and decision making. These orders and 21
opinions shall not be binding on the tribunal. 22
(9) The chief judge shall be afforded the opportunity to review and approve all 23
decisions and orders of the tribunal prior to their entry and publication. 24
(10) The tribunal shall promulgate administrative regulations in accordance with KRS 25
Chapter 13A to establish procedures and forms as may be necessary to carry out 26
the implementation, intent, and purposes of Sections 1 to 17 of this Act. 27
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SECTION 12. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 1
READ AS FOLLOWS: 2
(1) There is hereby created a small claims division of the Kentucky Tax Tribunal. 3
(2) At the direction of the chief judge, the judges of the tribunal shall sit as the 4
judges of the small claims division. 5
(3) (a) The small claims division shall have jurisdiction over any proceeding for: 6
1. Any calendar year, tax year, month, or quarter, where the net amount 7
of the tax deficiencies or claimed refunds in controversy for that time 8
period is at or under twenty -five thousand dollars ($25,000), exclusive 9
of interest, fees, and penalties; and 10
2. All residential real estate ad valorem tax appeals from the board of 11
assessment appeals under Section 36 of this Act. 12
(b) 1. A taxpayer may elect to proceed in the small claims division of the 13
tribunal by filing a petition in the form prescribed by the tribunal for 14
small claims. 15
2. The petition shall be filed no later than thirty (30) days after the 16
applicable agency's written notice of its final ruling, order, or 17
determination is made and communicated to the taxpayer. 18
3. No later than thirty (30) days after service of the petition to proceed in 19
the small claims division, or at any other time as the tribunal may 20
order, the taxing agency shall file with the tribunal an answer and 21
accept or reject the taxpayer's election for the smal l claims division 22
docket. 23
4. A taxpayer may not revoke an election to proceed in the small claims 24
division once an election has been made. 25
(4) At any time prior to judgment, a taxpayer may voluntarily dismiss a proceeding in 26
the small claims division by no tifying the clerk of the request to dismiss the 27
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proceeding in writing. The dismissal shall be with prejudice. 1
(5) (a) Hearings in the small claims division shall be informal, though judicial 2
decorum shall be maintained at all times. 3
(b) The judge may rece ive all evidence as he or she deems appropriate for 4
determination of the case. 5
(c) All testimony shall be given under oath or affirmation. 6
(d) A decision from the bench may be issued by the presiding judge if deemed 7
appropriate. 8
(6) A judgment of the sma ll claims division shall not be considered as precedent in 9
any other case, hearing, or proceeding. 10
(7) The taxpayer's election, if accepted by the taxing agency in its answer, shall 11
constitute a waiver of further appeal rights of the parties otherwise affo rded 12
under Section 13 of this Act and Section 115 of the Constitution of Kentucky. 13
SECTION 13. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 14
READ AS FOLLOWS: 15
(1) Except as provided in subsection (7) of Section 12 of thi s Act, a taxpayer or 16
agency shall be entitled to judicial review in the Kentucky Court of Appeals of: 17
(a) A final decision in the form of an opinion or order of the Kentucky Tax 18
Tribunal; or 19
(b) An interlocutory decision of the tribunal which shall be pursued under the 20
same conditions and standards, and in the same manner, as an 21
interlocutory decision of a Circuit Court, including applicable writs. 22
(2) The record on judicial review shall include: 23
(a) The final decision of the tribunal; 24
(b) The stenographic or video transcript of the hearing before the tribunal; 25
(c) The pleadings of record; 26
(d) Any motions submitted by either party; and 27
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(e) All exhibits, testimony, and documents admitted into evidence. 1
(3) The clerk of the tribunal shall be responsible for producing and certifying the 2
record. 3
SECTION 14. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 4
READ AS FOLLOWS: 5
(1) The following shall apply to appearances in proceedings conducted by the 6
tribunal: 7
(a) If an individual, the taxpayer shall be represented by himself or herself or 8
by an attorney admitted to practice in the Commonwealth; and 9
(b) If not an individual, the taxpayer shall be represented by an attorney 10
admitted to practice in the Commonwealth. 11
(2) Upon motion, the tribunal may allow an attorney not admitted to practice in the 12
Commonwealth to represent a taxpayer when: 13
(a) The attorney is authorized, licensed, and in good standing to practice in his 14
or her original jurisdiction; 15
(b) The taxpayer has retained an attorney admitted to practice in the 16
Commonwealth and that in-state attorney has: 17
1. Entered an appearance in the matter before the tribunal; and 18
2. Complied with all provisions of Kentucky law on pro hac vice 19
admissions, including adequate supervision of out -of-state counsel; 20
and 21
(c) Certified proof given by the submitting attorney of having paid three 22
hundred ten dollars ($310) to the clerk of the tribunal as a fee for the 23
admittance. 24
(3) The taxing agency shall be represented by an authorized attorney of its choosing 25
in all proceedings before the tribunal. 26
SECTION 15. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 27
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READ AS FOLLOWS: 1
Except for decisions issued by the small claims division, the tribunal shall index and 2
publish its final decisions in a print or electronic form in a manner consistent with the 3
appellate courts of the Commonwealth. These publications shall be permanently 4
available on the tribunal's website and constitute an official report of the tribunal. 5
SECTION 16. A NEW SECTION OF KRS CHAPTER 142 IS CREATED TO 6
READ AS FOLLOWS: 7
(1) The following shall constitute personal service on the other party: 8
(a) First class mail, sent to the: 9
1. Taxpayer at the address provided on the petition; 10
2. Taxpayer's attorneys of record; or 11
3. Taxing agency, or its attorney of record. 12
(b) Other means, as prescribed by the tribunal. 13
(2) Mail sent to the tribunal shall be by registered mail, certified mail, return receipt 14
requested, or delivery by a private delivery service approved by the tribunal or by 15
the Internal Revenue Service in accordance with 26 U.S.C. sec. 7502(f). Mailing 16
of any pleading, decision, order, notice, or other documents in respect to 17
proceedings before the tribunal shall be deemed to have occurred on the date 18
deposited with the United States Postal Service as noted by a stamped receipt or 19
postmark confirming the date of mailing or the date of submission to the private 20
delivery service. 21
(3) All filings may be filed with the tribunal by electronic transmission and the filing 22
shall not exceed fifty (50) pages. 23
(4) (a) The party filing a document by electronic transmission shall include a cover 24
page containing the following: 25
1. The date of the transmission; 26
2. The name, address, telephone number, facsimile number if available, 27
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and email address of the person transmitting the document; 1
3. The caption of the case and case number; 2
4. The name of the judge to whom the case is assigned; 3
5. The title or name of the document; and 4
6. The number of pages transmitted, including the cover page. 5
(b) If a judge or case number has not yet been assigned, that fact shall be stated 6
on the cover page. 7
(5) The sending party shall bear the risk of transmitting a document by electronic 8
transmission to the tribunal. 9
(6) Documents sent and accepted by electronic transmission shall be deemed filed as 10
of the date and time the electronic transmission was received by the tribunal. 11
(7) Electronic transmission filings shall be accepted only during the tribunal's posted 12
regular business hours. Any electronic transmission received after regular 13
business hours on a business day, or on a Saturday, Sunday, o r holiday, shall be 14
deemed filed on the next regular business day. 15
(8) A document filed by electronic transmission shall be accepted as the effective, 16
original filing. The submitting party shall file the source document with the 17
tribunal within three (3) b usiness days of submission by electronic transmission. 18
A party filing by electronic transmission shall also serve all other parties to the 19
proceeding by electronic transmission, when feasible. 20
(9) If the electronic transmission includes attachments that ca nnot be accurately 21
transmitted, or if the enclosure of these attachments would cause the filing to 22
exceed the fifty (50) page limit, each attachment shall be replaced by an inset 23
page describing the attachment and why it is not present. Unless otherwise 24
ordered, the missing attachment shall be filed with the source document 25
submitted to the tribunal. 26
(10) The tribunal may strike any document or attachment which is not filed as 27
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required by this section. 1
SECTION 17. A NEW S ECTION OF KRS CHAPTER 142 IS CREATED TO 2
READ AS FOLLOWS: 3
(1) (a) An action before the tribunal may be resolved by mediation among the 4
parties by filing a motion for diversion to mediation of an action. 5
(b) The motion may be made by any party within ninety (90) days of the filing 6
of the petition. 7
(c) The tribunal may also order at any time that an action be diverted to 8
mediation on its own motion. 9
(2) The clerk may schedule each action for a mediation conference before a qualified 10
mediator either independe ntly chosen by the parties or appointed by the chief 11
judge, and written notice shall be given to the parties or their attorney by mail. 12
(3) (a) All parties or their attorneys of record scheduled to appear at a mediation 13
conference shall secure settlement a uthority prior to the conference to 14
respond to settlement proposals that may be offered at the conference. 15
(b) All parties shall be prepared to discuss their positions and explore any 16
possibility of settlement. 17
(c) The costs associated with mediation shall be borne by the parties to the 18
mediation. 19
(4) The chief judge, upon recommendation of the mediator, may enter an order 20
setting forth the action taken or agreement reached at the mediation conference, 21
which, with t he consent and agreement of the parties, shall govern the 22
subsequent course of the proceedings. 23
(5) Any action that cannot be resolved through the mediation process shall be 24
scheduled for a hearing. 25
(6) All statements made and information provided by a par ty at a mediation 26
conference shall be confidential and shall not be disclosed by a party, a party's 27
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attorney, or the mediator except upon consent of the party. 1
(7) A stenographic record of mediation conferences shall not be taken or maintained. 2
(8) Statements made and information provided in the course of a mediation 3
conference shall not be admissible at a subsequent hearing, except when admitted 4
in accordance with Rule 408 of the Kentucky Rules of Evidence. 5
Section 18. KRS 11A.010 is amended to read as follows: 6
As used in this chapter, unless the context otherwise requires: 7
(1) "Business" means any corporation, limited liability company, partnership, limited 8
partnership, sole proprietorship, firm, enterprise, franchise, association, 9
organization, self -employed individual, holding company, joint stock company, 10
receivership, trust, or any legal entity through which business is conducted, whether 11
or not for profit; 12
(2) "Commission" means the Executive Branch Ethics Commission; 13
(3) "Compensation" means any money, thing of value, or economic benefit conferred 14
on, or received by, any person in return for services rendered, or to be rendered, by 15
himself or herself or another; 16
(4) "Family" means spouse and children, as well as a p erson who is related to a public 17
servant as any of the following, whether by blood or adoption: parent, brother, 18
sister, grandparent, grandchild, father -in-law, mother-in-law, brother-in-law, sister-19
in-law, son -in-law, daughter -in-law, stepfather, stepmoth er, stepson, stepdaughter, 20
stepbrother, stepsister, half brother, half sister; 21
(5) "Gift" means a payment, loan, subscription, advance, deposit of money, services, or 22
anything of value, unless consideration of equal or greater value is received; "gift" 23
does not include gifts from family members, campaign contributions, the waiver of 24
a registration fee for a presenter at a conference or training described in KRS 25
45A.097(5), or door prizes available to the public; 26
(6) "Income" means any money or thing of valu e received or to be received as a claim 27
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on future services, whether in the form of a fee, salary, expense allowance, 1
forbearance, forgiveness, interest, dividend, royalty, rent, capital gain, or any other 2
form of compensation or any combination thereof; 3
(7) "Officer" means: 4
(a) All major management personnel in the executive branch of state government, 5
including the secretary of the cabinet, the Governor's chief executive officers, 6
cabinet secretaries, deputy cabinet secretaries, general counsels, 7
commissioners, deputy commissioners, executive directors, executive 8
assistants, policy advisors, special assistants, administrative coordinators, 9
executive advisors, staff assistants, and division directors; 10
(b) Members and full-time chief administrative officers of: 11
1. The Parole Board; 12
2. Office of Claims and Appeals; 13
[3. Board of Tax Appeals;] 14
3.[4.] Board of Claims; 15
4.[5.] Crime Victims Compensation Board; 16
5.[6.] Kentucky Retirement Systems board of trustees; 17
6. Kentucky Tax Tribunal; 18
7. Kentucky Teachers' Retirement System board of trustees; 19
8. The Kentucky Public Employees Deferred Compensation Authority 20
board of trustees; 21
9. Public Service Commission; 22
10. Worker's Compensation Board and its administrative law judges; 23
11. The Kentucky Occupational Safety and Health Review Commission; 24
12. The Kentucky Board of Education; 25
13. The Council on Postsecondary Education; 26
14. County Employees Retirement System board of trustees; 27
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15. Kentucky Public Pensions Authority; and 1
16. The Kentucky Horse Racing and Gaming Corporation; 2
(c) Salaried members of executive branch boards and commissions; and 3
(d) Any person who, through a personal service contract or any other contra ctual 4
employment arrangement with an agency, performs on a full -time, 5
nonseasonal basis a function of any major management position listed in this 6
subsection; 7
(8) "Official duty" means any responsibility imposed on a public servant by virtue of 8
his or her position in the state service; 9
(9) "Public servant" means: 10
(a) The Governor; 11
(b) The Lieutenant Governor; 12
(c) The Secretary of State; 13
(d) The Attorney General; 14
(e) The Treasurer; 15
(f) The Commissioner of Agriculture; 16
(g) The Auditor of Public Accounts; 17
(h) All employees in the executive branch including officers as defined in 18
subsection (7) of this section and merit employees; and 19
(i) Any person who, through any contractual arrangement with an agency, is 20
employed to perform a function of a position within an executive branch 21
agency on a full-time, nonseasonal basis; 22
(10) "Agency" means every state office, cabinet, department, board, commission, public 23
corporation, or authority in the executive branch of state government. A public 24
servant is employed by the ag ency by which his or her appointing authority is 25
employed, unless his or her agency is attached to the appointing authority's agency 26
for administrative purposes only, or unless the agency's characteristics are of a 27
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separate independent nature distinct from the appointing authority and it is 1
considered an agency on its own, such as an independent department; 2
(11) "Lobbyist" means any person employed as a legislative agent as defined in KRS 3
6.611(23) or any person employed as an executive agency lobbyist as d efined in 4
KRS 11A.201(9); 5
(12) "Lobbyist's principal" means the entity in whose behalf the lobbyist promotes, 6
opposes, or acts; 7
(13) "Candidate" means those persons who have officially filed candidacy papers or who 8
have been nominated by their political pa rty pursuant to KRS 118.105, 118.115, 9
118.325, or 118.760 for any of the offices enumerated in subsections (9)(a) to (g) of 10
this section; 11
(14) "Does business with" or "doing business with" means contracting, entering into an 12
agreement, leasing, or otherwis e exchanging services or goods with a state agency 13
in return for payment by the state, including accepting a grant, but not including 14
accepting a state entitlement fund disbursement; 15
(15) "Public agency" means any governmental entity; 16
(16) "Appointing authority" means the agency head or any person whom he or she has 17
authorized by law to act on behalf of the agency with respect to employee 18
appointments; 19
(17) "Represent" means to attend an agency proceeding, write a letter, or communicate 20
with an employee of an agency on behalf of someone else; 21
(18) "Directly involved" means to work on personally or to supervise someone who 22
works on personally; 23
(19) "Sporting event" means any professional or amateur sport, athletic game, contest, 24
event, or race involving machines, persons, or animals, for which admission tickets 25
are offered for sale and that is viewed by the public; 26
(20) "Person" means an individual, proprietorship, firm, partnership, limited partnership, 27
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joint venture, joint stock company, synd icate, business or statutory trust, donative 1
trust, estate, company, corporation, limited liability company, association, club, 2
committee, organization, or group of persons acting in concert; and 3
(21) "Salaried" means receiving a fixed compensation or bene fit reserved for full -time 4
employees, which is paid on a regular basis without regard to the actual number of 5
hours worked. 6
Section 19. KRS 12.020 is amended to read as follows: 7
Departments, program cabinets and their de partments, and the respective major 8
administrative bodies that they include are enumerated in this section. It is not intended 9
that this enumeration of administrative bodies be all -inclusive. Every authority, board, 10
bureau, interstate compact, commission, committee, conference, council, office, or any 11
other form of organization shall be included in or attached to the department or program 12
cabinet in which they are included or to which they are attached by statute or statutorily 13
authorized executive order; e xcept in the case of the Personnel Board and where the 14
attached department or administrative body is headed by a constitutionally elected 15
officer, the attachment shall be solely for the purpose of dissemination of information and 16
coordination of activities and shall not include any authority over the functions, 17
personnel, funds, equipment, facilities, or records of the department or administrative 18
body. 19
I. Cabinet for General Government - Departments headed by elected officers: 20
(1) The Governor. 21
(2) Lieutenant Governor. 22
(3) Department of State. 23
(a) Secretary of State. 24
(b) Board of Elections. 25
(c) Registry of Election Finance. 26
(4) Department of Law. 27
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(a) Attorney General. 1
(5) Department of the Treasury. 2
(a) Treasurer. 3
(6) Department of Agriculture. 4
(a) Commissioner of Agriculture. 5
(b) Agricultural Development Board. 6
(c) Kentucky Agricultural Finance Corporation. 7
(7) Auditor of Public Accounts. 8
(a) Commonwealth Office of the Ombudsman. 9
II. Program cabinets headed by appointed officers: 10
(1) Justice and Public Safety Cabinet: 11
(a) Department of Kentucky State Police. 12
1. Office of Administrative Services. 13
a. Division of Operational Support. 14
b. Division of Management Services. 15
2. Office of Operations. 16
a. Division of West Troops. 17
b. Division of East Troops. 18
c. Division of Special Enforcement. 19
d. Division of Commercial Vehicle Enforcement. 20
3. Office of Technical Services. 21
a. Division of Forensic Sciences. 22
b. Division of Electronic Services. 23
c. Division of Records Management. 24
(b) Department of Criminal Justice Training. 25
(c) Department of Corrections. 26
(d) Department of Juvenile Justice. 27
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(e) Office of the Secretary. 1
(f) Office of Drug Control Policy. 2
(g) Office of Legal Services. 3
(h) Office of the Kentucky State Medical Examiner. 4
(i) Parole Board. 5
(j) Kentucky State Corrections Commission. 6
(k) Office of Legislative and Intergovernmental Services. 7
(l) Office of Human Resource Management. 8
1. Division of Human Resource Administration. 9
2. Division of Employee Management. 10
(m) Department of Public Advocacy. 11
(n) Office of Communications. 12
1. Information Technology Services Division. 13
(o) Office of Financial Management Services. 14
1. Division of Financial Management. 15
(p) Grants Management Division. 16
(2) Energy and Environment Cabinet: 17
(a) Office of the Secretary. 18
1. Office of Legislative and Intergovernmental Affairs. 19
2. Office of Legal Services. 20
a. Legal Division I. 21
b. Legal Division II. 22
3. Office of Administrative Hearings. 23
4. Office of Communication. 24
5. Mine Safety Review Commission. 25
6. Office of Kentucky Nature Preserves. 26
7. Kentucky Public Service Commission. 27
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(b) Department for Environmental Protection. 1
1. Office of the Commissioner. 2
2. Division for Air Quality. 3
3. Division of Water. 4
4. Division of Environmental Program Support. 5
5. Division of Waste Management. 6
6. Division of Enforcement. 7
7. Division of Compliance Assistance. 8
(c) Department for Natural Resources. 9
1. Office of the Commissioner. 10
2. Division of Mine Permits. 11
3. Division of Mine Reclamation and Enforcement. 12
4. Division of Abandoned Mine Lands. 13
5. Division of Oil and Gas. 14
6. Division of Mine Safety. 15
7. Division of Forestry. 16
8. Division of Conservation. 17
9. Office of the Reclamation Guaranty Fund. 18
(d) Office of Energy Policy. 19
1. Division of Energy Assistance. 20
(e) Office of Administrative Services. 21
1. Division of Human Resources Management. 22
2. Division of Financial Management. 23
3. Division of Information Services. 24
(3) Public Protection Cabinet. 25
(a) Office of the Secretary. 26
1. Office of Communications and Public Outreach. 27
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2. Office of Legal Services. 1
a. Insurance Legal Division. 2
b. Alcoholic Beverage Control Legal Division. 3
c. Housing, Buildings and Construction Legal Division. 4
d. Financial Institutions Legal Division. 5
e. Professional Licensing Legal Division. 6
3. Office of Administrative Hearings. 7
4. Office of Administrative Services. 8
a. Division of Human Resources. 9
b. Division of Fiscal Responsibility. 10
(b) Office of Claims and Appeals. 11
1. [Board of Tax Appeals. 12
2. ]Board of Claims. 13
2.[3.] Crime Victims Compensation Board. 14
(c) Kentucky Boxing and Wrestling Commission. 15
(d) Department of Alcoholic Beverage Control. 16
1. Division of Distilled Spirits. 17
2. Division of Malt Beverages. 18
3. Division of Enforcement. 19
4. Division of Tobacco, Nicotine, and Vapor Product Licensing. 20
(e) Department of Financial Institutions. 21
1. Division of Depository Institutions. 22
2. Division of Non-Depository Institutions. 23
3. Division of Securities. 24
(f) Department of Housing, Buildings and Construction. 25
1. Division of Fire Prevention. 26
2. Division of Plumbing. 27
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3. Division of Heating, Ventilation, and Air Conditioning. 1
4. Division of Building Code Enforcement. 2
(g) Department of Insurance. 3
1. Division of Health and Life Insurance and Managed Care. 4
2. Division of Property and Casualty Insurance. 5
3. Division of Administrative Services. 6
4. Division of Financial Standards and Examination. 7
5. Division of Licensing. 8
6. Division of Insurance Fraud Investigation. 9
7. Division of Consumer Protection. 10
(h) Department of Professional Licensing. 11
1. Real Estate Authority. 12
2. Division of Real Property Boards. 13
(4) Transportation Cabinet: 14
(a) Department of Highways. 15
1. Office of Project Development. 16
2. Office of Project Delivery and Preservation. 17
3. Office of Highway Safety. 18
4. Highway District Offices One through Twelve. 19
(b) Department of Vehicle Regulation. 20
(c) Department of Aviation. 21
(d) Department of Rural and Municipal Aid. 22
1. Office of Local Programs. 23
2. Office of Rural and Secondary Roads. 24
(e) Office of the Secretary. 25
1. Office of Public Affairs. 26
2. Office for Civil Rights and Small Business Development. 27
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3. Office of Budget and Fiscal Management. 1
4. Office of Inspector General. 2
5. Secretary's Office of Safety. 3
(f) Office of Support Services. 4
(g) Office of Transportation Delivery. 5
(h) Office of Audits. 6
(i) Office of Human Resource Management. 7
(j) Office of Information Technology. 8
(k) Office of Legal Services. 9
(5) Cabinet for Economic Development: 10
(a) Office of the Secretary. 11
1. Office of Legal Services. 12
2. Department for Business and Community Development. 13
a. Development and Retention Division – West Kentucky. 14
b. Development, Retention , and Administrative Division – 15
Central and East Kentucky. 16
c. Community and Workforce Development Division. 17
3. Department for Financial Services. 18
a. Kentucky Economic Development Finance Authority. 19
b. Finance and Personnel Division. 20
c. IT and Resource Management Division. 21
d. Compliance Division. 22
e. Program Administration Division. 23
f. Bluegrass State Skills Corporation. 24
g. The GRANT Commission. 25
4. Office of Strategy and Public Affairs. 26
a. Marketing and Communications Division. 27
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b. Research and Strategy Division. 1
5. Office of Entrepreneurship and Innovation. 2
a. Commission on Small Business Innovation and Advocacy. 3
6. Kentucky Film Office. 4
a. Kentucky Film Leadership Council. 5
(6) Cabinet for Health and Family Services: 6
(a) Office of the Secretary. 7
1. Office of Public Affairs. 8
2. Office of Legal Services. 9
3. Office of Inspector General. 10
4. Office of Human Resource Management. 11
5. Office of Finance and Budget. 12
6. Office of Legislative and Regulatory Affairs. 13
7. Office of Administrative Services. 14
8. Office of Application Technology Services. 15
9. Office of Data Analytics. 16
10. Office of Medical Cannabis. 17
a. Division of Enforcement and Compliance. 18
b. Division of Licensure and Access. 19
(b) Department for Public Health. 20
(c) Department for Medicaid Services. 21
(d) Department for Behavioral Health, Developmental and Intellectual 22
Disabilities. 23
(e) Department for Aging and Independent Living. 24
(f) Department for Community Based Services. 25
(g) Department for Family Resource Centers and Volunteer Services. 26
(7) Finance and Administration Cabinet: 27
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(a) Office of the Secretary. 1
(b) Office of the Inspector General. 2
(c) Office of Legislative and Intergovernmental Affairs. 3
(d) Office of General Counsel. 4
(e) Office of the Controller. 5
(f) Office of Administrative Services. 6
(g) Office of Policy and Audit. 7
(h) Department for Facilities and Support Services. 8
(i) Department of Revenue. 9
(j) Commonwealth Office of Technology. 10
(k) State Property and Buildings Commission. 11
(l) Office of Equal Employment Opportunity and Contract Compliance. 12
(m) Kentucky Employees Retirement Systems. 13
(n) Commonwealth Credit Union. 14
(o) State Investment Commission. 15
(p) Kentucky Housing Corporation. 16
(q) Kentucky Local Correctional Facilities Construction Authority. 17
(r) Kentucky Turnpike Authority. 18
(s) Historic Properties Advisory Commission. 19
(t) Kentucky Higher Education Assistance Authority. 20
(u) Kentucky River Authority. 21
(v) Kentucky Teachers' Retirement System Board of Trustees. 22
(w) Executive Branch Ethics Commission. 23
(x) Office of Fleet Management. 24
(8) Tourism, Arts and Heritage Cabinet: 25
(a) Kentucky Department of Tourism. 26
1. Division of Tourism Services. 27
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2. Division of Marketing and Administration. 1
3. Division of Communications and Promotions. 2
(b) Kentucky Department of Parks. 3
1. Division of Information Technology. 4
2. Division of Human Resources. 5
3. Division of Financial Operations. 6
4. Division of Purchasing. 7
5. Division of Facilities. 8
6. Division of Park Operations. 9
7. Division of Sales, Marketing, and Customer Service. 10
8. Division of Engagement. 11
9. Division of Food Services. 12
10. Division of Rangers. 13
(c) Department of Fish and Wildlife Resources. 14
1. Division of Law Enforcement. 15
2. Division of Administrative Services. 16
3. Division of Engineering, Infrastructure, and Technology. 17
4. Division of Fisheries. 18
5. Division of Information and Education. 19
6. Division of Wildlife. 20
7. Division of Marketing. 21
(d) Kentucky Horse Park. 22
1. Division of Support Services. 23
2. Division of Buildings and Grounds. 24
3. Division of Operational Services. 25
(e) Kentucky State Fair Board. 26
1. Office of Administrative and Information Technology Services. 27
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2. Office of Human Resources and Access Control. 1
3. Division of Expositions. 2
4. Division of Kentucky Exposition Center Operations. 3
5. Division of Kentucky International Convention Center. 4
6. Division of Public Relations and Media. 5
7. Division of Venue Services. 6
8. Division of Personnel Management and Staff Development. 7
9. Division of Sales. 8
10. Division of Security and Traffic Control. 9
11. Division of Information Technology. 10
12. Division of the Louisville Arena. 11
13. Division of Fiscal and Contract Management. 12
14. Division of Access Control. 13
(f) Office of the Secretary. 14
1. Office of Finance. 15
2. Office of Government Relations and Administration. 16
(g) Office of Legal Affairs. 17
(h) Office of Human Resources. 18
(i) Office of Public Affairs and Constituent Services. 19
(j) Office of Arts and Cultural Heritage. 20
(k) Kentucky African-American Heritage Commission. 21
(l) Kentucky Foundation for the Arts. 22
(m) Kentucky Humanities Council. 23
(n) Kentucky Heritage Council. 24
(o) Kentucky Arts Council. 25
(p) Kentucky Historical Society. 26
1. Division of Museums. 27
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2. Division of Oral History and Educational Outreach. 1
3. Division of Research and Publications. 2
4. Division of Administration. 3
(q) Kentucky Center for the Arts. 4
1. Division of Governor's School for the Arts. 5
(r) Kentucky Artisans Center at Berea. 6
(s) Northern Kentucky Convention Center. 7
(t) Eastern Kentucky Exposition Center. 8
(9) Personnel Cabinet: 9
(a) Office of the Secretary. 10
(b) Department of Human Resources Administration. 11
(c) Office of Employee Relations. 12
(d) Kentucky Public Employees Deferred Compensation Authority. 13
(e) Office of Administrative Services. 14
(f) Office of Legal Services. 15
(g) Governmental Services Center. 16
(h) Department of Employee Insurance. 17
(i) Office of Diversity, Equality, and Training. 18
(j) Office of Public Affairs. 19
(10) Education and Labor Cabinet: 20
(a) Office of the Secretary. 21
1. Office of Legal Services. 22
a. Workplace Standards Legal Division. 23
b. Workers' Claims Legal Division. 24
c. Workforce Development Legal Division. 25
2. Office of Administrative Services. 26
a. Division of Human Resources Management. 27
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b. Division of Fiscal Management. 1
c. Division of Operations and Support Services. 2
3. Office of Technology Services. 3
a. Division of Information Technology Services. 4
4. Office of Policy and Audit. 5
5. Office of Legislative Services. 6
6. Office of Communications. 7
7. Office of the Kentucky Center for Statistics. 8
8. Board of the Kentucky Center for Statistics. 9
9. Early Childhood Advisory Council. 10
10. Governors' Scholars Program. 11
11. Governor's School for Entrepreneurs Program. 12
12. Foundation for Adult Education. 13
(b) Department of Education. 14
1. Kentucky Board of Education. 15
2. Kentucky Technical Education Personnel Board. 16
3. Education Professional Standards Board. 17
(c) Board of Directors for the Center for School Safety. 18
(d) Department for Libraries and Archives. 19
(e) Kentucky Environmental Education Council. 20
(f) Kentucky Educational Television. 21
(g) Kentucky Commission on the Deaf and Hard of Hearing. 22
(h) Department of Workforce Development. 23
1. Career Development Office. 24
2. Office of Vocational Rehabilitation. 25
a. Division of Kentucky Business Enterprise. 26
b. Division of the Carl D. Perkins Vocational Training Center. 27
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c. Division of Blind Services. 1
d. Division of Field Services. 2
e. Statewide Council for Vocational Rehabilitation. 3
f. Employment First Council. 4
g. Division of Program Policy and Support. 5
3. Office of Industry and Apprenticeship Services. 6
a. Division of Apprenticeship. 7
b. Division of Workforce Talent. 8
4. Kentucky Apprenticeship Council. 9
5. Division of Technical Assistance. 10
6. Office of Adult Education. 11
7. Office of the Kentucky Workforce Innovation Board. 12
(i) Department of Workplace Standards. 13
1. Division of Occupational Safety and Health Compliance. 14
2. Division of Occupational Safety and Health Education and 15
Training. 16
3. Division of Wages and Hours. 17
(j) Office of Unemployment Insurance. 18
(k) Kentucky Unemployment Insurance Commission. 19
(l) Department of Workers' Claims. 20
1. Division of Workers' Compensation Funds. 21
2. Office of Administrative Law Judges. 22
3. Division of Claims Processing. 23
4. Division of Security and Compliance. 24
5. Division of Specialist and Medical Services. 25
6. Workers' Compensation Board. 26
(m) Workers' Compensation Funding Commission. 27
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(n) Kentucky Occupational Safety and Health Standards Board. 1
(o) State Labor Relations Board. 2
(p) Employers' Mutual Insurance Authority. 3
(q) Kentucky Occupational Safety and Health Review Commission. 4
(r) Workers' Compensation Nominating Committee. 5
(s) Office of Educational Programs. 6
(t) Kentucky Workforce Innovation Board. 7
(u) Kentucky Commission on Proprietary Education. 8
(v) Kentucky Work Ready Skills Advisory Committee. 9
(w) Kentucky Geographic Education Board. 10
(x) Department for Disability Determination Services. 11
1. Division of Operations. 12
2. Division of Support Services. 13
3. Division of Specialized Cases. 14
4. Division of Case Processing. 15
III. Other departments headed by appointed officers: 16
(1) Council on Postsecondary Education. 17
(2) Department of Military Affairs. 18
(3) Department for Local Government. 19
(4) Kentucky Commission on Human Rights. 20
(5) Kentucky Commission on Women. 21
(6) Department of Veterans' Affairs. 22
(7) Kentucky Commission on Military Affairs. 23
(8) Office of Minority Empowerment. 24
(9) Governor's Council on Wellness and Physical Activity. 25
(10) Kentucky Communications Network Authority. 26
(11) Kentucky Tax Tribunal. 27
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Section 20. KRS 13B.020 is amended to read as follows: 1
(1) The provisions of this chapter shall apply to all administrative hearings conducted 2
by an agency, with the exception of those specifically exempted under this section. 3
The provisions of this chapter shall supersede any other provisions of the Kentucky 4
Revised Statutes and administrative regulations, unless exempted under this section, 5
to the extent these other provisions are duplicative or in conflict. This chapter 6
creates only procedural rights and shall not be construed to confer upon any person 7
a right to hearing not expressly provided by law. 8
(2) The provisions of this chapter shall not apply to: 9
(a) Investigations, hearings to determine probable cause, or any other type of 10
information gathering or fact finding activities; 11
(b) Public hearings required in KRS Chapter 13A for the promulgation of 12
administrative regulations; 13
(c) Any other public hearing co nducted by an administrative agency which is 14
nonadjudicatory in nature and the primary purpose of which is to seek public 15
input on public policy making; 16
(d) Military adjudicatory proceedings conducted in accordance with KRS Chapter 17
35; 18
(e) Administrative hearings conducted by the legislative and judicial branches of 19
state government; 20
(f) Administrative hearings conducted by any city, county, urban -county, charter 21
county, or special district contained in KRS Chapters 65 to 109, or any other 22
unit of local government operating strictly in a local jurisdictional capacity; 23
(g) Informal hearings which are part of a multilevel hearing process that affords 24
an administrative hearing at some point in the hearing process if the 25
procedures for informal hearings are approved and promulgated in accordance 26
with subsections (4) and (5) of this section; 27
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(h) Limited exemptions granted for specific hearing provisions and denoted by 1
reference in the text of the applicable statutes or administrative regulations; 2
(i) Administrative hearings exempted pursuant to subsection (3) of this section; 3
(j) Administrative hearings exempted, in whole or in part, pursuant to 4
subsections (4) and (5) of this section;[ and] 5
(k) Any administrative hearing which was commenced but not completed prior to 6
July 15, 1996; and 7
(l) Any tax proceeding under the jurisdiction of the Kentucky Tax Tribunal 8
and governed by KRS Chapter 142, except as provided in subsection (7) of 9
Section 3 of this Act. 10
(3) The following administrative hearings are exempt from appl ication of this chapter 11
in compliance with 1994 Ky. Acts ch. 382, sec. 19: 12
(a) Finance and Administration Cabinet 13
1. Higher Education Assistance Authority 14
a. Wage garnishment hearings conducted under authority of 20 15
U.S.C. sec. 1095a and 34 C.F.R. sec. 682.410 16
b. Offset hearings conducted under authority of 31 U.S.C. sec. 17
3720A and sec. 3716, and 34 C.F.R. sec. 30.33 18
2. Department of Revenue 19
a. Any licensing and bond revocation hearings conducted under the 20
authority of KRS 138.210 to 138.448 and 234.310 to 234.440 21
b. Any license revocation hearings under KRS 131.630 and 138.130 22
to 138.205 23
(b) Cabinet for Health and Family Services 24
1. Office of the Inspector General 25
a. Certificate-of-need hearings and licensure conducted under 26
authority of KRS Chapter 216B 27
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b. Licensure revocation hearings conducted under authority of KRS 1
Chapter 216B 2
2. Department for Community Based Services 3
a. Supervised placement revocation hearings conducted under 4
authority of KRS Chapter 630 5
3. Department for Medicaid Services 6
a. Administrative appeal hearings following an external independent 7
third-party review of a Medicaid managed care organization's final 8
decision that denies, in whole or in part, a health care service to an 9
enrollee or a cla im for reimbursement to the provider for a health 10
care service rendered by the provider to an enrollee of the 11
Medicaid managed care organization, conducted under authority of 12
KRS 205.646 13
(c) Justice and Public Safety Cabinet 14
1. Department of Kentucky State Police 15
a. Kentucky State Police Trial Board disciplinary hearings conducted 16
under authority of KRS Chapter 16 17
2. Department of Corrections 18
a. Parole Board hearings conducted under authority of KRS Chapter 19
439 20
b. Prison adjustment committee hearings conduc ted under authority 21
of KRS Chapter 197 22
c. Prison grievance committee hearings conducted under authority of 23
KRS Chapters 196 and 197 24
3. Department of Juvenile Justice 25
a. Supervised placement revocation hearings conducted under KRS 26
Chapter 635 27
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(d) Energy and Environment Cabinet 1
1. Department for Natural Resources 2
a. Surface mining hearings conducted under authority of KRS 3
Chapter 350 4
b. Oil and gas hearings conducted under the authority of KRS 5
Chapter 353, except for those conducted by the Kentucky Oil and 6
Gas Conservation Commission pursuant to KRS 353.500 to 7
353.720 8
c. Explosives and blasting hearings conducted under the authority of 9
KRS 351.315 to 351.375 10
2. Department for Environmental Protection 11
a. Wild River hearings conducted under authority of KRS Chap ter 12
146 13
b. Water resources hearings conducted under authority of KRS 14
Chapter 151 15
c. Water plant operator and water well driller hearings conducted 16
under authority of KRS Chapter 223 17
d. Environmental protection hearings conducted under authority of 18
KRS Chapter 224 19
e. Petroleum Storage Tank Environmental Assurance Fund hearings 20
under authority of KRS Chapter 224 21
3. Public Service Commission 22
a. Utility hearings conducted under authority of KRS Chapters 74, 23
278, and 279 24
(e) Education and Labor Cabinet 25
1. Department of Workers' Claims 26
a. Workers' compensation hearings conducted under authority of 27
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KRS Chapter 342 1
2. Kentucky Occupational Safety and Health Review Commission 2
a. Occupational safety and health hearings conducted under authority 3
of KRS Chapter 338 4
3. Unemployment insurance hearings conducted under authority of KRS 5
Chapter 341 6
4. Disability determination hearings conducted under authority of 20 7
C.F.R. pt. 404 8
(f) Public Protection Cabinet 9
1. Board of Claims 10
a. Liability hearings conducted under authority of KRS 11
49.020(3)[(5)] and 49.040 to 49.180 12
(g) State universities and colleges 13
1. Student suspension and expulsion hearings conducted under authority of 14
KRS Chapter 164 15
2. University presidents and faculty removal hearings conducted under 16
authority of KRS Chapter 164 17
3. Campus residency hearings conducted under authority of KRS Chapter 18
164 19
4. Family Education Rights to Privacy Act hearings conducted under 20
authority of 20 U.S.C. sec. 1232 and 34 C.F.R. sec. 99 21
5. Federal Health Care Quality Improvement Act of 1986 hearings 22
conducted under authority of 42 U.S.C. sec. 11101 to 11115 and KRS 23
Chapter 311. 24
(4) Any administrative hearing, or portion thereof, may be certified a s exempt by the 25
Attorney General based on the following criteria: 26
(a) The provisions of this chapter conflict with any provision of federal law or 27
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regulation with which the agency must comply, or with any federal law or 1
regulation with which the agency mus t comply to permit the agency or 2
persons within the Commonwealth to receive federal tax benefits or federal 3
funds or other benefits; 4
(b) Conformity with the requirement of this chapter from which exemption is 5
sought would be so unreasonable or so impractic al as to deny due process 6
because of undue delay in the conduct of administrative hearings; or 7
(c) The hearing procedures represent informal proceedings which are the 8
preliminary stages or the review stages of a multilevel hearing process, if the 9
provisions of this chapter or the provisions of a substantially equivalent 10
hearing procedure exempted under subsection (3) of this section are applied at 11
some level within the multilevel process. 12
(5) The Attorney General shall not exempt an agency from any requirem ent of this 13
chapter until the agency establishes alternative procedures by administrative 14
regulation which, insofar as practical, shall be consistent with the intent and 15
purpose of this chapter. When regulations for alternative procedures are submitted 16
to the Administrative Regulation Review Subcommittee, they shall be accompanied 17
by the request for exemption and the approval of exemption from the Attorney 18
General. The decision of the Attorney General, whether affirmative or negative, 19
shall be subject to ju dicial review in the Franklin Circuit Court within thirty (30) 20
days of the date of issuance. The court shall not overturn a decision of the Attorney 21
General unless the decision was arbitrary or capricious or contrary to law. 22
(6) Except to the extent precluded by another provision of law, a person may waive any 23
procedural right conferred upon that person by this chapter. 24
(7) The provisions of KRS 13B.030(2)(b) shall not apply to administrative hearings 25
held under KRS 11A.100 or 18A.095. 26
Section 21. KRS 49.010 is amended to read as follows: 27
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(1) The Office of Claims and Appeals is created within the Public Protection Cabinet 1
and shall constitute a statutory administrative office of the state government within 2
the meaning of KRS Chapter 12. 3
(2) The Office of Claims and Appeals shall consist of two (2)[three (3)] separate and 4
distinct administrative boards attached to the office within the meaning of KRS 5
12.020: 6
[(a) The Board of Tax Appeals;] 7
(a)[(b)] The Board of Claims; and 8
(b)[(c)] The Crime Victims Compensation Board. 9
(3) The executive director of the Office of Claims and Appeals shall be appointed by 10
the secretary of the Public Protection Cabinet with the approval of the Governor in 11
accordance with KRS 12.050. The secretary of the Public Protection Cabinet is the 12
appointing authority for the Office of Claims and Appeals, and the executive 13
director shall be directly responsible to the secretary of the Public Protection 14
Cabinet and shall perform the functions, powers, and duties provided by law and 15
prescribed by the secretary of the Public Protection Cabinet. The executive director 16
shall: 17
(a) Carry out the policy and program directives of the boards; 18
(b) Be responsible for the day-to-day operations of the office; 19
(c) Establish appropriate organizational structures and personnel policies; 20
(d) Prepare annual reports on the office's and boards' activities; 21
(e) Prepare budgets; 22
(f) Perform all other duties as directed by the secretary and the boards and 23
necessary for the operations of the office; and 24
(g) Keep written records docume nting the completion of training by staff for and 25
members of the Crime Victims Compensation Board. 26
(4) The Office of Claims and Appeals shall be authorized to: 27
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(a) Employ necessary staff, secure adequate office space, and execute other 1
administrative and l ogistical matters as may be necessary to ensure proper 2
functioning of the office; 3
(b) Promulgate, amend, and repeal suitable administrative regulations to carry out 4
the provisions and purposes of the office's statutory authority; 5
(c) Publicize widely the f unctions and purposes of the Office of Claims and 6
Appeals and its attached boards; 7
(d) Enter into agreements with any state agency, political subdivision of the state, 8
postsecondary education institution, or other person or entity to enlist 9
assistance to implement the duties and responsibilities of the office; and 10
(e) Ensure that staff for the Crime Victims Compensation Board receives trauma -11
informed training to understand the challenges faced by victims of crime, 12
including factors that may result in the de layed filing of a claim. Staff shall 13
receive six (6) hours of training under this paragraph within thirty (30) days of 14
being hired, and three (3) hours of training each year thereafter. Training 15
pursuant to this paragraph may be developed in collaboration with 16
organizations and agencies that specialize in victim services and victim 17
advocacy. 18
(5) The principal office of the Office of Claims and Appeals shall be at Frankfort, 19
Kentucky, and shall be open during regular working hours for the conduct of its 20
business. 21
Section 22. KRS 49.020 is amended to read as follows: 22
[(1) (a) As used in this section and KRS 49.220, "revenue and taxation agency" means 23
and includes any agency of state or county government that issues final 24
rulings, orders, or determinations affecting revenue and taxation. 25
(b) The Board of Tax Appeals created by KRS 49.010 shall have the power and 26
authority to hear and determine appeals from final rulings, orders, and 27
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determinations of any revenue and taxation agency. 1
(2) (a) The Board of Tax Appeals shall consist of three (3) members appointed by the 2
Governor, subject to Senate confirmation in accordance with KRS 11.160 for 3
each appointment or reappointment. One (1) member shall be appointed 4
initially for a two (2) year term. One (1) member shall be appointed initially 5
for a three (3) year term. One (1) member shall be appointed initially for a 6
four (4) year term. Thereafter, all appointments to the board shall be for a four 7
(4) year term. There shall be no limit to the amount of reappointments a 8
member shall receive. 9
(b) Vacancies for unexpired terms shall be filled in the same manner as regular 10
appointments, but the appointees shall hold office only to the end of the 11
unexpired term of the member replaced. 12
(c) The Governor shall appoint a chairperson for the board, subject to Senate 13
confirmation in accordance with KRS 11.160 for each appointment or 14
reappointment. The chairperson shall be appointed for a four (4) year term 15
and shall be an attorney with the qualific ations required of candidates for 16
Circuit Judge. The chairperson shall be the presiding officer over appeals 17
heard by the board. 18
(d) The Governor shall establish the compensation, not to include benefits, of the 19
members of the board pursuant to KRS 64.640. 20
(e) Two (2) of the members shall be attorneys with the qualifications required of 21
candidates for Circuit Judge. One (1) of the members shall have a background 22
in taxation. No member shall engage in any occupation or business 23
inconsistent with his or her duties as such a member.] 24
(1)[(3)] The Crime Victims Compensation Board created by KRS 49.010 shall have 25
the power and authority to hear and determine all matters relating to a claim by a 26
crime victim or a person authorized by law to act on behalf of a cri me victim for 27
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compensation. 1
(2)[(4)] (a) The Crime Victims Compensation Board shall consist of three (3) 2
members appointed by the Governor, not all of whom shall be engaged in the 3
same occupation or profession. Appointed board members shall be subject to 4
Senate confirmation in accordance with KRS 11.160 for each appointment or 5
reappointment. Members shall be appointed for a four (4) year term. There 6
shall be no limit to the amount of reappointments a member may receive. One 7
(1) member shall be appointed ini tially for a two (2) year term. One (1) 8
member shall be appointed initially for a three (3) year term. One (1) member 9
shall be appointed initially for a four (4) year term. Thereafter, all 10
appointments to the board shall be for a four (4) year term. Two (2 ) of the 11
appointees shall be a victim as defined in KRS 421.500(1), the parent, spouse, 12
sibling, or child of a victim as defined in KRS 421.500(1), whether or not the 13
victim is deceased, or a victim advocate as defined in KRS 421.570(1); and 14
the other appo intee shall be an attorney licensed to practice law in this state 15
with two (2) years of experience. 16
(b) Vacancies for unexpired terms shall be filled in the same manner as regular 17
appointments, but the appointees shall hold office only to the end of the 18
unexpired term of the member replaced. 19
(c) The Governor shall appoint a chairperson for the board, subject to Senate 20
confirmation in accordance with KRS 11.160 for each appointment or 21
reappointment. The chairperson shall be appointed for a four (4) year term. 22
(d) The Governor shall establish the co mpensation, not to include benefits, of the 23
members of the board pursuant to the provisions of KRS 64.640. 24
(3)[(5)] The Board of Claims created by KRS 49.010 shall have the following powers 25
and authority to investigate, hear proof, and compensate persons for damages 26
sustained to either person or property as a proximate result of negligence on the part 27
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of the Commonwealt h, any of its cabinets, departments, bureaus, or agencies, or 1
any of its officers, agents, or employees while acting within the scope of their 2
employment by the Commonwealth or any of its cabinets, departments, bureaus, or 3
agencies; except, however, regard less of any provision of law to the contrary, the 4
Commonwealth, its cabinets, departments, bureaus, and agencies, and its officers, 5
agents, and employees, while acting within the scope of their employment by the 6
Commonwealth or any of its cabinets, departm ents, bureaus, or agencies, shall not 7
be liable for collateral or dependent claims which are dependent on loss to another 8
and not the claimant or damages for mental distress or pain or suffering, and 9
compensation shall not be allowed, awarded, or paid for such claims for damages. 10
(4)[(6)] (a) The Board of Claims shall consist of three (3) members appointed by the 11
Governor, subject to Senate confirmation in accordance with KRS 11.160 for 12
each appointment or reappointment. One (1) member shall be appointed 13
initially for a two (2) year term. One (1) member shall be appointed initially 14
for a three (3) year term. One (1) member shall be appointed initially for a 15
four (4) year term. Thereafter, all appointments to the board shall be for a four 16
(4) year term. There shall be no limit to the amount of reappointments a 17
member shall receive. 18
(b) Vacancies for unexpired terms shall be filled in the same manner as regular 19
appointments, but the appointees shall hold office only to the end of the 20
unexpired term of the member replaced. 21
(c) The Governor shall appoint a chairperson for the board, subject to Senate 22
confirmation in accordance with KRS 11.160 for each appointment or 23
reappointment. The chairperson shall be appointed for a four (4) year term, 24
and shall be an attorne y with the qualifications required of a candidate for 25
Circuit Judge. The chairperson shall be the presiding officer over appeals 26
heard by the board. 27
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(d) The Governor shall establish the compensation, not to include benefits, of the 1
members of the board pursuant to the provision of KRS 64.640. 2
(e) Two (2) of the members shall be attorneys with the qualifications required of 3
candidates for Circuit Judge and have a background and working knowledge 4
in Kentucky tort law. One (1) member shall have a background in business. 5
No member shall engage in any occupation or business inconsistent with his 6
or her duties as such a member. 7
(5)[(7)] The [Board of Tax Appeals, the] Board of Claims [,] and the Crime Victims 8
Compensation Board shall each be separately authorized to: 9
(a) Promulgate, amend, and repeal suitable administrative regulations to carry out 10
the provisions and purposes of the board's statutory authority; 11
(b) Issue subpoenas and discovery orders, and to petition a court of competent 12
jurisdiction for any order necessary to carry out the board's powers and duties; 13
(c) Take or cause to be taken affidavits or depositions within or without the state; 14
(d) Administer or cause to be administered oaths; 15
(e) Except for the power to issue final decisions on the merits of a claim or 16
appeal, to delegate any of its power or authority to the Office of Claims and 17
Appeals; and 18
(f) Publicize widely the functions and purposes of the board. 19
(6)[(8)] If any appointed board member has a conflict of interest, as contemplated by 20
KRS 11A.030, involving any matter pending before the board, the secretary of the 21
cabinet shall appoint a member of one (1) of the other boards administered by the 22
Office of Claims and Appeals as a substitute member. Following appointment, the 23
substitute board member shall serve in place of the member who has a conflict for 24
all actions and votes relevant to that matter. 25
(7)[(9)] Members of the [Board of Tax Appeals,] Board of Claims [,] and Crime 26
Victims Compensation Board shall receive new member orientation and annual 27
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training to discuss new legislation, pertinent court decisions, and board policies and 1
procedures. Members of the Crime Victims Compensation Board shall receive 2
trauma-informed training to understand the challenges faced by victims of crime, 3
including factors that may result in the delayed filing of a claim. Members shall 4
receive six (6) hours of training under this subsection within thirty (30) days of 5
appointment, and three (3) hours of training each year thereafter. Training pursuant 6
to this subse ction may be developed in collaboration with organizations and 7
agencies that specialize in victim services and victim advocacy. 8
(8)[(10)] The boards shall meet as often as necessary to perform their statutory 9
responsibilities as outlined in this chapter. A majority of the members of the 10
commission shall constitute a quorum for the transaction of business.[ 11
(11) Immediately following June 29, 2021, the Governor shall review the current board, 12
determine any members that are no longer qualified, and appoint ne w members to 13
the board if necessary. ] 14
Section 23. KRS 49.030 is amended to read as follows: 15
KRS 49.040 to 49.180 shall apply to the power and authority of the Board of Claims 16
outlined in KRS 49.020(3)[(5)]. 17
Section 24. KRS 49.090 is amended to read as follows: 18
(1) The Board of Claims may require affected state agencies to investigate claims and 19
the incidents on which they are based and to furnish to the board and the claimant in 20
writing the facts learned by investigation. Such response shall be sufficiently 21
specific to support a decision by the board to pay or deny the claim. If the agency 22
believes the state should refute a claim, the agency shall cite the facts about the 23
incident that support its belief. 24
(2) If the claim is under two thousand five hundred dollars ($2,500), it may be 25
investigated by the board in-house and if the board believes it needs additional facts 26
before deciding the claim, the parties may provide the needed informa tion by letter 27
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or as directed by the board. 1
(3) The board shall hold hearings on contested claims whose value is two thousand five 2
hundred dollars ($2,500) or greater but may decide claims under two thousand five 3
hundred dollars ($2,500) without a hearing. 4
(4) At its hearings, the board, or any of its members, or any of its hearing officers 5
appointed by the board shall hear the parties at issue and their representatives and 6
witnesses. 7
(5) The award or order shall be made within thirty (30) days after final submission, 8
except in cases involving large or complicated records or unusual questions of law, 9
and shall be made within ninety (90) days after final submission in any event. The 10
order or award, together with a statement of the findings of fact, rulings of law, and 11
other matters pertinent to the question at issue shall be filed with the record of the 12
claim and a copy of the order or award shall immediately be sent to the parties in 13
dispute. 14
(6) In cases over two thousand five hundred dollars ($2,500) that have been assigned to 15
a hearing officer or a member, the hearing officer or member shall tender a 16
recommended order to the full board. The final order in any claim heard by a single 17
member or hearing officer shall be made and entered by a majority of the board. 18
(7) In cases of two thousand five hundred dollars ($2,500) or less decided by a 19
member, a claimant may make an application for review to the full board within 20
fourteen (14) days from the date of the order or award. If an application is made, the 21
full board shall, as soon as practicable, review the evidence, or, if deemed 22
advisable, hear the parties at issue, their representatives and witnesses, and shall 23
make an order or award and file it as specified in subsection (5) above.[ 24
(8) The Office of Claims and Appeals may promulgate an administrative regulation 25
authorizing a filing fee of no more than two hundred dollars ($200) for all appeals 26
that are brought before the Board of Tax Appeals and the Board of Claims.] 27
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Section 25. KRS 49.990 is amended to read as follows: 1
Any person who fails or refuses to obey a subpoena or order of [ the Board of Tax 2
Appeals,] the Crime Victims Compensation Board [,] or the Board of Claims made 3
pursuant to KRS Chapter 13B shall be fined not less than twenty -five dollars ($25) nor 4
more than five hundred dollars ($500). 5
Section 26. KRS 62.160 is amended to read as follows: 6
(1) The state officers elected by the voters of the state at large, except the Governor and 7
the Lieutenant Governor, the heads of departments, offices, and cabinets of the state 8
government, the adjutant general, the members of the Public Service Commission, 9
the members of the State Fair Board and Fish and Wildlife Resources Commission, 10
and the members of the [Board of Tax Appeals, ] Board of Claims, Crime Victims 11
Compensation Board, and the Alcoholic Beverage Control Board, shall each give 12
bond. The amounts of the bonds shall be fixed by the Governor, which amounts as 13
to those offices set forth in subsection (2) of this section shall be not less than the 14
amounts set forth for the respective offices. At any time when it appears to be to the 15
interest of the Commonwealth, the Gove rnor may increase the penal sum of any 16
bond or require a renewal of the bond with other or additional surety. 17
(2) The minimum sum of the bond for the following offices shall be as follows: 18
Secretary of State .............................................................................................$10,000 19
Attorney General................................................................................................10,000 20
State Treasurer .................................................................................................300,000 21
Secretary for economic development ................................................................10,000 22
Commissioner of Agriculture ............................................................................10,000 23
Secretary of education and labor .......................................................................10,000 24
Auditor of Public Accounts ...............................................................................25,000 25
Adjutant general .................................................................................................10,000 26
Secretary of finance and administration ..........................................................100,000 27
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Commissioner of revenue ..................................................................................50,000 1
Secretary of transportation .................................................................................50,000 2
Commissioner of highways ...............................................................................50,000 3
Secretary of justice and public safety ................................................................50,000 4
Secretary of corrections .....................................................................................25,000 5
Commissioner for public health services ...........................................................10,000 6
Commissioner for natural resources ..................................................................50,000 7
State librarian .......................................................................................................5,000 8
Commissioner of alcoholic beverage control ....................................................10,000 9
Commissioner of financial institutions ..............................................................25,000 10
Secretary for energy and environment ...............................................................50,000 11
Commissioner of insurance ...............................................................................50,000 12
Commissioner of vehicle regulation ..................................................................10,000 13
Commissioner of fish and wildlife resources ......................................................5,000 14
Secretary for health and family services ............................................................20,000 15
Commissioner of environmental protection ......................................................10,000 16
Secretary of public protection ............................................................................10,000 17
Secretary of tourism, arts and heritage ..............................................................25,000 18
Commissioner for community based services ...................................................20,000 19
Member of the Public Service Commission ......................................................10,000 20
Member of State Fair Board ..............................................................................10,000 21
Member of Fish and Wildlife Resources Commission ........................................1,000 22
[ Member of Board of Tax Appeals ................................................................... 10,000] 23
Member of Board of Claims ..............................................................................10,000 24
Member of Crime Victims Compensation Board ..............................................10,000 25
Associate member of Alcoholic Beverage Control Board ...................................5,000 26
Commissioner of local government .................................................................100,000 27
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Section 27. KRS 131.081 is amended to read as follows: 1
The following rules, principles, or requirements shall apply in the administration of all 2
taxes subject to the jurisdiction of the department: 3
(1) The department shall develop and implement a Kentucky tax educ ation and 4
information program that: 5
(a) Is directed at new taxpayers, taxpayer and industry groups, and department 6
employees to enhance the understanding of and compliance with Kentucky 7
tax laws; 8
(b) Includes information on: 9
1. The application of new tax legislation to taxpayer activities; and 10
2. Areas of recurrent taxpayer noncompliance or inconsistency of 11
administration; and 12
(c) Is published as part of the administrative writings posted on its official 13
website; 14
(2) The department shall publish brief statements in simple and nontechnical language 15
which explain procedures, remedies, and the rights and obligations of taxpayers and 16
the department. These statements shall be provided to taxpayers with the initial 17
notice of audit; each original notice of tax due; each denial or reduction of a refund 18
or credit claimed by a taxpayer; each denial, cancellation, or revocation of any 19
license, permit, or other required authorization applied for or held by a taxpayer; 20
and, if practical and appropriate, in informational publications by the department 21
distributed to the public; 22
(3) Taxpayers shall have the right to be assisted or represented by an attorney, 23
accountant, or other person in any conference, hearing, or other matter before the 24
department. The taxpayer shall be informed of this right prior to conduct of any 25
conference or hearing; 26
(4) The department shall perform audits and conduct confere nces and hearings only at 27
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reasonable times and places; 1
(5) Taxpayers shall have the right to make audio recordings of any conference with or 2
hearing by the department. The department may make similar audio recordings if 3
prior written notice is given to the taxpayer or if the taxpayer records the conference 4
or hearing. The taxpayer shall be entitled to a copy of this department recording or a 5
transcript as provided in KRS 61.874; 6
(6) If any taxpayer's failure to submit a timely return or payment to the depar tment is 7
due to the taxpayer's reasonable reliance on written advice from the department, the 8
taxpayer shall be relieved of any penalty or interest with respect thereto, provided 9
the taxpayer requested the advice in writing from the department and the spec ific 10
facts and circumstances of the activity or transaction were fully described in the 11
taxpayer's request, the department did not subsequently rescind or modify the 12
advice in writing, and there were no subsequent changes in applicable laws or 13
regulations or a final decision of a court which rendered the department's earlier 14
written advice no longer valid; 15
(7) Taxpayers shall have the right to receive a copy of any audit of the department by 16
the Auditor of Public Accounts relating to the department's compli ance with the 17
provisions of KRS 131.041 to 131.081; 18
(8) (a) The department shall include with each notice of tax due a clear and concise 19
description of the basis and amount of any tax, penalty, and interest assessed 20
against the taxpayer and the agent's wri tten narrative setting forth the grounds 21
upon which the assessment is made. 22
(b) Copies of the agent's audit workpapers shall be: 23
1. Included with the notice of tax due; or 24
2. Delivered electronically to the taxpayer. 25
(c) Taxpayers shall be similarly notifi ed regarding the denial or reduction of any 26
refund or credit claim filed by a taxpayer; 27
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(9) (a) Taxpayers shall have the right to an installment payment agreement for the 1
payment of delinquent taxes, penalties, and interest owed, provided the 2
taxpayer requests the agreement in writing clearly demonstrating: 3
1. His or her inability to pay in full; and 4
2. That the agreement will facilitate collection by the department of the 5
amounts owed. 6
(b) The department may modify or terminate an installment payment agree ment 7
and may pursue statutory remedies against the taxpayer if it determines that: 8
1. The taxpayer has not complied with the terms of the agreement, 9
including minimum payment requirements established by the 10
agreement; 11
2. The taxpayers' financial condition has sufficiently changed; 12
3. The taxpayer fails to provide any requested financial condition update 13
information; 14
4. The taxpayer gave false or misleading information in securing the 15
agreement; or 16
5. The taxpayer fails to timely report and pay any other tax due the 17
Commonwealth. 18
(c) The department shall give written notice to the taxpayer at least thirty (30) 19
days prior to modifying or terminating an installment payment agreement 20
unless the department has reason to believe that collection of the amounts 21
owed will be jeopardized in whole or in part by delay; 22
(10) The department shall not knowingly authorize, require, or conduct any investigation 23
or surveillance of any person for nontax administration related purposes, except 24
internal security related investigations involving department personnel; 25
(11) In addition to the circumstances under which an extension of time for filing reports 26
or returns may be granted pursuant to KRS 131.170, taxpayers shall be entitled to 27
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the same extension of the due date of any comp arable Kentucky tax report or return 1
for which the taxpayer has secured a written extension from the Internal Revenue 2
Service provided the taxpayer notifies the department in writing and provides a 3
copy of the extension at the time and in the manner which the department may 4
require; 5
(12) The department shall bear the cost or, if paid by the taxpayer, reimburse the 6
taxpayer for recording or bank charges as the direct result of any erroneous lien or 7
levy by the department, provided the erroneous lien or levy was caused by 8
department error and, prior to issuance of the erroneous lien or levy, the taxpayer 9
timely responded to all contacts by the department and provided information or 10
documentation sufficient to establish his or her position. When the department 11
releases any erroneous lien or levy, notice of the fact shall be mailed to the taxpayer 12
and, if requested by the taxpayer, a copy of the release, together with an 13
explanation, shall be mailed to the major credit reporting companies located in the 14
county where it was filed; 15
(13) (a) The department shall not evaluate individual officers or employees on the 16
basis of taxes assessed or collected or impose or suggest tax assessment or 17
collection quotas or goals. 18
(b) No arrangement or contract shall be entered into for the service to: 19
1. Examine a taxpayer's books and records; 20
2. Collect a tax from a taxpayer; or 21
3. Provide legal representation of the department; 22
if any part of the compensation or other benefits paid or payable for the 23
service is contingent upon or otherwise related to the amount of tax, interest, 24
fee, or penalty assessed against or collected from the taxpayer. Any such 25
arrangement or contract shall be void and unenforceable; 26
(14) Taxpayers shall have the right to bring an action for damages against the 27
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Commonwealth to the Kentucky Tax Tribunal [Board of Tax Appeals] for actual 1
and direct monetary damages sustained by the taxpayer as a result of willful, 2
reckless, or intentional disregard by department employees of the rights of 3
taxpayers as set out in KRS 131.041 to 131.081 o r in the tax laws administered by 4
the department. In the awarding of damages pursuant to this subsection, the board 5
shall take into consideration the negligence or omissions, if any, on the part of the 6
taxpayer which contributed to the damages. If any proc eeding brought by a 7
taxpayer is ruled frivolous by the Kentucky Tax Tribunal [Board of Tax Appeals] , 8
the department shall be reimbursed by the taxpayer for its costs in defending the 9
action. Any claims brought pursuant to this subsection shall be in accorda nce with 10
Sections 1 to 17 of this Act [KRS 49.040 to 49.180]; and 11
(15) Taxpayers shall have the right to privacy with regard to the information provided on 12
their Kentucky tax returns and reports, including any attached information or 13
documents. Except as p rovided in KRS 131.190, no information pertaining to the 14
returns, reports, or the affairs of a person's business shall be divulged by the 15
department to any person or be intentionally and without authorization inspected by 16
any present or former commissioner or employee of the department, [ member of a 17
county board of assessment appeals,] property valuation administrator or employee, 18
or any other person. 19
Section 28. KRS 131.110 is amended to read as follows: 20
(1) (a) The department shall mail to the taxpayer a notice of any tax assessed by it. 21
The assessment shall be due and payable if not protested in writing to the 22
department within: 23
1. Forty-five (45) days from the date of notice, for assessments issued prior 24
to July 1, 2018; and 25
2. Sixty (60) days from the date of notice, for assessments issued on or 26
after July 1, 2018. 27
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(b) Claims for refund of paid assessments may be made under KRS 134.580 and 1
denials appealed under Section 7 of this Act[KRS 49.220]. 2
(c) 1. The protest shall be accompanied by a supporting statement setting forth 3
the grounds upon which the protest is made. 4
2. Upon written request, the department may extend the time for filing the 5
supporting statement if it appears the delay is necessary and 6
unavoidable. 7
3. The refusal of the extension may be reviewed in the same manner as a 8
protested assessment. 9
(2) After a timely protest has been filed, the taxpayer may request a conference with 10
the department. The request shall be granted in writing stating the date and tim e set 11
for the conference. The taxpayer may appear in person or by representative. Further 12
conferences may be held by mutual agreement. 13
(3) (a) After considering the taxpayer's protest, including any matters presented at the 14
final conference, the department shall issue a final ruling on any matter still in 15
controversy, which shall be mailed to the taxpayer. The ruling shall state that 16
it is a final ruling of the department, generally state the issues in controversy, 17
the department's position thereon and set forth the procedure for prosecuting 18
an appeal to the Kentucky Tax Tribunal[Board of Tax Appeals]. 19
(b) The taxpayer may request in writing a final ruling at any time after filing a 20
timely protest and supporting statement. When a final ruling is requested, t he 21
department shall issue such ruling within thirty (30) days from the date the 22
request is received by the department. 23
(c) If a taxpayer files a timely protest in dispute of a property tax assessment 24
issued under KRS 136.120 to 136.180 and does not receive from the 25
department, within one (1) year from the date on which the protest was filed: 26
1. A fully executed written agreement to settle the protest as authorized 27
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under KRS 131.030(3); 1
2. A final ruling in accordance with paragraphs (a) or (b) of this 2
subsection; or 3
3. Resolution and closure of the protest; 4
the department shall immediately issue a final ruling that accepts the 5
taxpayer's grounds of the protest, including the taxpayer's proposed true value 6
as stated in the protest. 7
(4) After a final ruling has been issued, the taxpayer may appeal to the Kentucky Tax 8
Tribunal[Board of Tax Appeals] pursuant to the provisions of Section 7 of this 9
Act[KRS 49.220]. 10
Section 29. KRS 131.180 is amended to read as follows: 11
The provisions of this section shall be known as the "Uniform Civil Penalty Act." 12
Penalties to be assessed in accordance with this section shall apply as follows unless 13
otherwise provided by law: 14
(1) Any taxpayer who files any return or report after the due date prescribed for filing 15
or the due date as extended by the department shall, unless it is shown to the 16
satisfaction of the department that the failure is due to reasonable cause, pay a 17
penalty equal to two percent (2%) of the total tax du e for each thirty (30) days or 18
fraction thereof that the report or return is late. The total penalty levied pursuant to 19
this subsection shall not exceed twenty percent (20%) of the total tax due; however, 20
the penalty shall not be less than ten dollars ($10); 21
(2) Any taxpayer who fails to withhold or collect any tax as required by law, fails to 22
pay the tax computed due on a return or report on or before the due date prescribed 23
for it or the due date as extended by the department or, excluding underpayments 24
determined under KRS 141.044 or 141.305, fails to have timely paid at least 25
seventy-five percent (75%) of the tax determined due by the department shall, 26
unless it is shown to the satisfaction of the department that the failure is due to 27
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reasonable cause, p ay a penalty equal to two percent (2%) of the tax not withheld, 1
collected, or timely paid for each thirty (30) days or fraction thereof that the 2
withholding, collection, or payment is late. The total penalty levied pursuant to this 3
subsection shall not exc eed twenty percent (20%) of the tax not timely withheld, 4
collected, or paid; however, the penalty shall not be less than ten dollars ($10); 5
(3) If any taxpayer fails or refuses to make and file a report or return or furnish any 6
information requested in wri ting by the department, the department may make an 7
estimate of the tax due from any information in its possession, assess the tax at not 8
more than twice the amount estimated to be due, and add a penalty equal to five 9
percent (5%) of the tax assessed for each thirty (30) days or fraction thereof that the 10
return or report is not filed. The total penalty levied pursuant to this subsection shall 11
not exceed fifty percent (50%) of the tax assessed; however, the penalty shall not be 12
less than one hundred dollars ( $100) unless the taxpayer demonstrates that the 13
failure to file was due to reasonable cause as defined in KRS 131.010(9). This 14
penalty shall be applicable whether or not any tax is determined to be due on a 15
subsequently filed return or if the subsequently filed return results in a refund; 16
(4) If any taxpayer fails or refuses to pay within sixty (60) days of the due date any tax 17
assessed by the department which is not protested in accordance with KRS 131.110, 18
there shall be added a penalty equal to two perce nt (2%) of the unpaid tax for each 19
thirty (30) days or fraction thereof that the tax is final, due, and owing, but not paid; 20
(5) Any taxpayer who fails to obtain any identification number, permit, license, or 21
other document of authority from the department within the time required by law 22
shall, unless it is shown to the satisfaction of the department that the failure is due 23
to reasonable cause, pay a penalty equal to ten percent (10%) of any cost or fee 24
required to be paid for the identification number, per mit, license, or other document 25
of authority; however, the penalty shall not be less than fifty dollars ($50); 26
(6) If any tax assessed by the department is the result of negligence by a taxpayer or 27
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other person, a penalty equal to ten percent (10%) of the tax so assessed shall be 1
paid by the taxpayer or other person who was negligent; 2
(7) If any tax assessed by the department is the result of fraud committed by the 3
taxpayer or other person, a penalty equal to fifty percent (50%) of the tax so 4
assessed shall be paid by the taxpayer or other person who committed fraud; 5
(8) If any check tendered to the department is not paid when presented to the drawee 6
bank for payment, there shall be paid as a penalty by the taxpayer who tendered the 7
check, upon notice and de mand of the department, an amount equal to ten percent 8
(10%) of the check. The penalty under this section shall not be less than ten dollars 9
($10) nor more than one hundred dollars ($100). If the taxpayer who tendered the 10
check shows to the department's satisfaction that the failure to honor payment of the 11
check resulted from error by parties other than the taxpayer, the department shall 12
waive the penalty; 13
(9) Any person who fails to make any tax report or return or pay any tax within the 14
time, or in the ma nner required by law, for which a specific civil penalty is not 15
provided by law, shall pay a penalty as provided in this section, with interest from 16
the date due at the tax interest rate as defined in KRS 131.010(6); 17
(10) The penalties levied pursuant to s ubsection (4) of this section shall apply to any tax 18
assessment protested pursuant to KRS 131.110 to the extent that any appeal of the 19
assessment or portion of it is ruled by the Kentucky Tax Tribunal [Board of Tax 20
Appeals] or, if appealed from, the court o f last resort, as not protested, appealed, or 21
pursued in good faith by the taxpayer; 22
(11) Nothing in this section shall be construed to prevent the assessment or collection of 23
more than one (1) of the penalties levied under this section or any other civil or 24
criminal penalty provided for violation of the law for which penalties are imposed; 25
and 26
(12) All penalties levied pursuant to this section shall be assessed, collected, and paid in 27
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the same manner as taxes. Any corporate officer or other person who beco mes 1
liable for payment of any tax assessed by the department shall likewise be liable for 2
all penalties and interest applicable thereto. 3
Section 30. KRS 131.190 is amended to read as follows: 4
(1) No present or former com missioner or employee of the department, [present or 5
former member of a county board of assessment appeals, ] present or former 6
property valuation administrator or employee, present or former secretary or 7
employee of the Finance and Administration Cabinet, former secretary or employee 8
of the Revenue Cabinet, or any other person, shall intentionally and without 9
authorization inspect or divulge any information acquired by him or her of the 10
affairs of any person, or information regarding the tax schedules, retu rns, or reports 11
required to be filed with the department or other proper officer, or any information 12
produced by a hearing or investigation, insofar as the information may have to do 13
with the affairs of the person's business. 14
(2) The prohibition established by subsection (1) of this section shall not extend to: 15
(a) Information required in prosecutions for making false reports or returns of 16
property for taxation, or any other infraction of the tax laws; 17
(b) Any matter properly entered upon any assessment rec ord, or in any way made 18
a matter of public record; 19
(c) Furnishing any taxpayer or his or her properly authorized agent with 20
information respecting his or her own return; 21
(d) Testimony provided by the commissioner or any employee of the department 22
in any court, or the introduction as evidence of returns or reports filed with the 23
department, in an action for violation of state or federal tax laws or in any 24
action challenging state or federal tax laws; 25
(e) Providing an owner of unmined coal, oil or gas reserve s, and other mineral or 26
energy resources assessed under KRS 132.820, or owners of surface land 27
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under which the unmined minerals lie, factual information about the owner's 1
property derived from third-party returns filed for that owner's property, under 2
the provisions of KRS 132.820, that is used to determine the owner's 3
assessment. This information shall be provided to the owner on a confidential 4
basis, and the owner shall be subject to the penalties provided in KRS 5
131.990(2). The third -party filer shall be given prior notice of any disclosure 6
of information to the owner that was provided by the third-party filer; 7
(f) Providing to a third -party purchaser pursuant to an order entered in a 8
foreclosure action filed in a court of competent jurisdiction, factual 9
information related to the owner or lessee of coal, oil, gas reserves, or any 10
other mineral resources assessed under KRS 132.820. The department may 11
promulgate an administrative regulation establishing a fee schedule for the 12
provision of the information de scribed in this paragraph. Any fee imposed 13
shall not exceed the greater of the actual cost of providing the information or 14
ten dollars ($10); 15
(g) Providing information to a licensing agency, the Transportation Cabinet, or 16
the Kentucky Supreme Court under KRS 131.1817; 17
(h) Statistics of gasoline and special fuels gallonage reported to the department 18
under KRS 138.210 to 138.448; 19
(i) Providing any utility gross receipts license tax return information that is 20
necessary to administer the provisions of KRS 160.6 13 to 160.617 to 21
applicable school districts on a confidential basis; 22
(j) Providing documents, data, or other information to a third party pursuant to an 23
order issued by a court of competent jurisdiction; 24
(k) Publishing administrative writings on its official website in accordance with 25
KRS 131.020(1)(b); or 26
(l) Providing information to the Legislative Research Commission under: 27
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1. KRS 139.519 for purposes of the sales and use tax refund on building 1
materials used for disaster recovery; 2
2. KRS 141.436 for purposes of the energy efficiency products credits; 3
3. KRS 141.437 for purpo ses of the ENERGY STAR home and the 4
ENERGY STAR manufactured home credits; 5
4. KRS 141.383 for purposes of the film industry incentives; 6
5. KRS 154.26-095 for purposes of the Kentucky industrial revitalization 7
credit and the job assessment fees; 8
6. KRS 141.068 for purposes of the Kentucky investment fund; 9
7. KRS 141.396 for purposes of the angel investor credit; 10
8. KRS 141.389 for purposes of the distilled spirits credit; 11
9. KRS 141.408 for purposes of the inventory credit; 12
10. KRS 141.390 for purposes of the recycling and composting credits; 13
11. KRS 141.3841 for purposes of the selling farmer credit; 14
12. KRS 141.4231 for purposes of the renewable chemical production 15
credit; 16
13. KRS 141.524 for purposes of the Education Opportunity Account 17
Program credit; 18
14. KRS 141.398 for purposes of the development area credit; 19
15. KRS 139.516 for purposes of the sales and use tax exemptions for the 20
commercial mining of cryptocurrency; 21
16. KRS 141.419 for purposes of the decontamination credit; 22
17. KRS 141.391 for purposes of the qualified broadband investment credit; 23
18. KRS 139.499 for purposes of the sales and use tax exemptions for a 24
qualified data center project; and 25
19. KRS 139.5325 for purposes of the sales and use tax incentive for a 26
qualifying attraction. 27
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(3) The commissioner shall make available any information for official use only and on 1
a confidential basis to the proper officer, agency, board or commission of this state, 2
any Kentucky county, any Kentucky city, any other state, or the federal 3
government, under r eciprocal agreements whereby the department shall receive 4
similar or useful information in return. 5
(4) Access to and inspection of information received from the Internal Revenue Service 6
is for department use only, and is restricted to tax administration pu rposes. 7
Information received from the Internal Revenue Service shall not be made available 8
to any other agency of state government, or any county, city, or other state, and 9
shall not be inspected intentionally and without authorization by any present 10
secretary or employee of the Finance and Administration Cabinet, commissioner or 11
employee of the department, or any other person. 12
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 13
requirements of KRS Chapter 137 and statis tics of natural gas production as 14
reported to the department under the natural resources severance tax requirements 15
of KRS Chapter 143A may be made public by the department by release to the 16
Energy and Environment Cabinet, Department for Natural Resources. 17
(6) Notwithstanding any provision of law to the contrary, beginning with mine -map 18
submissions for the 1989 tax year, the department may make public or divulge only 19
those portions of mine maps submitted by taxpayers to the department pursuant to 20
KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined -21
out parcel areas. These electronic maps shall not be relied upon to determine actual 22
boundaries of mined-out parcel areas. Property boundaries contained in mine maps 23
required under KRS Chapters 350 and 352 shall not be construed to constitute land 24
surveying or boundary surveys as defined by KRS 322.010 and any administrative 25
regulations promulgated thereto. 26
Section 31. KRS 131.622 is amended to read as follows: 27
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(1) (a) The following shall be contraband and subject to seizure and destruction: 1
1. Any cigarettes that have been affixed with a stamp in this state in 2
violation of KRS 131.612; or 3
2. Any cigarettes in the possession of a retailer from a tobacco product 4
manufacturer or brand family that has been removed from the directory. 5
(b) Whenever an y peace officer of this state, or any representative of the 6
department, finds any contraband cigarettes, the cigarettes shall be 7
immediately seized and stored in a depository to be selected by the officer or 8
representative. 9
(c) The seized cigarettes shall be held for a period of twenty (20) days to allow 10
the owner or any person having an interest in the cigarettes to protest the 11
seizure. 12
(d) At the time of seizure, the officer or representative shall: 13
1. Notify the department of the nature and quantity of t he cigarettes seized; 14
and 15
2. Deliver to the person in whose custody the cigarettes are found a receipt 16
for the cigarettes. The receipt shall state on its face the date of seizure, 17
and a notice that the cigarettes shall be destroyed if the seizure is not 18
protested in writing to the Department of Revenue, Frankfort, Kentucky, 19
within twenty (20) days from the seizure. 20
(e) The owner or any person having an interest in the seized cigarettes may 21
appeal to the Kentucky Tax Tribunal [Board of Tax Appeals] a final 22
determination made by the department pursuant to Section 7 of this Act [KRS 23
49.220]. 24
(f) If the owner or any person having an interest in the seized cigarettes fails to 25
protest the seizure before the end of the twenty (20) day holding period, the 26
department shall destroy the seized cigarettes. 27
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(2) The Attorney General may seek an injunction to restrain a violation of KRS 1
131.612 or 131.616 by a distributor or stamping agent and to compel the distributor 2
or stamping agent to comply with KRS 131.612 and 131.616. In any action brought 3
pursuant to this section, the state shall be entitled to recove r the costs of 4
investigation, costs of the action, and attorneys' fees from any distributor or 5
stamping agent found to be in violation of KRS 131.612 or 131.616. 6
(3) No stamping agent, distributor, retailer, or any other person shall sell or distribute 7
cigarettes, or acquire, hold, own, possess, transport, import, or cause to be imported 8
cigarettes that the stamping agent, distributor, retailer, or person knows are intended 9
for distribution or sale in the state in violation of KRS 131.612. A violation of th is 10
section is a Class A misdemeanor. 11
(4) Nothing in this section shall prohibit a stamping agent or distributor from 12
possessing unstamped containers of cigarettes held in inventory for delivery to, or 13
for sale in, another state if in possession of proof th at the cigarettes are intended for 14
sale in another state. 15
(5) In addition to or in lieu of any other civil or criminal remedy provided by law, upon 16
a determination that a stamping agent or distributor has violated KRS 131.612 or 17
any administrative regulation promulgated pursuant to KRS 131.600 to 131.630, the 18
commissioner may suspend the sale of cigarette stamps to the stamping agent or 19
distributor for failure to comply with the provisions of KRS 131.600 to 131.630. 20
Section 32. KRS 132.310 is amended to read as follows: 21
(1) Any person who has failed to list for taxation any property omitted from 22
assessment, except such as is subject to assessment by the Department of Revenue, 23
may at any time list such property with the pro perty valuation administrator. The 24
property valuation administrator shall proceed to assess any omitted real property 25
and shall within ten (10) days from the date the real property was listed notify the 26
taxpayer of the amount of the assessment. The notice shall be given as provided in 27
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KRS 132.450(4). The Department of Revenue shall assess any omitted personal 1
property and provide notice to the taxpayer in the manner provided in KRS 2
131.110. 3
(2) The property valuation administrator may at any time list and a ssess any real 4
property which may have been omitted from the regular assessment. Immediately 5
upon listing and assessing omitted real property, the property valuation 6
administrator shall notify the taxpayer of the amount of the assessment. The notice 7
shall be given as provided in KRS 132.450(4). If the property valuation 8
administrator fails to assess any omitted real property, the Department of Revenue 9
may initiate assessment and collection procedures under the same provisions it uses 10
for omitted personal property. 11
(3) The notice to the taxpayer required by subsections (1) and (2) of this section shall 12
specify a date and time at which the county board of assessment appeals will hear 13
the taxpayer's protest of the omitted assessment. For purposes of hearing app eals 14
from omitted assessments the county judge/executive shall notify the chairman of 15
the board of assessment appeals of the date set for hearing and may authorize one 16
(1) member of the board to hear the appeal and issue a ruling of his decision on the 17
assessment, which shall be appealable, to the Kentucky Tax Tribunal[Board of Tax 18
Appeals] as provided by Section 7 of this Act[KRS 49.220(3)]. 19
(4) Any property voluntarily listed as omitted property for taxation under this section 20
shall be subject to penalti es provided in KRS 132.290(3). Omitted property listed 21
for taxation under this section by the property valuation administrator shall be 22
subject to the penalties provided in KRS 132.290(4). 23
Section 33. KRS 132.460 is amended to read as follows: 24
The property valuation administrator, or an authorized deputy, shall attend all hearings 25
before the county board of assessment appeals and before the Kentucky Tax 26
Tribunal[Board of Tax Appeals] pursuant to Section 7 of this Act [KRS 49.200 to 27
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49.250] relative to his or her assessment and submit to examination and fully disclose to 1
them such information as he or she or she may have and any other matters pertinent to the 2
inquiry being made. He or she shall be entitled to reimbursement f rom the county for 3
expenses incurred in official business outside his or her county. If the Department of 4
Revenue directs him to perform official duties outside of his or her county, the expenses 5
shall be paid from the appropriation for the payment of the salaries of the property 6
valuation administrators. Such reimbursement shall be paid on the same basis as 7
employees of the Commonwealth are paid for travel expenses. 8
Section 34. KRS 132.470 is amended to read as follows: 9
The property valuation administrator shall assess his or her own property and that of his 10
or her deputies, and shall be governed by the laws applicable to the assessment of the 11
property of other taxpayers. The county board of assessment appeals shall revi ew the 12
assessment of the property of the property valuation administrator and his or her 13
deputies. 14
Section 35. KRS 132.620 is amended to read as follows: 15
(1) The Department of Revenue shall recover from any property valu ation 16
administrator all compensation paid to him or her for assessments that were 17
unauthorized or excessive when and to the extent it is determined by a final order of 18
the board of assessment appeals, Kentucky Tax Tribunal [Board of Tax Appeals] 19
pursuant to Section 7 of this Act [KRS 49.200 to 49.250] , or a court of competent 20
jurisdiction that such assessments were unauthorized or excessive. Whenever the 21
property valuation administrator fails to render the services required of him or her, 22
or he or she perform s any of his or her duties in such a manner as to fail to comply 23
substantially with the requirements of the law, he or she shall be required to pay a 24
sum that will reasonably compensate the Commonwealth of Kentucky for its costs 25
in rendering the duties req uired to be performed by the property valuation 26
administrator. The Department of Revenue shall notify the property valuation 27
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administrator by certified mail, return receipt requested, of any amount charged to 1
be due under this section and a statement of th e reasons therefor. The property 2
valuation administrator shall be entitled to a hearing before the Kentucky Tax 3
Tribunal[Board of Tax Appeals], and an appeal may be taken from the final action 4
of the tribunal[board] to the courts as provided by law. 5
(2) Any sum that may become due from any property valuation administrator by reason 6
of this section may be deducted from any amount that the Commonwealth of 7
Kentucky may become obliged to pay such property valuation administrator, or it 8
may be collected from the bondsman of the property valuation administrator. 9
Section 36. KRS 133.120 is amended to read as follows: 10
(1) (a) Any taxpayer desiring to appeal an assessment on real property made by the 11
property valuation administra tor shall first request a conference with the 12
property valuation administrator or his or her designated deputy. The 13
conference shall be held prior to or during the inspection period provided for 14
in KRS 133.045, or during an extension granted under subsecti on (2)(d) of 15
this section. 16
(b) 1. Any person receiving compensation to represent a property owner at a 17
conference with the property valuation administrator for a real property 18
assessment shall be: 19
a. An attorney; 20
b. A certified public accountant; 21
c. A certified real estate broker; 22
d. A Kentucky licensed real estate broker; 23
e. An employee of the property owner; 24
f. A licensed or certified Kentucky real estate appraiser; 25
g. An appraiser who possesses a temporary practice permit or 26
reciprocal license or certifi cation in Kentucky to perform 27
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appraisals and whose license or certification requires him or her to 1
conform to the Uniform Standards of Professional Appraisal 2
Practice; or 3
h. Any other individual possessing a professional appraisal 4
designation recognized by the department. 5
2. A person representing a property owner before the property valuation 6
administrator shall present written authorization from the property 7
owner which sets forth his or her professional capacity and shall 8
disclose to the property valuatio n administrator any personal or private 9
interests he or she may have in the matter, including any contingency 10
fee arrangements, except that attorneys shall not be required to disclose 11
the terms and conditions of any contingency fee arrangement. 12
(c) During this conference, the property valuation administrator or his or her 13
deputy shall provide an explanation to the taxpayer of the constitutional and 14
statutory provisions governing property tax administration, including the 15
appeal process, as well as an explan ation of the procedures followed in 16
deriving the assessed value for the taxpayer's property. 17
(d) The property valuation administrator or his or her deputy shall keep a record 18
of each conference which shall include but not be limited to the initial 19
assessed value, the value claimed by the taxpayer, an explanation of any 20
changes offered or agreed to by each party, and a brief account of the outcome 21
of the conference. 22
(e) At the request of the taxpayer, the conference may be held by telephone. 23
(2) (a) Any taxpayer still aggrieved by an assessment on real property made by the 24
property valuation administrator after complying with the provisions of subsection 25
(1) of this section may appeal to the board of assessment appeals. 26
(b) The taxpayer shall appeal his or he r assessment by filing in person or sending 27
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a letter or other written petition to the county clerk stating the reasons for 1
appeal, identifying the property for which the appeal is filed, and stating the 2
taxpayer's opinion of the fair cash value of the property. 3
(c) The appeal shall be filed no later than one (1) workday following the 4
conclusion of the inspection period provided for in KRS 133.045 or no later 5
than the last day of an extension granted under paragraph (d) of this 6
subsection. 7
(d) A property val uation administrator may make a written request to the 8
department to extend the deadline in his or her county of jurisdiction to allow 9
the completion of the conferences requested during the inspection period 10
required by subsection (1)(a) of this section an d to extend the filing deadline 11
for appeals to the board of assessment appeals. If approved by the department, 12
the deadline for the completion of the conferences requested during the 13
inspection period and filing appeals shall be extended for a period not t o 14
exceed twenty-five (25) days from the date of the original filing deadline. 15
(e) The county clerk shall notify the department of all assessment appeals and of 16
the date and times of the hearings. 17
(f) The board of assessment appeals may review and change an y assessment 18
made by the property valuation administrator upon recommendation of the 19
county judge/executive, mayor of any city using the county assessment, or the 20
superintendent of any school district in which the property is located, if the 21
recommendation is made to the board in writing specifying the individual 22
properties recommended for review and is made no later than one (1) work 23
day following the conclusion of the inspection period provided for in KRS 24
133.045, or no later than the last day of an exten sion granted under paragraph 25
(d) of this subsection, or upon the written recommendation of the department. 26
If the board of assessment appeals determines that the assessment should be 27
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increased, it shall give the taxpayer notice in the manner required by 1
subsection (4) of KRS 132.450, specifying a date when the board will hear the 2
taxpayer, if he or she so desires, in protest of an increase. 3
(g) Any real property owner who has listed his or her property with the property 4
valuation administrator at its fair c ash value may ask the county board of 5
assessment appeals to review the assessments of real properties he or she 6
believes to be assessed at less than fair cash value, if he or she specifies in 7
writing the individual properties for which the review is sought and factual 8
information upon which his or her request is based, such as comparable sales 9
or cost data and if the request is made no later than one (1) work day 10
following the conclusion of the inspection period provided for in KRS 11
133.045, or no later than the last day of an extension granted under paragraph 12
(d) of this subsection. 13
(h) Nothing in this section shall be construed as granting any property owner the 14
right to request a blanket review of properties or the board the power to 15
conduct such a review. 16
(3) (a) The board of assessment appeals shall hold a public hearing for each 17
individual taxpayer appeal in protest of the assessment by the property 18
valuation administrator filed in accordance with the provisions of subsection 19
(2) of this section, and after hearin g all the evidence, shall fix the assessment 20
of the property at its fair cash value. 21
(b) The department may be present at the hearing and present any pertinent 22
evidence as it pertains to the appeal. 23
(c) The taxpayer shall provide factual evidence to support his or her appeal. If the 24
taxpayer fails to provide reasonable information pertaining to the value of the 25
property requested by the property valuation administrator, the department, or 26
any member of the board, his or her appeal shall be denied. 27
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(d) This information shall include but not be limited to the physical 1
characteristics of land and improvements, insurance policies, cost of 2
construction, real estate sales listings and contracts, income and expense 3
statements for commercial property, and loans or mortgages. 4
(e) The board of assessment appeals shall only hear and consider evidence which 5
has been submitted to it in the presence of both the property valuation 6
administrator or his or her designated deputy and the taxpayer or his or her 7
authorized representative. 8
(4) (a) Any person receiving compensation to represent a property owner in an 9
appeal before the board shall be: 10
1. An attorney; 11
2. A certified public accountant; 12
3. A certified real estate broker; 13
4. A Kentucky licensed real estate broker; 14
5. An employee of the taxpayer; 15
6 A licensed or certified Kentucky real estate appraiser; 16
7. An appraiser who possesses a temporary practice permit or reciprocal 17
license or certification in Kentucky to perform appraisals and whose 18
license or certification requir es him or her to conform to the Uniform 19
Standards of Professional Appraisal Practice; or 20
8. Any other individual possessing a professional appraisal designation 21
recognized by the department. 22
(b) A person representing a property owner before the county boar d of 23
assessment appeals shall present a written authorization from the property 24
owner which sets forth his or her professional capacity and shall disclose to 25
the county board of assessment appeals any personal or private interests he or 26
she may have in the matter, including any contingency fee arrangements, 27
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except that attorneys shall not be required to disclose the terms and conditions 1
of any contingency fee arrangement. 2
(5) The board shall provide a written opinion justifying its action for each assessmen t 3
either decreased or increased in the record of its proceedings and orders required in 4
KRS 133.125 on forms or in a format provided or approved by the department. 5
(6) The board shall report to the property valuation administrator any real property 6
omitted from the tax roll. The property valuation administrator shall assess the 7
property and immediately give notice to the taxpayer in the manner required by 8
KRS 132.450(4), specifying a date when the board of assessment appeals will hear 9
the taxpayer, if he or she so desires, in protest of the action of the property valuation 10
administrator. 11
(7) The board of assessment appeals shall have power to issue subpoenas, compel the 12
attendance of witnesses, and adopt rules and regulations concerning the conduct of 13
its business. Any member of the board shall have power to administer oaths to any 14
witness in proceedings before the board. 15
(8) The powers of the board of assessment appeals shall be limited to those specifically 16
granted by this section. 17
(9) No appeal shall delay the collection or payment of any taxes based upon the 18
assessment in controversy. The taxpayer shall pay all state, county, and district 19
taxes due on the valuation which he or she claims as true value and stated in the 20
petition of appe al filed in accordance with the provisions of subsection (1) of this 21
section. When the valuation is finally determined upon appeal, the taxpayer shall be 22
billed for any additional tax and interest at the tax interest rate as defined in KRS 23
131.010(6) from the date when the tax would have become due if no appeal had 24
been taken. The provisions of KRS 134.015(6) shall apply to the tax bill. 25
(10) Any member of the county board of assessment appeals may be required to give 26
evidence in support of the board's find ings in any appeal from its actions to the 27
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Board of Tax Appeals pursuant to KRS 49.220. Any persons aggrieved by a 1
decision of the board, including the property valuation administrator, taxpayer, and 2
department, may appeal the decision to the Kentucky Tax Tribunal[Board of Tax 3
Appeals] pursuant to Section 7 of this Act [KRS 49.220]. Any taxpayer failing to 4
appeal to the county board of assessment appeals, or failing to appear before the 5
board, either in person or by designated representative, shall not be el igible to 6
appeal directly to the Kentucky Tax Tribunal[Board of Tax Appeals]. 7
(11) The county attorney shall represent the interest of the state and county in all 8
hearings before the board of assessment appeals and on all appeals prosecuted from 9
its decision. If the county attorney is unable to represent the state and county, [he or 10
she] the fiscal court shall arrange for substitute representation. 11
(12) Taxpayers shall have the right to make audio recordings of the hearing before the 12
county board of assessm ent appeals. The property valuation administrator may 13
make similar audio recordings only if prior written notice is given to the taxpayer. 14
The taxpayer shall be entitled to a copy of the department's recording as provided in 15
KRS 61.874. 16
(13) The county board of assessment appeals shall physically inspect a property upon the 17
request of the property owner or property valuation administrator. 18
Section 37. KRS 133.170 is amended to read as follows: 19
(1) When the Department of Revenue has completed its equalization of the assessment 20
of the property in any county, it shall certify its action to the county 21
judge/executive, with a copy of the certification for the county clerk, to be laid 22
before the fiscal court of the county. 23
(2) If the fiscal court deems it proper to ask for a review of the aggregate equalization 24
of any class or subclass of property, it shall direct the county attorney to prosecute 25
an appeal of the aggregate increase to the Kentucky Tax Trib unal[Board of Tax 26
Appeals] pursuant to Section 7 of this Act [KRS 49.220] within ten (10) days from 27
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the date of the certification. 1
(3) Within ten (10) days from the date that the department's aggregate equalization of 2
any or all classes or subclasses of pro perty becomes final by failure of the fiscal 3
court to prosecute an appeal or by order of the Kentucky Tax Tribunal [Board of 4
Tax Appeals] pursuant to Section 7 of this Act [KRS 49.200 to 49.250] or the 5
courts, the fiscal court shall cause to be published, at least one (1) time, in the 6
newspaper having the largest circulation within the county, a public notice of the 7
department's action. 8
(4) Within ten (10) days from the date of the publication of the notice required in 9
subsection (3) of this section, any indi vidual taxpayer whose property assessment is 10
increased above its fair cash value by the equalization action may file with the 11
county clerk an application for exoneration of his property assessment from the 12
increase. The application shall be filed in duplic ate and shall include the name and 13
address of the person in whose name the property is assessed; the assessment of the 14
property before the increase; the description and location of the property including 15
the description shown on the tax roll; the property owner's reason for appeal; and all 16
other pertinent facts having a bearing upon its value. The county clerk shall forward 17
one (1) copy, of each application for exoneration to the Department of Revenue and 18
shall exclude the amount of the equalization increas e from the assessment in the 19
preparation of the property tax bill for each property for which an application for 20
exoneration has been filed. 21
(5) The county judge/executive shall reconvene the board of supervisors immediately 22
following the close of the peri od for filing applications for exoneration from the 23
increase. The board shall schedule and conduct hearings on all applications in the 24
manner prescribed for hearing appeals by KRS 133.120; however, the board shall 25
not have authority to reduce any assessmen t to an amount less than that listed for 26
the property at the time of adjournment of the regular board session. 27
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(6) The county clerk shall act as clerk of the reconvened board and shall keep an 1
accurate record of the proceedings in the same manner as provid ed by KRS 2
133.125. Within five (5) days of the adjournment of the reconvened board, he or 3
she shall notify each property owner in writing of the final action of the board with 4
relation to the equalization increase and shall forward a copy of the proceeding s 5
certified by the chairman of the board and attested by him or her to the Department 6
of Revenue and to the other taxing districts participating in the tax. 7
(7) Any taxpayer whose application has been denied, in whole or in part, may appeal to 8
the Kentucky Tax Tribunal[Board of Tax Appeals] as provided in Section 7 of this 9
Act[KRS 49.220], and appeals thereafter may be taken to the courts as provided in 10
Section 13 of this Act[KRS 49.250]. 11
(8) The provisions of KRS 133.120(9) shall apply to the payment of ta xes upon any 12
property assessment for which an application for exoneration has been filed. 13
(9) The provisions of subsections (4), (5), (6), (7), and (8) of this section shall only 14
apply to appeals growing out of equalization action by the Department of Reve nue 15
under the provisions of KRS 133.150. 16
Section 38. KRS 133.215 is amended to read as follows: 17
The sheriff shall be entitled to the fee prescribed by KRS 64.090 for serving a subpoena 18
for the board of assessment appeals . He or she shall also have a like fee for serving a 19
subpoena or notice for the Kentucky Tax Tribunal[Board of Tax Appeals] regarding any 20
proceeding for the assessment of property subject to local taxation. Said fees shall be paid 21
out of the county levy. 22
Section 39. KRS 134.551 is amended to read as follows: 23
(1) If a certificate of delinquency or personal property certificate of delinquency held 24
by an individual is declared void by a court of competent jurisdiction because of the 25
irregularity of taxing officers, the amount for which the certificate was issued shall 26
be refunded by the state, county, and taxing districts on a pro rata basis. If a school 27
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district or county is unable to make the refund currently when requested , it shall be 1
given preference from the next year's revenue. The application for refund must be 2
made within one (1) year after the judgment. The property covered by the void 3
certificate shall be assessed immediately as omitted property and the tax bill sha ll 4
be payable as soon as prepared. 5
(2) (a) If a certificate of delinquency held by a third -party purchaser who paid the 6
certificate of delinquency to the county clerk: 7
1. Is unenforceable because: 8
a. It is a duplicate certificate of delinquency; 9
b. The tax liability represented by the certificate of delinquency was 10
satisfied prior to the purchase of the certificate of delinquency; 11
c. All or a portion of the certificate of delinquency is exonerated; or 12
d. The property to which the certificate of delinquency applies was 13
not subject to taxes as a matter of law as certified by the property 14
valuation administrator; or 15
2. Should not have been sold because, on the date of the annual sale, the 16
certificate of delinquency met the requirements for inclusion on the 17
protected list pursuant to KRS 134.504(10) and it: 18
a. Was included on the protected list; 19
b. Was mistakenly left off the protected list; or 20
c. Became eligible for inclusion on the protected list between the 21
date the protected list was submitted and the date of sale; 22
the third-party purchaser may apply to the county clerk for a refund. 23
(b) The application for refund filed with the county clerk shall include written 24
proof that one (1) of the situations described in paragraph (a) of this 25
subsection exists with regard to the certificate of delinquency for which a 26
refund is sought. 27
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(c) 1. Upon acceptance and approval of the application for refund, the county 1
clerk shall approve a refund of the amount paid to the county clerk by 2
the third-party purchaser in satisfaction of the certificate of delinquency. 3
The refunded amount shall not include any f iling fees paid by the third -4
party purchaser to the county clerk. 5
2. Amounts refunded to the third -party purchaser shall be deducted from 6
amounts in the hands of the county clerk due to the state, county, taxing 7
districts, sheriff, county attorney, and the county clerk on a pro rata 8
basis, if the county clerk has sufficient funds in his or her hands to make 9
the refund. 10
3. If the county clerk does not have sufficient funds to make the refund at 11
the time the refund is approved, the county clerk may either: 12
a. Retain the approved refund claim in his or her office and make the 13
refund payment as soon as he or she has sufficient funds in his or 14
her hands to make the refund payment; or 15
b. Provide a signed letter to the person to whom payment is due, 16
which includes the amount due from each taxing jurisdiction or fee 17
office, and which directs each taxing jurisdiction or fee official to 18
pay to the person the amount due and owing from that taxing 19
jurisdiction or fee official as reflected in the letter. 20
4. Upon the making of a refund to a third -party purchaser, the county clerk 21
shall issue and file a release of the lien on the property assessed for taxes 22
as provided in this subparagraph without charge to the third -party 23
purchaser. The release shall be linked to the encumb rance in the county 24
clerk's indexing system. 25
a. The department shall prepare a release form to be used by the 26
county clerk when a refund is paid under this paragraph. The form 27
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shall include, at a minimum, the following: 1
i. The name and address of the taxpayer; 2
ii. The name and address of the third-party purchaser; 3
iii. The book and page number of the third -party purchaser's lis 4
pendens filing; 5
iv. The property address; 6
v. The applicable tax year; and 7
vi. The map identification number or tax bill number. 8
b. The release form shall be signed by the government official 9
responsible for making the correction. 10
c. In addition to the signed release form, information filed by the 11
county clerk shall include a copy of the documentation provided 12
by the government official and a copy of the refund check or letter 13
of refund authorization issued to the third -party purchaser. The 14
county clerk shall record and file this information without a fee. 15
d. The county clerk shall also make any necessary corrections to the 16
tax records within the office of the county clerk. 17
e. The county clerk shall return the release document to the taxpayer 18
and shall provide a copy of the release document to the third -party 19
purchaser. 20
(d) If the county clerk denies the application for refund, or the pr operty valuation 21
administrator fails to certify that property was not subject to taxes as a matter 22
of law, the third -party purchaser may appeal the decision of the county clerk 23
or the property valuation administrator to the Kentucky Tax Tribunal [Board 24
of Tax Appeals] pursuant to Section 7 of this Act[KRS 49.220]. 25
Section 40. KRS 134.580 is amended to read as follows: 26
(1) As used in this section, unless the context requires otherwise: 27
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(a) "Agency" means the agency of state government which administers the tax to 1
be refunded or credited; and 2
(b) "Overpayment" or "payment where no tax was due" means the excess of the 3
tax payments made over the correct tax liability determined under the terms of 4
the applicable statute without reference to the constitutionality of the statute. 5
(2) When money has been paid into the State Treasury in payment of any state taxes, 6
except ad valorem t axes, whether payment was made voluntarily or involuntarily, 7
the appropriate agency shall authorize refunds to the person who paid the tax, or to 8
his or her heirs, personal representatives or assigns, of any overpayment of tax and 9
any payment where no tax was due. When a bona fide controversy exists between 10
the agency and the taxpayer as to the liability of the taxpayer for the payment of tax 11
claimed to be due by the agency, the taxpayer may pay the amount claimed by the 12
agency to be due, and if an appeal i s taken by the taxpayer from the ruling of the 13
agency within the time provided by Section 7 of this Act [KRS 49.220] and it is 14
finally adjudged that the taxpayer was not liable for the payment of the tax or any 15
part thereof, the agency shall authorize the r efund or credit as the Kentucky Tax 16
Tribunal[Board of Tax Appeals] or courts may direct. 17
(3) No refund shall be made unless each taxpayer individually files an application or 18
claim for the refund within four (4) years from the date payment was made. Each 19
claim or application for a refund shall be in writing and state the specific grounds 20
upon which it is based. Denials of refund claims or applications may be protested 21
and appealed in accordance with Section 7 of this Act[KRS 49.220] and 131.110. 22
(4) Notwithstanding any provision of this section, when an assessment of limited 23
liability entity tax is made under KRS 141.0401 against a pass -through entity as 24
defined in KRS 141.206, the corporation or individual partners, members, or 25
shareholders of the pass -through entity shall have the greater of the time period 26
provided by this section or one hundred eighty (180) days from the date the 27
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assessment becomes final to file amended returns requesting any refund of tax for 1
the taxable year of the assessment and to allow for items of income, deduction, and 2
credit to be properly reported on the returns of the p artners, members, or 3
shareholders of the pass-through entity subject to adjustment. 4
(5) Refunds shall be authorized with interest as provided in KRS 131.183. The refunds 5
authorized by this section shall be made in the same manner as other claims on the 6
State Treasury are paid. They shall not be charged against any appropriation, but 7
shall be deducted from tax receipts for the current fiscal year. 8
(6) Nothing in this section shall be construed to authorize the agency to make or cause 9
to be made any refund except within four (4) years of the date prescribed by law for 10
the filing of a return including any extension of time for filing the return, or the date 11
the money was paid into the State Treasury, whichever is the later, except in any 12
case where the assessment period has been extended by written agreement between 13
the taxpayer and the department, the limitation contained in this subsection shall be 14
extended accordingly. Nothing in this section shall be construed as requiring the 15
agency to authorize any refund to a taxpayer without demand from the taxpayer, if 16
in the opinion of the agency the cost to the state of authorizing the refund would be 17
greater than the amount that should be refunded or credited. 18
(7) This section shall not apply to any case in which the statute may be held 19
unconstitutional, either in whole or in part. 20
(8) In cases in which a statute has been held unconstitutional, taxes paid thereunder 21
may be refunded to the extent provided by KRS 134.590, and by the statute held 22
unconstitutional. 23
(9) No person shall secure a refund of motor fuels tax under KRS 134.580 unless the 24
person holds an unrevoked refund permit issued by the department before the 25
purchase of gasoline or special fuels and that permit entitles the person to apply for 26
a refund under KRS 138.344 to 138.355. 27
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(10) Notwithstanding any provision of the Kentucky Revised Statutes to the contrary: 1
(a) The Commonwealth hereby revokes and withdraws its consent to suit in any 2
forum whatsoever on any claim for recovery, refund, or credit of any ta x 3
overpayment for any taxable year ending before December 31, 1995, made by 4
an amended return or any other method after December 22, 1994, and based 5
on a change from any initially filed separate return or returns to a combined 6
return under the unitary busi ness concept or to a consolidated return. No such 7
claim shall be effective or recognized for any purpose; 8
(b) Any stated or implied consent for the Commonwealth of Kentucky, or any 9
agent or officer of the Commonwealth of Kentucky, to be sued by any person 10
for any legal, equitable, or other relief with respect to any claim for recovery, 11
refund, or credit of any tax overpayment for any taxable year ending before 12
December 31, 1995, made by an amended return or any other method after 13
December 22, 1994, and base d on a change from any initially filed separate 14
return or returns to a combined return under the unitary business concept or to 15
a consolidated return, is hereby withdrawn; and 16
(c) The provisions of this subsection shall apply retroactively for all taxable years 17
ending before December 31, 1995, and shall apply to all claims for such 18
taxable years pending in any judicial or administrative forum. 19
(11) Notwithstanding any provision of the Kentucky Revised Statutes to the contrary: 20
(a) No money shall be drawn fr om the State Treasury for the payment of any 21
claim for recovery, refund, or credit of any tax overpayment for any taxable 22
year ending before December 31, 1995, made by an amended return or any 23
other method after December 22, 1994, and based on a change fro m any 24
initially filed separate return or returns to a combined return under the unitary 25
business concept or to a consolidated return; and 26
(b) No provision of the Kentucky Revised Statutes shall constitute an 27
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appropriation or mandated appropriation for the payment of any claim for 1
recovery, refund, or credit of any tax overpayment for any taxable year ending 2
before December 31, 1995, made by an amended return or any other method 3
after December 22, 1994, and based on a change from any initially filed 4
separate return or returns to a combined return under the unitary business 5
concept or to a consolidated return. 6
Section 41. KRS 134.590 is amended to read as follows: 7
(1) When the appropriate state government agency determines t hat a taxpayer has paid 8
ad valorem taxes into the state treasury when no taxes were due or has paid under a 9
statute held unconstitutional, the state government agency which administers the tax 10
shall refund the money, or cause it to be refunded, to the pers on who paid the tax. 11
The state government agency shall not authorize a refund to a person who has paid 12
the tax due on any tract of land unless the taxpayer has paid the entire tax due the 13
state on the land. 14
(2) No state government agency shall authorize a refund unless each taxpayer 15
individually applies for a refund within two (2) years from the date the taxpayer 16
paid the tax. Each claim or application for a refund shall be in writing and state the 17
specific grounds upon which it is based. Denials of refund claims or applications 18
may be protested and appealed in accordance with Section 7 of this Act [KRS 19
49.220] and 131.110. No state government agency shall refund ad valorem taxes, 20
except those held unconstitutional, unless the taxpayer has properly followed t he 21
administrative remedy procedures established through the protest provisions of 22
KRS 131.110, the appeal provisions of KRS 133.120, the correction provisions of 23
KRS 133.110 and 133.130, or other administrative remedy procedures. 24
(3) If a taxpayer pays cit y, urban -county, county, school district, consolidated local 25
government, or special district ad valorem taxes to a city, urban -county, county, 26
school district, consolidated local government, or special district when no taxes 27
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were due or the amount paid exc eeded the amount finally determined to be due, the 1
taxes shall be refunded to the person who paid the tax. 2
(4) Refunds of ad valorem taxes shall be authorized by the mayor or chief finance 3
officer of any city, consolidated local government, or urban -county government for 4
the city, consolidated local government, or urban -county government or for any 5
special district for which the city, consolidated local government, or urban -county 6
government is the levying authority, by the county judge/executive of any cou nty 7
for the county or special district for which the fiscal court is the levying authority, 8
or by the chairman or finance officer of any district board of education. 9
(5) Upon proper authorization, the sheriff or collector shall refund the taxes from 10
current tax collections he or she holds. If there are no such funds, the district's 11
finance officer shall make the refunds. The sheriff or collector shall receive credit 12
on the next collection report to the district for any refunds the sheriff or collector 13
makes. 14
(6) No refund shall be made unless each taxpayer individually applies within two (2) 15
years from the date payment was made. If the amount of taxes due is in litigation, 16
the taxpayer shall individually apply for refund within two (2) years from the date 17
the amount due is finally determined. Each claim or application for a refund shall 18
be in writing and state the specific grounds upon which it is based. No refund for ad 19
valorem taxes, except those held unconstitutional, shall be made unless the taxpayer 20
has properly followed the administrative remedy procedures established through the 21
protest provisions of KRS 131.110, the appeal provisions of KRS 133.120, the 22
correction provisions of KRS 133.110 and 133.130, or other administrative remedy 23
procedures. 24
(7) Notwithstanding other statutory provisions, for property subject to a tax rate that is 25
set each year based on the certified assessment, a taxing district may recover any 26
loss of ad valorem tax revenue it suffers due to the issuance of refunds by adjusting 27
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the following tax year's tax rate. 1
Section 42. KRS 136.050 is amended to read as follows: 2
(1) Except where otherwise specially provided, all corporations required to make 3
reports to the Department of Revenue shall pay all t axes due the state from them 4
into the State Treasury at the same time as natural persons are required to pay taxes, 5
and when delinquent shall pay the same rate of interest and penalties as natural 6
persons who are delinquent. 7
(2) All state taxes assessed ag ainst any corporation under the provisions of KRS 8
136.120 to 136.200 shall be due and payable as provided in KRS 131.110. All 9
county, city, school, and other taxes so assessed shall be due and payable thirty (30) 10
days after notice of the amount of the tax is given by the collecting officer. The 11
state, county, city, school, and other taxes found to be due on any protested 12
assessment or portion thereof shall begin to bear legal interest on the sixty -first day 13
after the Kentucky Tax Tribunal[Board of Tax Appeals] acknowledges receipt of a 14
protest of any assessment or enters an order to certify the unprotested portion of any 15
assessment until paid, except that in no event shall interest begin to accrue prior to 16
January 1 following April 30 of the year in which th e report is due. Every 17
corporation so assessed that fails to pay its taxes when due shall be deemed 18
delinquent, a penalty of ten percent (10%) on the amount of the tax shall attach, and 19
thereafter the tax shall bear interest at the tax interest rate as def ined in KRS 20
131.010(6). 21
Section 43. KRS 136.658 is amended to read as follows: 22
(1) The Local Distribution Fund Oversight Committee is hereby created and 23
administratively attached to and staffed by the department. The ove rsight 24
committee shall consist of nine (9) members appointed by the Governor and shall 25
be representative of local government and state government officials. The Governor 26
shall receive recommendations for four (4) members each from the Kentucky 27
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Association of Counties and the Kentucky League of Cities from which the 1
Governor shall select two (2) members each. The Governor shall receive 2
recommendations for two (2) members each from the Kentucky School Board 3
Association, the Kentucky Superintendents Associatio n, and the Kentucky School 4
Administrators Association from which the Governor shall select one (1) member 5
each. One (1) member shall be appointed by the Governor to represent the interests 6
of special districts other than school districts. The remaining mem ber shall be the 7
commissioner of the Department for Local Government, who shall serve as 8
chairperson of the oversight committee. The members shall serve for a term of three 9
(3) years. Five (5) members of the oversight committee shall constitute a quorum. A 10
member may be removed for cause in accordance with procedures established by 11
the oversight committee and shall serve without salary but shall be reimbursed for 12
expenses in the same manner as state employees. Any vacancy occurring on the 13
oversight committee shall be filled by the Governor for the unexpired term. 14
(2) The duties of the oversight committee shall be: 15
(a) To monitor the department's implementation and distribution of funds from 16
the gross revenues and excise tax fund and the state baseline and local growth 17
fund and to report its findings to the commissioner of the department; and 18
(b) To act as a finder of fact for the commissioner of the department in disputes in 19
and between political subdivisions, school districts, special districts, and 20
sheriff departments, and between political subdivisions, school districts, 21
special districts, and sheriff departments, and the department regarding the 22
implementation and distribution of funds from the gross revenues and excise 23
tax fund and the state baseline and local growth fund. 24
(3) The department shall provide the oversight committee with an annual report 25
reflecting the amounts distributed to each participating political subdivision, school 26
district, special district, or sheriff department. 27
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(4) Any political subdivision, school district, special district, or sheriff department may 1
file a complaint and request a hearing wit h the oversight committee on a form 2
prescribed by the committee. The oversight committee shall give notice to any 3
political subdivision, school district, special district, or sheriff department that may 4
be affected by the complaint. Any political subdivisi on, school district, special 5
district, or sheriff department intending to respond to the complaint shall do so in 6
writing within thirty (30) days of notice of the complaint. 7
(5) In conducting its business: 8
(a) The oversight committee shall give due notice of the times and places of its 9
hearings; 10
(b) The parties shall be entitled to be heard, to present evidence, and to examine 11
and cross-examine witnesses; 12
(c) The oversight committee shall act by majority vote; 13
(d) The oversight committee shall adopt and pub lish rules of procedure and 14
practice regarding its hearings; and 15
(e) The oversight committee shall make written findings and recommendations to 16
the commissioner of the department. 17
(6) The commissioner of the department shall review the findings and 18
recommendations of the oversight committee and issue a final ruling within sixty 19
(60) days of receipt of the recommendations. 20
(7) The parties in the dispute shall have the rights and duties to appeal any final ruling 21
to the Kentucky Tax Tribunal [Board of Tax Appe als] under Section 7 of this 22
Act[KRS 49.220]. 23
(8) Nothing contained in this section shall prevent at any time a written compromise of 24
any matter or matters in dispute, if otherwise lawful, by the parties to the hearing 25
process. 26
Section 44. KRS 137.160 is amended to read as follows: 27
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(1) When the Department of Revenue has received the reports provided for in KRS 1
137.130, it shall, upon such reports and such other reports and information as it may 2
secure, assess the value of all grades or kinds of crude petroleum reported for each 3
month. 4
(2) Where the report shows no sale of crude petroleum during the month covered by the 5
report, the market value of crude petroleum on the first business day after the tenth 6
day of the month in which the report is made shall be fixed by the department as the 7
assessed value of all crude petroleum covered by the report. Where the report shows 8
that all crude petroleum reported has been sold during the month covered by the 9
report, the market price o f such crude petroleum on each day of sale shall be the 10
assessed value of all crude petroleum sold on that date of sale, and the total amount 11
of the tax to be reported as the assessment on the report shall be the total of the 12
assessments made on such sales. If the report shows that part of the crude petroleum 13
reported has been sold and part remains unsold, the market price of the crude 14
petroleum on the first business day after the tenth day of the month following the 15
month covered by the report shall be fix ed as the assessed value of the portion of 16
the crude petroleum unsold, the market price of the crude petroleum on each day of 17
sale shall be the assessed value of the portion sold, and the total amount of the tax 18
to be reported as the assessment on the repo rt shall be the total of the assessments 19
made on the sold and unsold crude petroleum. The department, in making its 20
assessments, shall take into consideration transportation charges. 21
(3) The department shall, by the last day of the month in which the repor ts are required 22
to be made, notify each transporter of his or her assessment, and certify the 23
assessment to the county clerk of each county that has reported the levy of a county 24
tax under KRS 137.150. The county clerk shall immediately deliver a copy ther eof 25
to the sheriff for collection of the county tax. The transporter so notified of the 26
assessment shall have the right to an appeal to the Kentucky Tax Tribunal[Board of 27
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Tax Appeals] pursuant to Section 7 of this Act[KRS 49.220]. 1
Section 45. KRS 138.132 is amended to read as follows: 2
(1) It is the declared legislative intent of KRS 138.130 to 138.205 that any untax -paid 3
tobacco products or vapor products held, owned, possessed, or in control of any 4
person other than as p rovided in KRS 138.130 to 138.205 are contraband and 5
subject to seizure and forfeiture as set out in this section. 6
(2) (a) If a retailer, who is not a licensed retail distributor, purchases tobacco 7
products or vapor products from a licensed distributor and the purchase 8
invoice does not contain the separate identification and display of the tobacco 9
products tax or vapor products tax, the retailer shall, within twenty -four (24) 10
hours, notify the department in writing. 11
(b) The notification shall include the na me and address of the person from whom 12
the tobacco products or vapor products were purchased and a copy of the 13
purchase invoice. 14
(c) The tobacco products or vapor products for which the required information 15
was not included on the invoice shall be retained by the retailer, and not sold, 16
for a period of fifteen (15) days after giving the proper notice as required by 17
this subsection. 18
(d) After the fifteen (15) day period, the retailer may pay the tax due on the 19
tobacco products or vapor products described in paragraph (c) of this 20
subsection according to administrative regulations promulgated by the 21
department, and after which may proceed to sell the tobacco products or vapor 22
products. 23
(3) If a retailer, who is not a licensed retail distributor, purchases tobac co products or 24
vapor products for resale from a person not licensed under KRS 138.195(7), which 25
is prohibited by KRS 138.140(2), the retailer may not sell those tobacco products or 26
vapor products until the retailer applies for and is granted a retail distr ibutor's 27
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license under KRS 138.195(7)(b). 1
(4) If, upon examination, the department determines that the retailer has failed to 2
comply with the provisions of subsection (3) of this section, the retailer shall pay all 3
tax and interest and applicable penalties due and the following shall apply: 4
(a) For the first offense, an additional penalty shall be assessed equal to ten 5
percent (10%) of the tax due; 6
(b) For a second offense within three (3) years or less of the first offense, an 7
additional penalty shall be assessed equal to twenty -five percent (25%) of the 8
tax due; and 9
(c) For a third offense or subsequent offense within three (3) years or less of the 10
first offense, the tobacco products or vapor products shall be contraband and 11
subject to seizure and forfeiture as provided in subsection (5) of this section. 12
(5) (a) Whenever a representative of the department finds contraband tobacco 13
products or contraband vapor products within the borders of this state, the 14
tobacco products or vapor products shall be immediately seized and stored in 15
a depository to be determined by the representative. 16
(b) At the time of seizure, the representative shall deliver to the person in w hose 17
custody the tobacco products or vapor products are found a receipt for the 18
seized products. The receipt shall state on its face that any inquiry concerning 19
any tobacco products or vapor products seized shall be directed to the 20
commissioner of the Department of Revenue, Frankfort, Kentucky. 21
(c) Immediately upon seizure, the representative shall notify the commissioner of 22
the nature and quantity of the tobacco products or vapor products seized. Any 23
seized tobacco products or vapor products shall be held for a period of twenty 24
(20) days, and if after that period no person has claimed the tobacco products 25
or vapor products as his or her property, the commissioner shall cause the 26
tobacco products or vapor products to be destroyed. 27
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(6) All fixtures, equipment , materials, and personal property used in substantial 1
connection with the sale or possession of tobacco products or vapor products 2
involved in a knowing and intentional violation of KRS 138.130 to 138.205 shall be 3
contraband and subject to seizure and forfeiture as follows: 4
(a) The department's representative shall seize the property and store the property 5
in a safe place selected by the representative; and 6
(b) The representative shall proceed as provided in KRS 138.165(2). The 7
commissioner shall cause the property to be sold after notice published 8
pursuant to KRS Chapter 424. The proceeds from the sale shall be applied as 9
provided in KRS 138.165(2). 10
(7) The owner or any person having an interest in the fixtures, materials, or personal 11
property that has bee n seized as provided by subsection (6) of this section may 12
apply to the commissioner for remission of the forfeiture for good cause shown. If it 13
is shown to the satisfaction of the commissioner that the owner or person having an 14
interest in the property was without fault, the department shall remit the forfeiture. 15
(8) Any party aggrieved by an order entered under this section may appeal to the 16
Kentucky Tax Tribunal [Board of Tax Appeals] pursuant to Section 7 of this 17
Act[KRS 49.220]. 18
Section 46. KRS 138.165 is amended to read as follows: 19
(1) It is declared to be the legislative intent of KRS 138.130 to 138.205 that any untax -20
paid cigarettes held, owned, possessed, or in control of any person other than as 21
provided in KRS 138.130 to 138.205 are contraband and subject to seizure and 22
forfeiture as set out in this section. 23
(2) (a) Whenever any peace officer of this state, or any representative of the 24
department, finds any untax -paid cigarettes within the borders o f this state in 25
the possession of any person other than a licensee authorized to possess untax-26
paid cigarettes by the provisions of KRS 138.130 to 138.205, those cigarettes 27
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shall be immediately seized and stored in a depository to be selected by the 1
officer or agent. 2
(b) At the time of seizure, the officer or agent shall deliver to the person in whose 3
custody the cigarettes are found a receipt for the cigarettes. The receipt shall 4
state on its face that any inquiry concerning any goods seized shall be directed 5
to the commissioner of the Department of Revenue, Frankfort, Kentucky. 6
(c) Immediately upon seizure, the officer or agent shall notify the commissioner 7
of the department of the nature and quantity of the goods seized. 8
(d) Any seized goods shall be held for a period of twenty (20) days and if after 9
that period no person has claimed the cigarettes, the commissioner shall cause 10
the same to be exposed to public sale to any person authorized to purchase 11
untax-paid cigarettes. The sale shall be on notice publ ished pursuant to KRS 12
Chapter 424. All proceeds, less the cost of sale, from the sale shall be paid 13
into the Kentucky State Treasury for general fund purposes. 14
(3) It is declared to be the legislative intent that any vending machine used for 15
dispensing cig arettes on which Kentucky cigarette tax has not been paid is 16
contraband and subject to seizure and forfeiture. In the event any peace officer or 17
agent of the department finds any vending machine within the borders of this state 18
dispensing untax -paid cigare ttes, the officer or agent shall immediately seize the 19
vending machine and store the vending machine in a safe place selected by the 20
officer or agent. The officer or agent shall proceed as provided in subsection (2) of 21
this section and the commissioner of the department shall cause the vending 22
machine to be sold, and the proceeds applied, as established in subsection (2) of this 23
section. 24
(4) No untax-paid cigarettes shall be transported within this state by any person other 25
than a manufacturer or a person licensed under the provisions of KRS 138.195. It is 26
declared to be the legislative intent that any motor vehicle used to transport any 27
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such cigarettes by other persons is contraband and subject to seizure and forfeiture. 1
If any peace officer or agent of the department finds any such motor vehicle, the 2
vehicle shall be seized immediately and stored in a safe place. The peace officer or 3
agent of the department shall proceed as provided in subsection (2) of this section, 4
and the commissioner of the department s hall cause the motor vehicle to be sold, 5
and the proceeds applied, as established in subsection (2) of this section. 6
(5) (a) The owner or any person having an interest in any goods, machines, or 7
vehicles seized as provided under subsections (1) to (4) of t his section may 8
apply to the commissioner of the department for remission of the forfeiture for 9
good cause shown. 10
(b) If it is shown to the satisfaction of the department that the owner was without 11
fault in the possession, dispensing, or transportation of the untax -paid 12
cigarettes, the department shall remit the forfeiture. 13
(c) If the department determines that the possession, dispensing, or transportation 14
of untax -paid cigarettes was willful or intentional, the department may 15
nevertheless remit the forfeit ure on condition that the owner pay a penalty to 16
be prescribed by the department of not more than fifty percent (50%) of the 17
value of the property forfeited. All taxes due on untax -paid cigarettes shall be 18
paid in addition to the penalty, if any. 19
(6) Any p arty aggrieved by an order entered hereunder may appeal to the Kentucky 20
Tax Tribunal [Board of Tax Appeals] pursuant to Section 7 of this Act [KRS 21
49.220]. 22
Section 47. KRS 138.195 is amended to read as follows: 23
(1) (a) No person other than a manufacturer shall acquire cigarettes in this state on 24
which the Kentucky cigarette tax has not been paid, nor act as a resident 25
wholesaler, nonresident wholesaler, vending machine operator, sub -jobber, 26
transporter or unclassified acquirer of such cigarettes without first obtaining a 27
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license from the department as set out in this section. 1
(b) No person shall act as a distributor of tobacco products or vapor products 2
without first obtaining a license from the department as set out in this section. 3
(c) For licenses effective for periods beginning on or after July 1, 2015, no 4
individual, entity, or any other group or combination acting as a unit may be 5
eligible to obtain a license under this section if the individual, or any partner, 6
director, principal officer, or manager of the entity or any other group or 7
combination acting as a unit has been convicted of or entered a plea of guilty 8
or nolo contendere to: 9
1. A crime relating to the reporting, distribution, sale, or taxation of 10
cigarettes, tobacco products, or vapor products; or 11
2. A crime involving fraud, falsification of records, improper business 12
transactions or reporting; 13
for ten (10) years from the expira tion of probation or final discharge from 14
parole or maximum expiration of sentence. 15
(2) (a) Each resident wholesaler shall secure a separate license for each place of 16
business at which cigarette tax evidence is affixed or at which cigarettes on 17
which the Kentucky cigarette tax has not been paid are received. 18
(b) Each nonresident wholesaler shall secure a separate license for each place of 19
business at which evidence of Kentucky cigarette tax is affixed or from where 20
Kentucky cigarette tax is reported and paid. 21
(c) Each license shall be secured on or before July 1 of each year. 22
(d) Each licensee shall pay the sum of five hundred dollars ($500) for each year, 23
or portion thereof, for which each license is secured. 24
(3) (a) Each sub -jobber shall secure a separate license for each place of business 25
from which cigarettes, upon which the cigarette tax has been paid, are made 26
available to retailers, whether the place of business is located within or 27
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without this state. 1
(b) Each license shall be secured on or before July 1 of each year. 2
(c) Each licensee shall pay the sum of five hundred dollars ($500) for each year, 3
or portion thereof, for which each license is secured. 4
(4) (a) Each vending machine operator shall secure a license for the privilege of 5
dispensing cigarett es, on which the cigarette tax has been paid, by vending 6
machines. 7
(b) Each license shall be secured on or before July 1 of each year. 8
(c) Each licensee shall pay the sum of twenty -five dollars ($25) for each year, or 9
portion thereof, for which each license is secured. 10
(d) No vending machine shall be operated within this Commonwealth without 11
having prominently affixed thereto the name of its operator and the license 12
number assigned to that operator by the department. 13
(e) The department shall prescribe by ad ministrative regulation the manner in 14
which the information shall be affixed to the vending machine. 15
(5) (a) Each transporter shall secure a license for the privilege of transporting 16
cigarettes within this state. 17
(b) Each license shall be secured on or before July 1 of each year. 18
(c) Each licensee shall pay the sum of fifty dollars ($50) for each year, or portion 19
thereof, for which each license is secured. 20
(d) No transporter shall transport any cigarettes without having in actual 21
possession an invoice or bill of lading therefor, showing: 22
1. The name and address of the consignor and consignee; 23
2. The date acquired by the transporter; 24
3. The name and address of the transporter; 25
4. The quantity of cigarettes being transported; and 26
5. The license number assigned to the transporter by the department. 27
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(6) Each unclassified acquirer shall secure a license for the privilege of acquiring 1
cigarettes on which the cigarette tax has not been paid. The license shall be secured 2
on or before July 1 of each year. Each license e shall pay the sum of fifty dollars 3
($50) for each year, or portion thereof, for which the license is secured. 4
(7) (a) 1. Each distributor shall secure a license for the privilege of selling tobacco 5
products or vapor products in this state. Each license s hall be secured on 6
or before July 1 of each year, and each licensee shall pay the sum of five 7
hundred dollars ($500) for each year, or portion thereof, for which the 8
license is secured. 9
2. a. A resident wholesaler, nonres ident wholesaler, or subjobber 10
licensed under this section may also obtain and maintain a 11
distributor's license at each place of business at no additional cost 12
each year. 13
b. An unclassified acquirer licensed under this section may also 14
obtain and maintain a distributor's license for the privilege of 15
selling tobacco products or vapor products in this state. The 16
license shall be secured on or before July 1 of each year, and each 17
licensee shall pay the sum of four hundred fifty dollars ($450) for 18
each year, or portion thereof, for which the license is secured. 19
3. The department may, upon application, grant a distributor's license to a 20
person other than a retailer and who is not otherwise required to hold a 21
distributor's license under this paragraph. If the depa rtment grants the 22
license, the licensee shall pay the sum of five hundred dollars ($500) for 23
each year, or portion thereof, for which the license is secured, and the 24
licensee shall be subject to the excise tax in the same manner and 25
subject to the same req uirements as a distributor required to be licensed 26
under this paragraph. 27
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(b) The department may, upon application, grant a retail distributor's license to a 1
retailer for the privilege of purchasing tobacco products or vapor products 2
from a distributor not licensed by the department. If the department grants the 3
license, the licensee shall pay the sum of one hundred dollars ($100) for each 4
year, or portion thereof, for which the license is secured. 5
(8) Nothing in KRS 138.130 to 138.205 shall be construed to prevent the department 6
from requiring a person to purchase more than one (1) license if the nature of that 7
person's business is so diversified as to justify the requirement. 8
(9) (a) The department may by administrative regulation require any person 9
requesting a license or holding a license under this section to supply such 10
information concerning his or her business, sales or any privilege exercised, 11
as is deemed reasonably necessary for the regulation of the licensees, and to 12
protect the revenues of the state. 13
(b) Failure on the part of the applicant or licensee to: 14
1. Comply with KRS 131.600 to 131.630, 138.130 to 138.205, 248.752, or 15
248.754 or any administrative regulations promulgated thereunder; or 16
2. Permit an inspection of premises, machines, or vehicles by an authorized 17
agent of the department at any reasonable time; 18
shall be grounds for the denial or revocation of any license issued by the 19
department, after due notice and a hearing by the department. 20
(c) The commissioner may assign a time and place for the hearing and may 21
appoint a conferee who shall conduct a hearing, receive evidence, and hear 22
arguments. 23
(d) The conferee shall thereupon file a report with the commissioner together 24
with a recommendation as to the denial or revocation of the license. 25
(e) From any denial or revocation made by the commissioner on the report, the 26
licensee may prosecute an appeal to the Kentucky Tax Tribunal[Board of Tax 27
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Appeals] pursuant to Section 7 of this Act[KRS 49.220]. 1
(f) Any person whose license has been revoked for the willful violation of any 2
provision of KRS 131.600 to 131.630, 138.130 to 138.205, 248.752, or 3
248.754 or any administrative regulations promulgated thereunder shall not be 4
entitled to any license provided for in this section, or have any interest i n any 5
license, either disclosed or undisclosed, either as an individual, partnership, 6
corporation or otherwise, for a period of two (2) years after the revocation. 7
(10) No license issued pursuant to this section shall be transferable or negotiable, except 8
that a license may be transferred between an individual and a corporation if that 9
individual is the exclusive owner of that corporation, or between a subsidiary 10
corporation and its parent corporation. 11
(11) Every manufacturer located or doing business in th is state and the first person to 12
import cigarettes into this state shall keep written records of all shipments of 13
cigarettes to persons within this state, and shall submit to the department monthly 14
reports of such shipments. All books, records, invoices, a nd documents required by 15
this section shall be preserved in a form prescribed by the department for not less 16
than four (4) years from the making of the records unless the department authorizes, 17
in writing, the destruction of the records. 18
(12) No person lic ensed under this section except nonresident wholesalers shall either 19
sell to or purchase from any other such licensee untax-paid cigarettes. 20
(13) (a) Licensed distributors of tobacco products or vapor products shall pay and 21
report the tobacco products tax or vapor products tax on or before the 22
twentieth day of the calendar month following the month in which the 23
possession or title of the tobacco products or vapor products are transferred 24
from the licensed distributor to retailers or consumers in this state, as the case 25
may be. 26
(b) Retailers who have applied for and been granted a retail distributor's license 27
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for the privilege of purchasing tobacco products or vapor products from a 1
person who is not a distributor licensed under KRS 138.195(7)(a) shall report 2
and pay the tobacco products tax or vapor products tax on or before the 3
twentieth day of the calendar month following the month in which the 4
products are acquired by the licensed retail distributors. 5
(c) If the distributor or retail distributor timely repo rts and pays the tax due, the 6
distributor or retail distributor may deduct an amount equal to one percent 7
(1%) of the tax due. 8
(d) The department shall promulgate administrative regulations setting forth the 9
details of the reporting requirements. 10
(14) A tax return shall be filed for each reporting period whether or not tax is due. 11
(15) Any license issued by the department under this section shall not be construed to 12
waive or condone any violation that occurred or may have occurred prior to the 13
issuance of t he license and shall not prevent subsequent proceedings against the 14
licensee. 15
(16) (a) The department may deny the issuance of a license under this section if: 16
1. The applicant has made any material false statement on the application 17
for the license; or 18
2. The applicant has violated any provision of KRS 131.600 to 131.630, 19
138.130 to 138.205, 248.754, or 248.756 or any administrative 20
regulations promulgated thereunder. 21
(b) If the department denies the applicant a license under this section, the 22
department shall notify the applicant of the grounds for the denial, and the 23
applicant may request a hearing and appeal the denial as provided in 24
subsection (9) of this section. 25
Section 48. KRS 138.340 is amended to read as follows: 26
(1) If any dealer or transporter required to be licensed under KRS 138.310 files a false 27
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report of the data or information required by KRS 138.210 to 138.280, or fails, 1
refuses or neglects to file the reports required by those sections, even though no tax 2
is due, or to pay the full amount of tax as required by those sections, or fails to meet 3
the qualifications of a dealer as set out in KRS 138.210, or violates any other 4
provision of this chapter, the license of the dealer or transporter may be revoked by 5
the Department of Revenue. The licensee shall be notified by certified or registered 6
letter or summons. The letter or summons shall apprise the licensee of the cha rge or 7
charges made against him and he shall have a reasonable opportunity to be heard 8
before his license may be revoked. The summons may be served in the same 9
manner and by the same officers or persons as provided by the Rules of Civil 10
Procedure, or it may be served in that manner by an employee of the Department of 11
Revenue. The hearing shall be set at least five (5) days after the summons is served 12
or the letter delivered. Any aggrieved licensee may appeal from an order of 13
revocation by the Department of Revenue to the Kentucky Tax Tribunal [Board of 14
Tax Appeals] pursuant to Section 7 of this Act [KRS 49.220] , subject to the 15
condition that the licensee has made bond sufficient in the opinion of the 16
Department of Revenue to protect the Commonwealth from loss of revenue. 17
(2) The department may cancel the license: 18
(a) Upon request in writing from the licensee, the cancellation to become 19
effective sixty (60) days from the date of receipt of the request; or 20
(b) Upon determination that the licensee has had no repor table activity in 21
Kentucky for at least the immediately preceding six (6) consecutive monthly 22
reporting periods. 23
Section 49. KRS 138.354 is amended to read as follows: 24
(1) No person shall make a false or fraudulent state ment in an application for a refund 25
permit or in a gasoline or special fuel refund invoice, or in an application for a 26
refund of any taxes as set out in KRS 138.344 to 138.355; or fraudulently obtain a 27
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refund of such taxes; or knowingly aid or assist in ma king any such false or 1
fraudulent statement or claim; or having bought gasoline or special fuel under the 2
provisions of KRS 138.344 to 138.355, shall use or permit such gasoline or special 3
fuel or any part thereof to be used for any purpose other than as p rovided in KRS 4
138.344. 5
(2) The refund permit of any person who shall violate any provision of subsection (1) 6
of this section may be revoked by the Department of Revenue subject to appeal to 7
the Kentucky Tax Tribunal [Board of Tax Appeals] pursuant to Section 7 of this 8
Act[KRS 49.220], and may not be reissued until two (2) years have elapsed from 9
the date of such revocation. 10
(3) The refund permit of any person who shall violate any provision of KRS 138.344 to 11
138.355, other than those contained in subsection (1) of this section, may be 12
suspended by the Department of Revenue for any period in its discretion not 13
exceeding six (6) months with the right of appeal to the Kentucky Tax 14
Tribunal[Board of Tax Appeals ]pursuant to Section 7 of this Act[KRS 49.220]. 15
(4) If a dealer violates any provision of KRS 138.344 to 138.355, his or her privilege to 16
sign refund invoices may be suspended by the Department of Revenue for a period 17
of not more than two (2) years subject to appeal to the Kentucky Tax 18
Tribunal[Board of Ta x Appeals ] pursuant to Section 7 of this Act [KRS 49.220]. 19
No refund shall be made on gasoline or special fuel purchased from a dealer while a 20
suspension of his privilege to sign refund invoices is in effect. 21
Section 50. KRS 138.355 is amended to read as follows: 22
If the department reasonably believes that any dealer or refund permit holder has been 23
guilty of a violation of KRS 138.344 to 138.355, which would subject the dealer or 24
permit holder to a su spension or revocation of his or her license or permit under KRS 25
138.354(2), (3), or (4), said dealer or permit holder may be cited by the department to 26
show cause at a public hearing before the Department of Revenue why his or her license 27
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or permit should not be suspended or revoked. The dealer or refund permit holder shall be 1
notified by certified or registered letter. The letter shall inform the dealer or refund permit 2
holder of the charge or charges made against him or her, and he or she shall have a 3
reasonable opportunity to be heard before his or her license or permit may be revoked or 4
suspended. The hearing shall be set at least five (5) days after the receipt of the letter. 5
Any aggrieved dealer or refund permit holder may appeal any order entered to the 6
Kentucky Tax Tribunal [Board of Tax Appeals] pursuant to Section 7 of this Act [KRS 7
49.220], subject to the condition that he or she make bond sufficient in the opinion of the 8
department to protect the Commonwealth from loss of revenue. 9
Section 51. KRS 138.729 is amended to read as follows: 10
Any final ruling of the Department of Vehicle Regulation with regard to the 11
administration of KRS 138.655 to 138.725 shall be appealed to the Kentucky Tax 12
Tribunal[Board of Tax Appeals] pursuant to Section 7 of this Act[KRS 49.220]. 13
Section 52. KRS 141.516 is amended to read as follows: 14
(1) The department may conduct an audit of an AGO or contract for the auditing of an 15
AGO. 16
(2) (a) In the event tha t the department determines that there has been a violation of 17
KRS 141.500 to 141.528 by an AGO, the department shall send written notice 18
to the AGO. 19
(b) The AGO that receives written notice of a violation will have sixty (60) days 20
from receipt of notice to correct the violation identified by the department. 21
(c) If the AGO fails or refuses to comply after sixty (60) days, the department 22
may revoke the AGO's certification to participate in the EOA program. 23
(3) An AGO whose certificate has been revoked under this section: 24
(a) May appeal the revocation of its certification to the Kentucky Tax 25
Tribunal[Board of Tax Appeals] pursuant to Section 7 of this Act [KRS 26
49.220]; 27
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(b) Shall continue administering EOAs that were donated prior to the date of 1
notice stated on the revocation; 2
(c) Shall not accept any further contributions for the purpose of funding EOAs on 3
or after the date of notice stated on the revocation; and 4
(d) Shall refund any contributions that were received for the purpose of funding 5
EOAs on or after the date of notice stated on the revocation. 6
Section 53. KRS 143.060 is amended to read as follows: 7
(1) As soon as practicable afte r each return is received, the department shall examine 8
and audit it. If the amount of tax computed by the department is greater than the 9
amount returned by the taxpayer, the excess shall be assessed within four (4) years 10
from the date the return was filed , except as provided in subsection (2) of this 11
section, and except that in the case of a failure to file a return or of a fraudulent 12
return, the excess may be assessed at any time. A notice of such assessment shall be 13
mailed to the taxpayer. The time herei n provided may be extended by agreement 14
between the taxpayer and the department. 15
(2) For the purpose of subsections (1) and (4) of this section, a return filed before the 16
last day prescribed by law for the filing thereof shall be considered as filed on suc h 17
last day. 18
(3) Any final ruling, order or determination of the department with regard to the 19
administration of this chapter may be reviewed only in the manner provided in 20
Sections 1 to 17 of this Act[KRS 49.200 to 49.250] and 131.110. 21
(4) Notwithstanding the four (4) year time limitation of subsection (1), in the case of a 22
return where the taxpayer understates the gross value by twenty -five percent (25%) 23
or more, the excess shall be assessed by the department within six (6) years from 24
the date the return was filed. 25
Section 54. KRS 186.070 is amended to read as follows: 26
(1) (a) Every manufacturer of, or dealer in, motor vehicles in this state shall register 27
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with each county clerk in which his or her principal office or place of business 1
and branch office, sub -agent, or agency is located, and pay an annual 2
registration fee of twenty-five dollars ($25) to each clerk. 3
(b) Upon receipt of the twenty -five dollar ($25) fee, the clerk shall issue the 4
manufacturer or dealer a certi ficate of registration and one (1) dealer plate. 5
Every manufacturer or dealer registered under this section shall be furnished 6
additional dealer's plates upon the payment of fourteen dollars and fifty cents 7
($14.50) for each additional plate requested. Thr ee dollars ($3) shall be 8
retained by the clerk for each additional plate issued. 9
(c) A motor vehicle bearing dealer's plates may be used on the highways only by 10
the following people: 11
1. A licensed dealer, bona fide salesman, or employee of the dealer; 12
2. A manufacturer or dealer licensed pursuant to the laws of this state 13
transporting a motor vehicle to his or her place of retail business from a 14
manufacturer or wholesale dealer in motor vehicles; and 15
3. A bona fide customer of a licensed dealer, or the cust omer's employees 16
when a motor vehicle is being demonstrated. This provision shall be 17
limited to one (1) trip or demonstration to the same prospective 18
customer. 19
(d) License plates issued under this section shall annually expire on December 31. 20
(e) As used i n this section, "bona fide salesman or employee" means a licensed 21
salesman, or an employee, who is actively engaged in and devotes a 22
substantial part of his or her time to the conduct of the dealer business. 23
(f) A vehicle bearing a dealer plate, except whe n the vehicle is being transported 24
to a dealer's place of business from a manufacturer, shall have, in the case of a 25
new motor vehicle, a "monroney" sticker attached to the vehicle, or, in the 26
case of a used motor vehicle, a Federal Trade Commission buyer' s guide 27
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sticker attached to the vehicle. 1
(2) (a) Each manufacturer and dealer when making application for dealer's plates 2
shall file a verified statement on at least a quarterly basis with the county 3
clerk, giving the name, address, and Social Security num ber of each dealer, 4
and each bona fide salesman or employee entitled to the use of the plates for 5
demonstration purposes only. When any bona fide registered salesman or 6
employee is no longer employed by the manufacturer or dealer, the 7
manufacturer or dealer shall file an amended verified statement with the clerk 8
stating that fact, and when any additional salesmen or employees are 9
employed, an amended verified statement showing their names and addresses 10
shall be filed with the clerk so that the records in th e clerk's office will at all 11
times show the bona fide salesmen and employees actually in the service of 12
the registered dealer or manufacturer; 13
(b) The names of each dealer and each bona fide salesman and employee shall be 14
entered by the clerk into the AVIS where it will be readily available to law 15
enforcement agencies. The information shall be entered by the clerk 16
immediately after each quarterly filing of the verified statement by the dealer; 17
(c) Any person who is hired as a driver by a motor vehicle deale r for the limited, 18
specific purpose of transporting a motor vehicle to or from that dealer's place 19
of business may, for that purpose only, operate a motor vehicle bearing a 20
dealer plate. For the purpose of that operation, the dealer shall provide to that 21
driver a permit, provided by the Transportation Cabinet. The permit shall be 22
valid for five (5) days from the date of issuance. A fee shall not be charged for 23
the permit. 24
(3) The license of any dealer or manufacturer may be revoked by the Transportation 25
Cabinet for the violation of any of the provisions of this section. The manufacturer 26
or dealer shall be given an opportunity to be heard in defense of the charge that he 27
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or she has violated any of the provisions of this section, and the Transportation 1
Cabinet shall promulgate administrative regulations governing the revocation 2
procedure. A manufacturer or dealer whose license is revoked may appeal the 3
revocation to the Kentucky Tax Tribunal [Board of Tax Appeals] pursuant to 4
Section 7 of this Act [KRS 49.220]. The manufacturer or dealer whose license has 5
been suspended shall be prohibited from engaging in the business of selling or 6
buying motor vehicles. The license of any manufacturer or dealer shall be revoked 7
for a period of one (1) year and his or her dealer' s plates canceled if he or she 8
violates any of the provisions of this section during this suspension period or has 9
been suspended by the cabinet more than twice for violations of this section. At the 10
end of the revocation or suspension period, the manufact urer or dealer whose 11
license has been revoked or suspended and dealer's plates canceled may follow the 12
provisions of this section and again be registered and secure dealer's plates from the 13
clerk. 14
(4) The Transportation Cabinet shall be responsible for the issuance and cancellation of 15
the plates provided for in this section, and the motor vehicle commission shall be 16
responsible for the enforcement of this section, except for the normal 17
responsibilities of law enforcement agencies. The cabinet may promulgate 18
administrative regulations pertaining to the administration of this section. 19
Section 55. KRS 211.392 is amended to read as follows: 20
(1) Application for a fluidized bed combustion technology tax exemption certificate 21
shall be filed with the Department of Revenue in the manner and form prescribed 22
by the Department of Revenue and shall contain plans and specifications of the 23
fluidized bed com bustion unit, including all materials incorporated and to be 24
incorporated therein and a descriptive list of all equipment acquired or to be 25
acquired by the applicant for the purpose of installing a fluidized bed combustion 26
unit to reduce the sulfur emissio ns from coal combustion, and any additional 27
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information deemed useful by the Department of Revenue for the proper 1
administration of this section. If the Department of Revenue finds that the facility 2
qualifies as a fluidized bed energy production facility, it shall enter a finding and 3
issue a certificate to that effect. The effective date of the certificate shall be the date 4
of issuance of the certificate. 5
(2) Before the denial, revocation, or modification of a fluidized bed combustion 6
technology tax exemption certificate, the Department of Revenue shall give the 7
applicant written notice and shall afford the applicant an opportunity for a 8
conference. The confere nce shall take place within sixty (60) days following 9
notification. The Department of Revenue shall on its own initiative revoke the 10
certificate when any of the following appears: 11
(a) The certificate was obtained by fraud or misrepresentation; 12
(b) The hold er of the certificate has failed substantially to proceed with the 13
construction, reconstruction, installation, or acquisition of the fluidized bed 14
combustion unit; or 15
(c) The fluidized combustion unit to which the certificate relates has ceased to be 16
the major energy source for the primary operations of the plant facility. 17
(3) If the circumstances so require, the Department of Revenue, in lieu of revoking the 18
certificate, may modify it. 19
(4) On mailing of notice of the action of the Department of Revenue rev oking or 20
modifying a certificate as provided in subsection (5) of this section, the certificate 21
shall cease to be in force or shall remain in force only as modified as the case may 22
require. 23
(5) A fluidized bed combustion technology tax exemption certificat e, when issued, 24
shall be sent by certified mail to the applicant. Notice of an order of the Department 25
of Revenue denying, revoking, or modifying a certificate in the form of certified 26
copies shall be sent by certified mail to the applicant or the holder. 27
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(6) The applicant or holder of the certificate aggrieved by the refusal to issue, 1
revocation, or modification of a fluidized bed combustion technology tax 2
exemption certificate may appeal from the final ruling of the Department of 3
Revenue to the Kentucky Tax Tribunal[Board of Tax Appeals] pursuant to Section 4
7 of this Act[KRS 49.220]. 5
(7) In the event of the sale, lease, or other transfer of a fluidized bed combustion unit, 6
not involving a different location or use, the holder of the fluidized bed construction 7
technology tax exemption certificate for the facility may transfer the certificate by 8
written instrument to the person who, except for the transfer of the certificate, 9
would be obligated to pay taxes on the facilities. The transferee shall become the 10
holder of the certificate and shall have all rights pertaining thereto, effective as the 11
date of transfer, together with a copy of the instrument of transfer to the Department 12
of Revenue. 13
(8) In the event a fluidized bed combustion unit for which an exempti on certificate is 14
held ceases to be used for the purpose of generating energy or is used for a purpose 15
other than that for which the exemption certificate was granted, the holder of the 16
certificate shall give written notice by certified mail of such change to the 17
Department of Revenue. 18
(9) The fluidized bed combustion technology tax exemption certificate, upon approval, 19
shall exempt the facilities from taxes outlined in the provision of this section and 20
KRS Chapters 132, 136, 138, and 139. Each exemption ce rtificate shall remain in 21
force for a period of eight (8) years from the date of issuance and at the end of said 22
period shall lapse. Any fluidized bed combustion unit previously exempt under the 23
terms of this section shall not be eligible for recertificati on upon completion of the 24
eight (8) year certificate period. 25
Section 56. KRS 224.1-310 is amended to read as follows: 26
(1) Application for a pollution control tax exemption certificate shall be filed with the 27
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Department of Revenue in such manner and in such form as may be prescribed by 1
regulations issued by the Department of Revenue and shall contain plans and 2
specifications of the structure or structures including all materials incorporated and 3
to be incorporated therein and a descriptive list of all equipment acquired or to be 4
acquired by the applicant for the purpose of air, noise, waste or water pollution 5
control and any additional information deemed necessary by the Department of 6
Revenue for the proper administration o f Acts 1974, Chapter 137. The cabinet shall 7
provide technical assistance and factual information as requested in writing by the 8
Department of Revenue. If the Department of Revenue finds that the facility 9
qualifies as a pollution control facility as defined in KRS 224.1 -300(1), it shall 10
enter a finding and issue a certificate to that effect. The effective date of said 11
certificate shall be the date of the making of the application for such certificate. 12
(2) Before issuing a pollution control tax exemption cert ificate, the Department of 13
Revenue shall give notice in writing by mail to the secretary of the cabinet, and 14
shall afford to the applicant and to the secretary of the cabinet an opportunity for a 15
hearing. On like notice and opportunity for a hearing, the D epartment of Revenue 16
shall on its own initiative revoke such certificate whenever any of the following 17
appears: 18
(a) The certificate was obtained by fraud or misrepresentation; 19
(b) The holder of the certificate has failed substantially to proceed with the 20
construction, reconstruction, installation, or acquisition of the pollution 21
control facilities; or 22
(c) The structure or equipment or both to which the certificate relates has ceased 23
to be used for the primary purpose of pollution control and is being used f or a 24
different purpose. 25
(3) Provided, however, that where the circumstances so require, the Department of 26
Revenue in lieu of revoking such certificate may modify the same. 27
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(4) On the mailing of notice of the action of the Department of Revenue revoking or 1
modifying a certificate as provided in subsection (5) of this section, such certificate 2
shall cease to be in force or shall remain in force only as modified as the case may 3
require. 4
(5) A pollution control tax exemption certificate, when issued, shall be s ent by certified 5
mail to the applicant and notice of such issuance in the form of certified copies 6
thereof shall be sent to the secretary of the cabinet. Notice of an order of the 7
Department of Revenue denying, revoking, or modifying a certificate in the f orm of 8
certified copies thereof shall be sent by certified mail to the applicant or the holder 9
thereof and shall be sent to the secretary of the cabinet. The applicant or holder and 10
the secretary of the cabinet are deemed parties for the purpose of the rev iew 11
afforded by subsection (6) of this section. 12
(6) Any party aggrieved by the issuance, refusal to issue, revocation, or modification of 13
a pollution control tax exemption certificate may appeal from the final ruling of the 14
Department of Revenue to the Kentucky Tax Tribunal [Board of Tax Appeals] 15
pursuant to Section 7 of this Act[KRS 49.220]. 16
(7) In the event of the sale, lease, or other transfer of a pollution control facility, not 17
involving a different location or use, the holder of a pollution control tax exemption 18
certificate for such facility may transfer the certificate by written instrument to the 19
person who, except for the transfer of the certificate, would be obligated to pay 20
taxes on such facility. The transferee shall become the holder of the certi ficate and 21
shall have all rights pertaining thereto, effective as of the date of transfer of the 22
facility or the date of transfer of the certificate, whichever is earlier. The transferee 23
shall give written notice of the effective date of the transfer, toge ther with a copy of 24
the instrument of transfer to the cabinet and to the Department of Revenue. 25
(8) In the event a pollution control facility for which an exemption certificate is held 26
ceases to be used for the primary purpose of pollution control or is us ed for a 27
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different purpose than that for which the exemption certificate was granted, the 1
holder of the certificate shall give written notice by certified mail of such change to 2
the cabinet and to the Department of Revenue. 3
Section 57. KRS 234.350 is amended to read as follows: 4
(1) If a licensee at any time files a false monthly report of the information required, or 5
fails or refuses to file the monthly report or to pay the full amount of the tax or 6
violates any other provision of KRS 234.310 to 234.440, without a showing that the 7
failure was due to reasonable cause, the department may cancel the license and 8
suspend the privilege of acting as a liquefied petroleum gas motor fuel dealer. 9
(2) Upon voluntary surrender of the license or upon receipt of a written request by a 10
licensee, the department may cancel his or her license, effective sixty (60) days 11
from the date of request, but no license shall be canceled upon surrender or request 12
unless the licensee has, prior to the d ate of cancellation, paid to this state all taxes, 13
penalties, interest, and fines that are due or have accrued, and unless the licensee 14
has surrendered to the department his or her license. 15
(3) If upon investigation the department ascertains that any perso n to whom a license 16
has been issued is no longer engaged as a liquefied petroleum gas motor fuel dealer 17
or a liquefied petroleum gas motor fuel user -seller, and has not been so engaged for 18
a period of six (6) months, the department may cancel the license b y giving the 19
person sixty (60) days' notice of cancellation, mailed to his or her last known 20
address in which event the license shall be surrendered to the department. 21
(4) Whenever a licensee ceases to engage in business within this state, he or she shall 22
notify the department in writing within fifteen (15) days after discontinuance. All 23
taxes that have accrued under KRS 234.310 to 234.440, whether or not then due, 24
shall become due and payable concurrently with the discontinuance. The licensee 25
shall make a report and pay all such taxes and any interest and penalties thereon, 26
and shall surrender to the department his or her license. 27
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(5) If the department takes action to cancel a license as provided in this section, the 1
licensee shall be notified by certified or registered letter or summons of the charges 2
against him or her, and he or she shall be afforded an opportunity for an informal 3
hearing on the matter. The hearing shall be set at least five (5) days from the date 4
the letter is delivered or the summons is served. Any licensee aggrieved by a 5
decision to cancel his or her license after the informal hearing may appeal the 6
decision to the Kentucky Tax Tribunal[Board of Tax Appeals] pursuant to Section 7
7 of this Act [KRS 49.220] where he or she shall be granted an administrative 8
hearing in accordance with KRS Chapter 13B. 9
(6) If the license is canceled by the department as provided in this s ection, and if the 10
licensee has paid to this state all taxes, interest, and penalties under KRS 234.310 to 11
234.440, the department shall cancel the bond filed by the licensee. 12
Section 58. KRS 247.920 is amended to read as follows: 13
(1) Application for an alcohol production exemption certificate shall be filed with the 14
Department of Revenue in such manner and in such form as may be prescribed by 15
regulations issued by the Department of Revenue and shall contain plans and 16
specifications of the structure or structures, including all materials incorporated and 17
to be incorporated therein and a descriptive list of all equipment acquired or to be 18
acquired by the applicant for the purpose of producing ethanol for fuel use, and any 19
additional information deemed necessary by the Department of Revenue for the 20
proper administration of KRS 247.910 and this section. The Office of Energy 21
Policy shall provide technical assistance and factual information as requested in 22
writing by the Department of Revenue. If the Department of Revenue finds that the 23
facility qualifies as an alcohol production facility as defined by KRS 247.910, it 24
shall enter a finding and issue a certificate to that effect. The effective date of the 25
certificate shall be the date of issuance of the certificate. 26
(2) Before issuing an alcohol production tax exemption certificate, the Department of 27
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Revenue shall give notice in writing by mail to the Office of Energy Policy, and 1
shall afford to the applicant and to the Office of E nergy Policy an opportunity for a 2
hearing. On like notice and opportunity for a hearing, the Department of Revenue 3
shall on its own initiative revoke the certificate when any of the following appears: 4
(a) The certificate was obtained by fraud or misrepresentation; 5
(b) The holder of the certificate has failed substantially to proceed with the 6
construction, reconstruction, installation, or acquisition of the alcohol 7
production facilities; or 8
(c) The structure or equipment or both to which the certificate rela tes has ceased 9
to be used for the primary purpose of alcohol production for fuel use and is 10
being used for a different purpose. 11
(3) If the circumstances so require, the Department of Revenue, in lieu of revoking the 12
certificate, may modify it. 13
(4) On maili ng of notice of the action of the Department of Revenue revoking or 14
modifying a certificate as provided in subsection (5) of this section, the certificate 15
shall cease to be in force or shall remain in force only as modified as the case may 16
require. 17
(5) An alcohol production tax exemption certificate, when issued, shall be sent by 18
certified mail to the applicant and the notice of issuance in the form of certified 19
copies thereof shall be sent to the Office of Energy Policy. Notice of an order of the 20
Department of Revenue denying, revoking, or modifying a certificate in the form of 21
certified copies thereof shall be sent by certified mail to the applicant or the holder 22
and shall be sent to the Office of Energy Policy. The applicant or holder and the 23
Office of En ergy Policy shall be deemed parties for the purpose of the review 24
afforded by subsection (6) of this section. 25
(6) Any party aggrieved by the issuance, refusal to issue, revocation, or modification of 26
an alcohol production tax exemption certificate may appe al from the final ruling of 27
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the Department of Revenue to the Kentucky Tax Tribunal [Board of Tax Appeals] 1
pursuant to Section 7 of this Act[KRS 49.220]. 2
(7) In the event of the sale, lease, or other transfer of an alcohol production facility, not 3
involving a different location or use, the holder of an alcohol production tax 4
exemption certificate for the facility may transfer the certificate by written 5
instrument to the person who, except for the transfer of the certificate, would be 6
obligated to pay taxes on the facility. The transferee shall become the holder of the 7
certificate and shall have all rights pertaining thereto, effective as of the date of 8
transfer of the certificate. The transferee shall give written notice of the effective 9
date of the transfer, together with a copy of the instrument of transfer to the Office 10
of Energy Policy and the Department of Revenue. 11
(8) In the event an alcohol production facility for which an exemption certificate is held 12
ceases to be used for the primary purpose of alcohol production for fuel use or is 13
used for a different purpose other than that for which the exemption certificate was 14
granted, the holder of the certificate shall give written notice by certified mail of the 15
change to the Office of Energy Policy and to the Department of Revenue. 16
(9) The alcohol production facility exemption certificate, upon approval, shall exempt 17
said facilities from taxes outlined in the provisions of KRS 247.910 and this section 18
and included in KRS Chapters 132, 136, 138, and 139. Each exe mption certificate 19
shall remain in force for a period of eight (8) years from the date of issuance and at 20
the end of said period shall lapse. Any alcohol production facility previously 21
exempted under the terms of KRS 247.910 and this section shall not be e ligible for 22
recertification upon completion of the eight (8) year certificate period. 23
Section 59. KRS 342.1231 is amended to read as follows: 24
(1) The funding commission may mail to the assessment payer a notice of any 25
assessment assessed by it. The assessment shall be final if not protested in writing 26
to the funding commission within thirty (30) days from the date of notice. Payment 27
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for the assessment, penalty and interest, and expenses shall be received by the 1
funding commission within thirty (30) days from the date the notice becomes final. 2
The protest shall be accompanied by a supporting statement setting forth the 3
grounds upon which the protest is made. Upon written request, the funding 4
commission may extend the time for filing the supporting statement if it appears the 5
delay is necessary and unavoidable. The refusal of such extension may be reviewed 6
in the same manner as a protested assessment. 7
(2) After a timely protest has been filed, the assessment payer may request a conference 8
with the funding commission. The request shall be granted in writing stating the 9
date and time set for the conference. The assessment payer may appear in person or 10
by representative. Further conferences may be held by mutual agreement. 11
(3) After considering the assessment payer's protest, including any matters presented at 12
the final conference, the funding commission shall issue a final ruling on any matter 13
still in controversy, which shall be mailed to the assessment payer. The ruling shall 14
state that it is a final ruling of the funding commission, generally state the issues in 15
controversy, the funding commission's position thereon and set forth the procedure 16
for prosecuting an appeal to the Kentucky Tax Tribunal[Board of Claims] pursuant 17
to Section 7 of this Act[KRS 49.220]. 18
(4) The assessment payer may request in writing a final ruling at any time after filing a 19
timely protest and supporting statement. When a final ruling is requested, the 20
funding commission shall issue such ruling within six ty (60) days or at the next 21
board of directors meeting, whichever is later, from the date the request is received 22
by the funding commission. 23
(5) After a final ruling has been issued, the assessment payer may appeal to the 24
Kentucky Tax Tribunal [Board of Cla ims] pursuant to Section 7 of this Act [KRS 25
49.220]. 26
(6) The expenses incurred by the funding commission in conducting audits required in 27
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this chapter shall be paid by the audited entities in accordance with administrative 1
regulations promulgated by the funding commission. 2
(7) Notwithstanding any provision to the contrary, a notice of assessment under 3
subsection (1) of this section shall not be collected unless the notice of assessment 4
is mailed to the assessment payer not later than five (5) years from the due date of 5
the quarterly premium report or the date the amended quarterly premium report is 6
filed, whichever is later. A quarterly premium report shall not be amended later 7
than one (1) year after the due date of the quarterly premium report. 8
(8) Assessment payers shall preserve, retain, and provide all documents relevant to 9
quarterly premium reports and subject to audits to the funding commission upon 10
request during the completion of the audit. 11
(9) (a) The funding commission may mail the assessment payer notice of a refund 12
amount to be returned to an insured. The insurance carrier shall pay the 13
amount of the refund to the insured within sixty (60) days from the date of 14
notice sent by the funding commission. If, after good -faith efforts, the refund 15
cannot be returned to the insured, the refund amount shall be remitted to the 16
funding commission within thirty (30) days from the last date of attempting 17
the refund. 18
(b) If a refund amount to an insured is unpaid on the date on which it is due, then 19
that amount shall bear a penalty of one and one-half percent (1.5%) per month 20
from that due date. The funding commission shall have the authority to waive 21
part or all of the penalty where failure to pay is shown, to the satisfaction of 22
the funding commission, to be for a reasonable cause. 23
(10) "Assessment payer" as used in this section means insurance carrier, self -insured 24
group, and self-insured employer. 25
Section 60. KRS 365.370 is amended to read as follows: 26
(1) The department shall promulgate administrative regulations for the enforcement of 27
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KRS 365.260 to 365.380 and may from time to time undertake and make or cause 1
to be made one (1) or more cost surveys for the state or trading area or areas as it 2
defines. When each survey is made by or approved by the department, it may use 3
the cost survey as provided in KRS 365.320(2) and 365.360(2). 4
(2) The department may, upon notice and after hearing, revoke or suspend any license 5
issued under KRS 138.195 and the administrative regulations of the department 6
promulgated thereunder, for failure of any person to comply with any provisions of 7
KRS 365.260 to 365.380 or any administrative regulation adopted thereunder. 8
(3) All of the pow ers vested in the commissioner and Department of Revenue by the 9
provisions of the cigarette tax law shall be available for the enforcement of KRS 10
365.260 to 365.380. 11
(4) Any person aggrieved by any decision, order, or finding of the Department of 12
Revenue, suspending or revoking any license, may appeal to the Kentucky Tax 13
Tribunal[Board of Tax Appeals] pursuant to Section 7 of this Act[KRS 49.220]. 14
Section 61. KRS 452.505 is amended to read as follows: 15
The following action s may be brought in the Franklin Circuit Court, or in the Franklin 16
District Court, or in any other Circuit Court or District Court having venue: 17
(1) Actions to collect the revenue and all other claims, demands and penalties due the 18
Commonwealth, or to have satisfaction made of judgments in favor of the 19
Commonwealth, except those actions which are prosecuted by an appeal to the 20
Kentucky Tax Tribunal [Board of Tax Appeals] under the provisions of Section 7 21
of this Act[KRS 49.220] and 131.110; 22
(2) Actions against persons required to collect money due the Commonwealth, to pay 23
money into the State Treasury, or to do any other act connected with the payment of 24
money into the State Treasury after it has been collected, and against the sureties, 25
heirs, devisees or representatives of such persons; 26
(3) Actions to surcharge and correct fee bills, accounts, and settlements, with their 27
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debits and credits, and all claims against the Treasury allowed and approved by any 1
court in the Commonwealth to any person; 2
(4) Actions to recover any fraudulent, erroneous or illegal account, fee bill, charge, 3
credit or claim approved and allowed or paid out of the Treasury to any person; and 4
(5) The defendant in any action brought in Franklin Circuit Court or Franklin District 5
Court under the provisions of subsection (1) of this section for the collection of 6
taxes assessed under KRS Chapter 141 shall at any time prior to the submission for 7
judgment upon proper motion have a change of venue to the county in which he 8
resides or his principal office or place of business is located at no cost to the 9
defendant in Franklin Circuit Court or Franklin District Court. 10
Section 62. The following KRS sections are repealed: 11
49.190 KRS 49.200 to 49.250 applicable to po wer and authority outlined in KRS 12
49.020(1). 13
49.200 Record of Board of Tax Appeals. 14
49.210 Location of hearings -- Expenses of hearings outside offices. 15
49.220 Exclusive jurisdiction of Board of Tax Appeals -- Notice of rulings of revenue 16
and taxation agencies -- Appeals to board -- Procedure. 17
49.230 Official records of proceedings of Board of Tax Appeals public in nature -- 18
Exception -- Appeal procedure. 19
49.240 Effect of final orders of Board of Tax Appeals -- Remand to agency --– 20
Refund. 21
49.250 Judicial review of final orders of Board of Tax Appeals -- Stay of collection of 22
tax. 23
Section 63. Sections 1 to 17 of this Act take effect on July 1, 2027, and Sections 24
18 to 63 of this Act shall take effect on January 1, 2028. 25